DRAFT RED HERRING PROSPECTUS Dated June 23, 2011 Please read Section 60B of the Companies Act,

1956 Book Building Issue

PCH Retail Limited

PCH Retail Ltd. was incorporated in Hyderabad, Andhra Pradesh on January 03, 2007 under the Companies Act, 1956 with the Registrar of Companies Andhra Pradesh. PCH Sales, PCH Associates, PCH Mobile Zone and PCH Business were taken over by PCH Retail Ltd. as going concern by way of Memorandum of Mutual Understanding dated March 04, 2007. The Companys corporate identification number as allotted by the Registrar of Companies, Andhra Pradesh is U74999AP2007PLC052227. For further details, please refer chapter titled History and Certain Corporate Matters beginning on page 137 of the Draft Red Herring Prospectus.

Registered Office: 103-107, Maheswari Chambers, Somajiguda, Hyderabad 500082, Andhra Pradesh, India, Tel: + 91-40-23317853/54; Fax: +91-40-23316310; Corporate Office: 8-2/269/4/3/D, 5 th floor, Road No.2, Banjara Hills, Hyderabad, Andhra Pradesh, India, Tel: + 91-40-49094909; Fax: + 91-40- 49094910 Company Secretary and Compliance Officer: Mr.Srinivasa Rao Kolagani Website: www.pchretail.com, Email: ipo@pchretailltd.com

PROMOTERS OF THE COMPANY : SARDAR BALVINDER SINGH AND MRS. BALJIT KAUR
PUBLIC ISSUE OF 1,68,27,000 EQUITY SHARES OF FACE VALUE OF H 10 EACH OF PCH RETAIL LIMITED (PCH OR THE COMPANY OR THE ISSUER) FOR CASH AT A PRICE OF H [ ] PER EQUITY SHARE (ISSUE PRICE) INCLUDING A SHARE PREMIUM OF H [ ] PER EQUITY SHARE AGGREGATING UP TO H [ ] LAKHS (THE ISSUE). THE ISSUE INCLUDES PROMOTERS CONTRIBUTION OF UP TO 55,27,000 EQUITY SHARES OF H 10 EACH. THE ISSUE LESS PROMOTERS CONTRIBUTION IS REFERRED TO AS THE NET ISSUE TO THE PUBLIC AND THE NET ISSUE TO THE PUBLIC SHALL CONSTITUTE 1,13,00,000 EQUITY SHARES OF FACE VALUE OF H 10 EACH. THE ISSUE AND THE NET ISSUE SHALL CONSTITUTE 38.71% & 25.99% OF THE FULLY DILUTED POST-ISSUE PAID-UP CAPITAL OF THE COMPANY. THE FACE VALUE OF THE EQUITY SHARES IS H 10 EACH THE PRICE BAND AND THE MINIMUM BID LOT SIZE WILL BE DECIDED BY THE COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGER AND ADVERTISED BY THE COMPANY AT LEAST 2 WORKING DAYS PRIOR TO THE BID/ISSUE OPENING DATE. In case of any revision in the Price Band, the Bidding Period shall be extended for three additional Working Days after such revision of the Price Band, subject to the Bidding Period not exceeding 10 Working Days. Any revision in the Price Band, and the revised Bidding Period, if applicable, shall be widely disseminated by notification to the National Stock Exchange of India Limited (the NSE) and the Bombay Stock Exchange Limited (the BSE), by issuing a press release and also by indicating the change on the websites of the Book Running Lead Manager and at the terminals of the other members of the Syndicate. The Issue is being made under sub-regulation (1) of Regulation 26 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and through the Book Building Process in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended (the SEBI Regulations) wherein up to 50% of the Net Issue will be allocated on a proportionate basis to Qualified Institutional Buyers (QIBs). Such number of Equity Shares representing 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the QIB Portion shall be available for allocation on a proportionate basis to QIBs including Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. Further, not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received from them at or above the Issue Price. All potential non-retail investors shall participate in this Issue through an Application Supported by Blocked Amount (ASBA) process. Retail investors participating in this issue may also utilise the ASBA process to submit their bids. For further details refer to the chapter titled Issue Procedure beginning on page 248 of the Draft Red Herring Prospectus.

RISKS IN RELATION TO FIRST ISSUE

This being the first public issue of 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 H10 each and the Floor Price is [ ] times of the face value and the Cap Price is [ ] times of the face value. The Issue Price (as determined and justified by the Company in consultation with Book Running Lead Manager (BRLM) as stated under the chapter titled Basis of Issue Price on page 63) 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.

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 the section titled Risk Factors beginning on page 11 of this Draft Red Herring Prospectus.

IPO GRADING
The Issue has been graded by [] and has been assigned the IPO Grade [ ] indicating [ ] fundamentals, through letter dated [ ]. 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 more information on IPO grading, see the section titled General Information on page 34.

COMPANYS 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 Issuer and this Issue, which is material in the context of this Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions, misleading, in any material respect.

LISTING
The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE). The Company has received in-principle approvals from the NSE and the BSE for listing of the Equity Shares pursuant to their letters dated [ ] and [ ], respectively. For the purposes of this Issue, the Designated Stock Exchange shall be [ ].

BOOK RUNNING LEAD MANAGER TO THE ISSUE

REGISTRAR TO THE ISSUE

BOB Capital Markets Limited

3 rd Floor, South Wing, UTI Tower, Gn Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051,India. Tel: +91-22-61389300, Fax: +91-22-66718535 Email: ipo.pch@bobcaps.in; Website: www.bobcaps.in Contact Person: Mr. Venkata Raveendra R / Mr. Aseem Srivastava SEBI registration No.: INM 000009926

Bigshare Services Pvt. Ltd. E-2 & 3, Ansa Industrial Estate Saki-Vihar Road, Sakinaka,Andheri (East), Mumbai - 400 072, India. Tel: +91-22-40430200, Fax: +91-22-28475207 E-mail: ipo@bigshareonline.com; Website: www.bigshareonline.com Contact Person: Mr. Ashok Shetty SEBI registration No.: INR000001385

BID / ISSUE PROGRAMME BID/ISSUE OPENS ON []

(1)

BID/ISSUE CLOSES ON [ ] BID/ISSUE CLOSES ON FOR QIBs[ ](1)

The Company may decide to close the Bidding/Issue Period for QIBs one day prior to the Bid/Issue Closing Date in accordance with the SEBI (ICDR) Regulations.

SECTION I

TABLE OF CONTENTS GENERAL INFORMATION DEFINITIONS AND ABBREVIATIONS PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA FORWARD LOOKING STATEMENTS RISK FACTORS RISK FACTORS INTRODUCTION SUMMARY OF INDUSTRY OVERVIEW SUMMARY OF BUSINESS OVERVIEW SUMMARY OF FINANCIAL INFORMATION THE ISSUE GENERAL INFORMATION CAPITAL STRUCTURE OBJECTS OF THE ISSUE BASIS OF ISSUE PRICE STATEMENT OF TAX BENEFITS ABOUT THE ISSUER COMPANY INDUSTRY OVERVIEW BUSINESS OVERVIEW KEY INDUSTRY REGULATIONS AND POLICIES HISTORY AND CERTAIN CORPORATE MATTERS OUR MANAGEMENT OUR PROMOTERS AND GROUP COMPANIES RELATED PARTY TRANSACTIONS DIVIDEND POLICY FINANCIAL STATEMENTS REPORT OF THE STATUTORY AUDITORS MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LEGAL AND REGULATORY INFORMATION OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS GOVERNMENT/STATUTORY AND OTHER APPROVALS OTHER REGULATORY AND STATUTORY DISCLOSURES ISSUE RELATED INFORMATION TERMS OF THE ISSUE ISSUE STRUCTURE ISSUE PROCEDURE RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION DECLARATION

II III

IV

Page No. 1 1 9 10 11 11 26 26 28 30 33 34 41 52 63 65 74 74 90 133 137 139 149 158 159 160 160 192 203 203 208 230 241 241 244 248 279 280 280 305 305 307

VI

VII VIII

IX X

SECTION I: GENERAL INFORMATION DEFINITIONS AND ABBREVIATIONS In this Draft Red Herring Prospectus, unless the context otherwise requires, the terms defined and abbreviations expanded herein below shall have the same meaning as stated in this Section. Term PCH Retail, our Company, the Company, the Issuer Company, the Issuer, we, us and our Promoter(s) Promoter Directors Our Promoter Group you, your or yours COMPANY RELATED TERMS Terms Articles / Articles of Association/AoA Auditor/Statutory Auditor Board/Board Board Director(s) of Description The articles of association of the Company, as amended. Description Unless the context otherwise requires, refers to PCH Retail Limited, a public limited company incorporated under the Companies Act, having its registered office at 103-107, Maheswari Chambers, Somajiguda, Hyderabad- 500082, India. Sardar Balvinder Singh and Mrs. Baljit Kaur Sardar Balvinder Singh and Mrs. Baljit Kaur Includes such persons and entities constituting our Promoter Group in terms of Regulation 2(zb) of the SEBI (ICDR) Regulations, 2009 Prospective investors in this Issue.

The statutory auditor of the Company, M/s. Karumanchi & Associates, Chartered Accountants Directors/our The board of directors of the Company, as constituted from time to time, or committees thereof. The director(s) of the Company, unless otherwise specified. Includes those companies, firms, ventures, etc. promoted by our Promoters, irrespective of whether such entities are covered under section 370 (1) (B) of the Companies Act, 1956 or not. Unless the context otherwise specifies, includes those entities mentioned in the chapter, Our Promoter and Group Companies on page 149 of the Draft Red Herring Prospectus. The memorandum of association of the Company, as amended from time to time. 103-107, Maheswari Chambers, Somajiguda, Hyderabad- 500082, India

Group Companies

Memorandum /Memorandum of Association/MoA Registered Company Office of the

ISSUE RELATED TERMS TERM Allot/Allotment/Allotted/ Allotment of Equity Shares Allottee ASBA/ Applications Supported by Blocked Amount ASBA Account DESCRIPTION Unless the context otherwise requires, means the allotment of Equity Shares pursuant to the Issue. A successful Bidder to whom the Equity Shares are allotted An application whether physical or electronic used by Bidders to make a Bid authorizing an SCSB to block the Bid Amount in their specified bank account maintained with the SCSB. An account maintained by the ASBA bidders with the SCSB and specified in the ASBA Bid cum Application Form for blocking the amount mentioned in the ASBA Bid cum Application Form The form, whether physical or electronic, used by a Bidder to make a Bid through ASBA process, which contains an authorisation to block the Bid Amount in an ASBA Account and will be considered as the application for Allotment for the purposes of the Red Herring Prospectus and the Prospectus Prospective investors in this Issue who Bid/ apply through the ASBA process. Pursuant to SEBI circular no. CIR/CFD/DIL/1/2011 dated April 29, 2011, nonretail Investors i.e. QIBs and Non-Institutional Investors participating in this Issue are required to mandatorily use the ASBA facility to submit their Bids. 1

ASBA Bid cum Application Form

ASBA Bidder

TERM ASBA Revision Form

Bid

Bid Amount

Bid/ Issue Closing Date

DESCRIPTION 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). An indication to make an offer, made during the Bidding Period by a prospective investor to subscribe to the Equity Shares 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 or the ASBA Bid-cum- Application Form as the case may be in case of ASBA Bidders, the amount mentioned in the ASBA Bid cum- Application Form and payable by the Bidder on submission of the Bid for the Issue. The date after which the members of the Syndicate and SCSB (in case of ASBA Bidders) will not accept any Bids for this Issue, which shall be notified in a widely circulated English national newspaper, a Hindi national newspaper and a Telugu newspaper.

The Company in consultation with BRLM may decide to close the Bidding Period for QIBs one day prior to the Bid/Issue Closing Date in accordance with the SEBI (ICDR) Regulations. Bid/ Issue Opening Date The date on which the members of the Syndicate and SCSB (in case of ASBA Bidders) shall start accepting Bids for the Issue, which shall be the date notified in a widely circulated English national newspaper, a Hindi national newspaper and a Telugu newspaper. Bid/ Issue Period Period between the Bid/Issue Opening Date and the Bid/Issue Closing Date, inclusive of both days, during which prospective Bidders can submit their Bids, including any revisions thereof. Bid-cum-Application Form The form in terms of which the Bidder shall make an offer to subscribe to the Equity Shares of the Company and which will be considered as the application for allotment in terms of the Red Herring Prospectus and the Prospectus Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and the Bid-cum-Application Form or the ASBA Bid cumApplication Form (in case of an ASBA Bidder). BOB Capital Markets Limited/ BOB Capital Markets Limited, 3rd Floor, South Wing, UTI Tower, Gn Block, BOBCAPS Bandra Kurla Complex, Bandra East, Mumbai 400 051. Book Building Process Book building mechanism as provided under Schedule XI of the SEBI (ICDR) Regulations, in terms of which the Issue is made. BRLM/ Book Running Lead Book Running Lead Manager(s) to the Issue, in this case being BOB Capital Manager Markets Limited. BSE The Bombay Stock Exchange Limited. CAN/ Confirmation of Allocation Except in relation to the note or advice or intimation of allocation of Equity Shares Note sent to the Bidders who have been allocated Equity Shares after discovery of Issue Price in the Book Building Process. CDSL Controlling Branches Central Depository Services (India) Limited Such branches of the SCSBs which coordinate with the BRLM, the Registrar to the Issue and the Stock Exchanges and a list of which is available at http://www.sebi.gov.in/pmd/scsb.html The upper end of the Price Band, above which the Issue Price will not be finalized and above which no Bids will be accepted. The Issue Price finalised by the Company in consultation with the BRLM. Only Retail Individual Bidders who are applying for a maximum bid amount not exceeding `200,000 are entitled to Bid at the Cut-off Price, for a bid amount not exceeding `200,000. QIBs and Non Institutional Bidders are not entitled to Bid at the Cut-off Price. NSDL and CDSL. The Depositories Act, 1996, as amended. A depository registered with SEBI under the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, as amended. A depository participant as defined under the Depositories Act 2

Cap Price Cut-off

Depositories Depositories Act Depository Depository Participant or DP

TERM Designated Branches

Designated Date

Designated Stock Exchange Draft Red Herring Prospectus or DRHP Eligible NRI

Equity Shares Escrow Account

Escrow Agreement

Escrow Collection Bank(s) FII

First Bidder Floor Price FCVIs

GIR Number Indian National Issue Issue Agreement Issue Price

Issue Proceeds Issue/ Bidding Period MICR Mutual Fund Portion

DESCRIPTION Such branches of the SCSBs which shall collect the ASBA Bid cum Application Form used by ASBA Bidders and a list of which is available on http://www.sebi.gov.in The date on which funds are transferred from the Escrow Account to the Public Issue Account or the amount blocked by the SCSB is transferred from the bank account of the ASBA Bidder to the Public Issue Account as the case may be after the Prospectus is filed with the Registrar of Companies Andhra Pradesh, Hyderabad, following which the Board of Directors shall allot Equity Shares to successful Bidders. In this case being the []. This Draft Red Herring Prospectus dated June 23, 2011 filed with SEBI and issued in accordance with the SEBI (ICDR) Regulations, which does not have complete particulars of the price at which the Equity Shares are offered and size of the Issue. 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 Allotted herein. Equity Shares of our Company of face value of `10 each unless otherwise specified in the context thereof. Account opened with Escrow Collection Bank(s) and in whose favour the Bidder (excluding the ASBA Bidders) will issue cheques or drafts in respect of the Bid Amount when submitting a Bid. Agreement to be entered into among the Company, the Registrar to this Issue, the Escrow Collection Banks, Syndicate Members and the BRLM in relation to the collection of the Bid Amounts and dispatch of the refunds (if any) of the amounts collected, to the Bidders (excluding the ASBA Bidders). The banks, which are registered with SEBI as Banker (s) to the Issue at which the Escrow Account for the Issue will be opened, in this case being []. Foreign Institutional Investors (as defined under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as amended) registered with SEBI. 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, below which the Issue Price will not be finalized and below which no Bids will be accepted. Foreign Venture Capital Investors (as defined under the Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000, as amended) registered with SEBI. General Index Registry Number. A citizen of India as defined under the Indian Citizenship Act, 1955, as amended, who is not an NRI. The Issue of 1,68,17,000 Equity Shares of `10 each fully paid up at the Issue Price aggregating to ` [] lakhs. Agreement dated June 11, 2011 entered into between the Company and the Book Running Lead Manager. The final price at which Equity Shares will be issued and allotted in terms of the Red Herring Prospectus or the Prospectus, as determined by the Company in consultation with the BRLM, on the Pricing Date. The proceeds of the Issue that is available to the Company. The period between the Bid / Issue Opening Date and the Bid/Issue Closing Date inclusive of both days and during which prospective Bidders can submit their Bids. Magnetic Ink Character Recognition. 5% of the QIB Portion i.e. up to 2,82,500 Equity Shares, available for allocation to Mutual Funds only, out of the QIB Portion, subject to valid bids being received from such Mutual Funds. Mutual funds registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996, as amended from time to time. National Electronic Clearing System. The Issue of 1,13,00,000 Equity Shares of `10 each fully paid up at the Issue Price aggregating to `[] lakhs. 3

Mutual Funds NECS Net Issue

TERM Non Institutional Bidders

Non Institutional Portion Non Residents NRI or Non Resident Indian

NSDL NSE OCB or Overseas Corporate Body

Offer Document Pay-in-Period Price Band

DESCRIPTION All Bidders that are not Qualified Institutional Buyers or Retail Individual Bidders and who have Bid for Equity Shares for an amount more than `2,00,000 (but not including NRIs other than eligible NRIs). The portion of the Issue being not less than 15% of the Net Issue consisting of 16,95,000 Equity Shares of `10 each available for allocation to Non-Institutional Bidders. All eligible Bidders that are persons resident outside India, as defined under FEMA, including eligible NRIs and FIIs. A person resident outside India, as defined under FEMA and who is a citizen of India or a person of Indian origin, such term as defined under the Foreign Exchange Management (Deposit) Regulations, 2000, as amended. National Securities Depository Limited The 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 and which was in existence on October 3, 2003 and immediately before such date had taken benefits under the general permission granted to OCBs under the FEMA. OCBs are not permitted to invest in the Issue. Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus The period commencing on the Bid/Issue Opening Date and extending until the Bid/Issue Closing Date; The price band of a minimum price (Floor Price) of `[] and the maximum price (Cap Price) of `[] and includes revisions thereof. The price band will be decided by our Company in consultation with the Book Running Lead Managers and advertised in an English newspaper, Hindi newspaper and Telugu newspaper with wide circulation at least two (2) Working Days prior to the Bid/Issue Opening Date. The date on which the Company in consultation with the BRLM finalizes the Issue Price. The Prospectus, to be filed with the Registrar of Companies; Andhra Pradesh, Hyderabad in accordance with section 60 of the 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. Account opened with the Banker(s) to the Issue to receive monies pursuant to Section 73 of the Companies Act from the Escrow Account for the Issue on the Designated Date. i. Mutual funds, venture capital funds, or foreign venture capital investors registered with the SEBI; ii. FIIs and their sub-accounts registered with the SEBI, other than a subaccount which is a foreign corporate or foreign individual; iii. Public financial institutions as defined in Section 4A of the Companies Act; iv. Scheduled commercial banks; v. Multilateral and bilateral development financial institutions; vi. State industrial development corporations; vii. Insurance companies registered with the Insurance Regulatory and Development Authority; viii. Provident funds with minimum corpus of `2,500 Lakhs; ix. Pension funds with minimum corpus of `2,500 Lakhs; x. National Investment Fund set up by resolution F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India; and xi. Insurance funds set up and managed by the army, navy, or air force of the Union of India. xii. Insurance funds set up and managed by the Department of Posts, India The portion of the Issue being up to 56,50,000 Equity Shares of `10 each, being upto 50% of the Net Issue to the public to be allotted to QIBs. The Red Herring Prospectus issued in accordance with Section 60B of the 4

Pricing Date Prospectus

Public Issue Account

Qualified Institutional Buyers or QIBs

QIB Portion Red Herring Prospectus/RHP

TERM

Refund Account Refund Bankers Registrar/ Registrar to this Issue Restated Summary Statements

DESCRIPTION Companies Act, which does not have complete particulars on the price at which the Equity Shares are offered and size of this Issue. It carries the same obligations as are applicable in case of a Prospectus and will be filed with the Registrar of Companies Andhra Pradesh, Hyderabad at least three days before the opening of this Issue. It will become a Prospectus after filing with the Registrar of Companies Andhra Pradesh, Hyderabad, after pricing and allocation. The account opened with Escrow Collection Bank(s), from which refunds, if any, of the whole or part of the Bid Amount to Bidders shall be made. [] Bigshare Services Private Limited.

Restated summary statements of assets and liabilities of the Company as at March 31, 2007, 2008, 2009 and 2010 and as at December 31, 2010 profit and loss statement and cash flows of the company for each of the year ended March 31, 2007, 2008, 2009 and 2010 and for the period ended December 31, 2010 and certain other financial information as more fully described in the Auditors report for such years and period included in the Draft Red Herring Prospects Resident Retail Individual A Retail Individual Investor who is a person resident in India as defined in Foreign Investor Exchange Management Act, 1999. Retail Individual Bidders Individual Bidders (including HUFs applying through their Karta and eligible NRIs) who have Bid for an amount less than or equal to `200,000 in any of the bidding options in this Issue. Retail Portion The portion of the Issue being not less than 39,55,000 Equity Shares of `10 each, being not less than 35% of the Net Issue, available for allocation to Retail Individual Bidder(s). Revision Form The form used by the Bidders excluding ASBA Bidders, to modify the quantity of Equity Shares or the Bid price in any of their Bid-cum-Application Forms or any previous Revision Form(s). ROC The Registrar of Companies, Andhra Pradesh, Hyderabad. RTGS Real Time Gross Settlement SCRA The Securities Contracts (Regulation) Act, 1956, as amended. SCRR The Securities Contracts (Regulation) Rules, 1957, as amended. The banks which are registered with SEBI under the Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994, as amended, and offer the Self Certified Syndicate Bank services of ASBA, including blocking of funds in bank accounts, are recognized as (SCSB) such by the SEBI and a list of which is available at http://www.sebi.gov.in/pmd/scsb.html Stock Exchanges Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. Syndicate The BRLM and the Syndicate Members. Syndicate Agreement The agreement to be entered into between the Company and the members of the Syndicate, in relation to the collection of Bids in this Issue. Syndicate Member(s) [] Transaction Registration Slip/ The slip or document issued by the Syndicate Members or an SCSB (only on TRS demand) to the Bidders as proof of registration of the Bid. Underwriters The BRLM and the Syndicate Member. Underwriting Agreement The Agreement among the Underwriters and the Company to be entered into on or after the Pricing Date. VCFs Venture Capital Funds (as defined under the Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996, as amended) registered with SEBI. Working Days Unless the context otherwise requires: (i) Till the Bid/ Issue closing date: All days other than a Saturday, Sunday or a public holiday; (ii) Post Bid/ Issue closing date and till the listing of Equity Shares Issued: All days other than a Sunday or a public holiday And on which commercial banks in Mumbai are open for business.All days except Sunday

CONVENTIONAL/ GENERAL TERMS Terms Act/ Companies Act/ the Act AGM AS ASBA CIN DIN DIPP Directors or Board of Directors DP ID EPS ESOP ESPS FCNR Account FEMA Description The Companies Act, 1956 and amendments thereto. Annual General Meeting. Accounting Standards as issued by the Institute of Chartered Accountants of India. Application supported by blocked amount. Corporate Identification Number. Directors Identification Number. Department of Industrial Policy & Promotion. Directors of the Company from time to time unless otherwise specified. Depository Participants Identity. Earnings Per Share. Employee Stock Option Plan. Employee Share Purchase Scheme. Foreign Currency Non Resident Account. Foreign Exchange Management Act, 1999, as amended from time to time and the regulations framed thereunder. Financial Year/ Fiscal/ FY The twelve months ended March 31 of that particular year. Insider Trading Regulations SEBI (Prohibition of Insider Trading) Regulations, 1992. IT Act The Income Tax Act, 1961, as amended from time to time except as stated otherwise. NAV/ Net Asset Value Net worth as at the end of the year divided by number of Equity Shares outstanding at the end of the year. Net worth The aggregate of the paid up share capital, share premium account, and reserves and surplus (excluding revaluation reserve) as reduced by the aggregate of miscellaneous expenditure (to the extent not adjusted or written off) and the debit balance of the profit and loss account. RBI The Reserve Bank of India. SEBI Securities and Exchange Board of India. SEBI (ICDR) Regulations/ SEBI SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as Regulations amended from time to time. SEBI Act Securities and Exchange Board of India Act 1992, as amended from time to time. SICA Sick Industrial Companies Act, 1985. ABBREVIATION OF GENERAL TERMS Terms A/C CAGR CAM CD EBITDA EGM FBT FDI GAAP GDP Government/ GOI FY HNI HUF IDC MoU NRE Account NRO Account p.a. Description Account. Compounded Annual Growth Rate. Common Area Maintenance Convertible Debenture Earnings before Interest, Tax, Depreciation and Amortisation. Extraordinary General Meeting. Fringe Benefit Tax. Foreign Direct Investment. Generally Accepted Accounting Principles. Gross Domestic Product. The Government of India. Financial Year High Net-worth Individual. Hindu Undivided Family. Interest During Construction Memorandum of Understanding Non Resident External Account. Non Resident Ordinary Account. per annum. 6

Terms P/E Ratio PAN PAT PBT PIO RBI Rs./INR/` RoNW SBI SBH SEBI Takeover Regulations SLM Sq. Ft. Sq. Mt. TAN UK US, USA USD/US$ WDV

Description Price/ Earning Ratio. Permanent Account Number. Profit After Tax. Profit Before Tax. Persons of Indian Origin. The Reserve Bank of India Indian Rupees. Return on Net worth. State Bank of India State Bank of Hyderabad Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, as amended from time to time. Straight Line Method. Square Feet. Square Meter. Tax Deduction Account Number. The United Kingdom of Great Britain and Northern Ireland. United States of America. United States Dollar. Written Down Value.

INDUSTRY / BUSINESS RELATED TERMS Terms A.C. B2B B2C CAGR CEAMA CMCR CSO CTV Cygnus DTH DVD FDI FICCI FMCG GDP GRDI India Retail Report 2011 IRIS ITC LCD LED MBO MENA MNC MPCE NCAER NSSO OPEX PC PFCE POS SIA SKU TEV TV Description Air Conditioner Business to Business Business to Customer Compounded Annual Growth Rate Consumer Electronics and Appliances Manufacturers Association Centre for Macro Consumer Research Central Statistical Organization Colour Television Cygnus Business Consulting and Research Private Limited Direct To Home Digital Versatile Disk Foreign Direct Investment Federation of Indian Chambers of Commerce and Industry Fast Moving Consumer Goods Gross Domestic Product Global Retail Development Index India Retail Report 2011 published by Images Multimedia Private Limited International Research Institutes Indian Tobacco Corporation Liquid Crystal Display Light Emitting Diode Multi Brand Outlets Middle East and North Africa Multi National Corporation Monthly Per Capita Consumption Expenditure National Council of Applied Economic Research National Sample Survey Organisation Operational Expenditure Personal Computer Private Final Consumption Expenditure Point of Sale Secretariat for Industrial Assistance Stock Keeping Units Techno Economic Viability Television 7

Terms VCD WC WCBF Notwithstanding the foregoing: a. b.

Description Video Compact Disk Working Capital Working Capital Bank Finance

In the chapter titled Financial Statements on page 160 of this Draft Red Herring Prospectus, defined terms shall have the meaning given to such terms in that chapter. In the section titled Main Provisions of the Articles of Association on page 280 of this Draft Red Herring Prospectus, defined terms have the meaning given to such terms in the Articles of Association of the Company.

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA FINANCIAL DATA Unless stated otherwise, the financial information used in this Draft Red Herring Prospectus is derived from the Companys restated financial statements prepared in accordance with Indian GAAP and the Companies Act and in accordance with SEBI (ICDR) Regulations, included in the DRHP. Companys fiscal commences on April 01 and ends on March 31 of a particular year. Unless stated otherwise, references herein to a fiscal (e.g., fiscal 2010), are to the fiscal ended March 31 of a particular year. In the DRHP, any discrepancies in any table between the total and the sum of the amounts listed are due to roundingoff. There are significant differences between Indian GAAP, International Financial Reporting Standards (IFRS) and U.S. GAAP. The Company has not attempted to quantify those differences or their impact on the financial data included herein, and you should consult your own advisors regarding such differences and their impact on the financial data. Accordingly, the degree to which the Indian GAAP restated summary statements included in the Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations. Any reliance by persons not familiar with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations on the financial disclosures presented in the Draft Red Herring Prospectus should accordingly be limited. Unless otherwise specified or if the context otherwise requires, all references to India in the Draft Red Herring Prospectus are to the Republic of India. Currency of Presentation All references to Rupees or Rs. or ` or INR are to Indian Rupees, the official currency of the Republic of India. All numbers in this document have been prescribed in lakhs or in whole numbers where the numbers have been too small to present in lakhs. Some numbers are also presented in crores wherever they have been taken from a third party source. Industry and Market Data Unless stated otherwise, industry data used in this Draft Red Herring Prospectus has been obtained from industry publications and internal Company reports. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although the Company believes the industry data used in this Draft Red Herring Prospectus is reliable, it has not been independently verified. Similarly, internal Company reports, while believed to be reliable, have not been verified by any independent source. Further, the extent to which the market data presented in the 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 We have included statements in this Draft Red Herring Prospectus which contain words or phrases such as will, aim, is likely to result, believe, expect, will continue, anticipate, estimate, intend, plan, contemplate, seek to, future, objective, goal, project, should, will pursue and similar expressions or variations of such expressions, that are forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from the expectations include, among others: General economic and business conditions in the markets in which we operate and in the local, regional and national and international economies; Changes in laws and regulations relating to the industries in which we operate; Increased competition in these industries; The Companys ability to successfully implement the growth strategy and expansion plans, and to successfully launch and implement various projects and business plans for which funds are being raised through this Issue; Our inability to enter into financing arrangement to meet short term and long term capital requirements; Fluctuations in operating costs; Unanticipated variations in the duration, size and scope of the projects; Our ability to attract and retain qualified personnel; The effect of wage pressures, seasonal hiring patterns and the time required to train and productively utilize new employees; Changes in political and social conditions in India or in other countries that we may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

For a further discussion of factors that could cause our actual results to differ, see the chapters titled Risk Factors Business Overview and Managements Discussion and Analysis of Financial Conditions and Results of Operations beginning on pages 11, 90 and 192 of this Draft Red Herring Prospectus 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 future gains or losses could materially differ from those that have been estimated. Neither we nor the Book Running Lead Manager, nor any of its respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, we and the Book Running Lead Manager will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges.

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SECTION II: RISK FACTORS RISK FACTORS An investment in Equity Shares involves a high degree of risk. The risks and uncertainties described below together with the other information contained in the Draft Red Herring Prospectus should be carefully considered before making an investment decision in our Equity Shares. The risks described below are relevant to the country, the industry in which the Company operates, the Company and the Equity Shares. Additional risks, not presently known to the Company or that we currently deem immaterial may also impair the Companys business operations. You should carefully consider all the information in the Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in our Equity Shares. If anyone or some combination of the following risks were to occur, our business, results of operations and financial condition could suffer, and the price of the Equity Shares and the value of your investment in the Equity Shares could decline. Prospective investors should pay particular attention to the fact that the Company is incorporated under the laws of India and is subject to a legal and regulatory environment that may differ in certain respects from that of other countries. The Draft Red Herring Prospectus also contains forward-looking statements that involve risk and uncertainties. The Companys actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the considerations described below and elsewhere in the Draft Red Herring Prospectus. See Forward-Looking Statements on page 10 of the Draft Red Herring Prospectus. Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any of the risks mentioned herein. In making an investment decision, prospective investors must rely on their own examination of the Company and the terms of the Issue, including merits and risks involved. To obtain a better understanding of our business, you should read this chapter in conjunction with other chapters of the Draft Red Herring Prospectus, including the chapters titled Business Overview, Financial Statements and Managements Discussion and Analysis on Financial Condition and Results of Operations on pages 90, 160 and 192 respectively of the Draft Red Herring Prospectus, together with all other financial information contained in the Draft Red Herring Prospectus. Unless otherwise stated, the financial data in this chapter is derived from our audited restated financial statements prepared in accordance with Indian GAAP and restated in accordance with SEBI (ICDR) Regulations. The numbering of the risk factors has been done to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk over another. Materiality The risk factors have been determined on basis of their materiality. The following factors have been considered for determining the materiality. 1. 2. 3. Some risks may not be material individually but may be material when considered collectively. Some risks may have an impact, which is qualitative though not quantitative. Some risks may not be material at present but may have a material impact in the future.

INTERNAL RISK FACTORS Risks related to the Company, our Business and our Industry 1. There are legal proceedings currently outstanding involving the Company and its Director Sardar Balvinder Singh. Any adverse decision may render us liable to liabilities/penalties and may adversely affect our business, results of operations.

There are legal proceedings currently outstanding involving the Company and our director. We have certain cases pertaining to civil, criminal and statutory legal proceedings and claims incidental thereto against us and our director. We have also received notices from The Assistant Labour Officer and The Regional Provident Fund Commissioner pertaining to penalty implications on the Company. These cases are pending at different levels of adjudication before various courts. There are pending arbitration proceedings against our Director 11

Sardar Balvinder Singh. Any adverse decision may render us liable to increased liabilities/penalties and may adversely affect our business, results of operations and profitability of the Company. A summary of these legal and other proceedings involving the Company and our Director, Sardar Balvinder Singh is given in the following table: Nature of Litigation Cases filed against the Company Civil Litigation Criminal Litigation Statutory Litigation Total Cases filed against our Directors Civil Litigation Notice issued by the Company Civil Litigation Number of Cases 2 1 1 4 Amounts 76,01,298/600/10,000/76,11,898/-

58,14,323/-

2,67,23,139/-

For further details on the outstanding litigations pertaining to the Company please refer to chapter titled Outstanding Litigations and Material Developments beginning on page 203 of the Draft Red Herring Prospectus. 2. Non-compliance with the relevant provisions of the Companies Act in relation to appointment of a whole-time company secretary during the period March 4, 2007 to June 24, 2010 and from October 16, 2010 to December 14, 2010 may attract penalties payable by the Company.

As per section 383A of the Companies Act, 1956, the Company is required to appoint a whole-time company secretary, but could not comply with the same for above mentioned periods. However, the Company has made a suo-motu application for compounding of the offence before the Company Law Board under section 621A of the Companies Act. There cannot be any assurance that Company Law Board will grant approval as requested for compounding the non-compliances on the part of the Company as prayed for and in such case the Company may be liable to pay penalty as may be levied by the said authority. 3. We have availed secured loans from various banks and body corporates, etc. from time to time in the ordinary course of business. In accordance with terms of sanctions of these loans, we are required to and have accordingly applied for a No Objection Certificate (NOC) from all our lenders. As of date, we are yet to receive NOCs from some of our lenders and in the event of non-receipt of these NOCs; we will not be able to go ahead with the Issue, thereby adversely affecting our growth plans.

We have availed secured loans from 15 lenders including 11 banks and 4 body corporates. We have applied for NOCs from all the lenders and lenders are in the process of issuing NOCs. However, because of procedural delays, we have received NOCs from only 5 banks and 1 body corporate. In the event of non-receipt of these NOCs; we will not be able to go ahead with the Issue, thereby adversely affecting our growth plans. 4. The Company had negative cash flows in all fiscals. Any negative cash flow in the future could affect our operations and results of operations.

As per our restated Financial Statements, the Company had negative cash flows in December 31, 2010, FY 2010, FY 2009, FY 2008 and FY 2007 as under: (` in lakhs) Period ended FY 2010 FY 2009 FY 2008 FY 2007 Particulars December 31, 2010 Net Cash from/ (used in) (799.76) (1,259.70) (1,338.22) (844.42) (3,175.20) Operating Activities Net Cash (used in)/ from (2,242.00) (4,938.91) (7,577.60) (2,104.70) (503.37) Investing Activities Net (Decrease)/ Increase in (68.12) (64.82) Cash & Cash Equivalents 12

Any negative cash flow in the future could affect our operations and financial conditions. For further details please refer to Annexure III Statement of Cash flows, as Restated, from the restated financial statements forming part of the section titled Financial Statements beginning on pages 160 of the Draft Red Herring Prospectus. 5. Our Promoter and one of our Directors have interests in the Company other than normal remuneration or reimbursement of expenses incurred or benefits.

Our Promoters and one of our Directors i.e Mr. Iyer Rangarajan are interested in the Company to the extent of their shareholding in the Company. Our Directors may also be regarded as interested in the Equity Shares, if any, held by them, that may be subscribed by or allotted to the companies, in which they are interested as directors, members, and promoters, pursuant to the 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 Equity Shares of the Company. For more details, see the chapters, Capital Structure, Our Management and Related Party Transactions beginning on pages 41, 139 and 187 respectively of the Draft Red Herring Prospectus. 6. We may face a potential conflict of interest as the Company and Group Companies have similar main object of carrying on retail operations of consumer durables.

Our promoters Sardar Balvinder Singh and Mrs. Baljit Kaur are also Promoter-Directors of our Group Companies, PCH Corporation Private Limited, PCH Global Services Private Limited, PCH Impex Private Limited, PCH Lifestyle Private Limited, PCH Retail Solutions Private Limited, PCH Telecom (India) Private Limited. These Companies have been incorporated with similar objects as that of the Company. There may be a potential conflict of interest as the objects and business activities of these Companies are similar or complementary to that of the Company. Further, any deficiency in the quality of products provided by these companies in future through their outlets may adversely affect our brand image as they shall operate under the same or similar name, thereby affecting our business, brand image and financial condition and our results of operations. 7. There are certain approvals and licenses which are required to be obtained in the ordinary course of business. We are yet to receive certain approvals and licenses. Any non-issuance or non-renewal of the said approvals and licenses would adversely affect the Companys operations, business and results of operations.

We require certain statutory and regulatory approvals, licenses, registrations and permissions to operate our business. We require trade licenses and labour licenses for operation of 110 outlets and 11 warehouses. We have been able to obtain and renew licenses for many of them. However, we have filed following applications for obtaining as well as renewal of trade & labour licenses. Nature of Application Trade Licenses New Applications Applications for Renewal Labour Licenses New Applications Payments made but awaiting issue of New Licenses Payments made but awaiting issue of renewed Licenses No. of Outlets 23 24 10 9 1 Warehouses 7 1 4 5 -

We have also not obtained registration under the Tamil Nadu State Tax on Professions, Trades, Callings and Employments Act, 1992 and Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975. There can be no assurance that we shall be able to obtain above mentioned trade and labour licenses and registrations. If we fail to obtain some or all of these approvals or licenses, or renewals thereof, in a timely manner or at all, we may incur penalties and this would adversely affect the Companys operations, financial condition and results of operations. 8. Our contingent liabilities that have not been provided for could affect our financial condition.

Our total contingent liabilities that have not been provided for and as disclosed in our restated financial statements, as of December 31, 2010, were `40.94 lakhs. In the event that any of these amounts that we have not

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provided for become due, our financial condition and results of operations may be adversely affected. Our contingent liabilities not provided for as of December 31, 2010 included the following: (` in lakhs) Particulars For the Period ended 31-Dec-10 Rent Claims Income tax Total 9. 38.01 2.93 40.94

Our dependence on our Promoter and Managing Director, Sardar Balvinder Singh will have a negative impact on the performance of the Company in the absence of his continued services.

Our Promoter and Managing Director, Sardar Balvinder Singh is the major driving force for the entire business on whom we rely for the management of our day to day operations including our business strategy and growth plans. Our future performance will be affected by the absence of continued services of Sardar Balvinder Singh. 10. We may continue to be controlled by our Promoters following the Issue and our other shareholders may not be able to affect the outcome of shareholder voting.

After the completion of the Issue, our Promoters will collectively hold approximately 53.43 % of the fully diluted post-Issue equity capital. Consequently, our Promoters, may exercise substantial control over us and may have the power to elect and remove a majority of our Directors and/or determine the outcome of proposals for corporate action requiring approval of our Board of Directors or shareholders, such as lending and investment policies, revenue budgets, capital expenditure and dividend policy, etc. Our Promoters will be able to influence our major policy decisions, including our overall strategic and investment decisions, by controlling the election of our Directors and, in turn, indirectly controlling the selection of our senior management, determining the timing and amount of any dividend payments, approving our annual budgets, deciding on increases or decreases in our share capital, determining our issuance of new securities, approving mergers, acquisitions and disposals of our assets or businesses, and amending our articles of association. This control could also delay, defer or prevent a change in control of the Company, impede a merger, consolidation, takeover or other business combination involving the Company, or discourage a potential acquirer from obtaining control of the Company even if it is in the best interests of the Company. While our promoters, being Directors of the Company are required to act in the best interests of the Company, it is possible that they may not do so and further, the interests of our promoters may conflict with the interests of our other shareholders and may make decisions that materially adversely affect your investment in the Equity Shares. 11. The utilisation of the Issue proceeds will not be monitored by any external, independent or a Monitoring Agency but through our Board of Directors.

There will be no external, independent or a Monitoring Agency, which would monitor the utilization of our Issue proceeds. However, our Board and/or Audit committee authorized in this behalf will monitor the utilization of the proceeds of the Issue. We will disclose the details of the utilisation of the Issue proceeds, including interim use, under a separate head in our financial statements specifying the purpose for which such proceeds have been utilized or otherwise disclose as per the disclosure requirements of our listing agreements with the Stock Exchanges and in particular Clause 49 of the listing agreement. 12. Our inability to manage our growth could disrupt our business and reduce our profitability.

A principal component of our strategy is to continue growing by expanding the size and geographical scope of our business. Although we plan to continue to expand our scale of operations through organic growth, there could be a possibility that we may not grow at a rate comparable to our growth rate in the past, either in terms of income or profit. Further, such growth strategy will place significant demands on our management, financial and other resources. It will require us to continuously develop and improve our operational, financial and internal controls and more importantly adhere to quality and high standards that meet customer expectations. Any inability on our part to manage such growth could disrupt our business prospects, impact our financial condition and adversely affect our results of operations. 13. We face tough competition from international markets which may have an adverse affect on our business and results of operation. Consumer durables like mobile phones, cooking appliances, audio & video systems, visual gaming devices, cameras and technical appliances have a huge organized market comprising of new as well as established brands 14

in the United States of America and other parts of the world. The technological advancement along with introduction of new products in the developed countries is unquestionable. Consumer preferences for such new proudcts are on a constant rise as prospective consumers are being offered such products at reasonable and affordable rates. As a result of such cutthroat competition, our target consumers may be limited to that extent or may even be reduced to a considerable extent over a period of time. We also face competition from other sources such as sale of goods over the internet, purchase of goods through relatives and friends who are outside the country etc. Additionally, we may face direct competition from the international players, if the policy of the Government of India regarding foreign participation in the retail sector is liberalized allowing them to open retail outlets in India, if that is done it may adversely impact on our market share and profit ability. 14. We operate in a highly competitive market where there are substantially larger competitors having greater financial strength and many small competitors.This competition may affect our business opportunities in the domestic market.

We may face severe competition from emerging players and also those who have established a dominant position in the market. We have many competitors that claim to offer better price, quality of services and other benefits, while, we may not be able to meet the expectation of the consumers or we may not be able to hold a prevailing position in the market over and above our competitors. This may affect our business opportunities in the market. We also expect to face competition from other participants in consumption-led sectors in sourcing and securing business opportunities. Some of our competitors are substantially larger and have considerably greater financing resources and may have a lower cost of funds and many have access to funding sources that may not available to us. In addition, certain of our competitors may have greater risk appetites or different risk assessment policies than ours, which could encourage them to consider a wider variety of opportunities, establish more relationships and more quickly build their market share. Our competitors may also be equipped with certain factors such as greater technical, marketing and other resources and greater experience in our lines of business than us, this may enable them to secure better opportunities than us with a lower price, providing greater incentives to the consumers. If we are not able to compete effectively with these competitors, our financial condition and results of operations will be adversely affected. 15. We are market participants of the sector which is in transition mode from unorganized to organized and associated actions like increasing spend on brand promotions, price reductions, etc. which will force us to adopt a similar path thereby affecting our business and results of operations.

We operate in a highly competitive market and face stiff competition from players operating both in organized and un-organized sectors at the same time. Pricing is one of the factors that plays an important role in our clients selection of our products. There are several strategies adopted by our competitors to increase their market share i.e. through advertising, pricing promotion, service, new product and service introductions among others. This increased competition by both traditional and new players may affect our margins. In order to protect our existing market share or seize future market share, we may be required to increase expenditure on advertising and promotions and may also have to introduce new products and consumer related services. Due to inherent risks in the marketplace associated with advertising and new product and service introductions, including uncertainties about consumer response, increased expenditure may not prove successful in maintaining or enhancing our market share and could result in lower profitability. Stiff competition from a variety of competitors in the organized and un-organised sectors adversely impacts our result of operations and profitability. 16. Our business strategy is focused on consumption-led sectors in India, and adverse developments in these sectors could materially affect our financial performance.

Our strategic focus on opportunities in consumption-led sectors in India may not be successful. The performance of these sectors is sensitive to changes in consumer spending habits and preferences and our success depends on our ability to anticipate and respond to these changing consumer trends. International companies, as well as newly emerging domestic companies entering the Indian consumption-led sectors, may change consumption patterns. Foreign investment and interest rate fluctuations could also impact the growth of the consumption-led sectors. Consumption-led industries are also predominantly dependent on the rise in household income levels; the recent growth of income levels in India has been due to the general growth of the economy and may not be sustainable in the future.

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17.

Our image and reputation in the market are dependant on the quality and quantum of products sourced from the suppliers and the manufacturers and any failure on their part to maintain quality and adequate supply would adversely affect our reputation.

Our Company being in the retail business relies on the quality of the products provided by the suppliers and manufacturers which is further dependent on the manufacturing capabilities of the original manufacturer. Further, if these suppliers and manufacturers are unable to procure the required level of inventories because of any change in the policy or any change in the arrangement between these supplier and the manufacturers and/or any failure on the part of the suppliers or the original manufacturers to maintain a high level of quality of the products could adversely affect the Companys reputation and revenue generation. 18. The failure to maintain a timely and adequate supply of products could have an adverse effect on the ongoing business of our Company.

Our Company being in the retail business needs to ensure continuous supply of the different products being offered under the different brands. As industry practice, the Company has not entered into any formal long-term agreements or arrangements with any of its suppliers. Arrangements for such supplies vary depending on different schemes offered by different brands. If the timely and adequate supply is not made available to the Company on acceptable commercial terms, or if there are significant increases in the cost of these products, the Companys results of operations and financial condition may be adversely affected. 19. The quality and consistency of after sales service cannot be guaranteed as technical support is provided by personnel hired by different companies offering their products thereby adversely affecting the reputation of our products.

After sales service for various appliances is provided by personnel hired and trained by the respective companies offering their brands. We have little or no control over the quality and consistency of after sales service provided by such personnel. Any failure to provide or any deficiency in after sale services may tarnish our reputation. 20. Our indebtedness and the conditions and restrictions imposed by our financing and other agreements could adversely affect our ability to conduct our business and operations.

We have an aggregate outstanding of around `21,732 lakhs secured loans as on December 31, 2010. We have availed these loans from various Banks and other institutions and these loans are secured by way of mortgage and/or hypothecation of properties owned by the Company, collateral properties by the promoters, credit receivables, stock, book debts, current assets movables, and personal guarantee given by the of promoters. In case we are not able to pay our dues in time, the same may adversely impact our result of operations. Further, we are subject to the usual and customary restrictive covenants in agreements that we have entered into with banks, like obtaining prior approval for undertaking any merger or demerger, issue of further capital, change in financial year, declaration of dividend, any substantial expansion and making investments, etc. For further details, please refer to Annexure VIII of section titled Financial Statements on page 160 of the Draft Red Herring Prospectus. We are required to obtain the approval/consent of the lenders under our financing arrangements before undertaking any significant corporate actions as mentioned above. There can be no assurance that the lenders will grant the required consents in a timely manner or at all. The time required to secure consents may hinder us from taking advantage of a dynamic market environment and thereby our business, results of operations, financial condition could adversely be affected. 21. Demand of the products from brand loyal consumers and non-availability of the same at our outlets may adversely affect our results of operation and profitability.

We may not stock products of all the brands at our outlets and demand for product of a particular brand, by any client, not available with us may compel a customer who has high loyalty for that brand to move to our competitor. Further, such unsatisfied customer may not return to us even to purchase other products, which may be available with us. This can have an adverse implication on our revenue generation and growth prospects. 22. Our Company is not strictly dependent on the outflow of a single type of product; however sudden fall in the demand for that specific product may adversely affect the sales and profitability of the Company.

Though the Company is not dependent on the outflow of a single type of product, but if demand of even a single product decreases, the sales and the profitability of the Company will be adversely affected. If the consumers 16

decrease or discontinue to buy a product, for reasons such as other preferred choices in the market, loss of usage of the product, better products replacing the existing product etc., the Company will have no choice but to stop purchasing that specific product from the suppliers, hence there will be no sale and the profitability of the Company over that specified product. Therefore the monetary and other specified targets that the Company has set to achieve for that specified product are not fulfilled and the Company may not make profits over the specified product. 23. The retail outlets situated in various States perform drastically different from each other. The nonperformance of outlets situated in a single state can drastically affect the sales and profitability of the Company.

Presently, we have our outlets in four states i.e. in Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. We propose to expand our business to various parts of the country. The results of operations of the Company are dependent on the performance of our outlets in each state. Various factors such as demand for the product, purchasing power of the people of the state, need and usage for the product, location of the outlet vary from state to state and from time to time. These factors may adversely affect the profitability of our Company. 24. Our ability to deliver the products to customers is largely dependent on the efficiency of the suppliers to make available the products on time.

The Company usually buys inventories for display purposes in its retail outlets and maintains an inventory of a product mix based on market feedback to ensure timely delivery to prospective customers. Sometimes, when there is demand for a particular product from the customers which is not available with the company, the Company places the required order with the supplier/manufacturer Any failure on the part of the suppliers to deliver the product on time may adversely affect the reputation and brand name of the Company and this may result into loss of revenue of the Company. 25. Pressing need for making expenditure on advertisements and the promotional activities and this may not prove successful in maintaining or enhancing market share thereby adversely affecting our results of operations.

We are required to advertise our brand so as to attract customers and increase sales and profitability. We have issued purchase orders to various advertisers for making the requisites hoardings at all the places where the outlets are located and at centrally located places. We may face a problem of non availability of place of our choice for hoarding for the advertisements, and this may adversely affect our brand name and popularity. Further, there are inherent risks associated with advertising and uncertainties about customer response, increased expenditure may not prove successful in maintaining or enhancing our market share and may therefore affect our results of operations. 26. Risk of reliance on the brand, reputation, intellectual property and technology provided by third parties and any damage to them would adversely affect our business and results of operations.

The goods that we are selling are branded goods manufactured by other companies. So any damage to the brand, reputation and intellectual property of such other companies may adversely affect our business and may lead to loss of revenue.

Risks based on Objects of the Issue 27. Our funding requirements and the deployment of the proceeds of the Issue are divided into three phase and are based on TEVstudy done by Cygnus and Phase I and II are appraised by SBI and any increase or decrease in project cost may adversely affect our business and results of operations.

Our funding requirements and the deployment of the proceeds of the Issue are divided into three phases. Phase I and II are appraised by SBI and Phase III is based on TEV study done by Cygnus and any increase or decrease in project cost may adversely affect our business and results of operations. For more details of the Phases please refer to the chapter Objects of the Issue on page 52 of the Draft Red Herring Prospectus. The estimated costs towards rents and deposits for the lease/license arrangements for our outlets and the cost towards holding the inventory may vary based on location, size and several other factors. In view of the highly competitive nature of the industry in which we operate, project cost may change from time to time and consequently our funding requirements may also change. This may result in the rescheduling of our project expenditure programs or relocations of some of the projected outlets and an increase or decrease in our proposed expenditure for a particular object may adversely affect our results of operations. 17

28.

In alliance to our Object of the Issue, we propose to set up outlets in states other than the existing states in which we are doing business. If we fail to procure the required infrastructure, our growth plans may be adversely affected.

We plan to add 9.50 lakhs sq. ft. space in the form of 100 additional MBOs ( areas and number of outlets may differ according to actual availability of suitable place ) in various states in order to make our presence felt all over India. For this purpose we are required to obtain additional premises, knowledge of consumer preferences, man power, resources, government approvals, inventories and all other necessities that are required to fulfill our expansion programme. We plan to expand in Tier I, II and III cities across India. Taking into account that we propose to expand into different states all over India, we may be exposed to risks which may arise due to lack of familiarity with the development, ownership and management of retail business in these regions and the customer preferences in such areas. We may also face challenge in view of our lack of understanding/ economic conditions and culture of these areas. If we are not able to manage the risk of such expansion it could have a material adverse affect on our operations and the growth of the Company. 29. There can be a delay in the schedule of setup of additional outlets for which the funds are being raised in the Issue. This may affect our financial condition and results of operation.

We have expansion plans of adding 100 additional outlets during the fiscal year 2012, for which funds are being raised from the Issue. As on the date of the Draft Red Herring Prospectus, though we have identified location for 15 outlets and have spent substantial amounts towards the Objects of the Issue there can be a possibility of us delaying the schedule of rollout of the proposed outlets. Normally, there is a lead time involved in setup of an outlet that may extend up to 4-6 weeks after the planning phase, which involves finalisation of the location. If we are not able to identify a suitable location within the time and place that we desire or at all and considering the time schedule required for rollout, we cannot guarantee that balance 85 additional outlets will be rolled out in the fiscal year 2012 and first quarter of 2013. This may adversely affect our growth plan and results of operations. 30. We have not identified any alternate source of financing the Objects of the Issue. If we fail to mobilize resources as per our plans, our growth and thereby results of operations would be adversely affected.

We have not identified any alternate source of funding and hence any failure or delay on our part to raise funds from the Issue or any shortfall in the issue proceeds may delay the implementation schedule and could adversely affect our growth plans. For further details please refer to the chapter titled Objects of the Issue beginning on page 52 of the Draft Red Herring Prospectus. 31. For the purpose of expansion we are required to find suitable location to open and operate the additional outlets. Failure to do so could have a material adverse impact on the Companys results of operations and financial condition.

The Company intends to use the funds raised from the Issue towards setting up of new Multi Brand Outlets. For the success of our business it is very essential that we identify the best possible location at a competitive cost. We are required to obtain locations that shall attract the most number of customers for us to be able to generate profits. There can be no assurance that the Company will be able to expand and grow at the rate at which it may desire to, as it may not be able to find locations that it believes will be necessary for implementing its expansion plans. If the Company is unable to find locations at the time and place that it desires, the same may have a material adverse impact on its results of operations and financial condition. 32. We have only one registered trade mark and that is only registered for the sale of electronic goods in the state of Andhra Pradesh. However, we have applied for 8 trademarks under various classes for registration. Our business could be adversely affected if we fail to protect and obtain our intellectual property rights. Our business might be affected due to our inability to protect our existing and future intellectual property rights. We use our intellectual property to promote and protect the goodwill of our brand, enhance our competitiveness and otherwise support our business goals and objectives. We only have one registered trade mark in the name of the Company. Our registered trade mark "PCH" is registered on November 30, 2006 under class 35 of the Trade Marks Act, 1999 and will expire on October 31, 2016. This trade mark has been registered for the sale of electronic goods in the state of Andhra Pradesh only. We will not be able to protect our trademark against any sort of infringement in states in which we are operating other than the state of Andhra Pradesh. We have made 8 18

applications to the trade mark registry for registering the brand name and the logo of the Company "PCH Lets Celebrate Life!" under various classes of The Trade Marks Act, 1999. Any delay or refusal to register these trademarks could adversely affect our image and reputation. There cannot be any assurance that all the pending applications will be decided in favour of the Company. If any of our trademarks are not registered it can allow any person to use a deceptively similar mark and market its product which could be similar to our products. Such infringement will hamper our business and adversely affect our results of operations. For more details please refer to the paragraph titled Intellectual Property beginning on page 132 of the Draft Red Herring Prospectus. 33. The Logo of the Company is not registered. However, we have applied for registration the same. We have also applied for registeration of the Logo under the Copyright Act. Our image and reputation and thereby business may be adversely affected if we are unable to register our Logo.

We have been using our registered trademark PCH as our logo. Since October 9, 2010 we have changed this practice and have been using "PCH Lets Celebrate Life!" as the Logo. However, the above Logo is not registered and we have applied for the registration of this Logo on November 29, 2010 under various classes of the Trade Marks Act, 1999. We have also made application for registering the Logo of the Company as artistic work under the Indian Copyright Act, 1957. For this purpose, we have made an application to the trade mark registry on February 21, 2011, to obtain a No Objection Certificate (NOC) for registering the above logo under the Indian Copyright Act, 1957. There can be no assurance that the pending application will be decided in favour of the Company. If, we are unable to obtain registrations in respect of the logo, then statutory protection may not be available to us which would adversely affect our imapge, reputation and business. 34. Our business and financial performance could be adversely affected if we are unable to maintain or improve our brand image.

We are retailing the consumer goods under the umbrella brand name of PCH through a network of 110 MBOs. Our brand PCH has significantly contributed to the success of our business in the state of Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. We believe that our success depends largely on the ability to offer to the consumer the best quality of consumer durables at the most competitive rates with attractive incentives. However, we may not be able to continue to meet everchaning consumer demands in the future. There can be no assurance that our brands will be effective in attracting and growing our customer base. 35. Success of our day to day operations depends largely on good relations with our employees and any dispute between our employees and the Company may adversely affect our business and results of operations.

While we believe that we enjoy good relations with our employees, there can be no assurance that this may continue in future. In the event of any dispute between the employees and the Company, our business and operations may get adversely affected. Such disputes may lead to unforeseen liability on the Company. 36. Out of 110 retail outlets 108 retail outlets and 11 warehouses are not on ownership basis but taken on contractual agreement basis. These retail outlets and warehouses are taken on a long lease wherein some contractual agreements do not have a renewal options. The non renewal of lease or any deficiency in the title/ ownership rights/ development rights of the owners may impede the operation of our outlets and thereby adversely affect our business and results of operations.

We do not own 108 of our outlets and 11 warehouses. These premises have been acquired by the Company on lease/ leave and license basis on different terms and conditions. There is no assurance that we will be able to comply with the requirements as may be contained in the agreements of lease or the leave and license agreements as the case may be. Any non-compliance by us with the terms of the said agreements may result in the termination of the agreements and may render our investments towards setting up and operating such premises as futile. Also some of these agreements do not have a renewal provision. In this case there could be a possibility that we may not be able to retain these premises. Also there can be no assurance that the Licensors/Owner or Lessors/Tenant will not terminate these agreements, which would have a material adverse effect on conducting our business and our commercial operations. For further details on all of our leased premises please refer to paragraph titled Properties on page 100 of the Draft Red Herring Prospectus.

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37.

All our lease and leave and license agreements are not registered and hence, we may not enforce our rights under these agreements which may impair our operations at all outlets.

Agreements for our retail outlets and warehouses are not registered and may not be adequately stamped. There can not be any assurance that we would be able to continue to use all such properties or be able to enforce our rights under such agreements, which may impair our operations and adversely affect our financial condition. 38. Our registered office premises are not owned by us.

We do not own the premises of our registered office. We operate from leased premises which will expire on April 30, 2012. The lease agreements are renewable on mutual consent upon payment of such rates as stated in these agreements. If any of the owners of these premises do not renew the agreements under which we occupy the premises or renew such agreements on terms and conditions that are unfavorable to us, we may suffer a disruption in our operations which could have an adverse effect on our business, financial conditions and results of operations. 39. Our success depends upon our ability to retain the Key Management and other managerial personnel and the loss of any of the members of our senior management or other key personnel may adversely affect our business and results of operations

We are dependent on our key management and managerial personnel for setting our strategic direction and managing our business, and our future performance will be dependent upon the continued services of these persons. Though we have a key man insurance policy for one of our promoters, we do not maintain key man life insurance for any others members of senior members of our management team or other key personnel. Competition for senior management and experienced personnel in our industry is intense, and we may not be able to retain such senior management personnel or attract and retain new senior management personnel in the future. The loss of any of the members of our senior management or other key personnel may adversely affect our business and results of operations. 40. Our insurance cover may be inadequate to fully protect us from all losses which in turn would adversely affect our financial condition and results of operations.

We have a corporate insurance policy covering shopkeepers insurance standard fire, earthquake, burglary, cash, glass breakage and public liability, etc. However, our insurance policies may not provide adequate coverage in certain circumstances and are subject to certain deductibles, exclusions and limits on coverage. There can be no assurance that the terms of our insurance policies will be adequate to cover any damage or loss suffered by us or that such coverage will continue to be available on reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. Further, we are not covered by business interruption policy. Interruption of our business operations for any reasons including on account of any natural calamities etc. may have a material and adverse impact on our business operations and profitability.For further details of insurance policies, please refer page 100 of the Draft Red Herring Prospectus. 41. We have in the past entered into related party transactions and may continue to do so in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and results of operations

We have, in the course of our business, entered into transactions with related parties that include entities forming part of our Promoter Group. The cumulative figure of related party transactions for the the period ended December 31, 2010 and for last four financial years ending March 31, 2010, 2009, 2008 and 2007 for is as follows: (` lakhs) Sr Particulars For the period /Year Ended . Dec 31, March 31, No 2010 2010 2009 2008 2007 1 Transactions with Promoters 93.41 106.41 60.29 47.87 27.50 2 Transactions with Relatives of Promoters NIL NIL 223.56 NIL NIL 3 Transactions with Enterprise Owned or 6808.93 9178.44 5413.69 2251.35 1882.17 Controlled by Promoters / Relatives TOTAL 6902.34 9284.85 5697.54 2299.22 1909.67

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While we believe that all such transactions have been conducted on an arms-length basis and contain commercial terms, there can be no assurance that we could not have achieved more favourable terms had such transactions not been entered into with related parties. Furthermore, it is likely that we will continue to enter into related party transactions in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and results of operations. For further details, please refer to Annexure XII forming part of the section titled Financial Statements on page 160 of the Draft Red Herring Prospectus. EXTERNAL RISK FACTORS 42. After this Issue, our Equity Shares may experience price and volume fluctuations or an active trading market for our Equity Shares may not develop.

The price of the Equity Shares may fluctuate after this Issue as a result of several factors, including, among other things, volatility in the Indian and global securities markets, the results of our operations and performance, the performance of our competitors, developments in the Indian retail and consumption-led sectors, changing perceptions in the market about participation in these sectors, adverse media reports on us or the Indian consumption-led sectors, changes in the estimates of our performance or recommendations by financial analysts, significant developments in Indias economic liberalization and deregulation policies and significant developments in Indias fiscal regulations. There has been no public market for the Equity Shares and an active trading market for the Equity Shares may not develop or be sustained after this Issue. Further, the price at which the Equity Shares are initially traded may not correspond to the Issue Price. The share prices of companies participating in business assets can fluctuate significantly, which subjects an investment in our Equity Shares to substantial volatility. For example, shares of such companies often trade at discounts to their net asset values and our Equity Shares may also trade at a discount. We cannot predict whether the Equity Shares will trade above, at or below our Adjusted Net Worth. The risk of loss associated with this characteristic may be greater for investors expecting to sell Equity Shares purchased in this Issue soon after the Issue. 43. Conditions in the Indian securities market may affect the price or liquidity of the Equity Shares.

The Indian securities markets are smaller than securities markets in more developed economies and 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 the more developed economies. Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. Further, the Indian stock exchanges have experienced recent volatility, particularly in 2008 which have continued into 2009 and 2010. The Indian stock exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Indian stock exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If similar problems occur in the future, the market price and liquidity of the Equity Shares could be adversely affected. A closure of, or trading stoppage on, the stock exchange also could adversely affect the trading price of the Equity Shares. 44. You will not be able to sell immediately on an Indian stock exchange any of the Equity Shares you purchase in the Issue.

The Equity Shares will be listed on the stock exchange. Pursuant to Indian regulations, certain requirements must be fulfilled before the Equity Shares can be listed and trading may commence. Investors book entry, or demat, accounts with depository participants in India are expected to be credited within two working days of the date on which the basis of allotment is approved by the stock exchange. Thereafter, upon receipt of final approval from the stock exchange, trading in the Equity Shares is expected to commence within seven working days of the date on which the basis of allotment is approved by the Designated Stock Exchange. We cannot assure you that the Equity Shares will be credited to investors demat accounts, or that trading in the Equity Shares will commence, within the time periods specified above.

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45.

Additional issuances of equity may dilute your holdings.

Any future issuance of our Equity Shares or securities linked to our Equity Shares may dilute your shareholding in our Company. Any issuance of Equity Shares may dilute the holdings of our existing shareholders. After the completion of the Issue, our Promoters will own, directly and indirectly, approximately [] of our outstanding Equity Shares. Sales of a large number of our Equity Shares by our Promoters could adversely affect the market price of our Equity Shares. Similarly, the perception that any such primary or secondary sale may occur could adversely affect the market price of our Equity Shares. 46. Any changes in the regulatory framework could adversely affect our operations and growth prospects

We are subject to various regulations and policies. For details see section titled Key Industry Regulations and Policies beginning on page 133 of the DRHP. Our business and prospects could be materially adversely affected by changes in any of these regulations and policies, including the introduction of new laws, policies or regulations or changes in the interpretation or application of existing laws, policies and regulations. There can be no assurance that we will succeed in obtaining all requisite regulatory approvals in the future for our operations or that compliance issues will not be raised in respect of our operations, either of which could have a material adverse affect on our business, financial condition and results of operations. 47. Future issues or sales of Equity Shares of our Company may significantly affect the trading price of the Equity Shares.

Future issue of Equity Shares / convertible instruments by our company or the disposal of Equity Shares by any of the major shareholders or the perception that such issues or sales may occur may significantly affect trading price of the Equity Shares. Other than the lock-in of Pre-issue capital as prescribed under SEBI ICDR Regulations 2009, none of the shareholders are subject to any lock-up arrangements restricting their ability to issue Equity Shares or the Shareholders ability to dispose of their Equity Shares, and there can be no assurance that any shareholder will not dispose of, encumber, or pledge, his shares. 48. Accidents in our retail outlets may lead to public liability consequences.

Though we take all possible steps to ensure adoption and compliance with high standards of safety and fire control in our retail outlets, we cannot assure you that these mechanisms will be adequate to contain safety risks that may arise in the future. Though we maintain public liability insurance cover for all our retail outlets, in the event of an accident, we may be exposed to civil, tort and criminal liabilities. 49. Multiplicities of legislations may impact the growth of organized retail.

The retail sector functions under multiple laws and regulations. Multiple licenses and clearances are required to be obtained before a store can be opened. This process is tedious and time consuming. Thereafter, stringent laws pertaining to labour, hours of work, etc may limit flexibility in operations, add to overall costs and impact retail operations. 50. Any downgrading of Indias debt rating by an independent agency may harm the Companys ability to raise debt financing

Any adverse revisions to Indias credit ratings for domestic and international debt by international rating agencies may adversely affect the Companys ability to raise additional financing and the interest rates and other commercial terms at which such additional financing is available. This could have a material adverse effect on the Companys capital expenditure plans, business and financial performance. 51. A slowdown in economic growth in India could cause our business to suffer.

We are incorporated in India, and all of our assets and employees are located in India. As a result, we are highly dependent on prevailing economic conditions in India and our results of operations are significantly affected by factors influencing the Indian economy. A slowdown in the Indian economy could adversely affect our business, including our ability to grow our assets, the quality of our assets, and our ability to implement our strategy. Factors that may adversely affect the Indian economy, and hence our results of operations, may include: any increase in Indian interest rates or inflation; any scarcity of credit or other financing in India; prevailing income conditions among Indian consumers and Indian corporations; volatility in, and actual or perceived trends in trading activity on, India's principal stock exchanges; 22

variations in exchange rates; changes in Indias tax, trade, fiscal or monetary policies; political instability, terrorism or military conflict in India or in countries in the region or globally, including in Indias various neighboring countries; natural disasters in India or in countries in the region or globally, including in Indias neighboring countries; prevailing regional or global economic conditions, including in Indias principal export markets; and other significant regulatory or economic developments in or affecting India or its retail and other consumption-led sectors or industries.

Any slowdown in the Indian economy or in the growth of the sectors we participate in or future volatility in global commodity prices could adversely affect our borrowers and contractual counterparties. This in turn could adversely affect our business and financial performance and the price of our Equity Shares. 52. Political instability and significant changes in Government policy could adversely affect economic conditions in India generally and the Companys business in particular.

Changes in exchange rates and controls, interest rates, Government policies, taxation, social and ethnic instability and other political and economic developments in and affecting India may have an adverse effect on the Companys results of operations. India has a mixed economy with a large public sector and an extensively regulated private sector. The role of the Central and the State Governments in the Indian economy and the effect on producers, consumers, service providers and regulators has remained significant over the years. The governments have in the past, among other things, imposed controls on the prices of a broad range of goods and services, restricted the ability of businesses to expand existing capacity and reduce the number of their employees, and determined the allocation to businesses of raw materials and foreign exchange. Since 1991, successive Governments have pursued policies of economic liberalization, including significantly relaxing restrictions in the private sector. Nevertheless, the role of the Central and State Governments in the Indian economy as producers, consumers and regulators has remained significant. There can be no assurance that its past liberalization policies or any political stability will continue in the future. Any significant change in Indias economic liberalization and deregulation policies could disrupt business and economic conditions in India generally and the Companys business in particular. 53. The financial markets in India are not as developed as in other countries.

The financial markets in India are still at a nascent stage of development in respect of complex financial instruments. Currently, structured instruments and products are not widely used in the Indian financial markets, and as a result we may not have access to various financial instruments and strategies that could potentially reduce our risk. 54. Difficulties faced by banks, financial institutions or NBFCs or the Indian financial sector generally could cause the price of our Equity Shares to decline.

We are exposed to the risks of the Indian financial sector which in turn may be affected by financial difficulties and other problems faced by Indian financial institutions. Certain Indian financial institutions have experienced difficulties during recent years, particularly in managing risks associated with their portfolios and matching the duration of their assets and liabilities, and some co-operative banks have also faced serious financial and liquidity crisis in the past. Any major difficulty or instability experienced by the Indian financial sector could create adverse market perception, which in turn could adversely affect the price of our Equity Shares. 55. Civil unrest and other acts of violence or war involving India and other countries could adversely affect the financial markets and our business.

Civil unrest and other acts of violence or war may negatively affect the Indian markets on which our Equity Shares will trade and also adversely affect the worldwide financial markets. These acts may also result in a loss of business confidence, impede travel and other services and ultimately adversely affect our business. In addition, any deterioration in relations between India and Pakistan might result in investor concern about stability in the region, which could adversely affect the price of our Equity Shares. India has also witnessed civil disturbances in recent years and it is possible that future civil unrest as well as other adverse social, economic and political events in India could have a negative impact on the value of share prices generally as well as the price of our Equity Shares. Such incidents could also create a greater perception 23

that investment in Indian companies involves a higher degree of risk and could have an adverse impact on our business and the price of our Equity Shares.

56.

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

India has experienced significant natural disasters such as earthquakes, a tsunami, floods and drought in the past few years. The extent and severity of these natural disasters determines their impact on the Indian economy and infrastructure. Future natural calamities could have a negative impact on the Indian economy, adversely affecting our business and the price of our Equity Shares. Prominent Notes: i. ii. Investors may contact the BRLM or the Compliance Officer for any complaints, information or clarifications pertaining to the Issue. The net worth of the Company based on restated financial statements of the Company as on December 31, 2010 and March 31, 2010 was `12,778.18 lakhs and `11,577.84 lakhs respectively. The net asset value per Equity Share as on December 31, 2010 and March 31, 2010 was `51.91 and `51.52 respectively based on restated financial statements of the Company.

iii. Issue is of 1,68,27,000 Equity Shares of the face value `10 each at a price of `[] per Equity Share for cash at a premium aggregating up to `[] lakhs and Net Issue is of 1,13,00,000 Equity Shares of the face value `10 each at a price of `[] per Equity Share for cash at a premium aggregating up to `[] lakhs. The Issue and the Net Issue will constitute 38.71% and 25.99 % of the post-issue paid up capital of the Company respectively. iv. As on the date of filing of this Draft Red Herring Prospectus, the average cost of acquisition of Equity Shares by the Promoters is as follows: Name of the Promoter Sardar Balvinder Singh Mrs. Baljit Kaur Average cost of acquisition (`) 16.42 10.00

This average cost of acquisition per Equity Share has been calculated by taking the total amount paid by the Promoters to acquire the Equity Shares divided by the total number of Equity Shares acquired. v. Except as disclosed in this Draft Red Herring Prospectus, none of the Directors have any interest in the Company except to the extent of remuneration and reimbursement of expenses and to the extent of the Equity Shares held by them or their relatives and associates or held by the companies, firms and trusts in which they are interested as directors, member, partner and/or trustee and to the extent of the benefits arising out of such shareholding. Further, the Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered into by them with any company in which they hold directorships or any proprietorship concerns in which they are proprietors

vi. We have not changed the name of the Company since incorporation. vii. Except as disclosed in this Draft Red Herring Prospectus, there has been no other financing arrangements whereby the Promoters, his relatives, promoter group, the directors of the Company 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 the period of six months immediately preceding the date of filing this Draft Red Herring Prospectus with SEBI. viii. Investors are advised to refer to the section titled Basis of Issue Price on page 63 of this Draft Red Herring Prospectus. ix. Except as disclosed in the DRHP, none of the Group Companies have any interest in the Company. The following table lists the aggregate value of all transactions entered into with our related party entities as per our restated financial Statements for the period and years ended December 31, 2010, March 31, 2010, 2009, 2008 and 2007.

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(` in Lakhs) Sr. No 1 2 3 Particulars Transactions with Promoters Transactions with Relatives of Promoters Transactions with Enterprise Owned or Controlled by Promoters / Relatives TOTAL Dec 31, 2010 93.41 NIL 6828.88 6922.29 For the Period / Year Ended March 31, 2010 2009 2008 106.41 60.29 47.87 NIL 223.56 NIL 9178.44 9284.85 5413.69 5697.54 2251.35 2299.22

2007 27.50 NIL 1882.17 1909.67

For further details please refer to the notes to the financial statements relating to related party transactions in the section titled Related Party Transactions beginning on page 187 of the Draft Red Herring Prospectus. x. All information shall be made available by the BRLM and the Company 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.

xi. No part of the Issue proceeds will be paid as consideration to the Promoters, Promoter Group, Directors, key managerial personnel, associate companies, or Group Companies. xii. Trading in Equity Shares of our Company for all the Investors shall be in dematerialized form only. xiii. The Company has not capitalized its reserves till date.

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SECTION III: INTRODUCTION SUMMARY OF INDUSTRY OVERVIEW Unless stated otherwise, information in this section is derived from various government sources, public sources and India Retail Report 2011. Neither we nor any other person connected with the issue has verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but that their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and, accordingly, investment decisions should not be based on such information. Industry sources and publications are also prepared based on information and estimates as of specific dates which may no longer be current. The data may have been reclassified by us for the purpose of presentation. Indian Retail Industry The Indian retail market has witnessed consistent growth over the last few years, maintaining its share of around 30% of the GDP at current prices. The total retail market is valued at `19,48,916 crore, out of which only `1,26,680 crore - or 6.5% of the total market is organised/modern. The organised market is growing at a CAGR of 27.69% and is expected to touch `2,06,500 crore in 2011-12. (Source: India Retail Report 2011). Modern retail has entered India through sprawling shopping centers, multi-storied malls and huge complexes offering shopping, entertainment and food under one roof. The increasing numbers of nuclear families, easy financing options, increase in the number of working women and emerging opportunities in the service sector during the past few years have been the key growth drivers for the organised retail sector in India. The following factors also contribute to the growth of organised retail in India: Changes in demographics Increased credit friendliness Rising Incomes Advertisement & Media Corporatization Foreign Retailers Technology Trained and Professional Manpower

Consumer Durables and Electronics Industry Consumer Durables and Electronics category covers home appliances, kitchen appliances, white goods, entertainment electronics, PCs, Laptops, related accessories, cameras etc. The market is currently dominated by the mono-brand dealership model, though the emerging organised Multi Brand Outlets (MBOs) are growing at an appreciable growth rate. India has an increasingly affluent middle class population that, on the back of rapid economic growth, has made the industry highly dynamic. The industry has been witnessing significant growth in recent years due to several factors, such as retail boom, growing disposable income and availability of easy finance schemes. But still there are vast rooms for future growth as the consumer durable goods, like refrigerators, televisions and air conditioners still have low penetration in the country. Consumer Durables and Electronics market is worth approximately `62,836 crore. The total market for the category has been growing at a CAGR of 3.53%; the organised market has grown at a CAGR of 18.06% between 2007 and 2010. For the next two years the category will grow at an estimated 16 to 17% (Source: India Retail Report 2011). Consumer Electronics 2009-10 2010-11 est. (in ` Cr) (in ` Cr) Total Retail Market 62,836 73,141 Organised Retail Market 11,684 14,371 Organised Market s har e in % 18.6 19.6 Unorganised Market share in % 81.4 80.4 (Source: IRIS Primary Research, India Retail Report 2011) Growth % (2010-11) 16.4 23.0 2011-12 est. (in ` Cr) 85,583 17,677 20.7 79.3 Growth % (2011-12) 17.0 23.0

Consumer Durable and Electronics form a major segment in the changing preferences of Indian consumers. According to CEAMA, the sectors that are projected to achieve year-on-year growth rates of more than 20% in 26

terms of quantity produced are air-conditioners, VCD/MP3 players, DVDs players and Semi-automatic washing machine. The goods which are projected to achieve growth rates in the range of 35% to 60% include microwave ovens, fully automatic washing machine, Split-air conditioners and frost-free refrigerators. High-end flat panel TV, LCD TV and Plasma TV are expected to achieve a growth rate of 100% or more (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd). For further details, please see the section Industry Overview beginning on page 74 of the Draft Red Herring Prospectus.

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SUMMARY OF BUSINESS OVERVIEW Investors should note that this is only a summary of our business and does not contain all the information that should be considered before investing in the Equity Shares. Before deciding to invest in the Equity Shares, prospective investors should read the entire Draft Red Herring Prospectus, including the information in the sections Risk Factors and Financial Statements beginning on pages 11 and 160, respectively, of the Draft Red Herring Prospectus. An investment in the Equity Shares involves a high degree of risk. For a discussion of certain risks in connection with an investment in the Equity Shares, please see the section Risk Factors beginning on page 11 of the Draft Red Herring Prospectus. Overview We are one of the leading retailers of Consumer Durables & Electronics products in Andhra Pradesh and also have good presence in Tamil Nadu, Karnataka and Maharashtra. We retail products of most major brands through our 110 MBOs and 11 warehouses spread across an area of 6,21,000 sq. ft. We have established operations in 28 cities across four states of India viz., Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. The Company is promoted by Sardar Balvinder Singh and Mrs. Baljit Kaur. PCH i.e Punjab Crockery House was started by Mr. Huzur Singh, father of Sardar Balvinder Singh in 1950 which was involved in trading of Crockery & Glassware items. In the year 2001, Sardar Balvinder Singh started a Proprietorship Firm namely, M/s PCH Business which dealt in retail & wholesale trading of electronic consumer durables of Videocon & Sony. In the year 2003, Sardar Balvinder Singh started PCH Group comprising of 3 partnership firms viz., M/s PCH Associates which dealt in retail trading of electronic goods & allied products and home appliances, M/s PCH Mobile Zone which dealt in retail & wholesale trading of mobiles and accessories and M/s PCH Sales which dealt in retail trading of electronic goods of Sony & mobiles of Sony Ericson exclusively. In March 2007, the three partnership Firms (i.e., M/s PCH Associates, M/s PCH Mobile Zone and M/s PCH Sales) and the proprietorship concern M/s PCH Business were taken over as going concerns by PCH Retail Ltd (incorporated in 2007) by way of Memorandum of Mutual Understanding dated March 04, 2007, with a focus on selling Consumer Durables, Electronics & Allied products, Home Appliances, Mobiles & Accessories, Cameras & Camcorders through wholesale trading and trading through retail outlets. As a retailer and wholesaler our endeavor is to offer one-stop shop solution to our customers. We offer our customers the whole gamut of Consumer Durables & Electronics products and most of Indian and multinational brands. Our product offering includes Washing Machines, Refrigerators, Television, LCD, LED, Audio Systems, Air Conditioners, Digital Cameras & Camcorders, Computers & Computer peripherals, Mobile Phones & accessories, Home Appliances etc. Competitive Strengths We believe that the following are our competitive strengths which have been contributing to our consistent growth and our current position in the industry: 1. 2. 3. 4. 5. 6. Strong regional presence Wide network of multi brand retail outlets Strong and efficient supply chain management Experienced & Competent Management team Customer Service Ability to identify new locations to promote our business plans

Our growth strategy We intend to pursue the following strategies in order to consolidate our position and grow further: 1. 2. 3. 4. Enhance our presence across India Brand promotion and enhancement Up-gradation of Information Technology systems & processes Maintain our focus on long term relationships 28

Our Business Model We deal with individual retail customers as well as other bulk customers (primarily retailers) to whom we sell our goods in bulk with a credit facility. Our sales are affected through our retail outlets as well as our warehouses at various locations. The movement of goods happens either through the outlets or warehouses depending on the availability of the same. The two pronged business model i.e., Wholesaling (Bulk orders) and Retailing gives us the following benefits: Higher volumes Economies of scale Better reach than that of local players Better turnaround of inventory

For further details, please see the section Business Overview beginning on page 90 of the Draft Red Herring Prospectus.

29

SUMMARY OF FINANCIAL INFORMATION The following tables set forth summary financial information extracted from the restated audited summary statements for period ended December 31, 2010 and for fiscals 2010, 2009, 2008, 2007. Financial information have been extracted out of audited financial statements for the respective years prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) and the Companies Act, and restated in accordance with the ICDR Regulations. The restated summary financial information presented below should be read in conjunction with the Restated Summary Statements included in the section Financial Statements beginning on page 160 of the Draft Red Herring Prospectus. Please also see the section Managements Discussion and Analysis of Financial Conditions and Results of Operations beginning on page 192 of the Draft Red Herring Prospectus. STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED (INR in Lakhs) Particulars For the Period ended 31-Dec-10 (1) Fixed assets Gross Block Less: Depreciation Net Block Less : Revaluation Reserve Net Block (after adjustment of Revaluation Reserve) Capital Work In Progress Total Fixed Assets (2) Investment (3) Current Assets, Loans and Advances: Inventories Sundry debtors Cash and bank balances Loans & Advances Other current assets Total Current Assets, Loans and Advances (4) Liabilities and Provisions Secured loans Unsecured loans Deferred Tax Liability# Current Liabilities & Provisions Total Current Liabilities and Provisions (5) Net Worth 31-Mar10 14,199.61 2,402.16 11,797.44 11,797.44 924.22 12,721.66 9,658.69 5,224.63 262.65 1,569.64 990.14 17,705.76 16,489.01 46.41 140.07 2,174.09 18,849.58 11,577.84 For the year ended

31-Mar09 9,230.58 867.11 8,363.46 8,363.46 954.34 9,317.80 7,190.03 3,425.08 327.47 586.77 171.48 11,700.82 11,088.43 140.02 1,876.15 13,104.61 7,914.02

31-Mar08 2,397.83 192.62 2,205.21 2,205.21 209.49 2,414.70 4,474.64 2,008.03 159.30 358.19 51.86 7,052.02 5,421.66 1,411.13 6,832.79 2,633.94 1,460.35 7.50 1,166.09 1,166.09 2,633.94

31-Mar07 143.37 2.14 141.23 141.23 360.00 501.23 2,145.38 1,423.32 2.26 95.96 24.00 3,690.92 2,426.37 26.00 468.27 2,920.64 1,271.51 1,255.00 16.51 16.51 1,271.51

16,768.72 3,920.70 12,848.02 12,848.02 597.11 13,445.13 15,702.67 6,518.16 194.53 1,653.69 959.46 25,028.50 21,731.97 104.25 3, 859.23 25,695.45 12,778.18

(6) Represented By: Share Capital 2,461.55 2,247.05 2,027.85 Share Application Money 2,145.00 1,400.00 Reserves and Surplus 10,316.63 7,185.79 4,486.17 Less: Revaluation Reserve 10,316.63 7,185.79 4,486.17 Reserves (Net of revaluation reserves) Less: Miscellaneous Expenditure Not Written Off (7) Net worth 12,778.18 11,577.84 7,914.02 # Deferred Tax Liability details have been taken from the audited financial statements. 30

Note: The Income Tax Liability has been provided as per the income tax computation filed with Income tax authorities for the year ended March, 31, 2007, 2008, 2009 and 2010 and the figures for the Dec 31, 2010 are based on the provisional computation of income tax made by the management of the Company.

STATEMENT OF PROFIT AND LOSS, AS RESTATED (INR in Lakhs) Particulars For the Period ended 31-Dec-10 For the Period ended

31-Mar10

31-Mar09

31-Mar08

31-Mar07

INCOME Sales i) Domestic b) Traded Goods Sub-Total ii) Export Total Other Income Increase / ( Decrease ) in Stocks TOTAL EXPENDITURE Purchases Personnel Expenses Administrative Expenses Selling and Distribution Expenses Depreciation TOTAL Net Profit before Interest, Tax and extraordinary items Financial Expenses Net Profit before Tax and extraordinary items Income Tax Deferred Tax Liability Fringe Benefit Tax Net Profit After Tax but before Extraordinary items Add/ (Less): Extraordinary items Net Profit after Extraordinary items

67,931.08 67,931.08 67,931.08 195.36 6,043.98 74,170.41

65,771.34 65,771.34 65,771.34 34.98 2,468.66 68,274.98

43,172.18 43,172.18 43,172.18 74.15 2,715.39 45,961.72

21,970.57 21,970.57 21,970.57 2,329.27 24,299.84

1,842.18 1,842.18 1,842.18 2,145.38 3,987.55

66,906.64 368.75 967.89 448.01 1,518.54 70,209.82 3,960.59 2,222.92 1,737.66 573.15 (35.82) 1,200.34 1,200.34

61,409.96 487.07 1,214.84 183.92 1,535.05 64,830.83 3,444.15 2,p.20 1,193.95 467.08 0.05 726.82 726.82

41,307.86 392.36 983.57 258.66 674.50 43,616.94 2,344.78 1,337.29 1,007.48 336.57 140.02 5.31 525.58 525.58

21,437.36 246.52 675.46 196.73 191.00 22,747.07 1,552.77 506.63 1,046.14 323.63 3.58 718.93 718.93

3,822.54 15.24 29.68 5.40 2.14 3,875.00 112.56 26.53 86.03 69.29 0.23 16.51 16.51

31

STATEMENT OF CASH FLOWS, AS RESTATED (INR in Lakhs) Particulars For the Period ended 31-Dec-10 1,737.66 31-Mar-10 1,193.95 For the year ended

Net Profit / (Loss) Before tax as Restated Adjustments for: Depreciation Interest Charges Interest Income (Profit)/Loss on sale of Fixed Assets Operating Profit/(Loss) Before Working Capital Changes Adjustment for: (Increase)/Decrease in Receivables (Increase)/Decrease in Inventories (Increase)/Decrease in Loans & Advances (Increase)/Decrease in Other Current Assets Increase/(Decrease )in Current Liabilities and Provisions Cash Generated from/(used in) Operations (Direct Taxes Paid)/Refund received Add: Interest Received Net Cash from/ (used in) Operating Activities (A) Cash Flow from Investing Activities Purchase of Fixed Assets Capitalization of Capital Work In Progress Sale of Fixed Assets/Capitalization of Capital Work In Progress Investment in Fixed Deposits ( net of withdrawals) Purchase of Investments Net Cash (used in)/ from Investing Activities (B) Cash Flow from Financing Activities Interest Paid Proceeds from Issue of Equity Shares Increase/ (Decrease) in Share application money Increase/ (Decrease) in Bank Borrowings Increase/ (Decrease) in Unsecured Loans Net Cash (used in) / from Financing Activities (C ) Net (Decrease)/ Increase in Cash & Cash Equivalents (A+B+C) Cash and Cash Equivalents At the Beginning of the Period/Year Cash and Cash Equivalents At the End of the Period/Year

31-Mar-09 1,007.48

31-Mar-08 1,046.14

31-Mar-07 86.03

1,518.54 2,222.92 (195.36) 5,283.77

1,535.05 2,250.20 (34.98) 4,944.22

674.50 1,337.29 (74.15) 2,945.13

191.00 506.63 0.22 1,743.99

2.14 26.53 114.70

(1,293.53) (6,043.98) (84.05) 30.69 1,373.30

(1,799.55) (2,468.66) (982.87) (818.67) 203.78

(1,417.05) (2,715.39) (228.58) (119.62) 476.63

(584.71) (2,329.27) (262.23) (27.86) 716.80

(1,423.32) (2,145.38) (95.96) (24.00) 402.99

(733.80) (261.31) 195.36 (799.76)

(921.76) (372.92) 34.98 (1,259.70)

(1,058.88) (353.49) 74.15 (1,338.22)

(743.28) (101.15) (844.42)

(3,170.97) (4.23) (3,175.20)

(2,569.11) 327.11 (2,242.00)

(4,969.03) 30.12 (4,938.91)

(6,832.75) (744.85) (7,577.60)

(2,259.65) 150.51 4.45 (2,104.70)

(142.96) (360.42) (503.37)

(2,222.92) 2,145.00 (2,145.00) 5,242.96 (46.41) 2,973.63 (68.12) 262.65 194.53

(2,250.20) 2,192.00 745.00 5,400.58 46.41 6,133.79 (64.82) 327.47 262.65

(1,337.29) 3,362.00 1,392.50 5,666.78 9,083.98 168.16 159.30 327.47

(506.63) 636.00 7.50 2,995.29 (26.00) 3,106.16 157.04 2.26 159.30

(26.53) 1,255.00 2,426.37 26.00 3,680.83 2.26 2.26

32

THE ISSUE Issue Promoters Contribution Net Issue Of which: A. Qualified Institutional Buyers portion* Of which Reservation for Mutual Funds Balance for all QIBs including Mutual Funds B. Non Institutional portion 1,68,27,000 Equity Shares 55,27,000 Equity shares 1,13,00,000 Equity shares 56,50,000 Equity Shares constituting upto 50% of the Net Issue 2,82,500 Equity Shares constituting 5% of QIB Portion 53,67,500 Equity Shares 16,95,000 Equity Shares constituting not less than 15% of the Net Issue that will be available for Allocation to NonInstitutional Bidders. 39,55,000 Equity Shares constituting not less than 35% of the Net Issue that will be available for Allocation to Retail Individual Bidders. 3,21,65,500 4,34,65, 500 Equity Shares For information, please refer to the section titled Objects of the Issue beginning on page 52 of the Draft Red Herring Prospectus

C. Retail portion Equity Shares outstanding prior to the Issue Equity Shares outstanding after the Issue Use of Proceeds of the Issue

*5% of the QIB Portion i.e. 2,82,500 Equity Shares shall be available for Allocation to Mutual Funds only. Mutual Fund Bidders shall also be eligible for allocation under the balance available in the QIB portion. Notes: 1. Allocation to all categories if any shall be made on a proportionate basis subject to valid Bids received at or above the Issue Price. In case of under-subscription in the Issue, spillover to the extent of under- subscription shall be permitted from other categories or a combination of categories at the discretion of the Company in consultation with the BRLM and the Designated Stock Exchange. Such inter-se spillover, if any, would be effectuated in accordance with applicable laws, rules, regulations and guidelines. In case inadequate demands from the mutual funds, the Equity shares will be made available to the QIBs other than the mutual funds.

2.

33

GENERAL INFORMATION PCH Retail Ltd. was incorporated on January 3, 2007 under the Companies Act, 1956 with the Registrar of Companies Andhra Pradesh. PCH Sales, PCH Associates, PCH Mobile Zone and PCH Business were taken over by the Company as going concern by way of Memorandum of Mutual Understanding dated March 4, 2007. It has obtained the Certificate of Commencement of Business on January 10, 2007 from Registrar of Companies, Andhra Pradesh, Hyderabad.

Registered Office PCH Retail Limited 103-107, Maheswari Chambers, Somajiguda, Hyderabad - 500082, Andhra Pradesh, India Tel. no: +91-40- 23317853, 23317854 Fax.no: +91-40-23316310 Email: ipo@pchretailltd.com Website: www.pchretail.com

Corporate Office: PCH Retail Limited 8-2/269/4/3/D 5th floor, Road No.2, Banjara Hills, Hyderabad, Andhra Pradesh, India Tel. no: + 91-40-49094909 Fax.no: + 91-40- 49094910

Corporate Identification Number: U74999AP2007PLC052227 Registration Number: 052227 Address of Registrar of Companies The Registrar of Companies, Kendriya Sadan, Koti, Hyderabad 500195, Andhra Pradesh, India. Board of Directors The Board of Directors of our Company comprises of the following persons: Name and Designation Sardar Balvinder Singh Designation: Chairman and Managing Director Occupation: Business Mrs. Baljit Kaur Designation: Whole Time Director Occupation: Business Mr. Bijay Kumar Mohanty Designation: Whole Time Director Occupation: Service Mr. Iyer Rangarajan Designation: Independent Director Occupation: Consulting Mr. Sirish Bommakanti Narasimha Designation: Independent Director Occupation: Professional Mr. Satyanarayanamurty Mukkamala Designation: Independent Director Occupation: Consulting 34 DIN 00959474 Age (years) 41 Address Flat No. 502, Road No. 5, Banjara Petals, Banjara Hills, Hyderabad 500034, Andhra Pradesh

01715792

36

Flat No. 502, Road No. 5, Banjara Petals, Banjara Hills, Hyderabad 500034, Andhra Pradesh Flat No. FF01, H.No. 26-122/40, Sheetal Apartments, Sarada Nagar, Safilguda, Hyderabad 500047 C-410,Kubera Towers, Ward-5 Circle VIII, Trimulgherry, Secunderabad, Andhra Pradesh 500015 6-3-865/1/1, Imperial Manor, Flat. No. 107, Green Lands, Ameerpet, Hyderabad, Hyderabad, Andhra Pradesh - 500016 FL 303/11, Vysya Bank Apartments, Opp. Sri Ramalayam, Huda Complex, Saroornagar, Hyderabad - 50035

03199999

58

01839851

69

02023568

47

02890135

63

For more details on the Directors, please refer to the section titled Our Management beginning on page 139 of the Draft Red Herring Prospectus. Company Secretary & Compliance Officer Mr. Srinivasa Rao Kolagani PCH Retail Limited 103-107, Maheshwari Chambers, Somajiguda, Hyderabad 500082, Andhra Pradesh, India. Tel. no: +91- 40- 23316310 Fax.no: +91- 40- 23316310 Email: cs@pchretailltd.com Website: www.pchretail.com Investors are requested to contact the Company Secretary & Compliance Officer and the Registrar to the Issue in case of any pre-issue or post- issue related clarification such as non-receipt of letters of allotment/ share certificates/ credit of securities in depository beneficiary account/ refund orders etc. All grievances relating to ASBA may be addressed to the Registrar to the Issue, with a copy to the SCSBs, giving full details such as name, address of the applicant, number of Equity Shares applied for, Bid Amount blocked, ASBA Account number and the Designated Branch where the ASBA Bid-cum-Application Form was submitted. For all Issue related queries and for redressal of complaints, Bidders may also write to the BRLM. All complaints, queries or comments received by SEBI shall be forwarded to the BRLM, who shall respond to such complaints. BOOK RUNNING LEAD MANAGER M/s BOB CAPITAL MARKETS LIMITED 3rd Floor, South Wing, UTI Tower, Gn Block, Bandra-Kurla Complex, Bandra East, Mumbai - 400 051, Maharashtra, India. Tel: +91-22-61389347 Fax: +91-22-66718535 E-mail: ipo.pch@bobcaps.in Website: www.bobcaps.in Contact Person: Mr. Venkata Raveendra R/ Mr. Aseem Srivastava SEBI Registration No: INM 000009926 LEGAL ADVISORS TO THE ISSUE M/s Kanga & Company Readymoney Mansion, 43, Veer Nariman Road, Mumbai - 400 001, Maharashtra, India. Tel: +91-22-66230000 Fax: +91-22-66339656 E-mail: pch.ipo@kangacompany.com REGISTRAR TO THE ISSUE M/s Bigshare Services Private Limited E-2 & 3, Ansa Industrial Estate Saki-Vihar Road, Sakinaka, Andheri (East) Mumbai - 400 072, Maharashtra, India. Tel: 91-22-40430200 Fax: 91-22-2847 5207 E-mail: ipo@bigshareonline.com Website: www.bigshareonline.com Contact Person: Mr. Ashok Shetty SEBI Registration No: INR000001385

35

BANKERS TO THE COMPANY State Bank of India Commercial Branch, Ashoka My home Chambers, S.P. Road, Secunderabad 500 003. Tel: +91-40-27816851 Fax: +91-40-27894520 E-mail: sa.4031@sbi.co.in Contact Person: Mr. Jaya Krishna Axis Bank H. No. 3-6-726, Romana Plaza, GF, Himayat Nagar, Hyderabad 500 029 Tel: +91-40-66516678 Fax: +91-40-27606842 E-mail: himayathnagaroperations @axisbank.com Contact Person: Mr. Kishore ICICI Bank Floor No. 6, North Wing, Block 3, Plot No. 12, Financial District, Gachibowli, Hyderabad Tel: +91-40-41064403 Fax: +91-40-41064500 E-mail: pentakota.chandrasekhar @icicibank.com Contact Person: Mr. Chandrasekhar State Bank of Mysore 6-3-865, My Home Jupally, Ameerpet, Hyderabad 500 016. Tel: +91-40-23410910 Fax: +91-40-23400899 E-mail: sreenath.pv@sbm.co.in Contact Person: Mr. Sreenath

United Bank of India 4-3-331, Bank Street, Koti, Hyderabad 500 003. Tel: +91-40-24755486 Fax: +91-40-24756811 E-mail: bmhyd@unitedbank.co.in Contact Person: Mr. Balasubramanium State Bank of Hyderabad IFB Branch, Topaz Building, Punjagutta Hyderabad 500 082 Tel: +91-40-23408128 Fax: +91-40-23402101 E-mail: sbhifb@yahoo.com Contact Person: Mr. Reddy

Barclays Bank PLC 601/603, Ceejay House, Shivsagar Estate, Dr. Annie Besant Road, Worli, Mumbai 400 018. Tel: +91-22-67196400 Fax: +91-22-67196767 E-mail: debadutta.mishra @barclays.com Contact Person: Mr. Usman Allahabad Bank IFB Branch, Ameerpet, Hyderabad 500 016 Tel: +91-40-23412156 Fax: +91-40-23411663 E-mail: br.ifbhyderabad @allahabadbank.in Contact Person: Mr. Sagar

Andhra Bank SCF Branch, 6-3-648, Padmaja Towers, Somajiguda, Hyderabad 500 082 Tel: +91-40-23461154 Fax: +91-40-23461177 E-mail: bmhydm1996 @andhrabank.co.in Contact Person: Mr. Shivaji

Oriental Bank of Commerce 6-3-865, My Home Jupally, Ameerpet, Hyderabad 500 016. Tel: +91-40-23408693 Fax: +91-40-23408300 E-mail: bm0706@obc.co.in Contact Person: Mr. Biswajit SYNDICATE MEMBERS [] ESCROW COLLECTION BANK [] BANKER(S) TO THE ISSUE [] BROKERS TO THE ISSUE [] 36

SELF-CERTIFIED SYNDICATE BANKS The list of banks that have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.pdf. For details on designated branches of SCSBs collecting the ASBA Bid cum Application Form, please refer the above mentioned SEBI link. SATUTORY AUDITORS TO THE COMPANY M/s Karumanchi & Associates Chartered Accountants. Flat No. 301, Swargnivas Enclave, 7-1-619/A, Behind Huda Complex, Ameerpet, Hyderabad 400 038 Andhra Pradesh, India. Tel No.: +91-40-23734980 Fax No.: +91-40-23735757 Email: karumanchi@myway.com Membership no: 25036 STATEMENT OF INTER SE ALLOCATION OF RESPONSIBILITIES FOR THE ISSUE BOB Capital Markets Limited is the sole Book Running Lead Manager to the Issue and all the responsibilities relating to co-ordination and other activities in relation to the Issue shall be performed by them. CREDIT RATING This being an issue of Equity Shares, credit rating is not required. IPO GRADING AGENCY [] IPO GRADING The IPO has been graded [] by [], 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. MONITORING AGENCY There is no requirement for a monitoring agency to be appointed for the Issue in terms of Regulation 16(1) of the SEBI (ICDR) Regulations. As required under the listing agreements with the Stock Exchanges, the Audit Committee appointed by our Board of Directors will monitor the utilization of the Issue proceeds. We will disclose the utilization of the proceeds of the Issue, including interim use, under a separate head in our quarterly financial disclosures and annual audited financial statements until the Issue proceeds remain unutilized, to the extent required under the applicable law and regulation. APPRAISING AGENCY The proceeds being raised through this Issue are intended to be utilised for purposes as detailed in the section titled Objects of the Issuebeginning on page 52 of the Draft Red Herring Prospectus. The proposed activities and expenditure for which the proceeds are being raised are divided into three phases. Phase I and II are appraised by State Bank of India and Phase III estimations are based on TEV study done Cygnus Business Consulting and Research Private Limited. TRUSTEES As this is an issue of equity shares, the appointment of trustees is not required. EXPERTS Except as disclosed in the Draft Red Herring Prospectus and the report of [] in respect of the IPO grading of this Issue, our Company has not obtained any expert opinions. 37

BOOK BUILDING PROCESS The Book Building Process, with reference to the Issue, refers to the process of collection of Bids on the basis of the Draft Red Herring Prospectus within the Price Band. The Issue Price is finalized after the Bid/Issue Closing Date. The principal parties involved in the Book Building Process are: The Company; The Book Running Lead Manager; 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 Book Running Lead Managers; Registrar to the Issue; Escrow Collection Bank(s); and Self Certified Syndicate Banks;

The Issue is being made through the Book Building Process where up to 50% of the Net Issue to the public shall be allocated on a proportionate basis to eligible Qualified Institutional Buyers (QIBs). 5% of the QIB 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 other eligible QIBs, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Net Issue to the public shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue to the public 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. The Company will complete the issuance, if any, of such Equity Shares prior to the filing of the Red Herring Prospectus with the RoC. In accordance with SEBI (ICDR) Regulations, QIBs are not allowed to withdraw their Bid after the Bid/Issue Closing Date. Allocation to QIBs will be on a proportionate basis. For details please see the section titled Issue Structure beginning on page 244 of the Draft Red Herring Prospectus. The Company shall comply with the SEBI (ICDR) Regulations and any other ancillary directions issued by SEBI for the Issue. In this regard, we have appointed BOB Capital Markets Limited as the Book Running Lead Manager to manage the Issue and procure subscriptions to the Issue. The process of Book Building under the SEBI (ICDR) Regulations is subject to change from time to time and the investors are advised to make their own judgment about investment through this process prior to making a Bid or application in the Issue. Illustration of Book Building and Price Discovery Process (Investors should note that this example is solely for illustrative purposes and is not specific to the Issue) Bidders can bid at any price within the price band. For instance, assuming a price band of `40 to `48 per share, issue size of 6,000 equity shares and receipt of nine bids from bidders, details of which are shown in the table below, the illustrative book would be as 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 as shown below indicates the demand for the shares of the company at various prices and is collated from bids from various investors. Bid Quantity Bid Price (`) Cumulative Quantity Subscription 500 48 500 8.33% 700 47 1,200 20.00% 1,000 46 2,200 36.67% 400 45 2,600 43.33% 500 44 3,100 51.67% 200 43 3,300 55.00% 2,700 42 6,000 100.00% 800 41 6,800 113.33% 1,200 40 8,000 133.33% The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the desired quantum of shares is the price at which the book cuts off i.e. `42 in the above example. The Issuer, in consultation with the BRLM will finalize the issue price at or below such cut-off price i.e. at or below `42. All bids at or above this issue price and cut-off bids are valid bids and are considered for allocation in respective category. 38

Steps to be taken by the Bidders for Bidding 1. 2. 3. Check eligibility for making a Bid (see section titled Issue Procedure - Who Can Bid? on page 251 of the Draft Red Herring Prospectus); Ensure that you have a dematerialized account and the dematerialized account details, the DP ID, Beneficiary Account and PAN details are correctly mentioned in the Bid cum Application Form; Except for Bids on behalf of the Central and State Government, residents of Sikkim and the officials appointed by the courts, for Bids of all values ensure that you have mentioned your PAN (see Issue Procedure PAN on page 265 of the Draft Red Herring Prospectus); and Ensure that the Bid cum Application Form/ASBA Bid cum Application Form is duly completed as per instructions given in the Red Herring Prospectus and in the Bid cum Application Form/ASBA Bid cum Application Form and submitted to SCSBs; Ensure the correctness of your demographic details (as defined in the Issue Procedure Bidders PAN, Depository Account and Bank Account Details beginning on page 265) given in the Bid cum Application Form/ASBA Bid cum Application Form, as the case may be, with the details recorded with your Depository Participant. Bids by QIBs will only have to be submitted to the BRLM and / or its affiliates or to the Syndicate Member(s), other than Bids by QIBs who Bid through the ASBA process who shall submit the Bids to the Designated Branch of the SCSBs; and Bids by ASBA Bidders will have to be submitted to the Designated Branches of the SCSBs. 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.

4.

5.

6.

7.

Withdrawal of the Issue The Company, in consultation with the BRLM, reserves the right not to proceed with the Issue after the Bid/Issue Opening Date but before the Allotment of the Equity Shares, and if so, the reason thereof shall be given as a public notice within two days of the closure of the Issue. The public notice shall be issued in the same newspapers where the pre-issue advertisement had appeared. The BRLM, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one day of receipt of such notification. The stock exchanges where the specified securities were proposed to be listed shall also be informed promptly. If the Company withdraws the Issue after the Bid/Issue Closing Date and thereafter determines that it will proceed with an initial public offering of its Equity Shares, it shall file a fresh draft red herring prospectus with the SEBI. Bid/Issue Period Bidding Period/Issue Period BID/ISSUE OPENS ON** [] BID / ISSUE CLOSES (EXCEPT FOR QIB BIDDERS) ON* [] BID / ISSUE CLOSES (FOR QIB BIDDERS) ON [] * Our Company, in consultation with the BRLMs may consider closing QIB Book a day before the Bid/Issue closing date subject to the Bid/ Issue Period being for a minimum of three Working Days. Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time) during the Bidding Period as mentioned above at the bidding centers mentioned on the Bid cum Application Form or in case of bids submitted through ASBA, the designated branches of the SCSBs except that on the Bid/ Issue Closing Date, Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time). On the Bid/Issue Closing Date, Bids (excluding the ASBA Bidders) shall be uploaded until (i) 4.00 p.m. in case of Bids by QIB Bidders, Non- Institutional Bidders and (ii) until 5.00 p.m. or such extended time as permitted by the BSE and the NSE, in case of Bids by Retail Individual Bidders where the Bid Amount is up to `2,00,000. It is clarified that Bids not uploaded in the book, would be rejected. Bids will be accepted only from Monday to Friday (excluding any public holiday). Bids by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the BSE and the NSE.

39

The Registrar to the Issue shall only look at the data entered in the electronic records and will not conduct any verification of data in the electronic book vis a vis the data contained in any physical Bid Cum Application Form for a particular Bidder. 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 the times mentioned above on the Bid/Issue Closing Date. All times are Indian Standard Time. 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, BRLM and Syndicate members will not be responsible. Bids will be accepted only on Working 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 submitted 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 BRLM to the Stock Exchanges within half an hour of such closure. Our Company reserves the right to revise the Price Band during the Bid/Issue Period in accordance with the SEBI (ICDR) Regulations provided that the Cap Price is less than or equal to 120% of the Floor Price. 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 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 Working days. Any revision in the Price Band and the revised Bid/Issue, 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 BRLM and at the terminals of the Syndicate. Underwriting Agreement After the determination of the Issue Price but prior to 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 issued through this Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the BRLM shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not fulfill their underwriting obligations. Pursuant to the terms of the Underwriting Agreement, the obligations of the Underwriters are several and not joint, and are subject to certain conditions as specified in such agreement. 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 before filing of the Prospectus with the ROC.) Name and Address of the Underwriters [] Total Indicated Number of Equity Shares to be Underwritten [] [] Amount Underwritten (` in Lakhs) [] []

The above-mentioned amount is an indicative underwriting and would be finalized after pricing and actual allocation. The above underwriting agreement is dated []. In the opinion of the Board of Directors of our Company (based on a certificate given by the Underwriters), the resources of all the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. All the above-mentioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with stock exchange(s). Allocation among Underwriters may not necessarily be in proportion to their underwriting commitments. Notwithstanding the above table, the BRLM and the Syndicate Members shall be severally responsible for ensuring payment with respect to Equity Shares allocated to investors procured by them. In the event of any default, the respective underwriter in addition to other obligations to be defined in the Underwriting Agreement, will also be required to procure/subscribe to the extent of the defaulted amount. The underwriting arrangements mentioned above shall not apply to the subscriptions by the ASBA Bidders in the Issue. The underwriting agreement shall list out the role and obligations of each Syndicate Member. 40

CAPITAL STRUCTURE The share capital of the Company as on the date of filing of the Draft Red Herring Prospectus with SEBI is set forth below: (in `) Sl. No. Aggregate Value Aggregate Value Particulars at Face value at Issue Price (A) AUTHORISED SHARE CAPITAL 4,50,00,000 Equity Shares of `10 each. 45,00,00,000 (B) ISSUED, SUBSCRIBED AND PAID UP EQUITY SHARE CAPITAL BEFORE THE ISSUE 2,66,38,500 Equity Shares of `10 each. 26,63,85,000 (C) PRESENT ISSUE IN TERMS OF THE DRAFT RED HERRING PROSPECTUS* 1,68,27,000 Equity Shares of face value of `10 each Of which: Promoters contribution of 55,27,000 Equity Shares of face value of `10 each** NET ISSUE TO THE PUBLIC 1,13,00,000 Equity Shares of face value of `10 each Of which: QIB Portion of upto 56,50,000 Equity Shares*** Non-Institutional portion of not less than 16,95,000 Equity Shares Retail Portion of not less than 39,55,000 Equity Shares ISSUED, SUBSCRIBED AND PAID UP EQUITY SHARE CAPITAL AFTER THE ISSUE 4,34,65,500 Equity Shares of `10 each fully paid up shares SHARE PREMIUM ACCOUNT Before the Issue After the Issue****

16,82,70,000 5,52,27,000

[] []

(D)

11,30,00,000 5,65,00,000 1,69,50,000 3,95,50,000

[]

(E)

43,46,55,000

[]

(F)

89,49,15,000 []

* The Issue has been authorized by a resolution passed by our Board on April 1, 2011 and by a special resolution passed pursuant to Section 81(1A) of the Companies Act, at the EGM of the shareholders of our Company held on April 30, 2011. ** Promoters contribution of 55,27, 000 Equity Shares will be brought in at least one day prior to the opening of the Issue towards financing for the project. In case of business exigencies if the amount towards promoters contribution is brought in before the opening of the Issue and/or utilized, the Company undertakes to disclose the cashflow statement disclosing the use of such funds in the Red Herring Prospectus/Prospectus as the case may be in compliance with the SEBI (ICDR) Regulations, 2009 as amended. *** Allocation to QIBs is proportionate as per the terms of the Draft Red Herring Prospectus. 5% of the QIB Portion shall be available for allocation to Mutual Funds. Mutual Funds participating in the 5% reservation in the QIB Portion will also be eligible for allocation in the remaining QIB Portion. **** The Securities Premium Account after the Issue will be determined after Book Building Process. All Equity Shares issued by our Company are fully paid-up.

41

Changes in Authorised Share Capital Our Company has increased its authorized share capital from time to time in accordance with the provisions of the Companies Act 1956. Date of Shareholders meeting Incorporation Authorised Capital pursuant to change The Authorized capital of the Company was `5,00,00,000 (Rupees Five Crores) divided in to 50,00,000 (Fifty lakhs only) Equity Shares of `10 (Rupees Ten only) each. The Authorized capital of the Company was increased from `5,00,00,000 (Rupees Five Crores) divided in to 50,00,000 (Fifty lakhs only) Equity Shares of `10 (Rupees Ten only) each to `20,00,00,000 (Rupees Twenty Crores) divided in to 2,00,00,000 (Two Crores only) Equity Shares of `10 (Rupees Ten only) each by an addition of `15,00,00,000 (Rupees Fifteen Crores) divided in to 1,50,00,000 (One Crore Fifty lakhs only) Equity Shares of `10 (Rupees Ten only). The Authorized capital of the Company was increased from `20,00,00,000 (Rupees Twenty Crores) divided in to 2,00,00,000 (Two Crores only) Equity Shares of `10 (Rupees Ten only) each to `40,00,00,000 (Rupees Forty Crores) divided in to 4,00,00,000 (Four Crores only) Equity Shares of `10 (Rupees Ten only) each by an addition of `20,00,00,000 (Rupees Twenty Crores) divided in to 2,00,00,000 (Two Crores only) Equity Shares of `10 (Rupees Ten only). The Authorized capital of the Company was increased from `40,00,00,000 (Rupees Forty Crores) divided in to 4,00,00,000 (Four Crores only) Equity Shares of `10 (Rupees Ten only) each to `45,00,00,000 (Rupees Forty five Crores) divided in to 4,50,00,000 (Four Crores Fifty Lakhs only) Equity Shares of `10 (Rupees Ten only) each by an addition of `5,00,00,000 (Rupees Five Crores) divided in to 50,00,000 (Fifty Lakhs only) Equity Shares of `10 (Rupees Ten only).

March 02, 2007

March 25, 2009

April 18, 2011

Notes to Capital Structure 1. Share Capital History

(a) The following is the history of the equity share capital and securities premium account of our Company:
Date of allotment of Equity Shares No. of Equity Shares Face Value (`) Cumulative no. of shares Issue Price (`) Conside ration Reasons for allotment Cumulative Paid-up Capital (`) Cumulative Securities Premium Account (`) Individuals/Entities to whom Equity Shares Allotted

49,896 03.01.2007 104 10 50,000 10 Cash

Incorporation 5,00,000 Against the takeover of the partnership firms Preferential Allotment Cash Preferential Allotment Cash Preferential Allotment 17,30,85,000 15,42,15,000 14,60,35,000 3,63,15,000 0

Sardar Balvinder Singh Mrs. Baljit Kaur Others(1)

04.03.2007

1,25,00,000

10

1,25,50,000

10

Other than Cash

12,55,00,000

24.03.2008

16,50,000 4,03,500

10

1,46,03,500

10 100

30.09.2008

13,95,000 13,10,000 11,00,000 18,70,000

10

1,73,08,500

10 100 10 100

31.03.2009

10

2,02,78,500

Cash

20,27,85,000

32,25,15,000

Sardar Balvinder Singh Mrs. Baljit Kaur Sardar Balvinder Singh Mrs. Baljit Kaur Others(2) Sardar Balvinder Singh Mrs. Baljit Kaur Others(3) Sardar Balvinder Singh Others(4)

42

30.05.2009 07.01.2010 25.09.2010

8,00,000 6,00,000 7,92,000 21,45,000 2,00,000 10,23,000 4,00,000 4,00,000

Preferential Allotment 10 10 10 2,16,78,500 2,24,70,500 2,46,15,500 100 100 100 Cash Cash Cash Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment 21,67,85,000 22,47,05,000 24,61,55,000 44,85,15,000 51,97,95,000 71,28,45,000

Sardar Balvinder Singh Others(5) Others(6) Others(7) Sardar Balvinder Singh Others(8) Others(9) Others(10)

07.03.2011 18.03.2011 24.03.2011

10 10 10

2,58,38,500 2,62,38,500 2,66,38,500

100 100 100

Cash Cash Cash

25,83,85,000 26,23,85,000 26,63,85,000

82,29,15,000 85,89,15,000 89,49,15,000

*All of the equity shares issued by the company were fully paid up when issued and allotted
All the above Preferential allotments have been done in accordane with unlisted companies Unlisted Public Companies (Preferential Allotment) Rules (1) Allotment of 100 Equity shares to B Ravi Chandran, 1 Equity Share to Madhu Kiran, 1 Equity share to G V Subba Rao, 1 Equity Share to S Ranga Rajan, 1 Equity Share to G Suresh Babu (2) Allotment of 38,500 Equity shares to VDR Consultants Pvt. Ltd., 11,000 Equity shares to Sarthak Traders Pvt. Limited, 27,500 Equity shares to Sukdhan Suppliers P. Ltd., 16,500 Equity shares to Avanti Vyapaar P. Ltd., 27,500 Equity shares to Novoflex Cable Care System Limited, 11,000 Equity shares to Bahuk Tradecon Private Ltd., 11,000 Equity shares to Sugreev Traders P. Ltd., 11,000 Equity shares to Welcome Vinimay P. Ltd., 22,000 Equity shares to Reward Sales Promotions P. Ltd., 5,500 Equity shares to Bhiksu Barter P. Ltd., 5,500 Equity shares to Vivek Tracom P. Ltd., 5,500 Equity shares to A.K. Construction Pvt. Ltd., 5,500 Equity shares to Vazir Vanijya P. Ltd., 5,500 Equity shares to Ramdoot Agencies P. Ltd., 70,000 Equity shares to Balbhadra Trading P. Ltd., 20,000 Equity shares to Satbichar Commercial Pvt. Ltd., 60,000 Equity shares to Sadjyothi Traders P. Ltd., 50,000 Equity shares to Malinath Trading P. Ltd. Allotment of 45,000 Equity shares to A.K. Construction Pvt. Ltd., 35,000 Equity shares to Agile Congcomerate Pvt. Ltd., 85,000 Equity shares to Archangles Distributors Pvt. Ltd., 20,000 Equity shares to Bhiksu Barter P. Ltd., 90,000 Equity shares to Pavapoori Prabhu Tradecon Pvt. Ltd., 5000 Equity shares to Potential Electricals and Electronics, 1,05,000 Equity shares to Raina Commodities Pvt. Ltd., 30,000 Equity shares to Rajhasthan Sarthak Traders Pvt. Ltd., 15,000 Equity shares to Rajsri Developers Entrepenuers Ltd., 25,000 Equity shares to Sadijyothi Traders Pvt. Ltd., 70,000 Equity shares to Satbichar Commercial Pvt. Ltd., 1,05,000 Equity shares to Sekhar Commerce Pvt. Ltd., 40,000 Equity shares to Shrest Distributors Pvt. Ltd., 30,000 Equity shares to Stanley Merchants Pvt. Ltd., 50,000 Equity shares to Sugreev Traders Pvt. Ltd., 30,000 Equity shares to Suskgyani Trading Pvt. Ltd., 50,000 Equity shares to Unnati Supply Pvt. Ltd., 1,20,000 Equity shares to VDR Consultants Pvt. Ltd., 2,10,000 Equity shares to Victory Merchantiles Pvt. Ltd., 65,000 Equity shares to Well Wisher Tieup Pvt. Ltd., 15,000 Equity shares to Zigma Electricals Pvt. Ltd., 35,000 Equity shares to Surpati Merchandise Pvt. Ltd., 30,000 Equity shares to Divya Electronics Pvt. Ltd., 5,000 Equity shares to Vivek Tracom Pvt. Ltd.

(3)

(4) Allotment of 3,45,000 Equity shares to Accurate Corporate Services Pvt. Ltd., 2,90,000 Equity shares to Miller Chemicals Pvt. Ltd., 3,00,000 Equity shares to Akon Management Consultancy Pvt. Ltd., 2,95,000 Equity shares to Mask Finvest Pvt. Ltd., 2,90,000 Equity shares to Sunblink Trading & Investment Pvt. Ltd., 2,50,000 Equity shares to Dhruv Advertising & Marketing Pvt. Ltd., 1,00,000 Equity shares to Namokar Metal. (5) Allotment of 1,00,000 Equity shares to Miller Chemicals Pvt. Ltd., 1,00,000 Equity shares to Akon Management Consultancy Pvt. Ltd., 1,00,000 Equity shares to Mask Finvest Pvt. Ltd., 2,00,000 Equity shares to Sunblink Trading & Investment Pvt. Ltd., 1,00,000 Equity shares to Dhruv Advertising & Marketing Pvt. Ltd.

(6) Allotment of 1,65,000 Equity shares to Miller Chemicals Pvt. Ltd., 2,27,000 Equity shares to Akon Management Consultancy Pvt. Ltd., 1,10,000 Equity shares to Mask Finvest Pvt. Ltd., 80,000 Equity shares to Sunblink Trading & Investment Pvt. Ltd., 1,00,000 Equity shares to Dhruv Advertising & Marketing Pvt. Ltd., 1,10,000 Equity shares to Accurate Corporate Services Pvt. Ltd. (7) Allotment of 1,85,000 Equity shares to Accurate Corporate Services Pvt. Ltd., 75,000 Equity shares to Akon Management Consultancy Pvt. Ltd., 2,75,000 Equity shares to Bhavesh Metal Pvt. Ltd., 1,75,000 Equity shares to Kalash Advertising and Marketing Pvt. Ltd., 4,30,000 Equity shares to Mask Finvest Pvt. Ltd., 1,50,000 Equity shares to Romex Metal and Tubes Pvt. Ltd., 2,00,000 Equity shares to Romex Corporate Services Pvt. Ltd., 1,05,000 Equity shares to Sunblink Trading and Investment Pvt. Ltd., 2,00,000 Equity shares to Florian Advertising and Marketing Pvt. Ltd., 2,00,000 Equity shares to Fordon Advertising and Marketing Pvt. Ltd.,

43

1,25,000 Equity shares to Dhruv Advertising and Marketing Pvt. Ltd., 25,000 Equity shares to Miller Chemicals Pvt. Ltd. (8) Allotment of 5,60,500 Equity Shares to GAP Investment Consultancy Private Limited, 4,62,500 Equity Shares to Aakar Security Services Private Limited. (9) Allotment of 2,00,000 Equity Shares to GAP Investment Consultancy Private Limited, 2,00,000 Equity Shares to Aakar Security Services Private Limited. (10) Allotment of 2,00,000 Equity Shares to GAP Investment Consultancy Private Limited, 2,00,000 Equity Shares to Aakar Security Services Private Limited.

Shares allotted for consideration other than cash Date of allotment of Equity Shares No. of Equity Shares Face Value (` ) Issue Price (` ) Consideration Reasons for allotment Individuals/Entities to whom Equity Shares Allotted Sardar Balvinder Singh Mrs. Baljit Kaur

04.03.2007

1,25,00,000

10

10

Other than cash

Takeover of the partnership firms

Share allotted as Bonus Issue No shares have been allotted by the Company as bonus shares.

Shares issued during the last one year from the date of filing of DRHP with the SEBI

Date of allotment of Equity Shares 25.09.2010

No. of Equity Shares 21,45,000

Face Value (` ) 10

Issue Price (` ) 100

Consi derati on Cash

Reasons for allotment

Individuals/Entities to whom Equity Shares Allotted

Preferential Allotment

07.03.2011

12,23,000

10

100

Cash

Preferential Allotment Preferential Allotment Preferential Allotment

18.03.2011 24.03.2011

4,00,000 4,00,000

10 10

100 100

Cash Cash

Accurate Corporate Services Pvt. Ltd. Akon Management Consultancy Pvt. Ltd. Bhavesh Metal Pvt. Ltd. Kalash Advertising and Marketing Pvt. Ltd. Mask Finvest Pvt. Ltd. Romex Metal and Tubes Pvt. Ltd. Romex Corporate Services Pvt. Ltd.Sunblink Trading and Investment Pvt. Ltd. Florian Advertising and Marketing Pvt. Ltd. Fordon Advertising and Marketing Pvt. Ltd. Dhruv Advertising and Marketing Pvt. Ltd. Miller Chemicals Pvt. Ltd. GAP Investment Consultancy Private Limited. Aakar Security Services Private Limited. Sardar Balvinder Singh. GAP Investment Consultancy Private Limited. Aakar Security Services Private Limited. GAP Investment Consultancy Private Limited. Aakar Security Services Private Limited.

44

2.

Build up of Promoters shareholding, Promoters Contribution and Lock in

Pursuant to the SEBI (ICDR) Regulations, an aggregate of 20% of the post-Issue Equity share capital of our Company shall be locked in for a period of three years from the date of Allotment. a) Details of the built-up of the Promoters shareholding in our Company:
Date of Transfer/Allo tment No. of Equity Shares Fac e Val ue Nature of considerat ion Reasons for Acquisition Acquisi tion Price Cumulative No. of equity shares % of preIssue paid-up capital 0.09 34.94 % of postIssue paid-up Capital

Sardar Balvinder Singh 03.01.2007 24,948

Subscription to 10 24,948 Memorandum 04.03.2007 93,07,285 10 Considerat Against the 10 93,32,233 ion other takeover of the than cash partnership firms 24.03.2008 13,00,000 10 Cash Preferential 10 1,06,32,233 Allotment 30.09.2008 12,80,000 10 Cash Preferential 10 1,19,12,233 Allotment 31.03.2009 11,00,000 10 Cash Preferential 10 1,30,12,233 Allotment 30.05.2009 8,00,000 10 Cash Preferential 100 1,38,12,233 Allotment 07.03.2011 2,00,000 10 Cash Preferential 100 1,40,12,233 Allotment As on the date of the DRHP, a total no. of 26,00,000 Equity Shares of Sardar Balvinder Singh are pledged with Axis Bank Limited and State Bank of Hyderabad. Mrs. Baljit Kaur 03.01.2007 04.03.2007

10

Cash

0.06 21.41

4.88 4.81 4.13 3.00 0.75 9.76

2.99 2.94 2.53 1.84 1.84 5.98

24,948 31,92,715

10 10

Cash Considerat ion other than cash Cash Cash

24.03.2008 30.09.2008

3,50,000 1,15,000

10 10

Subscription to Memorandum Against the takeover of the partnership firms Preferential Allotment Preferential Allotment

10 10

24,948 32,17,663

0.09 11.99

0.06 7.35

10 10

35,67,663 36,82,663

1.31 0.43

0.81 0.26

The aggregate shareholding of the Promoters & Promoter Group prior to the Issue Pre Issue % of pre issue paid up capital 52.60 13.82 66.42

Particulars No of Shares Promoter Sardar Balvinder Singh Mrs. Baljit Kaur Total

1,40,12,233 36,82,663 1,76,94,896

45

b) Details of Promoters Contribution and Lock-in: Our Promoters have by a written undertaking dated June 15, 2011, consented for 88,00,000 Equity Shares held by them, constituting 20.25% of the post-issue equity share capital of our Company to be considered as Promoters contribution and locked-in for a period of three years from the date of Allotment. The details of the Equity Shares, which shall be locked-in for a period of three years and one year respectively from the date of Allotment, are set forth in the table below: Date of Transfer/Allotment No. of Equity Shares Face Value Nature of consideration Acquisition Price % of preIssue paid-up capital* % of postIssue paidup capital 0.06 16.58 Lock in period in years*

Sardar Balvinder Singh 03.01.2007 04.03.2007

24,948 72,07,285

10 10

04.03.2007 24.03.2008 30.09.2008 30.09.2008 31.03.2009 30.05.2009 07.03.2011 Mrs. Baljit Kaur 03.01.2007 04.03.2007 24.03.2008 30.09.2008

21,00,000** 13,00,000 2,92,715 9,87,285 11,00,000 8,00,000** 2,00,000 24,948 31,92,715 3,50,000 1,15,000

10 10 10 10 10 10 10 10 10 10 10

Cash Consideration other than cash Consideration other than cash Cash Cash Cash Cash Cash Cash Cash Consideration other than cash Cash Cash

10 10

0.09 27.06

1 3

10 10 10 10 10 100 100 10 10 10 10

7.88 4.88 1.10 3.71 4.13 3.00 0.75 0.09 11.99 1.31 0.43

4.83 2.99 0.67 2.27 2.53 1.84 0.46 0.06 7.35 0.81 0.26

1 3 3 1 1 1 1 1 1

1 1

*Our Promoters shareholding constituting not less than 20% of the post-Issue share capital shall be locked in for a period of three years from the date of Allotment in the Issue. The Equity Shares constituting Promoters contribution shall be eligible in terms of the SEBI (ICDR) Regulations. Our Promoters hold 1,76,94,896 Equity Shares which constitutes 66.42 % of the pre Issue paid-up equity share capital of the Company. ** Out of total allotment of 29,00,000 equity shares, 26,00, 000 equity shares have been pledged with Axis Bank Limited and State Bank of Hyderabad Besides the above, the promoters contribution of 55, 27,000 equity shares in the Issue towards financing the project shall also be locked in for a period one year from the date of allotment in the Issue The Equity Shares that are being locked-in are not ineligible for computation of minimum Promoters contribution under Regulation 33 of the SEBI (ICDR) Regulations. In this regard, the Company confirms that the Equity Shares being locked-in do not consist of: (i) Equity Shares acquired during the preceding three years (a) for consideration other than cash and revaluation of assets or capitalization of intangible assets or (b) arising from bonus issue by utilization of revaluation reserves or unrealized profits of the Company or from a bonus issue against Equity Shares which are otherwise ineligible for computation of Promoters contribution; (ii) Equity Shares acquired by the Promoters during the one year preceding the date of the Draft Red Herring Prospectus, at a price lower than the price at which Equity Shares are being offered to the public in the Issue; (iii) Equity Shares issued to the Promoters upon conversion of a partnership firm; and 46

(iv) Equity Shares held by Promoterss pledged with any creditor. The minimum Promoters contribution has been brought to the extent of not less than the specified minimum lot and from the persons defined as Promoters under the SEBI (ICDR) Regulations. The Promoters contribution constituting not less than 20% post-Issue paid-up equity share capital shall be locked-in for a period of three years from the date of Allotment in the Issue. Our Promoters have pursuant to their undertaking dated June 15, 2011, agreed not to sell or transfer or pledge or otherwise dispose of in any manner, the Equity Shares forming part of the Promoters contribution from the date of filing of the Draft Red Herring Prospectus until the commencement of lock-in period specified above. a) Details of pre-Issue Equity Share capital locked in for one year:

In addition to the 20.25% of the post-Issue equity shareholding of the Company held by the Promoters and locked in for three years as specified above, the entire pre-Issue equity share capital will be locked-in for a period of one year from the date of Allotment. b) Other requirements in respect of lock-in:

Pursuant to Regulation 40 of the SEBI (ICDR) Regulations, the Equity Shares held by the Promoters may be transferred to and amongst the Promoter Group or to a new promoter or persons 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 SEBI Takeover Regulations as applicable. Further, pursuant to Regulation 40 of the SEBI (ICDR) Regulations, the Equity Shares held by person other than the Promoters prior to the Issue may be transferred to any other person holding Equity Shares which are lockedin 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 SEBI Takeover Regulations, as applicable. Pursuant to Regulation 39 of the SEBI (ICDR) Regulations,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 institution, provided that the pledge of Equity Shares can be created when the loan has been granted by such bank or financial institution 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 the pledge of the Equity Shares is one of the terms of sanction of the loan.
As on the date of the DRHP, a total no. of 26,00,000 Equity Shares of Sardar Balvinder Singh are pledged with Axis Bank Limited and State Bank of Hyderabad. Date of Allotment 04.03.2007 30.05.2009 No.of Equity Shares 21,00,000 5,00,000 Pledgee Bank Axis Bank Limited State Bank of Hyderbad

47

3.

The shareholding pattern of the Company

The table below presents the shareholding pattern of the Company as on the date of filing the Draft Red Herring Prospectus:
Total shareholding as a % of total no of shares Shares pledged or otherwise encumbered AS a % of No of (A+B+ Shares C)

Category Code

Category of shareholder

No. of sha reh olde rs

Total number of shares

No. of shares held in dematerialize d form

AS a % of (A+B)

AS a % of (A+B+C)

(A) (1) (a) (b) (c) (d) (e) (2) (a) (b) (c) (d)

(B) (1) (a) (b) (c) (d) (e) (f) (g) (h) (2) (a) (b)

(c)

(C) (1) (2)

Promoter and Promoter Group INDIAN Individuals/ HUF 2 17494896 2100000 66.42 Central Government/State 0 0 0 0.00 Government(s) Bodies Corporate 0 0 0 0.00 Financial Institutions / Banks 0 0 0 0.00 Others 0 0 0 0.00 Sub-Total A(1) : 2 17494896 2100000 66.42 FOREIGN Individuals (NRIs/Foreign 0 0 0 0.00 Individuals) Bodies Corporate 0 0 0 0.00 Institutions 0 0 0 0.00 Others 0 0 0 0.00 Sub-Total A(2) : 0 0 0 0.00 Total A=A(1)+A(2) 2 17494896 2100000 66.42 PUBLIC SHAREHOLDING INSTITUTIONS 0 0 0 0.00 Mutual Funds /UTI 0 0 0 0.00 Financial Institutions /Banks Central Government / State 0 0 0 0.00 Government(s) 0 0 0 0.00 Venture Capital Funds 0 0 0 0.00 Insurance Companies 0 0 0 0.00 Foreign Institutional Investors Foreign Venture Capital 0 0 0 0.00 Investors 0 0 0 0.00 Others 0 0 0 0.00 Sub-Total B(1) : NON-INSTITUTIONS 8 8943500 0 33.57 Bodies Corporate Individuals (i) Individuals holding nominal 5 104 0 0.00 share capital upto `1 lakh (ii) Individuals holding nominal share capital in excess of `1 0 0 0 0.00 lakh Others 0 0 0 0.00 Non resident Indians 0 0 0 0.00 Clearing Members 13 8943604 0 33.57 Sub-Total B(2) : 13 8943604 0 33.57 Total B=B(1)+B(2) : Total (A+B) : 15 26638500 2100000 100 Shares held by custodians, against which Depository Receipts have been issued 0 0 0 0.00 Promoter and Promoter Group 0 0 0 0.00 Public GRAND TOTAL (A)+(B)+(C) 15 26638500 2100000 100

66.42 0.00 0.00 0.00 0.00 66.42 0.00 0.00 0.00 0.00 0.00 66.42

2600000 0 0 0 0 2600000 0 0 0 0 0 2600000

9.76 0.00 0.00 0.00 0.00 9.76 0.00 0.00 0.00 0.00 0.00 9.76

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 33.57 0.00 0.00

2600000

9.76

0.00 0.00 33.57 33.57 100 0.00 0.00 100

0.00

48

4.

Equity Shares held by top 10 shareholders a. Our top ten shareholders and number of Equity Shares held by them as of the date of the Draft Red Herring Prospectus Name of the Shareholder Sardar Balvinder Singh Infoedge Capital Services Pvt. Ltd. Mrs. Baljit Kaur Aakar Security Services Pvt. Ltd. Gap Investments Private Ltd. Romex Corporate Services Pvt. Ltd. Florian Advertising and Marketing Pvt. Ltd. Fordon Advertising and Marketing Pvt. Ltd. Sunblink Trading and Investment Pvt. Ltd. Miller Chemical Pvt. Ltd. Total No. of Shares held 1,40,12,233 49,75,500 36,82,663 22,77,500 9,60,500 2,00,000 2,00,000 2,00,000 1,05,000 25,000 2,66,38,396 Percentage 52.60 18.68 13.82 8.55 3.61 0.75 0.75 0.75 0.39 0.09 99.99

Sr.No. 1 2 3 4 5 6 7 8 9 10

b. Sr.No. 1 2 3 4 5 6 7 8 9 10

Our top ten shareholders and number of Equity Shares held by them as of ten days prior to the date of filing of the Draft Red Herring Prospectus Name of the Shareholder Sardar Balvinder Singh Infoedge Capital Services Pvt. Ltd. Mrs. Baljit Kaur Aakar Security Services Pvt. Ltd. Gap Investments Private Ltd. Romex Corporate Services Pvt. Ltd. Florian Advertising and Marketing Pvt. Ltd Fordon Advertising and Marketing Pvt. Ltd. Sunblink Trading and Investment Pvt. Ltd. Miller Chemical Pvt. Ltd. Total No. of Shares held 1,40,12,233 49,75,500 36,82,663 22,77,500 9,60,500 2,00,000 2,00,000 2,00,000 1,05,000 25,000 2,66,38,396 Percentage 52.60 18.68 13.82 8.55 3.61 0.75 0.75 0.75 0.39 0.09 99.99

c.

Our top ten shareholders and number of Equity Shares held by them as of two years prior to the date of filing of the Draft Red Herring Prospectus : Name of the Shareholder Sardar Balvinder Singh Mrs. Baljit Kaur Sunblink Trading and Investment Pvt. Ltd. Akon Management Consultancy Pvt. Ltd. Mask Finvest Pvt. Ltd. Miller Chemicals Pvt. Ltd. Dhruv Advertising and Marketing Pvt. Ltd. Accurate Corporate Services Pvt. Ltd. Victory Merchantiles Pvt. Ltd. VDR Consultants Pvt. Ltd. Total No. of Shares held 1,38,12,233 36,82,663 4,90,000 4,00,000 3,95,000 3,90,000 3,50,000 3,45,000 2,10,000 1,58,500 2,02,33,396 Percentage 68.26% 18.20% 2.42% 1.98% 1.95% 1.93% 1.73% 1.71% 1.04% 0.78% 100.00%

Sr.No. 1 2 3 4 5 6 7 8 9 10

5.

The Company does not have any Employee Stock Option Scheme / Employee Stock Purchase Scheme for our employees and we do not intend to allot any Equity Shares to our employees under Employee Stock Option Scheme / Employee Stock Purchase Scheme. As and when options are granted to our employees under any ESPS, our Company shall comply with the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999. 49

6.

The Company, our Directors, our Promoters, the Promoter Group and their respective directors and the BRLM 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 the section titled Our Management beginning on page 139 of the Draft Red Herring Prospectus, none of our Directors or Key Managerial Personnel holds any Equity Shares in the Company. The Company has not entered into any financing arrangements whereby our Promoters, Promoter Group and Directors and their immediate relatives have financed the purchase by any other person of the Equity Shares of the Company other than in the normal course of business of financing the entity, during the period of six months immediately preceding the date of filing of the Draft Red Herring Prospectus. Other than as set out in this Section titled Capital Structure, as of the date of the Draft Red Herring Prospectus, no Equity Shares have been pledged by our Promoters or the Promoter Group. In the case of over-subscription in all categories, not more than 50% of the Net Issue shall be available for allocation on a proportionate basis to QIBs, 5% of the QIB Portion shall be reserved for Mutual Funds only subject to valid Bids being received at or above the Issue Price. Mutual Funds participating in the Mutual Fund Portion of the QIB Portion will also be eligible for allocation in the remaining QIB Portion. Under-subscription, if any, in the Mutual Funds portion will be met by a spillover from the QIB Portion and be allotted proportionately to the QIB Bidders. Further, not less than 15% of Net Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of Net 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.

7.

8.

9.

10. Under-subscription, if any, in any category would be met with spill over from other categories or combination of categories at the discretion of the Company in consultation with the BRLM and the Designated Stock Exchange. 11. Any oversubscription to the extent of 10% of the Net Issue can be retained for the purpose of rounding off and making allotments in minimum lots, while finalising the Basis of Allocation. Consequently, the Allotment may increase by a maximum of 10% of the Net Issue, as a result of which the post-Issue paid-up capital would also increase by the excess amount of allotment so made. In such an event, the Equity Shares to be locked-in towards the Promoters contribution shall be suitably increased, so as to ensure that 20% of the post-Issue paid-up capital is locked in. 12. Our Promoters and members of our Promoter Group will not subscribe to or apply for the Equity Shares in this Issue except as mentioned in the Draft Red Herring Prospectus. 13. An investor 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. 14. The Company does not propose to undertake any further issue of capital whether by way of issue of bonus shares, preferential allotment, right issue or in any other manner during the period commencing from submission of the Draft Red Herring Prospectus to SEBI until the Equity Shares issued pursuant to the Issue have been listed except as mentioned in this draft Red Herring Prospectus. 15. 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 issue of Equity Shares (including any issue of securities convertible into or exchangeable, directly or indirectly, for Equity Shares) on a preferential basis or issue of bonus or rights or further public issue of Equity Shares 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 acquisition or participation in such joint ventures. 16. No person connected with the Issue including, but not limited to, the BRLM, the members of the Syndicate, the Company, our Directors, our Promoters, the Promoter Group and our Group Companies of the Promoters shall offer any incentive, whether direct or indirect, in any manner, whether in cash, kind, services or otherwise, to any Bidder.

50

17. As of the date of the Draft Red Herring Prospectus, the BRLM and their associates do not hold any Equity Shares in the Company. 18. The Company has not issued any Equity Shares out of revaluation reserves or for consideration other than cash. The Company has not issued any Equity Shares in terms of any scheme approved under Sections 391-394 of the Companies Act. 19. The Company has not raised any bridge loan against the proceeds of the Issue. For details on use of proceeds, please see the section titled Objects of the Issue beginning on page 52. 20. A Bidder cannot make a Bid for more than the number of the Equity Shares offered through the Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of Bidder. 21. There will be only one denomination of the Equity Shares of the Company unless otherwise permitted by law and the Company shall comply with such disclosure and accounting norms as may be specified by the SEBI from time to time. 22. The Company has not made any public issue since its incorporation. 23. The Company has 15 members as of the date of the Draft Red Herring Prospectus.

51

OBJECTS OF THE ISSUE The Company proposes to expand the retail chain by adding 100 new MBOs in the exisiting as well as new markets on pan India basis with an estimated area of 9.5 Lakhs sq. ft. in Tier I, Tier II and Tier II cities across India. The expansion is proposed to be undertaken in the following 3 phases. Phases Estimated Area in sq. ft. Phase I 3,98,230 Phase II 3,51,770 Phase III 2,00,000 TOTAL 9,50,000

Approximate No. of Outlet 43 37 20 100

Under the current project, company proposes to add about 50 outlets spread over 12,000 sq. ft. on average and 30 outlets spread over 5,000 sq. ft. on average totalling 7.5 Lakhs sq. ft. and 20 more outlets spread over 10,000 sq. ft. each aggregating to 2.00 Lakhs sq. ft.. The company operates its outlets in leased space which is a general practice in retail industry. No land is needed to be bought and no civil construction is required except for the finishing works. The cost of the project includes finishing for the outlets, utilities & safety infrastructure, furniture & fittings, computers, advance of rentals, other expenses, Preliminary & Pre-operative expenses, contingency, working capital margin and IDC. The total project cost is estimated to be `26,979.00 lakhs. The project cost is estimated based on TEV study done by Cygnus Business Consulting and Research Private Limited and appraisal done State Bank of India. Requirement of Funds The details of the utilization of proceeds of the Issue are as per the table set forth below: Sr. No Particulars Fund Requirement Phase I 3,98,230 sq.ft 10,010.00 Phase II 3,51,770 sq.ft. 8,840.00 (` in Lakhs) Phase III Others 2,00,000 sq.ft 8,129.00

2 3 4

Setting up of additional 100 outlets across India spread across 9.5 lakhs square feet Repayment of debt General Corporate Purposes* Issue related expenses* Total

26,979.00

284.00 [] [] []

10,010.00

8,840.00

8,129.00

284.00 [] [] []

*will be incorporated at the time of filing of Prospectus

Our fund requirements and deployment thereof are based on TEV study done by Cygnus. Further, Phase I and Phase II are appraised by State Bank of India. These are based on current conditions and are subject to change in light of changes in external circumstances or costs or in other financial conditions, business strategy, as discussed further below. Means of Finance Sr. No. 1 2 3 4 5 Particulars Promoters equity (already brought in) Proceeds from issue of Equity Shares to GAP Investment Consultancy Private Limited & Aakar Security Services Private Limited (already brought in) Term Loans from SBI & SBH Term loans from other Banks Proceeds from Issue Proceeds from Promoters contribution [] Proceeds from Net Issue to the public []
Total

(` in Lakhs) Fund Requirement 200.00 1823.00 9000.00 2300.00 []

[]

The aforementioned fund requirement for Phase I & II will be met from proceeds promoters contribution in the Issue and bank borrowings and for Phase III will be met out of the proceeds of the Net Issue to the Public. 52

An amount of `2,023.00 lakhs has already been brought by issue of equity shares to promoters and others. Out of the term loans mentioned above, amounts of `6,000.00 lakhs and `3,000.00 lakhs term loans have been sanctioned by State Bank of India and State Bank of Hyderabad respectively. The details of terms of sanction have been suitably discloed in section titled Financial Statements beginning on page 160 of the Draft Red Herring Prospectus. As of date, SBI has already disbursed an amount of `3,042.29 lakhs. An amount of `2,300.00 lakhs shall be brought in by way of term loans from other banks. In case of shortfall, if any, we may explore other sources of funds including internal accruals arising from our future operations and/or debt. In case of any variations in the actual utilization of funds earmarked for the objects mentioned above or in case of increased fund requirements for a particular object, the shortfall, if any, may be financed by surplus funds, if any, available for other objects and/or the Companys internal accruals and/or debt facilities that may be availed from the banks/financial institutions, to the extent of such shortfall. In view of the dynamic nature of our industry, we may have to revise our business plans from time to time and consequently our fund requirements may also change, which may include rescheduling or re-working of our expansion. Any such change in our plans may require reworking/rescheduling of our expenditure programs, at the discretion of our management / Board. Our capital expenditure plans are subject to a number of variables, including possible cost overruns, locations, etc. and changes in managements views of the desirability of current plans, among others. We certify that firm arrangements of finance through verifiable means towards 75% of the stated means of finance have been made excluding the amount to be raised through the proposed Issue compliance with the Regulation 4(2)(g) of the SEBI Regulations. Details of the project The Company proposes to open additional 100 outlets in the following regions Estimated Area in Sq. Ft. Total Estimated Area identified in Area in Sq. Ft. Sq. Ft. 12000 Maharashtra Delhi Haryana Gujarat Tamilnadu Kerala Rajasthan Uttar Pradesh Karnataka Goa Odisha Chhattisgarh Madhya Pradesh Jharkhand Bihar Punjab Andhra Pradesh 4 3 2 5 5 2 1 3 4 1 3 3 3 2 2 2 5 50 5000 5 0 0 2 4 5 2 1 1 0 1 1 0 0 1 3 4 30 10000 4 0 0 1 1 2 1 2 2 0 0 0 2 1 0 4 0 20 113000 36000 24000 80000 90000 69000 32000 61000 73000 12000 41000 41000 56000 34000 29000 79000 80000 950000 43084 22400 35709 40316 26928 69746 238183 2 1 2 2 1 7 15 No. of outlets proposed

No. of outlets identified

Out of the total proposed outlets, the Company has already identified locations for 15 outlets. Further, the Companny has already entered into lease agreements for the same. For the details of the locations and lease agreements, please refer page 129 under the heading titled Properties under the section titled Business Overview. 53

Detailed Project Cost (` in Lakhs) Sr. No. Particulars Phase I 3,98,230 sq. ft. 1673.00 1221.00 Cost Phase II 3,51,770 sq. ft. 1477.00 1079.00 Phase III 2,00,000 sq. ft. 840.00 613.00

1 2

3 4 5 6 7 8 9 10 11 12

Building Electrical, Air Conditioning & Fire Safety Furniture & Fittings Computers Advances of rent Other expenses Preliminary & Preoperative Expenses Contingency Working capital margin Working capital IDC Brand Building TOTAL

TOTAL 3990.00 2913.00

1572.00 255.00 1004.00 611.00 1274.00 93.00 2154.00 153.00 0 10010.00

1388.00 225.00 886.00 539.00 1126.00 82.00 1903.00 135.00 0 8840.00

789.00 128.00 504.00 307.00 640.00 47.00 2923.00 1338.00 8129.00

3749.00 608.00 2394.00 1457.00 3040.00 222.00 4057.00 2923.00 288.00 1338.00 26979.00

The various categories of cost are classified into the broad headings such as Building, Furniture and Fixtures, Electrical Equipment, etc. in order to have a cost of project in proper headings and to make it simple for depreciation calculation. The assumption of the rate either per sq. ft. or per outlet on average area with that of proper heading are mentioned below: Building cost The company will take the premises on lease and then renovate the floor space. The renovation includes flooring and false ceiling activities. The cost of flooring and false ceiling considered are `350 per sq. ft. basis and `70 per sq. ft. basis respectively. Accordingly, the total cost adds to `420/- per sq. ft. The details of building cost are as given below. Phase I II III Particulars Building Building Building TOTAL Area sq. ft. 3,98,230 3,51,770 2,00,000 9,50,000 Rate in ` per sq. ft. 420 420 420 420 Total Cost in ` Lakhs 1672.57 1477.43 840.00 3990.00

Electrical, Air Conditioning & Fire Safety Electrical The expenditure towards electrical installations includes lighting, wiring, switches etc. the cost for the electrical installations is considered as `12.67 Lakhs on per show room basis Air conditioning The air conditioning cost is considered as `15.20 Lakhs on per show room basis. Fire Safety systems The fire safety systems are also considered as `1.26 Lakhs on per show room basis. The total cost for electrical, air conditioning and fire safety is estimated to be `2913 lakhs. Following table shows the details of these costs. Details Electrical Air Conditioning Fire Safety systems Total Average cost per show room (` lakhs) 12.67 15.20 1.26 29.13 54 No of show rooms 100 100 100 100 Total Cost in ` Lakhs 1267.00 1520.00 126.00 2913.00

Furniture & Fixture Furniture & Fixtures include, Glass shelves, Racks, Sign Boards, Furniture and Furniture for cabins & rest rooms. The following gives details of the break up. Glass shelves for Display Glass shelves mainly consist of the glass and furniture boxes that are used to display the different items like mobiles, handy cams and other small items. Glass shelves cost has been taken as `15.20 Lakhs per showroom. Racks Cost of racks is calculated based on per show room cost for the racks. The cost has been taken as `15.20 lakhs per show room. Sign boards Sign boards are used for the advertising and marketing purposes. The cost for the sign boards is considered on per show room basis and is `2.53 Lakhs per show room. Furniture The furniture cost is considered to be `2.79 Lakhs per show room. Furniture for Cabins & Rest rooms Each show room will have cabins and rest rooms depending on the number of employees working there. The cost of cabins & rest rooms considered is `1.77 Lakhs per show room. Following table gives the details of furniture & fixture: Classification Glass shelves Racks Sign Board Furniture etc Cabins & Rest rooms TOTAL Computers & Printers The cost of Computers & Printers includes in setting up the basic computer related infrastructure like server, POS (Point of Sales) solution and the printers. Computer & Printers Typically each show room will have a local server of required configuration suitable for the number and volume of transactions/ data generation. In addition, they will have computers in the sales counters and also for reception, where the address and contact details of the visitors are recorded for future purpose. The average cost of computer and printer for each show room is considered at `3.29 Lakhs. Networking Networking consists of main server, user Computers, networking equipment and others. It varies with the number of users and the size of the main server. The average cost per show room considered for the networking is 1.00 Lakhs. ERP Software Cost of ERP systems includes the cost of implementation of SAP and POS Solution. The tentative expenditure comes to `1.79 lakhs per outlet. The estimated cost for computers and network is estimated to `608.00 lakhs. Following table gives the details of computers and network. 55 Average cost per show room (` lakhs) 15.20 15.20 2.53 2.79 1.77 37.49 No of show rooms 100 100 100 100 100 100 Total Cost in ` Lakhs 1520.00 1520.00 253.00 279.00 177.00 3749.00

Classification Computer & Printers Networking ERP Software TOTAL Lease Advance

Average cost per show room (` lakhs) 3.29 1.00 1.79 6.08

No of show rooms 100 100 100 100

Total Cost in ` Lakhs 3.29 1.00 1.79 6.08

The lease rentals for the expansions are considered for each outlet based on their locations. For locations, please refer the table above. The average lease rental for all these locations put together is estimated to be `84 per sq. ft. per month. The advance of 3 months of lease rentals is considered to be paid by the company to occupy the retail space. The total cost is estimated to be `2394.00 lakhs. Phase I II III TOTAL Particulars Lease Advance Lease Advance Lease Advance Area sq. ft. 398230 351770 200000 950000 Rate per sq. ft. (in `) 84 84 84 84 Months 3 3 3 3 Total in ` Lakhs 1004.00 886.00 504.00 2394.00

Other expenses Other expenses include the cost of Property consultation and labour charges. Property consultant fee Company shall be appointing property consultants for the identification of the suitable place for show rooms and getting the show room on lease. The property consultant fee considered is `84.00 per sq. ft. which is about `798.00 lakhs for the project of 9.50 lakhs sq. ft. Labour charges It includes the entire cost of labour including cost of interior and finishing cost. The average labour charges considered is `6.59 lakhs per show room. The total estimated labour cost is `659.00 lakhs for the project of 9.50 lakhs sq. ft. Estimated cost for other expenses is `1457.00 lakhs. Preliminary & pre-operative expenses Preliminary & pre-operative expenses include the interior design fee and initial brand building expenses. Interior designing fee Company will be appointing consultants for the interior designing of the outlet. The fee towards the consultants is considered on per show room basis at `5.07 Lakhs per show room. The estimated cost for interior designing fee is estimated to be `507.00 lakhs for the project of 9.50 Lakhs sq. ft. Initial brand building expenses Company will be entering new markets with this project. So the Company needs to build brand in these markets for the success of the project. The cost considered for the brand building activity is `25.33 Lakhs per show room. The total estimated cost for brand building for the project is `2533.00 lakhs. The Preliminary & pre-operative expenses are estimated to be `3040.00 lakhs for the expansion of outlets. Contingencies Considering the duration of the project, we have considered contingency of 2% over the hard costs. On the basis of hard cost (Building, Electrical, Air Conditioning & Fire Safety, Furniture & Fittings and Computers), the contingencies cost is estimated about `225 lakhs.

56

Working capital requirement The working capital has been calculated based on the following assumptions. Holding period is considered in accordance with various factors like storage space, availability of the material in the region, the minimum duration for supplies and others. Working Capital Assumptions for phase I and II 1 2 3 4 5 Inventory Debtors Other Current Assets Credit from suppliers Other creditors 60 days of sales 30 days of Raw Material Consumed 8 days of expenditure 23 days purchase of Raw Material Purchased 15 days expenditure

Working capital calculation for 7.50 sq. ft. ` in Lakhs Existing Business Particulars Historical FY10 Historical FY11 Estimated holding holding holding period period period
Current Assets Days

FY12

Phase I & II Estimated holding period

Days

FY13

Inventories Receivables Other Current Assets

57 29 7

(` Lakhs) 9659 5225 1738

Audited

Days

Provisional (` Lakhs)

Days

Estimated (` Lakhs)

Estimated (` Lakhs)

67 27 10

16570 7007 2788

38* 30 8

7483 2959 075

60 30 8

12363 7448 188

Total 16621 26365 Current Assets Current Liabilities Sundry 8 1306 10 2482 23 Creditors Other 4 755 4 1096 15 Current Liabilities Total 2061 3578 Current Liabilities Working 14560 22788 Capital WC Margin * For the FY 12 the number of months of operation is assumed to be 5 months only Working Capital Assumptions for Phase III 1 2 3 4 5 Inventory Debtors Other Current Assets Credit from suppliers Other creditors

10517

19999

2310 149

23 15

4941 377

2459

5318

8050 4058

14681 6481

30 days of sales 30 days of Raw Material Consumed 1 day of expenditure 9 days purchase of Raw Material Purchase 2 days of expenditure

Working capital calculation for 2.00 lakhs sq. ft. in ` Lakhs Existing Business Particulars Historical FY10 Historical FY11 Estimated Holding Holding Holding Period Period Period
Current Assets Days

FY12

Phase III Estimated Holding Period

Days

FY13

Inventories

57

(` Lakhs) 9659

Audited

Days

Provisional (` Lakhs)

Days

Estimated (` Lakhs)

Estimated (` Lakhs)

67 57

16570

30

1575

30

1648

Receivables 29 Other 7 Current Assets Total Current Assets Current Liabilities Sundry 8 Creditors Other 4 Current Liabilities Total Current Liabilities Working Capital The Company proposes to raise 2012

5225 1738

27 10

7007 2788

30 1

1898 48

30 1

1986 50

16621

26365

3521

3685

1306 755

10 4

2482 1096

9 2

502 96

9 2

487 100

2061

3578

598

587

14560

22788

2923

3097

an amount of `2923 lakhs towards the working capital requirement for the FY

Working capital calculation for the entire Company in ` Lakhs Existing Business Particulars Historical FY10 Estimated FY11 Estimated Holding Holding Holding Period Period Period
Current Assets Days

FY12

Estimated Holding Period

Days

FY13

Inventories Receivable s Other Current Assets Total Current Assets Current Liabilities Sundry Creditors Other Current Liabilities Total Current Liabilities Working Capital Drawing Power WCBF

57 29 7

(` Lakhs) 9659 5225

Audited

Days

Provisional (` Lakhs)

Days

Estimated (` Lakhs)

Estimated (` Lakhs)

67 27 10

16570 7007 2788

65 36 10

17485 10701 3017

62 36 10

18346 11771 3319

1738

16621

26365

31203

33435

8 4

1306 755

10 4

2482 1096

9 4

2376 1049

9 4

2613 1154

2061

3578

3425

3768

14560 75% 10920 9338

22788 17091 14396

27777 20833 19000

29668 22551 21800

Interest during Construction (IDC) The term loan considered for the project is about `11300.00 lakhs out of which an amount of `9000.00 lakhs has already been sanctioned by SBI and SBH. Further, SBI has already disbursed an amount of `2960.00 lakhs as of date. Other bank is likely to sanction a loan amount to the extent of balance `2300.00 lakhs. Considering these disbursements and sanctions interest during construction is included in the project cost. The IDC for the project finance from SBI, SBH and a third bank is estimated to be `288.00 lakhs. The following is the detailed calculation of IDC. 58

(` Lakhs) Details of IDC from the term Loan from SBI Proposed Loan SBI Term loan `6000 Lakhs Opening Disbursement Balance FY 11 March 0.00 1460.00 FY 12 April 1460.00 0.00 May 1460.00 1500.00 June 2960.00 3040.00 Interest During Construction Interest 14.50% Interest 9.00 18.00 27.00 54.00 108.00 (` Lakhs) Details of IDC from the term Loan from SBH and others Proposed Loan Term loan `5300 Lakhs Opening Disbursement Balance FY 12 July 0.00 500.00 Quarter 2 August 500.00 500.00 September 1000.00 1000.00 Quarter 3 October 2000.00 1500.00 November 3500.00 1800.00 December 5300.00 Interest During Construction Brand Building The Company is expanding its presence into different territories by setting up additional 100 MBOs across India. Our brand is well known in the existing markets particularly Andhra Pradesh. However, in these new territories, our brand is relatively unknown and hence, we require huge efforts to create a brand image. This calls for a suitable strategy and increased expenditure on advertising. The Company has planned to create a brand image by adopting the means of promotion such as Hoarding/Display, TV & Radio media, banner and Print pamphlets, etc. Based on the sq. ft. of the outlets in each state, the costs related to various form of advertising are proportionately taken adding to the tune of to the total cost of `1338 lakhs.
Sl.No State 1 Maharastra 2 Delhi 3 Gujrat 4 Tamil Nadu 5 Kerala 6 Punjab 7 Rajasthan 8 Uttar Pradesh 9 Karnataka 10 Goa 11 Orissa 12 Chhatisgarh 13 Madhya Pradesh 14 Jharkhand 15 Bihar Total No. of Stores 15 5 8 12 9 10 4 8 7 1 4 2 8 3 4 100 Area in sq.ft. % to Total Exp. Hoardings/ Display Exp.In ` Lakhs TV / Audio Exp.In ` Lakhs Print & Promotion in Lakhs Total Area In ` Lakhs cities Rate/month For One year Rate/month For One year Rate/month 1.51 0.6 0.8 1.07 0.69 0.84 0.32 0.71 0.73 0.12 0.41 0.24 0.71 0.34 0.41 9.5 15.89 6.32 8.42 11.26 7.26 8.84 3.37 7.47 7.68 1.26 4.32 2.53 7.47 3.58 4.32 100.00 213 85 113 151 97 118 45 100 103 17 58 34 100 48 58 1338 6 2 4 6 6 5 3 5 3 1 3 2 4 1 2 53 2 2 0.5 1 0.5 0.6 0.3 0.3 1 0.3 0.2 0.2 0.2 0.2 0.2 144 48 24 72 36 36 10.8 18 36 3.6 7.2 4.8 9.6 2.4 4.8 457.2 0.5 1 0.2 0.5 0.2 0.3 0.2 0.2 0.5 0.1 0.1 0.1 0.1 0.1 0.1 36 24 9.6 36 14.4 18 7.2 12 18 1.2 3.6 2.4 4.8 1.2 2.4 190.8 2.5 2.5 1 1.5 1 0.9 0.5 0.5 1.5 0.5 0.4 0.4 0.4 0.4 0.5 Exp.In ` Lakhs For One year 180 60 48 108 72 54 18 30 54 6 14.4 9.6 19.2 4.8 12 690

Closing 1460.00 1460.00 2960.00 6000.00

Average Balance 730.00 1460.00 2960.00 6000.00

Closing 500.00 1000.00 2000.00 3500.00 5300.00 5300.00

Average Balance 250.00 750.00 1500.00 2750.00 4400.00 5300.00

Interest 14.50% Interest 3.00 9.00 18.00 33.00 53.00 64.00 180.00

Schedule of Implementation Under ideal conditions a new outlet can be set up in about 5-6 months, right from the identifying the region or the city in which the retail outlet will be located to setting up the outlet in a ready condition for sales operation. 59

The following table gives typical implementation schedule for each outlet Details Identifying the region & City City Survey Identifying the potential properties Finalization of Rent and Rent Agreement preparation Permissions (Municipal and Labour) Interior designing Completion of civil works (Setting up furniture & furnishings, electrical fixtures, false ceiling, air conditioning, flooring, sign boards and interiors) Arranging for supply of materials Marketing & Opening of showroom Estimated time in week(s) 1-2 2-3 1-2 1-2 5-6 2-3 2-3 1 1-2

Schedule of implementation of the project Details Quarter 1 Phase I 3 6182.72 Quarter 2 Phase I 3 11 9375 98425 3949.16 2012 Quarter 3 Phase II 3 32 9375 300425 8718.13 284.00 [] 2013 Quarter 1 Phase III 3 20 10000 200000 2923.00 [] Total

Number of Months Shop Opening in number Area Each Outlet ( Average) Total Area Opening per Quarter (Sq. Ft.) Deployment of funds (in ` Lakhs) expansion Deployment of funds (Repayment of loan)- (in ` Lakhs) Deployment of funds (Issue Expenses and General Corporate Purposes)- (in ` Lakhs) Repayment of debt

Quarter 4 Phase III 3 37 9375 351150 5206.00 []

100 950000 26979.00 284.00 []

We have from time to time availed secured and unsecured loans from various body corporates, banks and directors. These loans were primarily used for the purpose of financing capital expenditure for expansion of our outlets over the years and towards the working capital requirements. We operate 110 outlets as on the date of the Draft Red Herring Prospectus. To continuously grow ourselves we have made investments in the form of either the capital expenditure or the working capital. In this context, we have availed secured loan of `750.00 lakhs from TATA Capital Limited towards working capital requirement in 2007. We want to repay this debt out of the proceeds of the Issue. Name of the Entity Outstanding Amount* (in ` Lakhs) as on March 31,2011 284.00 Repayable by Applicable rate of interest 13.00%

TATA Capital Limited

Working Capital Demand Loan

General Corporate Purposes Surplus from the proceeds of the Issue after meeting the objects mentioned above, if any, will be used for our general corporate purposes including but not restricted to, meeting operating expenses, working capital ,initial development costs for purposes other than the identified ones, payment of taxes, partnerships, joint ventures, strategic initiatives and acquisitions, and meeting exigencies, which the Company in the ordinary course of 60

business may not foresee or any other purposes as approved by our Board of Directors, subject to compliance with the necessary provisions of the Companies Act and other applicable statutes. Our management, in accordance with the policies of the Board, will have flexibility in utilizing any amounts for general corporate purposes under the overall guidance and policies of our Board. Meeting Issue related Expenses The Issue related expenses includes, lead management fees, underwriting fees, selling commission, printing and distribution expenses, etc. The break- up of the estimated expenses of the Issue is as follows: (` Lakhs) Expenses* Activity As a % of As a % of Total Issue Total Issue Expenses Size Issue Management Fees [] [] [] (Lead Management, Underwriting & Selling Commission) Advertisement & Marketing Expenses [] [] [] Printing, Stationery & Distribution Expenses [] [] [] IPO Grading Expenses [] [] [] Others (including Legal Advisors Fee, Auditors Fee, [] [] [] Registrars Fee, SCSB commission, Regulatory Fees including filing fees paid to Stock Exchanges) Total estimated Issue expenses [] [] []
*

will be completed after finalisation of the Issue price

Funds Deployed The Company has incurred an expenditure of `5182.72 risklakhs as on May 31, 2011 towards Phase I of the objects of the issue as certified by our statutory auditors, Karumanchi & Associates, Chartered Accountants vide certificate dated June 07, 2011. The following table contains details funds deployed and means of finance so far. Deployment of funds Building Electrical, Air Conditioning and Fire Safety Furniture & Fittings Computers Advances of Rent Other Expenses Preliminary & Preoperative Expenses IDC Issue TOTAL Sources of funds Bank Finance Issue of Equity Shares Internal Accruals TOTAL Proposed Deployment of Funds We may make payments toward our Objects of the Issue, before we obtain proceeds from the Issue, through other means and source of financing, including bridge loan or other financial arrangements, which then will be repaid from the proceeds of the Issue. Appraisal The funds requirement and funding plans are as per the TEV study done by Cygnus and Phase I & II are appraised by State Bank of India.
` In Lakhs

1,594.33 1,201.76 1,114.51 180.73 89.89 479.48 434.60 56.00 31.42 5,182.72

3,042.29 2,023.00 117.43 5,182.72

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Interim Use of Proceeds Pending utilization for the purposes described above, we intend to temporarily invest the funds in high quality interest bearing liquid instruments including money market mutual funds, deposits with banks, for the necessary duration as permitted under the SEBI Regulations or we may temporarily utilize the proceeds for reducing our outstanding overdrafts. Such investments and other utilizations would be in accordance with investment policies approved by our Board or any committee thereof duly empowered, from time to time. The Company confirms that pending utilization of the Issue proceeds; it shall not use the funds for any investments in the equity markets. Monitoring of Utilisation of Funds We have not appointed a monitoring agency to monitor the utilization of the proceeds of the Issue. We will disclose the utilization of the proceeds of the Issue under a separate head along with details, for all such proceeds of the Issue that have not been utilized. We will indicate investments, if any, of unutilized proceeds of the Issue in our Balance Sheet for the relevant Financial Years subsequent to our listing. 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 proceeds of the Issue. On an annual basis, the Company shall prepare a statement of funds utilised for purposes other than those stated in this Red Herring Prospectus and place it before the Audit Committee. Such disclosure shall be made only until such time that all the proceeds of the Issue have been utilised in full. The statement will be certified by the statutory auditors of the Company. The Company shall be required to inform material deviations in the utilisation of the Net Proceeds of the Issue to the Stock Exchanges and shall also be required to simultaneously make the material deviations/adverse comments of the Audit committee/monitoring agency public through advertisement in newspapers. No part of the proceeds from the Issue will be paid by us as consideration to our Promoter, Directors, Group Companies or Key Managerial Personnel, except in the normal course of our business.

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BASIS OF ISSUE PRICE The Issue Price has been determined by the Company, in consultation with the BRLM on the basis of the demand from investors for the Equity Shares through the Book Building Process and is justified based on the below mentioned accounting ratios. Please see the section Risk Factors beginning on page 11 of the Draft Red Herring Prospectus and the Restated Summary Statements as set out in the section Financial Statements beginning on page 160 of the Draft Red Herring Prospectus to have a more informed view. The trading price of the Equity Shares of the Company could decline due to the factors mentioned in the section Risk Factors and you may lose all or part of your investment. The face value of the Equity Shares is `10 and the Issue Price is [] times the face value. Qualitative Factors We believe that we have the following principal competitive strengths: Strong regional presence Wide network of multi brand retail outlets Strong and efficient supply chain management Experienced & Competent Management team Customer Service Ability to identify new locations to promote our business plans

For more details on qualitative factors, refer to section Business Overview beginning on page 90 of the Draft Red Herring Prospectus. Quantitative Factors Information presented in this section is derived from the Restated Summary Statements included in the Draft Red Herring Prospectus. Some of the quantitative factors which may form the basis for computing the Issue Price are as follows: 1. Earning Per Share (EPS)(1)(2): As per the Companys restated summary statements: Particulars Year ended March 31, 2008 Year ended March 31, 2009 Year ended March 31, 2010 Weighted Average
(1)

Face value per share (`10 per share) Rupees Weight ( shares ) 5.71 1 3.29 2 3.36 3 3.73

Earnings per share represents both basic and diluted earnings per share calculated as net profit attributable to equity shareholders as restated divided by a weighted average number of shares outstanding during the year.
(2)

Face value per share is `10.

Note: The earning per share calculations have been done in accordance with Accounting Standard 20- Earning per share notified by the Companies (Accounting Standards) Rules, 2006, [as amended]. 2. Price Earning Ratio (P/E ratio) The Price/Earning (P/E) ratio, on the basis of an Issue Price of ` [] per share is as set forth below: As per the Companys restated summary statements: i. ii. iii. for the period ended December 31, 2010: for the year ended March 31, 2010: for the year ended March 31, 2009: [] [] []

63

There are no comparable listed companies in the same business as the Company and hence Industry PE is not available. 3. Return on Net Worth
(1)

Return on net worth as per the Companys restated summary statements: Particulars Year ended March 31, 2008 Year ended March 31, 2009 Year ended March 31, 2010 Weighted Average
(1)

RONW % 27.29 6.64 6.28 9.90

Weight 1 2 3

Return on Net Worth = Profit after tax as restated/ Net Worth at the end of the year

4. Minimum Return on Increased Net Worth required to maintain pre-issue earning per share for the year ended March 31, 2010: At the Floor Price: [] % based on the restated summary statements; At the Cap Price: [] % based on the restated summary statements; 5. Net Asset Value per Equity Share As on March 31, 2010 As on December 31, 2010 Issue Price As of March 31, 2010 after the Issue : 51.52 : 51.91 : []* : []

*Issue Price per Share will be determined on conclusion of the Book Building Process.

Net asset value per Equity Share represents the net worth, as restated, divided by the number of Equity Shares outstanding at the end of the period. 6. Comparison with Industry Peers As the Company is one of the organized players in the Consumer Durable and Electronics retail industry and since there are no Indian listed entities in the Consumer Durable and Electronics Industry, there are no comparable figures available with us. The Issue Price has been determined by the Company in consultation with the BRLM and on the basis of assessment of market demand for the Equity Shares through the Book Building Process. The BRLM believe that the Issue Price of ` [] is justified in view of the above qualitative and quantitative parameters. Investors should read the above mentioned information along with Risk Factors and Financial Statements beginning on pages 11 and 160, respectively, of the Draft Red Herring Prospectus, to have a more informed view.

64

STATEMENT OF TAX BENEFITS The Board of Directors PCH Retail Limited 103-107, Maheshwari Chambers, Somajiguda, Hyderabad. Dear Sirs, We hereby report that the attached Annexure states the possible tax benefits available to PCH Retail Limited (the Company) and to the shareholders of the Company under the Income Tax Act, 1961, Wealth Tax Act, 1957 presently in force in India, subject to the fact that several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws and their interpretation. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on the business imperatives, the Company may or may not choose to fulfil. The benefits discussed in the attached annexure are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the benefits, which an investor can avail. We do not express any opinion or provide any assurance as to whether: The Company or its shareholders will continue to obtain these benefits in future; or The conditions prescribed for availing these benefits have been / would be met with. Unless otherwise specified, sections referred to below are sections of the Income-tax Act, 1961 (the Act). The income tax rates referred here are the tax rates prescribed by the Finance Act 2011 for the Financial Year 201112. All the provisions set out below are subject to conditions specified in the respective sections. The tax benefits mentioned below are restricted to the provisions of the Income Tax Act, 1961 and Wealth Tax Act, 1957 presently in force and no discussion is made from the perspective of Direct Tax Code which is proposed to be implemented from 01.04.2012. We hereby give our consent to include enclosed statement regarding the tax benefits available to the Company and to its share holders in the Draft Red Herring Prospectus for the proposed initial public offer of equity shares which the Company intends to submit to the Securities and Exchange Board of India. LIMITATIONS Our Confirmation is based on the information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and the interpretation of the Current tax laws in force in India. No assurance is given that the revenue authorities / courts will concur with the views expressed herein. This report is intended solely for information and for the inclusion in the offer Document in connection with the proposed IPO of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent. Yours faithfully, For KARUMANCHI & ASSOCIATES Chartered Accountants (Firm Registration No. 001753S)

(K. Peddabbai) Partner Membership No. 25036 Place: Hyderabad Date: 25/05/2011

65

STATEMENT OF TAX BENEFITS AVAILABLE TO PCH RETAIL LTD (THE COMPANY) AND ITS SHAREHOLDERS Unless otherwise specified, sections referred to below are sections of the Income-tax Act, 1961 (the Act). The Income Tax rates referred here are the tax rates prescribed by the Finance Act 2011 for the Financial Year 201112. All the provisions set out below are subject to conditions specified in the respective sections. The tax benefits mentioned below are restricted to the provisions of the Income Tax Act, 1961 and Wealth Tax Act, 1957 presently in force and no discussion is made from the perspective of Direct Tax Code which is proposed to be implemented from April 1, 2012. Special Tax Benefits to the Company NIL General Tax Benefits to the Company These benefits are available to all companies after fulfilling certain conditions as required in the respective Act. I. 1. In accordance with section 10(34), dividend income (referred to in section 115-O) received by the company will be exempt from tax.

2.

Income received in respect of the units of mutual fund specified under section 10(23D) or income received in respect of units from administrator of the specified undertakings or income received in respect of units from the specified company is exempt from tax in the hand of the company, under section 10(35) of the Act. In accordance with section 32 of the Act, the company is entitled to claim depreciation on specified tangible (being Buildings, Plant & Machinery, Computer and Vehicles) and intangible assets (being Knowhow, Copyrights, Patents, Trademarks, Licenses, Franchises or any other business or commercial rights of similar nature) owned by it and used for the purpose of its business. The unabsorbed depreciation, if any, can be adjusted against any other income and can be carried forward for set-off with the income of future years.

3.

4.

In accordance with section 35D, the company is eligible for deduction in respect of specified 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 for each of the five successive previous years beginning with the previous year in which the extension of the undertaking is completed or the new unit commences production or operation, subject to conditions and limits specified in that section. In accordance with section 35DDA, the company is eligible for deduction in respect of payments made to its employees in connection with his voluntary retirement for an amount equal to 1/5th of the amount so paid for that previous year, and the balance in four equal instalments for each of the succeeding previous years subject to conditions specified in that section. In case of loss under the head Profit and Gains from Business or Profession, it can be set-off with other income under Section 71 and the excess loss, if any can be carried forward and set-off against future business income of the next eight assessment years under section 72 of the Act. The amount of tax paid under section 115JB by the company for any assessment year beginning on or after 1st April 2006 will be available as credit for ten years succeeding the assessment year in which Minimum Alternative Tax credit becomes allowable in accordance with the provisions of section 115JAA of the Act. If the company invests in the equity shares of another company, as per the provisions of section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax. However such income shall be taken into account in computing the Minimum Alternative Tax on book profit payable under section 115JB of the Act.

5.

6.

7.

8.

66

9.

As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be set-off against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity share in a company and such transaction is subject to securities transaction tax, the tax payable on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the rate of 15% (plus applicable surcharge and education cess and secondary & higher education cess) and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income. In accordance with section 112, the tax on capital gains on transfer of listed shares, where the transaction is not subject to securities transaction tax, held as long term capital assets will be the lower of:

10.

11.

a. 20 per cent (plus applicable surcharge and education cess and secondary & higher education cess) of
the capital gains as computed after indexation of the cost. or

b. 10 per cent (plus applicable surcharge and education cess and secondary & higher education cess) of
the capital gains as computed without indexation. II. Section 115-O

Tax on distributed profits of domestic companies The tax rate is 15% (plus applicable surcharge and education cess and secondary & higher education cess) Per sub-section (1A) to section 115O, the domestic company will be allowed to set-off the dividend received from its subsidiary company during the financial year against the dividend distributed by it, while computing the Dividend Distribution Tax (DDT) if:

the dividend is received from its subsidiary; the subsidiary has paid the DDT on the dividend distributed; the domestic company is not a subsidiary of any other company.

Provided that the same amount of dividend shall not be taken into account for reduction more than once. For the purpose of this sub-section, a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company. III. Tax Rates

The tax rate is 30%. The surcharge at the rate of 5.00% is applicable, only if the total income exceeds Rs.1 Crore. Education cess and secondary & higher education cess is 3%.

Special Tax Benefits to the Shareholders of the Company NIL General Tax Benefits to the Shareholders of the Company These benefits are available to the shareholders of any company after fulfilling certain conditions as required in the respective Act. (I) Under the Income-tax Act 67

Residents 1. In accordance with section 10(34), dividend income declared, distributed or paid by the company (referred to in section 115-O) will be exempt from tax. Under Section 10(32) of the Act, any income of minor children clubbed in the total income of the parent under section 64(1A) of the Act will be exempted from tax to the extent of Rs. 1,500 per minor child. Shares of the company held as capital asset for a period of more than twelve months preceding the date of transfer will be treated as a long term capital asset. In accordance with section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax including equity shares Offered for Sale under this issue which is subject to securities transaction tax at the time of sale. However in case of a corporate shareholder, such income shall be taken into account in computing the Minimum Alternate Tax on book profit, payable under section 115JB of the Act. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company and on which securities transaction tax is not payable, the tax payable on the capital gains shall be exempt from tax if the gains are invested within six months from the date of transfer in the purchase of a long-term specified asset. The long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot exceed Rs.50 Lakhs during any financial year. If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested. If the specified asset is transferred or converted into money at any time within a period of three years from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head Capital Gains of the year in which the specified asset is transferred. 5. In accordance with section 54F, long-term capital gains arising on the transfer of the shares of the company held by an individual or Hindu Undivided Family on which securities transaction tax is not payable, shall be exempt from capital gains tax, if the net consideration is utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a new residential house, or for construction of a residential house within three years. Such benefit will not be available, if the individual or Hindu Undivided Family- owns more than one residential house, other than the new residential house, on the date of transfer of the shares; or - purchases another residential house, other than the new residential house, within a period of one year after the date of transfer of the shares; or - constructs another residential house, other than the new residential house, within a period of three years after the date of transfer of the shares; and - the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head Income from house property. If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital gain the same proportion as the cost of the new residential house bears to the net consideration shall be exempt. If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, shall be deemed to be income chargeable under the head Capital Gains of the year in which the residential house is transferred. 6. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight 68

2.

3.

4.

assessment years. But long term capital loss cannot be set-off against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. 7. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity share in a company and such transaction is subject to securities transaction tax, the tax payable on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the rate of 15% (plus applicable surcharge and education cess and secondary & higher education cess) and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income. In accordance with section 112, the tax on capital gains on transfer of listed shares, where the transaction is not subject to securities transaction tax, held as long term capital assets will be the lower of: (a) 20 per cent (plus education cess and secondary & higher education cess) of the capital gains as computed after indexation of the cost. or (b) 10 per cent (plus education cess and secondary & higher education cess) of the capital gains as computed without indexation.

8.

Tax Rates for the Financial Year 2011-12: 1. Individuals, HUFs, BOI and Association of Persons: (i) (ii) The income tax exemption limit for the financial year 2011-12 is Rs. 1,80,000/Women residents of India and below the age of 65 years:

The income tax exemption limit for the financial year 2011-12 is Rs. 1,90,000/-. Education cess and secondary & higher education cess will be levied at the rate of 3 % of Income tax 2. Senior Citizens Individual residents of India and above the age of 65 years to 60 years: The income tax exemption limit for the financial year 2011-12 is Rs. 2,50,000/Education cess and secondary & higher education cess will be levied at the rate of 3 % of Income tax 3. Very Senior Citizens Individual residents of India and above the age of eighty years and above: The income tax exemption limit for the financial year 2011-12 is Rs. 5,00,000/Education cess and secondary & higher education cess will be levied at the rate of 3 % of Income tax B) 1. 1. Non-Residents In accordance with section 10(34), dividend income declared, distributed or paid by the company (referred to in section 115-O) will be exempt from tax. In accordance with section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax. In accordance with section 48, capital gains arising out of transfer of capital assets being shares in the company acquired in foreign currency, shall be computed by converting the cost of acquisition, expenditure in connection with such transfer and the full value of the consideration received or accruing as a result of the transfer into the same foreign currency as was initially utilised in the purchase of the shares and the capital gains computed in such foreign currency shall be reconverted into Indian currency, such that the aforesaid manner of computation of capital gains shall be applicable in respect of capital gains accruing/arising from every reinvestment thereafter and sale of shares or debentures of an Indian company including the Company. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company and on which securities transaction tax is not payable, the tax payable on the capital gains shall be exempt from tax if the gains are invested within six months from the date of transfer in the 69

2.

3.

4.

purchase of a long-term specified asset. The long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot exceed Rs.50 lakhs during any financial year. If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested. If the specified asset is transferred or converted into money at any time within a period of three years from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head Capital Gains of the year in which the specified asset is transferred. 5. In accordance with section 54F, long-term capital gains arising on the transfer of the shares of the company held by an individual or Hindu Undivided Family and on which securities transaction tax is not payable, shall be exempt from capital gains tax if the net consideration is utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a new residential house, or for construction of a residential house within three years. Such benefit will not be available if the individual or Hindu Undivided Family- owns more than one residential house, other than the new residential house, on the date of transfer of the shares; or - purchases another residential house, other than the new residential house, within a period of one year after the date of transfer of the shares; or - constructs another residential house, other than the new residential house, within a period of three years after the date of transfer of the shares; and - the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head Income from house property. If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital gain the same proportion as the cost of the new residential house bears to the net consideration shall be exempt. If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, shall be deemed to be income chargeable under the head Capital Gains of the year in which the residential house is transferred. 6. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be set-off against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. As per the provisions of section 90, the Non Resident shareholder has an option to be governed by the provisions of the Tax Treaty, if they are more beneficial than the domestic law, wherever India has entered into Double Taxation Avoidance Agreement with the relevant country for avoidance of double taxation of income. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity share in a company and such transaction is subject to securities transaction tax, the tax payable on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the rate of 15% (plus applicable surcharge and education cess and secondary & higher education cess) and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income. In accordance with section 112, the tax on capital gains on transfer of listed shares, where the transaction is not subject to securities transaction tax, held as long term capital assets will be at the rate of 20% (plus applicable surcharge and education cess) with the benefit of indexation and at the rate of 10% (plus applicable surcharge and education cess) without the benefit of indexation.

7.

8.

9.

70

A non-resident will not be eligible for adopting the indexed cost of acquisition and the indexed cost of improvement for the purpose of computation of long-term capital gain on sale of shares. However, a view is possible based on the proviso to section 112 and recent rulings that in case of listed securities or units, such gains could be taxed at 10% (plus applicable surcharge and education cess and secondary & higher education cess) without the benefit of indexation. B) 2. Non-Resident Indians Further, a Non-Resident Indian has the option to be governed by the provisions of Chapter XII-A of the Income-tax Act, which reads as under: 1. In accordance with section 115D r.w.s 115E, income from investment or income from long-term capital gains on transfer of assets other than specified asset shall be taxable at the rate of 20% (plus education cess and secondary & higher education cess). Income by way of long term capital gains in respect of a specified asset (as defined in Section 115C(f) of the Act), shall be chargeable at 10% (plus education cess and secondary & higher education cess) . However, in accordance with section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax. 2. In accordance with section 115F, subject to the conditions and to the extent specified therein, long-term capital gains arising from transfer of shares of the company acquired out of convertible foreign exchange, and on which securities transaction tax is not payable, shall be exempt from capital gains tax, if the net consideration is invested within six months of the date of transfer in any specified asset. If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration shall be exempt In accordance with section 115G, it is not necessary for a Non-Resident Indian to file a return of income under section 139(1), if his total income consists only of investment income earned on shares of the company acquired out of convertible foreign exchange or income by way of long-term capital gains earned on transfer of shares of the company acquired out of convertible foreign exchange, and the tax has been deducted at source from such income under the provisions of Chapter XVII-B of the Income-tax Act. Under section 115H of the Act, where a 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 under section 139 for that assessment year to the effect that the provisions of Chapter XII-A shall continue to apply to him in relation to such investment income derived from the specified assets for that assessment year and for every subsequent assessment year until the transfer or conversion into money of such assets. In accordance with section 115-I, where a Non-Resident Indian opts not to be governed by the provisions of Chapter XII-A for any assessment year, his total income for that assessment year (including income arising from investment in the company) will be computed and tax will be charged according to the other provisions of the Income-tax Act. In accordance with section 10(34), dividend income declared, distributed or paid by the company (referred to in section 115-O) will be exempt from tax. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company on which securities transaction tax is not payable, shall be exempt from tax if the gains are invested within six months from the date of transfer in the purchase of a long-term specified asset. The long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot exceed Rs.50 lakhs during any financial year. If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested.

3.

4.

5.

6.

7.

71

If the specified asset is transferred or converted into money at any time within a period of three years from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head Capital Gains of the year in which the specified asset is transferred. 8. In accordance with section 54F, long-term capital gains arising on the transfer of the shares of the company held by an individual or Hindu Undivided Family on which securities transaction tax is not payable, shall be exempt from capital gains tax if the net consideration is utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a new residential house, or for construction of a residential house within three years. Such benefit will not be available if the individual or Hindu Undivided Family- owns more than one residential house, other than the new residential house, on the date of transfer of the shares; or - purchases another residential house, other than the new residential house, within a period of one year after the date of transfer of the shares; or - constructs another residential house, other than the new residential house, within a period of three years after the date of transfer of the shares; and - the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head Income from house property. If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital gain the same proportion as the cost of the new residential house bears to the net consideration shall be exempt. If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, shall be deemed to be income chargeable under the head Capital Gains of the year in which the residential house is transferred. 9. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be set-off against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. As per the provisions of section 90, the NRI shareholder has an option to be governed by the provisions of the tax treaty, if they are more beneficial than the domestic law wherever India has entered into Double Taxation Avoidance Agreement (DTAA) with the relevant country for avoidance of double taxation of income. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity share in a company and such transaction is subject to securities transaction tax, the tax payable on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the rate of 15% (plus education cess and secondary & higher education cess) and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income. Foreign Institutional Investors (FIIs) In accordance with section 10(34), dividend income declared, distributed or paid by the company (referred to in section 115-O) will be exempt from tax in the hands of Foreign Institutional Investors (FIIs). In accordance with section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax. In accordance with section 115AD, FIIs will be taxed at 10% (plus applicable surcharge and education cess) on long-term capital gains, if securities transaction tax is not payable on the transfer of the shares 72

10.

11.

C) 1.

2.

3.

and at 15% (plus applicable surcharge and education cess and secondary & higher education cess) on short-term capital gains arising on the sale of the shares of the company which is subject to securities transaction tax. 4. Under section 196D(2) of the Act, no deduction of tax at source will be made in respect of income by way of capital gain arising from the transfer of securities referred to in section 115AD of the Act. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company on which securities transaction tax is not payable, shall be exempt from tax if the gains are invested within six months from the date of transfer in the purchase of a long-term specified asset. The long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot exceed Rs.50 lakhs during any financial year. If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested. If the specified asset is transferred or converted into money at any time within a period of three years from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head Capital Gains of the year in which the specified asset is transferred. 6. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be set-off against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. As per the provisions of section 90, the FII has an option to be governed by the provisions of the tax treaty, if they are more beneficial than the domestic law wherever India has entered into Double Taxation Avoidance Agreement (DTAA) with the relevant country for avoidance of double taxation of income. Persons carrying on business or profession in shares and securities. Income arising from carrying on business or profession in shares and securities would be taxable as Income from business or profession. The securities transaction tax paid in respect of securities transaction entered during the course of business will be available as deduction under section 36(1)(xv) while computing the taxable business income. E) Mutual Funds

5.

7.

D)

In accordance with section 10(23D), any income of: (i) (ii) a Mutual Fund registered under the Securities and Exchange Board of India Act 1992 or regulations made there under; Such other Mutual Fund set up by a public sector bank or a public financial institution or authorized by the Reserve Bank of India subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf, - will be exempt from income-tax. Venture Capital Companies / Funds

F)

In accordance with section 10(23FB) any income of a venture capital company or venture capital fund (registered under the Securities and Exchange Board of India Act, 1992 and regulations made thereunder and notified in this behalf) from investment in a venture capital undertaking will be exempt from income tax. (II) Under the Wealth Tax

Asset as defined under section 2(ea) of the Wealth-tax Act, 1957 does not include shares in companies and hence, these are not liable to wealth-tax. 73

SECTION IV ABOUT THE COMPANY INDUSTRY OVERVIEW Unless stated otherwise, information in this section is derived from various government sources, public sources and India Retail Report 2011. Neither we nor any other person connected with the issue has verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but that their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and, accordingly, investment decisions should not be based on such information. Industry sources and publications are also prepared based on information and estimates as of specific dates and may no longer be current. The data may have been reclassified by us for the purpose of presentation. INDIAN ECONOMY OVERVIEW India is the second fastest growing major economy in the world after China. Indias GDP on a purchasing power parity basis is estimated to be U.S. $4.046 trillion in 2010. This makes it the fifth largest economy in purchasing power parity (PPP) terms after European Union, USA, China and Japan (Source: CIA World Factbook). As per the latest information (Advance Estimates) of National Income for 2010-11 (at constant 2004-05 prices), released by the Central Statistical Organization, the growth of Gross Domestic Product (GDP) at factor cost is estimated at 8.6 % in 2010-11, with agriculture & allied activities growing at 5.4%, industry at 8.1% and services at 9.6%. The corresponding growth in GDP in 2009-10 was 8.0%, with agriculture and allied sector, industry and services growing at 0.4%, 8.0% and 10.1%, respectively (Source: Ministry of Finance Annual Report 2010 2011). The growth in GDP has been supported by growth in Private Consumption and subsequently in the retail market. The fiscal year 2009-10 began as a difficult one. There was a significant slowdown in the growth rate in the second half of 2008-09, following the financial crisis that began in the industrialised nations in 2007 and spread to the real economy across the world. The growth rate of the gross domestic product (GDP) in 2008-09 was 6.7%, representing a deceleration from high growth of 9.0% during 2007-08 (Source: Department of Economic Affairs, Monthly Economic Report July, 2009). The continued recession in the developed world, for the better part of 2009-10, meant a sluggish export recovery and a slowdown in financial flows into the economy. Yet, over the span of the year, the economy has posted a remarkable recovery. Growth has been fuelled by sustained investment and buoyant services. As data given in the table shows consumer goods sector registered a growth of 11.1% in February 2011 as against 6.3% growth registered in the same month of previous year. Growth in the durables goods segment has been robust through the year 2010-11 and the rise in interest rates has not had any visible impact on the performance of this sector. Improving consumer sentiment, strengthening employment scenario and increasing disposable incomes have contributed towards growth of consumption (Source: FICCI, Current State of Indian Economy April 2011). Percentage Growth in Industrial Production 2010-11 (Apr-Feb) February 2010 7.5 6.3 Consumer Goods 21.8 29.1 Consumer Durables 1.9 -0.8 Consumer Non Durables (Source: FICCI, Current State of Indian Economy April 2011)

February 2011 11.1 23.4 6.1

On a yearly basis, there has been a constant growth in Private Consumption value as GDP maintained its growth run. The retail sector being reflection of private consumption moves in tandem with its growth trends. During the downturn period the emphasis on savings replaced the aspirations of spending. Fiscal 2008-09 has been the lowest of such trend but reviving from 2009-10, Private consumption growth rate is estimated to touch double digit figures by 2012-13 (Source: India Retail Report 2011). GDP & Private Consumption 2004-05 2005-06 2006-07 29,67,599 32,49,130 35,64,627 9.5% 74 9.7%

GDP @ Constant Prices (2004-05) (in ` Crore) Growth %

2007-08 38,93,457 9.2%

2008-09 41,54,973 6.7%

2009-10 44,53,064 7.2%

Private Consumption @ Constant 19,26,858 20,91,639 22,65,665 24,83,357 Prices (2004-05) (in ` Crore) Growth % 8.6% 8.3% 9.6% Private Consumption % to GDP @ 64.9% 64.4% 63.6% 63.8% Constant Prices (Source: National Accounts, CSO - India Retail Report 2011) Consumption Pattern

26,51,786 6.8% 63.8%

28,71,921 8.3% 64.5%

The growth in economy has been well supported by the growth in income. Over four crore Indians earn a salary of over `8,97,000 a year; this is set to rise to 14 crore Indians in the coming years. According to McKinsey & Co, average real household disposable income is set to gallop; from `1,13,744 in 2005, it is set to jump to `3,18,896 in 2025 at CAGR of 5.3%. Compare against the fact that in the last two decades this growth has been about 3.6%. In comparison, average real household income in the U.S. and Japan rose at a CAGR of 1.5% and 0.25%, respectively, for the same period (Source: India Retail Report 2011). The surging economy has turned the tide for Indian households - the number of high-income households exceeded that of low-income by the end of 2009-10, according to a study conducted by the Centre for Macro Consumer Research (CMCR), a division of the National Council of Applied Economic Research's (NCAER). The report pegs the number of low-income households (less than `40,000 annual income) at 4.1 crore, while that of the high-income (more than `1.8 lakh annual income) at 4.67 crore. The rest, earning between `40,000 and `1.8 lakh, fall under the middle-income category, numbering 14.07 crore. This reflects a remarkable turnaround within just a decade, which started with just 1.38 crore households described as high-income (Source: India Retail Report 2011). A new report says that slowdown in growth over the last two years of the decade had the maximum impact on middle income households. Though in absolute terms the number of middle class households grew from 13.59 crore in 2007-08 to 14.07 crore in 2009-10, in percentage terms, it fell marginally from 62% of all households to 61.6% in the same period. The sizeable wage-earning population from the age group of 26 to 35 years forms the chief earners in 68% households and account for 61% of income earned in the country. This group constitutes 25% of the active population and 16.2% of the total population (Source: India Retail Report 2011). Per Capita Income The growth rates in per capita income and consumption, which are gross measures of welfare in general, declined between 2008 and 2010. This was a reflection of the slowdown in the overall GDP growth. While the growth in per capita income, measured in terms of GDP at constant market prices, declined from a high of 8.1% in 2007-08 to 3.7% in 2008- 09 and then recovered to 5.3% in 2009-10, per capita consumption growth as captured in the Private Final Consumption Expenditure (PFCE) shows a declining trend since 2007-08 with its growth rate in 2009-10 falling to one-third of that in 2007-08. Per capita income stood at `33,588 in 2009-10 against `31,821 in the previous financial year. According to NSSO, the national average of Monthly Per Capita Consumption Expenditure (MPCE) is `2,244. The MPCE in West and South India is above this average at `2,307 and `2,474 but East India averages the lowest at `2,031. The rural contribution is 34 % and that of urban India is 66%. South India is the highest in consumption in rural as well as urban population (Source: India Retail Report 2011). Indian Consumption Consumption has moved beyond the basic survival needs. Though the food and beverages vertical accounts for the largest share of revenues of the total retail market, we see other specialty categories such as apparel, Consumer Durables & Electronics, home, footwear, leisure and entertainment as the fastest growing verticals in the retail sector. That means, spends on non-basic needs are gaining momentum. This is more predominant in urban areas and emerging cities due to the increasing average income and purchasing power. In 1991, the average Indian spent on eight product categories, whereas in 2007 the number of categories increased to 19. This shows the shift towards discretionary spends (Source: India Retail Report 2011).

75

Share of Average Annual Household Consumption (in %) 100% 90% 80% 70% 60% 6 50% 40% 30% 20% 10% 0% 5 14 2 4 11 1 3 4 1995 12 3 8 17 2 5 7 2005 3 6 9 2015 est. 56 5 12 3 9 20 19 6 9 13 2025 est. 42 34 5 10 3 11 Food, beverages and Tobacco Apparel Housing Utilities Household products Personal products, services Transportation Communication Education, Recreation Health Care 25

(Source: India Retail Report 2011) Key drivers of Consumption Changes in demographics India has the lowest median age of 24 as compared to developed countries. The composition of the Indian population is shifting towards the age group of 20-49 i.e. the working population with purchasing power. Thus, India has the largest 'young' population in terms of sheer size and this young segment is the major driver of consumption as they have the ability and willingness to spend. Consumer Behaviour The growth of modern retail is linked to consumer needs, attitudes and behaviour. Rising income levels, education and global exposure have contributed to the evolution of the Indian middle class. As a result, purchasing and shopping habits have been inculcated and are increasing day by day. Today, people are willing to try new things and look different, which has increased spending on various other product categories apart from apparels, food and grocery items. There has been a change in shopping behaviour in urban India over the past few years; in other words, they want everything under one roof and a bigger choice of products. They also look for speed and efficiency. Increased awareness has also meant that consumers now seek information, variety, product availability, better quality and hygiene as well as increased customer service. Consumerism Cycle Being the closest link to the consumer in the supply chain, retailers benefit accordingly. Manufacturers spend a lot of money promoting a product, but if its not on the shop-shelf, consumers wont be able to buy it. Manufacturers have also realised that retailer recommendations matter, particularly in smaller towns. This synergy of objectivity in the supply chain will create the quality of deliverables of international standards which will be the consumer demand in the coming days. New Markets The rural markets along with small cities and towns are beginning to emerge as an important consumption area, for most key consumer durables and non-durable products. In response, manufacturers of consumer goods have begun developing new products and marketing strategies with these new markets in mind. The success to this strategy will be dependent highly on retail penetration in these markets. This is why the concerned players in the retail domain have planned to go ahead with expansion plans in these markets in near future. Supply Chain The consumer goods sector has been transformed by increased liberalisation, continuous reduction in customs duty, a shift from quota to tariff-based systems for imports and sophistication in manufacturing over the past 76

few years. Entry restrictions for multinationals have been removed in nearly all sectors. All this has enabled chain retailers to enjoy better range depth and sourcing options as well as improved average margins. There has been a proliferation in the range across all categories, with a simultaneous increase in the supply of products and quality retail space. This will help introducing new innovations and offerings to ever aspiring consumer. Employment Potential India tops among the countries with high employment potential. As the employment level improves with time, which with given growth will surely grow, there will be a flow of disposable income and will generate more and new crop of consumers. Shift from Necessities to Lifestyle Products Owing to the factors mentioned earlier, the consumption has seen a sea change in terms of products and services demand. Earlier the spending used to be more necessity based, which has now shifted to demands for lifestyle products and services. Thus share of wallet will be more inclined towards the latter. Increasing Overseas Travel Increasing overseas travel has updated Indians of high standards and exposed to various offerings across globe. Such a consumer who has seen it all would like to aspire for home delivery and availability of such products and services and would evolve as a part of ready market for consumption. Proliferation of Media Proliferation of media has contributed towards enhancing customer knowledge and dedicated shows, channels, magazines and events have created an aspirational attribute for consumption. (Source: India Retail Report 2011) INDIAN RETAIL INDUSTRY Retailing in India has assumed a gigantic proportion and has emerged as one of the most dynamic and fast paced industries in recent times. According to various reports it accounts for over 10% of the country's GDP and around 8% of employment. It is considered to be one of the chief sunrise industries and is at an inflexion point where the growth of organised retailing fuelled by an appetite for consumption and rising aspirational levels of a huge populace is going to take it on a higher growth track (Source: India Retail Report 2011). India Retail The Potential According to the 2010 Global Retail Development Index (GRDI) of AT Kearney, India is ranked third. The country ranks high on market potential as the market is not fully saturated. We see many foreign retailers trying to enter the market through joint ventures, tie-ups and franchise models, thus, bringing in a world-class shopping experience to the evolved Indian consumer (Source: India Retail Report 2011). 2010 Global Retail Development Index TM Top 10 2010 rank Market Country Market Time GRDI Attractiveness Risk Saturation Pressure Score (25%) (25%) (25%) (25%) China Asia 50.5 85.8 32.9 86.6 64.0 1 Kuwait MENA 75.4 94.3 56.2 24.5 62.6 2 India Asia 35.4 51.3 62.2 97.8 61.7 3 Saudi Arabia MENA 65.3 86.5 50.7 31.0 58.4 4 Brazil Latin America 73.5 74.3 46.6 36.9 57.8 5 Chile Latin America 71.8 92.3 27.5 38.3 57.5 6 UAE MENA 79.1 100.0 18.8 32.0 57.5 7 Uruguay Latin America 67.7 74.3 58.6 23.1 55.9 8 Peru Latin America 43.4 54.6 72.2 49.2 54.9 9 Russia Eastern Europe 63.5 55.1 32.0 61.8 53.1 10 (Source: Euromoney; Population Reference Bureau; International Monetary Fund; World Bank; World Economy Forum; Economist Intelligence Unit Planet Retail; A. T. Kearney analysis India Retail Report 2011) Country Region

77

2010 Global Retail Development Index Attractiveness

(Source: A.T. Kearney analysis India Retail Report 2011) Indian Retail Market Size The Indian retail market has witnessed consistent growth over the last few years, maintaining its share of around 30% of the GDP at current prices. The share of retail in private consumption rose to 53.3% in 2009-10 from 52.9% in 2006-07. The total retail market is valued at `19,48,916 crore ($428 billion), out of which only `1,26,680 crore ($28 billion) - or 6.5% of the total market is organised/modern. The organised market is growing at a CAGR of 27.69% and is expected to touch `2,06,500 crore in 2011-12. The share of the Modern Retail Market in the GDP is 2.1% and in Private Consumption is 3.4% (Source: India Retail Report 2011). At Market prices 2006-07 2007-08 2008-09 2009-10 Indian Retail Market (in ` Crore) 13,09,764 15,04,502 17,31,743 19,48,916 Growth% 14.9 15.1 12.5 Indian Retail Market % to Private 52.9 53.3 53.7 53.3 Consumption Organized Retail Market (in ` 78,300 90,000 1,05,000 1,26,680 Crore) Growth% 14.9 16.7 20.6 Organized Retail Market % to GDP 1.8 1.8 1.9 2.1 @ constant prices (2004-05) Organized Retail Market % to 3.2 3.2 3.3 3.4 Private Consumption Organized Retail Market % to Total 6 6 6.1 6.5 Retail Market (Source: IRIS Primary Research, India Retail Report 2011) Organized Retail Market The organised market's contribution to private consumption increased from 3.2% in 2006-07 to 3.4% in 200910. This implies that while the modern retail sector is growing, its share in total retail remained at 6% for the 2006-08 period and a marginal increase in 2008-09 led to a higher share of 6.5% in 2009-10. This can be attributed to the slowdown effect of the previous years during which a so-called consolidation of the modern 78 2010-11 22,21,764 14 53.7 1,58,603 25.2 2011-12 25,55,029 15 53 2,06,500 30.2

7.1

8.1

sector was in effect. The `1,26,680 crore organized/ modern retail sector, which is 6.5% of the total market, is growing at about 17.39% year-on-year. (Source: India Retail Report 2011). Retail Category 2009- 10 (in ` crore) Contribution (in %) (INR Cr) (in %) Apparel & clothing 44,166 34.90 Accessories 882 0.70 Footwear 11,814 9.30 Jewellery 3,700 2.90 Timewear 3,116 2.50 Eyewear 623 0.50 Food & Grocery 15,838 12.50 Catering & Food Services 9,737 7.70 Home & Interiors 7,530 5.90 Leisure 3,635 2.90 Mobile & Telecom 5,452 4.30 Pharmacy 2,986 2.40 Consumer Durables 11,684 9.20 Personal care & Fitness 1,103 0.90 Entertainment & Gaming 4,414 3.50 Total 1,26,680 100.00 (Source: IRIS Primary Research, India Retail Report 2011) The individual share of the modern retail category in the respective total market is of significance. The top-most category in terms of share of the organised market is Footwear (66 %), followed by Timewear (62 %), Eyewear (39 %), Apparel & Clothing (31 %) and so on (Source: India Retail Report 2011). (In ` Crore) ORGANISED RETAIL TO TOTAL RETAIL MARKET Retail Category Organised Market Total Market Share (in %) (INR Crore) (INR Crore) (in %) Footwear 11,814 17,859 66.2 Timewear 3,116 4,984 Eyewear 623 1,570 Apparel & Clothing 44,166 1,41,547 Personal Care & Fitness 1,103 5,670 Consumer Durables 11,684 62,836 Leisure 3,635 21,000 Mobile & Telecom 5,452 33,220 Home & Interiors 7,530 46,665 Accessories 882 7,450 Catering & Food Services 9,737 90,825 Entertainment & Gaming 4,414 55,440 Pharmacy 2,986 61,215 Jewellery 3,700 80,469 Food & Grocery 15,838 13,18,165 Total 1,26,680 19,48,916 (Source: IRIS Primary Research, India Retail Report 2011) 62.5 39.7 31.2 19.5 18.6 17.3 16.4 16.1 11.8 10.7 8.0 4.9 4.6 1.2 6.5

The organized market will be growing at a CAGR of 27.69% and is expected to touch `2,06,500 crores in 201112. Further, the organized retail market share to total retail market is 6.5% which is estimated to touch 8.1% in 2011-12. The opportunity for modern retail is very evident. With a CAGR of 11.2%, the total Indian retail market will approximtly reach `40,00,000 crores in five years. In the coming years a major chunk of this is expected to be cornered by organised retailers . One of the main factors supporting this assumption is that the unorganised sector is facing tremendous constraints due to increasing private vehicle population and shrinking parking space. Key Growth Drivers for Indian Retail Modern retail has entered India through sprawling shopping centres, multi-storied malls and huge complexes offering shopping, entertainment and food under one roof. The increasing numbers of nuclear families, easy 79

financing options, increase in the number of working women and emerging opportunities in the service sector during the past few years have been the key growth drivers for the organised retail sector in India. The following factors also contribute for the growth of modern retail: Changes in demographics As compared to the developed countries, India has a low median age of 24. Thus, India has the largest 'young' population in terms of its sheer size and this young segment is a major driver of consumption. Increased credit friendliness There has been a radical change in the Indian consumer's mindset regarding credit. With easy availability of credit and declining interest rates, personal credit has witnessed growth. The boom in financing has resulted in an increase in spends on housing and consumer durables such as two-wheelers and cars. The use of plastic money has significantly increased total spending on shopping and eating out. Consumer Pull In the pre- liberalisation supply-led market, the power rested clearly with manufacturers. In today's demand- led market, it's the consumer who is calling the shots. This has led to the emergence of demand-led markets. Rising Incomes India is the second fastest growing economy in the world. A larger number of households are getting added to the consuming class with growth in income levels. Increasing instances of double incomes in most families, coupled with the rise in spending power, are fuelling the growth of the retail sector. Though this growth is most evident in urban areas, it has also taken place in rural markets. Media The media bombardment during the last 15 years has exposed the Indian consumer to the lifestyles of more affluent countries and raised their aspirations and expectations from the shopping experience - they want more choice, value, service, experience and convenience. Entry of Corporates With the entry of large conglomerates, such as Bharti, Reliance, Tatas, Aditya Birla and ITC, in retailing - along with the existing small and regional players - the Indian consumer today is in a position to avail and enjoy the shopping satisfaction, entertainment, quality products aided by polite salespersons providing product information and discounts. The competitive environment will throw open new innovations, improvements and niche markets. New Entrepreneurs The growing attractiveness of the retail trade has begun to attract new entrepreneurs with ideas. Venture capitalists are also increasingly willing to invest in retail businesses. Foreign Retailers The increasing attractiveness of the sector has drawn the interest of a number of global retailers. With the opening up of the economy, more and more MNCs have entered the Indian business arena through joint ventures, franchisees or even self- owned stores. Technology The computerisation of various operations in a retail store, including inventory management, billing and payments as well as database management, and widespread use of bar coding have changed the face of retailing drastically. With further advancement in technology, things will get better for retail. Trained Manpower The last few years have seen many professional institutes and colleges come up with retail courses. The industry's in need of qualified and trained manpower institutes. The need for specialised skills is increasingly felt in the areas of strategic management, merchandise management and store management which are being supplemented by them. (Source: India Retail Report 2011) Challenges for Indian Retailing Although organised retailing is growing at an appreciable rate, several challenges are being faced by the industry. The following could be termed as main challenges faced by the modern retail sector: 80

'Consumer is King'. This is not a challenge in itself, but the environment which has emerged with this philosophy is certainly a challenge. Retailers are putting every effort to capture the consumer's wallet share and are on an experimental spree, thereby creating a situation where compromising with image and quality, heavy discounts, venturing into new business models and virgin markets are becoming rampant. This is not letting them consolidate the business in a competitive market. The industry needs to evolve in a way where every player has a room to sustain and grow. Role of the FDI policy is limited to the single brand entry. The demand to allow FDI in multi-brands retailing is increasing with the anticipation that it will boost infrastructure and increase employment. This is yet to be addressed by the government. Due to the high rental cost, a major component of the OPEX, the operating cost of retail is still very high. The industry tried to counter this problem during the downturn by renegotiating with the developers, but this was confined to mall retailing. The changing consumption pattern in a developing economy like India is also one of the biggest challenges for retailers. The days of brand loyalty are few and the demand for exclusivity and consistent service provider is gaining momentum. To meet these demands, the industry needs to react in time. (Source: India Retail Report 2011)

Formats of Retailing Retail happens through many categories and in India there are organized retailers across all categories. The operational formats in the retailing industry are as follows Department Stores A department store is a retail establishment that specializes in satisfying a wide range of the consumers durable goods requirements and offering the consumer a choice of multiple merchandise lines, at variable price points, in all product categories. The sales area of a department store is at least 25,000 sq. ft. In a department store, no product category accounts for over half of the total sales area. Department stores usually sell apparel, furniture, home appliances and electronic goods; in addition, they could offer select lines of products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewellery, toys and sporting goods. Hypermarkets Hypermarkets have emerged as the biggest crowd puller. This retail format not only offers consumers the most extensive merchandise mix, product and brand choices under one roof, but also creates superior value for money. With product categories on offer ranging from fresh produce and FMCG products to electronics, value apparel, house ware, do it yourself (DIY) and outdoor products, hypermarkets are gaining in popularity in India. The number of players operating in this format is also increasing by the day. Supermarkets Unlike in evolved markets, where supermarkets are prominently visible, in India they are in a growing phase. Supermarkets largely concentrate on selling food related products and key FMCG categories and are smaller in size when compared to Hypermarkets. Their value proposition is also different from Hypermarkets. Supermarkets offer relatively less assortments, but focus on specific product categories. They do not play the price game, rather use convenience and affordability as their salient features. Convenience Stores Convenience stores offer locational advantage to shoppers and provide ease of shopping and customized service. It charges average to above average prices depending on the product category and carries a moderate number of SKUs. Normally it remains open for long hours and shoppers use it to buy fill-in merchandise and emergency purchases. Discounters Discounters offer several advantages such as lower price, wider assortment and quality assurance. Wal-Mart and Aldi were able to quickly build scale and pass on benefits to the consumer. In the long run, though, success depends on the operational efficiency and consistent value delivery to consumers. e-Commerce The importance of internet retailing is growing all over the world. They provide virtual shopping space to vendors. Most of the Brick and Mortar retailers are entering online retailing as a second channel as they have physical infrastructure and they can use that to capture additional consumer wallet share. Other Emerging Formats Multi Brand Retail Outlets can be seen in Apparel as well as Food & Grocery retailing. But now the emerging product categories are Timewear, Footwear, Accessories and Electronics. Players such as Croma, Ethos and M&B are paving the way for the segment. Exclusive Brand Outlets will be one of the key formats in future retailing. The product categories going niche and exclusive will give rise to many new brands targeting new consumption demands. So far, fashion has been the largest segment for EBOs, 81

followed by Electronics and Food services (QSR and Specialty). The franchising model of business has given this format a major growth and scope for expansion. (Source: India Retail Report 2011) CONSUMER DURABLES AND ELECTRONICS Consumer Durables and Electronics category covers home appliances, kitchen appliances, white goods, entertainment electronics, PCs, Laptops, related accessories, cameras etc. The market is currently dominated by the mono-brand dealership model, though the emerging Organised Multi Brand Outlets (MBOs) are growing at an appreciable growth rate. India has an increasingly affluent middle class population that, on the back of rapid economic growth, has made the country's consumer electronics industry highly dynamic. The industry has been witnessing significant growth in recent years due to several factors, such as retail boom, growing disposable income and availability of easy finance schemes. But still, the consumer durable goods, like refrigerators, televisions and air conditioners, have low penetration in the country, leaving vast room for future growth. This is going to attract many foreign majors to the country. Consumer Durables and Electronics market is worth approximately `62,836 crore. The total market for the category has been growing at a CAGR of 3.53%; the organised market has grown at a CAGR of 18.06% between 2007 and 2010. For the next two years the category will grow at an estimated 16 to 17% (Source: India Retail Report 2011). Consumer Electronics 2009-10 2010-11 est. Growth % 2011-12 est. (in ` Cr) (in ` Cr) (2010-11) (in ` Cr) Total Retail Market 62,836 73,141 16.4 85,583 Organised Retail Market 11,684 14,371 23.0 17,677 Organised Market s har e in % 18.6 19.6 20.7 Unorganised Market share in % 81.4 80.4 79.3 (Source: IRIS Primary Research, India Retail Report 2011) Growth % (2011-12) 17.0 23.0

The industry experienced some effects of the downturn in the first few months of 2009, but with the recovering global economy and increased consumer confidence in the latter part of the year, the market revived. Young consumers look to keep up with the latest fashions in electronics. Traditionally, the Indian consumer electronics retail market has been largely governed by the unorganised market, but with large chain electronics stores offering competitive prices, organised retail is gradually gaining strength. Laptops, LCD TVs, DTH and portable media players will continue to be the fastest growing subsectors. Analogue products are not likely to disappear entirely over the forecast period, with some demand from rural areas and tier 3 cities. With rising incomes and technology becoming cheaper, demand for high end products like Blu-Ray players and In-car navigation is expected to pick up in the coming years. With the increase in price wars due to the entry of new players in the market and increase in manufacturing capacity by some original manufacturers, the profitability and margins of the companies are adversely affected. Poor distribution network in semi-urban and rural areas and low awareness of products in rural India are hindering overall growth. Presence of grey market in especially in DVD players, music players is also a challenge. Companies need to increase focus on product differentiation to address various segmental specific need (Source: India Retail Report 2011). Category Wise Growth of Consumer Durable and Electronics Consumer Durable and Electronics form a major segment in the changing preferences of Indian consumers. According to CEAMA, the sectors that are projected to achieve year-on-year growth rates of more than 20% in terms of quantity produced are air-conditioners, VCD/MP3 players, DVDs players and Semi-automatic washing machine. The goods which are projected to achieve growth rates in the range of 35% to 60% include microwave ovens, fully automatic washing machine, Split-air conditioners and frost-free refrigerators. High-end flat panel TV, LCD TV and Plasma TV are expected to achieve a growth rate of 100% or more (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd).

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Index of Industrial Production: Use-Based Consumer Durable (Base : 1993-94=100) Month 2008-2009 2009-2010 April 353 415 May 391 443 June 374 435 July 401 489 August 395 492 September 446 554 October 425 510 November 370 510 December 339 495 January 391 516 February 413 537 March 443 587 Average 395 498 (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd)

Growth 18% 13% 16% 22% 25% 24% 20% 38% 46% 32% 30% 33% 26%

Consumer Durable Products Air-conditioners Split A.C Frost Free Refrigerators Microwave ovens Semi-automatic Washing machines Fully Auto Washing Machine High- end Flat Panel T.V LCD TV Plasma TV VCD/MP3 players DVDs players (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd) Penetration level of consumer durable is low in Rural India

Growth 25% 60% 54% 35% 20% 35% 100% 110% 100% 20% 25%

Rural India that accounts for nearly 70% of the total number of households has an only 2% penetration in case of refrigerators and 0.5% for washing machines because of poor government spending on infrastructure and electrification which now offers plenty of scope and opportunities for the white goods industry. The urban consumer durable market for products including TV is growing annually by 7-10% whereas the rural market is zooming ahead at around 25% annually. The rural market is growing faster than the urban India, and the urban market now largely become a product replacement market. The penetration of Consumer Durables is provided in the table below: (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd) Penetration of Consumer Durables Consumer (No of households owing goods per000 household) Growth in Penetration Level Durables 1996 2002 2006 2010 2002 2006 2010 White Goods 149.4 247.1 319.1 451.7 65% 29% 42% (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd)

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Market Segment of Consumer Durable in India Key Consumer Durables % Share (In Value terms) 5% 18% 34% Colour TVs, Refrigerators, Air Conditioners and Washing Machines are few of the largest segments of the Indian consumer market. Colour Television segment accounted for 30% of the consumer durable market in value terms during 2009-10. The segment was followed by refrigerator with 18%, Air conditioners with 13% and Washing Machines with 5% of the overall market share.

30%
13%

Refrigerator Air Conditioner Washing Machine

Colour Television Others

Analysis of some of the Key Products in Consumer Durable and Electronics Colour Televisions Colour televisions (CTVs) are the leading products its total Indian market in terms of sales. CTVs sales for the year 2009-10 are estimated at around 15.15 million units. The Indian CTV market is a medium segment market with a screen length of 20" and 21" constituting bulk of the sales although large CTV segment with screen length greater than 21" is growing rapidly nowadays. Nowadays flat-screen CTVs account for approximately 65% of the total market due to the reduction in the price between conventional and flat-screen colour televisions. The demand for CTV is more in the consumer electronics category partially due to the rural sector. Lowering of prices, cable television, rise in number of regional channels, events like cricket world cup and IPL etc. influence the rural sector and colour televisions is normally the first white good which they purchase (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd).

(Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd). Room Air Conditioner With an increase in standard of living of the Indian middle class, there has been a tremendous shift in the demand for air-conditioners from non-branded assembled air conditioners to branded products in the urban area. India's AC industry is witnessing a steady growth as the base is still very small. Sales Volume in the market were 3.59 million units in 2009-10, which is expected to grow to 4.96 million units by 2011-12, reflecting a CAGR of 17.5% during the period 2009-10 to 2011-12. The urban market accounts a major portion of overall sales for most of the leading players in the segment. Products with a two-to-three star rating that have average energy consumption, are expected to account for a majority of the sales as they are cheaper and attracting the 84

first time buyers. Consumers have now started upgrading to higher priced, high star rated energy efficiency product for less power consuming air-conditioners to snip mounting electricity bills which acts as a saving in continuous manner (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd).

(Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd). Washing Machine: Washing Machine is one of the fastest growing consumer durable products in the Indian market. One of the major reasons for this is the increasing demand for these products in the semi-urban and rural markets of the country. Volume sales of washing machines in the country stood at 3.35 million units in 2009-10 and are expected to reach 5.27 million units by 2011-12, reflecting a compounded annual growth rate of 23.2% during the period 2007-08 to 2011-12 (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd).

(Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd). Refrigerators In India, for more than 8 months the weather is hot & humid and hence, refrigerators are used in almost all households throughout the year. Refrigerators for home can be bought in budget starting from less than `10,000 to over `1,00,000. Many electronic appliances stores offer special festive discount and best buy deals. In 200910, refrigerators production increased by 26.3% as against a mere 3.0% rise a year ago. This indicates a spectacular recovery in demand for refrigerators that was badly hit during 2008-09 on account of a slowdown in the economy. During 2009-10, export volumes of refrigerators are estimated to have grown by a robust 33.3% and the details are in the table below: (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd).

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(Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd). Microwaves Oven The market for microwaves oven, accounts for sales of 1.37 million units in the year 2009-10 and are expected to reach 1.69 million units market by 2011-12 at a growth rate of 23%. The demand for microwave ovens segment is increasing rapidly due to the changing lifestyles among the young adults, nuclear families with double income and working women where they have not much time to spend on cooking food. Nowadays, with the fast moving readymade food, tinned food and home delivery parcels provided at our doorsteps is making microwave oven sales increase in the urban sector (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd).

(Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd). Mobile Handsets Indian mobile handset sales accounted for around 32% of Indian consumer electronics spending in 2009. The total Indian market handset sales are expected to grow to 308.76 Million units in 2015, as mobile subscriber penetration soars towards 132%. The main reason behind this growth is lowering of call rates due to heavy competition new innovative features like touch screen and new services like email, gaming, internet etc. Currently the Vendors are focusing on semi-urban & rural customers, with penetration in rural areas estimated at less than 15%, which is far below than the national level (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd).

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Mobile Phone Demand in Units (In Millions) 350 300 250 200 150 100 50
195.97 225.78 280.2 253.09 308.76

0
FY 11 est. FY 12 est. FY 13 est. FY 14 est. FY 15 est. (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd).

Estimated Demand for Cell Phones in India (In Millions Numbers) Year India Andhra Pradesh 14.93 17.20 19.28 21.35 23.52 Gujarat Karnataka Kerala Maharashtra (excluding Mumbai) 15.74 18.13 20.32 22.50 24.79 Tamil Nadu (excluding Chennai) 12.03 13.86 15.54 17.20 18.96 Chennai Mumbai Delhi

FY 11 FY 12 FY 13 FY 14 FY 15

195.97 225.78 253.09 280.20 308.76

12.95 14.92 16.72 18.52 20.40

13.22 15.23 17.07 18.90 20.83

13.23 15.25 17.09 18.92 20.85

5.90 6.79 7.61 8.43 9.29

14.61 16.83 18.86 20.88 23.01

14.53 16.74 18.76 20.77 22.89

Source: Cygnus Research (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd). In durables, consumer preference for a product is not only driven by its affordability, but also its perceived utility for the cost of ownership (value for money). In consumer preference hierarchy, mobile phones are the most preferred appliance followed by colour televisions, two wheelers, refrigerators, washing machines and air conditioner. Mobile phones have steadily risen in the consumers preference hierarchy with the drastic fall in cost of ownership. The demand for mobiles and increased competition amongst manufacturers has led to increase in volumes and lowering of prices. Tie-ups between the manufacturers and the service providers are also resulting in increased sales (Source: Cygnus Research Techno Economic Viability Study on PCH Retail Ltd). GROWTH FACTORS In the last few years, the Consumer Durables and Electronics sector has grown at a rapid pace and so is the number of outlets. The sector is likely to further increase its share in the modern retail sector in the years to come. The factors contributing to its impressive growth are as follows: Economic prosperity: An important reason for the strong consumer sentiment is higher disposable incomes of Indian households. In urban settings, there is also the factor of double incomes, which puts more money in the hands of consumers. Even the rural sector has seen large-scale prosperity in recent years, and hence there is a big rush towards opening outlets in tier 2 and tier 3 towns by retail chains. Higher aspirations, better lifestyles: The rapid prosperity of the Indian economy in general and of individuals in particular has led to higher aspirations. It is a known fact that consumers want to buy products that have smart technology, innovative design and sleek look. Consumers have recently begun to believe that the use of consumer durables with higher technology will make life easier for them. Easy finance schemes: For High-end products, such as LED TVs, Laptops, Tilt Washing Machines, Frost-free Refrigerators and Cameras, retailers have tied up with banks and other financial institutions for easy finance 87

schemes, thereby boosting consumption patterns. Customers are charged low interest rates, or even zero interest rates, which give them a major incentive to buy products. Shopping experience: The trend of opening large-format Consumer Durables and Electronics outlets has added to the 'consumer experience'. These stores give more browsing space to the consumer and more choice of products. The 'look and feel' factor and the arrangement of products in modern stores result in consumer choosing to buy from these places rather than from traditional outlets. This experience is further enhanced with many retail chains heading for malls and opening stores which attract a large number of footfalls and have greater facilities. Finally, advertising of products seem to be whetting the consumer's appetite for such products. Competitive pricing: Constant value engineering efforts and efficacy of operations is resulting in a reduction of prices, thereby fuelling demand. For instance, the reduction in prices of LCDs has resulted in a subsequent jump in their sales. Festival period: Different festivals, whether celebrated at the national or state levels, boost sales. Other periods of high sales are sporting events such as the Cricket World Cup and the Football World Cup, or even Olympics, when a large number of people purchase TV sets. A seasonal factor is when people tend to purchase more air conditioners during the summer season, and more washing machines during the monsoon. International retail chains: With many western markets reaching saturation points, international retail chains, including Wal-Mart and Carrefour, are looking at India as a major market. There will be a major influx of Foreign Direct Investment (FDI) when the in multi brand retail sector is opened to foreign chains. (Source: India Retail Report 2011) CHALLENGES The biggest challenges will be the issues pertaining to distribution and infrastructure. There is a lack of welldeveloped distribution networks in rural markets and this makes to achieve growth in the rural sector. There are also issues of power cuts and poor road linkages in these areas. (Source: India Retail Report 2011) FUTURE According to a report by RNCOS titled "Global Consumer Electronics Market Forecast 2013", the Indian consumer electronics segment has immense growth potential. Penetration levels are still low: refrigerators (18%), washing machines (6%), microwave ovens (1%) and air conditioners (2%). According to a report by McKinsey Global Institute, the total consumption in India is likely to quadruple by 2025, making India the fifth largest market in the world. While urban India will account for 68% of consumption, rural India will for the remaining 32%. India also ranks as the fastest growing market in the world. In May 2010, the BMI India Retail Report for the fourth time in five years ranked India as the most attractive investment destination. The multi-brand Consumer Durables and Electronics sector is thus, on a major growth curve in India. Various factors, including low product penetration, high disposable incomes and lifestyle changes, will continue to contribute to its growth. (Source: India Retail Report 2011) FDI INVESTMENTS IN RETAIL SECTOR 1. Cash & Carry trading / Wholesale Trading FDI Cap - 100% Entry Route Automatic

Definition: Cash & Carry Wholesale trading/Wholesale trading would mean sale of goods/merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers. Wholesale trading would, accordingly, be sales for the purpose of trade, business and profession, as opposed to sales for the purpose of personal consumption. The yardstick to determine whether the sale is wholesale or not would be the type of customers to whom the sale is made and not the size and volume of sales. Wholesale trading would include resale, processing and thereafter sale, bulk imports with ex-port/ex-bonded warehouse business sales and B2B e-Commerce.

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2.

Single Brand product trading FDI Cap 51% Entry Route Government Approval

(1) Foreign Investment in Single Brand product trading is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India, and enhancing competitiveness of Indian enterprises through access to global designs, technologies and management practices. (2) FDI in Single Brand products retail trade would be subject to the following conditions: (a) Products to be sold should be of a Single Brand only. (b) Products should be sold under the same brand internationally i.e. products should be sold under the same brand in one or more countries other than India. (c) Single Brand product-retailing would cover only products which are branded during manufacturing. (3) Application seeking permission of the Government for FDI in retail trade of Single Brand products would be made to the Secretariat for Industrial Assistance (SIA) in the Department of Industrial Policy & Promotion. The application would specifically indicate the product/ product categories which are proposed to be sold under a Single Brand. Any addition to the product/ product categories to be sold under Single Brand would require a fresh approval of the Government. (4) Applications would be processed in the Department of Industrial Policy & Promotion, to determine whether the products proposed to be sold satisfy the notified guidelines, before being considered by the FIPB for Government approval. (Source: Consolidated FDI Policy, DIPP www.dipp.nic.in)

FDI Inflow in India In the past five years, India has been benefiting from substantial inflows of FDI in some sectors of economy, signifying the potential that global investors and fund managers see in the world's second most populous nation. Important facts substantiating the same are mentioned below The total FDI inflow in India from April 2000 to March 2011 is `5,80,722 crores. The total FDI inflows in Trading from April 2000 to March 2011 are `12,256.57 crores which is 2.14% of total FDI inflows. The total FDI inflows in Retail trading (Single Brand) from April 2000 to March 2011 are `304.85 crores which is 0.05% of total FDI inflows. (Source: www.dipp.nic.in)

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BUSINESS OVERVIEW In this section, unless the context requires otherwise, any reference to the terms PCH, our Company, we, us and our refers to PCH Retail Limited. Overview We are one of the leading retailers of Consumer Durables & Electronics products in Andhra Pradesh and also have good presence in Tamil Nadu, Karnataka and Maharashtra. We retail products of most major brands through our 110 MBOs and 11 warehouses spread across an area of 6,21,000 sq. ft. We have established operations in 28 cities across four states of India viz., Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. The Company is promoted by Sardar Balvinder Singh and Mrs. Baljit Kaur. PCH i.e Punjab Crockery House was started by Mr. Huzur Singh, father of Sardar Balvinder Singh in 1950 which was involved in trading of Crockery & Glassware items. In the year 2001, Sardar Balvinder Singh started a Proprietorship Firm namely, M/s PCH Business which dealt in retail & wholesale trading of electronic consumer durables of Videocon & Sony. In the year 2003, Sardar Balvinder Singh started PCH Group comprising of 3 partnership firms viz., M/s PCH Associates which dealt in retail trading of electronic goods & allied products and home appliances, M/s PCH Mobile Zone which dealt in retail & wholesale trading of mobiles and accessories and M/s PCH Sales which dealt in retail trading of electronic goods of Sony & mobiles of Sony Ericson exclusively. In March 2007, the three partnership Firms (i.e., M/s PCH Associates, M/s PCH Mobile Zone and M/s PCH Sales) and the proprietorship concern M/s PCH Business were taken over as going concerns by PCH Retail Ltd (incorporated in 2007) by way of Memorandum of Mutual Understanding dated March 04, 2007, with a focus on selling Consumer Durables, Electronics & Allied products, Home Appliances, Mobiles & Accessories, Cameras & Camcorders through wholesale trading and trading through retail outlets. As a retailer and wholesaler our endeavor is to offer one-stop shop solution to our customers. We offer our customers the whole gamut of Consumer Durables & Electronics products and most of Indian and multinational brands. Our product offering includes Washing Machines, Refrigerators, Television, LCD, LED, Audio Systems, Air Conditioners, Digital Cameras & Camcorders, Computers & Computer peripherals, Mobile Phones & accessories, Home Appliances etc. As per our Restated Financials, our total revenue for the financial year ending 2010 was `65,771.34 lakhs as compared to `43,172.18 lakhs for financial year ending 2009. During the same period our profit after tax was `726.82 lakhs and `525.58 lakhs respectively. For the nine (9) month period ended December 2010 our total revenues were `67,931.08 lakhs and profit after tax was `1,200.34 lakhs. Competitive Strengths We believe that the following are our principal competitive strengths, which differentiate us from other players in the Consumer Durables & Electronics space: Strong regional presence We have grown over a period of time by spreading our operations in states like Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. In these 4 states we have developed a network of 110 outlets with 11 warehouses. We have presence in Tier 2 and Tier 3 cities of these states and are able to understand the requirements of customers of these areas and design the product portfolio accordingly. We have a very strong reach in the interior parts of these states as well and are benefiting from the rural urban markets available. Our strong presence in these states has enabled us to build our brand value resulting in high brand recall among customers thus reducing the cost of marketing. Wide network of multi brand retail outlets We have a network of 110 Multi Brand Retail Outlets as of date with a retail space aggregating to 6.21 lakhs sq. ft. The high number of retail outlets has given us an opportunity to negotiate better with manufacturers and work on terms favorable to us. Also product portfolio of almost all major brands ensures that majority of customer requirements are met in the showroom. Our outlets are designed to accommodate a wide variety & range of products in Consumer Durables & Electronics, Home Appliances and IT products category thereby giving

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number of options to our customers. Also our existing infrastructure has been designed for a higher scale of operations than our current size, and helps us meet any sudden increase in demand. Ability to source products at lower cost Our business comprises of retailing & wholesaling, which allows us to purchase goods in bulk at a lower cost. We have a centralized & standardized purchasing system and pattern that enables us to place consolidated orders and source at attractive rates and avail the schemes of the manufacturers from time to time. Sourcing goods at lower cost enables us to sell it to other retailers at a competitive rate as well as give us additional volume and margin in our retail operations. Our warehouses & distribution centers are spread across 11 locations. These warehouses enable us to store products in bulk quantity. Further, we believe that we have a good network of logistics system supported with our own and contract transport carriers, which helps us in transporting and delivering these products in a cost and time efficient manner to our retail outlets and to our customers. Strong and efficient supply chain management We believe that our distribution and logistics set up is well networked and allows us to fulfill the store requisition as well as client requirement within short time period of generation and receipt of orders. We deal in a number of products of various companies and we distribute these products to our own retail outlets as well as to other retailers / distributors in various locations through our warehouses. To have uninterrupted business, we have built a supply chain management which involved planning, merchandizing sourcing, standardization, vendor management, logistics, replacement and replenishment. Being in the retail industry, rotation of products on the shelf has to be quick. Our supply chain management enables us to move products quickly. It further helps us to optimize in-store availability of merchandise and minimize transportation cost. Based on the demand from either the wholesale (bulk orders) segment or retail segment we plan our supply schedule. This also helps us in understanding as well as adapting to the changing patterns in consumer behaviour. Our business mix, supply chain management and distribution network enables us to have shorter business cycles thereby efficient working capital management. Experienced & Competent Management team We have an experienced management team steered by our Promoter and Managing Director, Sardar Balvinder Singh who is complemented by a team of experienced and professional managers & committed workforce. Our management team comprises of talented professionals who are highly experienced in the retail sector. This has assisted us in effective management of our outlets. We believe that we have created the right balance of performance bonuses and other incentives for our employees. As an on-going practice, we have adopted training modules through which we train our employees, thereby enabling them to achieve better results. The experience of our management has enabled us to draw the existing business model of the company wherein we move our goods fast and always try to offer our customer latest products. Our promoters have been able to build a huge network of retail outlets and a good bulk customer base to whom our company supplies products for further retailing. Customer Service We have experienced that improved customer service provides a tremendous boost to sales. Handing over the decision making in customer service to our outlet managers have empowered them to understand the customer better and address their needs and woo them in order to increase brand retention. Having a regional presence has also helped our store executives to develop customer relationships in their respective areas of operations. Ability to identify new locations to promote our business plans We believe that it is very critical to set up our outlets in prime localities to serve more no. of customers. Accordingly, we have a professional team in place whose responsibility is identification of locations with potential for growth and development of market. The function of team is to do an analysis of the business potential of the various locations. The team works on various factors such as target market mapping, demographic detailing, standard of living, connectivity to other business centers, market potential, infrastructure, etc. All these factors are further supplemented by establishment and operational costs.

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Our growth strategy We intend to pursue the following strategies in order to consolidate our position and grow further: Enhance our presence across India We intend to expand our presence both geographically and in terms of number of outlets. Fast developing smaller towns are currently under-served and there is a huge scope for organized retailing of Consumer Durables & Electronics products. We are looking to enter new markets, including Tier 2 and Tier 3 cities that offer potential for growth and provide an opportunity to gain a foothold in both the areas of business operations i.e., retailing & wholesaling. We also intend to strengthen and consolidate our presence in the existing markets by expanding our network of retail outlets. Brand promotion and enhancement We further intend to invest in developing and enhancing our brand image, through brand building efforts, communication and promotional initiatives such as advertisements in print media, hoardings, televisions, organizing events, and participation in industry events, etc. This is a continuous exercise which would increase the brand recall and image resulting in an increase of sales and profitability. Up-gradation of Information Technology systems & processes To better monitor the movement of goods and manage the network of outlets we require efficient information technology system & processes which can accurately track the movement of goods through POS allowing us to assess procurement levels and stock our outlets with optimum level of inventory. We are exploring implementation of SAP ERP management system which can replace/ integrate the existing FOCUS ERP for better management. With these systems in place, we can have a control on the stocks, pricing and promotions, replenish stock, quality control, in-store good shuffling, customer details, billing and payments. With the growth in operations we will upgrade our systems to connect all the outlets on real time basis. Improvement in systems and processes would help us scale up operations with less hindrance. Training initiatives to get better results from our employees We believe that one of the keys to our success is our ability to train and grow our team of employees consisting of sales and support staff. Training is necessary to build an efficient team which will be in a position to deliver results. It becomes imperative to impart appropriate training for effecting higher sales. We shall endeavor to continue and strengthen our training programs on various aspects viz., relationship management, etiquettes, client orientation, product know-how, accounts & bills management, customer feedback, etc. With the in-house and on-the-job training, we believe that effectiveness of employees increases in implementation of business plans, building customer relationships and generation of ideas at store level. Maintain our focus on long term relationships We believe in further developing and maintaining long term sustainable relationships with suppliers, customers and employees which will help us in achieving the goals set, particularly in view of entering into new markets. We offer wide range of products, latest trends and competitive pricing which will help us achieve customer satisfaction and build long term relationships, which will translate into repeat sales. We also help our customers in availing after sales service from the manufacturer. Our Business Model

The two pronged business model i.e., Wholesaling (Bulk orders) and Retailing gives us the following benefits Higher volumes Economies of scale Better reach than that of local players Better turnaround of inventory

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As depicted above, we service individual retail customers as well as other bulk customers (retailers), corporates, etc. to whom we sell our goods in bulk with a credit facility. Our sales are affected through our retail outlets as well as our warehouses at various locations. The movement of goods happens either through the outlets or warehouses depending on the availability of the same. As on date, we have the following network of 110 MBOs and 11 warehouses spread across in 28 cities in four states of India viz., Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. Wholesale Operations Our wholesale operations consist of bulk sales to other retailers, traders, corporates, etc. either on cash or credit. The concept of wholesale trade is B2B driven. We implement our wholesale operations by supplying the customers the goods either through our outlets or warehouses. Our wholesale operations consists of two main functions a) Procurement and b) Logistics

Procurement Our entire wholesale and retail operations are based on the procurement policy that we adopt. Procurement forms the center of our business operations because we will be able to sell only what we have. We plan our purchases, finances, marketing activity, deliveries, etc. based on the procurement function. The various activities that form part of procurement are as follows Report Collection The first step in procurement is collection of reports from the entire network of our retail outlets for their requirements of goods for shelf and their storage. Our entire network of outlets is connected through LAN & WAN wherein the sales and sales receipt are recorded real-time and there is an update to the procurement team on a minute by minute basis and also it automatically generates orders to the procurement team wherein the predetermined order levels are reached. This enables us to generate reports on a daily basis, weekly basis, fortnightly basis, monthly basis, etc. Additional demands of the season and festive occasions are estimated based on previous period performance and current trend supported by the projections of the manufacturers, availability of products with manufacturers godowns & supply chain and procurement level finalized. Further, we have built a system to monitor the inventory position on a real-time We are also in regular touch with our B2B customers on a regular basis and collect long and short lists of their requirements. Our follow up with our customers is on a fortnightly basis, quarterly basis and annual basis wherein we schedule our purchases on the fortnightly, monthly, quarterly, bi-annually and annually for our customers. Order Planning Based on the reports generated and the order schedule, we plan our ordering schedule. Further, our procurement is also based on the festivals and preferences of a particular region. We would further plan our ordering based on the credit facility available with each supplier/ manufacturer and their production & delivery schedule. For optimal utilization of space at the warehouses we also plan out our deliveries to distant store locations so as to have optimal level of stock holdings and ensure that new products reach customers in time. Our procurement team makes efforts to see that minimum level of inventory is maintained by us wherever manufacturers have their warehouses to service on short notice.

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Ordering Ordering is carried out by the purchase department which is based on the analysis of the reports generated as well as the plans made for ordering the goods. The ordering takes place on the basis of the procurement policy that we have adopted. The ordering team also looks out for specific discounts that are available from the suppliers and the same is synchronized with the movement of those particular goods through our outlets. We follow a centralized ordering pattern to get the benefit of economies of scale. We dont have any agreement with any of the suppliers whose goods we sell through our outlets. As a matter of practice, no manufacturer/supplier enters into any agreement with the traders/ dealers. However, we are trading partners / dealers of all the reputed brand manufacturers. As a matter of practice, the manufacturers announce a pricing policy every month/ festival season / special occasions to the traders / dealers which specifies the amount of margin, incentive, schemes that would be applicable to the dealers who participate in the Scheme announced. There will be an exchange of a statement showing item / model wise indent based on actual quantity available with the manufacturers. The following process takes place between us and the manufacturer / supplier Negotiation with manufacturer will be done. Offers with regard to previous accord will be provided Inputs with regard to running models, showroom requirement, prevailing market rates will be discussed & reviewed If negotiations are incomplete, the same will be forwarded to add further inputs by procurement team and it will be re-scheduled for negotiation till finalization of the accord On receipt of the finalized offer, the same will be intimated to purchase department for initiating the purchase process. Purchase department in coordination with Sales Head and Warehouse in-charge will formulate Material Requisition Form (MRF) The same will be approved & will be forwarded to purchase department for creation of Purchase Order (PO) along with all terms & conditions of payment and schemes applicable. On receipt of MRF the purchase department will raise PO in accordance with the approved Accord and will be sent to final approval. Approved PO will be handed over to manufacturer / warehouse, for initiating the supplies.

In some cases the manufacturers provide what is called an Accord Sheet outlining the scheme or margin mutually agreed. PCH being a preferred trading partner by virtue of having long association, being prominent retailer in Andhra Pradesh and having sizable growing sales and experienced marketing personel, enjoys the patronage of some of the manufacturers such as Samsung, LG, Sony, Godrej, Panasonic, Philips, HP, Olympus, Videocon etc. basically in terms of getting availability of a better product mix, volume of business, margin, or in terms of payment. As per the indent mentioned above, if we achieve a given volume, it becomes automatically entitled for the margin, scheme discounts and other reward schemes applicable for the limited period offer. Logistics The main purpose of our logistics team is to handle the movement of goods efficiently and utilization of available resources effectively so as to achieve the closure of sales. We believe in ordering the right quantity of goods at the right time and delivering the right quantity of goods at the right time. With efficient logistics in place we would be able to time the market and deliver only those goods to the market which the customers have a demand and need for. Further, our logistics is built to cater to the movement of goods amongst the warehouse and outlets as well as between the outlets. The idea is not to stock the goods on the shelf of a particular store but to get maximum accrual on the space of shelf by rotation of goods in a timely manner. Our logistics functions are broadly divided in three sub-functions viz., a) Inwards; b) Scheduling; and c) Outwards. These sub-functions are critical in nature due to our set-up and size of operations. We have 11 warehouses situated at different locations for which the good delivery and movement pattern needs to be devised much in advance so as to have no bottle-necks in our operations. We have put up a structure in place wherein there is a team assigned at every warehouse that will look at each of these sub-functions and further each of these warehouses are allocated outlets which are to be serviced by that particular warehouse. So the 94

team will co-ordinate with the outlets while drawing up the deliveries. Well planned logistics enables us to control our distribution costs as well as inventory holding costs. Inwards: We have centralized procurement policy, however our request of deliveries are either to warehouses or our outlets or at the locations of our wholesale customers. Based on the order quantity, space allocation, delivery schedules, etc. we define our inwards good movement schedule. The inward schedule is planned in such a manner that appropriate levels of inventory are maintained at all times. Our outward logistics is mapped to the inwards logistics function. Scheduling: We have presence in 28 cities and 110 outlets. Making goods available at each of these locations is a challenge. We have to plan our delivery schedule for our outlets as well as bulk buyers. While designing our delivery schedules we take various things into consideration viz., time to destination, social factors, etc. We also take into consideration various risks into consideration and take appropriate insurance coverage for the goods in transit. Further, we give more importance to scheduling since many of our outlets are in Tier 2 and Tier 3 cities, and the time taken to move from one place to another is more and the accessibility of huge vehicles is an issue. Outwards: Majority of the distribution to the outlets and customers happens through our warehouses. Depending on the flow of orders and the requisition from outlets, we design our distribution and deliver accordingly. Our delivery schedules to outlets are defined wherein the deliveries happen to a store every 15 days. The products sold to customers would either go through the warehouse or the outlets depending on the availability. We deal with a few carriers whose services we use to deliver our products to customers. However, we dont have any agreement with any of these carriers. Retail Operations Our retail operations consist of selling of goods through the point of sale. Through retailing we sell directly to individual retail customers for cash. Our retail operations are carried out through our outlets which are either owned by us or taken on lease. Our retail operations are divided mainly in 4 sections viz., a) Business Development; b) Inventory Buildup; c) Sales & Billing; and d) After Sales.

Business Development Business development enables us to grow businesses in new areas and expand our network of outlets. The various activities that we undertake for Business Development are as follows Business Planning Our management estimates the targets for a particular fiscal and the growth envisaged in the subsequent fiscal. Based on the managements business plan estimations, targets for regions are set and further based on the performance of a particular region in the last fiscal and the targets for the current fiscal capital expansion programme are worked out. The growth targets are broken down from regions to outlets, which helps the management to further decide on the procurement for a particular region and store. It also helps us in gauging the product mix strategy and the new product to be sourced.

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Market Mapping On freezing the capital expansion programme, the Business Development team will then draw up a plan with regards to setting up of new outlets as to whether the outlets have to come up in the same region where our existing outlets are or should we enter a new region. The team will do a detailed analysis of the market based on the growth potential, standard of living, demographics, population, competition, return on investment, etc. The approach primarily a top down approach wherein the first criteria set is to freeze on the region or state and then go down to the cities and then the area where the store can be set-up. Feasibility Study On identifying the suitable location, a detailed study is conducted with regards to the market in the area and the adjoining areas and what is the cost to sustain as well as capture turf of competitors. The other major study point would be store based factors like rent, deposits, capital expenditure, store approvals, business environment, etc. We look at each store from a profit perspective wherein the ROI is set and on that basis the decision to set-up the store is taken. Technical Evaluation Based on the finding during the feasibility study we would then take a call as to whether a store is feasible or not in that particular region. If the option is feasible, then we would get into technical details viz., whether standalone or in a mall, size of the store, product mix strategy, design, layout, team profiling, estimated business run up, etc. We do a detailed financial modeling of that particular store for the period of next 3 years and the cash flow required to sustain operations and the targets to be achieved. Commercial Evaluation On finalizing the technical study, we would get into commercial aspects wherein we will contact the local estate agents and screen properties where we need to put the outlets. On identifying the properties we will do a study on the rentals and map with our financial model of that particular store. If the rentals fall within our acceptance limits then we enter into a lease agreement depending on the business decision of the management. The next step is to give contract to our vendors for furniture and store fit-outs. Store Build up We have our own technical team which will analyze the property and determine the layout of the store and finalise with the accredited Architects/ Designers in the panel of the company. As such we have a standard store format and design which enables us to build our brand image and recall amongst our customers. The store build up is done on the basis of the customer profiling, the product mix and the store merchandising needs. The standard timeline for setting up a store is 3 months right from conceptualization to opening the doors to customers. The timelines are drawn and the cost component is drawn up simultaneously which the technocommercial team has to adhere to. It is the responsibility of the techno-commercial team to execute the work through contractors and hand over the store in reasonable time to the Commercial Team who will ensure all the support systems in place as per a check list and announce the readiness of the outlets for operation and then hand over to the Business Development Team which in turn will decide the store product mix and merchandising. Once the merchandising team is through with store product detailing and inventory buildup, the store will be passed on to the respective store manager for start of operations. Inventory Buildup Inventory planning and build up is critical to the turnover of our business. Further, the kind of inventory which is going to be built is also important, since our product portfolio is quite large. So, based on the working capital position, availability of the warehouse space, store inventory allocation, customer demand, etc. we would draw up our inventory position. We have a dedicated professional team with proven experience and expertise to manage the inventory levels and turnaround of the goods. Further, our business development team and the inventory team meets up with the manufacturers to understand their production schedule, product allocation, offers available and the new products introduction in the market, based on which we would draw a detailed trend report for inventory position for fortnight, month, quarter and the annual. While building up our inventory levels, we follow two processes which are described as follows

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Optimal Sales Quantity (OSQ) OSQ or Optimal Sales Quantity is an important parlance for us since the entire efficiency of a particular store depends on the shelf stack up and layout. Movement of customers in the store is also an important factors since the products that we sell are heavy and space consuming ones and hence there is a constraint with regards to space. Our OSQ depends on the amount of capital that we want to block for that particular store and the kind of space that is available with that store. OSQ also helps us decide what kind of products to place in our store so that no single product ends up on the shelf of a store for a period of more than 1 month. Further, with OSQ we also know how much of inventory we can have at the store level and how much of inventory we can have at the warehouses. Trend Tracking Every store is connected with the Procurement team on real time basis. The movement of products at the outlets is tracked and reports are generated for every product. Further, we have dedicated personnel who would look at particular kinds of products viz., Refrigerator, Mobile Phones, etc. In addition to that there is a weekly report that is generated by the store for the movement of goods and their estimation of on-ground demand. The store managers are in a better position to gauge and understand the local markets and based on their estimation outlets are stacked up. Sales & Billing Sale of products on the floor is extremely important for a chain of retail outlets of Consumer Durables and Electronics products. Customers of our country are price as well as quality sensitive and to match their requirements is a challenge in itself. We are dedicated to providing the right amount of information & good service and our endeavor is to achieve utmost customer satisfaction. In achieving our goals, we give importance to the following practices In Store Promotions Our marketing team, along with the store managers, will understand and analyse the local markets where the outlets are situated. Based on their understanding and the feedback given, a detailed promotional activity chart is prepared for a particular store and the budget is being allocated. There are 3 things which are part of the in store promotions viz. a) Store Display This is the first step which will pull a customer to walk into our store. We decide as to what sort of display should be put on the front of the store which can be either a product, price points, running offers, etc. or a combination of few or all of these.

b) Store Specific Offer Based on the store sales level and product movement we come up with attractive offers for the customers. We also draw up promotional activities based on the local competition. c) Information emanation our endeavor is to provide options to our customers with the right amount of information. For each category of product that we have in our outlets we have a detailed product list along with the price point and specifications which is advantageous to both the store staff and the customer.

Accounting We have an ERP Software of FOCUS installed at every store and warehouse which is connected through a central Server with the Corporate Accounts team. Every product movement, whether it is for a retail customer or a wholesale customer, is recorded through this software and a copy of the invoice is generated for the customer at the respective store or warehouse depending on the transaction. At the same time a copy of the invoice is also generated at the corporate office which enables us to have track of the sales through each of the outlets and also ease our auditing of accounts. We have built our systems in a manner that facilitates the finance team to gauge the working capital requirement for each store, for each region and for the company as a whole. The accounting system also enables us to generate MIS reports on a regular basis. Collections We carry out our retail sales through our retail outlets on cash and carry or under H.P. financing scheme or on credit. Normally, credit sales at outlets are allowed through credit cards. The wholesale sale/ bulk sales are 97

made on credit basis with payment terms ranging from 7 days to 60 days depending on the credibility of the customer. These customers are billed from ware house or corporate office as the case may be. Our outlets and warehouses have a team of dedicated personnel who will co-ordinate the customers and collect the payments. In addition, there is commercial and accounts team to regularly follow up with the customers and financing agencies for collection of overdues. We have a system of daily cash pick up from outlets in the city of Hyderabad and deposited with head Cashier and then deposited in Banks. In case of out station Outlets, the cash/cheque/DD will be deposited in the nearest Bank collection account by the store cashier daily. There is a system of verification of cash transactions by internal auditors on daily basis. After Sales Retail business is all about providing after Sales services which is efficient, on time and up to the mark. This ensures not only in repeat business from the existing customers but also spreads word of mouth publicity. Being in Tier 2 and Tier 3 cities these factors are advantageous to us as it enable us to acquire new customers. To maintain our sales & operations we have identified certain critical areas in after Sales which are as follows Delivery Co-ordination Each store will have after Sales personnel who will co-ordinate with the warehouse as well as the carrier for delivering the product to the customers doorstep. We ensure that the lead time from purchase to delivery is kept bare minimum, which we feel is one of the customer satisfaction points. Further, we have defined safety procedures for delivery of products to customers post sales and billing which needs to be adhered by each store. Registration The products that we sell come with warranties. Once the billing is done, we co-ordinate with the customers with regards to registration of their warranties and guarantees with the manufacturers. We record all the customer information at our end and send it to the manufacturer for registration of the warranties. Further, our after Sales team will co-ordinate with the vendors / manufacturers for providing a timely demo to the customers once the delivery is done. Repairs & Maintenance The products that we sell are being covered under warranties. In case of any mechanical and electrical defaults, we would follow up with the manufacturers and see to it that the products are being repaired. We also have our a few approved mechanics that we refer to our customers when the products are out of warranties. We also regularly advise our customers on safety tips, maintenance tips and cleaning tips. Marketing and Sales We follow a direct marketing strategy wherein we use different media like FM radio, local Newspapers, Hoardings, Pamphlets, Sponsoring events, In-cinema advertising, SMS etc. These media strategies are more from the store specific perspective wherein our brand is promoted as well as the local outlets are promoted. Our marketing strategy is based on attracting walk-ins to the outlets and trying to convert these to customers at the outlets level. The customer who wants to purchase in bulk or in wholesale, either contact the nearest store or contact the corporate marketing for closure of deal. We have a marketing team which collects various reports from different functional teams and develops a marketing plan, set-up a marketing budget, co-ordinate the marketing policy and execute the marketing plan. On implementing the marketing plan, the team will devise various tools to gauge the effectiveness of the marketing programme. The marketing activity that we carry on is more from the perspective of promoting our business and our outlets. As far as product specific marketing is concerned, we get good support from the manufacturers / vendors whose products we sell. The manufacturers / vendors have their own marketing programme wherein they would make their own media promotion, draw up schemes, etc. We have a strong marketing team which analyses the market and the upcoming opportunities. Further, we have a centralized call center that will take customer enquiries and pass it on to the respective outlets. Information Technology The company has in place an ERP System by FOCUS which is implemented in each store and warehouse. The information and data are routed through a central Server on line to corporate office. Considering growth plan on 98

pan India, the Company is exploring implementation of SAP or further up gradation of FOCUS as will be feasible. Presently FOCUS is working satisfactorily. Utilities The main utilities required are Power. We have made necessary arrangements for regular un-interrupted power supply at our retail outlets. We meet our power requirements from the electricity distribution companies at respective locations where our outlets are located. We also have Diesel Generator sets at our outlets which act as a backup for our power requirements in case of power cuts. Human Resources As on May 31, 2011, the Company has 391 employees on its payrolls. These employees are placed at our outlets, warehouses and corporate office. Sr. No. 1 2 3 4 Particulars Outlets Head Office Warehouses Call Centre TOTAL No. of employees 244 126 15 6 391

Training Being in the retail industry we need to update ourselves with the customer requirements, their tastes & preferences, new technology available, market dynamics, etc. Our store staff is trained regularly for various aspects like customer management, servicing aspect, sales pitch, sales closure, store management, inventory control, etc. The training initiative helps in achieving cost minimization, professionalism of employees and entrepreneurship from employees. Collaborations We dont have any agreements with any manufacturers of Consumer Durable and Electronics products. Some of our major suppliers for various products that we sell are as listed below. S. No. 1. 2 3. 4. 5. 6. 7. 8. 9. 10. 11 Item TV, LCD & LED Air conditioners Refrigerator Washing Machines & Disc Washers Digital Camera & Camcoder Laptops Computers and Related Peripherals Audios Home Appliances Other products (like Power adapters, Inverters etc) Mobiles Supplier Sony, Samsung, LG, Videocon, Panasonic etc. Samsung, LG, Videocon, Panasonic, Voltas, Godrej, etc. Godrej, Samsung, LG, Whirlpool etc. Samsung, LG, IFB, Videocon etc. Sony, Olympus, Panasonic, Cannon etc. Sony (Vaio series), HP, Compaq, Samsung etc. HCL, HP, Compaq etc. Sony, Philips etc. Bajaj Electricals, Kenstar, Voltas etc. APC and others Nokia, Sony Ericsson, Motorola, Samsung etc.

Export Obligation Our Company doesnt have any export obligation Market Our Company has retail outlets in the states of Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra.

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Competition We face competition from both the organized and unorganized market. There are a number of small and medium sized outlets in the unorganized sector from which we face competition. We also face competition from organized players for example eZone (Future Group), Croma (Tata Group), Next (Videocon Group), Vishal Electronics, Viveks, TMC (Tirumala Music Centre), Reliance Digital etc. Insurance Our operations are prone to various risks viz., damage of goods during transit, fire perils, theft, loss of business due to strikes, political instability, etc. We have taken adequate insurance policies to safeguard our operations against these risks. The aggregate coverage under the policies currently is `42,269.08 lakhs for the assets. We have the following insurance policies as on May 31, 2011: (In ` Lakhs) S. No. 1 2 3 4 5 6 Nature of Policy Fire & allied Peril and Burglary Stock Money Insurance Plate Glass, Neon and Glow Sign, Air Conditioner, Computer & Printer, Furniture & Fitting Fidelity Guarantee Public Liability Total Amount Insured 7,504.67 16,053.50 322.25 17,576.58 686.40 125.68 42,269.08

Our promoter Sardar Balvinder Singh is covered under Key man insurance policy amounting to `2,000.00 lakhs as on May 31, 2011.

Properties A. 1 (One) Registered Office of the Company 1 (One) Corporate Office of the Company 1 (One) Extension of Registered Office of the Company 110 (One hundred and eleven) Retail Outlets of the Company 11 (Eleven) Warehouses of the Company 9 (Nine)Owned properties of the Company lying vacant 15 (Fifteen) proposed outlets of the Company

1 (One) Registered Office of the Company taken on Lease by the Company: Parties and Date of the Agreement A.P. Marwardi Mahila Sanghtan (Lessor) and the Company (Lessee) Dated: 2011 May 01, Description Premises of Consideration Period and Main Terms and Conditions The Company agrees that the premises shall only be used as Registered Office of the Company and for no other purpose. The Company shall not store any dangerous or explosive articles. If the Company defaults in payment of rent for 2 consecutive months, the lessor can evict the Company and also be liable to pay an additional interest of 2% per. month for delayed payment. The Company shall be liable to pay 4 months rents for any damages occurred on the premises.

Sr. No 1.

Premises at First Floor, Maheshwari Chambers, flat bearing nos. 103 to 107, Somajiguda, Hyderabad.

Monthly rent of Rs. 40,669. Rent shall be increased by 10% after every year. Period: 1year i.e. from May 01, 2011 to April 30, 2012.

100

B.

1 (One) Corporate Office of the Company taken on Lease by the Company: Parties and Date of the Agreement Smt. K Usha Rani (Lessor) and the Company (Lessee) Dated: November 03, 2010 Description of Premises Premises on the fifth floor along with 8 car parking 8-2269/4/c/D, in survey no. 403/1, situated at Road No. 2, Banjara Hills, Hyderabad. Consideration and Period Monthly rent of Rs. 1,25,000 and an interest free, refundable security deposit of Rs. 7,50,000 Rent shall be increased by 5% after every year. Period: 9 year i.e. from January 1, 2011 to December 31, 2020. First 5 years lease period shall be considered as a lock in period and the parties cannot terminate this agreement. Main Terms and Conditions The lease can be terminated by mutual consent, after giving 4 months notice to the other party only after the expiry of the lock in period, default by the Company in payment of rent for 3 months consecutively and thereafter giving 1 month additional notice.

Sr. No 1.

C.

1 (One) additional premises taken on Lease by the Company and used as an Extension of the Registered Office of the Company: Parties and Date of the Agreement Sandeep ` Mr. Malpani (Owner) and the Company (Tenant) Dated: December 04, 2009 Description of Premises Premises at the fifth floor, bearing Flat no. 510, Maheshwari Chambers, Somajiguda, Hyderabad. Consideration and Period Monthly rent of Rs. 60,000 and interest free, refundable security deposit of Rs. 60,000. Rent shall be increased by 5% every year. Period: 3 years i.e. from January 01, 2010 to December 31, 2012. First 3 years lease period shall be considered as a lock in period. Thereafter the parties may renew as per mutually agreed terms. Main Terms and Conditions The Lessor can terminate the agreement if the Company defaults in payment of rent for 3 consecutive months. The Company and the Lessor can terminate this agreement by giving a 2 months notice or 2 months rent in lieu of notice to the other party.

Sr. No 1.

D. Sr. No 1.

108 (One hundred and eight) Retail Outlets taken on Lease or Leave and License basis by the Company: Parties and Date of the Agreement Mr. P. Krishna Rao (Owner) and the Company (Tenant) Dated: March 15, 2010 Description Premises of Consideration and Period Monthly rent of Rs. 25,000 and interest free, refundable security deposit of Rs. 66,000. Rent shall be increased by 5% after every 3 years. Period: 9 years i.e. from April 15, 2010 to April 14, 2019. Main Terms and Conditions The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

Premises bearing Do. No: 5-1-82, Palakonda Road, Srikakulam along with parking in the front of the premises.

101

2.

Mr. Nirmal Kumar Jhawar (Owner) and the Company (Tenant) Dated: 2010 April 28,

Premises bearing shop no, 5, along with parking area in the premises, located at Sai Durga Complex Mayuri Junction, Station Road, Vizanagram. Premises on the ground floor and all four floors, bearing no. T.S.No.79, Block No.9 of Waltair Ward, Visakhapatnam along with parking area in the premises. Premises bearing no. TS No. 654 bearing D.No.47-1037/1,Alipuram Ward, Dondaparty, Visakhapatnam.

Monthly rent of Rs. 7,000 and interest free, refundable security deposit of Rs. 42,000. Rent shall be increased by 7% after every 3 years. Period: 9 years i.e. from May 15, 2010 to May 14, 2019. Monthly rent of Rs. 4,64,362. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from January 01, 2009 to December 31, 2018. First 3 years shall be the lock in period and the Company cannot vacate the premises. Monthly rent of Rs. 2,19,000 and a refundable security deposit of Rs. 15,00,000. Rent shall be increased by 5% after every year. Period: 10 years commencing from May 1, 2007 to April 30, 2017. The lease may be extended for a further period at the option of the Lessor and the lessee.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

3.

Smt. Penmetsa Kamala Devi (Lessor) and the Company (Lessee) Dated: September 20, 2008

4.

Gunturu Bharathi Venkateshwari (Lessor) and PCH Associates (Lessee) Dated: 2007 April 10,

The Company shall not store any hazardous and explosive material in the premises. The Company is required to keep the premises insured. For any disputes between the parties, the Courts at Bangalore shall have the jurisdiction to resolve the dispute. The lease can be terminated if the Company defaults in payment of rent for 4 months consecutively and thereafter giving 1 month additional notice. The Company can extend the lease period by giving a two months notice to the Lessor. If the Company fails to pay the rent for a period of two months the Lessor can vacate the premises without further notice.

5.

(1) B. V. Audinarayana, (2) B. Madhvan (3) B. Naresh and (4) B. Jayanth Akhilesh (Lessor) and the Company (Lessee) Dated: 2007 July 15,

Premises on the ground floor in the Sai Dharani Castle, Door No. 11-226/25, Opposite Gopalpatnam Police Station, Gopalpatnam, Vishakapatnam. Premises bearing shop no 1 and Do. No: 39-40-43, DBR Complex, 104 Area, Marripalem, Visakhapatnam.

Monthly rent of Rs. 6,000. Rent shall be increased by 10% every year. Period: 10 years i.e. from August 01, 2007 to July 30, 2016.

6.

Mr. B. Durga Reddy (Owner) and the Company (Tenant) Dated: 2010 June 15,

Monthly rent of Rs. 7,000 and interest free, refundable security deposit of Rs. 50,000. Rent shall be increased by 10% after 3 years. Period: 9 years i.e. from June 15, 2010 to June 14, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

102

7.

Mrs. B. Rajaeshwari (Lessor) and the Company (Lessee) Dated: September 1, 2009

Premises on the Ground floor along with parking area, S.V. Buildings, Fish Market, Main Road, Anakapalli, Visakhapatnam District.

Monthly rent of Rs. 8,000 Rent shall be increased by 15% after 3 years. Period: 9 years i.e. from October 1, 2009 to September 31, 2018. First 3 years shall be the lock in period and the Company cannot vacate the premises. Monthly rent of Rs. 58,000 Rent shall be increased by 10% after 2 years. Period: 9 years i.e. from November 17, 2009 to November 16, 2018. First 3 years shall be the lock in period and the Company cannot vacate the premises. Monthly rent of Rs. 4,500 and interest free, refundable security deposit of Rs. 27,000 Rent shall be increased by 5% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. Monthly rent of Rs. 4,000 Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from October 1, 2009 to September 30, 2018. First 3 years shall be the lock in period and the Company cannot vacate the premises. Monthly rent of Rs. 12, 000 Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from October 1, 2009 to September 31, 2018. First 3 years shall be the lock in period and the Company cannot vacate the premises.

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

8.

Mr. Damera Srikanth Venkata Rangarayanim (Lessor) and the Company (Lessee) Dated: November 17 2009

Premises bearing no. 2-1-46, along with 3 parking area in the premises Rangarayanam Residency, Ground and First Floor, Srinagar, Near Banugudi Junction, Kakinada. Premises bearing shop No GF-1 and Do. No. 29-1-7, along with parking area in the premises, Cinema Hall Road, Kakinada. Premises on the Ground floor along with parking area, Gllaguda, High school street, Amalapuram, East Godavari District.

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

9.

Mrs. Pedapati Sujatha (Owner) and the Company (Tenant) Dated: 2010 April 20,

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

10.

Mrs. Shameem Elias (Lessor) and the Company (Lessee) Dated: September 10, 2009

11.

M/s. R.K. Bros represented by Mr. Rakesh Kumar (Lessor) and the Company (Lessee) Dated: September 10, 2009

Premises on the ground floor along with 3 parking area in the premises, Bearing No: 26/1/9/e, R.K. Bros Building Velpur, Road, Tanuku.

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

103

12.

Smt. P. Sunitha (Lessor) and the Company (Lessee) Dated September 1, 2010

Premises on the ground and first floor bearing No: 2-1-15, J.P. Road, Sri. Divya Plaza, Near Padmalaya Theater, Bhimavaram-2.

Monthly rent of Rs. 35,000 Rent shall be increased by 7.5% after every year. Period: 9 years i.e. from September 1, 2010 to August 31, 2018. First 3 years shall be the lock in period and the Company can only vacate the premises if its pays rent in lieu of the lock in period. Monthly rent of Rs. 70,761 Rent shall be increased by 12% after every 2 years. Period: 9 years i.e. from August 1, 2008 to July 31, 2017.

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

13.

Smt. M. Lakshmi Narasamma (Lessor) and the Company (Lessee) Dated June 4, 2008

Premises bearing DO. No. 6-5-6, Ground Floor, Opposite Shyamala Theatre, Main Road, Rajahmundry. Premises bearing No: 21-5-16/1, along with parking area in the premises, Thummalova Road, Devi Chowk Center, Rajahmundry. Premises bearing No: 46-9-26, along with parking area in the premises, Danavaipet, Bypass Road, Rajahmundry.

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

14.

Mrs. Rallu Satyavathe (Owner) and the Company (Tenant) Dated: 2010 April 20,

Monthly rent of Rs. 6,000 and interest free, refundable security deposit of Rs. 36,000 Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. Monthly rent of Rs. 7,000 and interest free, refundable security deposit of Rs. 42,000 Rent shall be increased by 10% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019.

15.

Mrs. Naga Devi (Owner) and the Company (Tenant) Dated: 2010 April 23,

16.

Mr. R. Satyanarayana (Owner) and the Company (Tenant) Dated: 2010 April 28,

Premises opposite Harshavardhan Public School, Main Road, ILTD Junction Rajahmundry, along with parking area in the premises. Premises bearing No. 22-B-1-29, and 3 parking spaces at GNT Road, Vasant Mahal, Powerpeta, Eluru.

Monthly rent of Rs. 3,500 and interest free, refundable security deposit of Rs. 30,000 Rent shall be increased by 5% after every 3 years. Period: 9 years i.e. from May 15, 2010 to April 14, 2019. Monthly rent of Rs. 49,500 Rent shall be increased by 18% after every 3 years. Period: 9 years i.e. from August 1, 2008 to July 31, 2017.

17.

M/s. Vasanth Mehal (Lessor) and the Company (Lessee) Dated June 4, 2008

104

18.

Mrs. Boyapati Vijayalaxmi (Lessor) and the Company (Lessee) Dated 2007 June 20,

Premises bearing no. 28-1-40, Vijaya Plaza, situated at Eluru Road, Governor Pet, Vijayawada.

Monthly rent of Rs. 1,00,000 Rent shall be increased by 10% after every 2 years. Period: 9 years i.e. from June 20, 2007 to June 19, 2016.

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

19.

Mr. K.V. Narasimha Rao (Owner) and the Company (Tenant) Dated: 2010 April 20,

Premises bearing Do. No. 11-25-19, along with parking area, Subbaramaiah Street, Opposite ING Vysya bank, One Town Vijayawada. Premises bearing DO. No: 24-9-152, along with parking area, Kundeti Street Bavajipeta, Satyanarayanapuram, Vijayawada. Premises bearing Do. No.24-1-131, along with parking area in front of the premises, Sumbhamurthy Road, Durgapuram, Vijayawada. Premises bearing No: 56-11-10, along with parking area in front of the premises, Near High School Road, MG Road, Patamata, Vijayawada.

Monthly rent of Rs. 9,000 and interest free, refundable security deposit of Rs. 54,000 Rent shall be increased by 10% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. Monthly rent of Rs. 6,000 and interest free, refundable security deposit of Rs. 36,000 Rent shall be increased by 10% after every 3 years. Period: 9 years i.e. from May 15, 2010 to May 14, 2019. Monthly rent of Rs. 4,300 and interest free, refundable security deposit of Rs. 25,800 Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. Monthly rent of Rs. 8,000 and interest free, refundable security deposit of Rs. 48,000 Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. Monthly rent of Rs. 3,500 and interest free, refundable security deposit of Rs. 21, 000 Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. Monthly rent of Rs. 55,000 and interest free, refundable security deposit of Rs. 1,65,000. Rent shall be increased by 5% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. 105

20.

Mr. K. Venkateshwara Rao (Owner) and the Company (Tenant) Dated: 2010 April 28,

21.

Mr. Shak Khasim Sharif (Owner) and the Company (Tenant) Dated: 2010 July 12,

22.

Mr. R. Bhramandha Rao (Owner) and the Company (Tenant) Dated: 2010 April 20,

23.

Mr. M. Satayavathi (Owner) and the Company (Tenant) Dated: 2010 April 23,

Premises along with parking area in the premises, near Anjanayya Swami Temple, Machavaram, Vijayawada. Premises bearing DO. No: 12-11, along with parking area in the premises, Ground Floor, 14th Lane, Aurandalpet, Guntur.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

24.

Mrs. B. Bhavani (Owner) and the Company (Tenant) Dated: March 15, 2010

25.

Mr. P. Sridhar (Owner) and the Company (Tenant) Dated: 2010 April 20,

Premises bearing DO. No: 15-37-157, 4/14, along with parking area in front of the premises, 1st Floor, Brodipeta, Guntur.

Monthly rent of Rs. 8,000 and interest free, refundable security deposit of Rs. 24,000. Rent shall be increased by 5% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

26.

Mrs. Ameerun (Owner) and the Company (Tenant) Dated: 2010 April 23,

Premises bearing DO. no: 18-5-49, along with parking area in front of the premises, Brahmanda Reddy Stadium Road, Old Bus Stand, Old Guntur, Guntur. Premises on the ground floor along with parking area in the premises bearing Do. No: 18-703, Ashok Nagar, Marayalaguda.

Monthly rent of Rs. 7,500 and interest free, refundable security deposit of Rs. 45,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. Monthly rent of Rs. 6,500 Rent shall be increased by 7.5% after every year. Period: 9 years i.e. from July 1, 2009 to June 30, 2018. First 3 years shall be the lock in period and the Company cannot vacate the premises. Monthly rent of Rs. 14,000 Rent shall be increased by 10% after every year. Period: 9 years i.e. from June 25, 2009 to June 24, 2018. First 3 years shall be the lock in period and the Company cannot vacate the premises. Monthly rent of Rs. 73,260 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from August 1, 2008 to July 31, 2017.

27.

Mr. G. Manikyamba (Lessor) and the Company (Lessee) Dated June 4, 2009

28.

Mr. Y. Nagaendra Prasad & Mr. Y. Naveen Prasad (Lessors) and the Company (Lessee) Dated: 2009 June 4,

Premises at Shop No: 7 & 8, Do. No: 6-2628, along with parking area in front of the premises, Opposite Bet Market, Hyderabad Road, Nalgonda. Premises on the ground floor, bearing Do. No. 11-2-30, Wyra Road, Khammam.

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

29.

(1) Sri. Yalamanchili Radhakrishna Murthy, (2) Smt. Yalamanchili Sarla Devi, (3) Sri. Yalamanchili Rama Koteshwara Rao, (4) Sri, Yalamanchili Ravindranadh, (5) Smt. Yalamanchili Rama Devi and (6) Sri Yalamanchili Nagamani (Lessors) and the Company (Lessee) Dated: June 4, 2008

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

106

30.

Mr. Yerram Badrish (Owner) and the Company (Tenant) Dated: 2010 April 23,

Premises at Shop No: 106, Bearing DO. No: 2-1-352, along with parking area in front of the premises, Sri Sai Viswanatham Apartments, Trunk Road, Khammam. Premises on the ground floor bearing Shop No.1-8-581, Opposite Water Tank, Hanumakonda.

Monthly rent of Rs. 10,000 and interest free, refundable security deposit of Rs. 60,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019. Monthly rent of Rs. 48,000 Rent shall be increased by 10% after every 2 years. Period: 9 years i.e. from December, 15, 2009 to December 14, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 5,000 and interest free, refundable security deposit of Rs. 50,000. Rent shall be increased by 5% after every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively.

31.

Mr. R. Vasantha Rao (Lessor) and the Company (Lessee) Dated: November, 28, 2009

32.

Mrs. D. Pushpa (Owner) and the Company (Tenant) Dated: 2010 April 28,

Premises at Shop No: 3 along with parking, Bearing DO. No: 2-583, MLN Arcade, Nakkalagutta, Hanmakonda.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The lease can be terminated by mutual consent, after giving 6 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 3 months additional notice.

33.

Mr. Pathipaka Rajalinga (Owner) and the Company (Tenant) Dated: 2010 April 28,

Premises at Shop No: G-21, Bearing No: 59-157, Sikhwada, Main Road, GMR & GS Complex, Hanmakonda.

Monthly rent of Rs. 10,000 and interest free, refundable security deposit of Rs. 60,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from May 10, 2010 to May 9, 2019.

34.

Mr. Ksheersagar Suresh Kumar (Lessor) and the Company (Lessee) Dated: September, 1, 2007

Premises bearing no. 9-8-77/1, Ground Floor, J.P.N. Road, Warangal.

Monthly rent of Rs. 11,500 Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from September 1, 2007 to August 31, 2016.

35.

Smt. M. Laxmi (Lessor) and the Company (Lessee) Dated: January 1, 2010

Premises bearing no. 8, 36/A & 37/A, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar. Premises bearing 3 and 31, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar.

Monthly rent of Rs. 15,450 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 3 months additional notice.

Smt. M. Shashikala (Lessor) and the Company (Lessee) Dated: January 1, 2010

Monthly rent of Rs. 7,500 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period.

107

Mr. M. V. Ravinder Reddy (Lessor) and the Company (Lessee)

Dated: January 1, 2010 Mr. P. Mahender Rao (Lessor) and the Company (Lessee) Dated: January 1, 2010 Mr. M. V. Narender Reddy (Lessor) and the Company (Lessee) Dated: January 1, 2010 Smt. R. Rajitha (Lessor) and the Company (Lessee) Dated: January 1, 2010

Premises bearing no. 5 and 33, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar.

Monthly rent of Rs. 10,170 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period.

Premises bearing no. 6, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar. Premises bearing no. 4 and 32, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar. Premises bearing no. 9 36/B & 37/B, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar. Premises bearing no. 10, 11, 10/Aand 11/A, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar. Premises bearing no. 3 and 31, along with parking area in the premises Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar. Premises bearing no. 7 and 35, along with parking area in the premises Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar.

Monthly rent of Rs. 7,230 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 10,170 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 16,650 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 21,000 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 7,500 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 12,300 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period.

Mr. R. Raja Reddy (Lessor) and the Company (Lessee) Dated: January 1, 2010

Smt. T. Laxmi (Lessor) and the Company (Lessee) Dated; January 1, 2010

Mr. G. Madhavi (Lessor) and the Company (Lessee) Dated: January 1, 2010

108

Smt. K. Srivani (Lessor) and the Company (Lessee) Dated: January 1, 2010

Premises bearing no. 34, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar.

Monthly current rent of Rs. 3,381. Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 9,900 Rent shall be increased by 15% after every 2 years. Period: 9 years i.e. from May 1, 2009 to April 30, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 18,000. Rent shall be increased by 10% every year. Period: 9 years i.e. from September 1, 2009 to August 31, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 1,05,000 for the first 3 year and thereafter the rent shall be as decide between the parties. Period: 9 years i.e. from June 1, 2009 to May 31, 2018. Monthly rent of Rs. 9,000 Rent shall be increased by 15% every 3 year. Period: 9 years i.e. from August 1, 2007 to July 31, 2016. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

Mr, M. Gopal Reddy (Lessor) and the Company (Lessee) Dated: January 1, 2010 36. Mr. K. Muralidhar Rao (Lessor) and the Company (Lessee) Dated: 2009 37. July 27,

Premises bearing no. 7/A and 35/A, along with parking area in the premises, Ground Floor, at Reddy's Residency, Christian Colony, Karimnagar. Premises at Ground Floor, bearing No: 5675/1, Opposite Bus Stand, Indranagar, Manchiryala.

Mrs. Rama Reddy and Ms. Neha Reddy (Lessors) and the Company (Lessee) Dated: May 1, 2009

Premises bearing DO.No.5-6-687/4, and five car parking space, Block No.6 Survey no. 225, Pragati Nagar, Nizamabad. Premises at Shop No.25, Ground Floor, in the Complex known as Khaleel Wadi Shopping Complex, along with one car parking space, 2-11-11, Thirumala Talkies Road, Nizamabad. Premises bearing Do. No: 3/223/1, along with car parking space, College Road, Near Geetha Mandhir, One Town Kurnool.

38.

Smt. A. Prabhavati and Smt. B Swarnalath (Lessor) and the Company (Lessee) Dated: July 1, 2007

39.

Mr. N. Yogesh Babu (Owner) and the Company (Tenant) Dated: 2010 June 29,

Monthly rent of Rs. 3,000 and interest free, refundable security deposit of Rs. 30,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from July 1, 2010 to June 30, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

109

40.

Mr. C. Vinay Kumar (Owner) and the Company (Tenant) Dated: 2010 April 23,

Premises Shop No: 5, Bearing No: 40/301A1, Medum Prabhas Plaza, Opposite Sri Rama Cinema Hall, Kurnool.

Monthly rent of Rs. 10,000 and interest free, refundable security deposit of Rs. 60,000. Rent shall be increased by 5% after every 3 years. Period: 9 years i.e. from June 1, 2010 to May 31, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

41.

Ms. Aleem Unnisa (Lessor) and the Company (Lessee) Dated: February 20, 2009

Premises bearing shutter No.3, on the ground floor along with car parking space, B.NO.10-15, Viyaya Nagar Colony, P. R. Pally X Roads, Sanaga Reddy. Premises at Shop No.9&10, D.No.7-5202/A, Opposite SBH Padmavathi Colony Branch, Lakshmi Nagar Colony, Mahaboob Nagar. Premises bearing no. 3-14-29, along with parking area in the premises, Ground Floor, Nehru Road, Tanali, Guntur District. Premises at Shop No.2-43-39, along with parking area, Main Road, Bhaskar Nagar, Kakinada.

Monthly rent of Rs. 5,000 and interest free, refundable security deposit of Rs. 1, 00,000. Rent shall be increased by 20% after every 3 years. Period: 9 years i.e. from March 1, 2009 to February 28, 2018.

42.

Smt. Venkatamma (Lessor) and the Company (Lessee) Dated: February 20, 2009

Monthly rent of Rs. 5,000 Rent shall be increased by 10% every year. Period: 9 years i.e. from April 1, 2009 to March 31, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 7,000 Rent shall be increased by 10% every year. Period: 9 years i.e. from November 1, 2009 to October 30, 2018. First 3 years shall be the lock in period. Monthly rent of Rs. 4,000 and interest free, refundable security deposit of Rs. 40,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from January 1, 2011 to December 31, 2019.

The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice. The lease can be terminated by mutual consent, after giving 15 days prior notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

43.

Mr. V. M. Lakshmipathi Rao (Lessor) and the Company (Lessee) Dated: November 1, 2009

44.

Mr. Bonagiri Veera Venkata Satyanarayana (Owner) and the Company (Tenant) Dated: December, 9, 2010

45.

Mr. Grurram Sudha Mani (Owner) and the Company (Tenant) Dated: December, 15, 2010

Premises bearing Shop No 5/726, along with parking area, Opposite SBH, Rebelavari Street, Stone Housepet Nellore.

Monthly rent of Rs. 10,000 and interest free, refundable security deposit of Rs. 1,10,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from December 15, 2010 to December 14, 2019.

110

46.

Mr. P. Suresh Reddy (Owner) and the Company (Tenant) Dated: December 15, 2010

Premises bearing DO. No.66B, along with parking space, Opposite Group Theatres, Nehru Street, Tirupathi.

Monthly rent of Rs. 20,000 and interest free, refundable security deposit of Rs. 1, 40,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from December 15, 2010 to December 14, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

47.

Mr. Vutakolu Ramanayya (Owner) and the Company (Tenant) Dated: December 10, 2010

Premises at Shop No.11, along with parking area, Municipal Complex, Addanki Bus Stand, Ongole.

Monthly rent of Rs. 6,000 and interest free, refundable security deposit of Rs. 60,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from December 15, 2010 to December 14, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

48.

Mr. V. Venkateshwar Rao (Owner) and the Company (Tenant) Dated: December 10, 2010

Premises bearing Shop No.2-69, along with parking space, Prasadampadu, Beside Toyota Show Room, Vijayawada Rural.

Monthly rent of Rs. 2,400 and interest free, refundable security deposit of Rs. 14,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from December 1, 2010 to November 31, 2019. Monthly rent of Rs. 2,000 and interest free, refundable security deposit of Rs. 20,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from January 1, 2010 to December 31, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

49.

Mr. Grandhi Srirama (Owner) and the Company (Tenant) Dated: December 9, 2010

Premises at Shop No.12-1-51, along with parking area, Gollapalli Vari Street, Anakapalli.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

50.

Mr. Narasimha Rao (Owner) and the Company (Tenant) Dated: December 22, 2010

Premises Door No 313-17, Ground Floor, Shop in R.C.C Building (Manikanta Building) Bhimavaram Town West Godavari District, Andhra Pradesh. Premises known as Kontham Ram Reddy Complex, Municipal bearing no. 23-25, Ground floor, Plot No.8 & 47, Survey no. 127 and 130/1 Kothapet, Gaddiannaram, Ranga Reddy District.

Monthly rent of Rs. 4,000 and interest free, refundable security deposit of Rs. 1, 50,000. Period: 3 years i.e. from January 1, 2010 to December 31, 2014.

51.

Sri. K. R. Satyanarayana Reddy Sri. K. R. Mahipal Reddy Sri. K. Raghuram Reddy Sri. K. Balram Reddy (Lessor) and the Company (Lessee) Dated: 2008. May 23,

Monthly rent of Rs. 2,70, 000. Rent shall be increased by 15% after every 3 years. Period: 10 years i.e. from May 23, 2008 to May 22, 2018.

The lease can be terminated by mutual consent, after giving 6 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

111

52.

Smt. Deva Karuna (Lessor) and Sardar Balvinder Singh (Lessee) Dated: February 22, 2002

Premises at DO.No.10-3-305/A, situated at Mehadipatnam, Hyderabad.

Monthly rent of Rs. 18,000 and security deposit of Rs. 1, 08,000. Rent shall be increased by 7% after every year. Period: 10 years i.e. from February 22, 2002 to February 21, 2012. The lease may be extended for a further period at the option of the lessee.

The lease can be terminated by mutual consent, after giving 6 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 3 months additional notice. If the Company wants to terminate the lease before 2 years, the Company is required to give a 3 months notice and also rent for 1 year. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. If the Company fails to pay the rent for 3 months, the Company may be liable for eviction. Either party can terminate by giving 3 months advance notice. The Company can give a 3 months notice to terminate this lease. If the Company defaults in payment of rent for 2 consecutive months, the Lessor can terminate this lease by issuing a 30 day notice.

Smt. Deva Karuna (Lessor) and PCH Mobile Zone (Lessee) Dated: July 1, 2006

Premises bearing Municipal no, at 103305/306/A,B&C,1st Floor, 2nd Floor & 3rd Floor, Humayan Nagar, Hyderabad.

Monthly rent of Rs. 35,000 and security deposit of Rs. 2, 00,000. Rs. 1600 as maintenance charges. Rent shall be increased by 7% after every year. Period: 6 years i.e. from July 1, 2006 to June 30, 2012 The lease may be renewed for a further period as mutually agreed.

53.

(1) Mr. Satish V. Futnani, (2) Mr. Murlimal V. Futnani (3) Mr, Manish M. Futnani, (4) Mr. Gautham A. Futnani and (5) Mr. Ashok V. Futnani (Lessors) and the Company (Lessee) Dated 2009 June 25,

Premises at Do.No.63-648, Hissa No. 6-3648 Padmaja Land Mark, Ground Floor, Somajiguda, Hyderabad.

Monthly rent of Rs. 26,620 Rs. 1600 as maintenance charges and security deposit of Rs. 1, 20,000. Rent shall be increased from time to time. Period: 9 years i.e. from April 1, 2009 to March 31, 2018.

Mr. T. Ravi Babu (Lessor) and PCH Associates (Lessee) Dated November 5, 2003

Premises bearing D. No.6-3 648, Padmaja Land Mark, Ground Floor, Somajiguda, Hyderabad.

Monthly rent of Rs. 82,500 and refundable, security deposit of Rs. 5,00,000. Rent shall be increased from time to time. Period: 10 years 6 months i.e. from February 1, 2003 to July 31, 2013.

The Company can give a 3 months notice to terminate this lease. If the Company defaults in payment of rent for 2 consecutive months, the Lessor can terminate this lease by issuing a 30 day notice.

54.

Mr. Ahmed Nawaz Khan (Lessor) and the Company (Lessee) Dated: 2007 March 2,

Premises bearing No.23-2-665/1,23-2665/3,23-3-666 and 23-2-667, Shah-AliBanda Road, Moghalpura, Hyderabad. Premises situated on the ground floor at Plot No.2 Layout 8835, SurveyNo.160, Kompally Ranga Reddy District.

Monthly rent of Rs. 45,000 Rent shall be increased by 5% after every 3 years. Period: 9 years i.e. from March 1, 2007 to February 28, 2015.

The lease can be terminated in the following way: by mutual consent, after giving 2 months notice to the other party, default by the Company in payment of rent for 2 months consecutively and thereafter giving 2 months additional notice. The lease can be terminated in the following way: by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

55.

Sri. Rajender Kargwal (Lessor) and the Company (Lessee) Dated: 2007 March 1,

Monthly rent of Rs. 20,000 Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from March 1, 2007 to February 29, 2016.

112

56.

(1) Sri. Ratan Mulali, (2) Smt. Suman Mulali, (3) Sri. Pradeep Mulani, (4) Smt. Chandra Mulani, (5) Smt. Madhu Mulani, and (6) Sri. Sumeet Mulani (Lessors) and the PCH Associates (Lessee) Dated: September 9, 2005

Premises on the ground floor at Plot No.B-19, Shop No.1 to 6, along with one parking area in the cellar of the shop of the building know as, GAYATHRI ARCADE, Vikrampuri Colony, Kakaguda, Secunderabad.

Monthly rent of Rs. 99,000 Rent shall be increased by 15% after every 3 years. Period: 10 years i.e. from October 1, 2005 to September 30, 2015. First 3 years shall be the lock in period.

If the company terminates the agreement before the lock in period the company is required to pay the rent for the remaining lock in period left. If the Company defaults in payment of rent for 3 consecutive months, the Lessor may terminate the lease

57.

Sri. V. Ramesh and Smt. V. Thulasamma (Lessors) and PCH Associates (Lessee) Dated: October 12, 2005

Premises with one car parking space at Plot No.6&11, Habsiguda, Uppal, Ranga Reddy District.

Monthly rent of Rs. 41,574 and refundable, security deposit of Rs. 10,00,000. Rent shall be increased by 5% after every year. Period: 10 years i.e. from November 1, 2005 to October 30, 2015.

The Company can give a 3 months notice to terminate this lease. If the Company defaults in payment of rent for 3 consecutive months, the Lessor can terminate this lease by issuing a 30 day notice. The lease may be further extended for a period of 10 years by entering into fresh lease. Only the Company can terminate the agreement by giving a 2 month advance notice after the lock in period. The Company is required to pay 50% of Municipal tax.

58.

Dr. K. Nalini Kumari (Lessor) and the Company (Lessee) Dated: November 9, 2006

Premises bearing no. G-2 on the Ground floor, in the building known as Anshu Colors bearing H.No.8-2293/82/A/70, Road No.1, Jubilee Hills, Hyderabad. Premises bearing no. G-3 on the ground floor, in the building known as Anshu Colors bearing H.No.8-2293/82/A/70, Road No.1, Jubilee Hills, Hyderabad.

Monthly rent of Rs. 1,00,000 and Rs. 24,381 as municipal tax. After the initial period of 2 years the rent shall be increased by 10% after every 2 years. Period: 10 years i.e. from January 1, 2007 to December 31, 2016. First 3 years shall be considered as the lock in period. Monthly rent of Rs. 75,000 and Rs. 12,879 as municipal tax. After the initial period of 2 years the rent shall be increased by 10% after every 2 years. Period: 10 years i.e. from January 1, 2007 to December 31, 2016. First 3 years shall be considered as the lock in period.

Smt. M. Kavita (Lessor and the Company (Lessee) Dated December 16, 2006

Only the Company can terminate the agreement by giving a 2 month advance notice after the lock in period. The Company is required to pay 50% of Municipal tax.

113

59.

Sri Durgaram Choudary and Sri Venaram Choudary (Lessor) and the Company (Lessee) Dated: March 16, 2011

Premises bearing no. 19-71/1/A on Plot No.A-6/2, and part of Plot no. A-6 in Survey No.500, Rukminipuram, Keesara Mandal, Ranga Reddy District.

Monthly rent of Rs. 85, 000. Rent shall be increased by 6% after every year. Period: 5 years i.e. from March 1, 2011 to February 28, 2016.

The payment of rent shall be divided into half and paid to both the Lessors. The Company is required to obtain a consent letter from the Lessor if the Company change the nature of business or allow its associates to use the premises. If the rent is remained unpaid for a period of three months after it has become due, the lease deed will stand canceled. The Company is required to give a notice if it wants to terminate or extend this agreement. The agreement shall be subject to the jurisdiction of the Hyderabad courts. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

60.

Sri. S. Rajender Pershad (Owner) and the Company (Tenant) Dated: 2008 June 25,

Premises comprising of 3 shops bearing no. 102,102-A & 102-B, Ground Floor Spectrum Square, bearing municipal no. 16-2-674/2, Judge Colony, Malakpet, Hyderabad. Premises bearing Do. No: 1-8-550-556, RTC Cross Road, Chikkadpally, Hyderabad.

Monthly rent of Rs. 31,000 and interest free, refundable security deposit of Rs. 5, 00,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from June 25, 2089 to June 24, 2017.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

61.

Mr. K. Ravi Rai (Lessor) and the Company (Lessee) Dated: 2009 July 21,

Monthly rent of Rs. 1,19,000 Rent shall be increased by 15% after every 3 years. Period: 15 years i.e. from July 21, 2009 to July 20, 2024. First 3 years shall be the lock in period and the Company cannot vacate the premises. Monthly rent of Rs. 45,000 Rent shall be increased by 15% after every 3 years. Period: 15 years i.e. from March 18, 2009 to March 17, 2024.

The lease can be terminated in the following way: by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

62.

M/s Mahalakhmi Homes represented by Mr. P. Srinivas (Lessor) and the Company (Lessee) Dated: March 18, 2009

Premises on the Ground Floor, Karthik Enclave, Mahalakshmi Trade Centre, S.No.2, Plot No.24,25&26 Bowenpally Secunderabad. Along with parking in front of the premises.

The lease can be terminated in the following way: by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

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63.

(1) Sri. K. Satyanarayana, (2) Smt. Kamshetty Rekha, (3) Sri K. Shashank and (4) Sri K. Saurabh (Lessors) and the Company (Lessee) Dated: 2009 May 22,

Premises bearing no. 3-11-107/GF/4, along with parking area at Kamashetty Mall, Ramanthapur, Hyderabad.

Monthly rent of Rs. 29,000 Rent shall be increased by 5% every year. Period: 15 years i.e. from April 19, 2009 to April 18, 2024. First 3 years shall be the lock in period and the Company cannot vacate the premises.

The lease can be terminated in the following way: by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

64.

Sri. Dantuluri Pratap Raju and Smt. Dantuluri Madhavi (Lessors) and PCH Associates (Lessee) Dated: November 10, 2005

Premises on the ground floor, Shop No. G2, Plot No.14/MIG, Survey .No.143 & 144, situated at Dharmareddy Colony Phase II, Kukatpally, Balanagar Mandal, Ranga Reddy District. Premises on the ground floor, and one parking space at Plot No.36/MIG, Survey No.143 & 144, situated at Dharmareddy Colony Phase II, Kukatpally, Balanagar Mandal, Ranga Reddy District. Premises at Shop No: 4, 6-4-431, Plot No: 79, along with parking area in front of the premises, SR Venkata Sai Complex, Phase IV, HIC, Category, Vanasthalipuram, Ranga Reddy District. Premises on the ground floor bearing Shop No. 8-1301&302/G-1, Saregama Apartments, and one car parking space in the premises 8-1-301 and 302 situated at Shaikpet, Hyderabad.

Monthly rent of Rs. 29,400 Rent shall be increased by 6% every year. Period: 10 years i.e. from November 1, 2005 to October 31, 2015.

The parties can terminate the agreement by giving a 6 months written notice to the other party.

Sri. Kolla ChandraMouli (Lessor) and PCH Associates (Lessee) Dated January 19, 2006

Monthly rent of Rs. 34,500 and security deposit of Rs. 50,000 and Rs. 3, 79,500 at the time of opening the shop.Rent shall be increased by 6% every year. Period: 10 years i.e. from February 1, 2006 to January 31, 2016.

The parties can terminate the agreement by giving a 6 months written notice to the other party.

65.

Mr. V Udaya Simha (Owner) and the Company (Tenant) Dated: May 25th, 2010

Monthly rent of Rs. 6,500 and interest free, refundable security deposit of Rs. 1, 00,000. Rent shall be increased by 10% after every 3 years. Period: 9 years i.e. from July 1, 2010 to June 30, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

66.

Smt. Veeraboina Devarani (Lessor) and the Company (Lessee) Dated: 2007 May 31,

Monthly rent of Rs. 23,500 Rent shall be increased by 15% in every 3 year. Period: 9 years i.e. from June 1, 2007 to May 31, 2016.

The lease can be terminated in the following way: by mutual consent, after giving 3 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 3 months additional notice.

115

67.

Mrs. Laxmi Patel (Lessor) and the Company (Lessee) Dated: 2010 May 11,

Premises at Plot No: G-1, Vertex Plaza, Srinivas Nagar Colony, Kapra Village (Kappera), Keesara Mandal, Ranga Reddy District.

Monthly rent of Rs. 15,000 and interest free, refundable security deposit of Rs. 1, 00,000. Rent shall be increased by 15% in every 3 year. Period: 9 years i.e. from May 1, 2010 to April 30, 2019.

The Company can terminate this agreement by giving a 4 month notice to the Lessor. If the Company defaults in payment of rent, the lessor can terminate this lease by giving a 4 month notice to the Company. Any disputes between the parties shall be subject to the exclusive jurisdiction of Hyderabad courts Andhra Pradesh. The Company can terminate this agreement by giving a 4 month notice to the Lessor. If the Company defaults in payment of rent, the lessor can terminate this lease by giving a 4 month notice to the Company. Any disputes between the parties shall be subject to the exclusive jurisdiction of Hyderabad courts Andhra Pradesh. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company can terminate this agreement by giving a 4 month notice to the Lessor. If the Company defaults in payment of rent, the lessor can terminate this lease by giving a 4 month notice to the Company. Any disputes between the parties shall be subject to the exclusive jurisdiction of Hyderabad courts Andhra Pradesh. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The lease can be terminated in the following way: by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 3 months additional notice.

68.

Mr. B. Gyneshwar Rao (Lessor) and the Company (Lessee) Dated: May 1, 2010

Premises at Shop No: S2, Chikodi Gardens, Begumpet, Hyderabad.

Monthly rent of Rs. 10,000 and interest free, refundable security deposit of Rs. 60,000. Rent shall be increased by 15% in every 3 year. Period: 9 years i.e. from May 1, 2010 to April 30, 2019.

69.

Mrs. T. Babita Rani (Owner) and the Company (Tenant) Dated: May 5, 2010

Premises at Do. No: 2-13/3, along with parking area in front of the premises, Huda MMTS Road, Gangaram, Hyderabad. Premises at Plot No: 35, L.B. Nagar, Donapur, Ranga Reddy District.

Monthly rent of Rs. 9,000 and interest free, refundable security deposit of Rs. 1, 00,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from May 11, 2010 to May 10, 2019. Monthly rent of Rs. 4,500 and interest free, refundable security deposit of Rs. 25,000. Rent shall be increased by 10% in every 11 months. Period: 9 years i.e. from May 1, 2010 to April 30, 2019.

70.

Mrs. Vijaya Laxmi Reddy (Lessor) and the Company (Lessee) Dated: May 1, 2010

71.

Mr. Madhukar (Owner) and the Company (Tenant) Dated: May 5, 2010

Premises at H No: 335-626, MG Nagar, AOC Centre, East Marredpally, Secundrabad.

Monthly rent of Rs. 5,000 and interest free, refundable security deposit of Rs. 30,000. Rent shall be increased by 20% after every 3 years. Period: 9 years i.e. from May 11, 2010 to May 10, 2019.

72.

Sri. V. Yadiah and Sri. V. Kumar Goud (Lessors) and the Company (Lessee) Dated: 2007 May 26,

Premises at 4-80/7, on the ground floor, Koundinya Nagar, Nacharam Village, Uppal Mandal, Ranga Reddy District.

Monthly rent of Rs. 6,000 Rent shall be increased by 7% after every year. Period: 6 years i.e. from June 10, 2007 to June 9, 2013.

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73.

Mr. Maddela Narasimha (Lessor) and the Company (Lessee) Dated: 2010. May 1,

Premises at House No: 9-8-126, Maruthi Nagar, Pochammagadda, Hyderabad.

Monthly rent of Rs. 5,000 and interest free, refundable security deposit of Rs. 60,000. Rent shall be increased by 15% in every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019.

The Company can terminate this agreement by giving a 4 month notice to the Lessor. If the Company defaults in payment of rent, the Lessor can terminate this lease by giving a 4 month notice to the Company. Any disputes between the parties shall be subject to the exclusive jurisdiction of Hyderabad courts Andhra Pradesh. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The lease can be terminated in the following way: by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

74.

Mr. Narender Reddy (Owner) and the Company (Tenant) Dated: 2010 May 10,

Premises at Shop No: 2-2-1118/3C/3, along with parking space in front of the premises, Beside Bank of Baroda, Shivam Road, Hyderabad. Premises at Plot No. 6, Survey No. 14 consisting of ground, first and second floor, Bearing Premises No. 5-5-1163, in Lakshmi Narayana Complex, situated at Sahebnagar Khurd, Main Road Hayathnagar Taluka, L. B. Nagar Ranga Reddy District. Premises at Shop No.6-3-668/9/10,6-3668/9/11/A & 6-3668/9/11/B, on the Ground Floor, 6-3668/9/12, 6-3668/9/13 & 6-3668/9/13/A, first floor & second floor in HSB Chambers situated at Panjagutta, Hyderabad.

Monthly rent of Rs. 7,200 and interest free, refundable security deposit of Rs. 1, 00,000. Rent shall be increased by 20% after every 3 years. Period: 9 years i.e. from May 11, 2010 to May 10, 2019. Monthly rent of Rs. 50,000 Rent shall be increased by 10% after every 2 years. Period: 10 years i.e. from January 1, 2010 to December 31, 2019.

75.

Smt. A. Saritha (Lessor) and the Company (Lessee). Dated: September 26, 2009

76.

(1) Mr. Barkat Ali Hakani, (2) Mr. Amin Mohammad, (3) Mr. Shoukat Ali, (4) Nasaruddin Sayani, (5) Mrs. Rashida Bai Manjiyani and (6) Mr. Ameen Chagani (Lessors) and the Company (Lessee) Dated: November 1, 2009

Monthly rent of Rs. 1,25,000 and interest free, refundable security deposit of Rs. 10,00,000. Rent shall be increased by 15% after every 3 years. Period: 9 years i.e. from November 1, 2009 to October 31, 2018. First 3 years shall be the lock in period and the Company cannot vacate the premises.

The lease can be terminated in the following way: by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

77.

Smt. P. S. Shashikala (Lessor) and the Company (Lessee) Dated: 2010 July 20,

Premises at Shop No.13, DO.No.8-2644/1/13, of Hi-Line Complex, Survey No. 129/171 on the Ground Floor, situated at Shaikpet Village, Road No.12, Banjara Hills, Hyderabad.

Monthly rent of Rs. 40,000 and an refundable deposit of Rs. 2,50,000. Rent shall be increased by 5% every years. Period: 5 years i.e. from July 20, 2010 to July 19, 2015.

The lease can be terminated in the following way: by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

117

78.

Mr. Ravi (Owner) and the Company (Tenant) Dated: July 5, 2010

Premises at shop no. 102 bearing DO. No: 1-3/1, Kothaguda, HiTech City, Ranga Reddy District, Hyderabad.

Monthly rent of Rs. 4,000 and a refundable security deposit of Rs. 24,000. Rent shall be increased by 20% after every 3 years. Period: 9 years i.e. from July 5, 2010 to July 4, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

79.

Feroz Ali (Lessor) and the Company (Lessee) Dated: 2010 July 21,

Premises in Shop bearing Municipal No. 5-9-208/1, Ground floor, in A1Noor Plaza, Chirag Ali Lane, Abids, Hyderabad. Premises at Shop No: 1, Municipal bearing No: 2-216, situated at Vani Nagar, Malkajgiri, Ranga Reddy District. Premises at Shop No: 1, Municipal bearing No: 2-216, situated at Vani Nagar, Malkajgiri, Ranga Reddy District. Premises bearing no. 5 at Ground, First and Second Floor, along with 3 car parking space, Survey. No. (205/P), Plot No.239, 240 & 241, Madhuranagar, Shamshabad Village Mandal, Ranga Reddy District. Premises bearing Hissa No.2-85, along with 3 car parking space, Chandanagar Village, Serilingampally Municipality, Ranga Reddy District.

Monthly rent of Rs. 18,000 and a refundable deposit of Rs. 2,00,000. Rent shall be increased by 7% every year. Period: 3 years i.e. from July 1, 2010 to June 30, 2013. Monthly rent of Rs. 11,000 and a refundable security deposit of 1,50,000. Rent shall be increased by 5% every year. Period: 5 years i.e. from July 15, 2010 to June 14, 2015. Monthly rent of Rs. 11,000 and a refundable security deposit of 1,50,000. Rent shall be increased by 5% every year. Period: 5 years i.e. from July 15, 2010 to June 14, 2015. Monthly rent of Rs. 15,000 and a refundable security deposit of Rs. 1,25,000. Rent shall be increased by 7% every year. Period: 5 years i.e. from November 23, 2010 to November 22, 2015.

The lease can be terminated by mutual consent, after giving 2 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. In the event of default by the Company in payment of rent for 3 months consecutively the lessee may terminate this agreement by giving a 3 months additional written notice.

80.

Sri N. Vinay Kumar (Lessor) and the Company (Lessee) Dated: 2008 July 15,

Sri. N. Laxman (Lessor) and the Company (Lessee) Dated July 15, 2010

In the event of default by the Company in payment of rent for 3 months consecutively the lessee may terminate this agreement by giving a 3 months additional written notice.

81.

Mrs. Pallamont Indira Devi (Lessor) and the Company (Lessee) Dated: November 25, 2010

The lease can be terminated by mutual consent, after giving 2 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice.

82.

Mr. Adul Mutalib (Lessor) and the Company (Lessee) Dated: November 25, 2010

Monthly rent of Rs. 25,000 and a refundable security deposit of Rs. 1,50,000. Rent shall be increased by 15% every year. Period: 9 years i.e. from November 25, 2010 to 24 November, 2019.

The lease can be terminated by mutual consent, after giving 2 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice.

118

83.

Mrs. Bhavana Kewlani (Lessor) and the Company (Lessee) Dated: November 25, 2010

Premises at Kiran Arcade LGF Shop No: 1-2-273/B, Lower Ground Floor, S. D. Road, Secunderabad.

Monthly rent of Rs. 37,000 and a refundable security deposit of Rs. 5,00,000. Rent shall be increased by 6% every year. Period: 5 years i.e. from November 25, 2010 to November 24, 2015. Monthly rent of Rs. 10,000 and a refundable security deposit of Rs. 1,00,000. Rent shall be increased by 20% every 3 years. Period: 9 years i.e. from May 1, 2010 to April 30, 2019.

The lease can be terminated by mutual consent, after giving 2 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. If the Company fails to evict the premises after the expiry of the lease period the Company is liable to pay an increase in 15% of the prevailing rent.

84.

Mrs. Kalpana, R. Kalghatgi, (Owner) and the Company (Tenant) Dated: 2010 May 10,

Premises bearing DO. NO. 3449, at Shop No: LG-2, Samadevigalli, Belgaum.

85.

Mr. Prakash N. (Owner) and the Company (Tenant) Dated: 2010 April 28,

Premises bearing Shop No: 628/11A, Nittavalli Main Road, Davangere.

Monthly rent of Rs. 8,000 and a refundable security deposit of Rs. 9,000. Rent shall be increased by 20% every 3 years. Period: 9 years i.e. from April 28, 2010 to April 27, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

86.

Mr. M. N. Lakshmamma (Owner) and the Company (Tenant) Dated: December 1, 2010

Premises at Shop No.12 on the first floor, SAS No.380, Ward No.25, Old Post Office Road, Behind Vanivilasa School, Hassan. Premises at Shop No.166, B.M Road, Hassan.

Monthly rent of Rs. 5,000 and a refundable security deposit of Rs. 50,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from December 1, 2010 to November 31, 2019. Monthly rent of Rs. 55,400 and a refundable security deposit of Rs. 5,00,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from March 1, 2010 to February 28, 2019.

87.

Mr. K. G. Madhava Kumar and Mr. K. G. Biju Gopinath (Owner) and the Company (Tenant) Dated: 2010 May 12,

88.

Mr. Shankar. K. Habib (Owner) and the Company (Tenant) Dated: 1, 2010 December

Premises at Shop No.68, B.G.F, situated at Sri Laxmi Balkrishna Square, Station Road, Hubli.

Monthly rent of Rs. 6,000 and a refundable security deposit of Rs. 75,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from December 1, 2010 to November 31, 2019.

119

89.

Mr. S. Valibasha (Owner) and the Company (Tenant) Dated: August 6, 2010

Premises at Shop No. 550/1B1, bearing Do. No. 110 Opposite Madina Masjid, Bandi Mot Bangalore Road Ballary.

Monthly rent of Rs. 3,500 and a refundable security deposit of Rs. 35,000. Rent shall be increased by 20% every 3 years. Period: 9 years i.e. from August 6, 2010 to August 5, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

90.

Mrs. Shailaja (Owner) and the Company (Tenant) Dated: May 5, 2010

Premises at Shop No: 247, bearing Do. No. 247, along with parking area, Patel Nagar, Hospet.

Monthly rent of Rs. 2,550 and a refundable security deposit of Rs. 30,000. Rent shall be increased by 30% every 3 years. Period: 9 years i.e. from May 5, 2010 to May 4, 2019.

91.

Mr. S. D. Jayaram (Owner) and the Company (Tenant) Dated: 2010 June 30,

Premises bearing Plot No. 2452, Street No. 32, situated at Shegaon Naka Chowk, Amaravati.

Monthly rent of Rs. 58,000 and a refundable security deposit of Rs. 2,00,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from October 1, 2010 to September 30, 2019. Monthly rent of Rs. 4,000 and an interest free security deposit of Rs. 25,000. Rent shall be increased by 10% every year. Period: 9 years i.e. from October 3, 2010 to October 2, 2019. Monthly rent of Rs. 14,000 and a refundable security deposit of Rs. 2, 00,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from March 23, 2010 to March 22, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. This agreement is only a leave and license agreement and no tenancy is intended to be created. If the parties want to terminate this agreement they are required to give 1 month notice to the other party.

92.

Mr. Suneetha Mohan Kalantre (Licensor) and the Company (Licensee) Dated: October 12, 2010

Premises bearing Shop No.5 on the ground floor of Pendarkar Complex, Vinus Chowk, Kolhapur.

93.

M/s Triveni Builders & Developers represented through Mr. Pravin Ghadge (Owner) and the Company (Tenant) Dated: March 23, 2010

Premises on the ground and the first floor, bearing No: G1, along with 3 parking area, Triveni Vihar, SD Waichal Road, Near Ruikar colony, Kolhapur.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

94.

Mr. Pradeep Devaram Kharti (Owner) and the Company (Tenant) Dated: October 1, 2010

Premises at Shop No.6, along with parking space in front of the premises, Balaji Apartment, Lahanuji Baba Nagar, Amaravati.

Monthly rent of Rs. 3,000 and a refundable security deposit of Rs. 20,000. Rent shall be increased by 20% every 3 years. Period: 9 years i.e. from October 10, 2010 to October 9, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

120

95.

Mr. Navin Parasmal Jain (Owner) and the Company (Tenant) Dated: October 1, 2010

Premises bearing Do. No. 5, Shirdi Sai Complex, 4th Main Road, Hormavn Main Road, RK Puram Bangalore.

Monthly rent of Rs. 15,000 and a refundable security deposit of Rs. 2, 00,000. Rent shall be increased by 5% every 3 years. Period: 9 years i.e. from July 1, 2010 to June 30, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The Lessor is required to pay property tax. The Company shall not sub-let the premises. The Lessor can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The Lessor is required to pay property tax. The Company shall not sub-let the premises. The Lessor can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The Lessor is required to pay property tax. The Company shall not sub-let the premises. The Lessor can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The Licensor is required to pay property tax. The Company shall not sub-let the premises. The Licensor can enter the premises at all reasonable hours for inspection.

96.

Mrs. Asha, Baburao, Niphadkar (Owner) and the Company (Tenant) Dated: October 1, 2010

Premises bearing Shop No.6, Uttamnagar, Cidco, Nasik.

Monthly rent of Rs. 6,000 and a refundable security deposit of Rs. 50,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from October 1, 2010 to September 30, 2019.

97.

Mr. Krunal Suresh Patil (Lessor) and the Company (Lessee) Dated: February 27, 2010

Premises at Shop No: 10 to 16 situated at Shraddha Park, Survey No: 23/6(P)+7/1 and 7/2/6, Plot No: 6 and Survey No:23/6(P) and 7/2/7, Plot No: 7. Premises at Plot No.383, along with parking space, Sector N-3, CIDCO, Aurangabad.

Monthly rent of Rs. 51,411 and a refundable security deposit of Rs. 2, 00,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from February 27, 2010 to February 26, 2019. Monthly rent of Rs. 7,000 and a refundable security deposit of Rs. 50,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from October 1, 2010 to September 30, 2019.

98.

Mrs, Pushpa Sudhakar Zine (Owner) and the Company (Tenant) Dated: October 1, 2010

99.

Mr. Abdul Waseem (Lessor) and the Company (Lessee) Dated: 2010 March 2,

Premises bearing Gut No: 83 ITH Kheda Beed, by pass Road, Aurangabad.

Monthly rent of Rs. 50,000 and a refundable security deposit of Rs. 1, 50,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from March 1, 2010 to February 28, 2019.

100.

Mr. Rajesh Bhimrao Londhe (Lessor) and the Company (Lessee) Dated: October 15, 2010

Premises at Shop No: 18, D.No-18, District Sports Complex, Opposite TV Centre, Kumtha-Naka Sholapur, Maharashtra. Premises Shop No: 1 and 10, in the Complex known as "Yashwant Market" situated at Gold Finch Peth, Sholapur.

Monthly rent of Rs. 5,000 and a refundable security deposit of Rs. 25,000. Rent shall be increased by 20% every 3 years. Period: 9 years i.e. from October 2, 2010 to October 1, 2019. Monthly rent of Rs. 32, 500 and a refundable security deposit of Rs. 1,50,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from March 29, 2011 to March 28, 2020.

101.

Shri Vasudeo Gopaldas Manwani (Licensor) and the Company (Licensee) Dated: February 26, 2010

121

102.

Mr. Harish Tekchand (Owner) and the Company (Tenant) Dated: October 19, 2010

Premises at Shop No.5, along with parking space in front of the premises, Plot No.654/6-7, Near Maasurkar Chowk, Old Motor Stand, Itwori Station Road, Nagpur. Premises at Shop No.3, along with parking space in front of the premises, Hanuman Lane, Sitabordi, Nagpur.

Monthly rent of Rs. 3,500 and a refundable security deposit of Rs. 30,000. Rent shall be increased by 20% every 3 years. Period: 9 years i.e. from October 10, 2010 to October 9, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

103.

Mr Ram Krishna Gupta (Owner) and the Company (Tenant) Dated: October 1, 2010

Monthly rent of Rs. 5,000 and a refundable security deposit of Rs. 50,000. Rent shall be increased by 20% every 3 years. Period: 9 years i.e. from October 10, 2010 to October 9, 2019. Monthly rent of Rs. 25,000 and an interest free, refundable security deposit of Rs. 1,50,000 Period: 3 years i.e. from July 15, 2010 to July 14, 2013. And shall be renewed for a further period of 3 year with a rent escalation of 15% for the renewed period. The Company cannot terminate this agreement for the first 12 months.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The Licensor is required to pay property tax. The Company shall not sub-let the premises. The Licensor can enter the premises at all reasonable hours for inspection. If the Company defaults in paying the rent for 2 consecutive months, the Licensor can terminate this agreement by giving a 2 month notice to the Company. If the Company wants to terminate this agreement after the lock in period. The Company can do so by giving a 2 month notice to the Licensor. The lease can be terminated by mutual consent, after giving 3 months notice to the other party, default by the Company in payment of rent for 2 months consecutively and thereafter giving 1 month additional written notice.

104.

Mr. Sameer Kirit Shah and Mrs. Nalini Kirit Shah (Licensor) and the Company (Licensee) Dated: 2010. July 15,

Premises at Shop No 4, Shivam Apartments, Survey No 8, Opposite Shivakar Garden, Next to Dominos Pizza, Wanoware, Pune-411040.

105.

M/s Sri Sai Enterprises (Lessor) and the Company (Lessee) Dated: September 27, 2010

Premises at Shop No.18, SemiBasement Floor of Sri Sai Complex, 147, Thadagam Road, Coimbatore.

Monthly rent of Rs. 5,900 Rent shall be increased by 10% every year. Period: 9 years i.e. from September 27, 2010 to September 26, 2019. First 3 years shall be the lock in period and the Company cannot vacate the premises. Monthly rent of Rs. 30,000 and a refundable security deposit of Rs. 1,80,000. Rent shall be increased by 15% every 3 years. Period: 9 years i.e. from November 18, 2010 to November 18, 2019. First 3 years shall be the lock in period and the Company cannot vacate the premises.

106.

Sincere Auto Accessories (Lessor) and the Company (Lessee) Dated: November 18, 2010

Premises bearing No.5, North Usman Road, T. Nagar.

The lease can be terminated by following ways: mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice.

122

107.

Mrs. Meera Khushal Pincha (Owner) and Company (Tenant) Dated: December, 16, 2010

Premises situated on the ground floor at Tawkal Layout, High Way Road, Wadi Nagpur.

Monthly rent of Rs. 25,000 and a refundable security deposit of Rs. 1,50,000. Rent shall be increased by 5% every 3 years. Period: 9 years i.e. from July 1, 2010 to June 30, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

108.

Mr. Pratham Sanjay Pincha (Owner) and Company (Tenant) Dated: December, 16, 2010

Premises situated at Tawkal Layout, High Way Road, Wadi Nagpur.

Monthly rent of Rs. 20,000 and a refundable security deposit of Rs. 1,20,000. Rent shall be increased by 5% every 3 years. Period: 9 years i.e. from December 1, 2010 to November, 31, 2019.

E.

2 (Two) Retail Outlets Owned by the Company: Parties and date of Agreement (1) Sri P. Mohan Murty, (2) Smt. P. Gayatri Murty, (3) Kum. P. Madhvi Murty, (4) Sri P. Anand Murty represented by M/s Om Sai Constructions ( Vendors) and the Company (Purchaser) Dated April 17, 2007 Description of Premises Premises comprising of entire Stilt Floor for parking (except three car parking lots already sold) and at 1st, 2nd 3rd and 4th Floor upto sky in semi finished stage in the said complex known as "AJAY EDIFICE" in premises bearing No.16--2--674/3, situated at Judges Colony, adjacent to National Highway No.9, Malakpet, in Ward No.16, Block No. 2, Municipal Corporation of Hyderabad, Registration Sub District Azampura, Hyderabad Andhra Pradesh. Consideration Rs. 2,00,00,000. (Rupees Two Crores) Other Terms and conditions 1. The Vendors does hereby agree to keep indemnified the Company may sustain by reason of any claim being made by anybody to the said property. The Company shall not make any structural alterations or modifications of the said property which encroaches upon the right of the other owners of the premises or endanger their property. The Company shall join the Association of all portions owners for managing common areas and facilities and pay its share of subscription. The land appurtenant to the building shall be common to all owners as parking place etc. Nobody shall be entitled to put up any constructions thereon and cause any obstruction to other occupants of the building. Ground rent if any on the land shall be borne by all the owners proportionately. The Company shall not store any hazardous or combustible nature or any goods of heavy as to adversely affect the structure of the main building.

Sr. No 109.

2.

3.

4.

5.

6.

(1) Sri P.S. Anup Kumar, (2) Sri P.S. Arun Kumar, and (3) Sri. P.S. Anil Kumar (Vendors) and the Company (Purchaser)

Premises at Portions Nos.1 (G-1), 2 (G-2), & 3 (G-3), on Ground Floor of the said complex known as "AJAY EDIFICE" in premises bearing No.16-2--674/3, with and three

Rs. 1,60,00,000 (Rupees one crore sixty lakhs) in the following break ups. Rs. 10,00,000 (Rupees ten lakhs) x 3, Rs. 11,00,000 (Rupees eleven lakhs), Rs.

1. The Company shall have proportionate right in the land and premises which works out to 210.00 sq. yards but shall not have exclusive right in any part of the land except its own portion/unit/floor.

123

Sr. No

Parties and date of Agreement Dated April 19, 2007

Description of Premises car parking area in cellar (i.e. stilt floor). situated at Judges Colony, adjacent to National Highway No.9, Malakpet, in Ward No.16, Block No.2, Municipal corporation of Hyderabad, Registration Sub District Azampura, Hyderabad Andhra Pradesh.

Consideration 4,00,000 (Rupees four lakhs), Rs. 18,00,000 (Rupees eighteen lakhs), Rs. 34,33,400 (Rupees thirty four lakhs thirty three thousand four hundred) Rs. 34,83,300 (Rupees thirty four lakhs) Rs. 27,83,300 (Rupees twenty seven lakhs eighty three thousand three hundred) Rs. 1,50,00,000 (Rupees one crore fifty Lakhs)

Other Terms and conditions 2. The remaining terms and the condition of this agreement are the same as the terms and conditions mentioned in the above agreement.

110

(1) Smt. Jyothi P. Raichandi, (2) Smt. Veena D. Raichandani, (3) Smt. Jaya R. Raichandani, (4) Smt. Manisha A. Raichandani, (5) Smt. Vibha S. Raichandani (Vendors) and the Company (Purchaser). Dated: October 16, 2010.

Premises located at the commercial units- 13, 14, and 15 on the ground floor of the building named and styled at Maruti Times Square, along with 6 car parking space in the lower cellar at Premises No. A-1 in Survey No. 56, GLR Survey No. 370, situated at Moti Valley, Tirumulgerry village, Secunderabad.

1. The Vendors have paid all the taxes, dues and charges payable in respect of the property. 2. The Vendors have not created any charge, mortgage, lien over the property. 3. The Vendors hereby indemnify the Purchaser against any loss or or expenses that the Company may sustain or pay. 4. The Company is entitled to enjoy all the common facilities areas, amenities, appurtenances, easement etc which are in usage of the Vendor on par with the occupants of the said building.

F.

11 (Eleven) Warehouses taken on Lease or Leave and Licenses basis by the Company: Parties and date of the Agreement Mr. A. Srinivasa Reddy (Lessor) and the Company (Lessee) Dated: September 6, 2010 Description Premises of Consideration and License Period Monthly rent of Rs. 60,000. Rent shall be increased by 5% every year. Period: 5 years i.e. from September 6, 2010 to September 5, 2015. Main Terms and Conditions The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional notice.

Sr. No 1.

Premises on the ground floor in "Ratnam Happy Homes Residency" along with car parking area bearing Door No.2-2-1089, (New No: 2-21089/A/1/2), 2-21089/A (New No: 22-1089/A/1/1), situated at Amberpet, Hyderabad, Andhra Pradesh.

2.

Mohammed Imtiaz (Lessor) and the Company (Lessee) Dated: October 24, 2010

Premises at 6-3580/2, Opposite Zilla Parishad Office, Anandnagar, Khairatabad, Hyderabad Andhra Pradesh.

Monthly rent of Rs. 15,000 and an interest free, refundable security deposit of Rs. 60,000. Rent shall be increased by 5% every year. Period: 5 years i.e. from October 24, 2010 to October 23, 2015. 124

The Company shall be liable to be evicted if the Company does not pay rent for 2 consecutive months and an additional interest shall be charged of 2% p.m. over the rent. The company shall be liable to pay 4 month rent for any damages to the premises.

3.

Mr. Dr. A. Sanjay Singh (Owner) and the Company (Tenant) Dated: September 16, 2010

Premises bearing No: 1-8-537/A, along with parking space in front of the premises, Chikkadpally, Hyderabad.

Monthly rent of Rs. 6,000 and interest free, refundable security deposit of Rs. 18,000. Rent shall be increased by 20% after 3 years. Period: 9 years i.e. from September 16, 2010 to September 9, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

4.

M/s Shakti Constructions by its sole proprietor Sri Raja Ram Mohan (Lessor) and the Company (Lessee) Dated February 21, 2008

Premises situated at Door No. 12-720/65/5 consisting of ground floor at Railway goods shed Complex Road, Mossapet, Sanathnagar, Hyderabad, Andhra Pradesh.

Monthly rent of Rs. 61,326. Rent shall be increased by 5% after every year. Period: 5 years i.e. from March 1, 2008 to February 28, 2013. The lease period can be further extended to 5 more years on mutual consent of the parties. First 2 years shall be considered to be the lock-in period.

5.

Mr. Kolla Chandra Mouli (Lessor) and the Company (Lessee) Dated: 2010 June 26,

Premises on the second floor, Plot No: 36/MIG, and Constructed Cellar, G=4 Upper Floors, in Survey No: 143 & 144, Situated at Dharma Reddy Colony, Phase - 11, Hydernagar Village, Under GHMC Kukatpally, Circle, Balangar Mandal, Ranga Reddy District. Premises bearing Shop No. G2, along with car parking space in front of the premises, Sharada Apartment, Ayodhya Nagar, A. S. Rao Nagar, Hyderabad. Premises bearing Do No: 16-1-4, Railway Feader Road, Near Goods Shed, Amudavalasa, Srikakulam.

Monthly rent of Rs. 25,850 and interest free, refundable security deposit of Rs. 2,84,000. Rent shall be increased by 18% after 3 years. Period: 9 years i.e. from July 1, 2010 to June 30, 2019.

The Company can terminate the agreement 3 months notice to the Lessor. If the Company wants to terminate the agreement before the lock in period of 2 years, the Company is required to pay rent for the balance period. The Lessor shall give the Company 30 day notice period to rectify the default, beyond which the Lessor may terminate this agreement. All disputes shall be referred to a sole arbitrator as decide mutually by the parties and the venue shall be Hyderabad. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

6.

Mr. V. Dayananda Raju (Owner) and the Company (Tenant) Dated: 2010 June 14,

Monthly rent of Rs. 5,000 and interest free, refundable security deposit of Rs. 5,000. Rent shall be increased by 20% after 3 years. Period: 9 years i.e. from June 14, 2010 to June 13, 2018. Monthly rent of Rs. 5,000 and interest free, refundable security deposit of Rs. 15,000. Rent shall be increased by 20% after 3 years. Period: 9 years i.e. from June 1, 2010 to May 31, 2018.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection. The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can

7.

Mr. J. Amarnath (Owner) and the Company (Tenant) Dated: 2010 May 10,

8.

M/s Vasanth Mehal represented by proprietor K. Prabhakar Rao (Owner) and the

Premises bearing No: 22-B-1-29, along with car parking space in front of the premises Cellar

Monthly rent of Rs. 13,000 and interest free, refundable security deposit of Rs. 39,000. Rent shall be increased by 125

Company (Tenant) Dated: 2010 9. May 10,

(Lower Ground), GNT Road, Vasanth Mahal, Powerpeta, Eluru. Premises at Godown "D", Bearing No: 28/1/1021, along with car parking space in front of the premises, Mypad Road, Navalak Gardens, Nellore Town, Nellore. Premises bearing Do. No.2/5, along with car parking space in front of the premises, Beside Sri Maheshwari Mills, Opp. SLV Gardens Masamaseed, Mamidalapadu, Kurnool. Premises bearing Door No. 5-7-588/2, Postal Colony, Subedari, Hanmakonda.

20% after 3 years. Period: 9 years i.e. from May 20, 2010 to May 19, 2019. Monthly rent of Rs. 8,000 and interest free, refundable security deposit of Rs. 48,000. Rent shall be increased by 15% after 3 years. Period: 9 years i.e. from June 1, 2010 to May 31, 2019.

enter the premises at all reasonable hours for inspection.

M/s S.V. Industries represented by its partner Sri Y. Sreenivasa Rao (Owner) and the Company (Tenant) Dated: 2010 May 10,

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

10. Mr. V. P. Malikarjuna Gupts (Owner) and the Company (Tenant) Dated: July 16, 2010

Monthly rent of Rs. 15,000 and interest free, refundable security deposit of Rs. 90,000. Rent shall be increased by 15% after 3 years. Period: 9 years i.e. from August 1, 2010 to July 30, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

11. Mr. Kola Rajaiah (Owner) and the Company (Tenant) Dated: July 13, 2010

Monthly rent of Rs. 8,500 and interest free, refundable security deposit of Rs. 25,500. Rent shall be increased by 18% after 3 years. Period: 9 years i.e. from July 20, 2010 to July 19, 2019.

The Company is required to pay electricity charges, professional taxes. The owner is required to pay property tax. The Company shall not sub-let the premises. The owner can enter the premises at all reasonable hours for inspection.

G.

9 (Nine) Owned Premises of the Company which are currently lying vacant: Parties and date of Agreement (1) Sri. Ramalingam Shantha Kumar, (2) Smt. Rani Shantha Kumar & (3) Sri. Suresh Kumar, (Vendors) and the Company (Vendee) Dated February 24, 2009 Description of Premises Premises bearing municipal no. 1-131/II/310 and 311 consisting of ground floor, first floor and second floor in Block No.1, on Plot 310 and 311 as per Saket Vorla Enclave Master Plan, Plot bearing No.49 and 50 (Part) in Survey Nos.125 (part) and 127 (part), situated at "SAKET VORLA ENCLAVE", Saket Nagar, Phase-2, Under Kapra Municipality, Keesara Mandal, Ranga Reddy District. Andhra Pradesh. Consideratio n Rs. 85,00,000 (Rupees eighty five lakhs) Other Terms and conditions At the request of Smt. Rani Shantha Kumar and Sri. Suresh Kumar, the entire sale consideration amount shall be paid to Sri Ramalingam Shantha Kumar. The Vendor agrees and undertakes to indemnify and keep indemnified the Company from and against all losses, damages, expenses, costs or other charges, suffered or incurred by the Company on account of any let or hindrance or other encumbrance by any one claiming through the Vendor, lawfully or otherwise, or on account of any levy whatsoever upon the Scheduled premises appertaining to the period prior to the date of sale. The Vendor covenants that in case there is any defect found or established in its title to the Scheduled land/property, the Vendor shall rectify such defects at its costs and give valid perfect and marketable title to the Company.

Sr. No 1.

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Sr. No 2.

Parties and date of Agreement (1) Sri. Vivek Agarwal & (2) Smt. Neelam Agarwal (Vendors) and the Company (Vendee) Dated March 16, 2009

Description of Premises Premises bearing municipal number 1-131/IV/91; in Block No.1, on Plot No.102 (PLOT NO.91 as per Mithila Master Plan), in Survey No.122 Part, covered by HUDA FILE NO.8326/MP2/HUDA/20 04 Situated at Mithila Nagar, Saket, Kapra Municipality, Keesara Mandal, Ranga Reddy District, Andhra Pradesh.

3.

Sri. Gurjit Singh (Seller) and the Company (Purchaser) Dated: December 10, 2008

Premises measuring twenty four and half Guntas (24 Guntas) in Survey. No. 159 of Begur Village, Begur Hobli, Bangalore South Taluk, and duly converted for non-agricultural residential purposes vide Order of the Deputy Commissioner, Bangalore District, Bangalore, bearing No.B.DIS.ALN.SR(S) 409/1996-97 dated May 29, 1997 and bearing Khata No.655 and presently bearing Khata No.696/1 in the records of the Begur Village Panchayath, Begur Hobli, Bangalore South Taluk . Premises, on Plot No.49/A and Plot No.49/B in Huda Enclave, T.S.NO.2(P) and 3(P), Block-D, Ward No.9 and T.S.NO.1(P), Block No. F, Ward No.9 of Shaikpet Village, Golconda Mandal, situated at Jubilee hills, Hyderabad District (Covered in MCH Ward No.8, Block No.2). Premises on Plot No.819, In Category-MIG Of The Nallagandla Huda Residential Complex in Survey No.302 to 310, 320 to 322, 324 to 361, 363 to 365, 384, 385, 387

Consideratio n Rs. 45,00,000 (Rupees forty five lakhs) in the following break ups. Rs. 9,50,000 (Rupees nine lakhs fifty thousand) paid to Smt. Neelam Agarwal, and Rs. 35,50,000 paid to Sri. Vivek Agarwal. Rs. 2,05,14,000 (Rupees two crores five lakhs and fourteen thousand)

Other Terms and conditions At the request of Smt. Neelam Agarwal, Rs. 9,50,000/- (Rupees nine lakhs fifty thousand) is requested to be paid to her and the entire balance amount of Rs. 35,50,000/- (Rupees thirty five lakhs fifty thousand) shall be paid to Sri. Vivek Agarwal. The remaining terms and the condition of this agreement are the same as the terms and conditions mentioned in the agreement in Serial No. 1.

The Seller assures that apart from him, there is no other person interested in the Schedule premises or portions thereof and the Seller hereby agrees to keep the Company at all times fully indemnified and harmless against any loss or liability, action or proceedings, cost or claims which may arise against the Company or the Schedule premises by reason of any defect in or want of title on the part of the Seller and/or breach of the terms of this sale. The Seller agrees and bind to defend the right, title, interest and ownership of the Company herein against all claims and demands and the expenses and the expenses in this regard will be fully borne to by the Seller.

4.

(1) Sri. D. Ramesh and (2) J. Seeta Rama Dass (Vendors) and Sri Ravinder Singh Sarna, Sri Abhish Kumar & Sri Rajinder Singh Sarna (Confirming Party) and the Company (Purchaser) Dated: March 18, 2009 Sri. Sutinder Singh (Vendors) and the Company (Purchaser) Dated: February 28, 2009

Rs. 31,53,120 (Rupees three crores thirty one lakhs fifty three thousand one hundred and twenty) .

Rajinder Singh has no objection of paying the sale consideration to Abhish Kumar and Ravinder Singh. For any disputes arising between the parties in regard to this Sale deed, they may refer the dispute to a sole arbitrator, venue of Arbitration shall be at Hyderabad and the Proceedings shall be in English language. The remaining terms and the condition of this agreement are the same as the terms and conditions mentioned of the agreement mentioned in Sr. No. 1. The terms and the condition of this agreement are the same as the terms and conditions mentioned of the agreement mentioned in Sr. No. 1.

5.

Rs. 19,42,500 (Rupees nineteen lakhs forty two thousand five hundred)

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Sr. No

Parties and date of Agreement

Description of Premises to 391 and 399 Situated At Nallagandla Village, Serlingampally Mandal and Municipality, Ranga Reddy District Andhra Pradesh. Premises bearing no. 44 constructed at plot bearing no. 44 ground and the first floor in the Project namely Anthem in Survey Nos. 42, 43, 44, 45 and 46/2 situated at Gundlapochampally village, Medchal Mandal and Municipality, Ranga Reddy District.

Consideratio n

Other Terms and conditions

6.

M/s PCH Agencies Private Limited (Vendor) and the Company (Vendee) Dated: April 27, 2010

Rs. 62,00,000 (Rupees sixty two lakhs)

7.

Sri Harish Rawtani (Vendor), M.s Maruti Infraventures (India) Private Limited (Consenting Party) and the Company (Vendee) Dated: September 4, 2010

Premises bearing Shop No. GF-4 on the ground floor with Mazzanine Floor constructed on Plot No. G-12 and 12(part) bearing Municipal No. 119/97, in survey no. 466, G-Block, Officers Colony, Dr. A.S. Rao Nagar, Kapra Village and Municipality, Ranga Reddy District with one car parking space.

Rs. 40,00,000 (Rupees Forty Lakhs)

The Vendors agree that the said property is free from all kind of encumbrances, claims, charges, lien, mortgage, attachments, and acquisition by the Government. The Vendors hereby indemnify the Company against any loss or expenses that the Company may sustain or pay. All expenses of stamp duty for conveyance, transfer tax registration fees, VAT and service tax is required to be borne by the Vendor and all other taxes applicable is required to be paid by the Company. The terms and the condition of this agreement are the same as the terms and conditions mentioned of the agreement mentioned in Sr. No. 1. The Company shall not demolish the premises or part of the building complex including common area. The Company shall not alter the exteriors color of the building. The Company agrees that he shall be the member of the Society formed by the Vendor as the principal member of the proposed society. The Company is required to pay the share towards the amenities, common services, insurance premium, taxes etc required to be paid by the occupants of the building. The Company is required to pay the property taxes, electricity deposit, electricity deposit, electricity consumption charges and water charges etc to the concerned authority. The Company shall only use the premises for commercial purposes and shall not cause nuisance or disturbance to the neighboring occupants of the building. The Company shall not store any explosives or goods of destructive nature which is likely to cause fire or explosion. The remaining terms and the condition of this agreement are the same as the terms and conditions mentioned of the agreement mentioned in Sr. No. 1 . The terms and conditions are the same as mentioned in the sale deed serial no. 1.

8.

M/s Ninestar Enterprises Private Limited (Vendor) and the Company (Vendee). Dated: December

Premises situated at Plot no. 45 of Huda Enclave T.S. No. 2 (P) and 3 (P), Block-D, Ward No. 9 and T.S. no. 1 (P), Block No F, Ward No. 9 of Shaikpet

Rs. 4,46,22,382 (Rupees four crores forty six lakhs twenty two

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Sr. No

Parties and date of Agreement 16, 2010

Description of Premises Village Golconda Mandal, Hyderabad District, Jubliee Hills Andhra Pradesh. Commercial units - 11 and 12 on the ground floor of the building named as Maruti Times Square forming a part and parcel of the property bearing no. A-1 in the survey no. 56, GLR survey no. 370 situated at Moti Valley, Tirumulgherry village, Secundrabad Cantonment along with 4 car parking space.

Consideratio n thousand three hundred and eighty two). Rs. 1,00,00,000 (Rupees one crore) in 10 instalments of Rs. 10,00,000 (Rupees Ten lakhs).

Other Terms and conditions

9.

(1) Smt. Jyothi P. Raichandani (2) Smt. Veena D. Raichandani (3) Smt Jaya R. Raichandani (4) Smt. Manisha A. Raichandani (5) Smt. Vibha S. Raichandani (Vendors) and the Company (Vendee) Dated: November 2, 2010

The Company is entitled to enjoy all the common facility amenities which are used by the other occupants of the buildings. The remaining terms and the condition of this agreement are the same as the terms and conditions mentioned of the agreement mentioned in Sr. No. 1.

H.

15 (fifteen) Proposed Retail Outlets of the Company taken on lease by the Company Parties and Date of the Agreement Mr. M.S. Sreedhar, & Mrs. Suma Sreedhar (Lessor) and the Company (Lessee) Dated: March 05, 2011 Description of Premises Premises at bearing Municipal No.57, (Old No.320D), PID No.58108-57, building comprising of basement, ground floor,1st ,2nd, 3rd & 4th Floor, situated at 9th Main, 5th Block, Jayanagar, Bangalore Consideration and Period Monthly rent of `6,00,000/and an refundable security deposit of `36,00,000/Rent shall be increased by 8% after every year. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. Monthly rent of `4,50,000/and an refundable security deposit of `27,00,000/-. Rent shall be increased by 5% after every year. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. Main Terms and Conditions The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice.

Sr. No 1.

2.

d(1) Mr. Syed Fazlur Rehman (2) Mr. Syed Ahmed, (3) Mrs. Thaseen Jaffer, & (4) Mrs. Ambrine Murthuza (Lessor) and the Company (Lessee) Dated: March 3, 2011 Citymall Vikash Pvt. Ltd represented through its director Mr. Sanjay Kumar Gupta (Lessor) and the Company (Lessee) Dated: 2011 March 6,

Premises on the ground floor and Mezanine Floor, along with 4 car parking space in the basement, in Commercial Complex known as RICE, Municipal Corporation No. 48, situated at 100 feet Road, 4th Block, Koramangala, Bangalore.

3.

Premises on the first floor, Shop No.30, Citymall-36 Multiplex Shopping Mall, Condominium situated at Mangala Chowk, N.H. Bilaspur City, Tahsil and District Bilaspur, Chhattisgarh.

Monthly rent of `2,18,442/and an refundable security deposit of `6,55,326/-. Period: 9 year i.e. from August 1, 2011 to July 30, 2020.

The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written

129

Sr. No

Parties and Date of the Agreement

Description of Premises

Consideration and Period

Main Terms and Conditions notice.

4.

Citymall Developers Pvt. Ltd represented through its director Sri. Sanjay Kumar Gupta (Lessor) and the Company (Lessee) Dated: 2011 March 9,

Premises on the 3rd Floor, in City Mall-36, Shop No64, Multiplex Shopping Mall, Condominium situated opposite Hotel Ambrosia, National Highway No. 6, G.E. Road, Purena Raipur City, Tahsil & District Raipur Chhattisgarh. Premises on the ground floor, 1st & 2nd Floor, along with 8 car parking area, 36, I, 1st Avenue Main Road, Annanagar West, Chennai.

Monthly rent of `2,04,975/and an refundable security deposit of `6,14,925/-. Period: 9 year i.e. from August 1, 2011 to July 30, 2020.

The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written

5.

Mrs. Mrudula (Lessor) and the Company (Lessee) Dated: March 10, 2011

Monthly rent of `4,48,000/and an refundable security deposit of `26,88,000/Rent shall be increased by 15% after every 3 years. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. Monthly rent of `2,69,280/and an refundable security deposit of `2,69,280/Period: 9 year i.e. from August 1, 2011 to July 30, 2020.

6.

M/S. M. P. Entertainment & Developers Pvt. Ltd. (Lessor) and the Company (Lessee) Dated: March 20, 2011

Premises on the Second floor, Malhar Mega Mall, Plot No.299, 299-A, 304, PU-4 Scheme 54, AB Road, Indore.

7.

M/s Ferena Corporate Park, represented by its Managing Director Mr. Pankaj Udhas (Lessor) and the Company (Lessee) Dated: March 23, 2011

Premises bearing shop No. 136/1/A/2 and 136/5/5B and 137/3A/3B/4 along with 10 car parking areas, at Farena Corporate Park, Near Magarpatta, Hadaspur, Pune.

Monthly rent of `9,77,100/and an refundable security deposit of `58,62,600/Rent shall be increased by 15% after every 3 years. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. Monthly rent of `2,25,000/and an refundable security deposit of `15,00,000/-. Rent shall be increased by 15% after the 1st three years term and 20% after the second three years term. Period: 9 year i.e. from

8.

Mrs. Meena Sudhir Kadam (Lessor) and the Company (Lessee) Dated: March 22, 2011.

Premises on the ground floor, mezzanine floor bearing shop No.1&2, at A J Towers, Plot No.176, S. No. 26, CTS No. 645, Dhanukar Colony, Village Kothrud, Pune.

130

Sr. No

Parties and Date of the Agreement

Description of Premises

Consideration and Period August 1, 2011 to July 30, 2020.

Main Terms and Conditions notice. The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent, after giving 4 months notice to the other party, default by the Company in payment of rent for 3 months consecutively and thereafter giving 4 months additional written notice. The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent or after giving 45 days notice to other party or default in payment of rent for any month.

9.

Mrs. Bhavana Kewlani (Lessor) and the Company (Lessee) Dated: March 19, 2011

Premises on the ground floor at Kiran Arcade LGF Shop No.1-2-273/B, Lower ground Floor, S.D. Road, Secunderabad.

Monthly rent of `37,000/and an refundable security deposit of `5,00,000/-. Rent shall be increased by 6% after every year. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. Monthly rent of `17,000/and an refundable security deposit of `1,50,000/-. Rent shall be increased by 15% after every 3 years. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. Monthly rent of `2,35, 500/and an refundable security deposit of `14,13,000/-. Rent shall be increased by 10% after every 2 years. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. First 11 months shall be considered to be the lock-in period excluding 45 days notice period. Monthly rent of `65,367/and an refundable security deposit of `3,92,202/-. Rent shall be increased by 10% after every 2 years. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. First 11 months shall be considered to be the lock-in period excluding 45 days notice period. Monthly rent of `5,36,480/and an interest free, refundable security deposit of `32,18,880/-.

10. Mr. Syed Mahaboob Bashsa (Lessor) and the Company (Lessee) Dated: March 18, 2011

Premises on the ground floor, bearing no. 2/386-1, R.S. Road Nagarajpet, Kadapa.

11. Mr. Ikram Ahmed Rashid (Lessor) and the Company (Lessee) Dated: April 5, 2011

Premises on the second floor, along wth car parking space no. C11, C16, C17, C18 & C19 on the cellar and SC6 & SC7 ON Sub cellar, in the premises called Aleem Complex, bearing plot no. 705, in TS No. 120/403-1 of Shaikpet Village, Jubilee Hills Road No.36, Hyderabad. Andhra Pradesh. Premises at unit no. 302A on third floor, along with the car parking space no. C14 and C15 on cellar level in the premises called Aleem Complex, situated at H.No.8-2293/82/A/705, bearing Plot no. 705, in TS No. 120/403-1 of Shaikpet Village, Ward No. 8, Block No. 2, Jubilee Hills Road No.36, Hyderabad, Andhra Pradesh. Premises on the ground floor, along with car parking space no. C2, C5, C7 & C8 on the cellar and SC3, Sc 16 and SC17 on

12. Mr. Srikanth Reddy (Lessor) and the Company (Lessee) Dated: April 11, 2011

The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent or after giving 45 days notice to other party or default in payment of rent for any month.

13. Mr. Ikram Ahmed Rashid (Owners) M/s Constructions HR

The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual

131

Sr. No

Parties and Date of the Agreement (Builder) (collectively called Lessor) and the Company (Lessee) Dated: April 5, 2011

Description of Premises sub- cellar in the premises called Aleem Complex, bearing plot no. 705, in TS No. 120/403-1 of Shaikpet Village, Jubilee Hills Road No.36, Hyderabad, Andhra Pradesh. Premises on the first floor, along with car parking space no. C9, C10, C12 & C13 on the cellar and SC4, SC5, SC18 & SC19 on sub cellar, in the premises called Aleem Complex, bearing plot no. 705, in TS No. 120/403-1 of Shaikpet Village, Jubilee Hills Road No.36, Hyderabad, Andhra Pradesh. Premises on the fourth floor, along with car parking space no. C20 & C21 on the cellar and SC8, SC12, SC13 SC14 & SC15 on sub cellar, in the premises called Aleem Complex, bearing plot no. 705, in TS No. 120/403-1 of Shaikpet Village, Jubilee Hills Road No. 36, Hyderabad, Andhra Pradesh.

Consideration and Period Rent shall be increased by 10% after every 2 years. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. First 11 months shall be considered to be the lock-in period excluding 45 days notice period. Monthly rent of `2,74,645/and an interest free, refundable security deposit of `16,47,870/-. Rent shall be increased by 10% after every 2 years. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. First 11 months shall be considered to be the lock-in period excluding 45 days notice period. Monthly rent of `1,96,250/and an interest free, refundable security deposit of `11,77,500/-. Rent shall be increased by 10% after every 2 years. Period: 9 year i.e. from August 1, 2011 to July 30, 2020. First 11 months shall be considered to be the lock-in period excluding 45 days notice period.

Main Terms and Conditions consent or after giving 45 days notice to other party or default in payment of rent for any month.

14. Mr. Ikram Ahmed Rashid (Owners) M/s HR Constructions (Builder) (collectively called Lessor) and the Company (Lessee)

The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent or after giving 45 days notice to other party or default in payment of rent for any month.

Dated: April 5, 2011

15. Mr. Ikram Ahmed Rashid (Owners) and the Company (Lessee) Dated: April 5, 2011

The Company shall not store any hazardous and inflammable material in the premises. The lease can be terminated by mutual consent or after giving 45 days notice to other party or default in payment of rent for any month.

I.

Intellectual Property Registrations I. We have received the registration certificate for our trademark in below class under the Trade Marks Act, 1999: Trade Mark No. 1. 1509131 Date of Registration November 30, 2006 Expires on October 31, 2016 Class 9 Name of the Applicant Sardar Balvinder Singh trading as PCH Business Trademark PCH

Sr. No.

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KEY INDUSTRY REGULATIONS AND POLICIES The following description is a summary of the relevant regulations and policies as prescribed by the Government of India, Government of Andhra Pradesh, and the respective bye laws framed by the local bodies in Hyderabad, and others incorporated under the laws of India. The information detailed in this chapter has been obtained from the various legislations and the bye laws of the respective local authorities that are available in the public domain. The regulations and policies set out below are not exhaustive and are only intended to provide general information to the investors and are neither designed nor intended to be a substitute for professional advice. Labour Laws Employees Provident Fund and Miscellaneous Provisions Act, 1952 Employees Provident Funds and Miscellaneous Provisions Act, 1952 ("EPFA") was introduced with the object to institute compulsory provident fund for the benefit of employees in factories and other establishments. The EPFA provides for the institution of provident funds and pension funds for employees in establishments where more than 20 persons are employed and factories specified in Schedule I of the EPFA. Under the EPFA, the Central Government has framed the "Employees Provident Fund Scheme", "Employees Deposit-linked Insurance Scheme" and the "Employees Family Pension Scheme". Liability is imposed on the employer and the employee to contribute to the funds mentioned above, in the manner specified in the statute. There is also a requirement to maintain prescribed records and registers and filing of forms with the concerned authorities. The EPFA also prescribes penalties for avoiding payments required to be made under the abovementioned schemes. Payment of Gratuity Act, 1972 The Payment of Gratuity Act, 1972 provides for payment of gratuity to employees employed in factories, shops and other establishments who have put in a continuous service of five years, in the event of their superannuation, retirement, resignation, death or disablement due to accidents or diseases. The rule of five year continuous service is however relaxed in case of death or disablement of an employee. Gratuity is calculated at the rate of 15 days wages for every completed year of service with the employer. Presently, an employer is obliged for a maximum gratuity payout of Rs. 350,000 for an employee. Employees State Insurance Act, 1948 The Employees State Insurance Act, 1948 (the ESI Act) provides for certain benefits to employees in case of sickness, maternity and employment injury. All employees in establishments covered by the ESI Act are required to be insured, with an obligation imposed on the employer to make certain contributions in relation thereto. In addition, the employer is also required to register itself under the ESI Act and maintain prescribed records and registers. Payment of Bonus Act, 1965 Pursuant to the Payment of Bonus Act, 1965, as amended, an employee in a factory or in any establishment where 20 or more persons are employed on any day during an accounting year, who has worked for at least 30 working days in a year is eligible to be paid a bonus. Contravention of the provisions of the Payment of Bonus Act, 1965 by a Company is punishable with imprisonment or a fine, against persons in charge of, and responsible to the Company for the conduct of the business of the Company at the time of contravention. Contract Labour (Regulation and Abolition) Act, 1970 The object of the Contract Labour (Regulation and Abolition) Act, 1970 is to prevent exploitation of contract labour and also to introduce better conditions of work. A workman is deemed to be employed as Contract Labour when he is hired in connection with the work of an establishment by or through a Contractor. Contract workmen are indirect employees. Contract Labour, by and large is not borne on pay roll nor is paid directly. The Contract Workmen are hired, supervised and remunerated by the Contractor, who in turn, is remunerated by the Establishment hiring the services of the Contractor. The Maternity Benefit Act, 1961 The purpose of the Maternity Benefit Act, 1961 is to regulate the employment of pregnant women and to ensure that they get paid leave for a specified period during and after their pregnancy. It provides, inter alia, for payment of maternity benefits, medical bonus and enacts prohibitions on dismissal, reduction of wages paid to pregnant women, etc. Maharashtra State Tax on Profession, Trades, Callings and Employments Act, 1975 Karnataka State Tax on Profession, Trades, Callings and Employments Act, 1976 133

Tamil Nadu State Tax on Profession, Trades, Callings and Employments Act, 1992 Andhra Pradesh State Tax on Profession, Trades, Callings and Employments Act, 1987 The professional tax slabs in India are applicable to those citizens of India who are either involved in any profession or trade. The State Government of each State is empowered with the responsibility of structuring as well as formulating the respective professional tax criteria and is also required to collect funds through professional tax. The professional taxes are charged on the incomes of individuals, profits of business or gains in vocations. The professional tax is charged as per the List II of the Constitution. The professional taxes are classified under various tax slabs in India. The State of Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh have their own professional tax structure and tax is levied on every person who exercises any profession or calling or is engaged in any trade or holds any appointment, public or private, or is employed in any manner in state is liable to pay the profession tax at the specified rate provided that no tax shall be payable by the person who have attained sixty five year of age and handicapped person with more than 40% disability or parent of a physically disabled or mentally retarded child. The tax payable under the State Acts as mentioned above by any person earning a salary or wage shall be deducted by his employer from the salary or wages payable to such person before such salary or wages is paid to him, and such employer shall, irrespective of whether such deduction has been made or not when the salary and wage is paid to such persons, be liable to pay tax on behalf of such person and employer has to obtain the registration from the assessing authority in the prescribed manner. Every person liable to pay tax under these Acts (other than a person earning salary or wages, in respect of whom the tax is payable by the employer), shall obtain a certificate of enrolment from the assessing authority. Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 Under the Act, all establishments are required to intimate vacancies in the different departments to the employment exchange prior to conducting the necessary recruitment. However, under the Act only intimation is mandatory, not the filling up of such vacancies. Further, the Act also requires the establishments to file quarterly and bi annual returns with the concerned authorities. Intellectual property Trademarks The Trade Marks Act governs the statutory protection of trademarks in India. Indian trademarks law permits registration of trademarks for goods and services. Certification trademarks and collective marks are also registrable under the Trade Marks Act. An application for trademark registration may be made by any person claiming to be the proprietor of a trademark and can be made on the basis of either current use or intention to use a trademark in the future. The registrations of certain types of trademarks are absolutely prohibited, including trademarks that are not distinctive and which indicate the kind or quality of the goods. Applications for a trademark registration may be made for in one or more classes. Once granted, trademark registration is valid for ten years, unless cancelled. The registration can be renewed for further period of ten years. If not renewed after ten years, the mark lapses and the registration for such mark have to be obtained afresh. While both registered and unregistered trademarks are protected under Indian law, the registration of trademarks offers significant advantages to the registered owner, particularly with respect to proving infringement. Registered trademarks may be protected by means of an action for infringement, whereas unregistered trademarks may only be protected by means of the common law remedy of passing off. In case of the latter, the plaintiff must, prior to proving passing off, first prove that he is the owner of the trademark concerned. In contrast, the owner of a registered trademark is prima facie regarded as the owner of the mark by virtue of the registration obtained. Tax Related Legislations Value Added Tax, 2005 Value Added Tax (VAT) is charged on sale of goods in the States under the law enacted by each State in respect thereof. VAT is however, not chargeable on the value of services which do not involve a transfer of goods. VAT is a multi-point levy on each of the entities in the supply chain with the facility of setoff of input tax that is the tax paid at the stage of purchase of goods by a trader and on purchase of raw materials by a manufacturer. Only the value addition in the hands of each of the entities is subject to tax. The following, among others, are the State VAT legislations applicable to the Company: Andhra Pradesh Value Added Tax Act, 2005 Karnataka Value Added Tax Act, 2003 Maharashtra Value Added Tax Act, 2002 Tamil Nadu Value Added Tax Act, 2006

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Income-tax Act, 1961 The Income-tax Act, 1961 (IT Act) is applicable to every Company, whether domestic or foreign whose income is taxable under the provisions of this Act or Rules made there under depending upon its Residential Status and Type of Income involved. Every Company assessable to income tax under the IT Act is required to comply with the provisions thereof, including those relating to Tax Deduction at Source, Advance Tax, Minimum Alternative Tax and like. Every such Company is also required to file its returns by 31st October of each assessment year. Service Tax Service tax is charged on taxable services as defined in Chapter V of Finance Act, 1994, which requires a service provider of taxable services to collect service tax from the recipient of such services and pay such tax to the Government. According to Rule 6 of the Service Tax Rules, every assesse is required to pay service tax in TR 6 challan by the 5th of the month immediately following the month to which it relates. Further, under Rule 7 (1) of Service Tax Rules, the Company is required to file a half yearly return in Form ST 3 by the 25th of the month immediately following the half year to which the return relates. Customs Act, 1962 The provisions of the Customs Act, 1962 and Rules made there under are applicable at the time of import of goods into India from a place outside India or at the time of export of goods out of India to a place outside India. Any Company requiring to import or export any goods is required to get itself registered and obtain an Importer Exporter Code (IEC) number. Importer Exporter Code Under the Indian Foreign Trade Policy, 2004, no export or import can be made by a person or Company without an Importer Exporter Code number unless such person/Company is specifically exempted. An application for an Importer Exporter Code number has to be made to the office of the Joint Director General of Foreign Trade, Ministry of Commerce. An Importer Exporter Code number allotted to an applicant is valid for all its branches/ divisions/ units/factories. General Competition Act, 2002 The Competition Act 2002 (the Competition Act) aims to prevent anti-competitive practices that cause or are likely to cause an appreciable adverse effect on competition in the relevant market in India. The Competition Act regulates anti-competitive agreements, abuse of dominant position and combinations. The Competition Act, although enacted in 2002, is being brought into force in a phased manner. Provisions relating to anti-competitive agreements and abuse of dominant position were brought into force with effect from May 20, 2009 and thereafter the Competition Commission of India (the Competition Commission) became operational from May 20, 2009. Sections 5 and 6 (dealing with combinations, mergers and acquisitions) are already notified by the GoI on June 01, 2011. The Competition Act also provides that the Competition Commission has the jurisdiction to inquire into and pass orders in relation to an anti-competitive agreement, abuse of dominant position or a combination, which even though entered into, arising or taking place outside India or signed between one or more non-Indian parties, but causes an appreciable adverse effect in the relevant market in India. Recently, the Lok Sabha has passed a bill to transfer the pending monopolies and restrictive trade practices cases under the Consumer Protection Act, 1986 to the Competition Appellate Tribunal. Once this bill is notified the Competition Appellate Tribunal will take up the pending cases of unfair trade practices under the Consumer Protection Act, 1986. This bill will replace the ordinance which was introduced on October 14, 2009 to make the Monopolies and Restrictive Trade Practice Commission non functional. The Indian Contract Act, 1872 The Indian Contract Act codifies the way in which a contract may be entered into, executed, implementation of the provisions of a contract and effects of breach of a contract. A person is free to contract on any terms he chooses. The Contract Act consists of limiting factors subject to which contract may be entered into, executed and breach enforced. It provides a framework of rules and regulations that govern formation and performance of contract. The contracting parties themselves decide the rights and duties of parties and terms of agreement. The Specific Relief Act, 1963 The Specific Relief Act is complimentary to the provisions of the Contract Act and the Transfer of Property Act, as the Act applies both to movable property and immovable property. The Act applies in cases where the Court can order specific performance of a contract. Specific relief can be granted only for purpose of enforcing 135

individual civil rights and not for the mere purpose of enforcing a civil law. Specific performance means Court will ask the party to perform his part of agreement, instead of asking him to pay damages to other party. Consumer Protection Act, 1986 The Consumer Protection Act, 1986 seeks to provide better protection of interests of the consumers and for that purpose to make provision for establishment of consumer councils and other authorities for the settlement of consumers disputes and for matters connected therewith. It seeks to promote and protect the rights of consumers. To provide steady and simple redressal to consumers disputes, a quasi-judicial machinery is sought to be set up at the district, state and central levels. The quasi-judicial bodies will observe the principles of natural justices and have been empowered to give relieves of a specific nature and to award wherever appropriate compensation to consumers. Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided. Andhra Pradesh Shops and Establishments Act, 1988 This is a State specific legislation and each State has framed its own rules for the Act. The State Government can exempt any establishment from all or any provisions of this Act either permanently or for a specified period. Establishments are required to be registered under the provisions of local shops and establishments legislations applicable in the states in which such establishments are set up. The provisions of this legislation are applicable to all persons employed in an establishment, whether with or without wages, the only exception being that of the members of the employer's family. The main objectives of the Shops and Establishments Act is to regulate the working & employment conditions of the workers employed in shops & establishments, including, commercial establishments. Fix the number of working hours, rest intervals, wages overtime, holidays, annual leave, employment of women, maintenance of records and termination of service.

The Company having its registered office at Hyderabad, Andhra Pradesh the provisions of the Andhra Pradesh Shops and Establishments Act, 1988 are applicable to the Company and the Company is registered under the Act. Other States Shops and Establishments Acts The Company is also governed by various other Shops and Establishments Acts as applicable in the states where its retail shops are located. The following, among others, are the acts and rules and regulations thereunder, as are applicable to our retail shops: The Bombay Shops and Establishments Act, 1948; The Karnataka Shops and Commercial Establishments Act, 1961; The Tamil Nadu Shops and Establishment Act, 1947; For details of the Companys material registration under the applicable Shops and Establishment legislations, please refer to the chapter titled Government/Statutory and Other Approvals beginning on page 208 of the Draft Red Herring Prospectus.

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HISTORY AND CERTAIN CORPORATE MATTERS The Company was incorporated as PCH Retail Limited on January 03, 2007 under the Companies Act, 1956, as amended, (the Companies Act) with the Registrar of Companies, Andhra Pradesh, Hyderabad and it obtained the Certificate of Commencement of Business on January 10, 2007 from Registrar of Companies, Andhra Pradesh, Hyderabad. The Companys corporate identification number as allotted by the Registrar of Companies, Andhra Pradesh, Hyderabad is U74999AP2007PLC052227. The Company is promoted by Sardar Balvinder Singh and Mrs. Baljit Kaur. The Company is one of the leading retailers of Consumer Durables & Electronics products in Andhra Pradesh and also have good presence in Tamil Nadu, Karnataka and Maharashtra. It is one of the largest electronics retail chains in Andhra Pradesh. PCH i.e Punjab Crockery House was started by Mr. Huzur Singh, father of Sardar Balvinder Singh in 1950 which was involved in trading of Crockery & Glassware items. In the year 2001, Sardar Balvinder Singh started a Proprietorship Firm namely, M/s PCH Business which dealt in retail & wholesale trading of electronic consumer durables of Videocon & Sony. In 2003, Sardar Balvinder Singh started PCH Group. At that time PCH Group was functioning as four different firms out of which 3 were partnership firms (i.e. PCH Associates, PCH Mobile Zone and PCH Sales) and PCH Business which was a proprietorship firm. In order to consolidate its business all four firms were taken over as going concern by way of Memorandum of Mutual Understanding dated March 04, 2007 by PCH Retail Ltd. As of date, we operate 110 retail outlets and 11 warehouses in India. These are spread over about 6,21,000 sq. ft. of retail space in 28 cities and towns across Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. As of the date of the Draft Red Herring Prospectus our Company has 15 shareholders. Change in the Registered Office The Company has not changed its registered office since inception. Major Events Fiscal January 03, 2007 March 04, 2007 March 26, 2009 March 31, 2010 Event Incorporation of the Company Businesses of PCH Associates, PCH Mobile Zone , PCH Sales and PCH Business were taken over The Companys obtained quality certification ISO 9001:2008 The Company achieved a turnover in excess of `50,000 lakhs

Amendments to the Memorandum of Association of the Company The following changes have been made to our Memorandum since incorporation: Date Shareholders approval January 25, 2007 of Amendment Type of Meeting

March 02, 2007

March 25, 2009

April 18, 2011

Main Objects of Memorandum of Association were modified with the deletion of letter s in the word PCH Mobiles and addition of the phrase zone after PCH Mobile The authorized share capital of the Company was increased from `5 Crore divided in to 50,00,000 Equity shares of `10 to `20 Crore divided in to 2,00,00,000 Equity shares of `10 each. The authorised share capital of the Company was increased from `20 Crore divided into 2,00,00,000 Equity shares of `10 each to `40 Crore divided into 4,00,00,000 Equity shares of `10 each. The Authorized capital of the Company was increased from `40 Crore divided in to 4,00,00,000 Equity Shares of `10 each to `45 Crore divided in to 4,50,00,000 Equity Shares of `10 each.

EGM

EGM

EGM

EGM

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Main Objects Our main objects as contained in our Memorandum are as follows: 1. To take over the business of existing partnership firms viz PCH associates, PCH Mobile Zone, PCH sales, and PCH Business, a proprietary business on going concern basis along with all its assets and liabilities. To carry on in India or elsewhere the business to trader, pack, repack, remove, grade, reduce, improve, buy, sell, resell, import, export, develop, design, market, procure, print, supply, work and to act as agent, broker, representative, collaborator, stockiest, liasioner, and to deal in all shapes, sizes, descriptions, applications, modalities, specifications, designs, varieties and kinds of consumable durable goods such as television, crockery, Mobile phones, fridge, washing machines, computer hardware, electronics, gifts, novelties, food items, sports items, paintings, readymade garments, apparels, crockery, Air conditioners, coolers. To carry on the business of trading all types of furniture and fixtures such as tables, beds, chairs, cots, bunker beds, and other consumer durable. To carry on in India or elsewhere the business of trader, fabricate, assemble, alter, brand, convert, commercialize, design, develop, exhibit, display, export, import, exchange, equip, handle, install, maintain, modify, operate, sponsor, purchase, sell, resell, barter, protect, provide, promote, repair, renovate, recondition, remodel, service, supply and to act as agent, broker, representative, marketing, stockist, traders, distributor, job worker, franchiser, joint venture or otherwise to deal in all sorts, capacities, strengths, varieties and descriptions of audio and video equipments, including radios, transistors, tape recorders, compact disc players, television, home theatre, digital system, mike systems, two-in ones, decks, public address systems, video communications, multimedia systems portable or fixed and their fittings, parts, accessories, appliances, components, sound exhibiting components, instruments.

2.

3. 4.

The present business of the Company is as per the main objects contained in the Memorandum of Association. Subsidiaries of our Company As on the date of the DRHP, the Company does not have any subsidiary. Shareholders Agreement Our company has not entered into any shareholders agreement as on the date of the DRHP. Other Agreements Our company has not entered into any other agreement other than in the normal course of business as on the date of the DRHP. Strategic Partners As on the date of the DRHP, the Company doesnt have any strategic partners. Financial Partners As on the date of the DRHP, apart from our arrangements with our Lenders and Bankers, which we undertake in ordinary course of business, the Company doesnt have any financial partners within the meaning of SEBI (ICDR) Regulations.

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OUR MANAGEMENT The Company is currently managed by the Board of Directors comprising of six Directors. Sardar Balvinder Singh is the Managing Director and is in charge of overall management of the Company subject to the supervision and control of the Board. As per our Articles of Association, our Board shall consist of not less than three Directors and not more than twelve Directors. The Company currently has 6 Directors consisting of 3 executive Directors and 3 independent Directors. The following table sets out the current details regarding our Board as on the date of the filling of the Draft Red Herring Prospectus: Sl. No. Name, Date of Birth, Fathers Name, Address, Designation, DIN, Occupation & Nationality Sardar Balvinder Singh Fathers Name: Mr. Huzur Singh Designation: Chairman and Managing Director Date of Birth: March 31, 1969 Address: Flat No. 502, Road No. 5, Banjara Petals, Banjara Hills, Hyderabad 500034, Andhra Pradesh Occupation: Business Nationality: Indian DIN : 00959474 Date of appointment and Term Other Directorships

1.

Appointed as first Director of the Company on January 03, 2007 Appointed as Managing Director with effect from January 03, 2007. Re-appointed as Managing Director with effect from October 01, 2010. Term: 5 years

Public Companies: Nil Private Companies: i. ii. iii. iv. v. vi. vii. PCH Global Systems Private Limited PCH Lifestyle Private Limited PCH Retail Solutions Private Limited PCH Telecom (India) Private Limited PCH Corporation Private Limited PCH Impex Private Limited PCH Constructions Private Limited.

2.

Mrs. Baljit Kaur Fathers Name: Mr. Gurubax Singh Designation: Whole time Director Date of Birth: April 17, 1974 Address: Flat No. 502, Road No. 5, Banjara Petals, Banjara Hills, Hyderabad 500034, Andhra Pradesh Occupation: Business Nationality: Indian DIN : 01715792

Appointed as first Director of the Company on January 03, 2007 Appointed as Whole-time Director with effect from January 03, 2007. Re-appointed as Whole time Director with effect from October 01, 2010 Term: 5 years

Proprietorship/Partnership Firm: Nil Public Companies: Nil Private Companies: i. ii. iii. iv. v. vi. PCH Global Systems Private Limited PCH Lifestyle Private Limited PCH Retail Solutions Private Limited PCH Telecom (India) Private Limited PCH Corporation Private Limited PCH Constructions Private Limited.

3.

Mr. Bijay Kumar Mohanty Fathers Name: Mr. Basanta Kumar Mohanty Designation: Whole time Director

Appointed as Additional Director on August 26, 2010, subsequently regularised as director on September 30, 2010 and appointed as Whole time Director with effect from 139

Proprietorship/Partnership Firm: Nil Public Companies: Nil Private Companies: i. PCH Global Systems Private Limited

Sl. No.

Name, Date of Birth, Fathers Name, Address, Designation, DIN, Occupation & Nationality Date of Birth: October 06, 1952 Address: Flat No. FF01, H NO 26-122/40, Sheetal Apartments, Sarada Nagar, Safilguda, Hyderabad, Andhra Pradesh 500047 Occupation: Service Nationality: Indian DIN : 03199999 Mr. Iyer Rangarajan Independent Director Fathers Name: Mr. Iyer Somasunderam Designation: Director Date of Birth: October 31, 1941 Address: C-410,Kubera Towers, Ward-5 Circle VIII, Trimulgherry, Secunderabad, Andhra Pradesh - 500015 Occupation: Consulting Nationality: Indian DIN : 01839851 Mr. Sirish Bommakanti Narasimha Independent Director Fathers Name: Mr. Sitarama Sastry Bommakanti Designation: Director Date of Birth: September 13, 1963 Address: 6-3-865/1/1, Imperial Manor, Flat. No. 107, Green Lands, Ameerpet, Hyderabad, Andhra Pradesh - 500016 Occupation: Chartered Accountant Nationality: Indian DIN : 02023568 Mr. Satyanarayanmurty Mukkamala Independent Director Fathers Name: Mr. Bhaskara Kameswara Rao Mukkamala

Date of appointment and Term

Other Directorships

January 01, 2011

ii.

PCH Corporation Private Limited

Term: liable to retire by rotation Proprietorship/Partnership Firm: Nil

4.

Appointed as Additional Director (Independent) on December 01, 2008 subsequently regularised as Director on September 30, 2009 Term: liable to retire by rotation

Public Companies: Nil Private Companies: i. ii. PCH Telecom (India) Private Limited PCH Impex Private Limited

Proprietorship/Partnership Firm: Nil

5.

Appointed as Director on January 04, 2007 Term: liable to retire by rotation

Public Companies: Servomax India Limited Private Companies: Nil Proprietorship/Partnership Firm: Nil

6.

Appointed as Additional Director (Independent) on December 01, 2008 subsequently regularised as Director on Septemeber 30, 2009 140

Public Companies: Nil Private Companies: i. PCH Retail Solutions Private Limited

Sl. No.

Name, Date of Birth, Fathers Name, Address, Designation, DIN, Occupation & Nationality Designation: Director Date of Birth: June 01, 1948 Address: FL-303/11, Vysya Bank Apartments, Opp. Sri Ramalayam, Huda Complex, Saroornagar, Hyderabad, Andhra Pradesh-500035 Occupation: Consulting Nationality: Indian DIN : 02890135

Date of appointment and Term

Other Directorships

Proprietorship/Partnership Firm: Nil Term: liable to retire by rotation

i. ii. iii.

iv.

None of the above mentioned Directors are on the RBI List of wilful defaulters. All our Directors are Indian nationals and none of our Directors are related to each other except Mrs. Baljit Kaur who is the spouse of Sardar Balvinder Singh. None of our Directors are or were directors of listed companies whose shares have been/were suspended from being traded on the BSE and/or NSE at any time during the last five years from the date of Draft Red Herring Prospectus. Further, none of the Directors of our Company are / were Directors of listed companies which have been / were delisted on the BSE and/or NSE and/or any other stock exchanges.

Brief Profile of the Directors Sardar Balvinder Singh, aged 42 years, is the Chairman & Managing Director of the Company. He is a graduate in commerce from Signodia Degree College, Osmania University. He is from a reputed business family of Hyderabad. Sardar Balvinder Singh was part of the family business until he established four firms on his own in 2001 to start verticals in the trading business of Electronics goods, Mobiles, Home appliances, Life style products etc. He has 16 years of rich experience in trading and retail sector. He is the Promoter and director of the Company since incorporation. Mrs. Baljit Kaur, aged 36 years is the Whole-Time Director of the Company. She is a graduate in Bachelor of Arts from Government College of Women, Punjab University. She is from a reputed business family of Punjab. She has marketing knowledge and experience in the retail sector. She looks after expansion and project implementations for the company. She is the Promoter and director of the Company since incorporation. Mr. Bijay Kumar Mohanty, aged 58 years is Director - Finance of the Company. He holds a Bachelor in Commerce from Utkal University and is also a Fellow member of Institute of Chartered Accountants of India. He has over 31 years of experience in various industries including Steel, Hospital & Retail. He has worked with Larsen & Toubro Ltd., Gulf Oil Corporation Ltd. (formerly known as IDL Industries Ltd.), Quippo Infrastructure Equipment Limited and NAC Infrastructure Equipment Ltd. in senior level positions. Apart from this, he held senior level positions in various companies in the sectors like Steel, Hospitality and Retail. He handled various projects like Winning Sales Tax & Central Excise cases for GOCL, implementation of ERP system, implementation of wind mills, successfully handling bulk Ammonium Nitrate imports for the first time in Vizag & Kakinada sea ports for GOCL. Mr. Iyer Rangarajan, aged 69 years is Independent Director of the Company. He holds a Bachelor of Arts (Honours) from University of Delhi. He has over 41 years of experience in various areas including personal management and administrative law. He was with Indian Army as Commissioned Officer for period of 6 years from September, 1963 to September, 1969. He has also worked with Kirloskar Pneumatic Co. Pvt. Ltd from 1969 to 1974, Steel Authority of India from 1974 to 1994 and as Consultant from 1994 onwards. Mr. Satyanarayanmurty Mukkamala, aged 63 years is Independent Director of the Company. He holds a Bachelor of Commerce, Bachelor of Law, and C.A.I.I.B (Certificate Associate of the Indian Institute of Bankers). He has over 42 years of experience in various areas. He was the Managing Director of Avyaya Finance Limited from October 05, 2006 to January 25, 2008. He has worked with Vysya Bank in different 141

capacities for over 30 years. He also worked as practicing Advocate & Tax consultant and as General Manager and Director in Co-operative Banks, Chit funds, finance companies. Mr. Sirish Bommakanti Narasimha, aged 47 years is Independent Director of the Company. He holds a Bachelor in Commerce and is a Fellow member of Institute of Chartered Accountants of India. He also holds DISA qualification. He has been practising as Chartered Accountant for last 21 years rendering services in the fields of auditing, taxation, management, advisory services for various companies and business entities. BORROWING POWERS OF THE BOARD OF DIRECTORS In terms of the Articles, the Board may, from time to time, at its discretion by a resolution passed at its meeting raise or borrow or secure the payment of any sum or sums of money for the purposes of our Company. However, if the moneys sought to be borrowed together with the moneys already borrowed (apart from temporary loans obtained from our Company's bankers in the ordinary course of business) should exceed the aggregate of the paid-up capital of our Company and our free reserves (not being reserves set apart for any specific purpose), the Board is required to obtain the consent of our Company in general meeting prior to undertaking such borrowing. In this regard, our Company, in the meeting of our shareholders dated September 30, 2010 had resolved that pursuant to the provisions of Section 293(1)(d) and other applicable provisions, if any, of the Companies Act, 1956, the Board is authorised to mortgage and/or change charge all or any of the immovable or movable properties of our Company to or in favour of the financial institutions, debenture trustees, banks and any other investing agency for securing the borrowings by our Company, provided that the total amount payable does not exceed `500 crores/- (Rupees Five hundred crores only) at any time. Payment to Executive Directors a. Sardar Balvinder Singh

The Board, pursuant to its resolution passed at its meeting held on August 30, 2010 appointed Sardar Balvinder Singh as Managing Director of the Company for a period of 5 years with effect from October 01, 2010 at a remuneration of `4,00,000 per month which was subsequently approved by the members at their Annual General Meeting held on September 30, 2010. b. Mrs. Baljit Kaur The Board, pursuant to its resolution passed at its meeting held on August 30, 2010 appointed Mrs. Baljit Kaur as Whole time Director of the Company for a period of 5 years with effect from October 01, 2010 at a remuneration of `2,00,000 per month which was subsequently approved by the members at their Annual General Meeting held on September 30, 2010. c. Mr. Bijay Kumar Mohanty

The Board, pursuant to its resolution passed at its meeting held on December 15, 2010 appointed Mr. Bijay Kumar Mohanty as Whole time Director of the Company for a period of 3 years with effect from January 01 2010 at a remuneration of `1,25,000 per month which was subsequently approved by the members at their extra ordinary general meeting held on March 17, 2011. Payment to Non-Executive Directors The non-executive independent Directors are paid sitting fees and any other amounts as may be decided by the Board and the shareholders of the Company, in accordance with the provisions of the Articles of Association, the Companies Act and any other applicable Indian laws and regulations. The sitting fees paid to the non-executive independent Directors for the financial year ending March 31, 2011 is set forth below. Other than the sitting fees, the independent Directors did not receive any other remuneration, commission or payment from the Company during this period. Sr. No. 1. 2. 3. 4. Payment to Non-Executive Director Mr. Iyer Rangarajan Mr. Satyanarayanmurty Mukkamala Mr. Sirish Bommakanti Narasimha Mr. Bijay Kumar Mohanty Sitting Fees paid (In `) 55000 55000 55000 35000

* Mr. Bijay Kumar Mohanty has become Wholetime Director of company from January 01, 2011. 142

Shareholding of the Directors Shareholder Equity Shares held before issue No. Of Shares % of paid-up capital 1,40,12,233 54.23 36,82,663 14.25 Equity Shares held after issue No. Of Shares % of paid-up capital [] [] [] []

Sardar Balvinder Singh Mrs. Baljit Kaur

INTEREST OF OUR DIRECTORS All of our Directors may be deemed to be interested to the extent of fees payable to them for attending meetings of the Board, commission payable to our Non-executive Directors as well as to the extent of remuneration payable to our Executive Directors for their services as executive directors of the Company and reimbursement of expenses payable to them under our Articles of Association. All our Directors may also be deemed to be interested to the extent of Equity Shares, if any, already held by them or their relatives or firms, trusts or other entities/ bodies corporate in which they have interest, and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. Our non-Promoter Directors may also be deemed to be interested in the Equity Shares, if any, out of the present Issue that may be subscribed by and allotted/transferred to the companies, firms and trusts and other entities/bodies corporate in which they are interested as Directors, members, partners and/or trustees or otherwise as also any benefits, monetary or otherwise derived there from. Except as stated in the section titled Financial Statements and Related Party Transactions in the Draft Red Herring Prospectus, the Company has not entered into any contract, agreements or arrangements during the preceding two years from the date of the Draft Red Herring Prospectus in which the Directors are directly or indirectly interested and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be made with them including the properties purchased by the company other than in the normal course of business. Further except as stated under the heading Related Party Transaction under the chapter titled Financial Statements beginning on page 160 of the Draft Red Herring Prospectus, the Directors do not have any other interest in the business of the Company. Changes in the Board of Directors during the Last Three Years Name Mr. Iyer Rangarajan Mr. V V Rao Mr. Iyer Rangarajan Mr. Satyanarayanamurty Mukkamala Mr. Iyer Rangarajan Mr. Satyanarayanamurty Mukkamala Mr. Bijay Kumar Mohanty Date of Appointment January 04, 2007 January 04, 2007 December 01, 2008 December 01, 2008 September 30, 2009 September 30, 2009 August 26, 2010 Date of Cessation November 30, 2008 November 30, 2008 Reason Resignation Resignation Appointed as an Additional Director Appointed as an Additional Director Appointment as Director Appointment as Director Appointment as Additional Director

Corporate Governance We have complied with such relevant provisions Listing Agreement with respect to corporate governance, including with respect to the appointment of independent Directors on our Board and the constitution of committees of our Board. The company undertakes to take all necessary steps to comply with all the requirements of Clause 49 of the Listing Agreement to be entered into with the Stock Exchanges. Currently, our Board has 6 Directors, of which the chairman of the Board is an Executive Director. In compliance with the requirements of Clause 49 of the listing agreement, we have 3 executive Directors and 3 non-executive and independent Directors on our Board. Further, in compliance with clause 49 of the Listing Agreement, the following Committees have been formed.

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Committees of the Board of Directors Audit Committee Our Board constituted an Audit Committee, pursuant to the provisions of Section 292A of the Companies Act, 1956. The constitution of the Audit Committee was approved at a meeting of the Board of Directors held on March 04, 2007 and the same was recently reconstituted vide the Board resolution dated December 15, 2010. The terms of reference of Audit Committee comply with the requirements of Clause 49 of the Listing Agreement, which will be entered into with the Stock Exchanges in due course. The committee consists of three independent directors. Sr. No. 1. 2. 3. Name Mr. Sirish Bommakanti Narasimha Mr. Iyer Rangarajan Mr. Satyanarayanmurthy Mukkamala Designation Chairman Member Member Nature of Directorship Independent Director Independent Director Independent Director

Our Company Secretary Mr. Srinivasa Rao Kolagani, will act as the secretary of the Committee. The terms of reference of our Audit Committee are given below: A. 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. B. 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. C. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. D. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to: a. b. c. d. e. f. g. 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, 1956 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.

E. Reviewing, with the management, the quarterly financial statements before submission to the board for approval F. 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. G. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems. H. 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. I. Discussion with internal auditors any significant findings and follow up there on. J. 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. K. 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. L. 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. M. To review the functioning of the Whistle Blower mechanism, in case the same is existing. N. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. 144

Remuneration Committee The Remuneration Committee has been formed by the Board of Directors at the meeting held on March 04, 2007. The Remuneration Committee was reconstituted vide the Board resolution Dated December 15, 2010 with the following Directors: Sr. No. 1. 2. 3. Name Mr. Iyer Rangarajan Mr. Sirish Bommakanti Narasimha Mr. Satyanarayanmurthy Mukkamala Designation Chairman Member Member Nature of Directorship Independent Director Independent Director Independent Director

Our Company Secretary Mr. Srinivasa Rao Kolagani will act as the secretary of the Committee. The terms of reference of our Remuneration Committee are given below: A. The remuneration framework for Non-Executive Directors; B. The remuneration and incentive framework, including any proposed equity incentive awards for the Chief Executive Officer, any other Executive Directors, Executive Committee Members and Senior Executives (Relevant Executives); C. Recommendations and Decisions(as relevant) on remuneration and all incentive awards for the Chief Executive Officer, any other Executive Directors and Executive Committee Members; and D. Strategic human resources policies; Investors Grievance Committee The Investors Grievance Committee has been formed by the Board of Directors at the meeting held on December 15, 2010 as per the requirements of the Clause 49 of the Listing Agreement. The Investors Grievance Committee has been constituted with the following Directors: Sr. No. 1. 2. 3. Name Mr. Satyanarayanmurthy Mukkamala Mr. Iyer Rangarajan Sardar Balvinder Singh Designation Chairman Member Member Nature of Directorship Independent Director Independent Director Managing Director

Our Company Secretary Mr. Srinivasa Rao Kolagani, will act as the secretary of the Committee. The terms of reference of the Investors Grievances Committee are as follows: A. B. C. D. Power to approve share transfers, Power to approve Share transmission, Power to issue duplicate shares certificates, Power to approve and issue fresh share certificate by way of split or consolidation of the existing certificate or in any other manner, E. To monitor the resolution of all types of shareholders/investors grievances and queries periodically, F. Power to allot shares, equity or preference, fully or partly convertible debentures, or other financial instruments convertible into equity shares at a later date in demat or physical mode , the issue of which has been approved by the Board of Directors of the Company, G. Any other power specifically assigned by the Board of Directors of the Company from time to time by way of resolution passed by it in a duly conducted Meeting,

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Management Organisational Structure

Board of Director

Chairman & Managing Director

Director (Finance)

Whole time
Director

Chief Executive Officer

CS & Compliance Officer

Vice President Northern Operations

Vice President HR

Exec.Vice President Brand Marcom Marketing & Institutional Biz

Sr. Vice President Buying /Purchase /Logistics /Supply Chain /Commercial.

Key Management Personnel of the Company In addition to our Wholetime directors following are our key managerial personnel as on the date of filing of the DRHP: Mr. Prashant K Das, age 48 years, is the Chief Executive Officer of the Company. He joined the company on November 26, 2010. He holds a Bachelor of Engineering in Mechanical from Regional Engineering College Silchar, University of Gauhati. He is responsible to set corporate strategic direction, Shape companies long term aspiration, Make decision on key strategic issues facing company, Establish organisational structure and operating system, Define core business process, Manage financial information and compliances activities and Lead senior team .He has over 24 years of experience in overall Operation Management, Strategic planning & business development and Structuring and Organization. Prior to joining the company, he has worked with Touch Homes Express Services Pvt. Ltd., LG Electronics India Pvt. Ltd., Samsung Electronics Pvt. Ltd., Electrolux Kelvinator India Pvt. Ltd., MIRC Electronics Ltd., BPL Ltd., Godrej GE Appliances Ltd. and Modi Xerox Ltd. Since Mr. Das joined us in 2010, his gross remuneration is `17.9 lakhs p.a. Mr. A V Ramakrishna, age 54 years is the Executive Vice President Brand Marcom Marketing & Institutional Biz of the Company. He joined the company on June 30, 2008. He holds a Bachelor of Science from Andhra University. He is responsible for complete Brand Marketing, All Communication Planning, Brand Building Strategy, Marketing Calendar Rolling Plan, Complete co-ordination with all Agencies, Media management, Negotiation and finalisation of Consumer Finance Schemes for Sell Out and Accountable for Marketing RoI of the Companies. He has over 30 years of experience in various areas including retailing & business development. Prior to joining the company, he has worked with Digital Shoppe as Vice President, Operations & Project; Reliance Infocomm Ltd. as Head Corporate Wireless; Tyche Peripheral Syst India Ltd. as Regional Manager; Solidaire India Ltd. as Branch Manager and Berger paints as Sales officer. The gross remuneration paid to him during fiscal 2010 was `10.21 lakhs. Mr. Jayant P More, age 45 years is the Sr. Vice President Buying /Purchase /Logistics /Supply Chain /Commercial. He joined the company on April 16, 2008. He holds a Bachelor of Science from Shradda Degree College. He is responsible for Buying Operation of the Company, Independent Price Negotiation, Price Management, Purchase decisions, Coordinate with Distributors, Managing Working Capital payments and collections, Managing Banking, Managing Commercial Operation and Overlook total logistics Operations at warehouses. He has over 22 years of experience in various areas including strategic planning and executing purchase and supply chain model of Retail Company. Prior to joining the company, he has worked with TNS 146

India Pvt. Ltd. as General Manager OPS from June 01, 1989 to September 05, 2008. The gross remuneration paid to him during fiscal 2010 was `9.59 lakhs. Mr. Sunil Shamkant Joshi, age 37 years is the Vice President Northern Operations. He joined the company on September 01, 2009. He holds a Bachelor in Arts from Dr B R Ambedkar Open University. He is responsible for expansion of retail chain in North, East and West India, International expansion of business in Asia Pacific & Middle East regions and corporate tie-ups. He has over 16 years of experience in various areas including operations, process building & implementation. Prior to joining the company, he has worked with Rosebys Interiors India Ltd., AR Systems India Pvt. Ltd., Zenith Computers Ltd., and Shricom Western Investments Ltd. Since Mr. Joshi joined us in 2010, his gross remuneration is `12.7 lakhs p.a. Mr. Vijayakumar Yelluri Champian, age 40 years is Assistant Vice President - HR. He joined the company on March 21, 2011. He holds a Bachelor in Arts from University of Madras and Executive Postgraduate Diploma in Human Resources Management from Loyola Institute of Business Administration. He is responsible for handling entire corporate HR functions. Prior to joining the company he has worked with Univercell Telecommunications (India) Private Limited, Shree Krishna Collection Retail Limited and Boss Profiles Limited. Since Mr. Vijayakumar Yelluri Champian joined us in 2011, his gross remuneration is `12 lakhs p.a. Mr. Srinivasa Rao Kolagani, age 28 is the Company Secretary of the Company. He joined the company on December 12, 2010. He holds a Bachelor of Science from Nagarjuna University and Associate member of The Institute of Company Secretaries of the India. He is responsible for the secretarial and compliance functions of the Company. Prior to joining the Company, he has worked with CIL Securities Limited as Sr. Secretarial Officer. Since Mr. Srinivasa Rao Kolaganis joined us in 2010, his gross remuneration is `3.60 lakhs p.a. All the key management personnel mentioned above are permanent employees of the Company. None of the key management personnel are related to each other or any promoter or directors. Shareholding of the Key Managerial Personnel None of the key managerial personnel holds any shares in the Company. Bonus or profit sharing plan for the Key Management Personnel There is no bonus or profit sharing plan for key managerial personnel of the Company. Changes in the Key Management Personnel The following are the changes in the key managerial personnel of the Company, other than the executive directors, in the last three years preceding the date of filing the Draft Red Herring Prospectus.

Name Mr. Jayant P More Mr. A V Ramakrishna Mr. Sree Nagamani Alluri Mr. Sunil Joshi Mr. P K Das Mr. Srinivasa Rao Kolagani

Date of Appointment April 16, 2008

Date of Cessation -

Company PCH

Designation Sr. Vice President Buying /Purchase /Logistics /Supply Chain /Commercial Executive Vice President Brand Marcom Marketing & Institutional Biz Company Secretary

Reason Appointment

June 30, 2008

PCH

Appointment

June 25, 2010

October 15, 2010 -

PCH

Resignation

September 01, 2010 November 26, 2010 December 15, 2010

PCH PCH PCH

Vice President - Northern Operations Chief Executive Officer Company Secretary

Appointment Appointment Appointment

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Service Contracts No service contracts have been entered into with any key management personnel or Director for provision of benefits or payments of any amount upon termination of employment. Arrangements and understanding with major shareholders None of the Directors or key managerial personnel have been appointed pursuant to any arrangement or understanding with the major shareholders, customers, suppliers or others, of the company. Loans taken by Directors / Key Management Personnel Nil Employees As of May 31, 2011, the company has 392 permanent employees. For more details about our employees please refer to chapter titled Business Overview beginning on page 90 of the Draft Red Herring Prospectus. Employee Stock Option Scheme As of the date of filing of the Draft Red Herring Prospectus, the Company does not have any Employee Stock Option or Purchase Scheme. Payment of Benefit to Officers of the Company (non-salary related) Except the statutory payments made by the Company, in the last two years, the Company has not paid any nonsalary amount or benefit to any of its employees.

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OUR PROMOTERS AND GROUP COMPANIES Our Promoters are Sardar Balvinder Singh who is the Chairman and Managing Director and Mrs. Baljit Kaur who is the Whole Time Director of the Company. They are resident Indian nationals. The details of our Promoters are as follows:

Identification: Name Age Residential Address PAN Passport No. Voter Identity No. Driving License No. Designation Professional experience qualification Other Directorship Sardar Balvinder Singh 42 Flat No. 502, Road no. 5, Banjara Petals, Banjara Hills, Hyderabad 34 ADVPS0174K Z1866604 TDZ0477281 DLCAP00989732009 Chairman and Managing Director Please see the chapter Our Management beginning on page 139 of the Draft Red Herring Prospectus Please see the chapter Our Management beginning on page 139 of the Draft Red Herring Prospectus

and

Education

Identification: Name Age Residential Address

Baljit Kaur 36 Flat No. 502, Road no. 5, Banjara Petals, Banjara Hills, Hyderabad 34 AJXPK8087H PAN Z1866762 Passport No. Voter Identity No. TDZ0477257 Driving License No. N.A. Whole-Time Director Designation Professional experience and Education Please see the chapter Our Management beginning on page 139 of the Draft Red Herring Prospectus qualification Please see the chapter Our Management beginning Other Directorship on page 139 of the Draft Red Herring Prospectus We confirm that the permanent account number, bank account number, passport number will be submitted to the BSE and the NSE, at the time of filing the Draft Red Herring Prospectus. Our Promoters, the Group Companies of our Promoters and the relatives of the Promoters have confirmed that they have not been identified as wilful defaulters by the RBI or any other governmental authority. Neither (i) the Promoters, the members of the Promoter Group and the Group Companies of our Promoters; nor (ii) the

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companies with which the Promoters are or were associated as a promoter, director or person in control, are debarred or prohibited from accessing the capital market for any reason by the SEBI or any other authority. There are no violations of securities laws committed by our Promoters and the Group Companies of our Promoters in the past or currently pending against them. Interest of Promoters The aforementioned Promoters of the Company are interested to the extent of their shareholding in the Company and the dividend they are entitled to receive, if declared, by the Company. Further, our Promoters who are also the Directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration, reimbursement of expenses payable to them. The Company has acquired certain properties on lease basis from our Promoter Group. Our Promoters or Promoter Group will be deemed to be interested to the extent of the lease rent received by them from the Company. For further information on our properties, please refer the section titled Business Overview beginning on page 90 of the DRHP. Except as stated in the section Our Promoters in the DRHP, we have not entered into any contract, agreements or arrangements during the preceding two years from the date of the DRHP in which the Promoters are directly or indirectly interested and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be made with them including the properties purchased by the Company other than in the normal course of business. Further except as otherwise stated under the section titled Financial Statements under the heading Related Party Transaction beginning on page 187 of the DRHP, the promoters do not have any other interest in the business of the Company. Payment or Benefit to Our Promoters For details of payments or benefits paid to our promoters, please refer to paragraph Payement to Executive Directors, Interest of Promoters and Related Party Transactions beginning on pages 142, 150 and 187 respectively of the DRHP. Common Pursuits Except as stated below, the Promoters do not have an interest in any venture that is involved in any activities similar to those conducted by the Company or any member of the Group Companies. 1. 2. 3. 4.
5. 6.

PCH Corporation Private Limited PCH Global Systems Private Limited PCH Impex Private Limited PCH Lifestyle Private Limited PCH Retail Solutions Private Limited PCH Telecom(India) Private Limited

Companies or firms from which the Promoters have disassociated themselves in the last three years Our Promoters have not disassociated themselves from any companies, including but not limited to, through transfer of shareholding and/or resignation from the board of directors in the ordinary course of business, in the last three years preceding the date of filing the Draft Red Herring Prospectus except from a proprietorship firm i.e PCH Agencies. Defunct Group Companies of our Promoters There is no defunct Group Companies of our Promoters.

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Sale or Purchase Exceeding 10% between Companies in the Promoter Group There are no sale or purchase transactions between the Company and Companies in the Group exceeding in value of 10% of the total sale or purchase of the Company except those transaction mentioned under Financial Statements -Related Party Transactions beginning on page 187 of the Draft Red Herring Prospectus. The entities/ companies which constitute our Group Entities have been provided below: 1) 2) 3) 4) 5) 6) 7) PCH Corporation Private Limited (PCHCPL) PCH Lifestyle Private Limited (PCHLPL) PCH Global Systems Private Limited (PCHGSPL) PCH Telecom (India) Private Limited (PCHTPL) PCH Impex Private Limited (PCHIPL) PCH Retail Solutions Private Limited (PCHRSPL) PCH Construction Private Limited (PCHCPL)

1) PCH Corporation Private Limited (PCHCPL) PCHCPL is a private limited company incorporated in Hyderabad, Andhra Pradesh on June 19, 2009 bearing Corporate Identification Number (CIN) U52100AP2009PTC064072. The previous name of the Company was PCH Agencies Private Limited. Registered Office: PCHCPLs registered office is situated in 103 - 107, Maheshwari Chambers, Somajiguda, Hyderabad - 500082, Andhra Pradesh, India Nature of Business: PCHCPL is in the business of trading in crockery, glassware and kitchenware products. Board of Directors: The board of directors of PCHCPL comprises of: 1. Sardar Balvinder Singh 2. Mrs. Baljit Kaur 3. Mr. Bijay Kumar Mohanty Capital Structure: The authorised share capital of PCHCPL is `12,00,00,000 (Rs. Twelve Crores only) divided into 1,20,00,000 (One Crore Twenty Lakhs only) equity shares of `10 each. The paid up capital of PCHCPL is `6,00,00,000 (Rs. Six Crores only) divided into 60,00,000 (Sixty Lakhs only) equity shares of `10 each. Shareholding Pattern The shareholding pattern of PCHCPL is as follows: Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. Name of Shareholders Sardar Balvinder Singh Mrs. Baljit Kaur Sunblink Trading Investment Private Limited Garrison Pharma(India) Pvt.Ltd. Somnath Vinimay Pvt.Ltd. Aviraj Marketing & Sales Pvt.Ltd. Accurate Corporate Services Pvt.Ltd. Fordon Advertising & Marketing Pvt.Ltd. Sidhidata Distributors Pvt.Ltd. Total Number of Shares 35,20,000 9,80,000 5,00,000 3,00,000 2,00,000 2,00,000 1,00,000 1,00,000 1,00,000 60,00,000 % of Shareholding 58.67 16.33 8.33 5.00 3.33 3.33 1.67 1.67 1.67 100.00

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Financial Performance The financial highlights of PCHCPL as per the latest available audited financial statement are as follows:Particulars Total Income Profit/loss after tax Reserves and Surplus Equity Capital Earnings per share (Basic and Diluted) (in `) Book value Book value per share (in `) (` in lakhs except per share data) Fiscal 2010 Fiscal 2011 6532.31 36562.86 84.84 568.39 1082.84 1651.24 500.00 500.00 1.69 11.37 1582.84 9150.61 31.65 183.01

PCHCPL is an unlisted company and it has not made any public or rights issue in the preceding three years. It has not become a sick company under the meaning of SICA and it is not subject to a winding-up order or petition. 2) PCH Lifestyle Private Limited (PCHLPL) PCHLPL is a private limited company incorporated in Hyderabad, Andhra Pradesh on September 03, 2009 bearing Corporate Identification Number (CIN) U52390AP2009PTC064937. Registered Office: PCHLPLs registered office is situated in 6-3-650, Ground Floor, Beside Medinova, Kavitha Complex, Somajiguda, Hyderabad, Andhra Pradesh Nature of Business: PCHLPL is in the business of trading in branded garments and fabrics Board of Directors: The board of directors of PCHLPL comprises of: 1. Sardar Balvinder Singh 2. Mrs. Baljit Kaur Capital Structure: The authorised share capital of PCHLPL is `12,00,00,000 (Rupees Twelve Crores only) divided into 1,20,00,000 (One Crore Twenty Lakhs only) equity shares of `10 each. The paid up capital of PCHLPL is `6,94,75,000 (Rupees Six Crore Ninety Four Lakh Seventy Five Thousand only) divided into 69,47,500 (Sixty Nine Lakh Forty Seven Thousand Five Hundred only) equity shares of `10 each. Shareholding Pattern The shareholding pattern of PCHLPL is as follows: Sr. No. 1. 2. 3. 4. 5. 6. Name of Shareholders Sardar Balvinder Singh Mrs. Baljit Kaur Akon Management Consultancy Services Pvt. Ltd. Accurate Corporate Services Pvt. Ltd. Sunblink Trading and Investment Pvt. Ltd. Florian Advertising and Marketing Ltd. Total No of Shares 48,50,390 7,55,000 6,30,960 3,32,880 2,26,960 1,51,310 69,47,500 % of Shareholding 69.81 10.87 9.08 4.79 3.27 2.18 100.00

Financial Performance The financial highlights of PCHLPL as per the latest available audited financial statement are as follows:152

Particulars Total Income Profit/loss after tax Reserves and Surplus Equity Capital Earnings per share (Basic and Diluted) (`) Book value Book value per share (in `)

Fiscal 2010

(` in lakhs except per share data) Fiscal 2011 1551.74 22741.57 24.37 420.05 24.37 1138.17 694.75 694.75 0.35 6.05 719.12 6558.08 10.35 94.39

PCHLPL is an unlisted company and it has not made any public or rights issue in the preceding three years. It has not become a sick company under the meaning of SICA and it is not subject to a winding-up order or petition. 3) PCH Global Systems Private Limited (PCHGSPL) PCHGSPL is private limited company incorporated in Hyderabad, Andhra Pradesh on April 27, 2009 bearing Corporate Identification Number (CIN) U52100AP2009PTC063453. The previous name of the Company was PCH Distributors Private Limited. Registered Office: PCHGSPLs registered office is situated in 103 - 107, Maheshwari Chambers, Somajiguda, Hyderabad 500082, Andhra Pradesh, India Nature of Business: PCHGSPL is in the business of trading in IT Products. Board of Directors: The board of directors of PCHGSPL comprises of: 1. Sardar Balvinder Singh 2. Mrs. Baljit Kaur 3. Mr. Bijay Kumar Mohanty Capital Structure: The authorised share capital of PCHGSPL is `12,00,00,000 (Rs. Twelve Crores only) divided into 1,20,00,000 (One Crore Twenty Lakhs only) equity shares of `10 each. The paid up capital of PCHGSPL is `6,57,46,670 (Rs. Six Crore Fifty Seven Lakh Forty Six Thousand Six Hundred and Seventy) divided into 65,74,667 (Sixty Five Lakhs Seventy Four Thousand Six Hundred Sixty Seven only) equity shares of `10 each. Shareholding Pattern The shareholding pattern of PCHGSPL is as follows: Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Name of Shareholders Sardar Balvinder Singh Mrs. Baljit Kaur Mask Finvest Private Ltd Sunblink Trading and Investment Pvt Ltd Romex Corporate Services Pvt Ltd Accurate Corporate Services Pvt Ltd Akon Management Consultancy Services Pvt Ltd Dhruv Advertising & Marketing Pvt Ltd Montex Metal and Steel Private Ltd Bhimrajka Sales Pvt Ltd Virat Metal Pvt Ltd Garrison Pharma (India) Limited Total 153 No. of Shares 23,00,000 17,00,000 7,59,667 4,50,000 80,000 1,90,000 1,80,000 60,000 2,65,000 3,25,000 1,90,000 75,000 65,74,667 % of Shareholding 34.98 25.86 11.56 6.84 1.22 2.89 2.74 0.91 4.03 4.94 2.89 1.14 100.00

Financial Performance The financial highlights of PCHGSPL as per the latest available audited financial statement are as follows:Particulars Total Income Profit/loss after tax Reserves and Surplus Equity Capital Earnings per share (Basic and Diluted) (in `) Book value Book value per share (in `) (` in lakhs except per share data) Fiscal 2010 15344.87 185.58 1184.92 657.46 2.82 1842.38 28.02

PCHGSPL is an unlisted company and it has not made any public or rights issue in the preceding three years. It has not become a sick company under the meaning of SICA and it is not subject to a winding-up order or petition.

4) PCH Telecom (India) Private Limited (PCHTPL) PCHTPL is private limited company incorporated in Hyderabad, Andhra Pradesh on March 10, 2010 bearing Corporate Identification Number (CIN) U52100AP2010PTC067465. Registered Office: PCHTPLs registered office is situated in Flat No. 510, Maheshwari Chambers, Somajiguda, Hyderabad 500082, Andhra Pradesh, India Nature of Business: PCHTPL is in the business of retailing of telecom products and its accessories. Board of Directors: The board of directors of comprises of: 1. Sardar Balvinder Singh 2. Mrs. Baljit Kaur 3. Mr. Iyer Rangarajan Capital Structure: The authorised share capital of PCHTPL is `12,00,00,000 (Rupees Twelve Crores only) divided into 1,20,00,000 (One Crore Twenty Lakhs only) equity shares of `10 each. The paid up capital of PCHTPL is `5,00,00,000 (Rs. Five Crore only) divided into 50,00,000 (Fifty Lakhs only) equity shares of `10 each. Shareholding Pattern The shareholding pattern of PCHTPL is as follows: Sr. No. 1. 2. 3. 4. 5. 6. Name of Shareholders Sardar Balvinder Singh Mrs. Baljit Kaur Gold Star Agencies Pvt. Ltd. Glory Merchantile Pvt. Ltd. City Distributors (Bombay) Pvt. Ltd. Status Merchantile Pvt. Ltd. Total Number of Shares 46,85,000 5,000 35,000 1,00,000 1,00,000 75,000 50,00,000 % of Shareholding 93.70 0.10 0.70 2.00 2.00 1.50 100.00

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Financial Performance The financial highlights of PCHTPL as per the latest available audited financial statement are as follows:Particulars Total Income Profit/loss after tax Reserves and Surplus Equity Capital Earnings per share (Basic and Diluted) (`) Book value Book value per share (in `) (` in lakhs except per share data) Fiscal 2011 8810.34 165.40 444.40 500.00 3.31 3178.27 63.57

PCHTPL is an unlisted company and it has not made any public or rights issue in the preceding three years. It has not become a sick company under the meaning of SICA and it is not subject to a winding-up order or petition. 5) PCH Impex Private Limited (PCHIPL) PCHIPL is a private limited company incorporated in Hyderabad, Andhra Pradesh on July 07, 2010 bearing Corporate Identification Number (CIN) U51909AP2010PTC069384. Registered Office: PCHIPLs registered office is situated in 103 - 107, Maheshwari Chambers, Somajiguda, Hyderabad - 500082, Andhra Pradesh, India Nature of Business: PCHIPL is in the business of trading in electronics goods, computers, mobile phones, crockery, fabrics, fruits and vegetables. Board of Directors: The board of directors of PCHIPL comprises of: 1. Sardar Balvinder Singh 2. Mr. Iyer Rangarajan Capital Structure: The authorised share capital of PCHIPL is `10,00,000 (Rs. Ten Lakhs only) divided into 1,00,000 (One Lakh only) equity shares of `10 each. The paid up capital of PCHIPL is `1,00,000 (Rs. One Lakh only) divided into 10,000 (Ten Thousand only) equity shares of `10 each. Shareholding Pattern The shareholding pattern of PCHIPL is as follows: Sr. No. 1. 2. Name of Shareholders Sardar Balvinder Singh Mr. Iyer Rangarajan Total Number of Shares 9,900 100 10,000 % of Shareholding 99.00 1.00 100.00

Financial Performance Since, PCHIPL is incorporated in July 2010, so Financial Statements are not available for preceding three years. PCHIPL is an unlisted company and it has not made any public or rights issue in the preceding three years. It has not become a sick company under the meaning of SICA and it is not subject to a winding-up order or petition.

155

6) PCH Retail Solutions Private Limited (PCHRSPL) PCHRSPL is private limited company incorporated in Hyderabad, Andhra Pradesh on February 01, 2010 bearing Corporate Identification Number (CIN) U52100AP2010PTC066850. Registered Office: PCHRSPLs registered office is situated at 5-9-208/1/201, AL-Noor Plaza, Chiragali Lane, Hyderabad 500002, Andhra Pradesh, India Nature of Business: PCHRSPL is in the business of retailing of furniture. Board of Directors: The board of directors of PCHRSPL comprises of: 1. Sardar Balvinder Singh 2. Mrs. Baljit Kaur 3. Mr. Satyanarayanmurthy Mukkamala Capital Structure: The authorised share capital of PCHRSPL is `10,00,000 (Rs. Ten Lakhs only) divided into 1,00,000 (One Lakh only) equity shares of `10 each. The paid up capital of PCHRSPL is `1,00,000 (Rs. One Lakh only) divided into 10,000 (Ten Thousand only) equity shares of `10 each. Shareholding Pattern The shareholding pattern of PCHRSPL is as follows: Sr. No. 1. 2. Name of Shareholders Sardar Balvinder Singh Mrs. Baljit Kaur Total Number of Shares 5,000 5,000 10,000 % of Shareholding 50.00 50.00 100.00

Financial Performance Since, PCHRSPL is incorporated in February 2010, financial statements are not available for preceding three years. PCHRSPL is an unlisted company and it has not made any public or rights issue in the preceding three years. It has not become a sick company under the meaning of SICA and it is not subject to a winding-up order or petition. 7) PCH Construction Private Limited (PCHCPL) PCHCPL is private limited company incorporated in Hyderabad, Andhra Pradesh on July 23, 2010 bearing Corporate Identification Number (CIN) U45209AP2010PTC069651. Registered Office: PCHCPLs registered office is situated in Flat No. 118, Maheshwari Chambers, Somajiguda, Hyderabad 500082, Andhra Pradesh, India Nature of Business: PCHCPL is in the business of Construction.

156

Board of Directors: The board of directors of PCHCPL comprises of: 1. Sardar Balvinder Singh 2. Mrs. Baljit Kaur Capital Structure: The authorised share capital of PCHCPL is `10,00,000 (Rs. Ten Lakhs only) divided into 1,00,000 (One Lakh only) equity shares of `10 each. The paid up capital of PCHCPL is `1,00,000 (Rs. One Lakh only) divided into10,000 (Ten Thousand only) equity shares of `10 each. Shareholding Pattern The shareholding pattern of PCHCPL is as follows: Sr. No. 1. 2. Name of Shareholders Sardar Balvinder Singh Mrs. Baljit Kaur Total Number of Shares 5,000 5,000 10,000 % of Shareholding 50.00 50.00 100.00

Financial Performance Since, PCHCPL is incorporated in July 2010, so financial statements are not available for preceding three years. PCHCPL is an unlisted company and it has not made any public or rights issue in the preceding three years. It has not become a sick company under the meaning of SICA and it is not subject to a winding-up order or petition.

157

RELATED PARTY TRANSACTIONS For details of related party transactions, please see the heading titled Related Party Transactions on page 187 under the section titled Financial Statements beginning on page 160 respectively of the Draft Red Herring Prospectus.

158

DIVIDEND POLICY The Board of Directors of our Company may, at its discretion, recommend dividend to be paid to the members of the Company. The factors that may be considered by our Board before making any recommendations for the dividend includes but not limited to profits/earnings during the financial year, liquidity of our Company, need for reserving resources for future growth, applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories of investors from time to time etc. Dividend will be declared and approved at the Annual General Meeting of the shareholders based on the recommendation of our Board. The Board may also from time to time pay interim dividend to the members if it considers justified by the profits generated by our Company.

159

SECTION V: FINANCIAL STATEMENTS REPORT OF THE STATUTORY AUDITORS

The Board of Directors, M/s PCH RETAIL LTD. Hyderabad. Dear Sirs, Re: Public issue of Equity Shares of M/s .PCH RETAILLTD 1. We have examined the financial information of PCH Retail Limited (the Company or the Issuer) annexed to this report for the purpose of inclusion in the Draft Red Herring Prospectus (the DRHP). The financial information has been prepared in accordance with the requirements of paragraph B of Part II of Schedule II to the Companies Act, 1956 (the Act), the Securities and Exchange Board of India (SEBI) (Issue of Capital and Disclosure Requirements) Regulation, 2009 (the ICDR Regulations) notified on August 26, 2009, the Guidance Note on Reports in Company Prospectuses (Revised) issued by the Institute of Chartered Accountants of India (ICAI) and terms of engagement agreed upon by us with the Company. The financial information has been prepared by the Company and approved by its Board of Directors. The financial information have been extracted by the Management from the financial statements for the year ended March 31, 2007, March 31, 2008, March 31, 2009, March 31,2010 and Nine Months period ended on 31st December, 2010. Audit for the financial year ended March 31, 2007 to March 31, 2010 was conducted by the auditor, M/s. N.A.Hariharan, Chartered Accountant and adopted by the Members of those respective years. We have re-audited the financials for the year March 31, 2010 as required under the SEBI regulations. We have audited the financials for the period ended December, 2010 as required under the SEBI regulations. Accordingly, reliance has been placed on the financial information audited by them for the financial years ended March 31, 2007, 2008, 2009 and 2010. Our opinion in so far as it relates to the amount included in these restated standalone statements are based on the auditors report of the respective auditors. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Regulations and terms of our engagement agreed with you, we further report that: The Statement of Assets and Liabilities, as Restated as at March 31, 2007, 2008, 2009 and 2010 and as at December, 2010 (Refer Annexures IV to XVIII). The Statement of Profit and Losses, as Restated and the Statement of Cash Flows, as Restated (of the Company, for the year ended March 31, 2007, 2008, 2009 and 2010 and for the period ended December, 2010 (Refer Annexures IV to XVIII ). Together referred to as the Summary Statements, have been extracted from the financial statements of the respective years. Audit for the financial year ended March 31, 2007 to March 31, 2010 was conducted by the auditor, M/s. N.A. Hariharan, Chartered Accountant and approved by the Board of Directors/ Members adopted by the Members of those respective years. Based on the above and also as per the reliance placed on the reports submitted by the auditor, M/s. N.A .Hariharan, for the respective years, we are of the opinion that the restated financial information have been made after incorporating: i. Adjustment for material amounts relating to prior years, changes in accounting policies in the restated financial information in the respective financial years to which they relate as shown in Annexure IV; There are no extra-ordinary items that need to be disclosed separately in the accounts and no qualifications requiring adjustments.

2.

3.

(a)

(b)

(c)

ii.

(d)

We have also examined the following other financial information relating to the Company, which is proposed to be enclosed in the offer document as approved by the Board of Directors of the Company

160

Details of Other Financial Information Statement of Reserves & Surplus Statement Showing Analysis of Sundry Debtors Statement of Loans and Advance Secured loans Unsecured loans Current Liabilities & Provisions Statement of Other Income Related Party Transactions Tax Shelter Statement Statement of Accounting and Other Ratios Statement of Earnings per Share Statement of Rates and amount of Dividend Capitalization Statement Contingent Liabilities (e)

Annexure reference V VI VII VIII,VIII-A IX X XI XII XIII XIV XV XVI XVII XVIII

4.

Based on our examination of the financial information of the Company attached to this report, we state that in our opinion the financial information contained in Annexure I to III of this report read along with the Significant Accounting Policies and Notes (Refer Annexures IV to XVIII ) prepared after making adjustments and regrouping as considered appropriate have been prepared in accordance with Part IIB of Schedule II of the Act and the SEBI Regulations. This report should not in any way be construed as a reissuance of any of our previous audit reports nor should this be construed as a new opinion on any of the financial statements referred to herein. 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 and is not to be used, referred to or distributed for any other purpose except with our prior written consent.

5.

For KARUMANCHI & ASSOCIATES Chartered Accountants (Firm Registration No. 001753S)

(K. Peddabbai) Partner Membership No. 25036 Place: Hyderabad Date: 25/05/2011

161

Statement of Assets and Liabilities, as Restated Particulars Annexure

Annexure I (INR in Lakhs) For the Period ended 31-Dec-10 31-Mar-10 14,199.61 2,402.16 11,797.44 11,797.44 924.22 12,721.66 For the year ended

31-Mar-09 9,230.58 867.11 8,363.46 8,363.46 954.34 9,317.80 -

31-Mar-08 2,397.83 192.62 2,205.21 2,205.21 209.49 2,414.70 -

31-Mar-07 143.37 2.14 141.23 141.23 360.00 501.23 -

(1) Fixed assets Gross Block Less: Depreciation Net Block Less : Revaluation Reserve Net Block (after adjustment of Revaluation Reserve) Capital Work In Progress Total Fixed Assets (2) Investment (3) Current Assets, Loans and Advances: Inventories Sundry debtors Cash and bank balances Loans & Advances Other current assets Total Current Assets, Loans and Advances (4) Liabilities and Provisions Secured loans Unsecured loans Deferred Tax Liability# Current Liabilities & Provisions Total Current Liabilities and Provisions (5) Net Worth (6) Represented By: Share Capital Share Application Money Reserves and Surplus Less: Revaluation Reserve Reserves (Net of revaluation reserves) Less: Miscellaneous Expenditure Not Written Off (7) Net worth

16,768.72 3,920.70 12,848.02 12,848.02 597.11 13,445.13 -

VI VII

15,702.67 6,518.16 194.53 1,653.69 959.46 25,028.50

9,658.69 5,224.63 262.65 1,569.64 990.14 17,705.76

7,190.03 3,425.08 327.47 586.77 171.48 11,700.82

4,474.64 2,008.03 159.30 358.19 51.86 7,052.02

2,145.38 1,423.32 2.26 95.96 24.00 3,690.92

VIII IX X

21,731.97 104.25 3, 859.23 25,695.45 12,778.18 2,461.55 10,316.63 10,316.63 12,778.18

16,489.01 46.41 140.07 2,174.09 18,849.58 11,577.84 2,247.05 2,145.00 7,185.79 7,185.79 11,577.84

11,088.43 140.02 1,876.15 13,104.61 7,914.02 2,027.85 1,400.00 4,486.17 4,486.17 7,914.02

5,421.66 1,411.13 6,832.79 2,633.94 1,460.35 7.50 1,166.09 1,166.09 2,633.94

2,426.37 26.00 468.27 2,920.64 1,271.51 1,255.00 16.51 16.51 1,271.51

# Deferred Tax Liability details have been taken from the audited financial statements. Note: The Income Tax Liability has been provided as per the income tax computation filed with Income tax authorities for the year ended March, 31, 2007, 2008, 2009 and 2010 and the figures for the Dec 31, 2010 are based on the provisional computation of income tax made by the management of the Company.

162

Statement of Profit and Loss, as Restated Particulars Annexure

Annexure II (INR in Lakhs) For the Period ended 31-Dec-10 For the Period ended

31-Mar-10

31-Mar-09

31-Mar-08

31-Mar-07

INCOME Sales i) Domestic b) Traded Goods Sub-Total ii) Export Total Other Income Increase / ( Decrease ) in Stocks TOTAL EXPENDITURE Purchases Personnel Expenses Administrative Expenses Selling and Distribution Expenses Depreciation TOTAL Net Profit before Interest, Tax and extraordinary items Financial Expenses Net Profit before Tax and extraordinary items Income Tax Deferred Tax Liability Fringe Benefit Tax Net Profit After Tax but before Extraordinary items Add/ (Less): Extraordinary items Net Profit after Extraordinary items

XI

67,931.08 67,931.08 67,931.08 195.36 6,043.98 74,170.41

65,771.34 65,771.34 65,771.34 34.98 2,468.66 68,274.98

43,172.18 43,172.18 43,172.18 74.15 2,715.39 45,961.72

21,970.57 21,970.57 21,970.57 2,329.27 24,299.84

1,842.18 1,842.18 1,842.18 2,145.38 3,987.55

66,906.64 368.75 967.89 448.01 1,518.54 70,209.82 3,960.59 2,222.92 1,737.66 573.15 (35.82) 1,200.34 1,200.34

61,409.96 487.07 1,214.84 183.92 1,535.05 64,830.83 3,444.15 2,250.20 1,193.95 467.08 0.05 726.82 726.82

41,307.86 392.36 983.57 258.66 674.50 43,616.94 2,344.78 1,337.29 1,007.48 336.57 140.02 5.31 525.58 525.58

21,437.36 246.52 675.46 196.73 191.00 22,747.07 1,552.77 506.63 1,046.14 323.63 3.58 718.93 718.93

3,822.54 15.24 29.68 5.40 2.14 3,875.00 112.56 26.53 86.03 69.29 0.23 16.51 16.51

163

Annexure III Statement of Cash flows, as Restated Particulars (INR in Lakhs) For the Period ended 31-Dec-10 1,737.66 31-Mar-10 1,193.95 For the year ended

Net Profit / (Loss) Before tax as Restated Adjustments for: Depreciation Interest Charges Interest Income (Profit)/Loss on sale of Fixed Assets Operating Profit/(Loss) Before Working Capital Changes Adjustment for: (Increase)/Decrease in Receivables (Increase)/Decrease in Inventories (Increase)/Decrease in Loans & Advances (Increase)/Decrease in Other Current Assets Increase/(Decrease )in Current Liabilities and Provisions Cash Generated from/(used in) Operations (Direct Taxes Paid)/Refund received Add: Interest Received Net Cash from/ (used in) Operating Activities (A) Cash Flow from Investing Activities Purchase of Fixed Assets Capitalization of Capital Work In Progress Sale of Fixed Assets/Capitalization of Capital Work In Progress Investment in Fixed Deposits ( net of withdrawals) Purchase of Investments Net Cash (used in)/ from Investing Activities (B) Cash Flow from Financing Activities Interest Paid Proceeds from Issue of Equity Shares Increase/ (Decrease) in Share application money Increase/ (Decrease) in Bank Borrowings Increase/ (Decrease) in Unsecured Loans Net Cash (used in) / from Financing Activities (C )

31-Mar-09 1,007.48

31-Mar-08 1,046.14

31-Mar-07 86.03

1,518.54 2,222.92 (195.36) 5,283.77

1,535.05 2,250.20 (34.98) 4,944.22

674.50 1,337.29 (74.15) 2,945.13

191.00 506.63 0.22 1,743.99

2.14 26.53 114.70

(1,293.53) (6,043.98) (84.05) 30.69 1,373.30

(1,799.55) (2,468.66) (982.87) (818.67) 203.78

(1,417.05) (2,715.39) (228.58) (119.62) 476.63

(584.71) (2,329.27) (262.23) (27.86) 716.80

(1,423.32) (2,145.38) (95.96) (24.00) 402.99

(733.80) (261.31) 195.36 (799.76)

(921.76) (372.92) 34.98 (1,259.70)

(1,058.88) (353.49) 74.15 (1,338.22)

(743.28) (101.15) (844.42)

(3,170.97) (4.23) (3,175.20)

(2,569.11) 327.11 (2,242.00)

(4,969.03) 30.12 (4,938.91)

(6,832.75) (744.85) (7,577.60)

(2,259.65) 150.51 4.45 (2,104.70)

(142.96) (360.42) (503.37)

(2,222.92) 2,145.00 (2,145.00) 5,242.96 (46.41) 2,973.63

(2,250.20) 2,192.00 745.00 5,400.58 46.41 6,133.79

(1,337.29) 3,362.00 1,392.50 5,666.78 9,083.98

(506.63) 636.00 7.50 2,995.29 (26.00) 3,106.16

(26.53) 1,255.00 2,426.37 26.00 3,680.83 2.26 2.26

Net (Decrease)/ Increase in Cash & Cash (68.12) (64.82) 168.16 157.04 Equivalents (A+B+C) Cash and Cash Equivalents At the Beginning of the 262.65 327.47 159.30 2.26 Period/Year Cash and Cash Equivalents At the End of the 194.53 262.65 327.47 159.30 Period/Year Note: 1. Cash Flow Statement is prepared as per indirect method as specified in AS-3 "Cash Flow Statement". 2. Figures in the bracket indicate cash outflow.

164

Statement of Adjustment in Profit & Loss Account arising out of Changes in accounting Policies and material adjustments relating to previous years/periods: (INR in Lakhs) Particulars For the Period ended 31-Dec-10 763.44 99.66 15.15 223.63 1.57 7.87 (31.04) 120.07 436.90 1,200.34 31-Mar-10 879.20 15.26 (6.21) (64.73) (0.69) (3.93) 27.99 (120.07) (152.38) 726.82 For the year ended 31-Mar-09 844.91 (153.49) 2.23 (158.90) 0.22 (2.56) (6.83) (319.33) 525.58 31-Mar-08 657.38 38.29 (7.29) (1.10) (1.37) 31.04 2.00 61.56 718.93 31-Mar-07 59.30 0.27 (3.87) (37.20) (2.00) (42.80) 16.51

Net Profit /(Loss) After Taxes as per Audited P&L A/C Excess /(Short) Provision in calculation of Depreciation Preliminary expenses (written off)/ adjusted Advertisement expenses (written off)/ adjusted Trade Marks (written off) / adjusted Provision for Gratuity Income Tax & Fringe Benefit Tax (Provision)/ Excess Provision Written Back Prior Period Items (Provisions)/ Excess Provision written back Net Total (Decrease)/Increase due to Adjustments Net Profit /(Loss) After Tax as per Restated Profit and Loss

MATERIAL ADJUSTMENTS RELATED TO PREVIOUS YEAR/ PERIOD AND CHANGE IN ACCOUNTING POLICY: The adjustments can be bifurcated as: On account of changes in accounting policies 1. The treatment of Preliminary Expenditure, Trade Marks and Advertisement Expenditure as deferred expenditure is not in accordance with AS-26 (Intangible Assets). Hence now the accounting treatment is changed and difference amount is debited to the Profit & Loss Account. Retirement Benefits (AS 15) The company has made less provision than the Employee retirement benefits liability determined by the Actuary in Compliance with AS 15 (Employee Benefits) as per their valuation reports. The details of the additional provision made or excess provision written back related to Gratuity Liability have been provided in the above table.

2.

Other adjustments

1) During the Financial year 2008-09 the company has paid Rs. 21.10 Lacs towards Income Tax pertaining to the Financial Year 2006-07, now restated and credited to the P & L Account for the Financial Year 2008-09 with suitable provision for the Financial Year 2006-07 2) During the Financial year 2009-10 the company has paid Rs. 16.10 Lacs towards Income Tax pertaining to the Financial Year 2006-07, now restated and credited to the P & L Account for the Financial Year 2009-10 with suitable provision for the Financial Year 2006-07 3) During the Financial year 2009-10 the company has paid Rs. 11.88 Lacs towards Income Tax pertaining to the Financial Year 2008-09, now restated and credited to the P & L Account for the Financial Year 2009-10 with suitable provision for the Financial Year 2008-09 4) The company has made less provision than the Employee retirement benefits liability determined by the Actuary in Compliance with AS 15 (Employee Benefits) as per their valuation reports. The details of the additional provision made or excess provision written back related to Gratuity Liability have been provided in the above table. 5) Excess/(Short) Provision in Calculation of depreciation details of which are provided below, now restated and charged to P&L account for the respective year

165

Excess /(Short) Provision in calculation of depreciation Particulars For the Period ended 31-Dec-10 Depreciation as per Audited Financials 1,518.54 Depreciation as per Re stated Financials 1,518.54 Excess/ (Short) Provision -

(INR in Lakhs) For the year ended

31-Mar-10 1,550.31 1,535.05 15.26

31-Mar-09 521.01 674.50 (153.49)

31-Mar-08 229.29 191.00 38.29

31-Mar-07 2.42 2.14 0.27

Annexure IV Significant Accounting Policies 1. Basis of Preparation of Financial Statements The Financial Statements have been prepared under the historical cost convention on accrual basis and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The said Financial Statements comply with the relevant provisions of the Companies Act, 1956 (the Act), the mandatory Accounting Standards notified by the Central Government of India under Companies (Accounting Standards) Rules, 2006. 2. Use of Estimates The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities as of the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon the management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from estimates and assumptions used in preparing these financial statements. 3. Inventories (AS 2) Inventories are valued at cost or net realizable value whichever is less. The cost includes Purchase Price and Freight. 4. Depreciation (AS 6) Depreciation is provided on Written down Value Method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956. 5. Recognition of Income and Expenditure (AS-9) Revenue from Sale of goods is recognized when: i) The Property in goods have been transferred to the buyer for a price or all significant risks and rewards of ownership have been transferred to the buyer. ii) No Significant uncertainty exits regarding the amount of the consideration that will be derived from the sale of the goods. Items of income and expenditure are recognized on accrual basis. 6. Fixed Assets (AS 10) The Fixed assets are stated at the cost of acquisition and after adjustment of additions and after charging depreciation up to the year. The Capital Work in progress represents advances paid towards installation of tiles, furniture & fixtures and electrical fittings in the new show room yet to be opened. Interest on Term Loan for Opening new show rooms has been capitalized from the date of disbursement to the date of operation of the show room. No revaluation of the assets has been done during the year. Fixed Assets are stated at cost less depreciation. Cost includes all direct expenses relating to the acquisition and installation of fixed assets. 166

7.

Foreign Currency Transactions (AS 11) Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transaction. At the year-end, all monetary assets and liabilities denominated in foreign currency are restated at the year-end exchange rates. Exchange differences arising on actual payment / realization and year end re-instatement referred to above are recognized in the Profit & Loss Account.

8.

Retirement Benefits (AS 15) (a) Post- employment benefit plans All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the Profit and Loss Account in the period in which the employee renders the related service. Defined contribution plans: A defined contribution plan i.e. provident fund is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal and constructive obligation to pay further amounts. Obligations for contributions to defined contribution provident plans are recognised as an employee benefit expense in the Profit and Loss Account when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Defined benefit plans: A defined benefit plan i.e. gratuity, is a post-employment benefit plan. The Companys gratuity plan is a defined benefit plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days last drawn salary for each completed year of service. The gratuity plan of the entity is an unfunded plan. The Companys net obligation in respect of defined benefit plans is calculated separately for each plan year by estimating the amount of future benefit that employee have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations. The calculation is performed annually by an independent actuary using the projected unit credit actuarial method. When the calculation results in a benefit to the Company, the asset is recognised only to the extent of the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognised immediately in the Profit and Loss Account. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs. The company has obtained the valuation certificate from Actuary and has made provision based on such valuation certificate. (b) Short term employment benefits The company does not have any written leave encashment plan and does not pay for leaves hence has not made any provision for leave encashment. The details of the components of net benefit expenses recognized in the profit and loss account with regard to gratuity and amounts recognized in the Balance Sheet are given below: Particulars For the Period ended 31-Dec-10 5.51 0.47 Nil (1.23) Nil Nil 167 For the year ended

Cost for the year: Current Service Cost Interest cost on benefit obligation Expected return on plan assets Net Actuarial (gain). Loss recognized in the year Past Services Cost Net Benefit expenses

31-Mar-10 4.62 0.31 Nil (1.00) Nil Nil

31-Mar-09 2.90 0.11 Nil (0.44) Nil Nil

31-Mar-08 1.37 Nil Nil Nil Nil Nil

Actual return on plan assets Opening defined benefit obligation Interest cost Current services cost Benefits paid Actuarial (gains)/losses on obligation Past Service Cost Closing defined benefit obligation Amounts recognized in the Balance Sheet: Projected benefit obligation at the end of the year Fair Value of Plan Assets at the end of the year Funded Status of the plan- (Assets)/Liability Assumptions Salary Rise Discount Rate Mortality Rate Retirement Age 9. Borrowing Cost (AS-16)

Nil 7.87 0.47 5.51 Nil (1.23) Nil 12.62

Nil 3.94 0.31 4.62 Nil (1.00) Nil 7.87

Nil 1.37 0.11 2.90 Nil (0.44) Nil 3.94

Nil Nil Nil 1.37 Nil Nil Nil 1.37

12.62 Nil 12.62

7.87 Nil 7.87

3.94 Nil 3.94

1.37 Nil 1.37

5% 8% LIC(1994-96) 58 Years

5% 8% LIC(1994-96) 58 Years

5% 8% LIC(1994-96) 58 Years

5% 8% LIC(1994-96) 58 Years

Borrowing cost attributable to acquisition of qualifying assets which take Substantial time to put to use are Capitalized. All other borrowing cost is charged to Revenue. 10. Segment Reporting (AS-17) The company operates in one business segment i.e., in retail trade of electronic items and operates in one Geographical segment i.e., India. As such, there are no separate reportable segments as per AS -17 Segment Reporting. 11. Earnings Per Share (AS-20) In computing earnings per share, the company considers the net profit or loss after tax for the year attributable to the equity shareholders. Basic Earnings per share are computed using the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the basis as basic EPS, after adjusting for the effect of potential dilutive equity shares and their corresponding effect on the net profit for the equity shareholders. 12. Taxation (AS-22) Current tax is determined on the income for the year chargeable to tax in accordance with Income tax Act, 1961. Deferred tax liability is recognized for all timing differences. Deferred tax assets are recognized subject to consideration of prudence. Statement of Deferred Tax Liability Particulars For the Period ended Opening Balance: Add: Deferred Tax Liability/(Asset) during the year Net Deferred Tax Effect 31-Dec-10 140.07 (35.82) 104.25 31-Mar-10 140.02 0.05 140.07 (INR in Lakhs) For the year ended

31-Mar-09 140.02 140.02

31-Mar-08 -

31-Mar-07 -

168

13. Intangible Assets (AS-26) The Preliminary Expenditure, Trade Marks and Advertisement Expenditure incurred by the company have been charged to Profit & Loss Account in the year of incurrence in accordance with AS-26 (Intangible Assets).

14. Provisions (AS-29) A provision is recognized when an enterprise has a present obligation as a result of past event; 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 its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. 15. Events occurring after Balance Sheet dates Except the below listed events, no significant events which could affect the financial position, to a material extent have been reported by the company, after the balance sheet date till the signing of report. A) The company has obtained loan s subsequent to the period of financials provided hereinabove details of which are provided below. Sr. No. Nature of facility/ borrowing Housing Loan Bank/ Party Sanctioned Amount (Rs.In Lacs) 1327 Interest Rate/Margin Repayment Schedule Security/Guarantee

1.

2.

Retail Finance (Autoloan)

Future Capital Financial Services Ltd BMW Financial Services India

ROI as charged to the customer 14%, Floating/Fixed

180 Months

42.3

Rate of Interest : 9.64% Per annum

3.

Term Loan

SBH

3000

Rate of Interest: 6.75% above SBH Base Rate, present effective rate 15.75 % p.a (floating) with reset of spread after every 2 years from the date of first disbursement. Margins : 39.90%

36 Months (Each Installment 1,34,690). EMI Start Date : (16-042011 to 1602-2014) Payment Structure : Normal 6 years 5 months including a moratorium period of 14 months

House Bearing No 116, MCH No-82-120/84, in S Y No 403/17, admeasuring 2022 sq yds situated at Dilruba, Road No 2, Banjara Hills, Hyderabad. Vehicle Details : BMW 5 Series 530d Vehicle Cost : 5647030/-

Primary : Term Loan I: Pari-passu first charge (Hyp) on fixed assets. Term Loan-II : First Pari-passu charge on the entire fixed assets of the company along with other term loan lenders Collateral :Term Loan I: Pari-pasu second charge on stocks, book debts and other current assets. Term Loan II: Pari-pasu second charge on stocks, book debts and other current assets. Personal Guarantee: i) Shri Balvinder Singh, MD 13.96 (crores) As on 10.09.10 ii) Smt Baljit Kaur, Wholetime Director 3.81 Crores As on 10.09.10

169

Term Loan II

SBI

6000

Rate of Interest: 5.90% above Base Rate, present effective rate 13.90 % p.a. Margins : 39.92%

6 years months.

Same securities as offered to Term Loan I

B) Allotment of shares: During the last quarter, the Company had issued 20,23,000 Equity shares of Rs. 10/- each, out of which 2,00,000 to promoters and 18,23,000 to non promoters at a price of Rs 100/- (inclusive of premium of Rs 90/- per each equity share). Sl.No. 1. 2. 3. 07-03-2011 18-03-2011 24-03-2011 Total Date of Allotment Total No. of shares Allotted 1223000 400000 400000 2023000 Allotted to Promoters 200000 200000

16. In the opinion of the Board, current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and provisions for all known and determined liabilities are adequate and not in the excess of the amount reasonably necessary. 17. An Asset is impaired if there are sufficient indication that the carrying cost would exceed the recoverable amount of cash generating asset. In that event an impairment loss so computed would be recognized in the accounts in the relevant year In view of Accounting Standard required by AS-28 Impairment of Assets issued by ICAI, the company has reviewed its fixed asset and does not expect any loss, on account of impairment in addition to the provision, if any, already made in the books. 18. There are no Micro and Small enterprises, to which the company owes dues, which are outstanding for more than 45 days. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company. Notes Pertaining to 2006-07 1. Share Capital During the year, the Company had issued 12,500,000 Equity shares at par value of Rs.10/- each to the promoters for taking over the erstwhile PCH Business, PCH Associates, PCH Mobile Zone, PCH Sales being partnership firms.

LIST OF ALLOTEES S.NO. NAME OF ALLOTTEE 1 2 3 4 Balvinder Balvinder Balvinder Balvinder Singh Singh Singh Singh

Firm/Proprietary Ship for which consideration was paid PCH Sales PCH Business PCH Associates PCH Mobiles Total Shares Allotted to Mr Balvinder Singh (A) PCH Sales PCH Associates PCH Mobiles Total Shares Allotted to Mr Baljit Kaur (B) Total No of Shares (A+B) 170

Nominal Value (Rs 10 per Share) 10 10 10 10

NO.OF SHARES 1348743 3343802 2541167 2073573 9307285 791142 1697640 703933 3192715 12500000

5 6 7

Baljit Kaur Baljit Kaur Baljit Kaur

10 10 10

Notes Pertaining to 2007-08:1. Share Capital During the year, the Company had issued 2,053,500 Equity shares out of which 1,650,000 at par value of Rs.10/- each to the promoters and 403,500 Equity shares of Rs 10/- each at a price of Rs 100/- (inclusive of premium of Rs 90/- per each equity share) to non promoters of the company. Notes pertaining to 2008-09:1. Share Capital During the year, the Company had issued 5,675,000 Equity shares out of which 2,495,000 at par value of Rs.10/- each to the promoters and 3,180,000 Equity shares of Rs 10/- each issued at a price of Rs 100/(inclusive of premium of Rs 90/- per each equity share) to non promoters of the company. Notes pertaining to 2009-10:1. Share Capital During the year, the Company had issued 2,192,000 Equity shares out of which 800,000 to promoters and 1,392,000 to non promoters at a price of Rs 100/- (inclusive of premium of Rs 90/- per each equity share). Notes pertaining to 2010-11:1. Share Capital During the year, the Company had issued 2,145,000 Equity shares a price of Rs 100/- (inclusive of premium of Rs 90/- per each equity share) to the promoter of the company. Annexure V Statement of Reserves & Surplus Particulars (INR in Lakhs) For the Period ended 31-Dec-10 1,987.84 1,200.34 3,188.18 7,128.45 10,316.63 For the year ended 31-Mar-10 1,261.02 726.82 1,987.84 5,197.95 7,185.79 31-Mar-09 735.44 525.58 1,261.02 3,225.15 4,486.17 31-Mar-08 16.51 718.93 735.44 430.65 1,166.09 31-Mar-07 16.51 16.51 16.51

Opening Balance of Profit & Loss A/c Add: Current Year Profit Closing Balance of Profit & Loss A/c (A) Securities Premium Account (B) Total (A+B)

Annexure VI Statement Showing Analysis of Sundry Debtors Particulars For the Period ended 31-Dec-10 Debts outstanding Exceeding six months Considered Good Considered Bad Debts outstanding Less than six months Considered Good Considered Bad Total 6,518.16 6,518.16 (INR in Lakhs) For the year ended 31-Mar-10 5,224.63 5,224.63 31-Mar-09 3,425.08 3,425.08 31-Mar-08 2,008.03 2,008.03 31-Mar-07 1,423.32 1,423.32

None of the Sundry Debtor includes the amount due from the directors, promoters, promoter group of the issuer company in any way other than those which are specifically mentioned herein below.

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Amounts Due from promoters/promoter group companies/directors/relatives of directors/associate companies Particulars For the Period ended 31-Dec-10 0.68 11.62 12.30 For the year ended

31-Mar-10 -

31-Mar-09 -

31-Mar-08 -

PCH Agencies Pvt. Ltd. PCH Lifestyle Pvt. Ltd. Total

31-Mar-07 -

Annexure VII Statement of Loans & Advances Particulars (INR in Lakhs) For the Period ended 31-Dec-10 772.58 44.03 25.93 811.15 1,653.69 For the year ended 31-Mar-10 698.92 31.59 30.54 568.13 240.46 1,569.64 31-Mar-09 569.80 16.51 0.46 586.77 31-Mar-08 333.47 12.91 5.71 0.24 5.87 358.19 31-Mar-07 87.41 3.42 1.01 4.13 95.96

(i) Security Deposits (ii) Advances Recoverable in Cash or kind or value to be received iii) Advance Taxes & TDS (iv) Advances to Suppliers (v) Other Loans & Advances Total

None of the Loans and Advances includes the amount due from the directors, promoters, promoter group of the issuer company in any way.

Annexure VIII Statement of Secured Loans Particulars (INR in Lakhs) For the Period ended 31-Dec-10 6.821.85 14,111.88 20.36 20,954.09 777.88 777.88 21,731.97 For the year ended 31-Mar-10 6,684.10 9,337.54 29.76 16,051.40 437.61 437.61 16,489.01 31-Mar-09 3,888.61 6,575.99 19.71 10,484.31 602.81 1.31 604.12 11,088.43 31-Mar-08 1,174.42 3,480.10 17.13 4,671.66 650.00 100.00 750.00 5,421.66 31-Mar-07 237.00 2,178.54 10.83 2,426.37 2,426.37

A) Loans and Advances From the Banks a) Term Loan b) Cash Credit c) Vehicle Loan Total (A) B) Other Loans and Advances a) Term Loan b) Cash Credit c) Vehicle Loan Total (B) Total (A+B)

Brief terms and conditions of secured loans including repayment schedule are given in Annexure VIII- A.

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Secured Loans Sl. Natur N e of Bank/ o facilit Party y/ borro wing 1 Term UBI Loan & Cash Credit

Annexure VIII-A (INR in Lakhs) Sanctioned Amount (Rs.) Term Loan:1435/Cash Credit:300/Overall Credit Limit:1735/Amount outstanding as on 31st Dec 2010 (Rs.) Term Loan :1,368.46/and Cash Credit:278.6 9/-

Interest Rate/ Margin

Repayment Schedule

Security / Guarantee

Rate of Interest: BT+5.00%, i.e.presently 13.25% p.a payable at monthly rests for both Term loan & Cash Credit limit as per Banks extant guidelines.

Term Loan: 23 quarterly installment Rs. 62.50 Lakhs per each quarter to be repaid up to 22 quarterly installments and last (i.e 23rd quarter) quarter installment Rs 60.00 Lakhs. Cash Credit: Repayable on Demand

Primary Security: i)Term Loan: Pari Passu first charge with the other term loan lenders on entire fixed assets of the company. ii)Cash Credit limit: Pari passu first charge with the other Working Capital Lenders on entire current assets of the company. Collateral Security for Term Loan & Cash Credit limit: i) Exclusive charge by way of creating Equitable Mortgage of immovable properties:a) Flat No 101, Dwarakapuri Colony, Punjagutta, Hyderabad in the name of Mr. Balvider Singh and Mrs.Baljit Kaur valued at Rs 1.30 Crore by Bank approved valuer Mr. Amarnath Prasad on 30.07.2009. b) Flat No 301, Dwarakapuri Colony, Punjagutta, Hyderabad in the name of Mr. Balvider Singh and Mrs.Baljit Kaur valued at Rs 1.30 Crore by Bank approved valuer Mr. Amarnath Prasad on 30.07.2009. c) Flat No 202, Motilalnagar, Begumpet, Hyderabad in the name of Mr. Balvinder Singh and Mrs.Baljit Kaur valued at Rs 1.18 Crore by Bank approved valuer Mr. Amarnath Prasad on 30.07.2009. d) Bunglow 408, Alwal, Hyderabad in the name of Mr.Balvinder Singh and Mrs.Baljit Kaur valued at Rs.0.66 Crore by Bank approved valuer Mr. Amarnath Prasad on 30.07.2009. ii) Term Loan with Bank of Rs 1.04 Crore and accrued future interest in the same. iii) For Term Loan, Pari Passu 2nd Charge on entire current assets along with other term loan lenders. iv) For Working Capital loan, Pari Passu 2nd charges on entire fixed assets along with other Working Capital Lenders. v) Personal guarantee of Promoter Directors, Mr. Balvinder Singh, MD (Net Worth Rs. 37.31 Crores as on 22.06.09) and Mrs. Baljit Kaur , Director (Net Worth Rs. 14.10 Crores) both as on 22.06.09).

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Cash Credit (Hyp), Worki ng Capita l Dema nd Loan and Letters of Credit

ICICI

Cash Credit and WCDL: 2800 /-

Letters of Credit:200/Total Fund & Non-Fund based Limits : 3,000.00/-

Rate of Interest: at sum of I-Base and spread of 6.00% p.a, plus applicable interest tax or other statutory levy, if any, on the principal amount of the loan remains outstanding each day. As on date the I-Base is 7.50% p.a and spread is 6.00% and the applicable rate of interest as on date is 13.50% p.a Margin: Inventory: Uniform margin of 25% against all components of inventory. Book debts: Covered period : 90days, Margin: 25% WCDL: Rate of Interest at the rate of interest for each tranche of the facility subject to a minimum of IBase, will be stipulated by ICICI bank at the time of disbursement of each tranche on the basis of the repayment schedule for that drawal plus applicable interest tax or other statutory levy, if any. Margin:

Cash Credit: Repayment WCDL Repayment: Maximum tenor of each tranche: 90 days (or) up to validity period of facility, whichever is earlier Minimum tenor of each tranche: 30 days.

2,577.70/- Primary Security : i) Pari passu 1st charge in banks favour by way of hypothecation of the borrowers entire current assets which inter-alia include stocks of raw materials, work in process, finished goods, consumable stores and spares and such other movables including book-debts, outstanding monies, receivables both present and future of such from satisfactory to the bank. 1) ii) Pari passu 2nd charge on movable fixed assets, both present and future, of the company. Collateral Security: Collateral should be in the form of exclusive charge by way of equitable mortgage of residential / commercial property, total value of such collateral should not be less than 35% of the sanctioned limits. The company has offered the below collateral properties : i) Plot No. 73 (Plot No.67 as per Mithila Master Plan) in S No 122 Part, 276 Sq yards covered by Huda File No.8326/MP2/HUDA/2004 situated at Mithila Nagar, Saket, Kapra Municipality, Keesara Mandal, Ranga Reddy Dist. Andhra Pradesh belonging to Balvinder Singh. (valued at Rs 10.00 Millions) ii) Plot No. 77 (Plot No.71 as per Mithila Master Plan) in S No 122 Part, 276 Sq yards covered by Huda File No.8326/MP2/HUDA/2004 situated at Mithila Nagar, Saket, Kapra Municipality, Keesara Mandal, Rnga Reddy Dist. Andhra Pradesh belonging to Baljit Kaur. (valued at Rs 10.00Millions) iii) Cash collateral of Rs. 46.50 Million by way of lien marked fixed deposit for a period until the fixed deposit is replaced with exclusive charge by way of equitable mortgage of any commercial or Residential immovable properties. iv) To provide additional collateral of value for the enhanced limits, by way of lien marked fixed deposit for a period until the fixed deposit is replaced with exclusive charge by way of equitable mortgage of any commercial or Residential immovable properties to make the collateral security covered equal to 35% of the total sanctioned limits. Unconditional & irrevocable personal guarantees of a) Mr Balvinder Singh

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Inventory: Uniform margin of 25% against all components of inventory. Book debts: Covered period : 90days, Margin: 25%

residing at flat no 502, Banjara Petals Apartments, Road No 5, Banjara Hills, Hyderabed 500034 (Net worth at March 31, 2009 Rs. 3731 Lakhs) b) Mrs Baljit kaur residing at flat no 502, Banjara Petals Apartments, Road No 5, Banjara Hills, Hyderabed 500034 (Net worth at March 31, 2009 Rs 1410 Lakhs) Personal guarantee of all the property owners offering collateral properties if any. the total collateral security cover equal to 35% of the total sanctioned limits. Unconditional & irrevocable personal guarantees of i)Mr Balvinder Singh residing at flat no 502, Banjara Petals Apartments, Road No 5, Banjara Hills, Hyderabed 500034 (Net worth at March 31, 2009 Rs. 373.10 Million) ii)Mrs Baljit kaur residing at flat no 502, Banjara Petals Apartments, Road No 5, Banjara Hills, Hyderabed 500034 (Net worth at March 31, 2009 Rs 141.00 Million) iii)Personal guarantee of all the property owners offering collateral properties if any.

Cash Credit (Hyp) & Letter of Credit

OBC

Cash Credit: 800/Letter of Credit: 200/-

Rate of Interest: BR+4.50% (Present BR of the bank is 8%, which translates into an interest rate of 12.50% at present) with monthly rests. Margin: 25% stock and receivables not older than 90 days Letter of Credit

Repayable on Demand

794.28/- Primary Security: i)Cash Credit: Pari passu first charge (Hyp) on all the stocks, book debts and other current assets along with other WC bankers. ii)Letter of Credit: a) Documents to title to goods in case of LC on DP basis. b) Hypothecation charge over the goods in case of LC on DA basis. (Documents to be delivered against trust receipt in case of LC on DA basis.) Collateral Security i)Cash Credit: 2nd charge on fixed assets of the

175

Cash Credit (Hyp) & Letter of Credit

SBM

Margin: 10% in the shape of unencumbered duly discharged TDRs. Cash Credit: Rate of 1500/Interest: Letter of Floating rate of 6.25% above Credit: 400/Base Rate present effective rate 14.00% Cash Credit : Margin: Stock in trade :25% Receivables:3 0% No drawing power will be allowed against receivables outstanding more than 60 days.

Repayable on Demand

Letter Credit:

of

Margin: 10% of the letter of Credit Value.

company along with other WC bankers. ii)Letter of Credit: 2nd charge on fixed assets of the company along with other WC bankers Cash Credit: Primary Security: 798.63/- i)Cash Credit: Hypothecation charge on stocks of raw materials, semi finished goods, finished goods, stores, spares, consumables (stored at the companys office, factory premises, with job workers or in transit) and receivables and all other current assets on pari passu basis with other working capital lenders within the overall limit of Rs 150.00 Crores. ii)Letter of Credit: Hypothecation charge on the goods procured under the letter of credit and extension of hypothecation charge on stocks of raw material, semi finished goods, finished goods, stores, spares, consumables (stored at the companys office, factory premises, with job workers or in transit) and receivables and all other current assets. Exclusive Collateral Security: i)Mortgage of residential site held in the name of the company, admeasuring 24.50 guntas located at Sy.No.159,katha No.655 and presently katha No.696/1 attached to AECS lay out, C Block, Chikka Begur Village ,Begur Hobli, Bangalore South Taluk, Valued at Rs 5.90 Crores as per valuation report dated 12.11.2008). ii) Lien on fixed deposits of Rs 1.14 Crore held in the name of company. iii) Mortgage of Flat No 402,4th Floor, Blssoms Residency,(Sri Hari Classic) H.No:6-3-347/22/1, Dwakapuri colony, Punjagutta, Hyderabad (Approximately valued at Rs 2.00 Crores. Valuation report will be obtained before releae of enhanced limits proposed). Collateral Security for all Facilities: Pari-passu second (HYP) charge on the fixed assets of the company along with other working capital banks. Personal Guarantee: Sri Balvinder Singh (Managing Director) Net Worth Rs 37.31 Crores. Smt. Baljit Kaur (Director)- Net Worth Rs 14.10 Crores.

176

Cash Axis Credit& Bank Letter LTD of Credit

Cash Credit : 1000 /Letter of Credit: 275/-

Rate of Interest: BPLR 2.50% i.e.,12.25% p.a. payable at monthly rests. Margin: The DP will be calculated by applying the margins mentioned below: Raw Material25% Stock in Process-25% Finished Goods & Package Material 25% Outlets and Spares-25% Book debts (Cover period 90 days) Letter of Credit: Margin: 10% to be collected upfront and kept in TDR with Banks lien noted thereon.

Repayment on Demand

963.83 /-

Primary Security: 1) Cash Credit: 1st pari passu charge on entire current assets of the company Collateral Security i) Second pari passu charge on fixed assets of the company. ii) Exclusive charge on equitable mortgage on the malakpet property valued. iii) Personal guarantee of Promoter directors Mr. Balvinder Singh and Mrs. Baljit Kaur.

2) Letter of Credit: i) Goods procured under Letter of Credit. ii) Security given for cash credit.

177

Short Term Loan (WC)

Barclays Bank PLC

Short Term Loan: 2500/for Working capital requirements.

Rate of Interest: The interest rate will be agreed between the bank and the borrower. Margin: The sum of (a) 30% margin on debtors up to 60 days, (b) 25% margin on work in progress, and (c)25% margin on raw materials and/or finished goods, less creditors.

Repayment on Demand

Term loan & Cash Credit

Andhra Bank

Term loan 500/for setting up and operate 200 retail outlets as part of expansion plan.

Term Loan: Rate of Interest: -BMPLR+ 2.50% (Spread) +TP.= 12.00%+2.50 %+0.25 = 14.75% (at present). Margin: (25%) Cash Credit: Rate of Interest: BMPLR+ 2.50% (Spread) = 12.00% + 2.50% = 14.50% Margin: 25% on stocks & 50% on book debts not older than 60 days.

Cash Credit: 500/- (Rs.2.50 crores against the Book Debts not older than 60 days) for Working capital requirements.

Term Loan: 18 Quarterly Installments with 3 Quarters moratorium period from disbursement. The repayment will start from III quarter of 2010-11. (Interest will be serviced as and when debited) 12 Months (Tenor)

Existing Security: i) First Charge by way of hypothecation on the entire current assets of the borrower, both present and future for amount of INR 1500/of the facility. ii)Exclusive mortgage over the immovable commercial property of Balvinder and Baljit Kaur , Situate at G-4,Groung floor,Anshu Colours (Dr Nalinis Anshu Colours),MCH no:82-293/82/A/70, Road No 1, Jubilee Hills , Hyderabad (Value INR 17.30 Mio ) for amount of INR 1500/- of the facility. iii)Exclusive mortgage over the immovable commercial property of Baljit Kaur, Situated at No 70, Plot No 76, Survey No 122(part), Mithila Nagar, Saket,Kapra,Block No 1, Kapra Mplly, Keesara Mandal, Ranga Reddy District, Hyderabad (Value INR 13.10 Mio) for amount of INR 1500/- of the facility. iv)Exclusive mortgage over the immovable commercial property of Balvinder Singh, situated at No 69,Plot No75, Survey No 122 (part), Mithila Nagar, Saket,Kapra,Block No 1, Kapra Mplly, Keesara Mandal,Ranga Reddy District, Hyderabad (Value INR 13.10 Mio) for amount of INR 1500/- of the facility. Term Loan: 1). Term loan: 498.28/- i) First charge on Pari Passu basis on and Cash fixed assets acquired for the project Credit: expansion acquired out of term loans 388.87/- among all the banks i.e. SBI, Axis Bank, State Bank of Hyderabad, State Bank of Mysore, Allahabad Bank, United Bank of India and Tata Capital Limited for term loan limits. ii) Second Charge on Pari Passu basis on stocks, Book Debts and all chargeable current assets of the company among all the banks i.e. SBI, Axis Bank, State Bank of Hyderabad, State Bank of Mysore, Allahabad Bank, Barclays Bank, United Bank of India and ICICI Bank for term loan limits. 2). Cash Credit: i).First Charge on Pari Passu basis on stocks, Book Debts and all chargeable current assets of the company among all the banks i.e. SBI, Axis Bank, State Bank of Hyderabad, State Bank of Mysore, Allahabad Bank, Barclays Bank, United Bank of India and ICICI Bank for fund based working capital limits. ii). Second charge on Pari Passu basis

2,512.09/-

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on fixed assets acquired for the project expansion acquired out of term loans among all the banks i.e. SBI, Axis Bank, State Bank of Hyderabad, State Bank of Mysore, Allahabad Bank, United Bank of India and Tata Capital Limited for fund based working capital limits. 3)Collateral Security: The company is offering Term Deposit of 25% of the amount of the Credit limit sanctioned by the bank, which will be substituted with urban land/building property(worth not less than 25% of credit limit) within a time period of 90 days from the of disbursement. 1) Term Loan: Primary Security: First charge on fixed assets of the Company, both present and future, ranking pari-passu with other banks sanctioning term loans for the expansion project. Collateral Security: Second (Hypothecation) charge on current assets of the Company, both present and future, ranking pari-passu with other lenders of the expansion project. 2) Cash Credit limit: Primary Security: First charge on current assets of the Company, both present and future, ranking pari-passu with other Working Capital lenders of the Company. Collateral Security: Second (Hypothecation) charge on fixed assets of the Company, both present and future, ranking pari-passu with other Working Capital lenders of the Company. Collateral Security For Term Loan & Cash Credit: 1. Exclusive charge on residential property at H.No.1-1-31/11/310 & 311, Block No.1, Plot No.49 & 50 Part , S.No.125 part, 127 part situated at Saket Voria Enclave, Saketnagar, Kapra Municipality, Keesara Mandal, Rnga Reddy dist. In the name of PCH Retail Limited, valued Rs. 2.68 Crore as per valuation report dated 25.02.2009 (Branch officialsvalution Rs. 2.40 Crore). 2. Residential plot No. 819/MIG, S.Nos.302 to 310, 320 to 322, 324 to 361 to 365, 384,385,387 to 391 & 399, situated at Nallagandla village, Serilingampally Mandal & Municipality, Rnga Reddy dist., In

Term Loan &Cash Credit

Allahaba d Bank

Term Loan: i)Rate of Interest: PLR+1.50% (floating) p.a with monthly rest. This Rate of Interest will be reset at the end of two years from first sanction, i.e on Cash Credit: 22.12.2010. 1000 /ii)Margin: (46% as existing) Cash Credit : i)Rate of Interest :PLR+1.50% (floating) p.a. with monthly rest. ii)Margin: 25% on Stocks and Book Debts up to 90 days

Term 500/-

Loan:

Term Loan: Moratorium period: Form 21.01.2010 to 20.01.2011. Repayment of Principal: In 25 quarterly Installments of Rs. 20 lakhs each, commencing from 21st January 2011. Cash Credit: On demand

Term Loan: 456.62/and Cash Credit: 887.43/-

179

Cash Credit

SBH

Working Capital : Fund Based Cash Credit1000/& Non-Fund Based Letter of Credit500/-

Rate of Interest: Pricing at 1.75% above SBHPLR, current effective rate 14.00% p.a (floating) for the proposed Fund Based Working Capital limits. Margin: i)Cash Credit: Finished goods (25%). Receivables (Cover 60 days) (25%).Letter of Credit (10%) ii) Letter of Credit: 10%.

Repayable on demand

the name of PCH Retail Limited, valued Rs. 0.52 Crore as per valuation report dated: 01.03.2009 (Branch officials valuation Rs. 0.40 Crore) 3. Additional collateral security of Rs. 1.80 Crore to be provided to cover the total Cash Credit and Term Loan limits. Initially, Pledge of FDR of Rs. 1.80 Crore may be accepted to be substituted later by mortgage of equivalent value of property acceptable to the bank. 994.74/- 1)Cash Credit : i)Primary Security: First charge over the entire current assets of the company including stocks, receivables and other current assets ranking pari-passu with other WC Lenders. ii)Collateral Security: Pari-Passu second (Hyp) charge on fixed assets. iii)Personal Guarantee: a)Shri Balvinder Singh (Managing Director). b)Smt Baljit Kaur (Whole time Director) 2)Letter of Credit: i)Primary Security: a) All the Securities applicable to fund based working capital limit will cover the letter of credit limits. b)Application-cum-indemnity from the borrower in respect of every letter of credit. ii)Collateral Security: Extension of all the collateral securities applicable to fund based limit to cover the letter of credit limits. iii)Personal Guarantee: a)Shri Balvinder Singh (Managing Director). b)Smt Baljit Kaur (Whole time Director) 3)Other Critical Covenants: The Standard covenants and negative covenants applicable to term loans and working capital advances will be applicable.

180

10

Term TATA Loan Capital &Worki Limited ng Capital Deman d Loan

Term Loan : 650/Working Capital Demand Loan: 100/-

Term loan :13.00% P.a Margin: Interest to be paid on monthly basis on reducing balance Principal After a moratorium of 1 year principal to be paid in 16 quarterly installments. 13.00%. Working Capital Demand Loan: Interest to be paid on monthly basis on reducing balance Principal two half yearly payments of Rs. 50 lakhs. Rate of Interest: PLR -2.00% pa (presently at 13.00% pa.) payable Monthly Margin: Minimum equity margin of 38%.

Term Loan : 5 Years Interest monthly Working Capital Demand Loan: Months

Term loan: 314.74/-.

12

i) Exclusive charge on the fixed assets of either the 12 outlets or outlets having total area of about 30,000sq.ft. ii) Equitable mortgage of the two row houses at saket, kapra, ECIL, Hyderabad having land area of 2681 Sq.Fts,each,Valuing around around Rs. 2.5 Crores. iii) Equitable mortgage of the showroom located at road \No. 10, adjacent jubilee hills check post having an area of about 1135 sq yards valuing around Rs. 1.5 crores. iv)Second charge on fixed assets & current assets v)Personal Guarantee of Promoter directors Mr. Balvinder singh and Mrs. Baljit Kaur having a net worth of 14.73 crores & Rs. 5.62 crores respectively vi) Equity stake conversion in case of default.

11

Term Loan

Axis Bank LTD

Term Loan: 1200/-

48 Equal monthly installments after a moratorium of one year (Tenor : 5 years (including a moratorium of one year)

363.59/- i)Primary Security: i) Exclusive charge on the fixed assets of the company. ii) Exclusive equitable mortgagee on the Malakpet Property. ii)Collateral Security: i) Second pari passu charge on the current assets of the company. ii) Escrow of credit card receivables from the outlets financed by UTI bank. iii) Lien on lease deposits backed by undertaking letters from lessors. iii)Personal Guarantee of promoter directors: Mr. Balvinder Singh and Mrs. Baljit Kaur. iv)Other Covenants: 1) The Borrower shall at quarterly intervals. Provide a certificate from the Chartered Accountant. To the satisfaction of the Bank Certifying.

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12

Term Loan

SBM

Term Loan: 1000/-

Rate of Interest: SBM-2, at 0.50% above SBMPLR, presently at 14.25% p.a floating with reset of spread after every 2 years. Margin: 25% (Proposed) Margin: 39.20% (Proposed)

Total 24 quarterly installments.

13

Term Loan

SBH

Term Loan: 2000/-

Rate of Interest for: Pricing at 15.00% p.a. (floating) i.e.2.00% above SBHPLR for the proposed TL limits for SBH-5 rated company under the new CRA model. Margin: Proposed 39.20%

24 Quarterly Installments Beginning from June09.

14

Term Loan and Cash Credit

SBI

Term Loan: 1984/Cash Credit: 4000/-

Rate of Interest: Term loan: 1.00% above SBAR, Present effective rate being 13.25% or the rate charged by other Bankers under MBA whichever is higher. Rate of Interest:

Term Loan: 24 Quarterly Installments Cash Credit: Payable on demand

Primary Security: Pari passu ( Hyp) charge on fixed assets to be acquired out of Term Loans to be availed under expansion project Collateral Security: i) EM of 5 Properties (exclusive to SBM) valued at Rs. 6.29 Crores. (These properties are to be mortgaged as collateral for WC limits also). Personal Guarantees (Term loan and Cash Credit): i) Shri Balvinder Singh-Net worth Rs 25.42 Crores (Net worth as on 31.03.08). ii) Smt Baljit Kaur-Net worth-Rs 12.49 Crores. (Net worth as on 31.03.08). Term loan: i)Primary Security: 1,500.53/- Pari passu (Hyp) charge on fixed assets to be acquired out of Term Loans to be availed under expansion project. ii)Collateral Security: a) Properties worth to the extent of 25% of the total loan amount (i.e., Rs 7.00 Crores) will be given for equitable mortgage with in a period of 6 months. The company is in the process of identifying the property and the property to be offered will be land and building situated in Hyderabad City (Banjara Hills, Jubilee Hills, Madhapur and Gachibowli). In the meanwhile equivalent amount (Rs. 7.00 crores) by way of TDR will be places with the branch as Collateral security. b) Pari passu second charge (Hyp) on current assets of the company. iii)Personal Guarantee: a)Shri Balvinder Singh -24.99 Crores, as on 31.03.2008. b) Smt. Baljit Kaur -12.06 Crores. as on 31.03.2008 Term Loan: Term Loan: 1,836.70/- Primary Security: Cash Credit: i)Pari passu (Hyp) first charge on 2,990.90/- fixed assets along with other lenders. Collateral Security: i)Extension of EM of 10 properties (Exclusive to SBI) belonging to promoters. ii)EM of additional two city properties on exclusive basis valued not less than Rs 3.00 Crores. iii)Pari Passu second charge on stocks, book debts and other current assets with other term lenders. ((i) and (ii) are exclusively given to SBI as collateral for WC and

797.67/-

182

15

Cash Credit

SBI

4.88/- USD Million

16

Vehicl e Loan

ICICI

17.00/-

Cash Credit: 1.00% above SBAR, Present effective rate being 13.25% p.a.at monthly rests or the rate charged by other participating banks whichever is higher. Margins: Finished Goods -25%, Receivables (Cover 60 days) -30%, Letter of Credit (usance 90 days)-25%. Rate of Interest: The loan will carry rate of interest at 3.25% above 6 months LIBOR at monthly rests, as on the date as on the date of disbursement of the loan. The LIBOR rates shall be the rate quoted by FD, Kolkata as available with reference the Reuter Screen. The rate of interest will be rounded off to the next higher multiple of 0.05%. The interest will be reset after six months. 11.99%

extended to cover Term Loan). Cash Credit: Primary Security: Pari passu first charge (Hyp) on all the stocks,book debts and other current assets along with other WC bankers. Collateral Security: i)EM of 10 properties (Exclusive to SBI) belonging to promoters. ii)EM of additional two city properties on exclusive basis valued not less than Rs 3.00 Crores. iii) Second pari passu charge on fixed assets of the company along with other WC bankers. Personal Guarantee: i)Shri Balvinder Singh. ii) Smt Baljit Kaur.

11 Months

924.74/-

60 Installments each Rs. 37,434.00 Starting from 10-04-2008

8.60/-

Vehicle (Honda CRV).

183

17

Vehicl e Loan

Axis

3.49/-

10.50% p.a (On monthly reducing basis)

18

Vehicl e Loan

Axis

9.00/-

10.00% p.a (On monthly reducing basis)

19

Vehicl e Loan

HDFC

6.4/- Rate of (3.20+3.20) Interest 11.88% p.a (On monthly reducing basis)

20

Housin Indiabulls g Loan Housing Finance Ltd

463.14/-

21

22

Housin Future g Loan Capital Financial Services Ltd Retail BMW Financ Financial e Services (Auto- India loan)

1327/-

42.3/-

Rate of Interest: 9.75% Interest type: Adjustable Rate of Interest. ROI as charged to the customer 14%, Floating/ Fixed Rate of Interest : 9.64% Per annum

36 Installments each Rs. 11,245.00 Starting from 01-02-2010 to 1-12-2012 36 Installments each Rs. 28,800 Starting from 01-12-2009 36 Installments each Rs. 10,610 of two vehicle loans Starting from 01-12-2009 to 07-05-2012 120 Installments each Rs 6,30,911/Staring from 01.02.2011 to 01.01.2021. 180 Months

2.43/-

Vehicle (Indica).

6.06/-

Vehicle (HONDA CITY).

3.29/-

Vehicle (2Nos Tata Indica)

463.14/- Plot No.45,Huda Enclave, T S No.1 (P)2,(P)&3(P),Shaikpet Village,Jubilee Hills,Golconda Mandal,Hyderabad.

23

Term Loan

SBH

3000/-

Rate of Interest: 6.75% above SBH Base Rate, present effective rate 15.75 % p.a (floating) with reset of spread after every 2 years from the date of first disbursement. Margins : 39.90%

36 Months (Each Installment 1,34,690). EMI Start Date : (16-042011 to 1602-2014) Payment Structure : Normal 6 years 5 months including a moratorium period of 14 months

House Bearing No 116, MCH No-82-120/84, in S Y No 403/17, admeasuring 2022 sq yds situated at Dilruba, Road No 2, Banjara Hills, Hyderabad. Vehicle Details : BMW 5 Series 530d Vehicle Cost : 5647030/-

Primary : Term Loan I: Pari-passu first charge (Hyp) on fixed assets. Term Loan-II : First Pari-passu charge on the entire fixed assets of the company along with other term loan lenders Collateral :Term Loan I: Pari-pasu second charge on stocks, book debts and other current assets. Term Loan II: Pari-pasu second charge on stocks, book debts and other current assets. Personal Guarantee: i) Shri Balvinder Singh, MD 13.96 (crores) As on 10.09.10 ii) Smt Baljit Kaur, Wholetime Director 3.81 Crores As on 10.09.10

184

Statement of Unsecured Loans Particulars

Annexure IX (INR in Lakhs)

For the Period For the year ended ended 31-Dec-10 31-Mar-10 31-Mar-09 31-Mar-08 From Director's 46.41 Note: There are no defaults or re-schedulement on above mentioned loans and no penalty has been levied.

31-Mar-07 26.00

Note: The above interest free Unsecured Loans taken from the Directors are repayable on demand. None of the Unsecured Loans includes the amount taken from the directors, promoters, promoter group of the issuer company in any way other than those which are specifically mentioned in annexure XII relating to related party transactions. Annexure X Statement of Current Liabilities & Provisions (INR in Lakhs) Particulars For the Period For the Period ended ended 31-Dec-10 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07 a) Current Liabilities: Sundry Creditors 2,673.33 1,325.90 1,240.35 461.95 180.79 Outstanding Expenses 347.74 326.64 212.34 516.68 36.74 Advances Received From Customers 45.67 3,021.07 1,652.53 1,452.69 978.62 263.20 Total (A) b) Provisions: Provision for Income Tax 825.53 513.69 419.53 431.14 205.07 Provision for Gratuity 12.62 7.87 3.94 1.3 838.16 521.56 423.47 432.51 205.07 Total (B) Grand Total (A+B) 3,859.23 2,174.09 1,876.15 1,411.13 468.27 Note: None of the Current Liabilities & Provisions includes the amount due to the directors, promoters, promoter group of the issuer company in any way other than those which are specifically mentioned herein below. As per the representation received from the Management and relied upon by us, there are no outstanding dues of small scale industrial undertaking(s) exceeding Rs. 1 Lakh which is outstanding for more than 30 days Amounts due to promoters/promoter group companies/relatives of directors/associate companies: Particulars For the Period For the year ended ended 31-Dec-10 31-Mar-10 31-Mar-09 31-Mar-08 PCH Marketing Pvt .Ltd. 12.34 8.29 5.42 PCH Telecom (India) Pvt. Ltd. 19.95 PCH Distributors Pvt. Ltd. 20.38 Total 52.67 8.29 5.42 Statement of Other Income Particulars

31-Mar-07 1,882.17 1882.17 Annexure XI (INR in Lakhs)

For the Period ended 31-Dec-10 51.31 32.00 83.31 86.74 0.28 21.47 3.56 112.05 195.36

For the year ended 31-Mar-10 34.98 34.98 34.98 185 31-Mar-09 2.64 14.76 17.40 44.76 11.98 56.75 74.15 31-Mar-08 31-Mar-07 -

Recurring Nature Interest on Loans & Advances and Deposits Commission received on Credit Card sales Rent Total (A) Non - Recurring Nature Insurance Claims Commission On Others Cash Discount Other Receipts Total (B) Grand Total (A+B)

Annexure XII Related Party Transactions as per Accounting Standard (AS-18) on Related Party Disclosures Issued by ICAI, the Disclosures of Transaction with the related Parties are as FollowsPromoters Name Balvinder Singh Baljit Kaur Designation From Managing Director Whole-time Director NIL 03.01.2007 03.01.2007 Period To Till Date Till Date Annexure

Subsidiary Companies Other Related Parties where Common control exists : Companies PCH Marketing Pvt. Ltd. PCH Agencies Pvt. Ltd. PCH Distributors Pvt. Ltd. PCH Retail Solutions Pvt. Ltd. PCH Telecom (INDIA) Pvt. Ltd. PCH Constructions Pvt. Ltd. PCH Life Style Pvt. Ltd. PCH Holdings Pvt. Ltd. PCH Impex Pvt. Ltd.

NIL

NIL

Partnership Firms

Proprietorship Firms PCH Agencies

186

Related Party Transactions As per Accounting Standard 18 Related Party Disclosures PARTICULARS NATURE OF RELATIONSHIP NAME OF RELATED PARTY For the period ended 31-12-10 Income & Expenses Sales Companies/Firms in which Promoters has significant interest Total Companies/Firms in which Promoters has significant interest Total Companies/Firms in which Promoters has significant interest Total Relatives of Promoters Total Promoters Total Companies/Firms in which Promoters has significant interest Total Promoters PCH Agencies Pvt. Ltd. PCH Lifestyle Pvt. Ltd. 0.68 11.62 12.30 6,682.25 19.95 20.38 6,722.58 62.00 9,178.44 5,413.69 2,251.35 31-03-10 For the year ended 31-03-09 31-03-08

Annexure XII (INR in Lakhs)

31-03-07 1,882.17

Purchases

PCH Marketing Pvt. Ltd. PCH Telecom (India) Pvt. Ltd. PCH Distributors Pvt .Ltd. PCH Agencies Pvt. Ltd.

9,178.44 -

5,413.69 -

2,251.35 -

1,882.17 -

Purchase of Properties

Gurjit Singh Sutinder Singh Balvinder Singh Baljith Kaur PCH Distributors Pvt. Ltd.

62.00 29.00 18.00 47.00 32.00

36.00 24.00 60.00 -

204.14 19.42 35.78 24.50 60.29 -

13.61 8.26 21.87 -

0.75 0.75 1.50 -

Managerial Remuneration

Rent Received

Balvinder Singh Baljith Kaur

32.00 -

35.05 11.36 46.41 -

16.00 10.00 26.00

16.00 10.00 26.00 -

Loans Received during the period

Total Promoters Total 187 Balvinder Singh Baljith Kaur

Loans Repaid during the period

35.05 11.36 46.41

Outstanding Balance at the end of the year Receivables (net of Payable)

Companies/Firms in which Promoters has significant interest

PCH Marketing Pvt. Ltd. PCH Distributors Pvt. Ltd. PCH Telecom (India) Pvt. Ltd. PCH Agencies Pvt. Ltd. PCH Lifestyle Pvt. Ltd.

(12.34) (20.38) (19.95) 0.68 11.62 (40.37) (1,066.18) (20.38) 0.68 (19.95) 11.62 (1,094.21) -

(8.29) -

(5.42) -

(1,882.17) -

Total Promoters Closing Balance (Loans Received) Total Companies/Firms in which Promoters has significant interest Balvinder Singh Baljith Kaur PCH Marketing Pvt. Ltd. PCH Distributors Pvt. Ltd. PCH Agencies Pvt. Ltd. PCH Telecom (India) Pvt. Ltd. PCH Lifestyle Pvt. Ltd. Total Promoters Total Balvinder Singh Baljith Kaur

(8.29) 35.05 11.36 46.41 (983.70) -

(5.42) (1,796.97) -

(87.09) -

(1,882.17) 16.00 10.00 26.00 -

Maximum Outstanding Balance(Debtors, Creditors and Advances)

(983.70) 35.05 11.36 46.41

(1,796.97) -

(87.09) 16.00 10.00 26.00

Maximum Outstanding Balance (Loans Received and Loans Given)

Note: a)The related party relationships have been identified by the management and relied upon by the auditors. b)Figures in Bracket indicate Credit Balances.

188

Tax Shelter Statement Particulars

Annexure XIII (INR in Lakhs) For the Period Ended 31-Dec-10 1,737.66 33.22% 577.21 31-Mar-10 1,193.95 33.99% 405.82 For the Year Ended

Net Profit before Taxes, as restated Tax Rate (%) Tax as per Net Profit Before Tax (A) Adjustments Permanent Differences 1.Donations (disallowed portion) 2. Asset Capitalized under Companies Act, but allowable as Repairs and Maintenance under IT Act, 1961 3.Loss on sale of Fixed Assets 4.Preliminery Expenses/Trade Marks Total Permanent Difference (B) Timing Difference 1.Provision for Gratuity 2.Difference between Tax Depreciation & Book Depreciation Total of Timing Difference (C) Total Adjustments (B+C)

31-Mar-09 1,007.48 33.99% 342.44

31-Mar-08 1,046.14 33.99% 355.58

31-Mar-07 86.03 33.66% 28.96

52.00 -

3.58 (156.42)

1.58 (87.04)

2.35 (292.60)

(5.03) 46.97 4.76 89.66 94.41 141.38 46.96 624.17

(3.96) (156.81) 3.93 87.84 91.77 (65.04) (22.11) 383.72

(2.45) (87.92) 2.56 (262.38) (259.81) (347.73) (118.19) 224.25

0.22 (3.03) (293.07) 1.37 16.52 17.90 (275.17) (93.53) 262.05

1.08 1.08 1.08 0.36 29.32

Tax Expense/(Saving) Thereon (D) Tax Liability After Considering the effect of adjustments (A) - (D) Statement of Accounting and Other Ratios Particulars

Annexure XIV For the Period Ended 31-Dec-10 12,778.18 1,200.34 2,46,15,500 2,24,70,581 5.34 9.39 51.91 51.91 For the Year Ended 31-Mar-10 11,577.84 726.82 2,24,70,500 2,16,28,462 3.36 6.28 51.52 51.52 31-Mar-09 7,914.02 525.58 2,02,78,500 1,59,60,432 3.29 6.64 39.03 39.03 31-Mar-08 2,633.94 718.93 1,46,03,500 1,25,89,382 5.71 27.29 18.04 18.04 31-Mar-07 1,271.51 16.51 1,25,50,000 39,29,310 0.42 1.30 10.13 10.13

Net worth as at the end of the year(Rs in Lakhs) Net Profit after Tax, as restated (Rs. In Lakhs) No. of equity shares outstanding at the end of year Weighted average no. of equity shares outstanding during the year Basic & Diluted Earnings per Share (Rs.) (As per AS-20- Earnings Per Share) Return on Net Worth (%) Net Asset Value per Share (Rs.) Book Value per Share (Rs)

189

The ratios have been computed as below:

Basic & Diluted Earnings per Share

Net Profit after Tax, as restated, attributable to shareholders Weighted average no. of equity shares outstanding during the year/period

Return on Net Worth (%)

Net Profit after Tax, as restated Net Worth (excluding revaluation reserve) as at the end of the year/period Net Worth as at the end of the year/period No. of equity shares outstanding as at the end of the year/period

X100

Net Assets Value per Equity Share

Book Value per Equity Share

Net Worth (excluding revaluation reserve )as at the end of the year/period No. of equity shares outstanding as at the end of the year/period

1. 2. 3. 4. 5.

6. 7.

Net Worth means Equity Share Capital + Reserves & Surplus (Net of Revaluation Reserve) Miscellaneous Expenditure Weighted average no. of shares has been calculated on time basis. The figures above are based on the restated financial statements of the Company Earnings per share calculations are done in accordance with Accounting Standard-20 "Earning per share" issued by the Institute of Chartered Accountants of India Restated net profit, as appearing in the restated Statement of profits and losses (Annexure II) and net worth as appearing in the statement of restated assets and liabilities (Annexure I), has been considered for the purpose of computing the above ratios. Calculation of ratios for post issue has not been considered. There are no securities outstanding having potential dilution effect on the equity shares during the above period. The Share application money is not considered as having potential dilution effect.

Annexure XV Statement of Earnings per Share Particulars (INR in Lakhs) For the Period Ended 31-Dec-10 Net Profit after Tax, as restated (Rs. In Lakhs) Weighted average no. of equity shares outstanding during the year Nominal Value of Per ordinary Share (In Rs.) Basic & Diluted Earnings per Share (Rs.) (As per AS-20- Earnings Per Share) 1,200.34 2,24,70,581 10/5.34 31-Mar-10 726.82 2,16,28,462 10/3.36 For the Year Ended

31-Mar-09 525.58 1,59,60,432 10/3.29

31-Mar-08 718.93 1,25,89,382 10/5.71

31-Mar-07 16.51 39,29,310 10/0.42

190

Statement of Rates and amount of Dividend Particulars

Annexure XVI For the Period ended 31-Dec-10 10 Nil Nil Nil For the year ended 31-Mar-10 10 Nil Nil Nil 31-Mar-09 10 Nil Nil Nil 31-Mar-08 31-Mar-07 10 10 Nil Nil Nil Nil Nil Nil Annexure XVII (INR in Lakhs) Pre- Issue as at Adjusted for March 31, 2010 Public Issue * 7,121.72 9,413.70 16,535.42

Face Value of Equity Shares (Rs.) Interim Dividend on each Equity Share (Rs.) Final dividend on each Equity Share (Rs.) Dividend Rate (%) Capitalization Statement Particulars Borrowings Long Term Debt Short Term Debt Total Debt

Pre- Issue as at Dec 31, 2010 7,599.73 14,132.24 21,731.97

Shareholders Funds Share Capital (include Share Application Money) Reserves Less : Debit Balance in P&L Less: Miscellaneous Expenditure to the extent not Written off Total Shareholders Fund (Net Worth) Long Term Debt/ Equity Share Capital Long Term Debt/ Shareholders funds (Net Worth) *Will be updated at the time of prospectus.

2,461.55 10,316.63 12,778.18 3.09 0.59

4,392.05 7,185.79 11,577.84 1.62 0.62

The Company had issued 20,23,000 Equity shares of Rs. 10/- each, out of which 2,00,000 to promoters and 18,23,000 to non promoters at a price of Rs 100/- (inclusive of premium of Rs 90/- per each equity shares). Total No. of shares Allotted to Promoters Allotted 07-03-2011 1223000 200000 1. 18-03-2011 400000 2. 24-03-2011 400000 3. Total 2023000 200000 As a result, the paid up equity share capital of the company has increased from Rs. 24,61,55,000/- to Rs. 26,63,85,000/-. Notes: 1. Short term Debts represent which are due within 12 months. 2. Long term Debts represent debts other than Short term Debt as defined above. 3. The figures disclosed above are based on re stated Standalone Summary statement of Assets and Liabilities of the company as at 31st March 2010 and for the period ended 31st December 2010. 4. Long term To Equity = Long term Debts/ Share holders Funds 5. Total Debt to equity ratio = Total Debt/ Share holders Fund 6. Share Application Money is considered for calculation of Shareholders Fund. 7. The corresponding post issue figures are not determinable at this stage pending the completion of book building process and hence have not been furnished Annexure XVIII Contingent Liabilities (INR in Lakhs) Particulars For the Period For the year ended ended 31-Dec-10 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07 Rent Claims 38.01 38.01 38.01 Income tax 2.93 2.93 2.93 2.93 2.93 Total 40.94 40.94 40.94 2.93 2.93 Sl.No. Date of Allotment

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS The following discussion of our financial condition and results of operations should be read in conjunction with our restated financial statements for the period ended December 31, 2010 and as of and for the Fiscal years ended March 31, 2010, 2009, 2008 and, 2007 restated in accordance with SEBI Regulations, including the notes thereto. Our restated financial statements were prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations and restated as described in the report of our Statutory Auditor Karumanchi & Associates, Chartered Accountants dated May 25, 2011 in the section titled Financial Statements beginning on page 160 of the Draft Red Herring Prospectus. You should also read the Chapter titled Risk Factors beginning on page 11 of the Draft Red Herring Prospectus which enumerates number of factors and contingencies that could impact the Companys financial condition and result of operations. Our financial year ends on March 31 of each year, so all references to a particular fiscal year are to the 12month period ended March 31 of that year. The Companys historical performance may not be considered as indicative of future financial performance. Business Overview We are one of the leading retailers of Consumer Durables & Electronics products in Andhra Pradesh and also have good presence in Tamil Nadu, Karnataka and Maharashtra. We retail products of all major brands through our 110 MBOs and 11 warehouses spread across an area of 6, 21,000 sq. ft. We have established operations in 28 cities across four states of India viz., Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. The Company is promoted by Sardar Balvinder Singh and Mrs. Baljit Kaur. In the year 2001, Sardar Balvinder Singh started a Proprietorship Firm namely, M/s PCH Business which dealt in retail & wholesale trading of electronic consumer durables of Videocon & Sony. In the year 2003, Sardar Balvinder Singh started PCH Group comprising of 3 partnership firms viz., M/s PCH Associates which dealt in retail trading of electronic goods & allied products and home appliances, M/s PCH Mobile Zone which dealt in retail & wholesale trading of mobiles and accessories and M/s PCH Sales which dealt in retail trading of electronic goods of Sony & mobiles of Sony Ericson exclusively. In March 2007, the three partnership Firms (i.e., M/s PCH Associates, M/s PCH Mobile Zone and M/s PCH Sales) and the proprietorship concern M/s PCH Business were taken over as going concerns by PCH Retail Ltd (incorporated in 2007) by way of Memorandum of Mutual Understanding dated March 04, 2007, with a focus on selling Consumer Durables, Electronics & Allied products, Home Appliances, Mobiles & Accessories, Cameras & Camcorders through wholesale trading and trading through retail outlets. As a retailer and wholesaler our endeavor is to offer one-stop shop solution to our customers. We offer our customers the whole gamut of Consumer Durables & Electronics products and most of Indian and multinational brands. Our product offering includes Washing Machines, Refrigerators, Television, LCD, LED, Audio Systems, Air Conditioners, Digital Cameras & Camcorders, Computers & Computer peripherals, Mobile Phones & accessories, Home Appliances etc. As per our Restated Financials, our total revenue for the financial year ending 2010 was `65,771.34 lakhs as compared to `43,172.18 lakhs for financial year ending 2009. During the same period our profit after tax was `726.82 lakhs and `525.58 lakhs respectively. For the nine (9) month period ended December 2010 our total revenues were `67,931.08 lakhs and profit after tax was `1,200.34 lakhs. As on date, we have the following network of 110 MBOs and 11 warehouses spread across an area of 6,21,000 sq. ft. in 28 cities in four states of India viz., Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra. STATE Andhra Pradesh Tamil Nadu Karnataka Maharashtra TOTAL Key factors affecting the results of operation Our financial condition and results of operations are affected by numerous factors and the following are of particular importance: Outlets 89 8 9 4 110 Warehouses 11 0 0 0 11

192

1. Brand Image; 2. Ability to expand in terms of number of outlets and the customer base; 3. Efficient logistics and supply chain management; 4. Ability to attract, recruit and retain good management; 5. Competition and Pricing pressures; 6. Condition and performance of the Consumer Durables industry; 7. General economic and demographic conditions. For more information on these and other factors/developments which have or may affect us, please refer to chapters titled Risk Factors, Industry Overview and Business Overview beginning on pages 11, 74 and 90 respectively of this Prospectus. OUR SIGNIFICANT ACCOUNTING POLICIES For Significant accounting policies please refer to the Section titled Financial Statements beginning on page 160 of the Draft Red Herring Prospectus. Principal Components of our Statement of Profit and Loss Account Total Income The Company is in business of retailing of products in Consumer Durables and Electronics segment. The breakup of totalincome for the earlier years are as under: (` in Lakhs)
Segment Traded Goods Other Income Increase / (Decrease) in Stocks Total Till 31.12.10 Amount % 67,931.08 195.36 6,043.98 74,170.41 91.59 0.26 8.15 100 2009-10 Amount % 65,771.34 34.98 2,468.66 68,274.98 96.33 0.05 3.62 100 2008-09 Amount % 43,172.18 74.15 2,715.39 45,961.72 93.93 0.16 5.91 100 2007-08 Amount % 21,970.57 2,329.27 24,299.84 9.59 100 90.41 2006-07 Amount % 1,842.18 2,145.38 3,987.55 53.80 100 46.20

Total Expenses The break-up of total expenses are as under: (` in Lakhs)

Till 31.12.2010 Segment Material and Consumabl es Amount Purchases Personnel Expenses Adm. Expenses S&D Expenses Financial Expenses Depreciatio n TOTAL 66,906.64 368.75 967.89 448.01 2,222.92 1,518.54 72,432.75 % 92.37 0.51 1.34 0.62 3.07 2.10 100.00 2009-10 Amount 61,409.96 487.07 1,214.84 183.92 2,250.20 1,535.05 67,081.03 % 91.55 0.73 1.81 0.27 3.35 2.29 100.00 2008-09 Amount 41,307.86 392.36 983.57 258.66 1,337.29 674.50 44,954.23 % 91.89 0.87 2.19 0.58 2.97 1.50 100.00 2007-08 Amount 21,437.36 246.52 675.46 196.73 506.63 191.00 23,253.70 % 92.19 1.06 2.90 0.85 2.18 0.82 100.00 2006-07 Amount 3,822.54 15.24 29.68 5.40 26.53 2.14 3,901.53 % 97.98 0.39 0.76 0.14 0.68 0.05 100.00

Infrastruct ure Charges

Purchase Expenses
Segment Material and consumables Till 31.12.10 Purchases 66,906.64 2009-10 61,409.96 2008-09 41,307.86 2007-08 21,437.36 2006-07 3,822.54

193

Other Expenses Administration Expenses Administration expense includes rent, rates & taxes, legal & professional services, insurance, electricity, fuel & vehicle maintenance, repair and maintenance, travelling expenses, conveyance, audit fee, brokerage & commission, recruitment charges, donations, interest on TDS, office expenses, printing and stationary, license and renewal fee, books & periodicals, sales tax, professional tax, subscription charges to club, telephone/fax & Internet expenses, security services, trademarks, discount given, postage & courier charges and other miscellaneous expenses. Personnel Expenses Personnel Expenses includes salaries & benefits, director remuneration, provision for gratuity and staff welfare expenses. Selling and Distribution Expenses Selling and Distribution Expenses includes advertisement expenses, business promotion expenses, incentives to sales staff and freight outwards. Finance Charges Finance charges consist of interest on cash credit & term loans, processing charges paid to bank & others and bank commission. Depreciation Depreciation has been provided on Written down Value Method as per rates specified in Schedule XIV of the Companies Act, 1956 as amended from time to time. Profit After Tax (` in Lakhs)
Particular PAT Sales PAT / Sales (%) 31.12.2010 1,200.34 67,931.08 1.77% 31.03.2010 726.82 65,771.34 1.11% Period Ended 31.03.2009 525.58 43,172.18 1.22% 31.03.2008 718.93 21,970.57 3.27% 31.03.2007 16.51 1,842.18 0.90%

The efforts of management in streamlining the operations of the Company has resulted in increase in margin from 1.11% in Fiscal 2010 to 1.77% for the period ended December 31, 2010. Sundry Debtors The details of debtors for the respective period are as under: (` in Lakhs)
Particulars For the Period ended 31.12.10 67,931.08 6,518.16 0 9.60 For the year ended

31.03.2010 65,771.34 5,224.63 0 7.94

31.03.2009 43,172.18 3,425.08 0 7.93

31.03.2008 21,970.57 2,008.03 0 9.14

31.03.2007 1,842.18 1,423.32 0 77.26

Sales Debtors Debts outstanding Exceeding 6 months Debts outstanding Less than 6 months Bad Debts written off Debtors as % of Sales

194

Discussion on Results of Operations

(` In Lakhs) Period ended Particulars 31.12.2010 % of Total Incom e 91.59 0.26 8.15 100.00 90.21 0.50 1.30 3.00 0.60 2.05 97.66 2.34 0.77 (0.05) 1.62 % of Total Incom e 96.33 0.05 3.62 100.00 89.95 0.71 1.78 3.30 0.27 2.25 98.25 1.75 0.68 0.00 1.06 % of Total Incom e 93.93 0.16 5.91 100.00 89.87 0.85 2.14 2.91 0.56 1.47 97.81 2.19 0.73 0.30 1.14 % of Total Incom e 90.41 9.59 100.00 88.22 1.01 2.78 2.08 0.81 0.79 95.69 4.31 1.33 2.96 % of Total Income

31.03.2010

31.03.2009

31.03.2008

31.03.2007

INCOME Sales Other Income Increase / ( Decrease ) in Stocks Total Income EXPENDITURE Purchases Personnel Expenses Administrative Expenses Financial Expenses Selling and Distribution Expenses Depreciation Total Expenditure Profit Before Tax Taxation Income Tax Deferred Tax Liability Fringe Benefit Tax Net Profit After Tax

67,931.08 195.36 6,043.98 74,170.41 66,906.64 368.75 967.89 2,222.92 448.01 1,518.54 72,432.75 1,737.66 573.15 (35.82) 1,200.34

65,771.34 34.98 2,468.66 68,274.98 61,409.96 487.07 1,214.84 2,250.20 183.92 1,535.05 67,081.03 1,193.95 467.08 0.05 726.82

43,172.18 74.15 2,715.39 45,961.72 41,307.86 392.36 983.57 1,337.29 258.66 674.50 44,954.23 1,007.48 336.57 140.02 5.31 525.58

21,970.57 2,329.27 24,299.84 21,437.36 246.52 675.46 506.63 196.73 191.00 23,253.70 1,046.14 323.63 3.58 718.93

1,842.18 2,145.38 3,987.55 3,822.54 15.24 29.68 26.53 5.40 2.14 3,901.53 86.03 69.29 0.23 16.51

46.20 53.80 100.00 95.86 0.38 0.74 0.67 0.14 0.05 97.84 2.16 1.74 0.41

Adjustments The financial information for FY 2007, 2008, 2009, 2010 and for the period ended December 31, 2010 has been restated in compliance with the ICDR Regulations. In accordance with Indian GAAP, the effects of restatement are shown as a restatement of individual line items in our profit and loss statement. Set out below is the summary of the result of the restatement of the audited financial statements for the respective years and its impact on the company: Statement of Adjustment in Profit & Loss For the Period ended 31-1210 763.44 99.66 15.15 223.63 1.57 7.87 (31.04) 120.07 195 (` in Lakhs) For the year ended 31-03-10 879.20 15.26 (6.21) (64.73) (0.69) (3.93) 27.99 (120.07) 31-03-09 844.91 (153.49) 2.23 (158.90) 0.22 (2.56) (6.83) 31-03-08 657.38 38.29 (7.29) (1.10) (1.37) 31.04 2.00 31-03-07 59.30 0.27 (3.87) (37.20) (2.00)

Particulars

Net Profit /(Loss) After Taxes as per Audited P&L A/C Excess /(Short) Provision in calculation of Depreciation Preliminary expenses (written off)/ adjusted Advertisement expenses (written off)/ adjusted Trade Marks (written off) / adjusted Provision for Gratuity Income Tax & Fringe Benefit Tax (Provision)/ Excess Provision Written Back Prior Period Items (Provisions)/ Excess

Provision written back Net Total (Decrease)/Increase due to Adjustments Net Profit /(Loss) After Tax as per Restated Profit and Loss Notes on Restated Accounts: 1. Advertisement Expenses During the Financial year 2009-10 the company had written off `55.91 lakhs as Advertisement expenses instead of `120.64 lakhs. In compliance with AS-26 (Intangible Assets) now restated and difference of `64.73 lakhs debited to Profit & Loss Account. During the financial year 2008-09 the company had written off `28.46 lakhs as advertisement expenses instead of `187.36 lakhs. Difference of `158.90 lakhs debited to Profit & Loss Account. 2. Depreciation Excess/ (Short) Provision in Calculation of depreciation details of which are provided below, now restated and charged to Profit and Loss account for the respective years. (` in Lakhs)
Particulars For the Period ended 31.12.10 1,518.54 1,518.54 For the year ended 31.03.2010 1,550.31 1,535.05 15.26 31.03.2009 521.01 674.50 (153.49) 31.03.2008 229.29 191.00 38.29 31.03.2007 2.42 2.14 0.27

436.90 1,200.34

(152.38) 726.82

(319.33) 525.58

61.56 718.93

(42.80) 16.51

Depreciation as per Audited Financials Depreciation as per Re stated Financials Difference

3.

Other adjustments a. During the Financial year 2008-09 the company had paid `21.10 lakhs towards Income Tax pertaining to the Financial Year 2006-07, now restated and credited to the P & L account for the Financial Year 2008-09 with suitable provision for the Financial Year 2006-07 During the Financial year 2009-10 the company had paid `16.10 lakhs towards Income Tax pertaining to the Financial Year 2006-07, now restated and credited to the P & L account for the Financial Year 2009-10 with suitable provision for the Financial Year 2006-07 During the Financial year 2009-10 the company had paid `11.88 lakhs towards Income Tax pertaining to the Financial Year 2008-09, now restated and credited to the P & L account for the Financial Year 2009-10 with suitable provision for the Financial Year 2008-09

b.

c.

4.

The treatment of Preliminary Expenditure, Trade Marks and Advertisement Expenditure as deferred expenditure is not in accordance with AS-26 (Intangible Assets). Hence now the accounting treatment is changed and difference amount is debited to the Profit & Loss Account. Prior period items a. Rental Expenses: During the period ended 31 Dec, 2010 the company had paid `120.07 lakhs towards rent pertaining to FY 2009-10. The said amount is restated and added to the rental expenses for the FY 2009-10.

5.

196

Results of operations from April 01, 2010 till December 31, 2010 Total Income: Our total income for the period ended December 31, 2010 was `74,170.41 lakhs which primarily consisted of sales income of `67,931.08 lakhs, other Income of `195.36 lakhs & increase in stock of `6,043.98lakhs. Total Income: Sales Sales Income constitutes the major part of our income from operations. Sale of products in Consumer Durables and Electronics segment, in retail as well as wholesale markets, for the period ended December 31, 2010 was `67,931.08 lakhs or 91.59% of total income for the period. Total Income: Other Income Other income for the period was `195.36 lakhs or 0.26% of total income for the period mainly consisting of interest on loans and advances, insurance claims and rent. Expenses: Our total expenditure for the given period was `72,432.75 lakhs. This expenditure comprised purchases, personnel expenses, administrative expenses, financial expenses, selling & distribution expenses and depreciation. Expenditure as a percentage of total income for the period was 97.66%. Purchases: Purchases were at `66,909.64 lakhs for the period ended December 31, 2010. Purchases constitute 90.21% of our total income. Personnel Expenses: Personnel Expenses were `368.75 lakhs for the period. Personnel Expenses consist of salaries & benefits, director remuneration, provision for gratuity and staff welfare expenses. Personnel Expenses as a percentage of total income for the period were 0.50%. Administration Expenses: The administration expenses were `967.89 lakhs for the period.The significant constituents of administration expenses were rent, donations, electricity, repairs & maintenance, insurance, consultancy services, rates & taxes and professional fees. Administration expenses as a percentage of total income for the period were 1.30%. Selling and Distribution Expenses: The selling and distribution expenses were `448.01lakhs for the period. The constituents of Selling and distribution expenses are advertisement expenses, business promotion expenses, incentives to sales staff and freight outwards. Selling and distribution expenses as a percentage of total income for the period were 0.60%. Finance Charges: Finance charges were `2,222.92 lakhs for the period, primarily on interest on loan, cash credit and others. Finance Charges as percentage of the total income for the period were 3.00%. Depreciation: We provided depreciation of `1,518.54 lakhs for this period. Depreciation as a percentage of total income for the period was 2.05%. Net Profit after tax: The net profit after tax for the period is `1,200.34 lakhs. As a percentage of total income for the period, our net profit after tax was 1.62%.

197

Comparison of Fiscal Year 2010 with 2009 Total Income: Our total income increased from `45,961.72 lakhs in FY 2009 to `68,274.98 lakhs in FY 2010. This increase was primarily due to increase in income from sales by 52.35%, other income by 52.83% and reduction in Increase / (Decrease) in stock by 9.09% compared to FY 2009. The overall increase was 48.55%. Total Income: Sales Income from Sales increased from `43,172.18 lakhs in FY 2009 to `65,771.34 lakhs in FY 2010 showing an increase of `22,599.17 lakhs or 52.35%. The increase was mainly on account of opening of additional outlets during the year 2010. Further, sales as a percentage of total income stood at 96.33% in FY 2010 as compared to 93.93% in FY 2009. Total Income: Other Income Other income reduced from `74.15 lakhs in FY 2009 to `34.98 lakhs in FY 2010 showing a reduction of 52.83% compared to FY 2009. Expenses: Total expenses increased by 49.22% from `44,954.23 lakhs in FY 2009 to `67,081.03 lakhs in FY 2010. The total expense as a percentage of total income increased from 97.81% to 98.25% for FY 2010. Increase in expenses was mainly due to increase in infrastructure charges. Increase in operating expenses was mainly due to increase in purchases by 48.66%, increase in personnel expenses by 24.14%, increase in administrative expenses by 23.51%, increase in financial expenses by 68.27% and increase in depreciation by 127.58% compared to FY 2009. Selling and distribution expenses decreased by 28.90% compared to FY 2009. Purchase expenses: Purchase expenses increased by 48.66% from `41,307.86 lakhs in FY 2009 to `61,409.96 lakhs in FY 2010. The total purchases as a percentage of total income increased slightly from 89.87% to 89.95% for FY 2010. Personnel Expenses: Personnel expenses include the salaries & benefits, director remuneration, provision for gratuity and staff welfare expenses. It increased by 24.14% from `392.36 lakhs in FY 2009 to `487.07 lakhs in the FY 2010. The increase was primarily due to increased hiring. Administration Expenses: Administration expenses increased from `983.57 lakhs in the FY 2009 to `1,214.84 lakhs during the FY 2010 showing increase of 23.51% mainly on account of increase in rent, donations, insurance, rates & taxes and repair & maintenance in FY 2010. Further, administrative expenses went down from 2.14% to 1.78% as a percentage of total income from FY 2009 to FY 2010. Selling and Distribution Expenses: Selling and distribution expenses decreased from `258.66 lakhs in the FY 2009 to `183.92 lakhs during the FY 2010 showing decrease of 28.90% mainly because of decrease in advertisement expenses. Further, Selling and distribution expenses went down from 0.56% to 0.27% of the total income from FY 2009 to FY 2010. Finance Charges: Finance Charges increased from `1,337.29 lakhs for the FY 2009 to `2,250.20 lakhs for the FY 2010 showing an increase of 68.27%.The increase was mainly due to increase in term and cash credit loans. Further, Finance charges as a percentage of total income stood at 3.30% in FY 2010 as compared to 2.91% in FY 2009. Depreciation: Depreciation increased from `674.50 lakhs in FY 2009 to `1535.05 lakhs in FY 2010 showing an increase of 127.58%. Further, Depreciation as a percentage of total income stood at 2.25% at in FY 2010 compared to 1.47% in FY 2009. Net Profit after tax: As a result of foregoing, the net profit after tax of the company increased from `525.58 lakhs for the FY 2009 to `726.82 lakhs for the FY 2010 an increase of 38.29%. Further, Net Profit after tax as a percentage of total income stood at 1.06% in FY 2010 as compared to 1.14% in FY 2009.

198

Comparison of Fiscal Year 2009 with 2008 Total Income: Our total income increased from `24,299.84 lakhs in FY 2008 to `45,961.72 lakhs in FY 2009 representing an increase of 89.14%. This increase was primarily due to increase in income from sales to the extent of 96.50%. Total Income: Sales Income from Sales increased from `21,970.57 lakhs in FY 2008 to `43,172.18 lakhs in FY 2009 showing an increase of 96.50%. The increase was mainly on account of opening of additional outlets during the year 2009. This increased sales to the extent of `21,201.60 lakhs during the year 2009 compared with 2008. Further, sales as a percentage of total income stood at 93.93% in FY 2009 compared to 90.41% in FY 2008. Total Income: Other Income Other income increased from Nil in FY 2008 to `74.15 lakhs in FY 2009. The increase was mainly on account of commission received to the extent of ` 59.52 lakhs and other receipts to the extent of `14.62 lakhs in the FY 2009. Expenses: Total expenses increased by 93.32% from `23,253.70 lakhs in FY 2008 to `44,954.23 lakhs in FY 2009. Increase in operating expenses was mainly due to increase in infrastructure charges on account of increase in number of outlets. Total expense constituted 97.81% of total income in FY 2009 and 95.69% in FY 2008. Personnel Expenses: Personnel expenses increased from `246.52 lakhs in the FY 2008 to `392.36 lakhs in the FY 2009, showing an increase of 59.16%.The increase was primarily due to general increase in salaries & bonuses and contribution towards staff welfare funds. Further, personnel expenses as a percentage of total income stood at 0.85% in FY 2009 compared to 1.01% in FY 2008. Administration Expenses: Administration expenses increased from `675.46 lakhs in the FY 2008 to `983.57 lakhs during the FY 2009 showing an increase of 45.61% mainly on account of increase in rent, donations, sales tax, insurance, security services, rates & taxes, repairs & maintenance in FY2009. Further, administrative expenses as a percentage of total income stood at 2.14% in FY 2009 compared to 2.78% in FY 2008. Selling and Distribution Expenses: Selling and distribution expenses increased from `196.73 lakhs in the FY 2008 to `258.66 lakhs during the FY 2009 showing an increase of 31.48%. The increase of expenses was mainly due to increase in advertisement expenses to the extent of `47.62 lakhs, business promotion expenses of `7.40 lakhs and freight outwards of `9.40 lakhs. Further, selling and distribution expenses went down from 0.81% to 0.56% of the total income from FY 2009 to FY 2010. Finance Charges: Finance Charges increased from `506.63 lakhs for the FY 2008 to `1,337.29 lakhs for the FY 2009 showing an increase of 163.96%. The increase was mainly due to increase in secured loans from banks to the extent of `5,666.78 lakhs. Further, Finance Charges as a percentage of total income stood at 2.91% in FY 2009 compared to 2.08% in FY 2008. Depreciation: Depreciation increased from `191.00 lakhs for the FY 2008 to `674.50 lakhs for the FY 2009 showing an increase of 253.14%. This was mainly due to addition of Fixed Assets to the extent of `6,832.75 lakhs. Further, Depreciation as a percentage of total income stood at 1.47% at in FY 2009 compared to 0.79% in FY 2008. Net Profit after tax: As a result of foregoing, the net profit after tax of the company decreased by 26.89% from `718.93 lakhs for the FY 2008 to `525.58 lakhs for the FY 2009. Further, Net Profit after tax as a percentage of total income stood at 1.14% in FY 2009 as compared to 2.96% in FY 2008.

199

Cash Flow Statement Set forth below is a table of selected, restated cash flow statement data for the period ended December 31, 2010 and for Fiscal 2010, 2009, 2008 and 2007: (` in Lakhs)

For Period ended December 31, 2010 Cash generated from / (used in) Operations Cash flow from / (used in) Investing Activities Cash flow From / (used in) Financing Activities Net increase / (decrease) in Cash and Cash Equivalents (799.76) (2,242.00) 2,973.63 (68.12)

Fiscal year ended March 31, 2010 2009 2008 (844.42) 2007 (3,175.20) (503.37) 3,680.83 2.26

(1,259.70) (1,338.22)

(4,938.91) (7,577.60) (2,104.70) 6,133.79 (64.82) 9,083.98 168.16 3,106.16 157.04

Net cash generated from operating activities Our net cash generated from operating activities is principally used for our operating expenses, general and administration expenses and our employee remuneration & benefits expenses. Fiscal year 2007 In the FY 2007, The Company had taken over the erstwhile PCH Business (Proprietary concern), PCH Associates, PCH Mobile Zone and PCH Sales being partnership firms in the month of March, 2007. The business was continued for 28 days only. Closing balances of receivables of `1,423.32 lakhs, inventories of `2,145.38 lakhs, loans & advances of `95.96 lakhs, current assets of ` 24.00 lakhs (including the balances of all these assets taken over) have been partly funded by current liabilities and provisions of `402.99 lakhs (including the balances of all these liabilities taken over) lead to negative cash flow situation in the FY 2007. These negative operating cash flows have been partly funded through bank borrowings (closing balance of `2,426.37 lakhs), unsecured loans (closing balance of `26.00 lakhs) and share capital (closing balance of `1,255.00 lakhs). Fiscal year 2008 In the FY 2008, the cash generated from operations become negative due to increase in receivables `584.71 lakhs, inventories `2,329.27 lakhs, loans & advances `262.23 lakhs, other current assets `27.86 lakhs. These increased assets have been partly funded by increase in current liabilities of `716.80 lakhs. The increase in current assets is attributable to the increased network of outlets and keeping of inventories at the new outlets to ensure meeting of demand from the customers As the Company was opening new outlets, there was a huge capital investment in terms of security deposits and interiors. To address this huge capital requirement, the Company raised funds by diluting equity (in the form of share application money and share capital) to the tune of `643.50 lakhs, secured loans of `2,995.29 lakhs. Fiscal year 2009 In the FY 2009, the cash generated from operations become negative due to increase in receivables `1,417.05 lakhs, inventories `2,715.39 lakhs, loans & advances ` 228.58 lakhs, other current assets `119.62 lakhs. These increased assets have been partly funded by increase in current liabilities of `476.63 lakhs. The increase in current assets is attributable to the increased network of outlets and keeping of inventories at the new outlets to ensure meeting of demand from the customers As the Company continued of opening new outlets, there was a huge capital investment in terms of security deposits and purchase of fixed assets like interiors, office equipment, furniture and computers. To address this huge capital requirement, the Company raised funds by diluting equity (in the form of share application money

200

and share capital) to the tune of `4,754.50 lakhs , borrowed secured loans from banks `5,666.78 lakhs. We have purchased fixed assets like interiors, office equipment, furniture and computers.

Fiscal year 2010 In the FY 2010, the cash generated from operations become negative due to increase in receivables `1,799.55 lakhs, inventories `2,468.66 lakhs, loans & advances `982.87 lakhs, other current assets `818.67lakhs. These increased assets have been partly funded by increase in current liabilities of `203.78 lakhs. The increase in current assets is attributable to the increased network of outlets and keeping of inventories at the new outlets to ensure meeting of demand from the customers As the Company continued opening new outlets, there was a huge capital investment in terms of security deposits and purchase of fixed assets like interiors, office equipment, furniture and computers. To address this huge capital requirement, the Company raised funds by diluting equity (in the form of share application money and share capital) to the tune of `2,937.00 lakhs , borrowed secured loans from banks `5,400.58 lakhs and unsecured loans `46.41 lakhs. For the period ended December 31, 2010 As per the growth momentum, the operational cash flow continued to be negative due to the increase of receivables and inventories. Also the company continued to spend on capital expenditure for interiors, furniture and fixtures at the new outlets. In order to fund such growth the company has raised money by issuing capital, rising of additional loans from the Banks FACTORS THAT MAY AFFECT THE RESULTS OF THE OPERATIONS: 1. Unusual or infrequent events or transactions.

There have been no unusual or infrequent events or transactions that have taken place. 2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

There have been no significant economic changes that materially affected or likely to affect income from continuing operations. 3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Other than described in the Chapter titled Risk Factors and Managements Discussion and Analysis of Financial Conditions and Results of Operations beginning on pages 11 and 192, respectively of the Draft Red Herring Prospectus, to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our income from continuing operations. 4. Future changes in relationship between costs and incomes

Other than described in the Chapter titled Risk Factors and Managements Discussion and Analysis of Financial Conditions and Results of Operations beginning on pages 11 and 192, respectively of the Draft Red Herring Prospectus, to our knowledge there are no known factors which will have a material adverse impact on our operations and finances. 5. 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.

The increase in operating income is mainly on account of increase in sales volume in the normal course of business.

201

6.

Total turnover of each major industry segment in which the issuer company operated.

Please refer to Chapter titled Industry Overview beginning on page 74 of the Draft Red Herring Prospectus. However, there are no published data available with the Company for total turnover of the industry in which the Company operates. 7. Status of any publicly announced new products or business segment.

The Company has not announced any new product and segment except in the ordinary course of our business. 8. The extent to which business is seasonal

The Companys business is somewhat seasonal for some of the products like Air Conditioners and Refrigerators which witness high sales during summer. Similarly in India market people tend to do bulk of their consumer durables and electronics buying around and during Dussehra and Diwali resulting in maximum sales happening in the last quarter of a year. 9. Any significant dependence on a single or few suppliers or customers

There is no significant dependence on a single or few suppliers. 10. Competitive conditions Please refer to Chapter titled Industry Overview and Business Overview beginning on pages 74 & 90 respectively of the Draft Red Herring Prospectus for details on competitive conditions. Material Recent Developments Except as disclosed under the chapter Outstanding Litigation and Material Developments beginning on page 203 and under the heading Material Developments occurring after last Balance Sheet date i.e.December 31, 2010 on page 207, in the opinion of our directors, there has not arisen any circumstances since the date of the last financial statements as disclosed in the Draft Red Herring Prospectus and which materially and adversely affect or is likely to affect the trading or profitability of the Company, or the value of our assets, or our ability to pay our liabilities within the next twelve months.

202

SECTION VI: LEGAL AND REGULATORY INFORMATION OUTSTANDING LITIGATIONS 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 Promoter, Directors and the Group Companies and there are no defaults, nonpayment 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, 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 and no disciplinary action has been taken by SEBI or any stock exchanges against the Company, its Subsidiary, its Promoter, Directors or the Group Companies.

This section has been divided into seven parts: Part 1 Contingent Liabilities of the Company Part 2 Litigation relating to the Company Part 3 Litigation against our Directors Part 4 Litigation relating to our Promoter and Group Companies Part 5 Amounts owed to Small Scale Undertakings and other Creditors Part 6 Material Developments Part 1 Contingent Liabilities of the Company For details of the contingent liabilities of the Company, refer to the section Financial Statements on page 160 of this Draft Red Herring Prospectus. Part 2 Litigation relating to the Company A. Cases filed against the Company 1. Litigation Involving Civil Laws:

Mr. Venkataratnam Pothuri (Lessor) has filed a suit in the Mandal Nyayalay, Vijayawada bearing Pre-Litigation case no. 121/09 against the Company asking the Company to pay arrears in rent, service tax, damages incurred on the property and the balance rent for the lock in period. The Company had entered into a lease agreement dated March 01, 2008 with Lessor for the property located at M.G. Road, 3 rd Floor in Sri Pothuri Towers bearing no. 40-1-140/2, Vijayawada. The Company terminated the lease before the expiry of the lease period, by issuing a notice to the Lessor. The Lessor has therefore, filed a complaint against the Company in the Mandal Nyayalay, Vijayawada, in default of payment of monthly rent from July 01, 2008 to December 31, 2008, maintenance, water and service tax from April 01, 2008 to December 31, 2008 and damages incurred on the property. The Lessor in its complaint is demanding the Company to pay `6,28,849 for the default of payment of rent and service tax arrears, `5,61,800 for damages incurred on property and `26,10,000 as rent payable for the balance years of the lock in period. The Company has been issued notice by Mandal Legal Service Committee to appear before it on May 25, 2010. The Company has not yet filed its reply as the Company is negotiating settlements with the Lessor. This matter is currently pending before the Lok Adalat Bench and the next date of hearing is on July 16, 2011.

Mr. Venkateswarlu Pothuri (Lessor) has filed a suit in the Mandal Nyayalay, Vijayawada bearing Pre-Litigation

203

case no. 120/09 against the Company asking the Company to pay arrears in rent, service tax, damages incurred on the property and the balance rent for the lock in period. The Company had entered into a lease agreement dated March 01, 2008 with Lessor for the property located at M.G. Road, 3rd Floor in Sri Pothuri Towers bearing no. 40-1-140/2, Vijayawada. The Company terminated the lease before the expiry of the lease period, by issuing a notice to the Lessor. The Lessor has therefore, filed a complaint against the Company in the Mandal Nyayalay, Vijayawada, in default of payment of monthly rent from July 01, 2008 to December 31, 2008, service tax from April 01, 2008 to December 31, 2008 and damages incurred on the property.The Lessor in its complaint is demanding the Company to pay `6,28,849 for the default of payment of rent and service tax arrears, `5,61,800 for damages incurred on property and `26,10,000 as rent payable for the balance years of the lock in period. The Company has been issued notice by Mandal Legal Service Committee to appear before it on May 25, 2010. The Company has not yet filed its reply as the Company is negotiating settlements with the Lessor. This matter is currently pending before the Lok Adalat Bench and the next date of hearing is on July 16, 2011. 2. Litigation Involving Criminal Laws: The Assistant Labour Officer has filed a complaint against the Company for various charges such as keeping the shop open on Sundays, not maintaining the registers, records, not displaying notices, registration certificate etc, under Andhra Pradesh Shops and Establishments Act, 1988. The Additional Metropolitan Magistrate, Hyderabad has summoned the Company to appear before it on September 30, 2009, thereafter the matter has been getting adjourned due to change in the administration systems of the court. This matter is currently pending and the next date of hearing is on June 30, 2011. Litigation Involving Securities and Economic Laws: The Company has filed a petition with the Company Law Board, Chennai ("CLB") for condoning the delay in filling the Form 8 with the Registrar of Company Andhra Pradesh ("ROC") for registering the charge over immovable property, book debts, movable property, floating charge and parri passu charge over all the current assets hypothecated with the State Bank of India.

3.

The Company had created a charge on March 03, 2007 over its said assets as security for loan of `25,85,00,000 with the State Bank of India and had filed Form 8 for registering the above charge. The Company further modified the charge on November 21, 2007 and June 17, 2008 and filed required Form 8 for the same. However, when the Company modified the charge the third time by availing an additional loan of `54,00,00,000 from State Bank of India, the Company did not file the Form 8 within the stipulated time of 60 days, for registering the additional charge over assets (immovable property, book debts, movable property, floating charge and parri passu charge over all the current assets.) The Company delayed the filling of Form 8 for modification of charge with the ROC. The Company has stated that the reason for delay was due to the non receipt of the documents from the State Bank of India and non availability of directors of the Company for signatures. The Company has requested CLB to condone the delay and therefore this petition filed. By an order dated March 23, 2010, CLB has condoned the delay of 187 days and has extended the time for filling the same provided the Company pays an additional fee that is 10 times the normal filling fees of the Company. The Company has paid the additional fee of `5000 as required under the order dated March 23, 2010. There are no further proceedings in this matter and the matter is closed. 4. Litigation Involving Statutory Laws: The Regional Provident Fund Commissioner has issued a notice to the Company on February 07, 2011 under Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 calling for enquiry with regard to late payment of amounts by the Company towards the employees and employers share of provident fund contributions for the period commencing from January 2007 to January 2010. The Commissioner had issued a summons to the Company to appear before the Commissioner on February 28, 2011. The Company has filed its reply dated April 05, 2011. The matter is currently pending and has been posted for final orders. Litigation Involving Labour Laws: Nil

6.

204

6.

Litigation Involving Tax Proceeding

The Income Tax Officer has vide its letter dated February 10, 2011, had summonsed the Company to attend the office of the Income Tax Officer on the February 14, 2011 at 11: 30 am, to give evidence and produce books of accounts and documents. By an order dated February 14, 2011under Section 201(1) of the Income Tax Act, 1961, the Income Tax officer directed the Company to deposit `85,45,759 into the Government Account in default of the non- payment of Tax Deducted at Source (TDS) for the financial year 201011, relevant to the Accounting year 201112 for the period from April 01, 2010 to January 31, 2011. The Company has paid TDS amount by way of challans deposited into the government accounts. There are no further proceedings in this matter and the matter is closed. The Commissioner of Customs, Hyderabad had filed an appeal no. C/85/09 against the order dated June 19, 2008 in the Customs, Excise and Service Tax Appellate Tribunal. The Company had imported certain goods and had filed Bill of Entry. At the time of filling of the Bill of Entry, the Company was not issued an Importer Exporter Code (IEC) by Department General of Foreign Trade. The Customs department therefore confiscated the imported goods of the Company. By an order dated January 03, 2011, the Appellate Tribunal rejected the appeal stating that the customs department had not issued a show cause notice to the Company and therefore, it could not confiscate the goods or impose any penalty on the Company. There are no further proceedings or appeals in this matter and the matter is closed.

B. Cases filed by the Company 1. Litigation Involving Civil Laws:

The Company has sent a legal notice to Rosebys Interiors India Limited ("Rosebys") on December 30, 2010 towards recovery of dues amounting to `3,30,00,000. The Company had entered into a Master Franchise Agreement dated November 25, 2008 with Rosebys for retail trading of life style products under the brand of Rosebys. In terms of Clause 2 of the Master Franchise Agreement Rosebys was required to pay a minimum guarantee amount to the Company, if the average productivity is less than 70% of the startup subsidy return. Rosebys was however unable to fulfill its commitment and thereby was liable to pay `7,14,20,650 to the Company. By an agreement dated March 26, 2010, the Company and Rosebys have come to a settlement, where it was agreed that Rosebys would pay `3,74,00,000 (which includes `44,00,000 of tax deducted at source) to the Company as full and final settlement of the claim. The Company on the other side would return the stocks worth `2,00,00,000 and dismantle the interiors of 31 outlets. This amount would be paid by issuing irrevocable Letter of Credit by May 20, 2010 in favour of the Company. However till date Rosebys has only issued the Letter of Credit for `1,06,76,861.The Company issued a notice to Rosebys on December 30, 2010, but the Company has not received an acknowledgment receipt for the notice. The Company is awaiting a reply to the notice from Rosebys. 2. 3. 4. 5. 6. Litigation Involving Criminal Laws: NIL Litigation Involving Securities and Economic Laws: NIL Litigation Involving Statutory Laws: NIL Litigation Involving Labour Laws: NIL Litigation Involving Tax Proceeding NIL

Part 3 Litigation against our Directors A. Litigation against Director of the Company: Sardar Balvinder Singh, the Managing Director of the Company had entered into a sale cum construction agreement dated July 15, 2006 with Saket Engineers Private Limited, for purchasing the premises located at Plot No. 73, Survey No.122 (part), Vampuguda Hamlet of Kapra Village, Keesara Mandal, Ranga Reddy Dist, admeasuring 276 sq. yrds (hereinafter referred to as the premises). The total consideration for the abovementioned premises is `42,00,000. On June 30, 2007 Sardar Balvinder Singh paid part consideration `38,02,502 and the balance of `3,97,498 along with 2.5% interest per month is still outstanding. Saket Engineers Private Limited has therefore initiated arbitration proceedings against Sardar Balvinder Singh for claiming the total balance consideration (including interest) of `9,03,053. Saket Engineers Private Limited has filed a statement of claims on July 26, 2009 and Sardar Balvinder Singh has filed a Statement of defense on December 27, 2009 before the sole arbitrator, Sri. D. Ramalinga Swamy. The matter is currently pending before the sole

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arbitrator and the next date of hearing is on June 23, 2011. Sardar Balvinder Singh, the Managing Director of the Company had entered into a sale cum construction agreement dated July 15, 2006 with Saket Engineers Private Limited, for purchasing the premises located at Plot No. 74, Survey No.122 (part), Vampuguda Hamlet of Kapra Village, Keesara Mandal, Ranga Reddy Dist, admeasuring 276 sq. yrds (hereinafter referred to as the premises). The total consideration for the abovementioned premises is `42,00,000. On June 30, 2007 Sardar Balvinder Singh paid part consideration `33,54,922 and the balance of `8,45,078 along with 2.5% interest per month is still outstanding. Saket Engineers Private Limited has therefore initiated arbitration proceedings against Sardar Balvinder Singh for claiming the total balance consideration (including interest) of `17,56,374. Saket Engineers Private Limited has filed a statement of claims on July 26, 2009 and Sardar Balvinder Singh has filed a Statement of defense on December 27, 2009 before the sole arbitrator, Sri. D.Ramalinga Swamy. The matter is currently pending before the sole arbitrator and the next date of hearing is on June 23, 2011. Sardar Balvinder Singh, the Managing Director of the Company had entered into a sale cum construction agreement dated July 15, 2006 with Saket Engineers Private Limited, for purchasing the premises located at Plot No. 75, Survey No.122 (part), Vampuguda Hamlet of Kapra Village, Keesara Mandal, Ranga Reddy Dist, admeasuring 276 sq. yrds (hereinafter referred to as the premises). The total consideration for the abovementioned premises is `42,00,000. On June 30, 2007 Sardar Balvinder Singh paid part consideration `39,78,285 and the balance of `2,21,715 along with 2.5% interest per month is still outstanding. Saket Engineers Private Limited has therefore initiated arbitration proceedings against Mr. Balvinder Singh for claiming the total balance consideration (including interest) of `5,37,759. Saket Engineers Private Limited has filed a statement of claims on July 26, 2009 and Mr. Balvinder Singh has filed a Statement of defense on December 27, 2009 before the sole arbitrator, Sri. D. Ramalinga Swamy. The matter is currently pending before the sole arbitrator and the next date of hearing is on June 23, 2011. Sardar Balvinder Singh, the Managing Director of the Company had entered into a sale cum construction agreement dated July 15, 2006 with Saket Engineers Private Limited, for purchasing the premises located at Plot No. 76, Survey No.122 (part), Vampuguda Hamlet of Kapra Village, Keesara Mandal, Ranga Reddy Dist, admeasuring 276 sq. yrds (hereinafter referred to as the premises). The total consideration for the abovementioned premises is `42,00,000. On June 30, 2007 Sardar Balvinder Singh paid part consideration `37,11,131 and the balance of `4,88,869 along with 2.5% interest per month is still outstanding. Saket Engineers Private Limited has therefore initiated arbitration proceedings against Sardar Balvinder Singh for claiming the total balance consideration (including interest) of `11,05,423. Saket Engineers Private Limited has filed a statement of claims on July 26, 2009 and Sardar Balvinder Singh has filed a Statement of defense on December 27, 2009 before the sole arbitrator, Sri. D. Ramalinga Swamy. The matter is currently pending before the sole arbitrator and the next date of hearing is on June 23, 2011. Sardar Balvinder Singh, the Managing Director of the Company had entered into a sale cum construction agreement dated July 15, 2006 with Saket Engineers Private Limited, for purchasing the premises located at Plot No. 77, Survey No.122 (part), Vampuguda Hamlet of Kapra Village, Keesara Mandal, Ranga Reddy Dist, admeasuring 276 sq. yrds (hereinafter referred to as the premises). The total consideration for the abovementioned premises is `42,00,000. On June 30, 2007 Sardar Balvinder Singh paid part consideration `34,87,185 and the balance of `7,12,815 along with 2.5% interest per month is still outstanding. Saket Engineers Private Limited has therefore initiated arbitration proceedings against Sardar Balvinder Singh for claiming the total balance consideration (including interest) of `15,11,714. Saket Engineers Private Limited has filed a statement of claims on July 26, 2009 and Sardar Balvinder Singh has filed a Statement of defense on December 27, 2009 before the sole arbitrator, Sri. D. Ramalinga Swamy. The matter is currently pending before the sole arbitrator and the next date of hearing is on June 23, 2011. B. Cases Filed by Directors of the Company: NIL

Part 4 Litigation relating to our Promoter and Group Companies Our Promoter A. Litigation against Promoter of the Company: NIL B. Cases Filed by Promoter of the Company: NIL

206

Our Group Companies A. Litigation against Group Company: Nil B. Cases Filed by Group Company: NIL Part 5 Amounts owed to Small Scale Undertakings and other Creditors There are no outstanding dues of small scale industrial undertaking(s) exceeding `1,00,000 which are outstanding for more than 30 days Part 6 Material Developments occurring after last Balance Sheet i.e. December 31, 2010 There has been no material development in relation to the Company, its Promoter or our Group Companies since December 31, 2010, except as disclosed below. (1) Authorised share capital of the Company has been increased from `4000 lakhs to `4500 lakhs (2) Allotment of 2, 00,000 Equity Shares to Sardar Balvinder Singh (3) Allotment of 5,60,500 Equity Shares to GAP Investment Consultancy Private Limited, 4,62,500 Equity Shares to Aakar Security Services Private Limited. (4) Allotment of 2,00,000 Equity Shares to GAP Investment Consultancy Private Limited, 2,00,000 Equity Shares to Aakar Security Services Private Limited. (5) Allotment of 2,00,000 Equity Shares to GAP Investment Consultancy Private Limited, 2,00,000 Equity Shares to Aakar Security Services Private Limited. (6) Terms loans have been sanctioned by SBI, SBH, Future Capital Financial Services Ltd. For detailed terms and conditions please refer page 160 of the section titled Financial Statements of the Draft Red Herring Prospectus (7) Vehicle loan sanctioned from BMW Financial Services India. For detailed terms and conditions please refer page 160 of the section titled Financial Statements of the Draft Red Herring Prospectus

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GOVERNMENT/ STATUTORY AND OTHER APPROVALS 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 the business activities. Unless otherwise stated, these approvals are all valid as of the date of this Draft Red Herring Prospectus. Approvals for the Issue 1. The Board of Directors have pursuant to resolution passed at its meeting held on April 01, 2011 authorised the Issue, subject to the approval by the shareholders of the Company under Section 81(1A) of the Companies Act. 2. The shareholders have, pursuant to a resolution dated April 30, 2011 under Section 81(1A) of the Companies Act, authorised the Issue. 3. In - principle approval from the NSE dated []. 4. In - principle approval from the BSE dated []. Incorporation Details 1. Certificate of incorporation dated January 3, 2007 issued by the Registrar of Companies, Andhra Pradesh. 2. Certificate of commencement of business dated January 10, 2007 issued by the Registrar of Companies, Andhra Pradesh. 3. The Corporate Identity number of the Company is U74999AP2007PLC052227. Tax related approvals/licenses/registrations 1. The Company has obtained Permanent Account Number AAECP1437B. 2. The Company has obtained Tax Deduction and Collection Account Number (TAN) HYDP04297G. 3. The Company has obtained Tax Payers Identification Number 28260090525 from the Commercial Tax Officer, VAT Registration Authority, Somajiguda Circle, Panjagutta Division under the Andhra Pradesh Value Added Tax Act, 2005 with effect from February 1, 2007 and has also been registered under the Central Sales Tax Act, 1956 under the same certificate. 4. The Company has obtained Tax Payers Identification Number 29790839161 under the Karnataka Value Added Tax Act, 2003 from the Assistant of Commercial Taxes, LVO 055, Bangalore-43 with effect from March 31, 2009. The Company has also been registered under the provisions of Central Sales Tax Act, 1956 under the same certificate. 5. The Company has been issued Tax Payers Identification Number 27980714687V under the Maharashtra Value Added Tax Act, 2002 from the Sales Tax Officer, Registration Branch, Mumbai with effective from June 18, 2009. The Company has been registered under the Central Sales Tax Act, 1956 and has been allotted registration number 27980714687C with effect from June 18, 2009. 6. The Company has been issued Tax Payers Identification Number 33331523198 under the Tamil Nadu Value Added Tax Act, 2008 from Assistant Commissioner (CT), Thyagaraya Nagar (North Assessment Circle), Chennai with effect from April 2, 2009. The Company has been registered under the Central Sales Tax Act, 1956 and has been allotted C.S.T Number 873820 by the Assistant Commissioner (CT), Thyagaraya Nagar (North Assessment Circle), Chennai with effect from April 2, 2009. 7. The Company has obtained enrolment under the Andhra Pradesh State Tax on Professions, Trades, Callings and Employments Act, 1987 and has been allotted Professional Tax Code number PJT/12/1/12/1811/06-07 vide Certificate of Enrolment by the concerned authority.

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8. The Company has obtained enrolment under the Karnataka State Tax on Professions, Trades, Callings and Employments Act, 1976 and has been allotted Enrollment No.: 2970839161vide Certificate of Enrolment by the Additional Commissioner of Commercial Taxes, Bangalore with effect from March 31, 2009. Approvals regarding the Outlets/Outlets SR. NO. NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES 1. A S Rao Nagar-MBC H. No. 19-71/1/A, Plot No. A-6/2 & A-6, Rukminipuram Colony, Dr. A.S. Rao Nagar Colony, Kapra, Ranga Reddy District. Trade license issued by Greater Hyderabad Municipal Corporation Kapra Circle No. 1 for the period 20112012 issued on May 31, 2011 bearing number GHMC/KC/D&O/AMOH/142/2011-12 which is valid till the regular trade license is given or till March 31, 2012, whichever is earlier. APPROVALS/LICENSES LABOUR LICENSES Renewal of Certificate of registration bearing Registration Certificate No. M/4439/07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011.

2.

A S Rao Nagar Plot No. G-1, Vertex Plaza, Srinivasnagar Colony, Kapra Village, Keesara Mandal, Ranga Reddy District.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation Kapra Village, regarding renewal of Trade License. The renewed license is awaited.

Certificate of Registration bearing Registration Number M/4816/10 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 26, 2010 which is valid up to December 31, 2011.

3.

Abids Shop No. 5-9-208/1, Ground Floor, A-1 Noor Plaza, Chirag Ali Lane, Abids.

Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 31604/27/05/2011 dated May 27, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration number ALO12/HYD/269/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 26, 2010 which is valid up to December 31, 2011.

4.

Banjara Hills Shop No.13, D.No.8-2664/1/13, High Line Complex, Shaikpet, Banjara Hills-Rd-12, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation Hyderabad, Banjara Hills, regarding renewal of Trade License. The renewed license is awaited.

Certificate of Registration bearing Registration Number ALO37/HYD/226/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 26, 2010 which is valid up to December 31, 2011. Certificate of registration bearing Registration No. ALO23/HYD/ 179/2007 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2010 to December 31, 2011. Certificate of Registration bearing Registration Number

5.

Ramanthapur-I 3-11-107/GF/4, Kamashetty Mall, Ramanathpur, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation Ramanthapur, Uppal, Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

6.

Chikaddpally D.No. 1-80-550/556, RTC

Trade license issued Hyderabad Municipal 209

by Greater Corporation

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES Cross Roads, Chikkadpally, Hyderabad.

APPROVALS/LICENSES LABOUR LICENSES ALO20/HYD/795/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 29, 2010 which is valid up to December 31, 2011.

Circle No. 9 for the period 2010-2011 issued on January 31, 2011 bearing number 009-320-2142 which is valid till the regular trade license is given or till March 31, 2012, whichever is earlier. Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation Madhapur Sherilingampally, Hyderabad, regarding renewal of Trade License. The renewed license is awaited

7.

Madhapur D.No. 1-3/1, Kothaguda, Hi-tech City, Madhapur, R.R. District, Hyderabad.

Certificate of Registration bearing Registration Number ALO/BNR/29/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 30, 2010 which is valid up to December 31, 2011.

8.

Kukatpally Plot No. 36/MIG, S. No. 143 & 144, Dharmareddy Colony, Kukatpally, R.R. District, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Kukatpally Hyderabad, regarding renewal of Trade License. The renewed license is awaited

Renewal of Certificate of Registration bearing Registration No. ALO31/HYD/176/2007 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2010 to December 31, 2011. Certificate of Registration bearing Registration Number ALO36/HYD/284/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 29, 2010 which is valid up to December 31, 2011. Renewal of Certificate of registration bearing Registration No. N/555/07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011.

9.

Diamond Point Plot No. 24, 25 & 26, Shop No. 2, Ground Floor, Karthik Enclave, Mahalakshmi Trade Centre, Bowenpally, Secundrabad.

Company has submitted letter dated May 30, 2011 to the Executive Office Cantonment Board Secunderabad regarding issue of Trade License. The License is awaited

10.

Nacharam 4-80/7, Koundinya Nagar, Nacharam, Uppal Mandal, R.R. District, Hyderabad.

Trade license issued by Greater Hyderabad Municipal Corporation Kapra Circle No. 1 for the period 20112012 issued on May 31, 2011 bearing number GHMC/KC/D&O/AMOH/141/2011-12 which is valid till the regular trade license is given or till March 31, 2011, whichever is earlier.

11.

Kompally Plot No.2, Sr. No. 160, Kompally, Quthbullapur, Ranga Reddy District.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Qutubullapur Municipality bearing Challan Number 2761 dated May 25, 2011. The renewed license is awaited.

Renewal of Certificate of registration bearing Registration No. 3769/OPR/07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2010 to December 31, 2011.

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SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Renewal of Certificate of registration bearing Registration No. ALO25/Hyd/77/07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2009 to December 31, 2011. Certificate of Registration bearing Registration Number ALO33/HYD/11/37/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 26, 2010 which is valid up to December 31, 2011. Certificate of Registration bearing Registration Number D/7876/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 30, 2010 which is valid up to December 31, 2011.

12.

Santoshnagar Shop No. 9-8-126 Maruthinagar, Pochmma Gadda, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation L.B. Nagar Municipality Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

13.

Maredpally D. No. 3-35-626, M.G. Nagar, A.O.C. Center, East Maredpally, Secunderabad.

Company has submitted letter dated May 30, 2011 to the Executive Office Cantonment Board Secunderabad regarding issue of Trade License. The License is awaited

14.

LB Nagar Plot No. 35, L.B. Nagar, Ranga Reddy District, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation L.B. Nagar Municipality, Hyderabad, regarding renewal of Trade License. The renewed license is awaited

15.

Shivam Road Shop No. 2-2-1118/3/C/3, Besides Bank of Baroda, Shivam Road, Hyderabad.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 3631605/27/05/11 dated May 27, 2011. The renewed license is awaited.

Certificate of Registration bearing registration number ALO23/HYD/774/2010 issued by the Assistant Labour Office, Circle 23 under the Andhra Pradesh Shops and Establishment Act,1988 on November 29, 2010 , which is valid up to December 31, 2011. Renewal of Certificate of registration bearing Registration No. ALO1/HYD/122/07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from 1st January 2010 to December 31, 2011.

16.

Old City (Moghalpura) 23-2-665/1,666, Shah Ali Banda Road, Hyderabad.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 31592/27/05/2011 dated May 27, 2011. The renewed license is awaited.

17.

Chandanagar H. No. 2-85, Chandanagar, Sirilingampally, Ranga Reddy District Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation Chandanagar Kukatpally Municipality Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

Certificate of Registration bearing Registration Number ALO/BNR/40/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 6, 2010 which is valid till December 31, 2011

211

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Certificate of Registration bearing Registration Number ALO/BNR/ 30/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 30, 2010 which is valid till December 31, 2011.

18.

Chandanagar H. No. 2-13/3, Huda M.M.T.S. Road, Gangaram, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Chandanagar Kukatpally Municipality Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

19.

Jubilee Hills Plot No. 7, Opposite Chiranjeevi Blood Bank, Anshu Colours

The Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 31620/27/05/2011 dated May 27, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number ALO/BNR/ 30/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 30, 2010 which is valid till December 31, 2011.

20.

Tolichowki H No. 8-1-301 & 302/G-1, Sarigama Apartments, Shaikpet, Hyderabad

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Tolichowdi, regarding renewal of Trade License. The renewed license is awaited.

Certificate of registration bearing Registration No. ALO27/HYD/REGD./07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2010 to December 31, 2011. Certificate of Registration bearing Registration Number D/7632/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on January 1, 2011 which is valid up to December 31, 2011.

21.

Dilsukhnagar 23-25, Main Road, Kothapet, R.R District.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, L.B. Nagar Municipality, Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

22.

Malakpet-Sony D. No. 16-2-674/3, Ground Floor, Adj: Ajay Edifice, Malakpet, Hyderabad.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 31609/27/05/2011 dated May 27, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number ALO5/HYD/537/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 25, 2010 which is valid up to December 31, 2011.

23.

Malakpet 16-2-674/2, Spectrum Sqaure, Opposite Yashoda Hospital, Malakpet, Hyderabad.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 31603/27/05/2011 dated May 27, 2011. The renewed license is awaited.

Renewal of Certificate of registration bearing Registration No. ALO5/HYD/113/07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2009 to December 31, 2011.

212

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Certificate of Registration bearing Registration Number DLCII/HYD/287/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 30, 2010 which is valid up to December 31, 2011.

24.

Somajiguda D.No. 6-3-648, Padmaja Landmark, Ground Floor, Somajigua, Hyderabad.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 31612/27/05/2011 dated May 27, 2011. The renewed license is awaited.

25.

Habsiguda Plot No. 6 & 11, G.F., Habsiguda, Nacharam, Kapra Circle, Hyderabad.

Trade license issued by Greater Hyderabad Municipal Corporation Kapra Circle No. 1 for the period 20112012 issued on May 31, 2011 bearing number GHMC/KC/D&O/AMOH/143/2011-12 which is valid till the regular trade license is given or till March 31, 2012, whichever is earlier.

Certificate of registration bearing Registration No. N/557/07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued on January 21, 2011for the period from 1st January 20110 to December 31, 2011.

26.

Masabtank H. No. 10-3-305/A, Near NMDC, Humayunnagar, Madhipatnam Road, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Masabtank, Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

Renewal of Certificate of registration bearing Registration No. ALO27/HYD/83/2007 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2010 to December 31, 2011. Renewal of Certificate of registration bearing Registration No. ALO1/HYD/122/07 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2010 to December 31, 2011. Certificate of Registration bearing Registration Number ALO22/HYD/527/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 4, 2010 which is valid up to December 31, 2011.

27.

Karkana Plot No. B-19, Ground Floor, Gayathri Arcade, Vikrampuri, Kakaguda, Secundrabad.

Company has submitted letter dated May 30, 2011 to the Executive Office Cantonment Board, Secunderabad, regarding issue of Trade License. The License is awaited.

28.

Begumpet Shop No. S2, Chikkoti Gardens, Begumpet, Hyderabad.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 31599/27/05/2011 dated May 27, 2011. The renewed license is awaited.

29.

Vanasthalipuram-I Premises No. 6-4-431, Plot No. 79, Phase-IV, Sri Venkata Sai Complex, HTC Category, Vanasthalipuram of L.B. Nagar Circle-III, GHMC.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, L.B. Nagar, Municipality Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Vanasthalipuram dated May 30, 2011.

213

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Certificate of Registration bearing Registration Number ALO33/HYD/11/38/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 26, 2010 which is valid up to December 31, 2011. Certificate of Registration bearing Registration Number ALO19/HYD/276/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 24, 2010 which is valid up to December 31, 2011. Certificate of Registration bearing Registration Number A/ 2276/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 16, 2010 which is valid up to December 31, 2011.

30.

Malkajgiri Shop No. 1, D. No. 2-2-16, Vaninagar, Malkajgiri, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Malkajgiri Municipality, Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

31.

Vikrampuri/Trimulghery A-1, Moti Valley Trimulgherry, X roads, Secunderabad.

Company has submitted letter dated May 30, 2011 to the Executive Office Cantonment Board Secunderabad regarding issue of Trade License. The License is awaited

32.

Shamshabad Shop No. 5, Ground Floor, First and Second Floor, S. No. 205/P, Plot No. 239, 240 & 241, Madhuranagar, Shamsabad, R.R.District.

Company has submitted letter dated May 30, 2011 to the Gram Panchayath Secretary, Shamshabad Village and Mandal Ranga Reddy District, regarding renewal of Trade License. The renewed license is awaited.

33.

Vansthalipuram-II 5-5-1163, Vanasthalipuram of L.B. Circle, Circle III, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, L.B. Nagar Municipality, Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Vanasthalipuram dated May 30, 2011.

34.

Panjaguta D. No. 6-3-668/9/10, 6-3668/9/11/A & 6-3668/9/11/B, Ground Floor, Near Hyderabad Central, Hyderabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Panjagutta, Khairathabad Circle, Hyderabad, regarding renewal of Trade License. The renewed license is awaited.

Certificate of Registration bearing Registration Number ALO10/HYD/261/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 24, 2010 which is valid up to December 31, 2011. Certificate of Registration bearing Registration Number ALOIII/112B/187/2007 under Andhra Pradesh Shops and Establishment Act, 1988 which is valid from November 1, 2009 to December 31, 2011. Certificate of registration bearing Registration No. 3483/I under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to

35.

Nizamabad (Mobiles) Shop No. 25, Complex, Station Nizambabad. D.S.A Road,

The Company has made payment of renewal fee for trade license and has obtained receipt from the Nizamabad Municipal Corporation bearing Receipt Number 011490490 dated June 4, 2011. The renewed license is awaited.

36.

Nizamabad D. No. 5-6-687/4, Block No. 6, Nizamabad.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Nizamabad Municipal Corporation bearing Receipt Number 011491394 dated May 30,

214

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES December 31, 2011.

2011. The renewed license is awaited.

37.

Karimnagar 36/A & 37/A, Ground Floor, Reddys Residency, Christian Colony, Karimnagar.

The Company has been issued receipt against application for the grant of trade license bearing receipt no. 011372575 for the year 2011-12 dated March 7, 2011 issued by Municipal Officer, Municipal Corporation, Karimnagar. The Company has been issued trade license cum bearing license no. F1/81/2011 for the year 2011-12 issued on May, 24 by Commissioner, Municipal Corporation, Manchiriyal.

Certificate of registration bearing Registration No. 4519/ALO KNRI under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011. Certificate of Registration bearing Registration Number 1784/ALO/MNCL-I under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 23, 2010 which is valid up to December 31, 2011. Renewal of Certificate of registration bearing Registration No. 4541/ALO/WGL-I under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011. Certificate of Registration bearing Registration Number 2455/I under Andhra Pradesh Shops and Establishment Act, 1988 issued by the Assistant Labour Officer, Circle-I, Kakinada on November 16, 2010, which is valid up to December 31, 2011.

38.

Manchiariyal D. No. 5-6-75/1, Opposite RTC Bus Stand, Indira Nagar, Manchiryala.

39.

Warangal D. No. 9-8-77/1, JPN Road, Warangal.

Trade license cum receipt has been issued by Warangal Municipal Corporation bearing License No. 14893 on April 6, 2011 valid upto March 31, 2011.

40.

Kakinada (Srinagar) Sri Rangarayanam Residency Complex, Opposite Reserve Police Line, Srinagar, Near Banugudi, Junction, Kakinada.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Kakinada Municipal Corporation Circle-II bearing Challan No. 27085 dated February 11, 2011. The renewed license is awaited.

41.

Kakinada (Cinema Road) D. No. G-F1, Cinema Hall Kakinada. 29-1-7, Road,

The Company has made payment of renewal fee for trade license and has obtained receipt from the Kakinada Municipal Corporation Circle-II bearing Challan No. 31676 dated March 1, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 2614/ALOI,KKD/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued by the Assistant Labour Officer, 1st Circle, Kakinada on November 26, 2010, which is valid up to December 31, 2011. Certificate of Registration bearing Registration Number 269/ALOI, KKD/2011 under Andhra Pradesh Shops and Establishment Act, 1988 issued on June 8, 2011 and valid upto December 31, 2011.

42.

Kakinada Nagar)

(Bhaskar

Shop No. 2-43-39, Main Road, Bhaskar Nagar, Kakinada.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Kakinada Municipal Corporation bearing Challan Number 317676 dated February 28, 2011. The renewed license is awaited.

215

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Certificate of Registration bearing Registration Number 2238/ALO4/RGY under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 30, 2010 for a period of one year.

43.

Rajahmundry (Danvaipet) Bearing No. 46-09-26, Danvaipet, Bypass Road, Rajhmundry.

The Company has made payment of renewal fee for trade license and has obtained provisional receipt from the Rajmundry Municipal Corporation bearing Challan Number 4713 dated May 30, 2011. The renewed license is awaited.

44.

Rajamandry Chowk)

(Devi

Bearing No. 21-5-16/1, Thummalova Road, Devi Chowk Centre, Rajhamundry.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Rajhmundry Municipal Corporation bearing Challan No. 24993 dated February 24, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 4563/III under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 27, 2010 for a period of one year.

45.

Rajamandry (ILTD Main Road) Harshavardhan Public School, Main Road, ILTD Junction, Rajhamundry.

Trade License issued by the Municipal Corporation, Rajahmundry bearing License No. VIII circle on December 3, 2010 for the year 2010-11.

Certificate of Establishment bearing Registration Number 11093/I issued on November 9, 2010 and valid for one year.

46.

Rajhmundry D. No. 6-5-6, Ground Floor, Deluxe Centre, Opposite Shyamala Theatre, Main Road, Rajamundry.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Rajhmundry Municipal Corporation bearing Challan No. 21420 dated February 17, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 10787/I issued on February 6, 2010 for a period of one year.

47.

Guntur Bearing No. 12-11, Ground Floor, 14 Lane, Aurandalpet, Guntur.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Guntur Municipal Corporation bearing Challan No. 236690 dated January 13, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 12679/GI under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 25, 2011 and valid upto the year 2012.

48.

Guntur D. No. 18-5-49, B.R. Stadium Road, Old Bus Stand, Guntur.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Guntur Municipal Corporation bearing Challan No. 898814 dated February 18, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 5836/GIV under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 25, 2011 and valid upto the year 2012.

49.

Guntur, D. No. 15-37-157, 4/14, Bradipeta, Guntur.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Municipal Corporation bearing Challan No. 899785 dated February 23, 2011. The 216

Certificate of Registration bearing Registration Number 8295/GII under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 28, 2011 and valid upto

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES the year 2012.

renewed license is awaited.

50.

S.D. Road Shop No. 1-2-273/B, Lower Ground Floor, Kiran Arcade, S.D. Road, Secunderabad.

Company has submitted letter dated Certificate of Registration bearing May 30, 2011 to the Dy. Commissioner, Registration Number Municipal Corporation, Secunderbad, ALO16/HYD/440/2010 issued by regarding renewal of Trade License. the Assistant Labor Officer, Circle 16 on December 16, 2010 for a The renewed license is awaited. period from November 25, 2010 to December 31, 2011.

51.

Kurnool (Medam Prabas) Shop No. 5, Medam Prabas Complex, Opp. Sri Rama Cinema Hall, Kurnool.

Company has made payment for renewal fee for trade license and has obtained receipt from Kurnool Municipal Corporation bearing Challan Number 3079 dated February 22, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 2590/KNLIII under Andhra Pradesh Shops and Establishment Act, 1988 issued on November 29, 2010 which is valid for one year.

52.

Kurnool (Mobiles) Bearing No. 3/223/1, College Road, Near Geeta Mandir, One Town, Kurnool.

Company has made payment of renewal fee for trade license and has obtained receipt from the Kurnool Municipal Corporation bearing Challan Number 3237 dated February 23, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 7126/KNL-I under Andhra Pradesh Shops and Establishment Act, 1988 issued on January 20, 2011 which is valid for one year.

53.

Mehboobnagar Shop No. 9 & 10, D. No. 75-202A, SBH Padmavati Colony Branch, Lakshmi Nagar Colony, Mehboobnagar.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Mehboobnagar Municipal Corporation bearing Challan Number 01025449 dated May 24, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 9095/MI2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 1, 2010 January 20, 2011 which is valid upto December 31,2011.

54.

Tenali 3-14-29, Ground Floor, Nehru Road, Tenali.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Tenali Municipal Corporation bearing Challan Number 25422 dated February 19, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 8556/TIIALO-Tenali under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 25, 2011 for a period of one year.

55.

Vishakhapatnam (Marripalem) Bearing No. 39-40-43, DBR Complex, 104 Area, Marripalem, Vishakhapatnam.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Government of Andhra Pradesh bearing Transaction Number 25081 dated May 24, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 5894/ALOV/VSP/2010 under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 4, 2010 for a period of one year.

217

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES

56.

Vishakhapatnam (Gopalapatam) Shop No. 25, Sai Dharani Castle, Gopalpatnam, Vishakhapatnam.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Government of Andhra Pradesh bearing Transaction Number 25680 dated May 24, 2011. The renewed license is awaited.

The Company has made payment of renewal fee for labour license and has obtained receipt from the Government of Andhra Pradesh bearing receipt no. 3504731 dated December, 3, 2010. The license is awaited.

57.

Hubli Shop No. 68, B.G.F, Shri Lakshmi Balkrishna Square, Station Road, Hubli.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hubli Karnataka, regarding renewal of Trade License. The renewed license is awaited.

Certificate of Registration bearing Registration Number 32/SHOP/1320 Karnataka Shops and Commercial Establishment Act, 1961 issued on September 8, 2010 and valid upto December 31, 2013. Certificate of Registration bearing Registration Number 3243/VIII under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 4, 2010 which is valid for one year.

58.

Vijaywada (Durgapuram) D. No. 24-1-131, Sumbhamurty Road, Durgapuram, Vijaywada.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Municipal Corporation of Vijayawada bearing Challan Number 9495/GCT dated February 22, 2011. The renewed license is awaited.

59.

Vijaywada (One Town) Bearing No.: 11-25-19, Subramanyam Street, Opp. ING Vysya Bank, One Town, Vijaywada.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Vijaywada Municipal Corporation bearing Challan No. 6618649 dated March 24, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 702/IX/VJA issued under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 4, 2010 which has to be renewed every year in November.

60.

Vijaywada (Patamatta) Bearing No.: 56-11-10, Near High School Road, M.G. Road, Patamatta, Vijaywada.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Vijaywada Municipal Corporation bearing Transaction No. 11114/PTM dated February 15, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 3427/V VZA under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 1, 2010.

218

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Certificate of Registration bearing Registration Number 3242/VIII under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 4, 2010 which is valid for one year.

61.

Vijaywada (Bavajipeta) House No. 24-9-152, Kundali Street, Bavajipeta, Satya Narayanpuram, Vijaywada.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Government of Andhra Pradesh bearing Transaction Number 12503/SNPV dated May 25, 2011. The renewed license is awaited.

62.

Vijaywada (Machavaram) Near Anjanaya Swami Temple, Machavaram, Vijayawada.

Company has made payment of renewal fee for trade license and has obtained receipt from the Municipal Corporation of Vijayawada bearing Challan Number 9432/GCT dated February 11, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 7246/VII under Andhra Pradesh Shops and Establishment Act, 1988 issued on January 10, 2011.

63.

Vijaywada (Eluru Road) Bearing No. 28-1-40, Vijaya Plaza, Eluru Road, Governor Pet, Vijaywada.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Vijaywada Municipal Corporation bearing Challan No. 4823260 dated March 9, 2011. The renewed license is awaited.

Company has applied for the Labour License and receipt has been issued by the Assistant Labour Officer, Vijaywada dated November 11, 2011 bearing number 081196. The renewed license is awaited. Certificate of registration bearing Registration No. 087212/08 dated February 2, 2011 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011.

64.

Vijaywada (Prasadampadu) Shop No. 2-69, Beside Toyota Show Room, Prasadampadu, Vijaywada.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner Municipal Corporation of Vijayawada Prasadampadu Village regarding issue of Trade License. The License is awaited

65.

Vishakhapatnam (Dondaparty) D.P. No. 47-10-37/1, Alipuram Ward, Dondaparty, Vishakapatnam.

The Company has submitted application for renewal of trade license and has obtained receipt from the Greater Visakhapatnam Municipal Corporation bearing Challan Number 17640 dated March 28, 2011. The renewed license is awaited.

Certificate of registration bearing Registration No. ACL II/VSP/534(A) under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011.

66.

Khammam House No. 2-1-335, Trunk Road, Khammam.

Company has made payment of renewal fee for trade license and has obtained receipt from the Municipal Corporation of Khammam bearing Challan Number 090196244 dated May 25, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration No. 6301/KMM-II issued under Andhra Pradesh Shops and Establishment Act, 1988 issued in November, 2010 and valid upto December 31, 2011.

219

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Certificate of Registration bearing Registration No. 3836-K-I issued under Andhra Pradesh Shops and Establishment Act, 1988 issued on January 1, 2011 and valid upto December 31, 2011.

67.

Khammam 11-2-30,Wyra Khammam.

Road,

Company has made payment of renewal fee for trade license and has obtained receipt from the Municipal Corporation of Khammam bearing Challan Number 090196243 dated May 25, 2011. The renewed license is awaited.

68.

Davanagiri Shop No. 628/11A, Nittavalli Main Road, Davangiri.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Devangiri Karnataka, regarding renewal of Trade License. The renewed license is awaited.

Certificate of Registration bearing Registration No. KND2/IX/SHOP/1736/10 issued under Karnataka Shops and Commercial Establishment Act, 1961 issued on September 13, 2010 and valid upto December 31, 2014. Certificate of Registration bearing Registration No. KNHII/SHOP/1182/10 issued under Karnataka Shops and Commercial Establishment Act, 1961 issued on September 20, 2010 and valid upto December 31, 2014.

69.

Hospet Shop No. 247, Patel Nagar, Hospet.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hospet, Karnataka, regarding renewal of Trade License. The renewed license is awaited.

70.

Belgam Shop No. LG-2, Bearing No. 3449, Samadevigalli, Belgaum.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Belgam regarding issue of Trade License. The license is awaited.

Certificate of Registration bearing Registration No. 31/S-705-2010 issued under Karnataka Shops and Commercial Establishment Act, 1961 issued on November 11, 2010 and valid upto December 31, 2014.

71.

Bhimavaram-I Bearing No. 2-1-16/1, J.P. Road, Bhagwan Plaza, Near Padmalaya Theatre, Bhimavaram.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Municipal Corporation Bhimavaram bearing Challan No. 18424 dated February 23, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration No. 7049/ALOII/BVRM issued under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 14, 2011.

220

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Certificate of Registration bearing Registration No. 7013/2010/ALOII/BVRM issued under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 26, 2010.

72.

Bhimavaram-II Bearing No. 3-13-17, Ground Floor, RCC Building, Manikanta, Bhimavaram.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Municipal Corporation Bhimavaram bearing Challan No. 17693 dated February 18, 2011. The renewed license is awaited.

73.

Anakapalli S.V. Building, Fish Market, Main Road, Anakapalli, Vishakhapatnam.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Anakapalli Municipality bearing Challan No. 916 dated May 26, 2011. The renewed license is awaited.

The Company has made payment of fee for labour license and has obtained receipt from the Government of Andhra Pradesh bearing receipt no. 29652.

74.

Anakapalli-II Shop No. 12-1-51, Gollapalli Vari Street, Anakapalli.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Anakapalli Municipal Corporation bearing Challan No. 9530 dated February 18, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration No. 8175/AKP-I issued under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 28, 2011 and valid upto December 31, 2011.

75.

Eluru 22-b-1-29, GNT Road, Vasant Mahal, Powerpeta, Eluru.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Eluru Municipal Corporation bearing Challan No. 1931 dated February 21, 2011. The renewed license is awaited.

Certificate of registration bearing Registration No. 12203/II dated October 11, 2010 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011.

76.

Tanuku Door No. 26-1-9E, R.K. Brothers Building, Velpuru Road, Tanuku.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Tanuku Municipal Corporation bearing Challan No. 646 dated May 25, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration Number 98757/TNK-I under Andhra Pradesh Shops and Establishment Act, 1988 issued on December 4, 2010 which is valid for one year.

77.

Hanamkonda Shop No. 21, Bearing No. 5-9-157, GMR & GS Comples, Krishnapura, Hanamkonda.

Trade License cum receipt has been issued by the Warangal Municipal Corporation, bearing License No. 15845 on March 31, 2011 for the year 2011-12.

Renewal of Certificate of registration bearing Registration No. 892/ALO/HNK under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011.

221

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Renewal of Certificate of Registration bearing Registration No. 3371/ALO/KZPT under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011. Renewal of Certificate of Registration bearing Registration No. 3372/ALO/KZPT under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011. Renewal of Certificate of registration bearing Registration No. ACL II/VSP/597 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011. Renewal of Certificate of Registration bearing registration number 5040/10 issued by Assistant Labour Officer for a period from January 1, 2011 to December 31, 2011.

78.

Hanamkonda Shop No.2, 2-5-83, MLN Archade, Nakkalagutta Hanamkonda.

Trade License cum receipt has been issued by the Warangal Municipal Corporation bearing License No. 15844 issued on March 30, 2011 for the year 2011-12.

79.

Hanamkonda Shop No. 1-8-581, Ground Floor, Opp. Water Tank, Main Road, Hanamkonda.

Trade License cum receipt has been issued by the Warangal Municipal Corporation bearing License No. 1151 issued on March 30, 2011 for the year 2011-12.

80.

Vishakhapatnam (Siripuram Junction) D. No. 50/12/A (1) T.S. No. 79, Block No. 9, Waltair Ward, Vishakhapatnam.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Government of Andhra Pradesh bearing Transaction Number 19923 dated May 24, 2011. The renewed license is awaited. The Company has made payment of renewal fee for trade license and has obtained receipt from the Nalgonda Municipality bearing Challan No. 010494949 dated May 16, 2011. The renewed license is awaited.

81.

Nalgonda H. No. 6-2-628, Hyderabad Road, Nalagonda

82.

Sangareddy D. No. 10-15, Vijayanagar Colony, P.R. Pally, X Roads Sangareddy, Medak District. Bellary Bankimote, Bangalore Road, Adjacent to Madina Masjid, Bellary.

Trade License bearing license Number 60864 issued on May 25, 2011 by Gram Panchayat Officer, Sangareddy for the year 2011-12.

Certificate of Registration bearing Registration Number 3048/SRD issued by the Assistant Labour Officer, Sangareddy on November 25, 2010, which is valid up to December 31, 2011. Certificate of registration bearing Registration No. KNB2/Ward/VI1560/2010 issued by Office of Inspector under Karnataka Shops and Establishment Act. Issued on October 21, 2010 and valid upto December 31, 2014. Certificate of Registration bearing Registration No. A/4999/2010 issued by the Assistant Labour Officer, Miryalaguda on November 27, 2010, which is valid up to December 31, 2011.

83.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Bellary, regarding renewal of Trade License. The renewed license is awaited.

84.

Miryalaguda 18-702/1 Ashok Nagar, Miryalaguda, Nalgonda District.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Miryalguda Municipality bearing Challan No. 010135603 dated May 24th, 2011. The renewed license is awaited.

222

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES

85.

Hassan Shop No. 380, Old Post Office Road, Hassan.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hassan, Karnataka, regarding renewal of Trade License. The renewed license is awaited.

Certificate of Registration bearing Registration No. 5/M-2108/2010 issued by the Office of Inspector under Karnataka Shops and Commercial Establishments Act, 1961. Issued on November 29, 2010 and valid upto December 31, 2014.

86.

Hassan Opposite Prithvi Theatre, B.M. Road, Hassan.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hassan, Karnataka, regarding renewal of Trade License. The renewed license is awaited.

Certificate of Registration bearing Registration No. M-853/10-11 issued by the Office of Inspector under Karnataka Shops and Commercial Establishments Act, 1961. Issued on November 29, 2010 and valid upto December 31, 2014.

87.

Srikakulam Bearing No. Palakonda Srikakulam.

5-1-82, Road,

The Company has made payment of renewal fee for trade license and has obtained receipt from the Srikakulam Municipality bearing Challan No. 2478 dated May 26, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration No. 3967/SrikakulamI issued by the Assistant Labour Officer, Circle-I, Srikakulam on November 26, 2010.

88.

Amalapuram Ground Floor, Gollagudam, High School Street, Amalapuram, East Godavari District.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Amalapuram Municipality bearing 5797 dated March 23, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration No. 142992/08 issued under Andhra Pradesh Shops and Establishment Act, 1988 on March 21, 2011.

89.

Tirupati D.No. 66/B, Opp. Group Theatres, Nehru Street, Tirupati.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Tirupati Municipal Corporation bearing Trade License No. TMC-TLNO-1-6695 dated February 21, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration No. 7336/ALOI issued under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 19, 2011.

223

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Certificate of Registration bearing Registration No. 11287/ALO-1 ONGOLE issued under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 21, 2011.

90.

Ongole Shop No. 11, Municipal Complex, Addanki Bus Stand, Ongole.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Ongole Municipal Corporation bearing Challan Number 26138 dated February 17, 2011. The renewed license is awaited.

91.

Nellore Shop No. 5/726, Opp. SBH, Rebelvari Street, Stonehousepet, Nellore

The Company has made payment of renewal fee for trade license and has obtained receipt from the Nellore Municipal Corporation bearing Challan Number 21654 dated February 9, 2011. The renewed license is awaited.

Certificate of Registration bearing Registration No. 10,121 issued under Andhra Pradesh Shops and Establishment Act, 1988 issued on February 19, 2011.

92.

Bangalore (Hormavu) Shop No. 5, Shiridi Sai Complex, 4th Main Road, Hormavu, K.P. Main Road, Bangalore.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hormavu regarding issue of Trade License. The license is awaited.

Certificate of Registration bearing Registration No. Karnataka I/A/1182/10 issued under Karnataka Shops and Commercial Establishment Act, 1961 on September 28, 2010. The certificate is valid upto December 31, 2014. Certificate of Registration bearing Registration No. 3167/ALOIII/VJM issued under Andhra Pradesh Shops and Establishment Act, 1988 on November 27, 2011.

93.

Vijaynagara Bearing no. 8-1-814, Sai Durga Complex, Mayuri Junction, Station Road, Vijaynagaram.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Vijaynagar Municipality bearing Challan No. 981 dated March 18, 2011. The renewed license is awaited.

94.

Amravati Shop No. 6, Balaji Apartment, Lahanuji Baba Nagar, Amravati.

The Company has made payment of renewal fee for trade license and has obtained receipt from the Amravati Municipality bearing Challan Number M/L 014516 dated February 9, 2011. The renewed license is awaited.

Company has made payment of fees under the Bombay Shops and Establishment Act, 1948 and challan for the same is obtained dated December 13, 2010. The license is awaited.

95.

Amravati Plot No. 2452, Sheet No. 32, Shegaon Nama Chowk, Amravati.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner Municipal Corporation Amravati, Maharashtra regarding issue of Trade License. The license is awaited

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Amravati dated May 30, 2011.

224

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES Company has made payment of fees under the Bombay Shops and Establishment Act, 1948 and challan for the same is obtained dated December 4, 2010. The License is awaited.

96.

Aurangabad Plot no. 383, Sector No.-3, CIDCO, Aurangabad.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Aurangabad regarding issue of Trade License. The License is awaited.

97.

Sholapur Plot No. 18, District Sports Complex, Kumtha Naka, Solapur.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Sholapur regarding issue of Trade License. The License is awaited.

Company has made payment of fees under the Bombay Shops and Establishment Act, 1948 and challan bearing no. 4921 for the same is obtained dated December 4, 2010.

98.

Sholapur Shop No. 1 & 10, Yashwant Market, Gold Pinch Peth, Sholapur.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner Municipal Corporation Sholapur Maharashtra regarding issue of Trade License. The license is awaited.

Company has made payment of fees under the Bombay Shops and Establishment Act, 1948 and challan for the same is obtained dated December 4, 2010. The license is awaited.

99.

Kolhapur Complex 55, Shop No. 5, Pendarkar Complex, Vinus Chowk, Kolhapur.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Kolhapur regarding issue of Trade License. The license is awaited.

Certificate of Registration bearing PN number 0005070 issued under Bombay Shops and Establishment Act, 1948 on January 11, 2011.

100.

Kolhapur Bearing No. G-1, Triveni Vihar, S.D. Vaichal Road, Kolhapur.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Kolhapur regarding issue of Trade License. The license is awaited.

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Kolhapur, dated May 30, 2011.

101.

Nagpur Takwal Layout, Highway Road, Wadi, Nagpur.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Nagpur regarding issue of Trade License. The license is awaited.

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Nagpur, dated May 30, 2011.

102.

Nagpur, Wadi Main Road, Tawakal Layout, Nagpur.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Nagpur regarding issue of Trade License. The license is awaited.

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Labour Department, Nagpur, dated May 30, 2011.

225

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES

103.

Nagpur Shop No. 3, Hanuman Lane, Sitabordi, Nagpur.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Nagpur regarding issue of Trade License. The license is awaited.

Company has made payment of fees under the Bombay Shops and Establishment Act, 1948 and challan for the same is obtained dated December 20, 2010. The license is awaited. Company has made payment of fees under the Bombay Shops and Establishment Act, 1948 and challan for the same is obtained dated December 20, 2010. The license is awaited. The Company has submitted application for issue of labour license to the Assistant Labour Officer, Nasik, dated May 30, 2011.

104.

Nagpur Shop no. 5, Plot No. 654/67, Near Maasurkar Chowk, Old Motor Stand, Itakari Station Road, Nagpur.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Nagpur regarding issue of Trade License. The license is awaited.

105.

Nasik Shop No. 5, Sector E-5, Neighbourhood Shrawan CIDCO, Uttamnagar, CIDCO, Nasik.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Nasik regarding issue of Trade License. The license is awaited.

106.

Nasik Shop no. 10 to 16 situated at Shraddha Park, S. No.: 23/6(P)+71 and 7/2/6, Plot No, 6 and S No.: 23/6 (P), Nasik.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Nasik regarding issue of Trade License. The license is awaited.

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Nasik, dated May 30, 2011.

107.

Pune Shop No. 4, Shivam Apartments. No. 8, Opp. Shivakar Garden, Next to Dominos Pizza, Wanoware, Pune.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Pune regarding issue of Trade License. The license is awaited.

Company has made payment of fees under the Bombay Shops and Establishment Act, 1948 and challan for the same is obtained dated December 15, 2010. The license is awaited.

108.

Chennai (T. Nagar) Bearing No. 5, North Usman Road, T Nagar, Chennai.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Chennai regarding issue of Trade License. The license is awaited.

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Chennai, dated May 30, 2011.

226

SR. NO.

NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES

APPROVALS/LICENSES LABOUR LICENSES The Company has submitted application for issue of labour license to the Assistant Labour Officer, Coimbatore, dated May 30, 2011.

109.

Coimbatore Shop no. 18, Semi Beseant Floor of Sri Sai Complex, Thadagam Road, Coimbatore.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Coimbatore regarding issue of Trade License. The License is awaited.

110.

Aurangabad GUT No: 83, ITH, Khedabeed By-Pass Road Aurangabad.

The Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Aurangabad, Maharashtra regarding issue of Trade License. The License is awaited.

Company has made payment of fees under the Bombay Shops and Establishment Act, 1948 and challan for the same is obtained dated December 7, 2010. The license is awaited.

Approvals regarding the Warehouses: SR. NO. NAME AND ADDRESS OF THE OUTLETS TRADE LICENSES 1. Moosapet D.No. 12-7-20/65/5, Ground Floor, Railways Goods Shed Complex Road, Moosapet, Sanathnar, Hyderabad. 2. Amberpet Door No. 2-2-1089, (New No.2-2-1089/A/1/2, 2-21089/A (New No. 2-21089/A/1/1), Amberpet, Hyderabad. 3. Khairatabad 6-3-580/2, Opp. Zilla Parishad Office, Anandnagar, Khairatabad, Hyderabad. Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hyderabad, regarding issue of Trade License. The License is awaited. The Company has submitted application for renewal of trade license to the Dy. Commissioner Municipal Corporation Amberpet, Hyderabad, dated May 30, 2011. The License is awaited. APPROVALS/LICENSES LABOUR LICENSES Company has made payment of fees under the Andhra Pradesh Shops and Establishment Act, 1948 and challan for the same is obtained dated February 7, 2011. The license is awaited. Company has made payment of fees under the Andhra Pradesh Shops and Establishment Act, 1948 and challan for the same is obtained dated February 7, 2011. The license is awaited. Company has made payment of fees under the Andhra Pradesh Shops and Establishment Act, 1948 and challan for the same is obtained dated February 7, 2011. The license is awaited. Company has made payment of fees under the Andhra Pradesh Shops and Establishment Act, 1948 and challan for the same is obtained dated February 7, 2011. The license is awaited. Company has made payment of fees under the Andhra Pradesh Shops and

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hyderabad regarding issue of Trade License. The License is awaited. The Company has made payment of renewal fee for trade license and has obtained receipt from the Greater Hyderabad Municipal Corporation bearing Receipt Number 31607/27/05/2011 dated May 27, 2011. The renewed license is awaited. Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, 227

4.

Chikadpally 1-8-550/556, Hyderabad. Chikadpally,

5.

Kukatpally

Plot No. 36/MIG and Constructed Cellar, in Survey No. 143 and 144, Situated at Dharma Reddy Colony, Kukatpally, Hyderabad. 6. Kurnool D. No. 216, Sri Maheshwari Mills, Opp SLV Gardens Masamaseed, Mamidalapadu, Kurnool. 7. Hanamkonda, H. No. 5-7-588/2, Postal Colony, Subedari, Hanamkonda. 8. Eluru Bearing No. 22-B-1-29, Cellar (Lower Ground), GNT Road, Vasanth Mahal, Powepeta, Eluru.

Municipal Corporation, Hyderabad regarding issue of Trade License. The License is awaited.

Establishment Act, 1948 and challan for the same is obtained dated February 7, 2011. The license is awaited. The Company has submitted application for issue of labour license to the Assistant Labour Officer, Kurnool, dated May 30, 2011.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Kurnool regarding issue of Trade License. The license is awaited. Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hanamkonda regarding issue of Trade License. The license is awaited. The Company has made payment of renewal fee for trade license and has obtained receipt from the Eluru Municipal Corporation bearing Challan No. 1931 dated February 21, 2011. The renewed license is awaited. The Company has made payment of renewal fee for trade license and has obtained receipt from the A Amadalavalasa Municipal Corporation bearing Receipt Number 455 dated May 27, 2011. The renewed license is awaited.

The Company has submitted application for issue of labour license to the Assistant Labour Officer, Hanamkonda, dated May 30, 2011. Certificate of Registration bearing Registration No. 087212/08 dated February 2, 2011 under the Andhra Pradesh Shops and Establishment Act, 1988 issued for the period from January 1, 2011 to December 31, 2011. Certificate of Registration bearing Registration No. 1057/ADV issued by Assistant Labour Officer (Amadalavalasa) under Andhra Pradesh Shops and Establishment Act, 1988 on November 17, 2010 and valid upto December 31, 2011. Company has submitted application for issue of labour license to the Assistant Labour Officer, Labour Department Nellore dated May 30, 2011. The Company has submitted application for issue of labour license to the Assistant Labour Officer, Hyderabad, dated May 30, 2011.

9.

Srikakulam Bearing No. 16-1-4, Railway Feader Road, Near Goods Shed, Amudalavalasa, Srikakulam.

10.

Nellore Godown D, Bearing No.: 28/1/1021, Mypad Road, Navalak Gardens, Nellore Town, Nellore.

Company has submitted letter dated May 30, 2011 to the Dy. Commissioner Municipal Corporation Nellore regarding issue of Trade License. The license is awaited. Company has submitted letter dated May 30, 2011 to the Dy. Commissioner, Municipal Corporation, Hyderabad regarding issue of Trade License. The license is awaited.

11.

A.S. Rao Nagar Flat No. G-2, Sharada Apartment, Ayodhyanagar, A.S. Rao Nagar, Hyderabad.

Other Approvals 1. 2. The Company has been granted IEC Number 0907006078 vide Certificate of Importer Exporter Code (IEC) dated July 5, 2007. The Company has been brought within the purview of Employees Provident Fund and Miscellaneous provisions Act, 1952 vide allotment of code number AP/HY/56375. The Company establishment has been classified as an establishment engaged in Trading and Commercial.

228

3.

The Company has obtained registration under Section 1(5) of the Employees Sate Insurance Corporation Act, 1948 and has been allotted registration number 52-27/26-102 by the Regional Office, Hyderabad with effect from April 1, 2007. The Company had appointed Mr. Sree Nagamani Alluri as a Whole Time Company Secretary from June 25, 2010 to October 15, 2010 and thereafter the Company appointed Mr. Mr. Srinivasa Rao Kolagani as a Whole Time Company Secretary from December 15, 2010 to till date. However the Company did not appoint any Whole Time Company Secretary since incorporation. Therefore the Company has suo moto filed an application in Form 61, with the ROC, requesting, compounding of the offence. This application has been made due to the violation of Section 621A read with section 383A of the Companies Act 1956, by the Company.

4.

Intellectual Property Registrations I. We have filed the following applications with the Trade Mark registry of Chennai for registration of trademarks and logo, which are pending registration in various classes under the Trade Marks Act, 1999: Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. Application No. 2060209 2060210 2060211 2060212 2060213 2060214 2060215 2080560 Date November 29, 2010 November 29, 2010 November 29, 2010 November 29, 2010 November 29, 2010 November 29, 2010 November 29, 2010 January 4, 2011 Class 24 21 20 11 27 35 9 35 Name of the Applicant M/s PCH Retail Limited M/s PCH Retail Limited M/s PCH Retail Limited M/s PCH Retail Limited M/s PCH Retail Limited M/s PCH Retail Limited M/s PCH Retail Limited M/s PCH Retail Limited Mark PCH Lets Celebrate Life! PCH Lets Celebrate Life! PCH Lets Celebrate Life! PCH Lets Celebrate Life! PCH Lets Celebrate Life! PCH Lets Celebrate Life! PCH Lets Celebrate Life! PCH Retail Registered as Brand Name with Logo Brand Name and Logo Brand Name and Logo Trademark and Logo Brand Name and Logo Brand Name and Logo Brand Name and Logo Brand Name

II.

Registering Copyright under the Indian Copyright Act, of 1957

We are also proposing to make an application for registration of copyright as artistic work and logo under the Indian Copyright Act, of 1957. And for this purpose we require a Non Objection Certificate for trade mark registry. We have filed a form TM-60 with the Trade Mark registry dated February 21, 2011 with application no 31215 to obtain a NOC for registering copyright as artistic work and logo. The proposed copyright over artistic work and logo is as under:

229

SECTION VII: OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue The Board has, pursuant to a resolution dated April 01, 2011 authorized the Issue, subject to the approval by the shareholders of our Company under Section 81(1A) of the Companies Act. The shareholders of our Company have authorized the Issue by a special resolution in accordance with Section 81(1A) of the Companies Act, passed at the EGM of our Company held on April 30, 2011. Our Company has received in-principle approvals from BSE and NSE for the listing of our Equity Shares pursuant to letters dated [] and [] respectively. [] is the Designated Stock Exchange for the purpose of the Issue. Prohibition by SEBI We confirm that neither (i) our Company, the Promoters, Promoter Group, persons in control of our Company or the Group Companies; nor (ii) companies with which any of the Promoters, the Directors, persons in control of our Company or any natural person behind the Promoters are or were associated as a promoter, director or person in control, are debarred or have been prohibited from accessing the capital markets under any order or direction passed by the SEBI or any other authority. There has been no action taken by the SEBI against the Directors or any other entity with which our Directors are associated as promoters or directors. Neither our Company, nor our Promoters, Promoter Group, Group Companies, or Directors have been declared as willful defaulters by the RBI or any other governmental authority. There are no violations of securities laws committed by them in the past or pending against them. Prohibition by RBI Our Company, its Directors, its Promoters, relatives of the Promoters (as defined under the Companies Act) and Group Companies have not been declared as wilful defaulter by RBI or any other government authority and there have been no violation of securities laws committed by them in the past or no such proceeding are pending against our Company or them. Eligibility for the Issue The Company is eligible for the Issue in accordance with Regulation 26(1) of the SEBI Regulations as explained under the eligibility criteria calculated in accordance with financial statements under Indian GAAP: The Company has net tangible assets of at least `300 Lakhs in each of the preceding three full years (of 12 months each), of which not more than 50% are held in monetary assets; The Company has a track record of distributable profits in accordance with Section 205 of the Companies Act, for at least three out of the immediately preceding five years; The Company has a net worth of at least `100 Lakhs in each of the three preceding full years (of 12 months each); The aggregate of the proposed Issue and all previous issues made in the same financial years in terms of the issue size is not expected to exceed five times the pre-Issue net worth of the Company; and The Company has not changed its name since incorporation.

The Companys net profit, dividend, net worth, net tangible assets and monetary assets derived from the financial information included in this Draft Red Herring Prospectus as at, and for the last five years are set forth below: (Amount ` in Lakhs) 2010 2009 2008 2007 Net Tangible Assets(1) 11,577.84 7,914.02 2,633.94 1,271.51 Monetary Assets(2) 262.65 327.47 159.3 2.26 Monetary Assets as a % of the Net 2.27 4.14 6.05 0.18 Tangible Assets (3) Distributable Profits 726.82 525.58 718.93 16.51 Net worth(4) 11,577.84 7,914.02 2,633.94 1,271.51 230

(1)

Net tangible assets are defined as the sum of fixed assets (including capital work in progress and capital advances and excluding intangible assets and revaluation reserves), investments, current assets (excluding deferred tax assets) less current liabilities (including working capital), and short term liabilities. (2) Monetary assets include cash on hand, bank balances and investments in mutual funds. (3) The distributable profits of our Company, as per section 205 of the Companies Act, have been calculated from the audited financial statements of respective years and/or period before making adjustments for restatement of Financial Statements. (4) Net worth = Equity Share Capital + Reserves & Surplus (excluding revaluation reserve, if any) Miscellaneous Expenditure Further, in accordance with Regulation 26(4) of the SEBI Regulations, our Company shall ensure that the number of prospective allottees to whom the Equity Shares will be allotted will be not less than 1,000; otherwise the entire application money will be refunded forthwith. If such application money is not repaid within eight days after our Company becomes liable to repay it (i.e., from the date of refusal or within 15 days from the Bid Closing Date, whichever is earlier), our Company will, on and from the expiry of eight days, be liable to repay such application money with interest thereon at the rate of 15.0% p.a., as prescribed under Section 73 of the Companies Act. Further, the Issue is subject to the fulfilment of the following conditions as required by Rule 19(2) (b) of the SCRR (which was in existence as of the date of filing of the Draft Red Herring Prospectus): A minimum of 2,000,000 Equity Shares (excluding reservations, firm allotments and promoter contribution) are offered to the public; The Issue size, which is the Issue Price multiplied by the number of Equity Shares offered to the public, is a minimum of `10,000 Lakhs; and The Issue is made through the Book Building Process with allocation of up to 50% of the Net Issue to the public to QIBs as specified by the SEBI.

Disclaimer Clause of SEBI "IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF OFFER DOCUMENT TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. THE LEAD MERCHANT BANKER, BOB CAPITAL MARKETS LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE OFFER DOCUMENT ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE 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 INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE OFFER DOCUMENT, THE LEAD MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MERCHANT BANKER BOB CAPITAL MARKETS LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED JUNE 22, 2011 WHICH READS AS FOLLOWS: (1) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT RED HERRING PROSPECTUS PERTAINING TO THE SAID ISSUE;

231

(2) 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.

(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. (4) WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS.- NOTED FOR COMPLIANCE (5) WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS 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 PROMOTERS 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. (6) 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 PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS. (7) 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, 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 ALL THAT PROMOTERS CONTRIBUTION RECEIVED ONE DAY BEFORE OPENING OF THE ISSUE 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. (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 232

NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION. (9) WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF 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. (10) WE CERTIFY THAT SINCE THE PROPOSED ISSUE SIZE IS MORE THAN `10 CRORES, THE PROVISION RELATING TO OPTION TO THE INVESTORS TO GET THE SHARES IN PHYSICAL MODE IS NOT APPLICABLE IN TERMS OF SECTION 68B OF THE COMPANIES ACT, 1956. (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. (12) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS/ DRAFT PROSPECTUS/ DRAFT LETTER OF OFFER: (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.

(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. (14) WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE ,ETC. (15) WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE 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 OFFER DOCUMENT DOES NOT, HOWEVER, ABSOLVE THE ISSUER FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY 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 LEAD MERCHANT BANKER ANY IRREGULARITIES OR LAPSES IN OFFER DOCUMENT." Our Promoters, Sardar Balvinder Singh and Mrs Baljit Kaur confirm that no information/material likely to have a bearing on the decision of investors in respect of the shares offered in terms of this Draft Red Herring Prospectus has been suppressed withheld and / or incorporated in the manner that would amount to misstatement/misrepresentation and in the event of its transpiring at any point in time till allotment/refund, as the case may be, that any information/material has been suppressed/withheld and/ or amounts to a mis-statement/ 233

misrepresentation, our Promoters and Directors undertake to refund the entire application monies to all subscribers within 7 days thereafter without prejudice to the provisions of section 63 of the Act. Caution- Disclaimer from our Company and BRLM The Company, the Directors, and the BRLM 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 the instance of the above mentioned entities and anyone depending on any other source of information, including our website, www.pchretail.com, or the website of our Promoters, Promoter Group, Group Companies, or any affiliate or associate of our Company or its subsidiaries, would be doing so at his or her own risk. The BRLM accepts no responsibility; save to the limited extent as provided in the Issue Agreement entered into between the BRLM and the Company dated June 11, 2011 and the Underwriting Agreement to be entered into among the Underwriters and us. All information shall be made available by our Company and the BRLM 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 or at bidding centres etc. The BRLM and their respective associates and affiliates may engage in transactions with, and perform services for, our Company, our Promoter Group, Group Companies, or our affiliates or associates in the ordinary course of business and have engaged, or may in future engage, in commercial banking and investment banking transactions with our Company, our Promoter Group, Group Companies, and our affiliates or associates, for which they have received and may in future receive compensation. As on date, our BRLM is not a banker to our Company. Neither we nor the Syndicate is liable to the Bidders 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 our 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 our Company and will not offer, sell, pledge or transfer the Equity Shares of our Company to any person who is not eligible under applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of our Company. Our Company, the Underwriters and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Equity Shares of our Company Disclaimer in respect of Jurisdiction This Issue is being made in India to persons resident in India including Indian nationals resident in India who are majors, HUFs, companies, corporate bodies and societies registered under the applicable laws in India and authorized 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), Trusts registered under the Societies Registration Act, 1860, as amended from time to time, or any other trust law and who are authorized under their constitution to hold and invest in shares, Public financial institutions as specified in Section 4A of the Companies Act, state industrial development corporations, insurance companies registered with Insurance Regulatory and Development Authority, and provident funds (subject to applicable law) with minimum corpus of `250 million and pension funds with minimum corpus of `250 million, provided that they are eligible under all applicable laws and regulations to hold Equity Shares of the Company. This Draft Red Herring Prospectus does not, however, constitute an offer to sell or an invitation to subscribe to Equity Shares offered hereby in any other jurisdiction 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 Hyderabad, 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 submitted to SEBI. 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 234

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 our 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 under the U.S. Securities Act 1933, as amended (the Securities Act) or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Equity Shares will be offered and sold outside the United States in compliance with Regulation S of the Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The Equity Shares have not been, and will not be, registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Further, each Bidder where required agrees that such Bidder will not sell or transfer any Equity Shares or create any economic interest therein, including any off-shore derivative instruments, such as participatory notes, issued against the Equity Shares or any similar security, other than pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable laws and legislations in each jurisdiction, including India. A) DISCLAIMER CLAUSE OF THE STOCK EXCHANGES

Disclaimer clause of the Bombay Stock Exchange Limited (BSE): As required, a copy of the Draft Red Herring Prospectus has been submitted to the BSE. BSE has given, by letter dated [], permission to our Company to use BSEs name in this Draft Red Herring Prospectus as one of the stock exchanges on which our Companys securities are proposed to be listed. The BSE has scrutinised the Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to our Company. The BSE does not in any manner: i. ii. iii. Warrant, certify or endorse the correctness of completeness of any of the contents of this Draft Red Herring Prospectus; or Warrant that our Companys securities will be listed or will continue to be listed on the BSE; or Take any responsibility for the financial or other soundness of our Company, our Promoter, our management or any scheme or project of our Company;

And it should not be deemed or construed that this Draft Red Herring Prospectus has been cleared or approved by the BSE. Every person who desires to apply for or otherwise acquires any securities of our Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the BSE whatsoever by reason of any loss which may be suffered by any person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated here or for any reason whatsoever. The disclaimer clause as intimated by the BSE to us, post scrutiny of the 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 this Draft Red Herring Prospectus has been submitted to National Stock Exchange of India Limited. NSE has given, by its letter dated [], permission to our Company to use the NSEs name in this Draft Red Herring Prospectus as one of the stock exchanges on which our Companys securities are proposed to be listed. The NSE has scrutinised the Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to our Company. It is to be distinctly understood that the aforesaid permission given by the NSE should not in any way be deemed or construed that the offer document has been cleared or approved by NSE.; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Red Herring Prospectus.; nor does it warrant that our Companys securities will be listed or will continue to be listed on the NSE; nor does it take any responsibility 235

for the financial or other soundness of our Company, our Promoters, our management or any scheme or project of our Company. Every person who desires to apply for or otherwise acquire any securities of our Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the NSE by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever. The disclaimer clause as intimated by the NSE to us, post scrutiny of the Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus prior to the RoC filing. Disclaimer Clause of IPO Grading Agency [] FILING A copy of this Draft Red Herring Prospectus dated June 23, 2011 has been filed with the SEBI at Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051. A copy of the Red Herring Prospectus, along with the other documents required to be filed under section 60B of the Companies Act, will be delivered for registration to the RoC and a copy of the Prospectus, alongwith the other documents required, to be filed under section 60 of the Companies Act will be delivered for registration to the RoC, situated at 2nd Floor, CPWD Building, Kendriya Sadan, Sultan Bazar, Koti, Hyderabad 500195, Andhra Pradesh, India. LISTING Applications will be made to BSE and NSE for permission to deal in and for an official quotation of the Equity Shares of our Company. [] shall be the Designated Stock Exchange with which the basis of allocation will be finalised. If the permission to deal in and for an official quotation of the Equity Shares is not granted by any of the Stock Exchanges mentioned above, our Company shall forthwith repay, without interest, all monies received from the applicants in pursuance of the Red Herring Prospectus. If such money is not repaid within eight days after our Company becomes liable to repay it (i.e. from the date of refusal or within 15 days from the Bid/Issue Closing Date, whichever is earlier), then our Company, and every Director of our Company who is an officer in default shall, on and from 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. Our Company shall ensure that all steps for the completion of the necessary formalities for listing and commencement of trading at both the Stock Exchanges mentioned above are taken within twelve Working Days from the Bid /Issue Closing Date. 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 b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years."

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CONSENTS Consents in writing of the Directors, our Company Secretary and Compliance Officer, the Auditors, the Legal Advisor, Bankers to our Company, Bankers to the Issue, BRLM, Syndicate Members, Escrow Collection Bankers and the Registrar to the Issue to act in their respective capacities, have been obtained and will be filed along with a copy of the RHP with the ROC as required under Sections 60 and 60B of the Companies Act and such consents have not been withdrawn up to the time of delivery of the Prospectus for registration with the ROC. M/s. Karumanchi & Associates, Auditors of our Company have also given their consent to the inclusion of their report as appearing in the form and context in this Draft Red Herring Prospectus at page 160 and also of the tax benefits accruing to our Company and to the members of our Company and such consent and report have not been withdrawn up to the time of signing this Draft Red Herring Prospectus. [], a SEBI registered credit rating agency engaged by us for the purpose of obtaining IPO grading in respect of this Issue, has given its written consent to being named as an expert for purposes of grading of the Issue and to the inclusion of its grading of the Issue in the Red Herring Prospectus and such consent and report will not be withdrawn up to the time of delivery of the Red Herring Prospectus and the Prospectus to the Designated Stock Exchange. EXPERT OPINION OBTAINED, IF ANY Except the report of [] in respect of the IPO grading of the Issue annexed herewith and the report of our Auditor in respect of the information in Financial Statements and Statement of Tax Benefits on pages 160 and 65 respectively our Company has not obtained any other expert opinions. EXPENSES OF THE ISSUE Our Management estimates an expense or `[] Lakhs towards issue expense. The expenses of this Issue include, among others, underwriting and lead management fees, selling commission, printing and distribution expenses, legal fees, statutory advertisement expenses and listing fees. All expenses with respect to the Issue will be borne by our Company. The estimated Issue expenses are as follows: (` In Lakhs) Activity Expenses % of the Issue % of the Issue Expenses Size Lead management, underwriting and [] [] [] selling commission* Registrar Fees* [] [] [] Advertising and Marketing expenses* [] [] [] Printing and stationery* [] [] [] Fees paid to the IPO grading agency* [] [] [] Bankers to the Issue* [] [] [] Others (Registrars fee, legal fee, listing [] [] [] fee, etc.)* Total estimated Issue expenses* [] [] [] *Will be completed after finalization of the Issue Price DETAILS OF FEES PAYABLE Book Running Lead Manager to the Issue and the Syndicate Members The total fees payable to the Book Running Lead Manager and the Syndicate Members (including underwriting commission and selling commission and reimbursement of their out of pocket expenses) will be as per the Issue Agreement dated October 21, 2010 signed with the BRLM and the Syndicate Agreement dated [] amongst our Company, the BRLM and the Syndicate members, copies of which are available for inspection at the Registered Office of our Company. The BRLM will be reimbursed for all relevant out-of-pocket expenses such as cost of travel, stationery, postage and communication expenses.

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Fees Payable to the Registrar to the Issue The fees payable by our 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 Agreement signed with our Company dated November 09, 2010a copy of which is available for inspection at our Companys registered office. 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 by our Company 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. PREVIOUS PUBLIC OR RIGHTS ISSUE The Company has not made any public or rights issue of shares either in India or abroad since the time of its incorporation. PREVIOUS ISSUE OF SHARES OTHERWISE THAN FOR CASH Except as stated in the chapters titled Capital Structure and History and Certain Coporate Matters beginning on pages 41 and 137 respectively, of the Draft Red Herring Prospectus, the Company has not made any previous issues of shares for consideration other than cash. COMMISSION AND BROKERAGE ON PREVIOUS ISSUES Since this is the initial public offer of our 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 inception of our Company. LISTED COMPANIES UNDER THE SAME MANAGEMENT Nil CAPITAL ISSUE DURING THE LAST THREE YEARS The Company has not made any capital issues in the last three years. PROMISE VIS-A-VIS PERFORMANCE Nil OUTSTANDING DEBENTURES OR BONDS AND REDEEMABLE PREFERENCE SHARES AND OTHER INSTRUMENTS There are no outstanding debentures or bonds or redeemable preference shares and other instruments issued by the Company as on the date of the Draft Red Herring Prospectus. STOCK MARKET DATA This being an initial public offering of our Company, the Equity Shares are not listed on any stock exchange.

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PURCHASE OF PROPERTY There is no property which has been purchased or acquired or is proposed to be purchased or acquired which is to be paid for wholly or partly from the proceeds of the present Issue or the purchase or acquisition of which has not been completed on the date of the Draft Red Herring Prospectus, other than property, in respect of which: The contract for the purchase or acquisition was entered into in the ordinary course of business, nor was the contract entered into in contemplation of the Issue, nor is the Issue contemplated in consequence of the contract; or The amount of the purchase money is not material. The Company has not purchased any property in which any of our Promoters and/or Directors, have any direct or indirect interest in any payment made thereunder. INVESTOR GRIEVANCES AND REDRESSAL SYSTEM The Company has appointed the Registrar to the Issue, to handle the investor grievances in co-ordination with the Compliance Officer of our Company. All grievances relating to the present issue may be addressed to the Registrar with a copy to the Compliance Officer, giving full details such as name, address of the applicant, number of equity shares applied for, amount paid on application and bank and branch. The Agreement between the Registrar to the Issue and our Company provides for retention of records with the Registrar to the Issue for a period of three years to enable the investors to approach the Registrar to the Issue for redressal of their grievances. We estimate that the average time required by us or the Registrar to the Issue for the redressal of routine investor grievances will be seven Working Days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, we will seek to redress these complaints as expeditiously as possible. Our Company would monitor the work of the registrar to ensure that the investor grievances are settled expeditiously and satisfactorily. All grievances relating to the ASBA process may be addressed to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount paid on application and the Designated Branch or the collection centre of the SCSB where the Bid-cum-Application Form was submitted by the ASBA Bidders. The Registrar to the issue, namely, Link Intime India Private Limited, will handle investors grievances pertaining to the issue. A fortnightly status report of the complaints received and redressed by them would be forwarded to our Company. Our Company would also be co-ordinating with the Registrar to the issue in attending to the grievances to the investor. Our Company assures that the Board of Directors in respect of the complaints, if any, to be received shall adhere to the following schedules: Sr. No. 1 2 3 Nature of complaint Non-receipt of refund Non Receipt of Share Certificate/Demat Credit Any other complaint in relation to Public Issue Time Table Within 7 days of receipt of complaint subject to production of satisfactory evidence Within 7 days of receipt of complaint subject to production of satisfactory evidence Within 7 days of receipt of complaint with all relevant details

Redressals of investors grievance are given top priority by our Company. The Committee oversees redressal of complaints of shareholders/investors and other important investor related matters. Our Company has adequate arrangements for redressal of investor complaints as follows: Share transfer/ dematerialisation/ rematerialisation are handled by well equipped professionally managed Registrar and Transfer Agent, appointed by our Company in terms of SEBIs direction for appointment of Common Agency for physical as well as demat shares. The Registrars are constantly monitored and supported by qualified and experienced personnel of our Company. We have appointed Mr. Srinivasa Rao Kolagani, Company Secretary as the Compliance Officer and he may be contacted in case of any pre-issue or post-issue problems. He can be contacted at the following address:

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Company Secretary and Compliance Officer PCH Retail Limited 103-107, Maheswari Chambers, Somajiguda, Hyderabad 500 082 Tel no: +91 40 2331 7853 Fax no: +91 40 2331 6310 Email: cs@pchretail.com Website: www.pchretail.com CHANGES IN AUDITORS IN THE LAST THREE YEARS Change in Auditors M/s N. A. Hariharan, Chartered Accountants M/s Karumanchi & Associates Date of Appointment Janurary 03, 2007 September 30, 2010 Date of Resignation September 27, 2010

CAPITALIZATION OF RESERVES OR PROFITS DURING LAST 5 YEARS Except as disclosed in the section titled Capital Structure beginning on page 41 of this Draft Red Herring Prospectus, our Company has not capitalised its reserves or profits at any time since incorporation. TAX IMPLICATIONS Investors that are allotted Equity Shares in the Issue will be subject to capital gains tax on any resale of the Equity Shares at applicable rates, depending on the duration for which the investors have held the Equity Shares prior to such resale and whether the Equity Shares are sold on the stock exchanges. For details, please see the section titled Statement of Tax Benefits beginning on page 65 of this Draft Red Herring Prospectus. REVALUATION OF ASSETS DURING THE LAST 5 YEARS Our company has not revalued its assets during the last 5 years.

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SECTION VIII: ISSUE RELATED INFORMATION TERMS OF THE ISSUE The Equity Shares being offered are subject to the provisions of the Companies Act, our Memorandum and Articles, the terms of this Draft Red Herring Prospectus, Red Herring Prospectus, the Prospectus, the Bid-cumApplication Form, the 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 as applicable, guidelines, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, Government of India, the Stock Exchanges, the Reserve Bank of India, ROC 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 offered shall be subject to the provisions of the Companies Act, our Memorandum and Articles and shall rank pari passu in all respects with the existing Equity Shares including rights in respect of dividend. The Allottees will be entitled to dividend or any other corporate benefits, if any, declared by our Company after the date of allotment. MODE OF PAYMENT OF DIVIDEND We shall pay dividend to our shareholders as per the provisions of the Companies Act, 1956. FACE VALUE AND ISSUE PRICE The face value of the Equity Shares is `10 each and the Floor Price is `[] and the Cap Price is `[] per Equity Share. At any given point of time there shall be only one denomination for the Equity Shares subject to the applicable laws. The Price Band and the minimum Bid lot size for the Issue will be decided by our Company, in consultation with the BRLMs, and advertised in [] edition of [] newspaper in English language, in [] edition of [] newspaper in Hindi language and in [] edition of [] newspaper in Telugu language with wide circulation, at least two Working days prior to the Bid/Issue Opening Date. COMPLIANCE WITH SEBI REGULATIONS Our Company shall comply with applicable disclosure and accounting norms specified by SEBI from time to time. RIGHTS OF THE EQUITY SHAREHOLDERS Subject to applicable laws, the equity shareholders shall have the following rights: a) b) c) d) e) f) g) 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 annual reports and notices to members; Right to receive offers for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation subject to any statutory and preferential claims being satisfied; Right of free transferability, subject to applicable foreign exchange regulations and other applicable laws; and h) Such other rights, as may be available to a shareholder of a listed public company under the Companies Act, 1956, the terms of the Equity Listing Agreement, and the Memorandum and Articles of our Company. MARKET LOT In terms of Section 68B of the Companies Act, 1956, the Equity Shares of our Company shall be allotted only in dematerialized form. In terms of the existing SEBI (ICDR) Regulations, the trading in the Equity Shares of our Company shall only be in dematerialized form for all investors. Since trading of our Equity Shares will be in dematerialized mode, the tradable lot is one Equity Share. Allotment of Equity Shares through this Issue will be

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done only in electronic form in multiples of one Equity Share subject to a minimum Allotment of [] Equity Shares. JOINT HOLDERS Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint-tenants with benefits of survivorship. NOMINATION FACILITY TO INVESTOR In accordance with Section 109A of the Companies Act, the sole or first Bidder, along with other joint Bidder(s), may nominate any one person in whom, in the event of death of the 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 in accordance with Section 109A of the Companies Act, 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. A fresh nomination can be made only on the prescribed form available on request at the registered office of our Company or with the Registrar. In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, shall upon the production of such evidence as may be required by our Board, elect either: 1. 2. 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, our 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, our Board may thereafter withhold payment of all dividends, bonuses or other monies 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 dematerialized form, there is no need to make a separate nomination with us. Nominations registered with the respective depository participant of the applicant would prevail. If the investors require changing the nomination, they are requested to inform their respective depository participant. MINIMUM SUBSCRIPTION In the event our Company does not receive a minimum subscription of 90% of the Issue, including devolvement to the Underwriters within 60 days from the Bid Closing Date, we shall forthwith refund the entire subscription amount received. If there is a delay beyond eight days after our Company becomes liable to pay the amount, we shall pay such interest prescribed under Section 73 of the Companies Act. Further, in accordance with Rule 19(2)(b)(i) of the SCRR read with Regulation 26(4) of the SEBI (ICDR) Regulations, our Company shall ensure that the number of Allottees under the Issue shall not be less than 1,000, failing which the entire application money will be refunded forthwith. BIDDING PERIOD Bidders may submit their Bids only in the Bidding Period. The Bid/Issue Opening Date is [] and the Bid/Issue Closing Date is []. ARRANGEMENTS FOR DISPOSAL OF ODD LOTS Our Company's Equity Shares will be traded in dematerialized form only. Marketable lot is one Equity Share. Hence there is no possibility of odd lots.

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RESTRICTIONS ON TRANSFER OF SHARES Except for the lock-in of the post-Issue Equity Shares forming the Promoters' contribution in the Issue and the balance pre-Issue share capital of our Company as detailed in "Capital Structure" beginning on page 41 of this Draft Red Herring Prospectus, there are no restrictions on the transfer and transmission of shares/debentures and on their consolidation/ splitting except as provided for in our Articles. Please see the section titled Main Provisions of the Articles of Association beginning on page 280 of this Draft Red Herring Prospectus. WITHDRAWAL OF THE ISSUE Our Company, in consultation with the BRLMs, reserves the right not to proceed with the Issue at any time after the Bid/Issue Opening Date but before the Board meeting for Allotment, without assigning any reason therefor. If our Company withdraws from the Issue, it shall issue a public notice within two days of the closure of the Issue. The notice shall be issued in the same newspapers where the pre-Issue advertisements have appeared and our Company shall also promptly inform the Stock Exchanges. If our Company withdraws the Issue after the Bid/Issue Closing Date and thereafter determines that it will proceed with an initial public offering of its Equity Shares, it shall file a fresh draft red herring prospectus with SEBI. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment and (ii) the final RoC approval of the Prospectus after it is filed with the RoC. In terms of the SEBI (ICDR) Regulations, the QIBs shall not be allowed to withdraw their Bids after the Bid/Issue Closing Date.

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ISSUE STRUCTURE The present Issue of 1,68,27,000 Equity Shares of `10 each at a price of `[] for cash, aggregating `[] is being made through the Book Building Process out of which the promoters contribution consists of 55, 27, 000 Equity Shares of `10 each at a price of `[] for cash and Net Issue to the public constitutes 1, 13,00,000 Equity Shares of `10 each at a price of `[] for cash. The Issue and Net Issue will constitute 38.71% and 25.99% of the fully diluted post Issue paid up capital of the Company. The Issue is being made through a 100% Book Building Process. Particulars Number of Equity Shares* QIBs# Up to 56,50,000 Equity Shares. Non-Institutional Bidders Not less than 16,95,000 Equity Shares or Net Issue less allocation to QIB Bidders and Retail Individual Bidders shall be available for allocation. Not less than 15% of the Net Issue or the Net Issue less allocation to QIB Bidders and Retail Individual Bidders shall be available for allocation. Proportionate. Retail Individual Bidders Not less than 39,55,000 Equity Shares or the Net Issue less allocation to QIB Bidders and Non- Institutional Bidders shall be made available for allocation.

Percentage of Issue available for Allocation

size

Up to 50% of the Net Issue. However, up to 5% of the QIB Portion shall be available for allocation proportionately to Mutual Funds only.

Not less than 35% of the Net Issue or the Net Issue less allocation to QIB Bidders and Non-Institutional Bidders shall be available for allocation.

Basis of Allocation if Respective Category is Oversubscribed

Minimum Bid

Proportionate as follows: (a) Equity Shares constituting 5% of the QIB portion shall be allocated on a proportionate basis to Mutual Funds (b) The balance Equity Shares shall be allocated 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 `100,000 and in multiples of [] Equity Shares. Such number of Equity Shares not exceeding the Net Issue, subject to applicable limits. Compulsorily in dematerialized form. [] Equity Shares and in multiples on [] Equity Shares thereafter One Equity Share Public financial institution

Proportionate.

Maximum Bid

Mode of Allotment Bid/ Allotment lot

Trading Lot Who can Apply**

Such number of Equity Shares that the Bid Amount exceeds `100,000 and in multiples of [] Equity Shares. Such number of Equity Shares not exceeding the Net Issue subject to applicable limits. Compulsorily in dematerialized form. [] Equity Shares and in multiples on [] Equity Shares thereafter One Equity Share Resident Indian 244

[] Equity Shares

Such number of Equity Shares whereby the Bid Amount does not exceed `200,000.

Compulsorily in dematerialized form. [] Equity Shares and in multiples on [] Equity Shares thereafter One Equity Share Resident Indian

Individuals

Particulars

QIBs# as defined in section 4A of the Companies Act, 1956, scheduled commercial banks, state industrial development corporations, insurance companies registered with the Insurance Regulatory and Development Authority (IRDA), provident funds with minimum corpus of `2,500 Lakhs, pension funds with minimum corpus of `2,500 Lakhs, National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of Government of India published in the Gazette of India, Insurance funds set up and managed by the army, navy, or air force of the Union of India, Insurance funds set up and managed by the Department of Posts, India Full Bid Amount on Bidding.

Non-Institutional Bidders individuals including HUF (in the name of Karta), companies, bodies corporate, scientific institutions societies, trusts.

Retail Individual Bidders including HUF (in the name of Karta), applying for Equity Shares such that the Bid Amount per individual Bidder does not exceed `200,000.in value.

Terms Payment***

of

Full Bid Amount on Bidding.

Full Bid Amount on Bidding.

* Subject to valid Bids being received at or above the Issue Price. The Issue is being made through a 100% Book Building Process wherein up to 50% of the Net Issue shall be allotted on a proportionate basis to QIBs. 5% of the Issue in the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds. The remainder shall be available for allotment on a proportionate basis to QIBs, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Under-subscription, if any, in any category would be allowed to be met with spill-over from any other category or combination of categories at the sole discretion of our Company in consultation with the BRLM and the Designated Stock Exchange. ** In case the Bid cum Application Form or the Application Supported by Blocked Amount is submitted in joint names, the investors 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 or the Application Supported by Blocked Amount. *** 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 Bid cum ASBA Form.

Withdrawal of the Issue Our Company, in consultation with the BRLM, reserves the right not to proceed with the Issue at any time after the Bid/Issue Opening Date but before the Board meeting for Allotment, without assigning any reason there for. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment and (ii) the final RoC 245

acknowledgement of the Prospectus after it is filed with the RoC. In such an event our Company would issue a public notice in the newspapers, in which the pre-Issue advertisements were published, within two days of the Bid/ Issue Closing Date, providing reasons for not proceeding with the Issue. Our Company shall also inform the same to Stock Exchanges on which the Equity Shares are proposed to be listed. The BRLM, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one day from the date of receipt of notification of withdrawal of the issue. Under the SEBI Guidelines, QIBs are not allowed to withdraw their Bids after the Bid/Issue Closing Date. If our Company does not receive minimum subscription of 90% of the Issue size, including devolvement of the members of the syndicate, our Company shall forthwith refund the entire subscription amount received. In case, our Company receives minimum subscription but wishes to withdraw the Issue after Issue Opening but before allotment, our Company will give public notice giving reasons for withdrawal of Issue but if our Company thereafter decides to proceed with the initial public offering of its Equity Shares, it shall file a fresh draft red herring prospectus. The Public Notice will appear in an English national newspaper, a Hindi national newspaper and one regional language newspaper with wide circulation. Letters of Allotment or Refund Orders Our Company shall credit each beneficiary account with its depository participant within 10 Working Days of the Bid/Issue Closing Date. Applicants those who are residents of the 68 cities notified by SEBI through its notification (Ref. No. SEBI/CFD/DILDIP/29/2008/01/02) dated February 1, 2008 will receive refunds through NECS only (subject to availability of all information for crediting the refund through NECS) except where the applicant is eligible to receive refunds through direct credit, NEFT or RTGS. In the case of other applicants, our Company shall ensure the dispatch of refund orders, if any, of value up to `1,500 by Under Certificate of Posting, and shall dispatch refund orders above `1,500, if any, by registered post or speed post at the sole or First Bidders, sole risk within 10 Working Days of the Bid/Issue Closing Date. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter (refund advice) through ordinary post informing them about the mode of credit of refund, within 10 Working Days of the Bid/Issue Closing Date. In case of ASBA Bidders, the Registrar to the Issue will, within 9 Working Days of the Bid Closing Date, instruct the relevant SCSB to, on the receipt of such instructions from the Registrar to the Issue, unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the Bid cum Application Form or the relevant part thereof, for withdrawn, rejected, unsuccessful or partially successful ASBA Bids. Interest in case of delay in dispatch of Allotment Letters/Refund Orders In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Guidelines, our Company undertakes that: Allotment shall be made only in dematerialized form within 10 Working Days from the Bid/Issue Closing Date; Dispatch of refund orders shall be done within 10 Working Days from the Bid/Issue Closing Date; and Our Company shall pay interest at 15% per annum, if Allotment is not made and refund orders are not dispatched to the applicant or if, in a case where the refund or portion thereof is made in electronic mode/manner, the refund instructions have not been given to clearing members and/or demat credits are not made to investors within the 15 day time period prescribed above.

Our 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 the Escrow Collection Banks and payable at par at places where Bids are received, except where the refund or portion thereof is made in electronic mode/manner. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centers will be payable by the Bidders. Bid/Issue Program BID/ISSUE OPENS ON BID / ISSUE CLOSES (EXCEPT FOR QIB BIDDERS) ON BID / ISSUE CLOSES (FOR QIB BIDDERS) ON [] [] []

246

Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time) during the Bidding Period as mentioned above at the bidding centers mentioned on the Bid cum Application Form or incase of bids submitted through ASBA, the designated branches of the SCSBs except that on the Bid/Issue Closing Date, Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time) and uploaded till (i) 4.00 p.m. in case of Bids by QIB Bidders and Non-Institutional Bidders (ii) till until 5.00 p.m. in case of Bids by Retail Individual Bidders. Due to limitation of the 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. (Indian Standard Time) on the Bid/Issue Closing Date. Bidders are advised that due to clustering of last day applications, as is typically experienced in public offerings, some Bids may not get uploaded on the last date. Such Bids that cannot be uploaded will not be considered for allocation under the Issue. If such Bids are not uploaded, the Issuer, BRLM and Syndicate members will not be responsible. Bids will be accepted only on Working days, i.e. Monday to Friday (excluding any public holiday). Bids by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the NSE and the BSE. On the Bid/Issue Closing Date, extension of time may 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 timings for acceptance of Bid cum Application Forms and ASBA Form as stated herein and reported by the BRLM to the Stock Exchange within half an hour of such closure. 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 submitted through the ASBA process, for a particular ASBA Bidder, 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 the times mentioned above on the Bid/Issue Closing Date. All times are Indian Standard Time. 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, BRLM and Syndicate members will not be responsible. Bids will be accepted only on Working days, i.e., Monday to Friday (excluding any public holidays). Our Company reserves the right to revise the Price Band during the Bid/Issue Period in accordance with the SEBI ICDR Regulations provided that the Cap Price is less than or equal to 20% of the Floor Price. 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 Closing Date. In case of revision in the Price Band, the Issue Period will be extended for three additional Working days after revision of Price Band subject to the Bidding Period/Issue Period not exceeding 10 Working days. Any revision in the Price Band and the revised Bidding Period/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 change on the web sites of the Book Runners at the terminals of the Syndicate.

247

ISSUE PROCEDURE This section applies to all Bidders. Please note that pursuant to the SEBI Circular dated April 29, 2011, bearing no. CIR/CFD/DIL/1/2011, all non-Retail Individual Bidders i.e. QIBs and Non-Institutional Bidders are mandatorily required to submit their Bids by way of ASBA. ASBA Bidders should note that the ASBA process involves application procedures that may be 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 or instruct the relevant SCSB to block the full Bid Amount along with the Bid cum Application Form. Please note that the information stated/ covered in this section may not be complete and / or accurate and as such would be subject to modification/ change. Our Company and the Book Running Lead Manager would not be liable for any amendment, modification or change in applicable law, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure that their Bids do not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or as specified in the Red Herring Prospectus and the Prospectus. It may be noted that as per circular dated Oct 12, 2010 by SEBI, the Syndicate has been permitted to procure ASBA Bid-cum-Application Forms from the ASBA Bidders and submit the same to the SCCBs. The said SEBI Circular further states that the implementation of this circular would require some modification in existing processes and systems and such modifications shall be communicated in due course. We shall incorporate disclosures to this effect in the Red Herring Prospectus/ Prospectus to be filed for the Issue, once the requisite modifications to existing processes and systems are communicated or otherwise suggested by SEBI. Book Building Procedure The Issue is being made through a Book Building Process wherein not more than 50% of the Net Issue will be available for allocation to Qualified Institutional Buyers (QIBs). 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. Further, not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to NonInstitutional Bidders and not less than 35% of the Net 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. Undersubscription, if any, in any category, would be allowed to be met with spill-over from any other category or combination of categories at the sole discretion of our Company, in consultation with the BRLM and Designated Stock Exchange. In case of QIBs, Bidding through the Syndicate ASBA, the Managers and their affiliate members of the Syndicate, may reject Bids at the time of acceptance of the ASBA Bid cum Application Form provided that the reasons for such rejection shall be disclosed to such Bidder in writing. In case of Non-Institutional Bidders and Retail Individual Bidders, our Company has a right to reject Bids based on technical grounds only. Investors should note that Allotment to successful Bidders will be only in the dematerialised form. Bid cum Application Forms or ASBA Bid cum Application Forms which do not have the details of the Bidders depository accounts including DP ID, PAN and Client ID will be treated as incomplete and rejected. Bidders will not have the option of receiving Allotment in physical form. On Allotment, the Equity Shares will be traded only on the dematerialized segment of the Stock Exchanges. Bidders are required to ensure that the PAN (of the sole/ first Bidder) provided in the Bid cum Application Form or the ASBA Bid cum Application Form is exactly the same as the PAN of the person(s) in whose name the relevant beneficiary account is held. If the Bid cum Application Form or the ASBA Bid cum Application Form was submitted in joint names, Bidders are required to ensure that the beneficiary accounts are held in the same joint names in the same sequence in which they appeared in the Bid cum Application Form or the ASBA Bid cum Application Form.

248

ASBA Process In accordance with the ICDR Regulations, all Bidders can participate in the Issue through the ASBA process. ASBA Bidders shall submit an ASBA Bid-cum-Application Form either (i) in physical form to the Designated Branch of an SCSB or (ii) in electronic form through the internet banking facility offered by an SCSB authorizing blocking of funds that are available in the bank account (ASBA Account) specified in the ASBA Bid-cum- Application Form used by ASBA Bidders. The SCSB shall block an amount equal to the Bid Amount in the ASBA Account, on the basis of an authorization to this effect given by the account holder at the time of submitting the Bid. The ASBA data shall be uploaded by the SCSB in the electronic bidding system of the Stock Exchanges. The Bid Amount shall remain blocked in the ASBA Account until approval of the basis of Allotment in the Issue by the Designated Stock Exchange and consequent transfer of the Bid Amount against the allocated shares to the Public Issue Account, or until withdrawal or failure of the Issue or until withdrawal or rejection of the ASBA Bid, as the case may be. Once the basis of Allotment is approved by the Designated Stock Exchange, the Registrar to the Issue shall send an appropriate request to the Controlling Branch of the SCSB for unblocking the relevant bank accounts and for transferring the requisite amount to the Public Issue Account. In case of withdrawal or failure of the Issue, the blocked amount shall be unblocked on receipt of such information from the BRLM and/or the Registrar. Investors should note that allotment of Equity Shares to all successful Bidders will only be in the dematerialized form. The Bid-cum-Application Forms and ASBA Bid-cum-Application Forms which do not have the details of the Bidders Depository Account shall be treated as incomplete and are liable to be rejected. Bidders will not have the option of being allotted the Equity Shares in physical form. Upon allotment, the Equity Shares shall be traded only in the dematerialized segment of the Stock Exchanges. Bid-cum-Application Form And ASBA Bid-cum-Application Form Copies of the Bid cum Application Form will be available for all categories of Bidders, with the members of the Syndicate and our Registered Office and our Corporate Office. In addition, ASBA Bid cum Application Forms in physical form will be available with the Designated Branches, and electronic ASBA Bid cum Application Forms will be available on the websites of the SCSBs and of the Stock Exchanges at least one day prior to the Issue Opening Date. Copies of the Red Herring Prospectus shall, on a request being made by any Bidder, be furnished to such Bidder at our Registered Office, our Corporate Office and the Designated Branches. Bidders shall only use the specified Bid cum Application Form bearing the stamp of a member of the Syndicate, unless they are using the ASBA Process. Before being issued to the Bidders, the Bid cum Application Form shall be serially numbered and date and time stamped and such form shall be issued in duplicate signed by the Bidder. The Bid Cum Application Form and the ASBA Bid cum Application Form shall contain information about the Bidders, the price and the number of Equity Shares Bid for. Bidders shall have the option to make a maximum of three Bids (in terms of number of Equity Shares and respective Bid Amount) in the Bid cum Application Form and such options shall not be considered as multiple Bids. The collection centre of the Syndicate will acknowledge the receipt of the Bid Cum Application Form or Revision Form by stamping the acknowledgment slip and returning it to the Bidder. This acknowledgment slip shall serve as the duplicate of the Bid Cum Application Form for the records of the Bidder and the Bidder shall preserve this and should provide the same for any queries relating to non-Allotment of Equity Shares in the Issue. Upon completing and submitting the Bid cum Application Form to a member of the Syndicate, the Bidder is deemed to have authorised our Company to make the necessary changes in the Red Herring Prospectus and the Bid cum Application Form as would be required for filing the Prospectus with the RoC and as would be required by the RoC after such filing, without prior or subsequent notice of such changes to the Bidder. Upon determination of the Issue Price and filing of the Prospectus with the RoC, the Bid cum Application Form shall be considered as the application form. Bidders can also submit their Bids through the ASBA by submitting ASBA Bid cum Application Forms, either in physical or electronic mode, to the SCSB with whom the ASBA Account is maintained or through the members of the Syndicate/ sub-Syndicate (ASBA Bids through the members of the Syndicate/ sub-Syndicate shall hereinafter be referred to as the Syndicate ASBA). However, ASBA Bids through Syndicate ASBA is permitted only at the Syndicate ASBA Centres. An ASBA Bidder shall use the ASBA Bid cum Application Form obtained from the Designated Branches for the purpose of making a Bid. ASBA Bidders can submit their Bids, either in physical or electronic mode. In case of application in physical mode, the ASBA Bidder shall submit the ASBA Bid cum Application Form, which shall be stamped, at the 249

relevant Designated Branch. ASBA Bid cum Application Form in physical mode, which shall be stamped, can also be submitted to be members of the Syndicate at Syndicate ASBA Centres. In case of application in electronic form, the ASBA Bidder shall submit the ASBA Bid cum Application Form either through the internet banking facility available with the SCSBs or such other electronically enabled mechanism for Bidding and blocking funds in the ASBA Account held with SCSB, and accordingly registering such Bids. The SCSB shall block an amount in the ASBA Account equal to the Payment Amount specified in the ASBA Bid cum Application Form. Upon completing and submitting the ASBA Bid cum Application Form to the SCSB or to the members of the Syndicate, the ASBA Bidder is deemed to have authorised our Company to make the necessary changes in the Red Herring Prospectus and the ASBA Bid cum Application Form, 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 ASBA Bidder. To supplement the foregoing, the mode and manner of Bidding is illustrated in the following chart Category of bidder Retail Individual Bidders Mode of Bidding Application form to be used for Bidding (i) If Bidding through ASBA, ASBA Form (physical or electronic); or (ii) If Bidding through non-ASBA, Bid cum Application Form. To whom the application form has to be submitted (i) If using physical ASBA Form, to the members of the Syndicate only at Syndicate ASBA Centres; or (ii) If using physical ASBA Form, to the Designated Branches of the SCSBs where the SCSB account is maintained; or (iii) If using electronic ASBA Form, to the SCSBs, electronically through internet banking facility, where the SCSB account is maintained; or (iv) If using Bid cum Application Form, to the members of the Syndicate at the Bidding Centres. (i) If using physical ASBA Form, to the members of the Syndicate only at Syndicate ASBA Centre; or (ii) If using physical ASBA Form, to the Designated Branches of the SCSBs where the SCSB account is maintained; or (iii) If using electronic ASBA Form, to the SCSBs, electronically through internet banking facility, where the SCSB account is maintained.

Either (i) ASBA or (ii) non-ASBA

NonInstitutional Bidders and QIBs

ASBA (Kindly note that ASBA is mandatory and no other mode of Bidding is permitted)

ASBA Form (physical or electronic)

The prescribed colour of the Bid cum Application Form /ASBA Bid cum Application Form for various categoriesis as follows: Category Resident Indians Non-Institutional Bidders and QIB Bidders Colour of Bid cumApplication Form [] []

250

Who can Bid? Persons eligible to invest in the Equity Shares under all applicable laws, rules, regulations and guidelines; 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 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; Indian financial institutions, scheduled commercial banks (excluding foreign banks), regional rural banks, co-operative banks (subject to RBI regulations and the SEBI Regulations and other laws, as applicable); 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 `250 million and who are authorised under their constitution to hold and invest in equity shares; Pension Funds with a minimum corpus of `250 million and who are authorised under their constitution to hold and invest in equity shares; and National Investment Fund; and Insurance funds set up and managed by the army, navy or air force and Department of Posts of the Union of India.

Participation by associates of BRLM and Syndicate Members The BRLM and Syndicate Members shall not be allowed to subscribe to the Issue in any manner except towards fulfilling their underwriting obligations. However, associates and affiliates of the BRLM and Syndicate Members may subscribe for Equity Shares in the Issue, either in QIB Portion or Non-Institutional Portion as may be applicable to such Bidder, where the allotment is on a proportionate basis. Bids by Mutual Funds An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual Funds 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 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 Funds Portion. The Bids made by the Asset Management Companies or Custodians of Mutual Funds shall specifically state the names of the concerned schemes for which the Bids are made. In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with the 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 for which the Bid has been made. In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. 251

As per the current regulations, the following restrictions are applicable for investments by mutual funds: No mutual fund scheme shall invest more than 10% of its net asset value in the equity shares or equity related instruments of any 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 capital carrying voting rights. Bids made by Provident Funds In case of the Bids made by provident funds, subject to applicable law, with minimum corpus of `250 million and pension funds with minimum corpus of `250 million, a certified copy of certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged along with the Bid cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason thereof. The above information is given for the benefit of the Bidders. Our Company, the Directors, the officers of the Company and the Syndicate are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure that the number of Equity Shares Bid for do not exceed the applicable limits under laws or regulations. Bids by insurance companies In case of Bids made by insurance companies registered with the IRDA, a certified copy of certificate of registration issued by IRDA must be attached to the Bid cum Application Form or the ASBA Bid cum Application Form. Failing this, our Company reserves the right to reject any Bid without assigning any reason thereof. The exposure norms for insurers, prescribed under the Insurance Regulatory and Development Authority (Investment) Regulations, 2000, as amended (the IRDA Investment Regulations), are broadly set forth below: (a) equity shares of a company: the least of 10% of the investee companys subscribed capital (face value) or 10% of the respective fund in case of life insurer or 10% of investment assets in case of general insurer or reinsurer; the entire group of the investee company: the least of 10% of the respective fund in case of a life insurer or 10% of investment assets in case of a general insurer or reinsurer (25% in case of ULIPS); and the industry sector in which the investee company operates: 10% of the insurers total investment exposure to the industry sector (25% in case of ULIPS).

(b)

(c)

Bids by QIBs Only QIBs as defined in clause 2 (zd) of the SEBI Regulations and not otherwise excluded pursuant to Regulation 86 of the SEBI Regulations are eligible to invest. Currently the definition of a QIB includes: Public financial institutions as defined in section 4A of the Companies Act; Scheduled commercial banks; Mutual funds registered with SEBI; Foreign institutional investors and sub-account 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 with minimum corpus of Rs. 25 Crores; Pension Funds with minimum corpus of Rs. 25 Crores; and

252

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

However, non-residents including FIIs, FVCIs as well as foreign multilateral and bilateral development financial institutions are not eligible to bid or invest in this Issue. Bids under Power of Attorney In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, Mutual Funds, insurance companies and provident funds with a minimum corpus of ` 250 million (subject to applicable law) and pension funds with a minimum corpus of ` 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, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason thereof. In case of Bid by way of ASBA pursuant to a power of attorney, a certified copy of the power of attorney must be lodged along with the ASBA Bid cum Application Form. In addition to the above, certain additional documents are required to be submitted by the following entities: (a) With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be lodged along with the Bid cum Application Form; 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)

Our 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 our Company, and the BRLM may deem fit. Our Company in its absolute discretion, reserves the right to permit the holder of the power of attorney to request the Registrar that for the purpose of printing particulars on the refund order and mailing of the refund order/ CANs/ allocation advice, the demographic details given on the Bid-cumApplication Form should be used (and not those obtained from the Depository of the Bidder). In such cases, the Registrar shall use demographic details as given in the Bid-cum-Application Form instead of those obtained from the depositories Bids by ASBA Investor For ASBA process, please refer ASBA Process beginning on page 249 in the Draft Red Herring Prospectus. Maximum and Minimum Bid Size (including ASBA Bidder) (i) For Retail Individual Bidders: The Bid must be for a minimum of [] Equity Shares and in multiples of [] Equity Shares thereafter, so as to ensure that the Bid Price payable by the Bidder does not exceed ` 200,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid Price does not exceed `200,000. In case the Bid Price is over `200,000 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 NonInstitutional Bidders 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): The Bid must be for a minimum of such number of [] Equity Shares such that the Bid Amount exceeds `200,000 and in multiples of [] Equity 253

(ii)

Shares thereafter. A Bid cannot be submitted for more than the Issue. However, the maximum Bid by a QIB investor should not exceed the investment limits prescribed for them by applicable laws. QIB Bidders cannot withdraw their Bids after the Bid Closing Date & is required to pay the entire Bid amount upon submission of the Bid. In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the Bid Amount is greater than `200,000 for being considered for allocation in the Non-Institutional Portion. In case the Bid Amount reduces to `200,000 or less due to a revision in Bids or revision of the Price Band, Bids by NonInstitutional Bidders who are eligible for allocation in the Retail Portion would be considered for allotment under the Retail Portion. Non-Institutional Bidders and QIBs are not allowed to Bid at Cut-Off Price The maximum and the minimum Bid size applicable to a QIB, Retail Individual Bidder or a Non Institutional Bidder shall be applicable to an ASBA Bidder in accordance with the category that such ASBA Bidder falls under. The above information is given for the benefit of the Bidders. Our Company and the BRLM are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and Bidders are advised to ensure that any single Bid from them does not exceed the applicable 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. Payments made upon any revision of Bids shall be adjusted against the payment made at the time of the original Bid or the previously revised Bid. Information for the Bidders: 1. The Company will file the Red Herring Prospectus with the Designated Stock Exchange at least 3 (three) days before the Bid/Issue Opening Date. The Company and the BRLM shall declare the Bid/ Issue Opening Date, Bid/ Issue Closing Date and Price Band at the time of filing the Red Herring Prospectus with the Designated Stock Exchange and also publish the same in three widely circulated newspapers (one each in English, Hindi and Marathi). The Company may not disclose the floor price or price band in the Red Herring Prospectus if the same is disclosed at least two Working days before the opening of the bid, by way of an announcement in all the newspapers in which the pre-issue advertisement was released by the Company or the BRLM. The members of the Syndicate will circulate copies of the Red Herring Prospectus along with the Bid cum Application Form to potential investors. For ASBA Bidders, ASBA Bid cum Application Forms will be available with the designated branch of the SCSBs and on the website of the Stock Exchanges. Any investor (who is eligible to invest in our 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 or from any of the members of the Syndicate and should approach any of the BRLM or Syndicate Members or their authorized agent(s) to register their bids. The Members of the Syndicate shall accept Bids from the Bidders during the Issue Period in accordance with the terms of the Syndicate Agreement. 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 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. The Biding/ Issue Period shall be for a minimum of 3 (three) Working days and not exceeding 7 (seven) Working days. In case the Price Band is revised, the revised Price Band and the Bidding/ Issue Period will be published in one English national daily newspaper, one Hindi national newspaper and one regional 254

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language newspaper all having wide circulation and the Bidding/ Issue Period may be extended, if required, by an additional 3 (three) days, subject to the total Bidding/ Issue Period not exceeding 10(ten) Working days. 8. The Price Band has been fixed at `[] to `[] per Equity Share of `10 each, `[] being the lower end of the Price Band and `[] being the higher end of the Price Band. The Bidders can bid at any price within the Price Band, in multiples of `1 (one). The Company in consultation with the BRLM, reserve the right to revise the Price Band, during the Bidding/ Issue Period, in accordance with SEBI (ICDR) Regulations. The higher end of the Price Band should not be more than 20% of the lower end of the Price Band. Subject to compliance with the immediately preceding sentence, the lower end of the Price Band can move up or down to the extent of 20% of the lower end of the Price Band disclosed in the Red Herring Prospectus.

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10. In case of revision in the Price Band, the Bidding/ Issue Period will be extended for 3 (three) additional Working days after revision of Price Band subject to a maximum of 10 (ten) Working days. Any revision in the Price Band and the revised Bidding/ Issue Period, if applicable, will be widely disseminated by notification to BSE and NSE, by issuing a public notice in three widely circulated newspapers (one each in English, Hindi and regional language) with wide circulation, and also by indicating the change on the websites of the BRLM and at the terminals of the Syndicate Members. 11. The Company in consultation with the BRLM, can finalize the Issue Price within the Price Band without the prior approval of, or intimation, to the Bidders. 12. With effect from August 16, 2010, the demat accounts of Bidders for whom PAN details have not been verified shall be suspended for credit and no credit of Equity Shares pursuant to the Issue will be made into the accounts of such Bidders. Additional information specific to ASBA Bidders 1. ASBA Bid cum Application Forms in physical form will be available with the Designated Branches and with the members of the Syndicate; and electronic ASBA Bid cum Application Forms will be available on the websites of the SCSBs and the Stock Exchanges at least one day prior to the Issue Opening Date. Further, the SCSBs will ensure that the abridged Red Herring Prospectus is made available on their websites. SCSBs may provide the electronic mode of Bidding either through an internet enabled Bidding and banking facility or such other secured, electronically enabled mechanism for Bidding and blocking funds in the ASBA Account. Eligible ASBA Bidders may also approach the Designated Branches to register their Bids through the ASBA process. The SCSBs shall accept Bids only during the Bid Period and only from the ASBA Bidders. The SCSB shall not accept any ASBA Bid cum Application Form after the closing time of acceptance of Bids on the Issue Closing Date. The ASBA Bid cum Application Form shall bear the stamp of the Designated Branch or the members of the Syndicate (in case of Bids through Syndicate ASBA), if not, the same shall be rejected.

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Method and Process of Bidding 1. Each Bid cum Application and/or the ASBA Bid cum Application Form will give the Bidder the choice to bid for up to three optional prices (for details refer to the paragraph titled Bids at Different Price Levels and Revision of Bids beginning on page 257 of the Draft Red Herring Prospectus) 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 and/or the ASBA 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 Price, will become automatically invalid.

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The Bidder cannot Bid on another Bid cum Application Form or ASBA Bid cum Application Form after Bid(s) on one Bid cum Application Form or ASBA Bid cum Application Form have been submitted to any member of the Syndicate or SCSBs. Submission of a second Bid cum Application Form or ASBA Bid cum Application Form to either the same or to another member of the Syndicate or SCSBs 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 the Issue. However, the Bidder can revise the Bid through the Revision Form or ASBA Revision Form, the procedure for which is detailed under the paragraph titled Bids at Different Price Levels and Revision of Bids beginning on page 257 of the Draft Red Herring Prospectus. 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 or ASBA Bid cum Application Form. With regard to Syndicate ASBA, upon receipt of the ASBA Bid cum Application Form by a member of the Syndicate, the concerned member of the Syndicate shall issue an acknowledgement by giving the counter foil of the ASBA Bid cum Application Form to the ASBA Bidder as proof of having accepted the Bid. Thereafter, the member of the Syndicate shall upload the details of the Bid in the electronic Bidding system of the Stock Exchanges and forward the ASBA Bid cum Application Form to the concerned SCSB. The SCSB shall carry out further action for such ASBA Bid cum Application Forms such as signature verification and blocking of funds. If sufficient funds are not available in the ASBA Account, the SCSB shall reject such Bids. If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to the Payment Amount mentioned in the ASBA Bid cum Application Form and generate a TRS for each price and demand option. The TRS shall be furnished to the ASBA Bidder on request. With regard to non-Syndicate ASBA i.e. ASBA Bidders Bidding through the SCSBs, upon receipt of an ASBA Bid cum Application Form, submitted whether in physical or electronic mode, the respective Designated Branch shall verify if sufficient funds equal to the Payment 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 respective Designated Branch 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 Payment 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. The Payment Amount shall remain blocked in the aforesaid ASBA Account until approval of the Basis of Allotment and consequent transfer of the Payment Amount against the Allotted Equity Shares to the Public Issue Account, or until withdrawal/failure of the Issue or until withdrawal/rejection of the ASBA Bid cum Application Form, as the case may be. Once the Basis of Allotment is approved, the Registrar to the Issue shall send an appropriate request to the Controlling Branch of the SCSB for unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful ASBA Bidders to the Public Issue Account. In case of withdrawal/failure of the Issue, the blocked amount shall be unblocked on receipt of such information from the Registrar to the Issue. During the Bidding/Issue Period, Bidders should approach the members of the Syndicate or their authorized agents to submit their Bid. Every member of the Syndicate shall accept Bids from all clients/investors who place orders through them and shall have the right to vet the Bids, subject to the terms of the Syndicate Agreement and the Draft Red Herring Prospectus. ASBA Bidders Bidding through Syndicate ASBA should submit their Bids to the members of the Syndicate. ASBA Bidders Bidding through the SCSBs are required to submit their Bids to the Designated Branches of such SCSBs. The Members of the Syndicate shall accept Bids from the Bidders during the Bid/Issue Period in accordance with the terms of the Syndicate Agreement. Along with the Bid cum Application Form, all Bidders (other than ASBA Bidders) will make payment in the manner described in Escrow Mechanism Terms of Payment and Payment into the Escrow Accounts beginning on page 257 of the Draft Red Herring Prospectus. 256

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Bids at Different Price Levels and Revision of Bids 1. Our Company, in consultation with the BRLM and without the prior approval of, or intimation, to the Bidders, reserves the right to revise the Price Band during the Bid/Issue Period, provided that the Cap Price shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price Band shall not exceed 20% on the either side i.e. the floor price can move up or down to the extent of 20% of the floor price disclosed at least two days prior to the Bid/Issue Opening Date and the Cap Price will be revised accordingly. Our Company, in consultation with the BRLM will finalize the Issue Price within the Price Band, without the prior approval of, or intimation, to the Bidders. The Bidder 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 applying for a maximum Bid in any of the bidding options not exceeding `200,000 may bid at Cut-Off Price. However, bidding at Cut-Off Price is prohibited for QIB, Non-Institutional Bidders bidding in excess of `200,000 and such bids 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 and Bidders shall submit the Bid cum Application Form along with a cheque/demand draft for the Bid Amount based on the Cap Price with the Syndicate. In case of ASBA Bidders bidding at Cut-off Price, the ASBA Bidders shall instruct the SCSBs to block an amount based on the Cap Price. In the event of any revision in the Price Band, whether upward or downward, 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 `5,000 to `7,000.

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Escrow mechanism, terms of payment and payment into the Escrow Accounts For details of the escrow mechanism and payment instructions, please see the sub section Payment Instructions on page 266. Electronic Registration of Bids 1. 2. The Syndicate and the SCSBs will register the Bids using the on-line facilities of the Stock Exchanges. The Syndicate and the SCSBs will undertake modification of selected fields in the Bid details already uploaded within one Working Day from the Bid/Issue Closing Date. 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 Syndicate Members and/or SCSBs shall be 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 Bids by ASBA Bidders, Bids accepted and uploaded without blocking funds in the ASBA Accounts. 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 Bid/Issue Period. The Syndicate Members and the Designated Branches of the SCSBs 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 Syndicate and the Designated Branches of the SCSBs shall upload the Bids till such time as may be permitted by the Stock Exchanges. This information is available with the members of the Syndicate on regular basis.

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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. At the time of registering each Bid other than ASBA Bids, the Syndicate shall enter the following details of the Bidders in the on-line system: Investor Category Individual, Corporate, Mutual Fund etc.; Numbers of Equity Shares Bid for; Bid Amount; Cheque Details; Bid cum Application Form number; DP ID and Client ID; and PAN.

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With respect to Bids by ASBA Bidders, at the time of registering such Bids, the SCSBs shall enter the following information pertaining to the ASBA Bidders into the online system: 7. ASBA Bid cum Application Form Number; PAN (of First ASBA Bidder, in case of more than one ASBA Bidder); Investor Category and Sub-Category Individual, Corporate, Mutual Funds etc.: DP ID and Client ID; Numbers of Equity Shares Bid for; Bid Amount; and Bank account number;

TRS will be generated for each of the bidding options when the Bid is registered. It is the Bidders responsibility to obtain the TRS from 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 Syndicate or our Company Such TRS will be non-negotiable and by itself will not create any obligation of any kind. In case of QIB Bidders, only the BRLM and its affiliates 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 listed herein.

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10. The permission given by the Stock Exchanges to use their network and software of the online IPO connectivity system should not in any way be deemed or construed to mean that the compliance with various statutory and other requirements by our Company and/or the BRLM are cleared or approved by the Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the statutory and other requirements nor does it take any responsibility for the financial or other soundness of our Company, the Promoter, the management or any scheme or project of our Company; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this 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. 11. Only Bids that are uploaded on the online IPO system of the Stock Exchanges shall be considered for allocation/Allotment. Members of the Syndicate and the SCSBs will be given up to one day after the Bid/Issue Closing Date to verify DP ID, Client ID and PAN uploaded in the online IPO system during the

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Bid/Issue Period after which the Registrar to the Issue will receive this data from the Stock Exchanges and will validate the electronic bid details with depositorys records. Build up of the book and revision of Bids 1. Bids received from various Bidders through 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 BRLM 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 or ASBA Revision Form, which is a part of the Bid cum Application Form and/or ASBA Bid cum Application Form. Retail Individual Bidders may revise their bids within the Price Band at any time until finalization of Basis of Allotment. Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using the Revision Form or ASBA Revision Form. Apart from mentioning the revised options in the Revision Form or ASBA Revision Form, the Bidder must also mention the details of all the options in his or her Bid cum Application Form, or ASBA Bid cum Application Form or earlier Revision Form, or ASBA Revision Form. For example, if a Bidder has Bid for three options in the Bid cum Application Form/ ASBA Bid cum Application Form and such Bidder is changing only one of the options in the Revision Form/ ASBA Revision Form, the Bidder must still fill the details of the other two options that are not being revised, in the Revision Form or ASBA Revision Form. The Syndicate and the Designated Branches of the SCSBs will not accept incomplete or inaccurate Revision Form/ASBA Revision Form. 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 ` 200,000 if the Bidder wants to continue to Bid at Cut-off Price), with the Syndicate to whom the original Bid was submitted. In case the total amount (i.e., original Bid Amount plus additional payment) exceeds ` 200,000 by Retail Individual Bidders, the Bid will be considered for allocation under the NonInstitutional Portion in terms of the 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 approved such revised Bid at Cut-off Price. 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 or unblocked by the SCSBs in case of ASBA Bidders. Our Company, in consultation with the BRLM, shall decide the minimum number of Equity Shares for each Bid to ensure that the minimum application value is within the range of ` 5,000 to ` 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 Bids by ASBA Bidders, 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 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 by the QIB Bidders. In such cases, the Syndicate will revise the earlier Bids 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. The excess amount, if any, resulting from downward 259

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revision of Bid would returned to the Bidder at the time of refund in accordance with the terms of the Red Herring Prospectus. 10. When a Bidder revises his or her Bid, he or she should surrender the earlier TRS and request for a revised TRS from the Syndicate or the SCSB, as proof of his or her having revised the previous Bid. Price Discovery and Allocation 1. After the Bid/Issue Closing Date, the BRLM will analyze the demand generated at various price levels and discuss pricing strategy with us. Our Company, in consultation with the BRLM shall finalize the Issue Price, the number of Equity Shares to be allotted in each category of Bidders. The allocation available to QIBs for not more than 50% of the Net Issue to the Public, of which 5% shall be reserved for Mutual Funds, would be on a proportionate basis, subject to valid bids being received at or above the Issue Price in the manner as described in the section titled Basis of Allotment The allocation to Non-Institutional Bidders and Retail Individual Bidders of not less than 15% and 35% of the Net Issue to the Public, respectively, would be on proportionate basis, in the manner specified in the SEBI (ICDR) Regulations in consultation with Designated Stock Exchange, subject to valid Bids being received at or above the Issue Price. Under subscription, if any, in QIBs, Non-Institutional and Retail categories would be allowed to be met with spill over from any of the other categories at the discretion of the Company and the BRLM. However, if the aggregate demand by Mutual Funds is less than [] Equity Shares, the balance Equity Shares from the portion specifically available for allocation to Mutual Funds in the QIB Portion will first be added to the QIB Portion and be allocated proportionately to the QIB Bidders in proportion to their Bids. The BRLM, in consultation with us, shall notify the Syndicate Members of the Issue Price and allocations to their respective Bidders, where the full Bid Amount has not been collected from the Bidders. Our Company in consultation with the BRLM, reserves the right to cancel the Issue any time after the Bid/Issue Opening Date but before allocation, without assigning reasons whatsoever. The allotment details shall be uploaded on the website of the Registrar to the Issue.

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The allotment details shall be uploaded on the website of the Registrar of Issue. Signing of the Underwriting Agreement and the RoC Filing (a) Our Company, the BRLM 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, our 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, the underwriting arrangements and will be complete in all material respects.

(b)

Public Announcement post filing of the Draft Red Herring Prospectus Our Company shall, either on the date of filing of this Draft Red Herring Prospectus or the next day, make a public announcement on one English language national daily, one Hindi language national daily and one Marathi language newspaper, each with wide circulation, disclosing to the public the fact of filing of the Draft Red Herring Prospectus with the SEBI and inviting the public to give their comments to the SEBI in respect of disclosures made in the Draft Red Herring Prospectus. Pre-Issue Advertisement Subject to Section 66 of the Companies Act, our Company shall, after registering the Red Herring Prospectus with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI Regulations, in one English

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language national newspaper (one each in English and Hindi) and one Marathi newspaper, each with wide circulation. Advertisement regarding Issue Price and Prospectus Our Company will issue a statutory advertisement after the filing of the Prospectus with the RoC. This advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate the 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 Allotment Note (CAN) (a) Upon approval of the Basis of Allotment by the Designated Stock Exchange, the Registrar shall send to the Syndicate a list of the Bidders who have been Allotted Equity Shares in the Issue. The Registrar will then dispatch CANs to the Bidders who have been Allotted Equity Shares in the Issue. The dispatch of CAN shall be deemed a valid, binding and irrevocable contract for the Bidder.

(b) (c)

Designated Date and Allotment of Equity Shares (a) Our Company will ensure that (i) the Allotment of Equity Shares; and (ii) credit to the successful Bidders depository account will be completed within 12 Working Days of the Bid/Issue Closing Date. After the funds are transferred from the Escrow Account to the Public Issue Account on the Designated Date, our Company will ensure the credit to the successful Bidders depository account is completed within two Working Days from the date of Allotment. 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.

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Bidders 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) (c) (d) Check if you are eligible to apply; Ensure that you have Bid within the Price Band; Read all the instructions carefully and complete the Bid cum Application Form; Ensure that the details about the Depository Participant and the beneficiary account are correct as Allotment of Equity Shares will be in the dematerialised form only; 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 Bids by ASBA Bidders 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;

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(h)

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; Ensure that the full Bid Amount is paid for the Bids submitted to the Syndicate and funds equivalent to the Bid Amount are blocked in case of any Bids submitted though the SCSBs; 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 (i) on behalf of the Central or State Governments and the officials appointed by the courts, who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transacting in the securities market, and (ii) Bids by persons resident in the state of Sikkim, who, in terms of a SEBI circular dated July 20, 2006, may be exempted from specifying their PAN for transacting in the securities market, for Bids of all values, ensure that you have mentioned your PAN allotted under the Income Tax Act in the Bid cum Application Form or the ASBA Bid cum Application Form. 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 and all Bidders should mention their PAN allotted under the IT Act; Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all respects.

(i)

(j)

(k)

(l)

(m)

Donts: (a) (b) (c) Do not Bid for lower than the minimum Bid size; Do not Bid/revise Bid Amount to less than the Floor Price or higher than the Cap Price; Do not Bid on another Bid cum Application Form after you have submitted a Bid to the Syndicate or the SCSBs, 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 SCSBs only; Do not submit more than five ASBA Bid cum Application forms with respect to any single ASBA Account; Do not Bid at Cut-off Price (for QIB Bidders and Non-Institutional Bidders, for Bid Amount in excess of Rs. 200,000); Do not Bid for a Bid Amount exceeding Rs. 200,000 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; Do not submit the Bids without the full Bid Amount; and. Do not Bid if you are not competent to contract under the Indian Contract Act, 1872.

(d) (e)

(f)

(g)

(h) (i)

(j) (k) (l)

262

ADDITIONAL INSTRUCTIONS SPECIFIC TO ASBA BIDDERS Dos: (a) (b) (c) Check if you are eligible to Bid under ASBA; Ensure that you use the ASBA Bid cum Application Form specified for the purposes of ASBA; Before submitting the physical ASBA Bid Cum Application Form with the member of the Syndicate for Bidding through Syndicate ASBA ensure that the SCSB, whose name has been filled in the ASBA Bid Cum Application Form, has named a branch in that centre; Read all the instructions carefully and complete the ASBA Bid cum Application Form; For ASBA Bidders Bidding through Syndicate ASBA, ensure that your ASBA Bid cum Application Form is submitted to the members of the Syndicate at the Syndicate ASBA Centre and not to the Escrow Collection Banks (assuming that such bank is not a SCSB), to our Company, the Selling Shareholders or the Registrar to the Issue; For ASBA Bidders Bidding through the SCSBs, ensure that your ASBA Bid cum Application Form is submitted at a Designated Branch of the SCSB where the ASBA Account is maintained, and not to the Escrow Collection Banks (assuming that such bank is not a SCSB), to our Company, the Selling Shareholders or the Registrar to the Issue or the members of the Syndicate; Ensure that the ASBA Bid cum Application Form is signed by the ASBA Account holder in case the ASBA Bidder is not the account holder; Ensure that you have mentioned the correct ASBA Account number in the ASBA Bid cum Application Form; Ensure that you have funds equal to the Payment Amount in the ASBA Account before submitting ASBA Bid cum Application Form to the respective Designated Branch; the

(d) (e)

(f)

(g)

(h)

(i)

(j)

Ensure that you have correctly ticked, provided or checked the authorisation box in the ASBA Bid cum Application Form, or have otherwise provided an authorisation to the SCSB via the electronic mode, for the Designated Branch to block funds in the ASBA Account equivalent to the Payment Amount mentioned in the ASBA Bid cum Application Form; Ensure that you receive an acknowledgement from the Designated Branch or the concerned member of the Syndicate, as the case may be, for the submission of the ASBA Bid cum Application Form; Submit the ASBA Revision Form with the same Designed Branch or concerned member of the Syndicate, as the case may be, through whom the ASBA Bid cum Application Form was placed and obtain a revised acknowledgment; Ensure that the name(s) given in the ASBA 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 ASBA 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 ASBA Bid cum Application Form.

(k)

(l)

(m)

Don'ts: (a) Do not Bid on another ASBA Bid cum Application Form after you have submitted a Bid to a member of the Syndicate or a Designated Branch, as the case may be; Payment of Payment Amount in any mode other than through blocking of Payment Amount in the ASBA Accounts shall not be accepted under the ASBA;

(b)

263

(c)

Do not submit the ASBA Bid cum Application Form with a member of the Syndicate at a location other than the Syndicate ASBA Centres; Do not send your physical ASBA Bid cum Application Form by post. Instead submit the same a Designated Branch or a members of the Syndicate, as the case may be; and Do not submit more than five ASBA Bid cum Application Forms per ASBA Account. with

(d)

(e)

INSTRUCTIONS FOR COMPLETING THE BID CUM APPLICATION FORM AND ASBA BID CUM APPLICATION FORM Bids must be: (a) Made only in the prescribed Bid cum Application Form or Revision Form, ASBA Bid cum Application Form or ASBA 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 ASBA Bid cum Application Form or in the Revision Form or ASBA Revision Form as the case may be. Incomplete Bid cum Application Forms/ASBA Bid cum Applicable Form or Revision Form or Revision Forms/ASBA Revision Form are liable to be rejected. Bidders should note that 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/ASBA Bid cum Applicable Form or Revision Forms/ASBA Revision Form; Information provided by the Bidders will be uploaded in the online IPO system by the Syndicate and the SCSBs, as the case may be, and the electronic data will be used to make allocation/Allotment. The Bidders should 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 `200,000; For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of Equity Shares that the Bid Amount exceeds `200,000 and in multiples of [] Equity Shares thereafter. Bids cannot be made for more than the Issue size. 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; 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; Bids through ASBA must be: (i) made only in the prescribed ASBA Bid cum Application Form or ASBA Revision Forms (if submitted in physical mode) or the electronic mode;

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(ii) made in single name or in joint names (not more than three, and in the same order as their details appear with the Depository Participant); (iii) completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained in the Red Herring Prospectus and in the ASBA Bid cum Application Form; (i) If the ASBA Account holder is different from the ASBA Bidder, the ASBA Bid cum Application Form should be signed by the ASBA Account holder also, in accordance with the instructions provided in the ASBA Bid cum Application Form;

264

(j)

For ASBA Bidders, SCSBs may provide the electronic mode of Bidding either through an internet enabled Bidding and banking facility or such other secured, electronically enabled mechanism for Bidding and blocking funds in the ASBA Account. For details regarding mode of Bidding and manner of submission of the Bid cum Application Form, please see, Issue Procedure - Bid cum Application Form and ASBA Bid cum Application Form on page 264.

Bidders PAN, Depository Account and Bank Account Details Bidders should note that on the basis of PAN of the Bidders, DP ID and beneficiary account number provided by them in the Bid cum Application Form, the Registrar will obtain from the Depository the demographic details including 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 (including through physical refund warrants, direct credit, NECS, NEFT and RTGS) or unblocking of ASBA Account. 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 or unblocking of ASBA Account at the Bidders sole risk and neither the BRLM or the Registrar or the Escrow Collection Banks or the SCSBs nor our 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 ASBA Bid cum Application Form as the case may be. IT IS MANDATORY FOR ALL THE BIDDERS TO RECEIVE THEIR EQUITY SHARES INDEMATERIALIZED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY PARTICIPANTS NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER, CLIENT IDENTIFICATION NUMBER AND PAN IN THE BID-CUM-APPLICATION FORM/ASBA BID-CUMAPPLICATION FORM. INVESTORS MUST ENSURE THAT THE NAME GIVEN ON THE BIDCUM-APPLICATIONFORM/ASBA BID-CUM-APPLICATION FORM IS EXACTLY THE SAME AS THENAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. ADDITIONALLY, THE PAN IN THE BID-CUM-APPLICATION FORM/ASBA BIDCUM- APPLICATION FORM SHOULD BE EXACTLYTHE SAME AS PROVIDED TO THE DEPOSITORY PARTICIPANT. IF THE BID-CUMAPPLICATIONFORM/ASBA BID-CUMAPPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND SUCH JOINT NAMES ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR ON THE BID CUM APPLICATION FORM/ASBA BID CUM APPLICATION FORM. Bidders may note that in case the DP ID, BAN and PAN mentioned in the Bid cum Application Form or the ASBA Bid cum Application Form, as the case may be and entered into the electronic Bidding system of the stock exchanges by the members of the Syndicate and the SCSBs, as the case may be, do not match with the DP ID, BAN and PAN available in the Depository database, the application Bid cum Application Form or the ASBA Bid cum Application Form, as the case may be is liable to be rejected and the Selling Shareholders, our Company and the members of the Syndicate shall not be liable for losses, if any These Demographic Details would be used for all correspondence with the Bidders including mailing of the refund orders/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 or ASBA Bid cum Application Form would not be used for any other purpose by the Registrar. By signing the Bid cum Application Form, or ASBA Bid cum Application Form the Bidder would be deemed to have authorised the Depositories to provide, upon request, to the Registrar, the required Demographic Details as available on its records. Refund orders/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/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 (other than ASBA Bidders) 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 our Company or the Escrow Collection Banks or the Registrar or the BRLM 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.

265

In case no corresponding record is available with the Depositories, which matches three parameters, namely, PAN of the Bidder, the DP ID and Client ID, then such Bids are liable to be rejected. PAYMENT INSTRUCTIONS Escrow Mechanism for Bidders other than ASBA Bidders Our Company and the Syndicate shall open Escrow Account(s) with one or more Escrow Collection Bank(s) in whose favour the Bidders (other than ASBA 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 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 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 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. The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an arrangement between our Company, the Syndicate, the Escrow Collection Banks and the Registrar to facilitate collections of monies 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 Bids by ASBA Bidder, as the case may be. Payment into Escrow Account for Bidders other than ASBA Bidders Please Note that the payment into the Escrow Account is applicable only to Retail Individual Bidders, Bidding through the Bid cum Application Form. Each Bidder shall draw a cheque or demand draft or remit the funds electronically through the RTGS mechanism for the Bid Amount payable on the Bid 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 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) In case of QIB Bidders: []; In case of Resident Retail and Non-Institutional Bidders: [];

2.

3.

266

4.

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 Working Days from the Bid/Issue Closing Date, the Escrow Collection Bank shall also refund all amounts payable to unsuccessful Bidders (other than ASBA Bidders) and also the excess amount paid on bidding, if any, after adjusting for allocation/Allotment to such 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. Please note that cheques without the nine digit Magnetic Ink Character Recognition (MICR) code are liable to be rejected. Bidders are advised to provide the number of the Bid cum Application Form on the reverse of the cheque or bank draft to avoid misuse of instruments submitted with the Bid cum Application Form.

5.

6.

7.

8.

Payment by cash/ stockinvest/ money order Payment through cash/ stockinvest/ money order shall not be accepted in this Issue. Submission of Bid cum Application Form and ASBA Bid cum Application Forms 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 regard to submission of ASBA Bid cum Application Forms, please see, Issue Procedure - Bid cum Application Form and ASBA Bid cum Application Form on page 264. 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. In case of ASBA Bids, an acknowledgement from the Designated Branch or concerned member of the Syndicate, as the case may be, for submission of the ASBA Bid cum Application Form may be provided. 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 Bidder whose name appears first in the Bid cum Application Form/ASBA Bid cum Application Form or Revision Form/ASBA 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. Multiple Bids A Bidder should submit only one (and not more than one) Bid. In case of a Mutual Fund, a separate Bid may be made in respect of each scheme of the Mutual Fund and such Bids in respect of over 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 QIB Portion will not be considered as multiple Bids. Our Company reserves the right to reject, in its absolute discretion, all or any multiple Bids in any or all categories. 267

In this regard, the procedures which would be followed by the Registrar to detect multiple Bids are given below: a) All Bids 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 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 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.

b)

c)

d)

e)

Permanent Account Number or PAN Except for Bids on behalf of the Central or State Government and the officials appointed by the courts, the Bidders, or in the case of a Bid in joint names, each of the Bidders, should mention his/her PAN allotted under the I.T. 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/ASBA Bid cum Application Form without the PAN is liable to be rejected, except for resident in the state of Sikkim, on behalf of the Central or State Governments and the officials appointed by the courts, may be exempted from specifying their PAN for transactions in the securities market. 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. With effect from August 16, 2010, the beneficiary accounts of Bidders for whom PAN details have not been verified have been labelled suspended for credit by the Depositories and no credit of Equity Shares pursuant to the Issue will be made in the accounts of such Bidders. Withdrawal of ASBA Bids QIBs cannot withdraw their ASBA Bids after the applicable Issue Closing Date. ASBA Bidders can withdraw their Bids during the Issue Period by submitting a request for the same to the concerned SCSB or the concerned member of the Syndicate, as applicable, who shall do the requisite, including deletion of details of the withdrawn ASBA Bid cum Application Form from the electronic Bidding system of the Stock Exchanges. Further the SCSBs shall unblock the funds in the ASBA Account either directly or at the instruction of the member of the Syndicate which had forwarded to it the ASBA Bid Cum Application Form. In case an ASBA Bidder (other than a QIB) wishes to withdraw the Bid after the Issue Closing Date, the same can be done by submitting a withdrawal request to the Registrar to the Issue prior to the finalization of Allotment. The Registrar to the Issue shall delete the withdrawn Bid from the Bid file and give instruction to the SCSB for unblocking the ASBA Account after approval of the Basis of Allotment Rejection of Bids In case of QIB Bidders, our Company, in consultation with the BRLM 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, our 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 268

Bidders address at the Bidders risk. With respect to Bids by ASBA Bidders, the Designated Branches of the SCSBs shall have the right to reject Bids by ASBA Bidders if at the time of blocking the Bid Amount in the Bidders bank account, the respective Designated Branch of the SCSB ascertains that sufficient funds are not available in the Bidders bank account maintained with the SCSB. Subsequent to the acceptance of the Bid by ASBA Bidder by the SCSB, our Company would have a right to reject the ASBA Bids only on technical grounds.

Grounds for Technical Rejections Bidders are advised to note that Bids are liable to be rejected on technical grounds including: Bid submitted without payment of the entire Payment Amount or if the amount paid does not tally with the Payment Amount; Bids submitted by Retail Individual Bidders through the non-ASBA process, wherein the Payment Amount exceeds ` 200,000 upon revision of Bids; Bids submitted by Retail Individual Bidders which does not contain details of the Bid Amount and the Payment Amount in the Bid cum Application Form; Application submitted on a plan paper; Bids by HUFs not mentioned correctly as given in Who can Bid; 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. However a limited liability partnership firm can apply in its own name; Bids by minors identified based on the Demographic Details provided by the Depositories; PAN not mentioned in the Bid cum Application Form or ASBA Bid cum Application Form, except forbids by or on behalf of the Central or State Government and the officials appointed by the courts and by investors residing in the State of Sikkim provided such claims have been verified by the Depository Participants, DP ID and Client ID not mentioned in the Bid cum Application Form or ASBA 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 Floor Price; Bids at a price more than the Cap Price; Bids at Cut-off Price by Non-Institutional Bidders and QIBs; Bids with Payment Amount for a value of more than `200,000 by Bidders falling under the category of Retail Individual Bidders; Bids by QIBs and Non-Institutional Bidders not submitted through ASBA; Bids by persons who are not eligible to acquire Equity Shares in terms of all applicable laws, rules, regulations, guidelines and approvals; Bids for number of Equity Shares which are not in multiples of []; Multiple bids as referred to in this Draft Red Herring Prospectus;

269

Bids accompanied by stockinvest/money order/postal order/cash; Bid cum Application Forms and ASBA Bid cum Application Forms not delivered by the Bidders within the time prescribed as per the Bid cum Application Forms and ASBA Bid cum Application Forms, Issue Opening Date advertisement and the Red Herring Prospectus and as per the instructions in the Red Herring Prospectus and the Bid cum Application Forms and ASBA Bid cum Application Forms; In case no corresponding record is available with the Depositories that matches three parameters namely, DP ID, Client ID and PAN; Bids for amounts greater than the maximum permissible amounts prescribed by the regulations and applicable law; Bids where clear funds are not available in Escrow Accounts as per final certificates from Escrow Collection Banks; With respect to ASBA Bids, the ASBA Account not having credit balance to meet the application money or no confirmation is received from the SCSB for blocking of funds; Bids by persons prohibited from buying, selling or dealing in shares, directly or indirectly, by SEBI or any other regulatory authority; Bids not uploaded on the terminals of the Stock Exchanges; and Bids by QIBs uploaded after 4.00 p.m. on the Issue Closing Date applicable to QIBs, Bids by NonInstitutional Bidder and Bids by Retail Individual Bidders uploaded after 5.00 p.m. on the Issue Closing Date.

IN CASE THE DP ID, CLIENT ID AND PAN MENTIONED IN THE BID CUM APPLICATION FORM AND ENTERED INTO THE ELECTRONIC BIDDING SYSTEM OF THE STOCK EXCHANGES BY THE SYNDICATE/THE SCSBs DO NOT MATCH WITH THE DP ID, CLIENT ID AND PAN AVAILABLE IN THE RECORDS WITH THE DEPOSITORIES, THE APPLICATION IS LIABLE TO BE REJECTED. FURTHER, BIDS BY PERSONS PROHBITED FROM BUYING, SELLING OR DEALING IN THE EQUITY SHARES DIRECTLY OR INDIRECTLY BY SEBI OR ANY OTHER REGULATORY AUTHORITY WILL 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 dematerialised 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 our Company, the respective Depositories and the Registrar: Agreement dated April 15, 2011between NSDL, the Company and the Registrar to the Issue; Agreement dated January 21, 2011between 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 Beneficiary Account Number and Depository Participants identification number) appearing in the Bid cum Application Form or Revision Form. 270

(b)

(c)

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 our Company would be in dematerialised form only for all Bidders in the demat segment of the respective Stock Exchanges. Non transferable advice or refund orders will be directly sent to the Bidders by the Registrar to the Issue.

(d)

(e)

(f)

(g)

(h)

(j)

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/ASBA Bid cum Application Form number, Bidders Depository Account Details, number of Equity Shares applied for, date of Bid cum Application Form / ASBA 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. Bidders can contact the Compliance Officer or the Registrar in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of Allotment, credit of Allotted shares in the respective beneficiary accounts, refund orders etc. In case of ASBA Bids submitted to the Designated Branches of the SCSBs, the Bidders can contact the Designated Branches of the SCSBs. PAYMENT OF REFUND Bidders other than ASBA Bidders must note that on the basis of Bidders DP ID and beneficiary account number provided by them in the Bid cum Application Form, the Registrar 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 to make refunds. On the Designated Date and no later than 12 Working Days from the Bid/Issue Closing Date, the Escrow Collection Banks shall despatch refund orders for all amounts payable to unsuccessful Bidders (other than ASBA Bidders) and also the excess amount paid on bidding, if any, after adjusting for allocation/Allotment to such Bidders. 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 order of preference: 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. The payment of refunds is mandatory for applicants having a bank account at any of the centres where such facility is made available, except where the applicant, is eligible and opts to receive refund through direct credit or RTGS. 271

2.

Direct Credit Applicants having bank accounts with the Refund Bank (s), as mentioned in the Bid cum Application Form, 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 our Company. RTGS Applicants having a bank account at any of the centres where such facility is available and whose refund amount exceeds ` 200,000 will be considered to receive refund through RTGS. For such eligible applicants, IFSC code will be derived based on MICR code of the Bidder as per depository records. In the event the same is not available as per depositorys records, refund shall be made through NECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by our 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 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. 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 up to `1,500 and through Speed Post/Registered Post for refund orders of `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.

3.

4.

5.

Mode of making refunds for ASBA Bidders In case of ASBA Bidders, the Registrar shall instruct the SCSBs to unblock the funds in the relevant ASBA Accounts 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, our 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 of the Bidders and submit the documents pertaining to the Allotment to the Stock Exchanges within 10 Working Days of 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 dispatched to the Bidders receiving refunds through this mode within 12 Working Days of Bid/Issue Closing Date, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund. Our 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 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, our 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; and 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 12 272

Working 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 dispatched within 12 Working Days from the Bid/Issue Closing Date. Our Company shall pay interest at 15% p.a. for any delay beyond 12 Working Days from the Bid/Issue Closing Date as mentioned above, if Allotment is not made and refund orders are not dispatched or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner 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 our Company becomes liable to repay, our Company and every Director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under the applicable law. 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, shall be punishable with imprisonment for a term which may extend to five years.

(b)

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 39,55,000 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 39,55,000 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 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 to 16,95,000 Equity Shares at or above the Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand. 273

In case the aggregate demand in this category is greater than 16,95,000 Equity Shares at or above the Issue Price, Allotment shall be made on a proportionate basis up to a minimum of [] Equity Shares, and in multiples of [] Equity Shares thereafter. For the method of proportionate Basis of Allotment refer below.

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 Issue size less Allotment to Non Institutional Bidders and Retail shall be available for Allotment to Non- QIB Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price. 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 shall be determined as follows: (i) In the event that Bids by Mutual Fund exceeds 5% of the QIB Portion, allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion; In the event that the aggregate demand from Mutual Funds is less than 5% of the QIB 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: (i) In the event that the oversubscription in the QIB Portion, all QIB Bidders who have submitted Bids above the Issue Price shall be allotted Equity Shares on a proportionate basis, upto a minimum of [] Equity Shares and in multiples of [] Equity Shares thereafter 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, upto a minimum of []Equity Shares and in multiples of [] Equity Shares thereafter, along with other QIB Bidders; Under-subscription below 5% of the QIB Portion, if any, from Mutual Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis. The aggregate Allotment to QIB Bidders shall not be less than [] Equity Shares.

(ii)

(iii)

The Book Running Lead Managers, the Registrar to the Issue and the Designated Stock Exchange shall ensure that the Basis of Allocation is finalized in a fair and proper manner in accordance with the SEBI Regulations. The drawing of lots (where required) to finalize the Basis of Allocation shall be done in the presence of a public representative on the Governing Board of the Designated Stock Exchange.

274

A.

Illustration of Allotment to QIBs and Mutual Funds (MF) Sr. No 1. 2. 3. 4. Particulars Issue size Allocation QIB (50%) Anchor Investor Portion Portion available to QIBs other than Anchor Investors Of which Reservation for Mutual Funds (5%) Balance for all QIBs including Mutual Funds No. of QIB applicants No. of shares applied for Issue details 200 Crores equity Shares 100 Crores Equity Shares 30 Crores Equity Shares 70 Crores Equity Shares

a. b. 5. 6.

3.5 Crores Equity Shares 66.5 Crores Equity Shares [] []

B. Details of QIB Bids Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Type of QIB bidders A1 A2 A3 A4 A5 MF1 MF 2 MF3 MF4 MF5 Total No. of shares bid for (in millions) 50 20 130 50 50 40 40 80 20 20 500

# 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 MF 2 MF3 MF4 MF5 Total

Shares bid for

Allocation of 5% equity shares

Allocation of 95% equity shares (IV) 6.65 2.66 17.29 6.65 6.65 5.32 5.32 10.64 2.66 2.66 66.5

Aggregate allocation to MFs (V) 0 0 0 0 0 6.02 6.02 12.04 3.01 3.01 30.1

(II) (III) (Number of equity shares in million) 50 0 20 0 130 0 50 0 50 0 40 0.7 40 0.7 80 1.4 20 0.35 20 0.35 500 3.5

275

Please note: 1. The illustration presumes compliance with the requirements specified in this Draft Red Herring Prospectus in the section titled Issue Structure on page 244. Out of 70 crores equity shares allocated to QIBs, 3.5 crores (i.e. 5%) will be allocated on proportionate basis among five Mutual Fund applicants who applied for 200 equity shares in QIB category. The balance 66.5 crores equity shares (i.e. 70 3.5 (available for MFs)) will be allocated on proportionate basis among 10 QIB applicants who applied for 500 equity shares (including five MF applicants who applied for 200 equity shares). The figures in the fourth column entitled Allocation of balance 66.5 crores Equity Shares to QIBs proportionately in the above illustration are arrived as under:

2.

3.

4.

For QIBs other than Mutual Funds (A1 to A5) = No. of shares bid for (i.e. in column II) X 66.5 /496.5 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 66.5 / 496.5. The numerator and denominator for arriving at allocation of 66.5 crore Equity shares to the 10 QIBs are reduced by 3.5 crores Equity shares, which have already been allotted to Mutual Funds in the manner specified in column III of the table above. Method of Proportionate Basis of Allotment in the Issue In the event of the Issue being over-subscribed, our 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 BRLM and the Registrar shall be responsible for ensuring that the Basis of Allotment is finalised in a fair and proper manner. 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; In all Bids where the proportionate Allotment is less than [] Equity Shares per Bidder, the Allotment shall be made as follows: Each successful Bidder shall be Allotted a minimum of [] Equity Shares; and 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.

c)

d)

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; Investors should note that the Equity Shares will be allocated to all successful Bidders in dematerialised form only. Bidders will have the option of being allocated Equity Shares in physical form;. 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 Equity Shares are not sufficient for proportionate 276

e)

f)

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. Letters of Allotment or Refund Orders or instructions to the SCSBs Our Company shall credit the Allotted Equity Shares to the beneficiary account with depository participants within 12 Working Days from the Bid/Issue Closing Date. Applicants residing at the centres where clearing houses are managed by the RBI, will get refunds through NECS only except where applicant is otherwise disclosed as eligible to get refunds through direct credit and RTGS. Our Company shall ensure dispatch of refund orders, if any, of value up to ` 1,500, by Under Certificate of Posting, and shall dispatch refund orders above ` 1,500, if any, by registered post or speed post at the Bidders sole risk within 10 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 the Bid/Issue Closing Date. In case of ASBA Bidders, the Registrar shall instruct the relevant SCSBs to, on the receipt of such instructions from the Registrar unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum Application Form or the relevant part thereof, for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within 10 Working Days of the Bid/Issue Closing Date. Interest in case of delay in despatch of Allotment Letters or Refund Orders/instruction to the SCSBs by the Registrar Our Company agrees that (i) Allotment of Equity Shares; and (ii) credit to the successful Bidders depository accounts will be completed within 12 Working Days of the Bid/Issue Closing Date. Our 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 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 12 Working Days from the Bid/Issue Closing Date. Our 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 our 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 OUR COMPANY Our Company undertakes the following: That the complaints received in respect of this Issue shall be attended to by our Company expeditiously and satisfactorily; That all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges 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 by the Issuer; That where refunds are made through electronic transfer of funds, a suitable communication shall be dispatched to the applicant within 10 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 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, undersubscription etc.; and

277

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.

Utilisation of Issue proceeds The Board of Directors of our Company certify 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 the 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; Our Company shall comply with the requirement of Clause 49 of the Listing Agreement in relation to the disclosure and monitoring of the utilization of the Net Proceeds; and Our Company shall not have recourse to the proceeds if the Issue until the approval for trading of the Equity Shares from the Stock Exchanges has been received.

Withdrawal of the Issue Our Company and / or any of the Selling Shareholders, in consultation with the Managers, reserve the right not to proceed with the Issue anytime after the Issue Opening Date but before the Allotment of Equity Shares. In such an event the Company shall issue a public notice in the newspapers (including the reasons for such withdrawal), in which the pre-Issue advertisements were published, within two days of the Issue Closing Date. Our Company shall also inform the same to the Stock Exchanges on which the Equity Shares are proposed to be listed and the Managers, through the Registrar to the Issue, shall notify the SCSBs to unblock the accounts of the ASBA Bidders. If our Company and / or any of the Selling Shareholders withdraw the Issue after the Issue Closing Date and our Company, thereafter, determines that it will proceed with an initial public offering of its Equity Shares, our Company shall file a fresh draft red herring prospectus with SEBI. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment; and (ii) the final approval of the RoC, after the Prospectus is filed with the RoC.

278

RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of 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. Subscription by Non Resident Indian and Foreign Institutional Investors (NRIs/FIIs) Under the extant Consolidated FDI Policy, April 2011, FDI in Indian companies carrying on business in Indian retail and trading sector is prohibited, exceptSingle Brand Productretailing. Press Note No. 3 (2006 Series) which provides guidelines for FDI in retail trade ofSingle Brand Products, prescribes a 51% cap on the same, with prior Government approval. Further, Press Note No. 4 (2006 Series), which aims at rationalisation of the FDI Policy, states that the GoI has decided to allow FDI up to 51% with prior Government approval for retail trade ofSingle Brand Products. Therefore, foreign investment in the Multi Brand Retail Sector is prohibited under the automatic route and also under the approval route. As per the existing policy of the Government of India, OCBs cannot participate in this Issue. Non-residents including FIIs, FVCIs as well as foreign multilateral and bilateral development financial institutions are also not eligible to invest in this Issue. In this regard, it is pertinent to note that the corollary changes to the foreign exchange control regulations promulgated by the Reserve Bank of India under the Foreign Investment Management Act, 1999 have not been notified.

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. The above information is given for the benefit of the Bidders. Our Company and the BRLM are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus.

279

SECTION IX: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION Capitalized 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 (ICDR) Regulations, the main provisions of the Articles of Association of the Company are detailed below: GENERAL: 1. Regulations contained in Table A in the first schedule to the Act shall not apply to the extent explicitly or impliedly provided herein. General Authority: Where in the Act or any other law for the time being in force, it has been provided, whether explicitly or implicitly, that the Company shall have any right, privilege or authority or that the Company cannot carry out any transaction unless the Company is so authorised by its Articles, then and in that case, these Articles hereby authorize and empower the Company to have such right, privilege or authority and to carry out such transactions as have been permitted by the Act or such other law.

2.

4.

CAPITAL; INCREASE AND REDUCTION IN CAPITAL The Authorized Share Capital of the Company is. Rs. 40,00,00,000/- (Rupees Forty Crores Only) divided into 4,00,00,000 (Four crores only) Equity Shares of Rs.10/- (Rupees Ten Only) each with power to increase or reduce the share capital of the Company and to divide the shares in the capital for the time being into several classes and to attach thereto respectively preferential, cumulative convertible preference, guaranteed, qualified or special rights, privileges or conditions as may be determined by or in accordance with the Articles of Association of the Company and to vary, modify, amalgamate or abrogate such rights, privileges or conditions in such manner as may for the time being be provided by the Articles of Association. Increase in capital by the Company, and how carried into effect: a. The Company may from time to time in a general meeting increase its share capital by the issue of new shares of such amounts, as it thinks expedient. Subject to the provisions of the Act, the new shares shall be issued in accordance with the provisions contained in these Articles. Capital same as existing capital: Except as otherwise provided by the conditions of issue or by these presents, any capital raised by the creation or issue of new shares shall be considered as part of the existing capital and shall be subject to the provisions herein contained with reference to payment of calls, instalments, transfer, transmissions, forfeiture, lien, surrender, voting and otherwise. The rights or privileges conferred upon the holders of the shares of any class issued with preference or other rights, shall not unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied or modified or affected by the creation or issue of further shares, ranking pari passu therewith. REDUCTION AND ALTERATION OF CAPITAL The Company may from time to time by special resolution and subject to the provisions of the Act reduce its share capital and any Capital Redemption Reserve Account or Securities Premium Account in any manner for the time being authorized by law. In particular and without prejudice to the generality of the foregoing power, the Company may: a. Extinguish or reduce the liability on any of its shares in respect of share capital and paid up share capital; 280

4.1 a.

4.2

b.

4.3.1 a.

b.

5. 5.1

b.

Either with or without extinguishing or reducing liability on any of its shares, cancel paid up share capital which is lost or is unrepresented by available assets; or Either with or without extinguishing or reducing liability on any of its shares, pay off any paid up share capital which is in excess of the wants of the Company; and may, if and so far as is necessary, alter its Memorandum, by reducing the amount of its share capital and of its shares accordingly. Conversion of share into stock and re-conversion The Company in a general meeting may convert any paid up shares into stock and when any shares shall have been converted into stock, the holders of any such stock may thenceforth transfer their respective interest therein or any part of such interests in the same manner and subject to the same Articles as those shares from which the stock 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.

c.

5.2.

6.

BUY-BACK OF SHARES The Board of Directors of the Company may, 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, 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.

7.

DIVISION, SUBDIVISION, CONSOLIDATION, CONVERSION AND CANCELLATION OF SHARES

7.1. Subject to the provisions of Section 94 of the Act and these Articles, the Company in general meeting may by an ordinary resolution alter the conditions of its Memorandum as follows, that is to say, it may: a. Consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares; Sub-divide its shares or any of them into shares of a smaller amount than originally fixed by the Memorandum, provided however that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived, and so that as between the holders of the shares resulting from such sub-division one or more of such shares may, subject to the provisions of the Act, be given any preference or advantage over the others or any other such shares; Convert all or any of its fully paid up shares into stock, and re-convert that stock into fully paid up shares of any denomination; Cancel shares which at the date of such general meeting 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. Modifications of rights: If at any time the share capital is divided into different classes of shares, all or any of the rights and privileges attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the provisions of sections 106 and 107 of the Act and subject to consents required under Article 17A hereunder, and whether or not the Company is being wound up, be varied, modified, commuted, affected or abrogated with the consent in writing of the holders of three-fourths in nominal value of the issued shares of that class, or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. This Article shall not derogate from any power which the Company would have if this Article were omitted. The provisions of the Act and these Articles relating to general meetings shall mutatis mutandis apply to meetings of such

b.

c.

d.

7.2.

281

meeting of the shareholders, except that if a quorum as defined in the Act or these Articles is not present, the persons who are present shall constitute the requisite quorum. 8. 8.1. REGISTER OF MEMBERS Register and index of members: The Company shall keep and maintain a register and Index of members in accordance with sections 150 and 151 of the Act. The Company shall be entitled to keep in any State or country outside India a branch register of members, resident in that State or country. 8.2 Further Issue of capital: A further issue of shares by the Company shall be undertaken in the manner set forth in Article 14A of these Articles. 9. 9.1. a. b. ISSUE OF SHARES AT PREMIUM OR DISCOUNT Subject to the provisions of the Act and these Articles: Any share may be issued at a discount, as the Company in general meeting may determine. The Company in general meeting, or the Board, as the case may be, may issue any shares at a premium, such premium to be applied in accordance with the provisions of the Act. Sale of fractional shares: If as a result of an issue of new shares or on any consolidation or sub-division of shares, any shares are held by members in fractions, the Directors shall sell those shares which the members hold in fractions, for the best price reasonably obtainable and shall pay and distribute to and amongst the members entitled to such shares in due proportion, the net proceeds of the sale thereof. For the purpose of giving effect to any such sale, the Directors may authorize any person to transfer the shares sold to the purchaser thereof, and the purchaser shall not be bound to see the application of the purchase money nor shall his title to such shares be affected by any irregularity or invalidity in the proceedings in reference to such sale. 9.3 The money (if any) which the Board shall, on the allotment of any shares being made by them, require or direct to be paid by way of deposit, call or otherwise, in respect of any shares allotted by them, shall immediately on the insertion of the name of the allottee in the register of members as the holder of such shares, become a debt due to and recoverable by the Company from the allottee thereof, and shall be paid by him accordingly. Save as herein provided, the Company shall be entitled to treat the person whose name appears in the register of members as the holder of any share as the absolute owner thereof, and accordingly shall not (except other than as ordered by a Court of competent jurisdiction or as by law required) be bound to recognize any benami, or partial or other claim or claims or right to or interest in such share on the part of any other person whether or not the Company shall have express or implied notice thereof. Every member or his heirs, executors or administrators, shall pay to the Company the portion of the capital represented on his share or shares which may, for the time being, remain unpaid thereon, in such amounts, at such time or times, and in such manner as the Board shall, from time to time in accordance with the Articles, require or fix for the payment thereof.

9.2.

9.4

9.5

10. BENEFICIAL OWNER OF SHARES Save as herein otherwise provided, the Company Shall be entitled to treat the person whose name appears in the register of members as the holder of any share(s) and whose name appears as the beneficial owner of shares in the records of the Depository, as the absolute owner thereof and accordingly, shall not (except as ordered by a Court of competent Jurisdiction or as by Law required) be bound to recognize any Benami Trust or Equity or Equitable contingent, future or partial interest, Lien, Pledge(except only as by these presents otherwise 282

provided for) or other claim to or interest in such shares(s) on the part of any other person whether or not it shall have express or implied notice thereof. 11. 11.1. SHARE CERTIFICATES The issue of certificates of shares or of duplicate or renewal of certificates of shares shall be governed by the provisions of Section 84 and other provisions of the Act, as may be applicable and by the Rules, Notifications or Orders, if any, made by any competent authority under the Act. The certificate of title of shares shall be issued under the Common Seal of the Company and shall be signed by such directors or officers or other authorized persons as may be prescribed by the Act or the Rules made thereunder. Every member shall be entitled, without payment, to one certificate each for all the shares/debentures of such class or denomination registered in his name. If the Directors so approve, (upon paying such fees as the Directors may from time to time determine), members may be issued several certificates, each for one or more of such shares, and the Company shall complete and deliver such certificates within the time provided by Section 113 of the Act. Every certificate of shares shall specify the amount paid up on the shares/debentures covered thereby and shall be in such form as the Directors shall prescribe or approve. Provided that in respect of a share or debenture held jointly by several persons, the Company shall not be bound to issue more than one certificate and delivery of a certificate of shares to one of several joint holders shall be sufficient delivery to all such holders. Shares to be numbered progressively and no share to be sub-divided: The shares in the capital of the Company shall be numbered progressively according to their several denominations and except in the manner hereinabove mentioned no share shall be subdivided. Every forfeited or surrendered share shall continue and no share shall bear the number by which any share earlier issued was distinguished. 11.5. Replacement of share/debenture certificates a. If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back thereof for endorsement of transfer, then upon production and surrender thereof, a new certificate may be issued in lieu of the surrendered certificate, in accordance with the applicable rules prescribed thereunder. Subject to the provisions of the Act and the Rules made thereunder, if a share/debenture certificate is lost or destroyed, a new certificate in lieu thereof may be issued with prior consent of the Board or a Committee constituted by the Board on such terms, if any, as to evidence and indemnity and as to the payment of out-of pocket expenses incurred by the Company in investigating evidence, as the Board thinks fit.

11.2.

11.3.

11.4.

b.

11.6 (1). Notwithstanding anything contained in the Articles of Association, the Company may provide the facility to the shareholders to keep their shares in demat form by admitting/surrendering the shares into either NSDL or CDSL or both. For this purpose the company may appoint a common agency for maintaining the data of the shareholders either in the electronic form or physical or both on behalf of the company. 11.6 (2). Notwithstanding anything contained in these Articles, in the case of shares or other marketable securities where the Company has not issued any certificates and where such Shares or being held in an electronic and fungible form, the provisions of the Depositories Act, 1996 shall apply. 12. 12.1 CALLS Directors to make calls: The directors/any person on behalf of the company shall not make any calls to the shareholders unless obtained the approval of the members in the general meeting. Notice of calls, extension etc.:

12.2.

283

a.

At least one months notice in writing of any call shall be given by the Company specifying the time and place of payment, and the person or persons to whom such calls shall be paid. A call shall be deemed to have been made at the time when the resolution from the Directors authorizing such call was passed and may be made payable by the members/debenture holders on a subsequent date to be specified by the Directors. The Directors may, from time to time, at their discretion, extend the time fixed for the payment of any call, to all or any of the members/debenture holders for sufficient cause as the Directors may deem fit to be fairly entitled to such extension, but no member/debenture holder shall be entitled to such extension save as a matter of grace and favour. Instalments: If, by the condition of allotment of any shares/debentures, the whole or any part of the amount of the issue price thereof shall be payable by instalments, every such instalment shall, when due, be paid to the Company by the person who, for the time being and from time to time, shall be the registered holder of the share/debenture or by his legal representative. Calls in respect of shares / debentures which form part of the same class shall be made on a uniform basis.

b.

c.

12.3. a.

b.

Explanation: For the purpose of these provisions, shares of the same nominal value on which different amounts have been paid up shall not be deemed to fall under the same class. 12.4. Liability of joint holders: The joint holders of a share/debenture shall be severally as well as jointly liable for the payment of all instalments and calls due in respect of such shares/debentures. 12.5. a. Calls to carry Interest: If the sum payable in respect of any call or instalment is not paid on or before the day appointed for payment thereof or any such extension thereof, the holder for the time being or allottee of the shares/debenture in respect of which the call shall have been made or from whom the instalment shall be due, shall pay interest at such rate as shall be fixed by the Board, from the day appointed for the payment thereof or any such extension thereof to the time of actual payment. The Directors may waive payment of such interest wholly or in part. Any sum, which by the terms of issue of a share/debenture becomes payable on allotment or at any fixed date, whether on account of the nominal value of calls or by way of premium, shall for the purposes of these Articles be deemed to be a call duly made and payable on the date on which by the terms of issue the same become 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. On the trial or hearing of any action or suit brought by the Company against any member/debenture holder or his representatives for the recovery of any money claimed to be due to the Company in respect of his shares/debentures, it shall be sufficient to prove that the name of the member/debenture holder in respect of whose shares/debentures the money is sought to be recovered appears on the register as the holder, at any date at which the money sought to be recovered is due on the shares/debentures, that the resolution making the call is duly recorded in the minute book and that notice of the call was duly given to the member or his representatives and issued in pursuance of these Articles, and it shall not be necessary to prove the appointment of the Directors who made such call nor that a quorum of Directors was present at the Board at which any call was made nor that such meeting was duly convened or constituted nor any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt. Any amount paid-up in advance of calls on any shares shall not carry interest and also shall not entitle the holder of the shares to participate in respect thereof and in a dividend subsequently declared. 284

b.

12.6

12.7

12.8

The Directors may, if they think fit, subject to the provisions of Section 92 of the Act, agree to and receive from any member willing to advance the same, the whole or any part of the money due by him beyond the sums actually called for, and upon the amount being so paid or satisfied in advance, or so much thereof as from time to time exceed the amount of the calls then made upon the shares in respect of which such advance has been made, the Company may pay interest at such rate, to the member paying such sum in advance as the Directors may be resolution determine, provided that money paid in advance of calls shall not confer a right to participate in profits or dividends. The Company may at any time repay the amount so advanced, provided such amount has not been called up. No member shall however 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. LIEN The fully paid shares will be free from all lien, while in the case of partly paid shares, the companys lien, if any will be restricted to moneys called or payable at a fixed time in respect of such shares. Companys right to have first lien on shares: The Company shall have a first and paramount lien upon all the shares and/or debentures (other than fully paid up shares and/or debentures) registered in the name of each member and/or debenture holder (whether held singly or jointly with others) in respect of all moneys whether presently payable or not which shall extend to all dividends, interest, rights and bonuses from time to time declared in respect of such shares and/or debentures. Unless otherwise agreed, the registration of transfer of shares and/or debentures shall operate as waiver of Companys lien, if any, on such shares and/or debentures. The Directors may at any time declare any shares and/or debentures wholly or in part exempt from the provision of this Article.)

12.9

13. 13.1.

13.2.

Enforcement of lien by sale of shares: For the purpose of enforcing such a lien, the Board may sell the shares and/or debentures subject thereto in such manner as it shall think fit, and for that purpose may cause to be issued a duplicate certificate in respect of such shares and/or debentures, and may authorize one of the members or appoint any officer or agent to execute a transfer thereof, on behalf of and in the name of such member/debenture holder. No sale shall be made until notice in writing of the intention to sell shall have been served on such member and/or debenture holder or his legal representatives and default shall have been made by him or them in payment, fulfilment or discharge of such debts, liabilities or engagement for thirty (30) days after such notice.

13.3.

Application of proceeds of sale: a. The net proceeds of any such sale shall be received by the Company and applied in or towards payment of such part of the amount in respect of which the lien exists as is presently payable and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the shares before the sale) be paid to the persons entitled to the shares and/or debentures at the date of the sale. The Companys lien in relation to any share shall prevail notwithstanding that it has received notice of any claim that some person other than the registered holder thereof has any interest, equitable or otherwise, in such share.

b.

14. FORFIETURE OF SHARES/DIVIDENDS 14.1. Notice to shareholders on non payment: 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 285

same together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment. 14.2. Form of notice: The notice shall name a day not being less than thirty (14) days from the date of the notice and a place or places, on and at which such call, or instalment or such part or other moneys as aforesaid are to be paid. The notice shall also state, that in the event of the non-payment of call amount with interest, at or before the time and at the place appointed, the share or debentures in respect of which the call was made or instalment or such part or other moneys is or are payable will be liable to be forfeited and/or cancelled as the case may be. 14.3. Default of Payment: If the requirements of any such notice as aforesaid shall not be complied with any share/debenture in respect of which such notice has been given, may at any time thereafter, before payment of all calls or instalments, interest and expenses, or other moneys due in respect thereof, be forfeited by a resolution of the Board to that effect. Neither the receipt by the Company of a portion of any money which shall from time to time be due from any member of the Company in respect of his shares, either by way of principal or interest, nor any indulgence granted by the Company, in respect of the payment of any such money, shall preclude the Company from thereafter proceeding to enforce forfeiture of such shares or cancel the allotment of debentures as herein provided. Such forfeiture shall include all dividends declared or interest paid or any other moneys payable in respect of the forfeited shares or debentures and not actually paid before the forfeiture/cancellation. 14.4. Notice of forfeiture/cancellation: When any shares shall have been so forfeited and/or allotment of debenture shall have been so cancelled, notice of the forfeiture/ cancellation, shall be given to the member/debenture holder in the name it stood immediately prior to the forfeiture/cancellation and an entry of the forfeiture/cancellation with the date thereof, shall forthwith be made in the register of members/debenture holder. But no forfeiture/cancellation shall be in any manner invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid. 14.5. Forfeiture and cancellation of allotment: Any share so forfeited shall be deemed to be the property of the Company, and may be sold, re-allotted or otherwise disposed of either to the original holder thereof or to any other person upon such terms and in such manner as the Board shall think fit. Upon cancellation of the allotment, the debenture issued shall be deemed to be the property of the Company and may be reissued or allotted to any person, upon such terms and in such manner as the Board shall think fit. 14.6. Any member whose shares have been forfeited shall cease to be a member in respect of such shares but shall, notwithstanding forfeiture, be liable to pay and shall forthwith pay to the Company on demand all calls, instalments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture together with interest thereof from time of the forfeiture until payment, at such rate as the Board may determine, and the Board may enforce the payment thereof, if it thinks fit, or deduct from the same, expenses incurred in calling the money due on a debenture while cancelling the allotment thereof. The forfeiture of a share shall involve extinction at the time of the forfeiture, of all interest in and all claims and demands against the Company in respect of the share and all other rights, incidental to the share, except only such of those rights as by these Articles are expressly saved. A declaration in writing by one Director or by the Secretary or any other officer authorized by the Directors for the purpose, that the call in respect of a share or debenture was made and notice thereof given and that default in payment of the call was made that the forfeiture/ cancellation of the share or debenture was made by a resolution of Directors to that effect shall be conclusive evidence of the facts stated therein as against all persons entitled to such share or debenture.

14.7.

14.8.

286

14.9.

Upon any sale after forfeiture or upon enforcing a lien in purported exercise of the power or reissue of debenture upon cancellation of allotment herein before given, the Board may appoint any person to execute an instrument of transfer of the shares sold and cause the purchasers name to be entered in the register in respect of the shares/debentures sold/reissued and the purchaser shall not be bound to see to the regularity of the proceedings or to the application of the purchase money, and after his name has been entered in the register in respect of such shares/debentures the validity of the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall exclusively be in damages against the Company. Upon any sale, re-allotment or other disposal under the provision of the preceding articles, the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting member) stand cancelled and become null and void and of no effect and the Directors shall be entitled to issue a duplicate certificate or certificates in respect of the said shares to the person or persons entitled thereto. The Board may at any time, before any share so forfeited/allotment of debenture so cancelled have been then sold /re-allotted or otherwise disposed of, annul the forfeiture thereof upon such conditions as it thinks fit. The Directors may, subject to the provisions of the Act, accept a surrender of any share or debenture from or by any member or debenture holder desirous of surrendering them on such terms as they may think fit. There shall not be any forfeiture of unclaimed dividends before the claim becomes barred by the law. TRANSFER AND TRANSMISSION OF SHARES/DEBENTURES The company shall use a common form of transfer. Not withstanding anything contained in the Articles, the Board of Directors may appoint an agency which is registered with the SEBI as Share Transfer Agents on behalf of the company. Register of transfer of shares or debentures: The Board shall keep a book to be called the Register of transfers and therein fairly and distinctly enter the particulars of every transfer or transmission of any share.

14.10.

14.11.

14.12.

14.13 15. 15.1.

15.2.

Instrument of transfer: The instrument of transfer of shares/debentures shall be in writing and shall be in such form as may be prescribed by the Act. The instrument of transfer duly stamped and executed by the transferor and the transferee shall be delivered to the Company or Transfer Agents in accordance with the provisions of the Act along with the certificates relating to the shares or if no such certificate is in existence along with the letter of allotment of the shares. The instrument of transfer shall be accompanied by such evidence as the Board/Transfer Agents may require to prove the title of the transferor and his rights to transfer the shares and every registered instrument of transfer shall remain in the custody of the Company/Transfer Agents until destroyed by order of the Board. The transferor shall be deemed to be the holder of such shares until the name of the transferee has been entered in the Register of Members in respect thereof.

15.3 (a)

Registration of Transfer of Shares A transfer of shares shall not be registered unless approved by the majority of the Board, or by a committee of the Board or by officer(s) of the Company to whom the foregoing authority may be specifically delegated by the majority of the Board. Subject to the provisions of Section 111 A of the Act, the Board or the committee of the Board or the officer(s) authorized to approve the transfer of shares as provided in Article 14.3(a), may at its discretion, decline to register or acknowledge any transfer of shares whether fully paid or not, notwithstanding that the proposed transferee be already a member, but in such cases it shall, within 287

(b)

two months from the date on which the instrument of transfer was lodged with the Company, send to the transferee and the transferor notice of the refusal to register such transfer, provided that registration of a transfer shall not be refused on the ground only of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except a lien on shares. 17. 17.1. BORROWINGS BY COMPANY Boards powers to borrow and conditions thereto: Subject to the provisions of Sections 58A, 292 and 293 of the Act, and to the provisions of Articles 17A and 18.4, the Directors may borrow or raise and secure the payment of such sum(s) in such manner and upon such terms and conditions in all respects as they think, fit, and in particular by the issue of bonds, debentures or debenture stocks or other securities or any mortgage or pledge charge or other security on the undertaking of the whole or any part of the property of the company (both present and future) including its uncalled capital for the time being. 17.2. Bonds, debentures etc. to be subject to the control the Directors: Any bonds, debentures, debenture stocks or other securities issued or to be issued by the Company shall be under the control of the Directors who may, subject to Article 17A and 18.4, issue them upon such terms and conditions and in such manner for such consideration as they shall consider to be for the benefit of the Company. 17.3 Register of Mortgages etc, to be kept The Board shall cause a proper Register to be kept in accordance with the provisions of Section 143 of the Act, of all mortgages, debentures and charges specifically affecting the property of the Company, and shall cause the requirements of Sections 118, 125 and 127 to 144 (both inclusive) of the Act in that behalf to be duly complied with. 17.4 Register and Index of Debentures holders The Company shall, if any time it issues debentures, keep a Register and Index of Debenture-holders in accordance with Section 152 of the Act. The Company shall have the power to keep in any state or country outside India a branch Register of Debenture-holders resident in that Sate or country. 18. 18.1 a. MEETINGS OF MEMBERS General Meetings: The Company shall in each year hold a general meeting as its Annual General Meeting in addition to any other meeting in that year. All general meetings other than annual general meetings shall be called extraordinary general meetings. If for any reason beyond the control of the Board, the general meeting (including an annual general meeting) cannot be held on the appointed day, the Board shall have power to postpone the general meeting of which a notice shall be given to the members through advertisement in at least two newspapers, of which one shall be in the language of the region in which the Registered office of the company is situated. 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. Sections 171 to 186 of the Act with such adaptation and modifications, if any, as may be prescribed, shall apply with respect to meetings of any class of members or debenture holders of the Company in like manner as with respect to general meetings of the Company.

b.

c.

d.

288

18.2.

Extra-ordinary General Meetings: The Board may, whenever it thinks fit, call an extraordinary general meeting and it shall do so including upon a requisition in writing by any member or members holding in the aggregate not less than the amount prescribed under the Act out 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.

18.3.

Quorum: The quorum for a general meeting of the Company shall be as prescribed under the Companies Act, 1956 or any other law for the time being in force.

18.4. a.

Absence of quorum and its consequences: If within half an hour from the time appointed for holding a meeting of the Company, a quorum is not present, the meeting, if called upon by requisition of members, shall stand dissolved. In any other case, the meeting shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place, as the Board may determine. If at the adjourned general meeting, a quorum is not present within half an hour from the time appointed for holding the meeting, the members present shall form the quorum. Where a resolution is passed at an adjourned meeting of the Company, the resolution shall, for all purposes, be treated as having been passed on the date on which it was in fact passed and shall not be deemed to have been passed on any earlier date. No business shall be transacted at any general meeting unless the requisite quorum be present at the commencement of the business. Chairman of general Meetings No business shall be discussed or transacted at any general meeting except the election of Chairman whilst the Chair is vacant. The Chairman of the Board of Directors, if any, and in his absence the Vice-Chairman, if any, shall be entitled to take the Chair at every general meeting. If there be no Chairman or Vice-Chairman or if at any meeting he shall not be present within fifteen (15) minutes after the time appointed for holding such meeting or is unwilling to act, the Directors present may choose one of themselves to be the Chairman and in default of their doing so, the members present shall choose one of the Directors to be the Chairman and if no Directors be present or be willing to take the chair, the members present shall choose one of themselves to be the Chairman for the meeting. The Chairman may, with the consent of a meeting at which a quorum is present and if so directed by the meeting, adjourn any meeting from time to time and from place to place. Chairmans power to adjourn meetings in the event of disorders in meetings: Notwithstanding the provision as above, in the event of disorder at a validly convened meeting, the Chairman may adjourn the meeting provided that such an adjournment shall not be for a longer period than the Chairman considers necessary to bring order at the meeting and the Chairman communicates his decision to those present in so far as it is possible.

b.

c.

d.

e.

18.5. a.

b.

c.

d.

18.6.

18.7. a.

Transaction at adjourned general meeting and notice of adjourned meeting in special cases: No business shall be transacted at any adjourned meeting other than the business which might have been transacted at the meeting from which the adjournment took place.

289

b.

When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of the original meeting. VOTES OF MEMBERS Members in arrears not entitled to vote: No member shall be entitled to vote either personally or by proxy at any general meeting or meetings of a class of shareholders either upon a show of hands or upon a poll in respect of any shares registered in his name in which any calls or other sums presently payable by him, have not been paid or in regard to which the Company has, or has exercised, any right of lien.

19. 19.1.

19.2.

Appointment of proxy: A member of the Company is entitled to attend and vote at the meeting also entitled to appoint any other persons (whether a member or not) as his proxy to vote and attend instead of himself in accordance with the provisions of the Act and upon filing of a proxy in the usual common form provided in the Act or the Rules made thereunder.

19.3.

Every member is entitled to be present, speak and vote: Subject to the provisions for exercise of any voting right when there are calls in arrears, and without prejudice to any special privileges or restrictions as to voting for the time being attached to any class of shares forming part of the capital of the Company, every member not disqualified shall be entitled to be present and to speak and vote at such meeting.

19.4.

Proxy : An instrument of proxy shall be delivered/deposited at the registered office of the company not less than 48 hours prior to commencement of the general meeting or such lesser time as may be decided by the Board of directors. The executed date of proxy form shall not be older than the notice of the meeting of that General Meeting.

19.5.

Proxy to vote only on a poll: A Proxy shall be entitled to vote only on a poll.

19.6.

Validity of votes given by proxy notwithstanding death or insanity of members: A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal, or the revocation of the proxy or of the authority under which the proxy was executed or the transfer of the share in respect of which the proxy is given, provided that no intimation in writing of the death or insanity, revocation or transfer shall have been received at the Office before the meeting/adjourned meeting as the case may be.

19.7.

Right of a member to use his vote differently: On a poll taken at a meeting of the Company a member or other person entitled to vote for him as the case may be, need not, if he votes, use all his votes or cast in the same way, all the votes he uses.

19.8.

Reckoning of votes: The voting rights attached to each Equity Share shall be the same.

19.9.

Special notice: Where by any provision contained in the Act or in these Articles special notice is required for any resolution, notice of the intention to move the resolution shall be given to the Company not less than 290

fourteen days before the meeting at which it is to be moved exclusive of the day on which the notice is served or deemed to be served and the day of the meeting. The Company shall immediately after the notice of the intention to move any such resolution has been received by it, give its members notice of the resolution in the same manner as it gives notice of the meeting, or if that is not practicable, shall give them notice thereof either by advertisement in a newspaper having an appropriate circulation or in any other mode allowed by these presents not less than seven days before the meeting. 19.10. Minutes of the proceedings of meeting: Minutes of the proceedings of the all General Meetings, Board Meetings including all committee Meetings shall be recorded and maintained at the registered office of the company or at such place as may be determined by the Board of Directors. 20. 20.1. DIRECTORS AND BOARD OF DIRECTORS First directors: The first directors of the Company shall be: 1. Mr Balvinder Singh; 2. Mrs. Baljit Kaur; and 3. Mr B. Ravichandran 20.2. Meetings: The Board of Directors shall meet once every quarter and at such other times as may be necessary for the conduct of the business of the Company, provided that the Directors receive written notice of the time and place of such meeting, at least 7(seven) Days prior to such meeting. Any meeting to be held on less than ten (7) Days advance notice shall require the unanimous consent or waiver of the Board. Directors may, acting unanimously, waive in writing, the requirements for notice before, at or after a meeting, and attendance by a Director at a meeting without objection by a Director shall be deemed a waiver of such notice requirement. 20.3. Quorum: The quorum for a Board meeting shall be 1/3rd of the board strength or 2 (Two) Directors, whichever is higher. 20.4. Circular Resolutions: The Board may act by written resolution, or in any other legally permissible manner, on any matter, except matters which by Applicable Law may only be acted upon at a meeting. Subject to any restrictions imposed by law, no written resolution shall be deemed to have been duly adopted by the Board, unless such written resolution shall have been approved in accordance with the provisions of these Articles. 20.5. Alternate Director: The Board may, if requested by any Director (other than an Alternate Director) appoint any individual to act as his alternate during the absence of such Director from the state in which meetings of the Board are ordinarily held for the period prescribed under the Act. The original Director in whose place such alternate Director is to be appointed shall recommend the alternate Director to the Board and the Board shall act upon the recommendation of such original Director. 20.6. Additional Director: The Board of Directors may in accordance with the provisions of the Act and these Articles, appoint additional directors who shall hold office until the next annual general meeting of the Company.

291

20.7.

Committees: The Board may constitute such committees of the Board, including an Audit Committee and a Remuneration/Compensation Committee, with such composition and functions as may be determined by a majority of the Directors, in accordance with the provisions of the Act.

20.8. 20.9.

A director is not required to hold any qualification shares. Remuneration of directors: a. Subject to the provisions of the Act, a managing director or a director who is in the whole time employment of the Company may be paid remuneration either by way of a monthly payment or at a specified percentage of the net profits of the Company or partly by one way and partly by the other. Subject to the provisions of sections 198, 309, 310, 311 and 314 of the Act, and in the case of the managing director, subject to the provisions of these Articles, the Board shall have power to pay remuneration to a director for his service, whole time or part time, to the Company, or for services of professional or other nature rendered by him as may be determined by the Board. If any director, being willing, shall be called upon to perform extra services or make any special exertion, or otherwise, in the Companys business or for any of the provisions of the Act, the Board shall have power to pay to such director such remuneration as may be determined by the Board. The fee payable to a director (including a managing or whole time director, if any) for attending a meeting of the Board or Committee thereof shall be such sum as the Board may from time to time determine within the limit prescribed by the Central Government pursuant to the provisions of the Act from time to time.

b.

c.

20.10.

When the number of directors in office falls below the minimum fixed by the Act, the Directors shall not act except in emergencies or for the purpose of filling up vacancies or for summoning a general meeting of the Company or for complying with any provision of law and so long as the number is below the minimum they may so act notwithstanding the absence of the necessary quorum, for filling vacancies or for summoning a general meeting of the Company or for complying with any provision of law and so long as the number is below the minimum they may so act notwithstanding the absence of the necessary quorum. The Chairman and the Vice Chairman of the Board of Directors of the Company shall be appointed from among the directors and such Chairman/Vice Chairman of the Board shall hold office until the period of office is determined by the Board. If at any meeting of the Board, the Chairman is not present within fifteen minutes from the time appointed for holding the meeting, the Vice Chairman shall be the chairman of the meeting and if both of them are not present within fifteen minutes of the time appointed for the meeting the remaining directors may elect anyone of the other directors as the case may be, who shall preside as Chairman of the meeting. Subject to the above, the Directors present may, from time to time, elect one from amongst their numbers to act as the Chairman for that meeting. The Chairman of a meeting shall have a second or casting vote. All acts done by the Board or by a Committee of the Board, or by any person acting, as a Director shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of such director or persons acting as aforesaid or that they or any of them were disqualified or that the appointment of any of them had been terminated by virtue of any provisions contained in the Act or these Articles, be as valid as if every such person had been duly appointed and was qualified to be a director and had not vacated his office or his appointment had not been terminated, provided that nothing in this Article shall be deemed to give validity to acts done by a Director after his appointment has been shown to the Company to be invalid or to have terminated. Subject to the provisions contained in the Act and these Articles, the Board may appoint and, at their discretion, remove or suspend such officers, by whatever designation called, including a secretary to perform the duties under the Act, managers, engineers, experts, legal advisers, solicitors, clerks, agents, salesmen, workmen, and other servants or professionals, for permanent, temporary or special services, as the Board may from time to time think fit and determine their duties, fix either salaries or

20.11.

20.12.

20.13.

292

emoluments and delegate to or confer upon them such powers, including the power to sub delegate as the Board may think fit. 20.14. Directors and Officers Insurance: The Company shall obtain appropriate directors and officers insurance as may be determined by the Board. The Company shall also obtain suitable key man insurance policies for senior management as determined by the Board in consultation with the Investors. 20.15. Stock Option Plan Any modification to the Stock Option Plan and/or the ESPS as well as any new grant of options or shares (as the case may be) there under shall require the approval of the Board of Directors, including at least a majority of the Investor Directors. Any Equity Shares issued to the Founder under the Stock Option Plan shall be subject to the terms and conditions of these Articles. 21. MANAGING DIRECTORS/WHOLE TIME DIRECTORS 21.1 The Board may from time to time with such sanction of the Central Government as may be required by law appoint one or more of their body to the office of Managing Director or Whole-time Directors. The Directors may from time to time resolve that there shall be either one or more Managing Directors or whole time Directors. In the event of any vacancy arising in the office of Managing Directors of whole time Director and the Directors resolve to increase the number of Managing Directors or Whole-time Directors the vacancy shall be filled up by the Board of Directors and the Managing Director or whole time Director so appointed shall hold the office for such period as the Board of Directors may fix subject to the approval of the Central Government. If a Managing Director or whole time Director ceases to hold office as Director he shall IPSO FACTO and immediately cease to be a Managing Director or whole time Director. The Managing Director shall not be liable to retirement by rotation as long as he holds office as Managing Director. Managing Director or Wholetime Director shall subject to supervision, control and direction of the Board and subject to the provisions of the Act, exercise such powers as are exercisable under these presents by the Board of Directors as they may think fit and confer such powers for such time and to be exercised for such object, purposes and upon such terms and conditions and with such restrictions as they may think expedient and from time to time revoke, withdraw, alter, vary all or any of such powers. The Managing Directors or whole time Directors may exercise all the powers entrusted to them by the Board of Directors in accordance with the Boards Direction. Subject to the provisions of the Act and subject such sanction of the Central Government as may be required for the purpose, the Managing Director or whole time Directors shall receive such remuneration (whether by way of salary, commission or participation in profits or partly in one way and partly in another) as the Company in General Meeting may from time to time determine. The Managing Director or whole time Director shall be entitled to charge and be paid for all actual expenses, if any, which they may incur for or in connection with the business of the Company. They shall be entitled to appoint part time employees in connection with the management of the affairs of the Company and pay remuneration to such part time employees. The Managing Director or whole time Director shall subject to the supervision, control and directions of the Board have the management of the whole of the business of the Company and all of its affairs and shall exercise all powers and perform all duties in relation to the Management of the affairs and transactions of the Company except such powers and such duties as are required by law or by these presents to be exercised or done by the company in General Meeting or by the Board of Directors and also subject to such conditions or restrictions, imposed by the Companies Act, or by these presents. 293

21.2

21.3

21.4

21.5

21.6

21.7

21.8

21.9

21.10

Without prejudice to the generality of the foregoing and subject to supervision and control of the Board of Directors the business of the company shall be carried on by the Managing Director or whole time Director and he shall have and exercise all the powers set out in Article 116 except those which are by law or by these presents or by any resolution of the Board required to be done by the Company in General Meeting or by the Board. The Board may from time to time delegate to the Managing Director or whole time directors such of their powers and subject such limitations and conditions as they may deem fit. The Board may from time to time revoke, withdraw, alter or vary all or any of the powers conferred on the Managing Director or whole time director by the Board or by these presents.

21.11

22. POWERS & DUTIES OF DIRECTORS The business of the Company shall be managed by the Board of Directors, who may exercise all such powers of the Company, as are authorised by the Act or any statutory modifications thereof for the time being in force except those by these presents are required to be exercised by the Company in General Meeting. Provided that in exercising any power or doing any such act or thing, the Board shall be subjected to the provisions contained in that behalf in the Act or any other provision of Law or the Memorandum of Association of the Company or these Articles or in any regulation not inconsistent therewith and duly made thereunder including regulations made in General Meeting but no regulation made by the Company in General Meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made. 22.1 Without prejudice to the generality of the foregoing, it is hereby expressly declared that the Directors shall have the following powers, that is to say: a) To carry on and transact the several kinds of business specified in Clause III of the Memorandum of Association of the Company, subject to the provisions of law in that behalf. b) To draw, accept, endorse, discount negotiate and discharge on behalf of the Company all bills of exchange, promissory notes, any prior, hundies, drafts, railway receipts, dock warrants, delivery order Government promissory notes, other Government instruments, bonds, debentures or debenture stocks of Corporation, Local bodies, Port trusts, improvements Trusts or other Corporate bodies and to execute transfer deeds for transferring stocks shares or stock certificates of the Govt. and other local or corporate bodies in connection with any subject of the Company. c) At their discretion, to pay for any property, rights or privileges acquired by or services rendered to the Company, either wholly or partially in cash or in shares bonds, debentures or other securities of the Company, and such shares may be issued either as fully paid up or with such amount credited as paid up thereon as may be agreed upon; and any such bonds, debentures, or other securities may be either specifically charged upon all or any of the property of the Company or not so charged. d) To engage and in their discretion to remove, suspend, dismiss and remunerate banker, legal advisers, accountants, cashier, agents dealers brokers, men servants, employees of every description and to employ such professional or technical or skilled assistants as from time to time may in their option be necessary or advisable in the interest of the Company and upon such terms as to durations of employment, remuneration or otherwise as may be required and security in such instances and to such amounts as the Directors think fit. e) Subject to the provisions of Sections 100 to 105 to accept from any member, on such terms and conditions as shall agreed, a surrender of his shares of stock or any part thereof. f) To secure the fulfillment of any contracts or agreements entered into by the Company, by mortgage on all or any of the Company or in such other manner as they think fit.

294

g) To institute, conduct, defend, compound or abandon any actions, suits and legal proceeding by or against the Company or its officers or otherwise concerning the affairs of the Company and also to compound or compromise or submit to arbitration the same actions, suits and legal proceedings. h) To make and give receipts, releases and other discharges or money payable to the Company and for the claims and demands of the Company. i) To determine who shall be entitled to sign on the Companys behalf bills of exchange promissory notes, dividend warrants, cheques and other negotiable instruments, receipt, acceptance endorsements, releases, contracts, deeds and documents. j) From time to time to regulate the affairs of the company in such manner as they think fit and in particular to appoint any person to be the attorneys or agents for the Company either abroad or in India with such terms as may be thought fit. k) To invest and deal with any money of the Company not immediately required for the purpose of the business of the Company upon such securities as they think fit. l) To execute in the name and on behalf of the Company in favour of any Director or other person who may incur or be about to incur any personal liability for the Companys property (present and future) as they think fit. m) To give to any person employed by the Company commission on the profits, or any particular business or transactions, or a share in the general profits of the Company, and such commission, or share of profits shall be treated as part of the working expenses of the Company. n) From time to time, to make, vary and repeal bye-laws for the regulation of the business of the Company, its officers and servants. o) To enter into all such negotiations and contracts and to rescind and vary all such contracts, and execute and do all such acts, deeds and things in the name and on behalf of the Company as they may consider expedient for or in relation to any of the matters aforesaid or otherwise for the purpose of the Company. p) To pay gratuities, bonus, rewards, presents and gifts to employees or dependants of any deceased employees to charitable institutions or purposes, to subscribe for provident funds and other associations for the benefit of the employees. 22.2. Subject to the provisions of Section 292 of the Act, and other provisions of the Act, the Board may delegate from time to time and at any time to a committee formed out of the directors all or any of the powers, authorities and descriptions for the time being vested in the Board and any such delegations may be made on such terms and subject to such conditions as the Board may think fit.\ The Board may appoint at any time and from time to time a power of attorney under the Companys seal for any person to be attorney of the Company to such purposes and with such powers, authorities and discretion not exceeding those vested in or exercisable by the Board under these Articles and for such period and subject to such conditions as the board may from time to time think fit, and any such appointment may if the Board thinks fit, be made in favour of the members or any of the members of any firm or Company, or otherwise in favour of any body or persons, nominated directly by the Board and any such power of attorney may contain such provision for the protection convenience of persons dealing with such attorney as the Board may think fit. The Board may authorize any such delegatee or attorney as aforesaid to sub-delegate all or any of the powers, authorities and discretions for the time being vested in it. The Board shall duly comply with the provisions of the Act and in particular with the provisions in regard to the registration of the particulars of the mortgages and charges effecting the Company or created by it and to keeping a Register of the Directors and or sending to the Registrar an annual list of members and a summary of particulars of shares and stock and copies of special resolutions and other

22.3.

22.4

22.5

295

resolutions of the Board as are required to be filed with the Registrar under Section 192 of the Act, and a copy of the Register of Directors and notification of any changes therein. 22.6 The Board of Directors shall comply with the requirement of Sections 193 of the Act, in respect of keeping of the minutes of all proceedings of every general meeting and of every meeting of the Board or any Committee of the Board. The Chairman of the meeting may exclude at his absolute discretion such of the matters as are or could reasonably be regarded as defamatory of any person, irrelevant or immaterial to the proceeding or detrimental to the interests of the Company. The Board may appoint such person as the Secretary possessing the prescribed qualifications under the company law and fit in their opinion for the said office for such period and on such terms and conditions as regards remuneration and otherwise as they may determine. The Secretary shall have such powers and duties as may, from time to time, be delegated to or entrusted to him by the Directors. Any branch or kind of business which by the Memorandum of Association of the Company or these presents is expressly or by implication authorized to be undertaken by the Company may be undertaken by the Board at such time or times as they shall think fit and further may be suffered by them to be in abeyance whether such branch or kind of business may have been actually commenced or not so long as the Board may deem it expedient not to commence or proceed with such branch or kind of business. Subject to provisions of Section 292, the Board may delegate all or any of their powers to any Directors jointly or severally or to any one Director at their discretion. The Board of Directors may from time to time but with such consent of the Company in General Meeting as may be required under Section 293 raise any moneys or sums of money for the purpose of the Company provided that the moneys to be borrowed by the Company apart from temporary loans obtained from the Companys bankers in the ordinary course of business shall not, without the consent of the Company at a General Meeting, exceed the aggregate of the paid-up capital of the Company and its free reserves, that is to say reserves not set apart for any specific purpose and in particular, but subject to the provisions of Section 292 of the Act the Board may from time to time at their discretion raise or borrow or secure the payment of any such sum of money for the purpose of the Company by the issue of debentures, perpetual or otherwise including debentures convertible into shares of this or any other company or perpetual annuities and in security of any money so borrowed, raised or received, mortgage, pledge or charge, the whole or any part of the property, assets or revenue of the Company present or future including its uncalled capital by special assignment or otherwise or to transfer or convey the same absolutely or in trust and to give the lenders powers of sale and other powers as may be expedient and to purchase, redeem or pay off any such securities. Provided that every resolution passed by the Company in general meeting in relation to the exercise of the power to borrow as stated above shall specify the total amount upto which moneys may be borrowed by the Board of Directors. 22.12. The Board may delegate by passing a resolution, the above power to borrow money otherwise than on debentures to a Committee of Directors or the Managing Director, within the limits prescribed. Subject to the provisions of the above clause, the Directors may from time to time, at their discretion, raise or borrow or secure the payment of any sum of money for the purpose of the Company at such time and in such manner and upon such terms and conditions in all respects as they think fit, and in particular, by promissory notes or by opening current account or by receiving deposits and advances with or without security or by the issue of bonds, perpetual or redeemable debentures or debenture stock of the Company (both present and future) including its uncalled capital for the time being, or by mortgaging or charging or pledging any lands, buildings goods or other properties and securities of the Company, or by such other means as to them may seem expedient. Such debentures, debenture stock, bonds or other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

22.7

22.8

22.9.

22.10.

22.11.

22.13.

22.14

296

22.15.

Any such debentures, debenture stock, bonds or other securities may be issued at a discount, premium or otherwise and with any special privileges as to redemption, surrender, drawings, allotments of shares of the Company appointment of Director or otherwise. Debentures, debenture stocks, bonds or other securities, with a right of conversion into or allotment of shares shall be issued only with the sanction of the Company in General Meeting. The Directors shall cause a proper register to be kept in accordance with the Act, of all mortgages and charges specially affecting the property of the Company and shall duly comply with the requirements of the Act, in regard to the registration of mortgage and charges therein specified. Where any uncalled capital of the Company is charged, all persons taking any subsequent charge thereon shall take the same, subject to such prior charge and shall not be entitled by notice to the shareholders or otherwise to obtain priority over such prior charge. If the Director or any other persons shall become personally liable for the payment of any sum primarily due from the Company, the Board may execute or cause to be executed any mortgage charge or security over or affecting the whole or any part of the assets of the Company; by way of indemnity to secure the Directors or other persons so becoming liable as aforesaid from any loss in respect of such liability. The Board of Directors shall exercise the following powers on behalf of the Company and said powers shall be exercised only by resolution passed at the meeting of the Board. a) Power to make calls on share holders in respect of moneys unpaid on their shares; b) Power to issue debentures; c) Power to borrow moneys otherwise than on debentures; d) Power to invest the funds of the Company; e) Power to make Loans; Debenture/Debenture Stocks, Loan/Loan stocks, bonds or other securities conferring the right to allotment or conversion into shares or the option or right to call for allotment of shares shall not be issued except with the sanction of the Company in General Meeting.

22.16.

22.17.

22.18.

22.19.

22.20

The Board of Directors may by a meeting resolve to delegate to any Committee of the Directors or Managing Director, the powers specified in sub-clauses(c),(d) and (e) above. Every resolution delegating the power set out in sub-clause(e) above shall specify the total amount up to which money may be borrowed by the said delegate. Every resolution delegating the power referred to in sub-clause (d) above shall specify the total amount upto which the funds may be invested and the nature of the investment which may be made by the delegate. Every resolution delegating the power referred to in sub-clause(e) above shall specify the total amount upon which the loans may be made by the delegate, the purpose for which the loans may be made by the delegate, and the maximum amount of loans which may be made for each such purpose in individual cases. SEAL The Board shall provide a Common Seal for the purposes of the Company, and shall have power from time to time to destroy the same and substitute a new Seal in lieu thereof, and the Board shall provide for the safe custody of the Seal for the time being and the Seal shall never be used except by the authority of the Board or a Committee of the Board previously given. The Company shall also be at liberty to have an Official Seal in accordance with Section 50 of the Act, for use in any territory, district or place, outside India. The Common Seal of the Company shall be used by or under the authority of the Directors or a Committee of the Board of Directors authorized by it in that behalf in the presence of at least one director or a constituted attorney of the Company or the secretary or any other person or persons 297

22.21

22.22

22.23

23. 23.1.

23.2.

23.3.

authorized by the Board or a Committee thereof who shall sign every instrument to which the seal is affixed. 24. DISTRIBUTION OF PROFITS 24.1 The profits of the Company to any special rights relating thereto created or authorized to be created by these presents and subject to the provisions of the presents, as to the reserve fund, shall be divisible among the members in proportion to the amount of capital paid up on the shares held by them respectively. Where capital is paid on any share in advance of calls, upon the footing that the same shall carry interest, such capital shall not whilst carrying interest, confer a right to participate in profits. The Company in General Meeting may declare dividend but no dividend shall exceed the amount recommended by the Board. The Board may from time to time pay to the members such interim dividends as appear to them to be justified by the profits of the Company. No dividend shall be payable except out of the profits except as provided by Section 205 of the Act. The Board may, before recommending any dividends set aside out of the profits of the Company such sums as its thinks proper as a reserve or reserves which shall at the discretion of the Board, be applicable for any purpose to which the profits of the Company may be properly applied, including provisions for meeting contingencies or for equalising dividends and pending such application may at the like discretion either be employed in the business of the Company or as the Board may from time to time think fit. The Board may also carry forward any profits when it may think prudent not to divide, without setting them aside as reserve. The Board may deduct from any dividend payable to any members all sums of money, if any, presently payable by him to the Company on account of calls and otherwise in relation to the shares of the Company. Any General Meeting declaring a dividend or bonus may make a call on the members of such amounts as the meeting fixes but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may, if so arranged between the Company and the members be set off against the call. Any dividend interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through post direct to registered address of the holder or in the case of joint holders to the registered address of that one of the joint holders who is first named on the register of members or to such person and to such address as the holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Every such cheque or warrant shall be posted within thirty days from the date of declaration of dividend. Any one or two or more joint holders of a share may give effectual receipt for any dividends, bonuses or other moneys payable in respect of such shares. Notice of any dividend that may have been declared shall be given to the persons entitled to share thereto in the manner mentioned in the Act. No dividend shall bear interest against the Company. No unclaimed dividend shall be forfeited by the Board unless the claim thereto becomes barred by law and the Company shall comply with all the provisions of Section 205-A of the Act, in respect of unclaimed dividends.

24.2

24.3

24.4

24.5 24.6

24.7

24.8.

24.9

24.10

24.11. 24.12.

24.13

24.14.

24.15

298

24.16

Where dividend has been declared by the Company but has not been paid or the warrant in respect thereof has not been posted within thirty days from the date of declaration to any share holder entitled for the payment of dividend the Company shall within 7 days from the date of expiry of the said period of 30 days, transfer the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted within the said period of thirty days to a special account to be opened by the Company in that behalf in any scheduled bank to be called Unpaid dividend Account. Any money transferred to the unpaid dividend account that remains unpaid or unclaimed for a period of 7 years from the date of such transfer shall be transferred by the Company to the Investor Education and Protection Fund Account of the Central Government but a claim to any money so transferred to the Investor Education and Protection Fund account may be preferred to the Central Government by the person to whom the money is due and shall be dealt with as if such transfer to the General Revenue Account had not been made the order if any for payment of the claim being treated as an order for refund or revenue. The Company shall when making any transfer under clause(2) to the Investor Education and Protection Fund Account of the Central Government any unpaid or unclaimed dividend furnish to such officer as the Central Government may appoint in this behalf, a statement in the prescribed form setting forth in respect of all sums included in such transfer the nature of the sums the names and the last known addresses of the persons entitled to receive the sum the amount to which such person is entitled and the nature of his claim thereto of and such other particulars as may be prescribed. Any transfer of shares shall pass the right to any dividend declared thereon before the registration of the transfer.

24.17

24.18

24.19.

25. CAPITALISATION OF PROFITS 25.1 The members of the Company in General Meeting by passing ordinary resolution may on the recommendation of the Board: a) capitalize any part of the amounts for the time being standing to the credit of the Companys reserve accounts or to the credit of the profit and loss accounts or dividend otherwise available for distribution: and b) That such some be accordingly set free for distribution in the manner specified in clause(2) amongst the members who would have been entitled thereto if distributed by way of such dividend and in the same proportion. 25.2 The sum aforesaid shall not be paid in cash but shall be applied subject to the provisions contained in clause(3) either in or towards: I) Paying up any amount for the time being unpaid on shares held by such members respectively; II) Paying up in full un- issued shares of be Company to the allotted and distributed credited as fully paid up to and amongst such members in the proportion aforesaid; or III) Partly in the way specified in sub-clause (I) and partly in that specified in sub-clause (II) 1) Whenever such a resolution as aforesaid shall have been passed the Board shall: a) make all appropriations and applications of the undistributed profits to be capitalised thereby and issue of fully paid shares or debentures, if any; and b) generally do all acts and things required to give effect thereto. 2) The Board shall have full powers: a) to make such provisions by the issue of fractional certificates or by payment in cash or otherwise as it thinks fit, in the case of shares becoming distributable in fraction, and also b) to authorise any person to enter, on behalf of all the members entitled thereto, into an agreement with the Company providing for the allotment to them respectively, credit as fully paid up of any further shares or debentures of which they may be entitled upon such capitalization, or as the case may require, for the payment of by the Company on their behalf, by the application thereto of their

25.3

299

respective proportions of the profits resolved to be capitalized of the amounts or any part of the amounts remaining unpaid on their existing shares. 3) Any agreement made under such authority shall be effective and binding on all such members. 26. 26.1 BOOKS OF ACCOUNTS AND DOCUMENTS; RECORDS; REPORTS; NOTICES Books and Records. The books and records of the Company shall be maintained in accordance with generally accepted accounting principles in India. The method of accounting and the accounting policies of the Company shall be consistently applied. The books and records shall be maintained at the Companys principal office and all such books and records shall be available to any Investor for inspection at such location, at such Investors sole cost and expense during normal business hours on at least twenty-four (24) hours prior notice. In connection therewith, each Investor (and its agents and representatives) shall have the unfettered right to meet and consult with any and all employees of the Company. 26. 2 The Board of Directors shall cause true accounts to be kept of all sums of money received and expended by the Company and the matters in respect of which such receipts and expenditure takes place of all sales and purchases of goods by the Company and of the assets credits and liabilities of the Company. If the Company establishes any branch office whether in or outside the country, proper books of account relating to the transactions effected at that office shall be kept at the office and proper summarized returns made upto date at intervals of not more than three months, shall be sent by Branch office to the Company at its registered office or to such other place in India as the Board thinks fit where the main books of the Company are kept. All the aforesaid books shall give a fair and true view of the affairs of the Company or of its Branch Office as the case may be with respect to the matters aforesaid and explain its transaction. The Books of account shall be kept at the Registered Office or at such other place in India as the Directors think fit. The Board of Directors shall from time to time determine whether and to what extent and at what time and place and under what conditions or regulation the Accounts and books and documents of the Company or any of them shall be open to the inspection of the members and no member (not being a Director) shall have any right of inspecting any Account or books of account or documents of the Company except as conferred by statute or authorized by the Directors or by a resolution of the Company in General Meeting. The Board of Directors shall keep before each annual general meeting a profit and loss account for the financial year of the Company and a balance sheet made up as at the end of the financial year which shall not precede the day of the meeting by more than six months or such extended period as shall have been granted by the Registrar under the provisions of the Act. Subject to the provisions of Section 211 of the Act, every balance sheet and Profit and Loss Account of the Company shall be in the forms set out in Para I and 11 respectively of Schedule VI of the Act, or as near thereto as circumstances admit. So long as the Company is a holding Company having a subsidiary, the Company shall conform to Section 212 and other applicable provisions of the Act. Every Balance Sheet and every Profits & Loss Account of the Company shall be signed by the Secretary, if any, and by not less than two Directors of the Company one of whom shall be the Managing Director. Provided that when only one Director is for the time being in India the Balance Sheet and Profit & Loss Account shall be signed by such Director and in such a case there shall be attached to the Balance Sheet and the Profit & Loss Account a statement signed by him explaining the reason of noncompliance with the provisions of sub-clause. 300

26.3

26.4

26.5

26.6

26.7

26.8

26.9

26.10

26.11

The Balance Sheet and every Profits & Loss Account shall be approved by the Board of Directors before they are signed on behalf of the Board in accordance with the provisions of this Article and before they are submitted to the Auditors for their report thereon. The Profit & Loss Account and the auditors report shall be attached there to every balance sheet of the Company and shall be laid before the members of the Company.

26.12

26.13

Every Balance Sheet laid before the Company in Annual General Meeting shall have attached to it a report by the Board of Directors with a report to the state of Companys affairs, the amounts if any, which it proposes to carry to any reserves in such Balance Sheet and the amount if any, which if recommends to be paid by way of dividend, material charges and commitment if any, affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the Balance Sheet relates and the date of the report. The report shall, so for as it is material for the appreciation or the state of the Companys affairs by its members deal with any changes which have occurred during financial year in the nature to the Companys business or in the Companys subsidiaries or in the nature of business in which the company has an interest. The Boards report shall also include a statement showing the name of every employee of the Company who if employed throughout the financial year was in receipt of remuneration for that year which in the aggregate was not less of remuneration for any part of that year at a rate which in the aggregate was not less than such amount as may be prescribed under section 217-2A of the Companies Act, 1956 from time to time. The statement shall also indicate whether any such employee is a relative of any Director or Manager of the company and if so, the names of such Director and such other particulars prescribed. The Board shall also give the fullest information and explanation in its report in cases falling under the provision to Section 222 in an addendum to that report on every reservation, qualification or adverse remark contained in the Auditors Report. The Boards Report and addendum (if any) thereto shall be signed by its Chairman, if he is authorised in that behalf by the Board and where he is not so authorised shall be signed by such number of Directors as are required to sign the Balance Sheet and the Profit & Loss Account of the Company by virtue of sub-clause (1) and (2) of the Article 100. The Board shall have the right to charge any person being a Director with the duty of seeing that the provisions of sub-clause) to (3) of this article are complied with. The Company shall comply with the requirement of Section 219 of the Act.

26.14

26.15

26.16

26.17

26.18

26.19

27. ANNUAL RETURNS 27.1 The Company shall make the requisite Annual Return in accordance with the Sections 159 and 162 of the Act. AUDIT Once at least in every year the books of account of the Company shall be examined by one or more Auditor or Auditors. All matters of Appointment, powers, rights remuneration and duties of the Auditors shall be regulated by Sections 224 to 233 of the Act. SERVICE OF DOCUMENTS AND NOTICES Service of document or notice to a member: 301

28. 28.1

28.2

29. 29.1

A document or notice may be served or given by the Company on any member either personally or by sending it by post to his registered address or (if he has no registered address in India) to the address, if any, in India supplied by him to the Company for serving documents or notices on him or by email if provided and agreed by the member. In addition notices shall also be served on members by issuing a notice thereof to the address provided by the member outside India. 29.2 Service by post or personal meeting: Where a document or notice is sent by post, service of the document or notice shall be deemed to be effected by properly addressing, pre-paying and posting a letter containing the document or notice. 29.3 The members of the company may also be served in its meeting relating to the business, particularly the weekly or monthly meeting of its borrowers wherein the members could participate. Reading the notice, affixation in the meeting place and making it known by the company officials would be treated as proper service through these articles.

29.4 Specific mode of service if required by the members, and when it is deemed to have been served: Where a member has intimated to the Company in advance that documents or notices should be sent to him under a certificate of posting or by registered post with the acknowledgement due and has deposited with the Company a sum sufficient to defray the expenses of doing so, service of the document or notice shall not be deemed to be effected unless it is sent in the manner intimated by the member and, such service shall be deemed to have been effected in the case of a notice of a meeting, at the expiration of forty eight (48) hours after the letter containing the document or notice is posted and in any other case, at the time at which the letter would be delivered in the course of post. 29.5 Service on joint holders: A document or notice may be served or given by the Company on or to the joint holders of a share by serving or giving the document or notice on or to the joint holder named first in the Register of Members in respect of the share. 29.6 Service on personal representatives etc.: A document or notice may be served or given by the Company to the persons entitled to a share in consequence of the death or insolvency of a member by sending it though the post as a prepaid letter addressed to them by name or by the title or representatives of the deceased, or assignee, of the insolvent or by any like description, at the address, if any, in India supplied for the purpose by the persons claiming to be entitled, or (until such an address has been so supplied) by serving the document of notice in any manner in which the same might have been given if the death or insolvency had not occurred. 29.7 Who are entitled to receive notices in the case of general meetings: Documents or notices of every general meeting shall be served or given in same manner hereinafter authorized on or to (a) every member, (b) every person entitled to a share in consequence of the death or insolvency of member (c) every director and (d) the or Auditor or Auditors for the time being of the Company. . 29.8 Members bound by document of notices served on or given to previous holders: Every person who, by operation of law, transfer or other means whatsoever, shall become entitled to any share, shall be bound by every document or notice in respect of such share, which previously to his name address being entered on the register of members shall have duly served on or given to the person from whom he derives his title to such shares. 29.9 Service of documents or notices on members:

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Any document or notice to be served or given by the Company may be signed by a director or secretary or by some person duly authorized by the Board for such purpose and the signature thereto may be written, printed or lithographed. 29.10 Service on the company: All documents or notices to be served or given by members on or to the Company or any officer thereof shall be served or given by sending it to the Company or officer at the office by post under a certificate of posting or by registered post, or by leaving it at the office 29.11 Accidental omission not to invalidate the meeting: Any accidental omission to give notice to, or the non-receipt of notice by any member or other persons to whom it should be given shall not invalidate the proceedings at the meeting. 30. AUTHENTICATION OF DOCUMENTS Save as otherwise expressly provided in the Act or these Articles a document or proceeding requiring authentication by the Company may be signed by a Director, Managing Director, Manager or Secretary or an authorized officer of the Company and need not be under its seal. 31. 31.1 WINDING UP If the Company is wound up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by the Act, divide amongst the members, in specie or kind, the whole or any part of the assets of the company, whether they shall consist of property of the same kind or not. The liquidator on any winding up (whether voluntary, under supervision or compulsory) may, with the sanction of a special resolution divide among the contributories 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 benefits of the contributories as the liquidators with the like sanction shall think fit. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit, but so that no member shall be compelled to accept any share or other securities whereon there is any liability.

31.2

31.3

33. 33.1

INDEMNITY FOR DIRECTORS, INVESTORS, AND EMPLOYEES Directors and other officers not responsible for the acts of others: Subject to the provisions of section 201 of the Act, every director, Managing director, whole-time director, manager, secretary and other officer or employee of the company shall be indemnified by the Company against, and it shall be the duty of the Directors, out of the funds of the Company, to pay all costs, losses and expenses including travelling expenses which such director, manager, secretary and officer or employee may incur-or become liable to by reason of any contract entered into or act or deed done by him as such director, manager, secretary, officer or servant or in any way in the discharge of his duties, and the amount for which such indemnity is provided, shall immediately attach as a lien on the property of the Company and have priority between the members over all other calms. Subject as aforesaid, every director, managing director, manager, secretary, or other officer and employee of the Company shall be indemnified against any liability incurred by him in defending any proceedings, whether civil or criminal in which judgment 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 given to him by the Court and the amount for which such indemnity is provided shall immediately attach as a lien or the property if the Company.

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Subject to the provisions of section 201 of the Act, no director, managing director, whole-time director or other officer of the Company shall be liable for the acts, receipt, neglects or defaults of any other director or officer, or for joining in any receipt or other act for conformity, or for any loss or expense happening to the Company through insufficiency or deficiency of title to any property acquired by order of the Directors for or on behalf of the Company, or for the insufficiency or deficiency of any security in or upon which any of the moneys of the Company shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortuous act of any person, company or corporation, with whom any moneys, securities, or effects shall be entrusted or deposited, or for any loss occasioned by any error of judgment or oversight on his part, or for any other loss or damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto, unless the same happens through his own dishonesty

33.2

Indemnification by the Company: To the maximum extent permitted under Applicable Law, the Company shall indemnify, hold harmless and defend each Investor and the Founder, the Directors, including any Group A Investors Nominee Directors and Sandstone Nominee Directors or their respective Alternate Directors and each of their respective officers, directors, members, shareholders and employees (each an Indemnified Party) from and against any and all loss, cost, expense, damage, claim, liability or injury (including, any judgment, award, settlement, and reasonable attorneys fees and other costs related thereto) (collectively, Losses) suffered or sustained by them by reason of or arising out of (i) their activities on behalf of the Company or otherwise in furtherance of the interests of the Company, (ii) their status as managers, officers or directors, including Group A Investors Nominee Directors and Sandstone Nominee Director or their respective Alternate Directors, and (iii) in the case of the Investors only, any obligation to be performed by the Investors pursuant to any provision of Applicable Law, in connection with the offer and sale of the Equity Shares and / or CCPS and/or compliance with statutory or other requirements of stipulated by bodies, including SEBI and any applicable stock exchanges, (iv) breach of any of the representations and warranties given by the Company in any Agreement executed between the Company and the Investors; provided that the actions or omissions forming the basis of the Losses were not performed or omitted to be performed fraudulently or as a result of the willful misconduct by the Indemnified Party or as a result of the willful breach of this Agreement or the organizational agreements of the Company.

33.3

Exculpation: To the maximum extent permitted by Applicable Law, no Founder, Independent or Nominee Directors, and each of their respective officers, directors, members, shareholders and employees shall be liable to the Company for Losses arising out of or in connection with the operation of the business of the Company, unless such Losses arise out of such Persons fraud, bad faith or willful misconduct or an action or omission that was outside of the scope of the authority granted to such Person.

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SECTION X: OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts (not being contracts entered into in the ordinary course of business carried on by our Company or contracts entered into more than two years before the date of this Draft Red Herring Prospectus) which are or may be deemed material have been entered or to be entered into by our Company. These contracts, copies of which have been attached to the copy of the Draft Red Herring Prospectus have been delivered to the Registrar of Companies, Andhra Pradesh, Hyderabad, for registration and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of our Company from 11:00 am to 5:00 pm on all Working days from the date of this Draft Red Herring Prospectus until the Bid/Issue Closing date. MATERIAL CONTRACTS 1. Issue Agreement dated June 11, 2011 entered into between the Company and the Book Running Lead Manager. Memorandum of Understanding dated November 09, 2010 entered into between Bigshare Services Private Limited and the Company to act as the Registrar to the Issue. Escrow Agreement dated [] between the Company, BRLM, Registrar to the Issue and Escrow Bankers. Syndicate Agreement dated [] amongst the Company, BRLM and the Syndicate Members. Underwriting Agreement dated [] between the Company and the Syndicate.

2.

3.

4. 5.

DOCUMENTS FOR INSPECTION 1. Certified true copy of Memorandum and Articles of Association, as amended from time to time including Certificate of Incorporation dated January 03, 2007 and Certificate of Commencement of Business dated January 10, 2007 issued by the Registrar of Companies, Andhra Pradesh, Hyderabad; Certified true copy of the Resolution passed at the meeting of the Board of Directors held on April 01, 2011 approving the Issue. Certified true copy of the Resolution passed u/s. 81(1A) of the Companies Act, 1956 at the Extraordinary General Meeting dated April 30, 2011 approving the Issue. Consents of all Directors, Company Secretary and Compliance Officer, Auditor, BRLM to the Issue, Syndicate Members, Legal Advisor to the Issue, Bankers to the Company, Bankers to the Issue, Registrar to the Issue, to include their names in the Draft Red Herring Prospectus to act in their respective capacities. Report of our Statutory Auditor dated May 25, 2011 regarding Restated Financial Statements of the Company for Fiscals 2007, 2008, 2009, 2010 and for the nine months period ended December 31, 2010. Annual Reports of the Company for the FY 2010, 2009, 2008 and 2007. Report of the Auditors M/s Karumanchi & Associates, Chartered Accountants dated May 25, 2011 on the Tax Benefits available to the Company and its shareholders. Statutory Auditors Certificate dated June 07, 2011 regarding Sources and Deployment of Funds. Consent of the Auditors, M/s. Karumanchi & Associates, Chartered Accountants for inclusion of their report on accounts and tax benefits in the form and context in which they appear in the Draft Red Herring Prospectus.

2.

3.

4.

5.

6. 7.

8. 9.

10. Certified true copy of Due Diligence Certificate dated June 22, 2011 to SEBI from BOB Capital Markets Limited. 305

11. Shareholders Resolution dated September 30, 2010 re-appointing Managing Director; 12. Shareholders Resolution dated September 30, 2010 re-appointing Whole-time Director; 13. In-principle listing approvals from BSE and NSE dated [] and [] respectively. 14. Report of the IPO grading agency, [] dated [] furnishing the rationale for its grading, disclosed in the DRHP. 15. Consent from [] for inclusion of their name in the Draft Red Herring Prospectus as IPO Grading Agency and for inclusion of their report in the form and context in which they appear in the Red Herring Prospectus and the Prospectus. 16. Tripartite agreement dated April 15, 2011 amongst the Company, Bigshare Services Pvt. Limited and NSDL, for offering depository services. 17. Tripartite agreement dated January 21, 2011 amongst the Company, Bigshare Services Pvt. Limited and CDSL, for offering depository services. 18. Certified copy of resolution of Board of Directors dated June 23, 2011 approving the Draft Red Herring Prospectus;

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DECLARATION We, hereby declare that all relevant provisions of the Companies Act, 1956 and the regulations or guidelines issued by the Government of India and/ or the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in the Draft Red Herring Prospectus is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or the Rules, Regulations or Guidelines issued or made there under, as the case may be. We further certify that all statements in the Draft Red Herring Prospectus are true and correct. SIGNED BY THE DIRECTORS OF THE COMPANY Sardar Balvinder Singh Chairman and Managing Director

Mrs. Baljit Kaur Whole Time Director

Mr. Bijay Kumar Mohanty Whole Time Director

Mr. Iyer Rangarajan Independent Director

Mr. Sirish Bommakanti Narasimha Independent Director

Mr. Satyanarayanamurty Mukkamala Independent Director

Date: June 23, 2011 Place: Hyderabad

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