for equity shareholders of our company letter of offer... · for equity shareholders of our company...

Draft Letter of Offer Dated: November 23, 2016 For Equity Shareholders of our Company

PB GLOBAL LIMITED

(Formerly Pesticides & Brewers Limited)

Our Company was originally incorporated as Pesticides Limited on October 28, 1960 in the State of Maharashtra as a public lim ited company under the Companies Act, 1956. Our Company received the Certificate for Commencement of Business on March 28, 1961. Subsequently, the name of our Company was changed to Pesticides and Brewers Limited vide special resolution passed by the shareholders of our Company in their meeting held on October 16, 1970 and fresh Certificate consequent upon change of name issued by the RoC, Maharashtra on December 22, 1970. The name of our Company changed to PB Global Limited vide special resolution passed by the shareholders of our Company in their meeting held on August 1, 2016 and Certificate of Incorporation pursuant to change of name issued by Roc, Mumbai on August 10, 2016 Our Corporate Identification Number is L99999MH1960PLC011864. For details of incorporation, please refer to chapter titled Histo ry and Corporate Structure beginning on page no. 89 of this Draft Letter of Offer.

Registered Office: Chitalsar, Manpada Swami Vivekananda Road, Thane 400607, Maharashtra, India Tel. No.: +91 22 2204 7131/2282 8033, Fax No.: +91 22 22886137. Email: [email protected], Website: www.pbltd.in,

Contact Person: Bijal Shah-, Company Secretary and Compliance Officer. Corporate Identity Number: L99999MH1960PLC011864

THE ISSUE

FOR PRIVATE CIRCULATION TO THE ELIGIBLE SHAREHOLDERS OF THE COMPANY OR THE ISSUER ONLY

ISSUE OF [] EQUITY SHARES WITH A FACE VALUE OF RS. 10/- EACH FOR CASH AT A PRICE OF RS. [] EACH INCLUDING A SHARE PREMIUM OF RS. [] PER EQUITY SHARE AGGREGATING TO AN AMOUNT NOT EXCEEDING RS. 4000.00 LAKHS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF [] FULLY PAID UP EQUITY SHARES FOR EVERY [] FULLY PAID UP EQUITY SHARES HELD ON RECORD DATE, I.E. []. THE ISSUE PRICE IS [] TIMES OF THE FACE VALUE OF THE FULLY PAID UP EQUITY SHARE.FOR FURTHER DETAILS PLEASE SEE THE CHAPTER TITLED TERMS OF THE ISSUE ON PAGE 148 OF THIS DRAFT LETTER OF OFFER.

GENERALRISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision, investors must rely on their own examination of the Issuer and the offer including the risks involved. The securities being 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 the adequacy of this document. Investors are advised to refer to the section entitled Risk Factors beginning on page 11 of this Draft Letter of Offer before making an investment in this Issue.

ISSUERSABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Draft Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in context of the Issue, that the information contained in this Draft Letter of Offer is true and correct in all material respects 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 document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The existing Equity Shares of the Company are listed on BSE Limited (BSE). The Company has received in-principle approvals from BSE vide their letter nos. [] dated [] for listing of the Equity Shares being issued in terms of this Draft Letter of Offer. For the purposes of the Issue, the Designated Stock Exchange shall be BSE.

LEAD MANAGER REGISTRAR TOTHE ISSUE

GRETEX CORPORATE SERVICES PRIVATE LIMITED Office No. 13, 1st Floor, Raja Bahadur Mansion, New Bansilal Building, 9-15, HomiModi Street , Fort, Near BSE Ltd, Mumbai -400023 Tel No.: +91 22 40025273 / 9836822199/ 9836821999 Fax No.: +91 22 40025273 Email: [email protected] Website: www.gretexcorporate.com Investor Grievance Email: [email protected] Contact Person: Mr. Tanmoy Banerjee SEBI Registration No. INM000012177

PURVA SHAREGISTERY (INDIA) PRIVATE LIMITED 9, Shiv Shakti Industrial Estate, J. R. BorichaMarg, Opposite Kasturba Hospital Lane, Lower Parel (East), Mumbai 400 013, Maharashtra, India Telephone: +91 22 2301 6761 Fax: +91 22 2301 2517 Email: [email protected] Website: www.purvashare.com Investor Grievance Email: [email protected] Contact Person: Mr. V.B. Shah SEBI Registration Number: INR000001112

ISSUE SCHEDULE

ISSUE OPENS ON LAST DATE FOR RECEIVING REQUEST FOR SPLIT APPLICATION FORMS

ISSUE CLOSES ON

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TABLE OF CONTENTS

TITLE PAGE

SECTION I GENERAL 2

DEFINITIONS AND ABBREVIATIONS 2

NOTICE TO OVERSEAS SHAREHOLDERS 7 PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

8

FORWARD LOOKING STATEMENTS 9

SECTION II RISK FACTORS 11

INTERNAL RISK FACTORS 11

EXTERNAL RISK FACTORS 20

SECTION III INTRODUCTION 27

THE ISSUE 27

SUMMARY OF FINANCIAL INFORMATION 28

GENERAL INFORMATION 31

CAPITAL STRUCTURE 35

SECTION IV PARTICULARS OF THE ISSUE 40

OBJECTS OF THE ISSUE 40

BASIS OF ISSUE PRICE 47

KEY INDUSTRY REGULATIONS AND POLICIES 49

STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS 54

SECTION V ABOUT THE COMPANY 57

INDUSTRY OVERVIEW 57

BUSINESS OVERVIEW 80

HISTORY & CORPORATE STRUCTURE 89

OUR MANAGEMENT 93

OUR GROUP ENTITIES 102

DIVIDEND POLICY 104

SECTION VI FINANCIAL INFORMATION 105

FINANCIAL STATEMENTS 105

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OFOPERATIONS

129

SECTION VII LEGAL AND OTHER INFORMATION 135

OUTSTANDING LITIGATIONS AND OTHER DEFAULTS 135

MATERIAL DEVELOPMENTS 137

GOVERNMENT AND OTHER STATUTORY APPROVALS 138

OTHER REGULATORY AND STATUTORY DISCLOSURES 140

SECTION VIII ISSUE RELATED INFORMATION 148

TERMS OF THE ISSUE 148

SECTION IX MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OUR COMPANY

176

SECTION X STATUTORY AND OTHER INFORMATION 220

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 220

SECTION XI -DECLARATION 221

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SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

In this Draft Letter of Offer, unless the context otherwise requires, the terms defined and abbreviations expanded below shall have the same meaning as stated in this section. References to statutes, rules, regulations, guidelines and policies will be deemed to include all amendments and modifications notified thereto. In this Draft Letter of Offer, unless otherwise indicated or the context otherwise requires, all references to P B GLOBAL Limited the/our Company, PBGL, Issuer, we, our and us are to P B Global Limited and references to you are to the Equity Shareholders and or/ prospective investors in the Issue. Company Related Terms

Terms Description

PBGL, Our Company, the Company the Issuer the Issuer Company We us our

P B Global Limited

Articles/ Articles of Association/ AoA Articles of Association of our Company, as amended from time to time

Auditor/ Statutory Auditor Our statutory auditors namely, P. V. Page & Co., Chartered Accountants

Board/Board of Directors Board of Directors of our Company including a committee thereof

CFO Parimal Vibhash Mehta

Company Secretary & Compliance Officer Bijal Shah

Director(s) Any or all director(s) of our Company, unless otherwise specified and as the context may require

Equity Shareholder(s)/ Shareholder(s) A holder of the Equity Shares of our Company

Equity Share(s) Equity Shares of our Company of face value of Rs.10.00 each

Group Companies/ Group Entities The companies, firms, ventures, etc. covered under the applicable accounting standards (i.e. Accounting Standard 18 issued by the Institute of Chartered accountants of India) on a consolidated basis, or other Companies as considered material by our Board.

Eligible Equity Shareholder(s) Equity Shareholders whose names appear on the register of members of our Company or on the list of register of beneficial owners of our Company maintained by the Depositories as at the end of business hours on the Record Date i.e. []

Memorandum /Memorandum of Association/MoA

Memorandum of Association of our Company, as amended from time to time.

Promoters As on date, there is no promoter/ promoter group.

Promoter Group/Promoter Group Entities As on date, there is no promoter/ promoter group.

Registered Office Chitalsar, Manpada Swami Vivekananda Road Thane Mumbai City MH- 400607 India

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Term Description

Abridged Letter of Offer The abridged letter of offer to be sent to the Eligible Equity Shareholders of our Company with respect to the Issue in accordance with the SEBI ICDR Regulations

Allottee(s) Persons to whom Equity Shares of our Company will be issued pursuant to the Issue

Allotment Date The date on which the Allotment is made

Applicant(s) The Eligible Equity Shareholders and/or the Renouncees who are entitled to apply or have applied for the Rights Issue Equity Shares under the Issue, as the case may be

Application Application made by the Applicant whether submitted by way of the CAF or the SAF or in the form of a plain-paper Application, to subscribe to the Rights Issue Equity Shares issued pursuant to the Issue at the Issue Price

Application Amount The aggregate value of the Application indicated in the Application Form or the SAF or in the plain paper application, payable at the time of the Application

Application Form The form in terms of which an Applicant shall make an Application to subscribe to the Rights Issue Equity Shares pursuant to the Issue, including plain-paper Applications

Application Supported by Blocked Amount/ ASBA

The application (whether physical or electronic) used by an ASBA Investors to make an application authorizing the SCSB to block the Application Amount in his/her/its specified bank account maintained with the SCSB

ASBA Account An account maintained with an SCSB and specified in the CAF or plain paper Application, as the case may be, for blocking the amount mentioned in the CAF or plain paper Application, as the case may be.

ASBA Investor(s)/ASBA Applicant

Eligible Equity Shareholders proposing to subscribe to the Issue through ASBA process and who: (a) are holding the Equity Shares of our Company in dematerialized form as on the Record Date and have applied for their Rights Entitlements and/or additional Equity Shares in dematerialized form; (b) have not renounced their Rights Entitlements in full or in part; (c ) are not Renouncees; and (d) are applying through blocking of funds in a bank account maintained with the SCSBs. Please note that, in terms of SEBI circular CIR/CFD/DIL/1/2011 dated April 29, 2011, QIB applicants, Non-Institutional Investors (including all companies and bodies corporate) and other applicants whose application amount exceeds Rs.200,000 can participate in the Issue only through the ASBA process, subject to them complying with the requirements of SEBI circular dated December 30, 2009. Further, all QIB applicants and Non-Institutional Investors are mandatorily required to use the ASBA facility, even if application amount does not exceed Rs.2,00,000/-.

Bankers to the Company []

Bankers to the Issue []

Category III Foreign Portfolio Investor(s)

Includes all other investors who are not eligible under category I and category II foreign portfolio investors (as defined under the SEBI (FPI) Regulations) such as endowments, charitable societies, charitable trusts, foundations, corporate bodies, trusts, individuals and family offices

Composite Application Form/CAF

The form used by an Investor to make an application for the Allotment of Right Issue Equity Shares in the Issue, or renounce his Rights Entitlement or request for the SAFs, and used by sole Renouncee to make an Application for Allotment of the Equity Shares in the Issue to the extent of renunciation of Rights Entitlement in their favour.

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Consolidated Certificate In case of holding of Equity Shares in physical form, the certificate that our Company would issue for the Equity Shares Allotted to one folio.

Controlling Branches of the SCSBs

Such branches of the SCSBs which coordinate with the Lead Manager, the Registrar to the Issue and the Stock Exchanges, a list of which is available at http://www.sebi.gov.in/cms/sebi_data/attachdocs/1365051213899.html

Draft Letter of Offer/ DLOO

The draft letter of offer dated November 23, 2016 issued by our Company in accordance with the SEBI Regulations and filed with SEBI for its observations does not contain complete particulars of the Issue

Designated Stock Exchange

BSE Limited

Equity Shareholders/ Eligible Equity Shareholders

A holder/beneficial owner of our Equity Shares as on the Record Date.

Foreign Portfolio Investor(s)/FPI(s)

A person who satisfies the eligibility criteria prescribed under Regulation 4 of the SEBI (FPI) Regulations and has been considered under chapter III of the SEBI (FPI) Regulations, which shall be deemed to be an intermediary in terms of the provisions of the SEBI Act. Provided that any foreign institutional investor or qualified foreign investor who holds a valid certificate of registration shall be deemed to be a foreign portfolio investor till the expiry of the block of three years for which fees have been paid as per the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as amended from time to time.

HNI High Networth Individual

Issue / Rights Issue Issue of [] Equity Shares of face value of Rs. 10/- (right issue equity shares) for cash at Issue Price of Rs. [] per Equity Share including share premium of Rs. [] per Equity Share for an amount aggregating upto Rs. 4,000 Lacs to our existing equity shareholders on a rights basis in the ratio of [] Equity Share for every [] fully paid-up Equity Share held by the Equity Shareholders on the Record Date.

Issue Closing Date []

Issue Opening Date []

Issue Price []

Issue Proceeds The proceeds of the Issue that are available to our Company

Issue Size Not exceeding Rs. 4,000 Lacs

Lead Manager Gretex Corporate Services Private Ltd

Letter of Offer/ LoF This final letter of offer dated [] filed with the stock exchanges after incorporating the observations received from the SEBI on the Draft Letter of Offer

Net Proceeds The Issue Proceeds less the Issue related expenses. For further details, see the section Object of the Issue on page no. 40

Non Institutional Investors/ Non Institutional Investors

All Investors, including FPIs which are foreign corporate or foreign individuals, that are not QIBs or Retail Individual Investors and who have applied for Equity Shares for an cumulative amount more than Rs. 2,00,000/-

Qualified Foreign Investors / QFIs

QFI shall mean a person who has opened a dematerialized account with a qualified depositary participant as a qualified foreign investor under the SEBI (FPI) Regulations

Qualified Institutional Buyers or QIBs

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI (ICDR) Regulations

Record Date []

Refund Bank []

Registrar to the Issue / Registrar

Purva Sharegistery (India) Private Limited

Renouncee(s) []

Retail Individual Individual Investors who have applied for Equity Shares for an amount not more

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Conventional and General Terms or Abbreviations

Term /Abbreviation Description Full Form

Rs. /Rupees or INR Indian Rupee

AGM Annual General Meeting

AS Accounting Standards issued by the ICAI

BSE BSE Limited

CDSL Central Depository Services (India) Limited

Central Government / Government of India

The Central Government of India

CIN Corporate Identification Number

CEO Chief Executive Officer

Companies Act, 1956 Companies Act, 1956, to the extent applicable

Companies Act, 2013 Companies Act, 2013, to the extent notified as amended from time to time

Companies Act Companies Act, 1956 and / or Companies Act, 2013, to the extent applicable

Depositories Act Depositories Act, 1996, as amended from time to time

Depository A depository registered with the SEBI under the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996

DIN Director Identification Number

DIPP The Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.

DP ID Depository Participant Identity

DP/Depository Participant Depository Participant as defined under the Depositories Act,1996

EBITDA Earnings Before Interest, Tax, Depreciation and Amortization

EGM Extra-Ordinary General Meeting

EPS Earnings Per Share

FY Financial Year

FCNR Account Foreign Currency Non - Repatriable Account

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999, as amended from time to time

FII Foreign Institutional Investor (as defined under the SEBI (Foreign Portfolio Investors) Regulations, 2014), registered with the SEBI under applicable laws in India

Financial Year/fiscal year/ Fiscal/ FY

Period of 12 months ending March 31 of that particular year.

GAAP Generally Accepted Accounting Principles

GDP Gross Domestic Product

Investors than Rs. 2 Lacs (including HUFs applying through their Karta)

Rights Entitlement The number of Equity Shares that an Eligible Equity Shareholder is entitled to in proportion to the number of Equity Shares held by the Eligible Equity Shareholder on the Record Date

SAF(s) Split Application Form(s)

SCSB(s) A Self Certified Syndicate Bank, registered with SEBI, which acts as a banker to the Issue and which offers the facility of ASBA. A list of all SCSBs is available at http://www.sebi.gov.in/cms/sebi_data/attachdocs/1365051213899.html

Securities Act The Securities and Exchange Board of India, 1992 as amended from time to time

SEBI LODR Regulations The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended

Stock Exchanges BSE Limited and National Stock Exchange Limited where our Equity Shares are presently listed.

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Government The Central Government and/or the State Government, as applicable

HUF/HUFs Hindu Undivided Family / Hindu Undivided Families

ICAI The Institute of Chartered Accountants of India

IFSC Indian Financial System Code

IFRS International Financial Reporting Standards

India Republic of India

Indian GAAP Generally accepted accounting principles followed in India

IT Act Income Tax Act, 1961

KMP Key Managerial Personnel

KYC Know Your Customer

MCX Multi Commodity Exchange

MICR Magnetic Ink Character Recognition

NECS National Electronic Clearing Service

NOF Net Owned Fund

NRE Account Non-Resident External Account

NRO Account Non-Resident Ordinary Account

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

OCB(s) Overseas Corporate Body(ies)

PAN Permanent Account Number

PAT Profit After Tax

PBT Profit Before Tax

P/E Ratio Price / Earnings Ratio

RBI Reserve Bank of India

ROE Return on Equity

RONW Return on Net Worth

Rs. Rupees, the official currency of the Republic of India

RTGS Real Time Gross Settlement

SCRA Securities Contract (Regulation) Act, 1956, as amended from time to time

SCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to time.

Sec. Section

SEZ Special Economic Zone

SOP Standard Operating Procedure

SSI Small Scale Industry

STT Securities Transaction Tax

US/ United States United States of America

USD/ US$/ $ United States Dollar, the official currency of the Unites States of America

VCF / Venture Capital Fund

Foreign Venture Capital Funds (as defined under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996) registered with SEBI under applicable laws in India.

VAT Value Added Tax

WDV Written Down Value

Working Days All days except Saturday, Sunday and any public holiday

Notwithstanding the foregoing, terms in sections titled Statement of Tax Benefits, Financial Information and Outstanding Litigation and Other Defaults on pages 54, 105 and 135 respectively of the DLOO, have the meanings given to such terms in these respective sections. The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms under the Companies Act, as amended, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made there under

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NOTICE TO OVERSEAS SHAREHOLDERS

The distribution of this Draft Letter of Offer and the issue of the Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession the Draft Letter of Offer/Letter of Offer/Abridged Letter of Offer and CAF may come are required to inform them about and observe such restrictions. Our Company is making this Issue on a rights basis to the Eligible Equity Shareholders of our Company as on the Record Date and will dispatch the Draft Letter of Offer/Letter of Offer/Abridged Letter of Offer and CAF to Eligible Equity Shareholders who have provided an Indian address. Overseas shareholders, who have not updated our records with their Indian address or the address of their duly authorized representative in India, prior to the date on which we propose to dispatch the Letter of Offer / Abridged Letter of Offer and CAFs, shall not be sent the Letter of Offer / Abridged Letter of Offer and CAFs No action has been or will be taken to permit the Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer has been filed with the SEBI for its observations. Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and the Draft Letter of Offer may not be distributed, in any jurisdiction outside India. Receipt of the Draft Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, in those circumstances, the Draft Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy of the Draft Letter of Offer should not, in connection with the issue of the Equity Shares or the Rights Entitlements, distribute or send the Draft Letter of Offer in or into the United States of America or any other jurisdiction where to do so would or might contravene local securities laws or regulations. If the Draft Letter of Offer is received by any person in any such territory, or by their agent or nominee, they must not seek to subscribe to the Equity Shares or the Rights Entitlements referred to in the Draft Letter of Offer. Envelopes containing a CAF should not be dispatched from any jurisdiction where it would be illegal to make an offer, and all persons subscribing for the Equity Shares in this Issue must provide an Indian address. Any person who makes an application to acquire rights and the Equity Shares offered in this Issue will be deemed to have declared, represented, warranted and agreed that such person is authorized to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations prevailing in his jurisdiction. We, the Registrar, the Lead Managers or any other person acting on behalf of us reserve the right to treat any CAF as invalid where we believe that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements and we shall not be bound to allot or issue any Equity Shares or Rights Entitlement in respect of any such CAF. Neither the delivery of the Draft Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in our Company's affairs from the date hereof or that the information contained herein is correct as at any time subsequent to the date of the Draft Letter of Offer. The contents of the Draft Letter of Offer should not be construed as legal, tax or investment advice. Prospective Investors may be subject to adverse foreign, state or local tax or legal consequences as a result of the offer of Equity Shares. As a result, each Investor should consult its own counsel, business advisor and tax advisor as to the legal, business, tax and related matters concerning the offer of Equity Shares. In addition, neither our Company nor the Lead Manager is making any representation to any offeree or purchaser of the Equity Shares regarding the legality of an investment in the Equity Shares by such offeree or purchaser under any applicable laws or regulations.

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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

Certain Conventions References in this Draft Letter of Offer to India are to the Republic of India. Financial Data Unless stated otherwise, the financial data in this Draft Letter of Offer is derived from our Company's audited financial statements. Our Company's fiscal year commences on April 1 and ends on March 31 of the following calendar year. Our Company prepares its financial statements in accordance with the generally accepted accounting principles in India, which differ in certain respects from generally accepted accounting principles in other countries. Indian GAAP differs in certain significant respects from the IFRS. Our Company publishes its financial statements in Indian Rupees. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Letter of Offer should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. In this Draft Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off, and unless otherwise specified, all financial numbers in parenthesis represent negative figures. For definitions, see the section Definitions and Abbreviations on page no. 2 of the DLOO. Currency of Presentation All references to Rupees, INR or Rs. are to Indian Rupees, the official currency of the Republic of India. In this Draft Letter of Offer, reference to the singular also refers to the plural and one gender also refers to any other gender. Unless stated otherwise, throughout this Draft Letter of Offer, all figures have been expressed in Lacs, where the 1 Lac means 100 thousand. In this Draft Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off, and unless otherwise specified, all financial numbers in parenthesis represent negative.

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FORWARD LOOKING STATEMENTS

Certain statements contained in this Draft Letter of Offer are not historical facts but are forward-looking in nature. Forward-looking statements include statements concerning our Company's plans, objectives, goals, strategies, future events, future revenues or financial performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, our Company's competitive strengths and weaknesses, our Company's business strategy and the trends our Company anticipates in the industries and the political and legal environment, and geographical locations, in which our Company operates, and other information that is not historical information. Words such as believe, anticipate, estimate, seek, expect, continue, intend, predict, project, should, goal, future, could, may, will, would, targets, aims, is likely to, plan and similar expressions, or variations of such expressions, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These risks, uncertainties and other factors include, among other things, those listed under Risk Factors, as well as those included elsewhere in this Draft Letter of Offer. Investors should be aware that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited, to:

General economic and business conditions in India and other countries.

Regulatory changes relating to the finance and capital market sectors in India and our ability to respond to them.

Changes in laws and regulations that apply to the Company.

Our ability to successfully implement our strategy, our growth and expansion, technological changes, our exposure to market risks that have an impact on our business activities or investments.

Our ability to keep pace with rapid changes in finance and stock broking sector.

The monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic and foreign laws, regulations and taxes and changes in competition in our industry.

Changes in the value of the Rupee and other currencies.

The occurrence of natural disasters or calamities.

Change in political and social condition in India. For a further discussion of factors that could cause our Company's actual results to differ, see the sections Risk Factors on page no.11 of the DLOO. 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. The forward-looking statements contained in this Draft Letter of Offer are based on the beliefs of management, as well as the assumptions made by, and information currently available to, management of our Company. Whilst our Company believes that the expectations reflected in such forward-looking statements are reasonable at this time, it cannot assure investors that such expectations will prove to be correct. Given these uncertainties, Investors are cautioned not to place undue reliance on such forward-looking statements. Neither our Company nor the Lead Manager or any of their respective affiliates make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and

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such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. Neither our Company nor the Lead Manager nor any of their respective affiliates or advisors 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/Stock Exchanges requirements, our Company and Lead Manager will ensure that investors in India are informed of material developments until the time of the grant of listing and trading permissions by the Stock Exchanges for the Equity Shares allotted pursuant to this Issue.

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SECTION II - RISK FACTORS An investment in the Equity Shares involves a high degree of risk. You should carefully consider all information in this Draft Letter of Offer, including the risks and uncertainties described below, before making an investment in the Equity Shares. If any or some combination of the following risks actually occur, our business, prospects, results of operations, cash flows and financial condition could suffer, the trading price of the Equity Shares could decline and you may lose all or part of your investment. Investors in the Equity Shares should pay particular attention to the fact that we are subject to extensive regulatory environment that may differ significantly from one jurisdiction to other. We have described the risks and uncertainties that our management believes are material, but these risks and uncertainties may not be the only ones we face. Some risks may be unknown to us and other risks, currently believed to be immaterial, could be or become material. To obtain a complete understanding of our business, you should read this section in conjunction with the sections Business Overview, Managements Discussion and Analysis of Financial Condition and Results of Operations and Financial Statements on pages 80, 129 and 105, respectively. This Draft Letter of Offer also contains forward-looking statements, which refer to future events that involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, which may cause the actual results to be materially different from those expressed or implied by the forward-looking statements. See Forward-Looking Statements on page 9. Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implications of any of the risks described in this section.

INTERNAL RISK FACTORS: 1. We are dependent on our management team for success whose loss could seriously impair the ability to continue to manage and expand business efficiently. Our success largely depends on the continued services and performance of our management and other key personnel. The loss of service of the senior management could seriously impair the ability to continue to manage and expand the business efficiently. Further, the loss of any of the senior management or other key personnel may adversely affect the operations, finances and profitability of our Company. Any failure or inability of our Company to efficiently retain and manage its human resources would adversely affect our ability to implement new projects and expand our business. 2. Our management team play key role in our functioning and we heavily rely on their knowledge and experience in operating our business and therefore, it is critical for our business that our management team remain associated with us. Our success also depends upon the services of our key managerial personnel and our ability to attract and retain key managerial personnel and our inability to attract them may affect our operations.

We benefit from our relationship with our management and our success depends upon the continuing services of our management who have been responsible for the growth of our business and are closely involved in the overall strategy, direction and management of our business. Our managements have been actively involved in the day to day operations and management since the incorporation of the Company. Accordingly, our performance is heavily dependent upon the services of our managements. If our management are unable or unwilling to continue in their present position, we may not be able to replace them easily or at all. Further, we rely on the continued services and performance of our key executives and senior management for continued success and smooth functioning of the operations of the Company. If we lose the services of any of our key managerial personnel, we may be unable to locate suitable or qualified replacements, and may incur

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additional expenses to recruit and train new personnel, which could adversely affect our business operations and affect our ability to continue to manage and expand our business. 3. Our management team and Directors may have interests in us other than reimbursement of expenses incurred or normal remuneration or benefits. Our management is interested in us to the extent of any transactions entered into or their shareholding and dividend entitlement. Our Directors are also interested in us to the extent of their shareholding and dividend entitlement, remuneration paid to them for services rendered as our Directors and reimbursement of expenses payable to them. For further information, see Management chapter of the Draft Letter of Offer. 4. We rely on our systems including information technology systems to manage our business processes and reporting and their failure could adversely affect our business operations.

We rely on our information technology systems to manage our business processes and reporting. Any failure or malfunction in these information technology systems could result in business interruptions, including disruption in tracking, recording and analyzing work in progress, processing financial information, managing creditors/debtors or engaging in normal business activities. This could adversely affect our reputation, competitive position and operational efficiencies. 5. Our success depends on our ability to retain and attract technical personnel and various other professionals including consultants. If we are not able to retain them or recruit additional qualified personnel, we may not be able to successfully develop our business.

We are assisted by various technical personnel and experienced professionals including consultants globally to provide us with critical market and regulatory information applicable to the jurisdictions where they operate. We benefit from their experience and the loss of their association with us may significantly delay or prevent the development of our business. Competition among agrochemical companies for qualified professionals is intense and the ability to retain or associate with qualified individuals is critical to our success. There can be no assurance that we will be able to retain and attract such professionals in the future on acceptable terms, or at all, and the failure to do so may have an adverse effect on our business and results of operations. 6. Our Company had negative cash flow from investing activities and financing activities respectively, details of which are given below. Sustained negative cash flow could adversely impact our business, financial condition and results of operations.

Cash Flow from March 31, 2016(Rs in Lacs) March 31, 2015(Rs in Lacs)

Investing Activities (527.94) 0.13

Financing Activity (585.84 ) (219.56 )

7. Our Company has not complied certain statutory provisions like Companies Act 2013, SEBI Listing Regulations, and Listing Agreement etc. Such non compliances may attract penalties.

Currently, the shares of the Company are suspended at BSE Ltd due to non-compliances Listing Agreement and SEBI Listing Regulation. Such non-compliance may in the future render us liable to statutory penalties and disallowing the resolutions, which may have consequence of violation of SEBI Listing regulations. Our Company has not regularized the appointment of additional directors in terms of the provisions of the Companies Act, 2013.

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8. We may be subject to fine or compounding pursuant to delay in appointment of a whole-time Company secretary and Chief Financial Officer. We were required to have a whole-time company secretary and Chief Financial Officer. However, we have appointed a whole-time company secretary and Chief Financial Officer in September 2016 resulting in delay in the appointment of the whole-time secretary and Chief Financial Officer. We cannot assure you that the Tribunal (erstwhile Company Law Board) or the Appellate Tribunal will not impose any penalty or take any action against us which may impact our reputation, results of operations and cash flows. Such non-compliance in the future may render us liable to statutory penalties. 9. Some of our historical, legal and secretarial records are not traceable. Non-availability of certain historical, legal and secretarial records exposes us to the risk of penalties that may be imposed by the competent regulatory authority in future. We have not been able to locate many of our important corporate records. We have been unable to locate the copies of certain of our corporate records including but not limited to Board, AGM, EGM Minutes, forms filed by us with the RoC and share transfer forms. Our Company believes that these records were duly filed with the RoC on a timely basis. Prior to 2006, all the documents are not available with the RoC. Our Company cannot assure you that these forms filed with Roc will be available in the future. If RoC initiates proceedings for any actual or perceived irregularity in our compliance with reporting requirements in any future or historic periods, there may be an adverse effect on our business, results of operation and financial condition. 10. We operate our agrochemical business in a highly regulated sector and if we fail to comply with the regulations prescribed by the authorities of the jurisdictions in which we operate, our business, results of operations, cash flows and financial condition could be adversely affected.

We operate our agrochemical business in a highly regulated sector and are subject to extensive regulations and stringent registration conditions. We are required to obtain specific registration from the authorities in each jurisdiction in which we distribute our agro chemical products and the procedural and regulatory requirements to obtain such registrations differ in each jurisdiction. If we fail to comply with applicable statutory, regulatory or procedural requirements for obtaining registrations in different jurisdictions, there could be a delay in the grant of registrations and consequently delay in the distribution of agro chemical products and we may lose the identified business opportunity. Moreover, if we fail to comply with various conditions attached to such registrations and permissions once received, the relevant regulatory body may suspend, curtail or revoke our ability to distribute such formulations or generic active ingredients. If we fail to obtain or comply with the conditions in such registrations and other related approvals, in a timely manner or at all, our business, results of operations, cash flows and financial condition could be adversely affected. 11. We are required to obtain, renew and maintain statutory and regulatory permits, registrations, licenses and approvals for our business operations from time to time. Any failure or delay to obtain or renew them may adversely affect our operations.

We require certain statutory and regulatory permits, licenses and approvals to carry out our business operations and applications for their renewal need to be made within certain timeframes. Particularly for our agrochemical business, we are required to hold registrations for formulations and generic active ingredients across jurisdictions in which we operate and some of such registrations may be subject to periodical renewal by the authorities. The period after which renewal is required and the procedure for renewal varies from jurisdiction to jurisdiction. While we have applied renewal for a few of these approvals, registrations and permits, we cannot assure you that we will receive these approvals and registrations in a timely manner or at all. Further, if we are unable to renew or obtain necessary permits, licenses and approvals on acceptable terms,

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in a timely manner or at all, our business, operations and financial conditions may be adversely affected. For further details, see Government and Other Statutory Approvals on page 138. 12. Certain approvals, registrations, licenses are available in old name.

Certain approvals, registrations, licenses are available in old name, Pesticides & Brewers Limited. The Company has not applied for change of name for the following approvals/licenses:

Sl. No.

Particulars Authority Registration No Date of Registration

1 Central Excise Registration Certificate

Central Board of Excise And Customs Ministry of Finance Department of Revenue

AAACP2251PXD002 AAACP2251PEI004

09.03.2009 29.04.2014

2 Service Tax Registration under Section 69 of the Finance Act, 1994 (32 of 1994)

Central Board of Excise And Customs Ministry of Finance Department of Revenue

AAACP2251PST001 18.01.2005

3 Certificate of Importer-Exporter Code

Ministry of Commerce & Industry 0391172948 27.03.1992

13. Our results of operations are subject to risks arising from exchange rate fluctuations.

Whilst our reporting currency is Indian Rupees, we transact a significant portion of our business in several other foreign currencies, primarily, in U.S. Dollars, Euros and British Pound. Accordingly, substantial portion of our revenues are denominated in foreign currencies. Moreover, due to the time gap between the accounting of sales and realisation of payment, the foreign exchange rate at which the sale is recorded in the books of account may vary with the foreign exchange rate at which the cash is realized by us, thereby benefiting or adversely affecting us, depending on the depreciation or appreciation of Rupee. 14. If we are unable to effectively implement our business and growth strategies, our results of operations may be adversely affected. Our success will depend, in large part, on our ability to effectively implement our business and growth strategies. We cannot assure you that we will be able to execute our strategies in a timely manner or within budget estimates or that we will meet the expectations of targeted customers. We believe that our business and growth strategies will place significant demands on our management and other resources and will require us to develop and improve operational, financial and other internal controls. Any inability to manage our business and growth strategies could adversely affect our business, financial condition and results of operations. 15. Our business is dependent on our key customers and the loss of any significant customer could adversely affect our financial results.

The loss of a significant customer or customers would have a material adverse effect on our financial results. We cannot assure you that we can maintain the historical levels of business from current customers or that we will be able to replace these customers in case we lose any of them. Further the business with customers is based on regular requirements and orders, rather than yearly contracts.

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16. A substantial portion of our agrochemical and non-agrochemical sales are undertaken against future payment on an unsecured basis which may subject us to significant credit risk.

We deliver a significant portion agro chemical and non-agrochemical products against future payment. Our credit terms vary according to local market practice and typically, the credit period ranges between 30 days to 180 days. If any of our customers fail to make payments to us or become insolvent, we would suffer losses and our business, financial condition and results of operations could be adversely affected. Whilst we believe that we have not experienced material losses in this respect, but in severe abnormal conditions there can be a significant impact on our customers ability to pay their debts, which could result in a material adverse effect on our business, results of operations and financial condition. Moreover, majority of our agrochemical and non-agrochemical sales are not supported by letters of credit or bank guarantee. In case of any disputes or differences or default with regard to our payments, we would have to initiate appropriate recovery proceedings and in many instances in the jurisdiction of the customer which may pose additional challenges due to unawareness of the civil laws and procedures of such jurisdiction. Further, we may be subject to working capital shortages due to delays or defaults in payments by customers. If buyers default in their payments on an assignment for which we have devoted significant resources or if an order or assignment in which we have invested significant resources is delayed, cancelled or curtailed, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. 17. Our business is subject to risks related to weather, disease and pests that could adversely affect the results of our operations and our financial condition. Agri-products and Agri-inputs industry is subject to substantially all of the risks faced by the agriculture in India. The agri-products and agri-inputs industry is substantially subject to weather factors, which make its operational results relatively unpredictable. Weather among other factors also affects the presence of disease and pests in the short term on a regional basis. Extreme weather conditions, disease and pests can potentially affect quality and quantity of a substantial portion of our products in any year and have a material adverse effect on our business, results of operations and financial condition. 18. If we are unable to accurately forecast and manage inventory levels we may be exposed to risk of unexpected shortfall and / or surplus of products. We monitor our inventory levels based on our own projections of future demand. Because of the length of time necessary to produce commercial quantities of our products, we make production decisions well in advance of sales. An inaccurate forecast of demand for any product can result in the unavailability / surplus of products. This unavailability of products in high demand may depress sales volumes and adversely affect customer relationships. Conversely, an inaccurate forecast can also result in an over-supply of products, which may increase costs, negatively impact cash flow, reduce the quality of inventory, erode margins substantially and ultimately create write-offs of inventory. Any of the aforesaid circumstances could have a material adverse effect on our business, results of operations and financial condition. 19. The agri-products and agri-inputs business is highly seasonal in our country and such seasonality may affect our operating results.

The agri-products and agri-inputs business is highly seasonal in our country. Our raw material supplies are seasonal and our sales are also seasonal in nature. Further, majority of the farmers depend on rain for cultivation. Generally rainfall occurs during Kharif season and hence, the timing and seasonality of rainfall also impacts the business of our Company. Thus, we are subject to seasonal factors, which make our operating results relatively unpredictable. We recognize revenues upon the sale of our agri-input products.

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20. Decline in prices of our products may reduce our profit margins. Prices of our products are influenced by several factors, including the inherent strength and productivity of the product, supply of competing product(s) in the market, demand from farmers and dealers, among others. Any adverse changes in terms of sale price, including not being able to revise prices in accordance with cost increases and other relevant factors including those not being in our control, may lead to a material adverse effect on our sales margins, profitability which would have a material adverse effect on our business, results of operations and financial condition. 21. Product defects could adversely affect our business. Although seeds undergo extensive quality checks before they are processed, they may still contain defective or undesired characteristics that may be difficult to detect, with the available technology and tools at our dominion, prior to their sale and use. Since our seeds are used by farmers, any quality defects therein would directly affect the earnings of the farmer. Losses claimed by farmers may include the value of lost crops, which could greatly exceed the value of the seeds we sell. We cannot assure that use of our products will not expose us to costly and time-consuming litigations/claims and lead to negative publicity about the quality of our products, further affecting our sales and performance. Any of the aforesaid factors would have a material adverse effect on business, financial condition and results of operations. 22. We have entered into certain related party transactions and may continue to do so.

We have entered into related party transactions with our Management and Directors. For details of these transactions, please refer to section titled "Related Party Transactions" at page 105 of the Draft Letter of Offer. 23. The loss of key suppliers or their failure to deliver material on a timely basis could negatively impact our business prospects and results of operations.

We must have an adequate supply of materials to execute our order positions at all times. We purchase all the required materials from our suppliers on a purchase order basis and have no long-term contracts with any suppliers. If the suppliers, most of whom are local/domestic, are unable to supply us with these materials products in a timely manner or the costs of these products increase due to unforeseen circumstances, this could negatively impact our operating results. 24. The industry segments in which we operate being fragmented, we face competition from other players, which may affect our business operations and financial conditions.

The market for our products is competitive on account of both the organized and unorganized players. Players in this industry generally compete with each other on key attributes such as technical competence, quality of products, distribution network, pricing and timely delivery. Some of our competitors may have longer industry experience and greater financial, technical and other resources, which may enable them to react faster in changing market scenario and remain competitive. Moreover, the unorganized sector offers their products at highly competitive prices which may not be matched by us and consequently affect our volume of sales and growth prospects. Growing competition may result in a decline in our market share and may affect our margins which may adversely affect our business operations and our financial condition. 25. Fluctuations in the availability and quality of raw materials could cause delay and increase costs.

As on date we do not have any long term tie-up or agreements for supply of raw materials. Any decrease in the availability of raw materials for whatever reason, including climatic change, could adversely affect our sales and profitability. Further, any price volatility of raw materials and our inability to adjust to the same could adversely affect our results of operations and profitability.

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26. If any third party laboratory on which we rely for tests does not perform its obligations as contractually required or in accordance with Good Laboratory Practices (GLP), we may not be able to obtain regulatory approval or commercialize formulations. We approach independent certified laboratories and other third party service providers for conducting tests of new agro chemical products and expect to continue to do so. We do not control many aspects of their activities and third party laboratories may not complete activities on schedule or may not conduct studies in accordance with applicable plans and protocols. Nonetheless, in certain jurisdictions we are responsible for confirming that each of our laboratory tests is conducted in accordance with its protocol and GLP standards. If third parties fail to carry out their obligations, their registration and commercialization could be delayed or prevented or an enforcement action could be brought against us which may adversely affect our business, financial condition and results of operations. 27. We face substantial competition in the industry; our revenues could get affected in case we are not able to obtain customers and orders.

Our Company is operating in agriculture sector. We will face significant competition from existing players and potential entrants in the industry. Further, we will face significant competition mainly from large vertically integrated and diversified companies in the industry. Our revenues could get affected adversely in case we are not able to secure new customers and orders. 28. Any changes in regulations or applicable government incentives would materially adversely affect our Companys operations and growth prospects.

Our Company is enjoying benefit of subsidies in relation to the sale of certain fertilizers and as such is subjected to various regulations in India. Our Companys business and prospects could be adversely affected by changes in any of these regulations and policies, or if any or all of the incentives currently available cease. 29. Our operations are subject to high working capital requirements. Our inability to obtain and / or maintain sufficient cash flow, credit facilities and other sources of funding, in a timely manner, or at all, to meet our requirement of working capital or pay our debts, could adversely affect our operations. Our business requires significant amount of working capital. In many cases, significant amount of our working capital is required for purchasing and maintaining of stock of goods. Though, presently we have sanctioned working capital limits from the existing bankers, we may need to incur additional indebtedness in the future to satisfy our working capital needs. Our inability to obtain and / or maintain working capital or pay our debts, could adversely affect our financial condition and results of operations. 30. The objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. The deployment of funds in the project is entirely at the discretion of our management and as per the details mentioned in the section titled Objects of the Issue. Any revision in the estimates may require us to reschedule our project expenditure and may have a bearing on our expected revenues and earnings.

Our funding requirements and the deployment of the Proceeds of the Issue are based on quotations from machinery suppliers and civil contractors and our man8agements estimates. Our Company may have to revise such estimates from time to time and consequently our funding requirements may also change. Our estimates for the project may exceed the value that would have been determined by third party appraisals and may require us to reschedule our project expenditure which may have a bearing on our expected revenues and earnings. Further, the deployment of the funds towards the objects of the Issue is entirely at the discretion of our management and is not subject to monitoring by any external independent agency. However, the deployment of funds is subject to monitoring by our Audit Committee.

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31. The implementation of the proposed Objects of the Issue is in a preliminary stage.

Since the funding for the working capital is mainly from the issue proceeds, any delay in access to issue proceeds would eventually delay the process of placing the orders. Our Company is further subject to risks on account of inflation in the price of plant and machinery. There may also be a possibility of delay at the suppliers end in providing timely delivery of these machineries, which in turn may delay the implementation of our project. For further details, please refer to the chapter titled Objects of the Issue beginning on page number 40 of the Draft Letter of Offer. 32. 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 plans may be affected. We have not identified any alternate source of funding and hence any failure or delay on our part to raise money from the Issue or any shortfall in the Issue Proceeds may delay the implementation schedule of our Project and could affect our growth plans. For further details please refer to the Chapter titled Objects of the Issue beginning on page 40 of this Draft Letter of Offer. 33. We have not disclosed the details of investment in subsidiary under the head of Non-Current Investments in the Audited Financial Statement. Our Company has not disclosed the details of investment made in subsidiary under the head of Non-Current Investments in the Audited Financial Statement for the year ended March 31, 2016. However, the investment made in the subsidiary is disclosed in the Directors Report dated September 1, 2016. B: Risk related to this Issue and our Equity Shares

34. After this Issue, the Equity Shares may experience price and volume fluctuations or an active trading market for the 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 industry in which we operate and changing perceptions in the market about participation in these 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 our 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 the Equity Shares to substantial volatility. 35. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholders ability to sell, or the price at which it can sell, the Equity Shares at a particular point in time. The price of the Equity Shares will be subject to a daily circuit breaker imposed by Stock Exchanges in India which does not allow transactions beyond a certain level of volatility in the price of the Equity Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers generally imposed by the SEBI on Indian stock exchanges. The percentage limit on our circuit breaker is set by the stock exchanges based on the historical volatility in the price and trading volume of the Equity Shares. The stock exchanges do not inform us of the percentage limit of the circuit breaker from time to time, and may change it without our knowledge. This circuit breaker effectively limits upward and downward movements in the price of the

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Equity Shares. As a result, shareholders ability to sell the Equity Shares, or the price at which they can sell the Equity Shares, may be adversely affected at a particular point in time. 36. Conditions in the Indian securities market may affect the price or liquidity of our 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 volatility in the recent times. 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 and limited price movements. A closure of, or trading stoppage on the Stock Exchanges also could adversely affect the trading price of the Equity Shares. 37. Fluctuations in operating results and other factors may result in decreases in our Equity Share price. Stock markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Equity Shares. There may be significant volatility in the market price of our Equity Shares. If we are unable to operate profitably or as profitably as we have in the past, investors could sell our Equity Shares when it becomes apparent that the expectations of the market may not be realized, resulting in a decrease in the market price of our Equity Shares. In addition to our operating results, the operating results of other competitor companies, changes in financial estimates or recommendations by analysts, governmental investigations and litigation, speculation in the press or investment community, changes in general conditions in the economy or the financial markets, or other developments affecting the industry in which we operate, could cause the market price of our Equity Shares to be issued to fluctuate substantially. 38. Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares. Under current Indian tax laws and regulations, capital gains arising from the sale of equity shares in an Indian company are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if Securities Transaction Tax (STT) has been paid on the transaction. STT will be levied on and collected by a domestic stock exchange on which the equity shares are sold. Any gain realised on the sale of equity shares held for more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange and on which no STT has been paid, will be subject to long term capital gains tax in India. Further, any gain realised on the sale of listed equity shares held for a period of 12 months or less will be subject to short term capital gains tax in India. Capital gains arising from the sale of the Equity Shares will be exempt from taxation in India in cases where the exemption from taxation in India is provided under a treaty between India and the country of which the seller is resident. 39. Our ability to pay dividends will depend upon future earnings, financial condition, cash flows, working capital requirements, capital expenditure and other factors. Our Company has not yet paid any dividends. For further details please refer to chapter titled Dividend Policy on page 104 of the Draft Letter of Offer. The amount of our future dividend payments, if any, will depend upon our future earnings, financial conditions, cash flows, working capital requirements, capital expenditures and other factors. There can be no assurance that we shall have distributable funds or that we

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will declare dividends. We cannot assure you that we will be able to secure adequate financing in the future on acceptable terms, in time, or at all. 40. Any future issue of Equity Shares may dilute your shareholding and sales of our Equity Shares by our major shareholders may adversely affect the trading price of the Equity Shares. Any future equity issues by us, including in a primary offering, may lead to the dilution of investors' shareholdings in us. Any future equity issuances by us or sales of its Equity Shares by our major shareholders may adversely affect the trading price of the Equity Shares. In addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares. 41. We could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect our financial condition, results of operations and reputation.

Employee misconduct or errors could expose us to business risks or losses, including regulatory sanctions and serious harm to our reputation. There can be no assurance that we will be able to detect or deter such misconduct. Moreover, the precautions we take to prevent and detect such activity may not be effective in all cases. Our employees and agents may also commit errors that could subject us to claims and proceedings for alleged negligence, as well as regulatory actions on account of which our business, financial condition, results of operations and goodwill could be adversely affected. 42. Our ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures and there can be no assurance that we will be able to pay dividends in the future. The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital requirements and capital expenditures. Hence, there can be no assurance that we will be able to pay dividends in the future. In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued pursuant to the Issue will not be granted until after the Equity Shares have been issued and allotted. Approval for listing and trading will require all relevant documents authorizing the issuing of Equity Shares to be submitted and there could therefore be a failure or delay in listing the Equity Shares on the BSE. Any failure or delay in obtaining such approval would restrict your ability to dispose of your Equity Shares. The BSE has in the past experienced problems, including temporary exchange closures, broker defaults, settlements delays and strikes by brokerage firm employees, which, if continuing or recurring, could affect the market price and liquidity of the securities of Indian companies, including our Equity Shares. A closure of, or trading stoppage on the BSE could adversely affect the trading price of the Equity Shares.

EXTERNAL RISK FACTORS

43. 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, Indias principal stock exchanges;

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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;

Prevailing regional or global economic conditions; and

Other significant regulatory or economic developments in or affecting India. 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. 44. The Companies Act, 2013 has effected significant changes to the existing Indian company law framework, which may subject us to higher compliance requirements and increase our compliance costs.

A majority of the provisions and rules under the Companies Act, 2013 have recently been notified and have come into effect from the date of their respective notification, resulting in the corresponding provisions of the Companies Act, 1956 ceasing to have effect. The Companies Act, 2013 has brought into effect significant changes to the Indian company law framework, such as in the provisions related to issue of capital, disclosures in prospectus, corporate governance norms, audit matters, related party transactions, introduction of a provision allowing the initiation of class action suits in India against companies by shareholders or depositors, a restriction on investment by an Indian company through more than two layers of subsidiary investment companies (subject to certain permitted exceptions), prohibitions on loans to directors and insider trading and restrictions on directors and key managerial personnel from engaging in forward dealing. Penalties for instances of non-compliance have been prescribed under the Companies Act, 2013, which may result in inter alia, our Company, Directors and key managerial employees being subject to such penalties and formal actions as prescribed under the Companies Act, 2013, should we not be able to comply with the provisions of the Companies Act, 2013 within the prescribed timelines, and this could also affect our reputation. To ensure compliance with the requirements of the Companies Act, 2013 within the prescribed timelines, we may need to allocate additional resources, which may increase our regulatory compliance costs and divert management attention. While we shall endeavor to comply with the prescribed framework and procedures, we may not be in a position to do so in a timely manner. Further, we cannot currently determine the impact of provisions of the Companies Act, 2013, which are yet to come in force. Any increase in our compliance requirements or in our compliance costs may have an adverse effect on our business and results of operations. 45. Our growth will depend on our ability to develop our brand and failure to do so will have a negative impact on our ability to compete in this industry. We believe that continuing to build our brand, particularly in our industry; will be critical to achieving widespread recognition of our products. Promoting and positioning our brand will depend largely on the success of our marketing efforts and our ability to provide high quality products. Brand promotion activities may not yield increased revenues, and even if they do, any increased revenues may not offset the expenses we incur in building our brand. If we fail to promote and maintain our brand, our business, financial condition and results of operations could be adversely affected. 46. The Company has not independently verified the industry data taken from the Government of India, SEBI and RBI and trade, industry or general publications and other third-party sources in this Draft Letter of Offer. We have not independently verified data from the Government of India, SEBI and RBI and trade, industry or general publications and other third-party sources contained herein and although we believe these sources to be reliable, we cannot assure you that they are complete or reliable. Such data may also be produced on a different basis from comparable information compiled with regard to other countries. Therefore, discussions of matters relating to India and its economy are subject to the caveat that the statistical and other data upon which such discussions are based have not been verified by us. These facts and other statistics include the facts

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and statistics included under the sections titled "Industry Overview" on page 57 of this Draft Letter of Offer. Further, this market and industry data has not been prepared or independently verified by us. Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various factors. 47. Our operations and profitability are dependent upon the availability of transportation and other logistic facilities in a time and cost efficient manner. The prolonged disruption or unavailability of their facilities in a timely manner could result in delays or non-supply or may require us to look for alternative sources which may be cost inefficient, thereby adversely affecting our operations, profitability, reputation

and market position. We do not have in-house transportation facility and we heavily rely on efficient transportation and other logistic facilities at every stage of our business activity. For this purpose, we hire services of transportation companies on a transaction to transaction basis. Factors such as increased transportation costs and transportation strikes could adversely impact the supply of our products. There is no assurance that such disruptions will not occur in the future 48. Natural calamities and force majeure events may have an adverse impact on our business.

Natural disasters may cause significant interruption to our operations, and damage to the environment that could have a material adverse impact on us. The extent and severity of these natural disasters determines their impact on the Indian economy. Prolonged spells of deficient or abnormal rainfall and other natural calamities could have an adverse impact on the Indian economy, which could adversely affect our business and results of operations. 49. We have not prepared, and currently do not intend to prepare, our financial statements in accordance with the International Financial Reporting Standards (IFRS). Our transition to IFRS reporting could have a material adverse effect on our reported results of operations or financial condition.

Public companies in India, including us, may be required to prepare annual and interim financial statements under IFRS in accordance with the roadmap for convergence with IFRS announced by the Ministry of Corporate Affairs, Government of India through a press note dated January 22, 2010 (the IFRS Convergence Note). The Ministry of Corporate Affairs by a press release dated February 25, 2011 has notified that 35 Indian Accounting Standards are to be converged with IFRS. The date of implementation of such converged Indian accounting standards has not yet been determined. Our financial condition, results of operations, cash flows or changes in shareholders equity may appear materially different under IFRS than under Indian GAAP or our adoption of converged Indian Accounting Standards may adversely affect our reported results of operations or financial condition. This may have a material adverse effect on the amount of income recognized during that period and in the corresponding (restated) period in the comparative Fiscal/period. 50. Our business and activities may be regulated by the Competition Act, 2002. The Competition Act, 2002, as amended (the Competition Act) was enacted for the purpose of preventing practices that have or are likely to have an adverse effect on competition in India and has mandated the Competition Commission of India (the CCI) to separate such practices. Under the Competition Act, any arrangement, understanding or action, whether formal or informal, which causes or is likely to cause an appreciable adverse effect on competition is void and attracts substantial penalties. Any agreement among competitors which directly or indirectly involves determination of purchase or sale prices, limits or controls production, or shares the market by way of geographical area or number of customers in the relevant market is presumed to have an appreciable adverse effect on competition in the relevant market in India and shall be void. Further, the Competition Act prohibits abuse of dominant position by any enterprise. If it is proved that the contravention committed by a company took place with the consent or connivance or is attributable to any neglect on the part of, any director, manager, secretary or other officer of such company, that person shall be guilty of the contravention and liable to be punished.

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51. If the rate of price inflation increases, our business and results of operations may be adversely affected. If the rate of price inflation increases in India or in other economies in which we operate, our costs, such as salaries, or any other of our expenses may increase. If this trend continues, we may be unable to accurately estimate or control our expenses and this could have an adverse effect on our business and results of operations. 52. Political instability or changes in the Government could adversely affect economic conditions in India generally and our business in particular. Our business, and the market price and liquidity of our Equity Shares, may be affected by interest rates, changes in Government policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India. Elimination or substantial change of policies or the introduction of policies that negatively affect the Companys business could cause its results of operations to suffer. Any significant change in Indias economic policies could disrupt business and economic conditions in India generally and the Companys business in particular. 53. Financial instability in Indian financial markets could adversely affect our companys results of operations and financial condition.

In this globalized world, the Indian economy and financial markets are significantly influenced by worldwide economic, financial and market conditions. Any financial turmoil, say in the United States of America, Europe, China or other emerging economies, may have a negative impact on the Indian economy. Although economic conditions differ in each country, investors reactions to any significant developments in one country can have adverse effects on the financial and market conditions in other countries. A loss in investor confidence in the financial systems, particularly in other emerging markets, may cause increased volatility in Indian financial markets. Indian financial markets have also experienced the contagion effect of the global financial turmoil. Any prolonged financial crisis may have an adverse impact on the Indian economy, thereby resulting in a material and adverse effect on our Company's business, operations, financial condition, profitability and price of its Shares. Stock exchanges in India have in the past experienced substantial fluctuations in the prices of listed securities. 54. Financial instability in other countries could disrupt Indian financial markets and our Companys business and have an adverse effect on the market for the Equity Shares.

The Indian financial markets and the Indian economy are influenced by economic and market conditions in our Country and other countries, particularly emerging market countries in Asia. Although economic conditions are different in each country, investors reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets due to negative economic development such as rising fiscal or trade deficit or a default on sovereign debt in emerging markets may cause volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy. This in turn could negatively impact on the movement of exchange rates and interest rates in India. Any significant financial disruption could have an adverse effect on our Companys business, future financial performance and the market for the Issue Shares. 55. Global economic, political and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price.

Global economic and political factors that are beyond our control, influence forecasts and directly affect performance. These factors include interest rates, rates of economic growth, fiscal and monetary policies of

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governments, inflation, deflation, foreign exchange fluctuations, consumer credit availability, fluctuations in commodities markets, consumer debt levels, unemployment trends and other matters that influence consumer confidence, spending and tourism. Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude, which may negatively affect our stock prices. 56. Terrorist attacks, civil unrests and other acts of violence or war involving India or other countries could adversely affect the financial markets, our business, financial condition and the price of our Equity Shares.

Any major hostilities involving India or other acts of violence, including civil unrest or similar events that are beyond our control, could have a material adverse effect on Indias economy and our business. Incidents such as terrorist attacks and other acts of violence may adversely affect the Indian stock markets where our Equity Shares will trade as well the global equity markets generally. Such acts could negatively impact business sentiment as well as trade between countries, which could adversely affect our Companys business and profitability. Additionally, such events could have a material adverse effect on the market for securities of Indian companies, including the Equity Shares. 57. Taxes and other levies imposed by the Government of India or other State Governments, as well as other financial policies and regulations, may have a material adverse effect on our business, financial condition and results of operations. Taxes and other levies imposed by the Central or State Governments in India that affect our industry include sales tax, income tax and other taxes, duties or surcharges introduced on a permanent or temporary basis from time to time. Imposition of any other taxes by the Central and the State Governments may adversely affect our results of operations. 58. Any downgrading of Indias sovereign rating by an independent agency may harm our ability to raise financing.

Any adverse revisions to India's credit ratings for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing may be available. This could have an adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures and the trading price of our Equity Shares. 59. Natural calamities could have a negative impact on the Indian economy and cause Our Company's business to suffer

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