ripldlofmanagement’s discussion and analysis of financial ... registrar of companies / roc...

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TABLE OF CONTENTS

SECTION I – GENERAL ...................................................................................................................................................... iii DEFINITIONS AND ABBREVIATIONS ........................................................................................................................ iii PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA ............................................................................................................................................................................... vii FORWARD LOOKING STATEMENTS ....................................................................................................................... viii

SECTION II –RISK FACTORS ............................................................................................................................................ ix SECTION III – INTRODUCTION ...................................................................................................................................... 18

SUMMARY OF INDUSTRY AND BUSINESS ............................................................................................................. 18 THE ISSUE ...................................................................................................................................................................... 24 SELECTED FINANCIAL STATEMENTS ..................................................................................................................... 25 GENERAL INFORMATION ........................................................................................................................................... 29 CAPITAL STRUCTURE ................................................................................................................................................. 35 OBJECTS OF THE ISSUE ............................................................................................................................................... 41 BASIS FOR ISSUE PRICE .............................................................................................................................................. 46 STATEMENT OF TAX BENEFITS ................................................................................................................................ 48

SECTION IV – ABOUT US .................................................................................................................................................. 57 INDUSTRY OVERVIEW ................................................................................................................................................ 57 OUR BUSINESS .............................................................................................................................................................. 65 KEY INDUSTRY REGULATIONS AND POLICIES .................................................................................................... 74 HISTORY AND OTHER CORPORATE MATTERS ..................................................................................................... 81 OUR MANAGEMENT .................................................................................................................................................... 85 OUR PROMOTER ........................................................................................................................................................... 96 OUR PROMOTER GROUP ............................................................................................................................................. 99 OUR GROUP COMPANIES ......................................................................................................................................... 100 DIVIDEND POLICY ..................................................................................................................................................... 106 RELATED PARTY TRANSACTIONS ......................................................................................................................... 107

SECTION V – FINANCIAL INFORMATION ................................................................................................................. 108 FINANCIAL STATEMENTS ........................................................................................................................................ 108 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................................................................................................... 124

SECTION VI – LEGAL AND OTHER INFORMATION ............................................................................................... 131 OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS .................................................................. 131 GOVERNMENT AND STATUTORY APPROVALS .................................................................................................. 133 OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................................. 135 STOCK MARKET DATA FOR THE EQUITY SHARES OF OUR COMPANY ........................................................ 143

SECTION VII – ISSUE RELATED INFORMATION .................................................................................................... 144 TERMS OF THE ISSUE ................................................................................................................................................ 144

SECTION VIII – MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION .................................................... 172 MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ................................................................................. 172

SECTION IX - OTHER INFORMATION ........................................................................................................................ 183 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ....................................................................... 183 DECLARATION ............................................................................................................................................................ 185

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SECTION I – GENERAL

DEFINITIONS AND ABBREVIATIONS

In the Draft Letter of offer, unless the context otherwise requires, the terms defined and abbreviations expanded herein below shall have the same meaning as stated in this Section.

Term Description “our Company”, “the Company”, “the Issuer Company”, “the Issuer”, “we”, “us”, and “our”

Remidicherla Infra & Power Limited having its registered office at Remidicherla House, CPR Brundavan, flat number 401, near Nectar Garden, Hyderabad – 500 081, India

Promoter Mr. M. Srinivasa Reddy Promoter Group Mr. M. Venki Reddy, Ms. M. Mangama, Ms. M. Padmavathi, Mr. M. Krishna Reddy,

Mr. M. Malla Reddy, Ms. K. Vijayalakshmi, Ms. S. Malleswari, Ms. M. Kanaka Prudhvi Reddy, Mr. Subba Reddy, Mr. K. V. Rajashekhar Reddy, Ms. K. Shravani Reddy, Ms. K. Vijayalakshmi, and Farmax India Limited

GENERAL / CONVENTIONAL TERMS

Term Description Act The Companies Act, 1956, as amended from time to time Articles / Articles of Association The Articles of Association of our Company Auditors (Statutory Auditors of our Company)

The statutory auditor of our Company, being Mr. S. Kishore Kumar, Chartered Accountant

Auditor – Peer Reviewed (Peer reviewed Auditor)

The peer review certified auditor of our Company, being M/s. K. Prahlada Rao & Co.

Board of Directors / Board/ Directors

The Board of Directors of our Company Mr. M. Srinivasa Reddy (M. Srinivasa Reddy), Ms. Priyanka Palacharla (P. Priyanka), Mr. Kamala Kumar Pothapragada (P. Kamala Kumar), Mr. Koti Reddy Somala (S. Koti Reddy), Mr. Indukuri Srinivasa Raju (I. Srinivasa Raju), Mr. Samanthapudi Krishna Kanth Varma (S. Krishna Kant Varma), Mr. Mr. Mudunuri Veera Venkata Ramana Varma and Ms. Swapna Chaparala or a duly constituted committee thereof.

Depositories Act The Depositories Act, 1996, as amended from time to time Depository A depository registered with SEBI under the Securities and Exchange Board of India

(Depositories and Participant) Regulations, 1996, as amended from time to time Depository Participant A depository participant as defined under the Depositories Act Director(s) Director(s) of our Company unless otherwise specified EPS Earnings Per Share FEMA Foreign Exchange Management Act, 1999, as amended from time to time, and the rules

and regulations framed there under Financial Year / Fiscal Year / FY The period of twelve months ended March 31 of that particular year, unless specifically

otherwise stated Indian GAAP Generally Accepted Accounting Principles in India I.T. Act / IT Act The Income Tax Act, 1961, as amended from time to time Memorandum / Memorandum of Association

The Memorandum of Association of our Company

Non Resident A “person resident outside India”, as defined under FEMA including FIIs Non-Resident Indian A “person resident outside India”, as defined under FEMA and who is a citizen of India or

is a person of Indian origin as defined under the Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time

RBI Act The Reserve Bank of India Act, 1934, as amended from time to time Registered Office CPR Brundavan, flat number 401, near Nectar Garden, Hyderabad – 500 081, India Registrar of Companies / RoC Registrar of Companies, Andhra Pradesh, 2nd floor, CPWD Building, Kendriya Sadan,

Sultan Bazar, Koti, Hyderabad – 500195, Andhra Pradesh, India Securities Act The United States Securities Act of 1933 as amended from time to time SEBI Act The Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI Regulations / SEBI (ICDR) Regulations 2009

The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, and any amendments thereto

SEBI Insider Trading Regulations Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, as amended from time to time, including instructions and clarifications issued by SEBI from time to time

SEBI Takeover Regulations / Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)

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Term Description Takeover Code Regulations, 1997, as amended from time to time Self Certified Syndicate Bank or SCSB

The banks which are registered with SEBI under the SEBI (Bankers to an Issue) Regulations, 1994 and offers services of ASBA, including blocking of bank account and a list of which is available on SEBI’s website

U.S. GAAP Generally Accepted Accounting Principles in the United States of America ISSUE RELATED TERMS

Term Description Abridged Letter of Offer The abridged letter of offer to be sent to the eligible Equity Shareholders of the Company

with respect to this Issue, in accordance with SEBI Regulations Application Unless the context otherwise requires, the application for allotment of Equity Shares in the

Issue Allotment Unless the context otherwise requires, the allotment of Equity Shares pursuant to the Issue Application Supported by Blocked Amount/ ASBA

The application (whether physical or electronic) used by an Investor to make an application authorizing the SCSB to block the amount payable on application in their specified bank account

ASBA Investor An applicant who intends to apply through ASBA process and: (a) holds the shares of the Company in dematerialized form as on the record date and has

applied for entitlements and / or additional shares in dematerialized form; (b) has not renounced his/her entitlements in full or in part; (c) is not a renouncee; (d) is applying through a bank account maintained with SCSBs

Bankers to the Issue [●] Composite Application Form / CAF

The form used by an investor to make an application for allotment of Equity Shares in this Issue

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

Controlling Branches Such branches of the SCSBs which coordinate applications under the Issue by the ASBA Investors with the Registrar to the Issue and the Stock Exchanges and a list of which is available at SEBI’s website; that is at http://www.sebi.gov.in/

Designated Stock Exchange The Bombay Stock Exchange Limited Draft Letter of Offer The Draft Letter of Offer dated July 26, 2010 filed with SEBI for its observations. Equity Shareholder(s) A holder(s) of Equity Shares of our Company as on the Record Date. Issue The issue of 2,88,00,000 equity shares with a face value of Rs. 10/- each at par aggregating

to Rs. 28,80,00,000 by the Company to the Equity Shareholders on rights basis in the ratio of one hundred twenty (120) equity shares for every one (1) equity share.

Issue Closing Date [●] Issue Opening Date [●] Issue Price Rs. 10/- per Equity Share Investor(s) The Equity Shareholders and Renouncees Lead Manager/ Lead Merchant Banker

Intensive Fiscal Services Private Limited

Letter of Offer / LOF The Letter of Offer to be filed with the Stock Exchange after incorporating SEBI observations in the Draft Letter of Offer

Listing Agreement The Equity Listing Agreement signed between the Company and the Stock Exchange Record Date [●] Registrar to the Issue or Registrar

Venture Capital & Corporate Investments Pvt.Ltd.

Renouncees Persons who have acquired Rights Entitlements from Equity Shareholders Rights Entitlement The number of Equity Shares that an Equity Shareholder is entitled to in proportion to his /

her Shareholding in the Company as on the Record Date Stock Exchange BSE where the Equity Shares of the Company are presently listed

BUSINESS / INDUSTRY RELATED TERMS AND ABBREVIATIONS Term Description BOT Build Operate Transfer Crash Barrier Is a barrier on a road designed to prevent vehicles from leaving the roadway to improve road safety Eleventh Plan The Eleventh Five Year Plan ( 2007-2012) FMCG Fast Moving Consumer Goods Gabions Cylinders, or boxes filled with soil or sand

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Gantry A framework of steel bars raised on side supports to bridge over or around something; can display railway signals above several tracks or can support a travelling crane etc.

GQ Golden Quadrilateral GSB Granular Sub Base Kmph Kilometer per hour MDR Major District Roads NHAI National Highway Authority of India NHDP National Highway Development Project NSEW North South East West ODR Other District Roads PWD Public Works Department R & B Roads & Buildings SU State Undertaking Tenth Plan The Tenth Five Year Plan (2002-2007) VR Village Roads ABBREVIATIONS

Term Description ACIT Assistant Commissioner of Income Tax APRDC Andhra Pradesh Road Development Corporation AGM Annual General Meeting AS Accounting Standard as issued by The Institute of Chartered Accountants of India ASBA Application Supported by Blocked Amount Asst. Assessment BSE The Bombay Stock Exchange Limited CAGR Compounded Annual Growth Rate CIA Central Intelligence Agency CDSL Central Depository Services (India) Limited CSO Central Statistics Office DP Depository Participant Depository A depository registered with SEBI under the SEBI (Depository and Participant) Regulations, 1996,

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

The SEBI (Depository and Participant) Regulations, 1996, as amended from time to time

EBIDTA Earnings Before Interest Depreciation, Tax and Amortization EGM Extra-Ordinary General Meeting EPS Earnings Per Share PPP Purchasing power parity FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999, and the subsequent amendments thereto FII Foreign Institutional Investor as defined Under SEBI (Foreign Institutional Investors) Regulations,

1995 registered with SEBI and as defined under FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 and under other applicable laws in India

FIPB Foreign Investment Promotion Board FY/ Fiscal Year ended March 31 GDP Gross Domestic Product GoI Government of India IMF International Monetary Fund ISIN International Securities Identification Number allotted by the Depository IT Act Income Tax Act, 1961, as amended from time to time N. A. Not applicable NECS National Electronic Clearing Service NEFT National Electronic Fund Transfer NSDL National Securities Depositories Limited OCB(s) Overseas Corporate Body(ies) P/E ratio Price to Earnings Ratio PAN Permanent Account Number

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PAT Profit after Tax RBI Reserve Bank of India RBI Act Reserve Bank of India Act, 1934 ROI Return on Investment ROC / RoC Registrar of Companies RONW Return on Networth RTGS Real Time Gross Settlement SCSB Self Certified Syndicate Bank SEBI Securities and Exchange Board of India SEBI Regulations SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended Takeover Code Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)

Regulations, 1997 read with amendments issued subsequent to that date UIN Unique Identification Number UT Union Territory

Notwithstanding the foregoing,

(i) In the section titled ‘Main Provisions of the Articles of Association’ beginning on page 172 of the Draft Letter of Offer, defined terms shall have the meaning given to such terms in that section;

(ii) In the section titled ‘Financial Statements’ beginning on page 108 of the Draft Letter of Offer, defined terms shall have the meaning given to such terms in that section;

(iii) In the paragraphs titled ‘Disclaimer Clause of Securities and Exchange Board of India (SEBI)’ and ‘Disclaimer Clause of Bombay Stock Exchange Limited’ beginning on page 135 and 138 respectively of the Draft Letter of Offer, defined terms shall have the meaning given to such terms in those paragraphs.

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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Unless stated otherwise, the financial data in the Draft Letter of Offer is derived from our restated audited financial information which has been prepared in accordance with Indian GAAP, the Act and restated in accordance with SEBI Regulations. Our current financial year commenced on April 1, 2010 and will end on March 31, 2011. In the 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. Unless stated otherwise, industry data used throughout the Draft Letter of Offer has been obtained from industry publications. 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 we believe that industry data used in the Draft Letter of Offer is reliable, it has not been independently verified.

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FORWARD LOOKING STATEMENTS

We have included statements in the Draft Letter of Offer which contain words or phrases such as “will”, “aim”, “is likely to result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “seek to”, “future”, “objective”, “goal”, “project”, “should” 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 our expectations include but are not limited to:

• General economic and business conditions in the markets in which we operate and in the local, regional and national economies;

• Increasing competition in or other factors affecting the industry segments in which our Company operates; • Changes in laws and regulations relating to the industries in which we operate; • Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and

implement various projects and business plans; • Our ability to meet our capital expenditure requirements and/or increase in capital expenditure; • Fluctuations in operating costs and impact on the financial results; • Our ability to attract and retain qualified personnel; • Changes in technology in future; • Changes in political and social conditions in India or in countries that we may enter, the monetary policies of India and

other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; • Variations in exchange rates; • The performance of the financial markets in India and globally; • Any adverse outcome in the legal proceedings in which we may be involved in.

For a further discussion of factors that could cause our actual results to differ, please refer to the sections titled “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages ix, 65 and124 respectively of the Draft Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither the Company nor the Lead Manager nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI / Stock Exchange requirements, the 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 permission by the Stock Exchange.

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SECTION II –RISK FACTORS

RISK FACTORS An investment in our Equity Shares involves a high degree of risk. You should consider all the information in the Draft Letter of Offer, including the risks and uncertainties described below, before making an investment in our Equity Shares. Investors should carefully consider all the information contained in the section titled “Financial Information” beginning on page 108 of the Draft Letter of Offer for the information related to the financial performance of our Company. If any of the following risks or any of the risks and uncertainties discussed in the Draft Letter of Offer actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline and you may lose all or part a of your investment. The risk set out in the Draft Letter of Offer may not be exhaustive and additional risks and uncertainties may arise, which are presently not known to us, or which may arise or may become material in the future. Further, some events may have a material impact from a qualitative perspective rather than a quantitative perspective and may be material collectively rather than individually. In making an investment decision, prospective investors must rely on their own examination of the Company and the terms of the Issue, including the merits and risks involved. Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implication of any of the risks described in this section. Materiality The Risk Factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality: 1. Some events may not be material individually but may be found material collectively. 2. Some events may have material impact qualitatively instead of quantitatively. 3. Some events may not be material at present but may be having material impacts in future. Internal Risk Factors RISKS IN RELATION TO OUR BUSINESS AND RESULTS OF OPERATIONS: 1. Our Company has recently ventured in to a new line of business, so it is difficult to estimate our future performance. We have recently ventured into infrastructure, construction and other related activities and have currently no projects in operation or other revenue generating operations, and it has no significant operating history from which its business, future prospects and viability can be evaluated. The development of projects involves various risks, including among others, execution risk, regulatory risk, construction risk, financing risk and the risk that these projects may prove to be unprofitable. Any inability of the Company to effectively develop and operate its projects could adversely affect its business prospects, financial condition and results of operation. Moreover, investors should not evaluate the Company’s prospects and viability based on the performance of its Promoter, FIL or other affiliates. We are scheduled to complete our first project in FY 2011-12 and the Company’s prospects must be considered in light of the risks and uncertainties inherent in new business ventures. 2. Projects included in our balance order book may be delayed or cancelled which could have a material adverse effect on

our cash flow position, revenues and earnings. As of June 30, 2010, our balance order book was Rs. 5,173.50 lakhs. Our order book does not necessarily indicate future earnings. Balance order book merely indicates the values of signed contracts and represents only business that is considered firm, although cancellations or modifications may occur. Most of our projects are still under development and have recently commenced operation. We may also face problems in executing the project as contracted, or executing it on a timely basis. Moreover, factors beyond our control or the control of our clients may delay a project or cause change of scope, including delays or failures to obtain necessary permits, authorizations, permissions, right-of-way, and other types of difficulties or obstructions. Due to the possibility of delays or changes in project scope and schedule, as a result of exercise of our clients’ discretion, problems we encounter in project execution, or reasons outside our control or the control of our clients, we cannot predict with certainty when, if or to what extent an order book project will be performed. Delays in the completion of a project can lead to clients delaying to us some or all of the amounts we expect to be paid in respect of the project. Any delay, reduction in scope, execution difficulty or payment delay in regard to balance order book projects, or disputes with clients in respect of any of the foregoing, could have a material adverse effect on our cash flow position, revenues and earnings.

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3. Our financial condition and business prospects could be materially and adversely affected if we do not complete our projects as planned or if our projects experience delays.

Our projects under development have a long gestation period before they become operational or generate profit. Our projects are typically required to achieve financial closure no later than the scheduled commercial operations date specified under the relevant concession agreement. The completion targets for our projects are based on our estimates and are subject to various risks, including, among other things, contractor performance shortfalls, unforeseen engineering problems, force majeure events, unanticipated cost increases or changes in scope and delays in obtaining certain property rights and government approvals, any of which could give rise to delays, cost overruns or the termination of a project's development. In addition, completion of our projects can be delayed by other risks, including increased raw material or labor costs, unfavorable financing conditions, damage or injury to third parties, interruptions to construction due to bad weather, unforeseen environmental or engineering problems, failure to perform by our contactors or their suppliers, site accidents or other incidents and contractual disputes with our construction contractors. The failure to complete our projects within the required period and in accordance with agreed specifications could render benefits granted by the government unavailable or may result in higher costs, penalties or liquidated damages, invocation to performance guarantees, cancellation of our concession, loss of our equity contribution in the project, lower returns on capital or reduced earnings. In addition, such delays or failure would delay the commencement of our toll operations and annuity payments from such projects. Moreover, any loss of our goodwill, though not quantifiable monetarily, could adversely affect our ability to pre-qualify for new projects. Such loss of revenue or any of the foregoing factors could materially and adversely affect our business, cash flows, reputation, prospects and results of operations.

4. In the past, trading in the equity shares of our Company had been suspended from January 14, 2003 to May 18, 2010.

Shareholders will bear the risk of fluctuations in the price of the Equity Shares of our Company. The trading in the equity shares of our Company had been suspended from January 14, 2003 to May 18, 2010. Further the price of the Equity Shares on the BSE may fluctuate after this offering as a result of several factors, including, but not limited to: volatility in the Indian and global securities market; operations and performance of the Company; performance of its competitors and the perception in the market about investments in the electrical products and services industry; adverse media reports on the Company or the Indian electrical industry; changes in the estimates of the Company’s performance or recommendations by financial analysts; significant developments in India’s economic liberalization and deregulation policies; and significant developments in India’s fiscal and environmental regulations. Trading in the equity shares of our Company may be re-suspended due to lapses on part of our Company. There can be no assurance that the prices at which the Equity Shares are currently traded will correspond to the prices at which the Equity Shares will trade in the market subsequently. For further details please refer to “Stock Market Data for the Equity Shares of Our Company” on page 143 of the Draft Letter of Offer. 5. We have taken two properties on lease, which are owned by our Promoter Group entity. Our Company utilizes the property situated at Remidicherla House, CPR Brundavan, flat number 401, near Nectar Garden, Hyderabad – 500 081, for commercial purposes and more particularly as our Company’s Registered Office. This has been taken on lease by our Promoter’s brother, Mr. M. Malla Reddy for a period of 5 years effective from March 1, 2010 on a monthly rent of Rs. 18,000/-. Further, in order to facilitate the smooth functioning of our business activities as well as timely co-ordination for undertaking our projects, we plan to set up an additional office space at Municipal No. 8-2-293/82/A/732-A/1 on part of plot number 732-A, in the layout of Jubilee Hills Cooperative House Building Society Limited, IVth floor, road number 36, Madhapur Road, Jubilee Hills, Hyderabad. Our Company has entered into a lease agreement with Mr. S. Pulla Reddy, Mr. M Malla Reddy our Promoter’s brother, Mr. M Koti Reddy, Mr. M Krishna Reddy, Mrs. S. Malleswari dated July 7, 2010 for leasing of the property admeasuring 6,635 sq ft., for a period of 5 years effective from July 1, 2010. The monthly rent of the above mentioned property is Rs. 6,63,500/-. For further information please refer paragraph titled “Property” beginning on page 70 under Chapter titled “Our Business” beginning on page 65 of the Draft Letter of Offer. 6. Our registered office from where we operate is taken on lease leased. Discontinuation of lease agreements may require us

to vacate such premises which may have an adverse impact on our business continuity and profitability. Further the lease deeds/agreements entered into by our Company are not adequately stamped and registered.

If the owner of the premise of our registered office terminates the agreement under which we occupy the premises or refuses to renew the agreement on terms and conditions that are unfavorable to us, we may suffer a disruption in our operations which could have a material adverse effect on our business, financial condition and results of operations. The lease deed entered into by our Company for its registered office may not be adequately stamped and/or registered. The potential consequence of this could be that the said lease documents may not be admissible as evidence in a court of law, until the relevant stamp duty is paid and the relevant registration, if required, is done. Any claim or adverse order/ finding in connection with these properties could adversely affect the operations of our Company. For further information please refer paragraph titled “Property” beginning on page 70 under Chapter titled “Our Business” beginning on page 65 of the Draft Letter of Offer.

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7. Our Promoter does not possess experience in the current line of business. Any inability on part of our Promoter to implement the projects at hand would materially impact our results of operation.

Our Promoter, Mr. M. Srinivasa Reddy, does not have experience in the proposed line of business, that is, infrastructure, construction and related activities. Our business would be managed by our Promoter with the assistance of our Management and experienced Key Managerial Personnel. Any incorrect decisions taken by our Promoter with regards to implementing the projects at hand could materially impact our profitability and results of operations. Further, our Company may be subjected to penalties which may arise due to non performance of contracts / inability to complete our projects at hand, on a timely manner. 8. Our Company had negative cash flows in the recent fiscals.

(Rs. in lakhs) Particulars Year Ended March

31, 2010 Year Ended March

31, 2009 Year Ended March

31, 2008 Net cash from /(used in) Operating Activities 21.12 (0.17) 1.33 Net cash from /(used in) Investing Activities (31.86) 0 0 Net cash from /(used in) Financing Activities 11.00 0 0 Net increase in Cash & Cash Equivalents 0.26 (0.17) 1.33

We had negative cash flows from / (used in) Investing Activities for the prior years. This has been primarily due to Inter Corporate Deposit of Rs. 31.64 lakhs given to our Group Company in fiscal 2010. Our cash and cash equivalents have been negative for the fiscal 2009 due to negative cash flows from operating activities. For further details please refer to “Financial Statements – Annexure 3” beginning on page 113 of the Draft Letter of Offer. 9. We have to renew, maintain and obtain statutory and regulatory permits and licenses as may be required to operate our

business and any delay or inability to obtain the same may have an adverse impact on our business. Being in the infrastructure and construction business, we require several statutory and regulatory permits, licenses and approvals to operate our business. Many of these approvals are granted for fixed periods of time after the expiry of which these need to be renewed from time to time. We cannot assure that we would apply for and obtain the relevant licenses/approvals required for our projects or otherwise within the statutory time limits, and there can be no assurance that the relevant authorities will issue any such permits, licenses or approvals in time or at all. Failure by us to renew, maintain or obtain the required permits, licenses or approvals, or cancellation, suspension or revocation of any of our permits, licenses or approvals may result in the interruption of our operations and may have a material adverse effect on our business. For further information with regards to statutory and regulatory permits, licenses and approvals kindly refer to the chapter titled “Government and Statutory Approvals” on page 133 of the Draft Letter of Offer.

10. We do not own the trademark “ ”. We may be unable to adequately protect our intellectual property.

Furthermore, we may be subject to claims alleging breach of third party intellectual property rights. We have not applied for registration of our logo under the provisions of the Trademarks Act, 1999. As such, we do not enjoy the statutory protections accorded to a registered trademark. There can be no assurance that we will be able to register the trademark and the logo or that, third parties will not infringe its intellectual property, causing damage to its business prospects, reputation and goodwill. Further, we cannot assure you that any application for registration of our trademark in the future by our Company will be granted by the relevant authorities in a timely manner or at all. Our efforts to protect our intellectual property may not be adequate and may lead to erosion of our business value and our operations could be adversely affected. We may need to litigate in order to determine the validity of such claims and the scope of the proprietary rights of others. Any such litigation could be time consuming and costly and the outcome cannot be guaranteed. We may not be able to detect any unauthorized use or take appropriate and timely steps to enforce or protect its intellectual property. 11. We may not qualify for bidding for larger projects independently. Our operations primarily include Infrastructure, construction and related activities. We can bid for projects only if we meet the pre-qualification bidding criteria set for each project. We are comparatively small in size vis-à-vis other construction companies with whom we compete. This necessitates a need for entering into joint venture with bigger construction companies; on account of which, our profit margins may be impacted. We cannot assure that we will be able to secure projects independently in the future or of being able to secure the projects on our terms which may adversely impact our results of operations and financial condition. 12. We face competition in our business from other engineering construction companies. We mainly compete with domestic players in the road construction segment. While service quality, technical capability, past performance record, experience, safety records and availability of skilled personnel are key factors influencing client decisions,

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price often is the deciding factor when it comes to awarding contracts. There are a number of competitors having better financials and other resources who have achieved greater market penetration than we have in the markets in which we compete. We may have to accept contracts with lower margins and values if we are unable to compete with other bigger players in the large and high margin contracts. This may affect our relative market share and profit. 13. Our inability to adhere to agreed timelines could adversely affect our reputation and/or expose us to financial liability. Most contracts awarded to us contain conditions for completion of the contract within stipulated schedules with liquidated damages payable in the event the schedules not being adhered to. However in the course of our business our client / awarding authority, subject to prior intimation to us, may revise the scope and schedule of the project. Failure on our part to adhere to contractually agreed or revised schedules could result in payment of liquidated damages in addition to the damage which may be caused to our reputation within the construction industry, among clients or prospective clients. 14. Our risk management policies and procedures may leave us exposed to unidentified risks or unanticipated levels of risk. The policies and procedures we employ to identify, monitor and manage risks may not be fully effective. Some methods of risk management are based on the use of observed historical market behavior. As a result, these methods may not predict future risk exposures, which could be significantly greater than the historical measures indicate. Other risk management methods depend on evaluation of information regarding markets, clients or other matters that are publicly available or otherwise accessible by us. This information may not be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risk requires, among other things, policies and procedures to properly record and verify a large number of transactions and events. We cannot assure you that our policies and procedures will effectively and accurately record and verify this information. We seek to monitor and control our risk exposure through a variety of separate but complementary financial, credit, operational and legal reporting systems. Nonetheless, the effectiveness of our ability to manage risk exposure cannot be completely or accurately predicted or fully assured. For example, unexpectedly large or rapid movements or disruptions in one or more markets or other unforeseen developments could have a material adverse effect on our results of operations and financial condition. The consequences of these developments could include losses due to adverse changes in inventory values, higher volatility in earnings, increases in our credit risk to customers as well as to third parties and increases in general systemic risk. 15. Increasing raw material costs could have an adverse effect on our profitability. Raw materials are subject to price volatility caused by factors including commodity market fluctuations, the quality and availability of supply, currency fluctuations, consumer demand and changes in governmental programs. Raw material price increases result in corresponding increases in our raw material costs. 16. Our business operations are sensitive to weather conditions, which may affect our revenues. Implementation of our projects may get affected due to adverse weather conditions, such as heavy rains and floods. Though we make adequate provisions for non-execution during certain seasons like monsoon, any unforeseen vagaries of nature and season may result in failure of our meeting the contractual obligations and affect our business. Further, we record contract revenues for those stages of a project for which we receive certification from the client. Since revenues are not recognized until we make progress on a contract and receipt of certification from our clients, revenues booked in the first half of our financial year are traditionally lower as compared to revenues recorded during the second half of our financial year. 17. Changes in the scope of work may result in disputes, which could have a material and adverse impact on the profits from

that project. In certain cases, we may be required to perform additional work on a project that is beyond the stated scope of the contract. We may not receive any remuneration for the same, or payments in respect of the same may be delayed or may not be commensurate to the quantum of work performed, which may have a material adverse effect on our profits. Further, in certain contracts we may be required to execute modified work order as directed by the client which may not be agreed upon at the time of execution of the contract. This process may result in disputes and may result in delayed or inadequate payments. This could have an adverse effect on our profits. 18. Loss of key managerial personnel could have a material adverse effect our business. Our business substantially depends on the continued service of our key managerial personnel. The loss of the services of our key managerial personnel could have a material and adverse effect on our operations. Our future success will also depend on our ability to attract and retain experienced and skilled personnel, such as engineering, project management and senior management professionals. We could experience difficulty from time to time in hiring and retaining the personnel necessary to support our business. If we do not succeed in retaining our current employees and attracting new qualified employees it may adversely affect our reputation and our future business.

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19. We rely on contract labour for the performance of many of our operations. We do not typically maintain contractual relationship with these contractors.

Going forward, we will have to rely on contractors who engage on-site labourers for performance of many of our unskilled operations. The requirement of these contract labourers would be mostly met through local contractors. We do not typically maintain contractual relationship with these contractors; hence any change in relationship with these contractors may adversely affect our operations. Further, pursuant to hiring of labourers, there may be application made by the contract labourers to a court/tribunal, pleading for regularisation or absorption as permanent employees of our Company, which may lead to judicial proceedings and orders against us. 20. Our business is subject to legal and tax regulations and there may be changes in legislation governing the rules

implementing them or the regulator enforcing them. We are subject to the jurisdiction of various laws, tax authorities and regulations. The final determination of our tax liabilities involve the interpretation of local tax laws and related authorities in each jurisdiction as well as the significant reliance on estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred. Changes in the operating environment, including changes in tax law, could impact the determination of our tax liabilities for any given year. Taxes and other levies imposed by the central or state governments in India that affect our industry include customs duties, excise duties, VAT, income tax, service tax and other taxes, duties or surcharges introduced from time to time. 21. Present equity paid up share capital of our Company is held in physical form which may affect the trading in the Equity

Shares on the Stock Exchange The Company plans to enter into a tri-partite agreement with NSDL respectively and accordingly our equity shares will be admitted in the de-materialised form. If our Company fails in converting its share capital into de-materialised form, investors may face difficulties in trading on the Stock Exchange. RISK IN RELATION TO OBJECTS OF THE ISSUE 22. We do not have any definitive agreements to utilize the net proceeds of the Issue. Further the Objects of the Issue have not

been appraised by any bank or financial institution. We have not entered into any definitive agreements for utilisation of the net proceeds of the Issue for investment in capital equipment. Further our capital expenditure plans are based on management estimates and have not been appraised by any bank or financial institution or any other independent organization. In addition, our capital expenditure plans are subject to a number of variables, including possible cost overruns and changes in the perception of management for current plans, amongst others. There can be no assurance that we will be able to conclude definitive agreements for such investments in capital equipment. For details please see the section titled "Objects of the Issue" beginning on page 41 of the Draft Letter of Offer. 23. The Objects of our Issue will be financed from the proceeds of this Issue. Any delay in launching the Issue may impact the

implementation of the Objects of our Issue or increase the cost of implementation of the objects of the Issue. The total requirement of funds for the Objects of our Issue is Rs. 2,880 lakhs. We propose to use the net proceeds of this Issue for investment in capital equipments, paying a deposit for leasing of equipment, acquisition of land for parking and maintenance of our equipment, Corporate brand building and advertisement, ERP Implementation and setting up of an additional office space. In case there is any delay in launching the Issue, the implementation of the objects of this Issue would be delayed, which may increase the cost in relation thereto, and/or require us to make alternative arrangements for the implementation. We cannot assure that such alternative arrangements can be made, or made on terms and conditions acceptable to us. 24. We have not placed any orders for all the equipment required in terms of our objects for the Issue. We have not placed any of the orders for equipment aggregating to Rs. 1486.00 lakhs to be financed from the proceeds of this Issue. Further this requirement is based on our management estimates. Any delay in obtaining such equipment could significantly hamper our ability to undertake construction orders/ completing existing contracts. We may also have to compensate our clients for any cost over runs which may result because of us not receiving the equipment in time. 25. Our Company has not made any arrangements for borrowings, bank finance or institutional finance in respect of working

capital requirements As on the date of the Draft Letter of Offer our Company has not entered into any arrangements for borrowings, bank finance or institutional finance with regards to our working capital requirements. The Issue Proceeds will not be utilized towards financing the working capital requirement and the same will be met through tie ups with lenders as and when the requirement arises. We cannot assure you that we will be able to obtain financial assistance for the purpose of meeting our working capital requirements.

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Any inability on our part to meet the working capital requirements could severely hamper our operations and thus adversely affect our profitability and results of operations. 26. We will continue to be controlled by our Promoter, Mr. M. Srinivas Reddy, following this Issue and our other shareholders

may not be able to affect the outcome of shareholder voting. Currently Mr. M. Srinivas Reddy holds 74.60% of our fully paid up equity share capital. Post this Issue, his shareholding would further increase. For details in this regard, see the section titled “Capital Structure – Our Shareholding Pattern” on page 36. Consequently, Mr. Reddy would exercise substantial control over us and determine the outcome of proposals for certain corporate actions requiring approval of our Board or shareholders. Mr. Reddy will be able to influence our major policy decisions. This control could also delay, defer or prevent a change in control of our Company, impede a merger, consolidation, takeover or other business combination involving our Company, or discourage a potential acquirer from obtaining control of our Company even if it is in our best interests. The interests of our controlling shareholders could conflict with the interests of our other shareholders, including the holders of the Equity Shares, and the controlling shareholders could make decisions that adversely affect your investment in the Equity Shares. RISKS ARISING OUT OF SHAREHOLDING / EQUITY SHARES 27. Our ability to pay dividends will depend upon future earnings, financial condition, cash flows, working capital

requirements, capital expenditures, lender’s approvals and other factors. Till date our Company has not paid any dividends and has had negative cash flows from operating and investing activities in the past three financial years. The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital requirements, capital expenditures, lender’s approvals and other factors. There can be no assurance that we shall have distributable funds or that we will declare dividends in the future. Additionally, the terms of any financing we obtain in the future, may contain restrictive covenants which may also affect some of the rights of our shareholders, including the payment of the dividend. 28. There may not be an active or liquid market for our Equity Shares, which may cause the price of our Equity Shares to fall and

may limit an investor's ability to sell our Equity Shares. The price at which our Equity Shares will trade after this Issue will be determined by the marketplace and may be influenced by many factors, including: • our financial results and the financial results of the companies in the businesses we operate in; • the history of, and the prospects for, our business and the sectors and industries in which we compete; • the valuation of publicly traded companies that are engaged in business activities similar to ours; • significant developments in India’s economic policies.

In addition, the Indian stock market has from time to time experienced significant price and volume fluctuations that have affected the market prices for the securities of Indian companies. As a result, investors in our Equity Shares may experience a decrease in the value of our Equity Shares regardless of our operating performance or prospects. 29. We may have to raise capital or debt to fund our growth, which may further dilute the rights/interests of the existing equity

shareholders and/or increase our overall interest cost. The infrastructure and construction industry is capital intensive in nature. Going forward, to meet our capital requirements or pre-qualification criteria for bidding, we may have to raise further debt to fund our growth. This in turn, could further dilute the rights or interests of our existing equity shareholders and/or increase our overall interest cost. External Risk Factors 1. The extent and reliability of Indian infrastructure could adversely affect our results of operations and financial condition. India‘s physical infrastructure is less developed than that of many developed nations. Any congestion or disruption in its port, rail and road networks, electricity grid, communication systems or any other public facility could disrupt our normal business activity. Any deterioration of India‘s physical infrastructure would harm the national economy, disrupt the transportation of goods and supplies, and add costs to doing business in India. These problems could interrupt our business operations, which could have an adverse effect on our results of operations and financial condition. 2. Political, economic and social developments in India could adversely affect our business. The Government of India has traditionally exercised, and continues to exercise, a significant influence over many aspects of the economy. 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.

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Since 1991, successive Indian governments have pursued policies of economic liberalization and financial sector reforms. The government dissolved parliament in May 18, 2009 and following the general elections held during April and May 2009, a new coalition Government of India, was formed on May 22, 2009. The new cabinet was sworn in on May 28, 2009. The new Government of India has announced its general intention to continue India’s current economic and financial sector liberalization and deregulation policies. However, there can be no assurance that such policies will be continued and a significant change in the Government of India’s policies in the future could affect business and economic conditions in India and could also adversely affect our business, prospects, financial condition and results of operations. 3. Financial instability in Indian financial markets could materially and adversely affect our results of operations and

financial condition. The Indian financial market and the Indian economy are influenced by economic and market conditions in other countries, particularly in emerging market Asian countries. Financial turmoil in Asia, the United States and elsewhere in the world in recent years has affected the Indian economy. Although economic conditions are different in each country, investors' reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss in investor confidence in the financial systems of other emerging markets may cause increased volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability, including further deterioration of credit conditions in the U.S. market, could also have a negative impact on the Indian economy. Financial disruptions may occur again and could harm our results of operations and financial condition. 4. After the Issue, the price of our Equity Shares may become highly volatile, or an active trading market for our Equity

Shares may not develop. The price of our Equity Shares on the Bombay Stock Exchange may fluctuate after the Issue as a result of several factors, including: volatility in the Indian and global securities market; our operations and performance; performance of our competitors; the perception in the market with respect to investments in the sectors in which we operate in India; adverse media reports about us or the sectors in which we operate; changes in the estimates of our performance or recommendations by financial analysts; significant developments in India's economic liberalization and deregulation policies; and significant developments in India's fiscal regulations. There can be no assurance that an active trading market for the Equity Shares will be sustained after this Issue, or that the price at which the Equity Shares are being currently traded, or will trade on listing of the Equity Shares pursuant to the Issue, will correspond to the price at which the Equity Shares will trade in the market subsequent to the Issue. 5. You will not be able to immediately sell any of the Equity Shares you purchase in this Issue on the Stock Exchanges. You

can start trading in the Equity Shares only after they have been credited to your dematerialized account and listing and trading permissions are received from the Stock Exchanges.

Under the SEBI Regulations, we are permitted to allot Equity Shares within 15 days of the Issue Closing Date. Consequently, the Equity Shares you purchase in the Issue may not be credited to your dematerialized account with Depository Participants until 15 days of the Issue Closing Date. You can start trading in the Equity Shares only after they have been credited to your dematerialized account and listing and trading permissions are received from the Stock Exchanges. 6. The Issue Price of our Equity Shares may not be indicative of the market price of our Equity Shares after the Issue. The Issue Price of Rs. 10- per Equity Share may not be indicative of the market price for our Equity Shares after the Issue. The market price of our Equity Shares could be subject to significant fluctuations after the Issue, and may decline below the Issue Price. There can be no assurance that the investor will be able to resell their shares at or above the Issue Price. Among the factors that could affect our share price are: • quarterly variations in the rate of growth of our financial indicators, such as earnings per share, net income and revenues; • changes in revenue or earnings estimates or publication of research reports by analysts; • speculation in the press or investment community; • general market conditions; and • domestic and international economic, legal and regulatory factors unrelated to our performance. 7. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholder's

ability to sell, or the price at which it can sell, Equity Shares at a particular point in time. No assurance can be given regarding your ability to sell your Equity Shares or the price at which you may be able to sell your Equity Shares at any particular time.

Our Equity Shares currently are, and will on listing of the Equity Shares being offered in the Issue be, subject to a daily “circuit breaker” imposed by all stock exchanges in India, which does not allow transactions beyond specified increases or decreases in the price of the Equity Shares. This circuit breaker operates independently of the index-based, market-wide circuit breakers generally imposed by SEBI on Indian stock exchanges. The percentage limit on our circuit breakers will be set by the stock exchanges based on the historical volatility in the price and trading volume of the Equity Shares.

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The stock exchanges will not inform us of the percentage limit of the circuit breaker in effect from time to time and may change it without our knowledge. Circuit breaker will limit the movements in the price of the Equity Shares. As a result of circuit breaker, no assurance can be given regarding your ability to sell your Equity Shares or the price at which you may be able to sell your Equity Shares at any particular time. 8. Additional issuances of equity may dilute your share holding in the Company. Any future issuance of our Equity Shares or securities linked to our Equity Shares may dilute your shareholding in our Company. Further, sale of a large number of our Equity Shares by our major shareholders 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. 9. Our business and activities will be regulated by the Competition Act, 2002 (the” Competition Act”) and any application of

the Competition Act to use could have a material adverse effect on our business, financial condition and results of operations.

The Indian Parliament has enacted the Competition Act for the purpose of preventing business practices that have an appreciable adverse effect on competition in India under the auspices of the Competition Commission of India, which (other than for certain provisions relating to the regulation of combinations) has recently become effective. Under the Competition Act, any arrangement, understanding or action in concert between enterprises, whether or not formal or informal, which causes or is likely to cause an appreciable adverse effect on competition in India is void and attracts substantial monetary penalties. Any agreement which directly or indirectly determines purchase or sale prices, limits or controls production, shares the market by way of geographical area or market or number of customers in the market is presumed to have an appreciable adverse effect on competition. The effect of the Competition Act and the Competition Commission of India on the business environment in India is as yet unclear. Any application of the Competition Act to us may be unfavorable and may have a material adverse effect on our business, financial condition and results of operations. 10. A third party could be prevented from acquiring control of our Company because of the takeover regulations under Indian

law. There are provisions in Indian law that may discourage a third party from attempting to take control of our Company, even if it would result in the purchase of our Equity Shares at a premium to the market price or would otherwise be beneficial to our Company’s shareholders. Indian takeover regulations contain certain provisions that may delay, deter or prevent a future takeover or change in control so as to ensure that the interests of shareholders are protected. Any person acquiring either “control” or an interest (either on its own or together with parties acting in concert with it) in 15% or more of our Company’s voting Equity Shares must make an open offer to acquire at least another 20% of our Company’s outstanding voting Equity Shares. A takeover offer to acquire at least another 20% of our Company’s outstanding voting Equity Shares also must be made if a person (either on its own or together with parties acting in concert with it) holding between 15% and 55% of our Company’s voting Equity Shares has entered into an agreement to acquire or decided to acquire additional voting Equity Shares in any financial year that exceed 5% of our Company’s voting Equity Shares. These and other applicable provisions may discourage or prevent certain types of transactions involving an actual or threatened change in control. 11. Global economic, political and social conditions may harm our ability to do business, increase our costs and negatively

affect our stock price. External factors such as potential terrorist attacks, terror threats, pandemics, acts of war or geopolitical and social turmoil in many parts of the world could prevent or hinder our ability to do business, increase our costs and negatively affect our stock price. For example, increased instability may adversely impact the desire of employees and customers to travel, the reliability and cost of transportation, our ability to obtain adequate insurance at reasonable rates or require us to incur increased costs for security measures for our operations. These uncertainties make it difficult for us and our customers to accurately plan future business activities. More generally, these geopolitical social and economic conditions could result in increased volatility in India and worldwide financial markets and economy. 12. Our plants can be affected by natural disasters and technical failures. Any such failures could adversely affect our

business and the operations of our Company. The operations of our plants can be affected by natural disasters and technical failures including malfunctioning or breakdown of equipment, which could adversely affect the business, financial condition and the operations of our Company.

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Prominent Notes 1. Issue of 2,88,00,000 Equity Shares with a face value of Rs. 10/- each at par each for an amount aggregating to Rs. 2,880 Lakh

son rights basis to the existing equity shareholders of our Company in the ratio of 120 Equity Share for every 1 Equity Share held by the equity shareholders on the Record Date i.e. [●]. For more details, please refer to the chapter titled “Terms of the Issue” beginning on page 144 of the Draft Letter of Offer.

2. The net asset value per Equity Share was Rs. -4.73 and Rs. 0.58, based on the restated audited financial information of our

Company as on March 31, 2010 and March 31, 2009 respectively.

3. Based on our restated audited financial information, our net worth was Rs. (11.35) as on March 31, 2010.

4. Except as disclosed in the section titled “Capital Structure” on page 35 of the Draft Letter of Offer, none of our Promoters, Promoter Group and Directors have consummated any transactions in our Equity Shares during the last six months prior to the filing of the Draft Letter of Offer with SEBI.

5. Our Company was incorporated as Star Leasing Company Limited on August 01, 1983 with the Registrar of Companies, Maharashtra under the Act. It got commencement certificate on September 20, 1983 & later changed its name to Star Leasing Limited in the year 1996 and was further changed to Remidicherla Infra & Power Limited consequent to a special resolution passed by the members at its Extra-Ordinary General Meeting held on January 28, 2010 which has been approved by the Registrar of Companies of Andhra Pradesh. Our Company received a fresh certificate of incorporation on February 08 2010. The main objects clause of our MoA was amended consequent to the change in the name of our Company to Remidicherla Infra & Power Limited. For further details, see the section titled “History and Other Corporate Matters” on page 81 of the Draft Letter of Offer.

6. The company has not fully complied with the listing requirements of the concerned stock exchange and no punitive action has

been taken against the company by the Stock Exchange except the suspension in the trading in the securities of the Company by Bombay Stock Exchange Limited. BSE has suspended trading of Star Leasing Limited with effect from January 14, 2003 due to the non compliance of clauses of listing agreement which was revoked w.e.f, May 18, 2010 vide its Notice No.20100512-21 dated 12th May 2010.

7. Except as disclosed in the section titled “Our Management” and “Our Promoter” and “Our Promoter Group” on pages 85, 96 and 99 respectively and “Financial Statements – Annexure 16” on page 122 as disclosed herein below of the Draft Letter of Offer, none of the Promoter, Directors and our key management personnel have any interest in our 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.

8. Our Company has not made any loans and advances to our Directors, relatives of our Directors and any persons or companies in which our Directors are interested.

9. Investors may contact the Lead Manager for any complaints, information or clarifications pertaining to the Issue.

10. Before making an investment decision in respect of this Issue, investors are advised to review the entire Draft Letter of Offer, please also refer to the section titled “Terms of the Issue – Basis for the Issue” on page 144 of the Draft Letter of Offer.

11. Refer to the section titled “Terms of the Issue – Basis of Allotment” on page 156 of the Draft Letter of Offer for details of the basis of allotment.

12. During the year March 31, 2010 we have granted Inter corporate loan of Rs. 31.64

13. We don’t have any subsidiary; hence the reporting of the same is no applicable. For details of related party transactions please refer to “Financial Statements – Annexure 16” on page 122 of the Draft Letter of Offer.

14. Our Company and the Lead Manager are obliged to keep the Draft Letter of Offer updated and inform investors of any

material developments/changes.

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SECTION III – INTRODUCTION

SUMMARY OF INDUSTRY

INFRASTRUCTURE IN INDIA AND PRIVATE PARTICIPATION The fast growth of the economy in recent years has placed increasing stress on physical infrastructure such as electricity, railways, roads, ports, airports, irrigation, and urban and rural water supply and sanitation, all of which already suffer from a substantial deficit from the past in terms of capacities as well as efficiencies in the delivery of critical infrastructure services. The pattern of inclusive growth of the economy projected for the Eleventh Plan, with GDP growth averaging 9% per year can be achieved only if this infrastructure deficit can be overcome and adequate investment takes place to support higher growth and an improved quality of life for both urban and rural communities. According to the Planning Commission, Government of India, inadequate infrastructure constitutes a significant constraint in India’s growth potential and improvement in physical infrastructure has emerged as a high priority area. Increased private participation would be necessary for mobilizing the resources needed to bridge the infrastructure deficit. The Eleventh Five Year Plan (2007-2012) the ("Eleventh Plan"), therefore, recognizes that adequate, cost-effective and quality infrastructure is a pre-requisite for sustaining the growth momentum and that investment in physical infrastructure would have to be increased from approximately 5.0 percent of GDP during the Tenth Plan (2002-07) (the "Tenth Plan") to 9.0 percent of GDP by the end of the Eleventh Plan. The investment in infrastructure during the Tenth Plan was Rs. 8,877,940.00 million which constituted 5.07 percent of GDP. This included Rs. 1,752,030.00 million of investment by the private sector. To overcome the infrastructure deficit, the Eleventh Plan projects an investment of Rs. 20,561,500.00 million which would imply an investment of 7.6 percent of GDP during the Eleventh Plan and 9.0 percent of GDP in the terminal year of the Eleventh Plan (2011-12). This includes public sector investment of Rs. 7,656,220.00 million in the Central Government projects and Rs. 6,709,370.00 million in the State Government projects, leaving the remaining Rs. 6,195,910.00 million, to be invested by the private sector. Private capital is thus expected to fund approximately 30 percent of the total investment during the Eleventh Plan, as compared to 20 percent realized during the Tenth Plan. The total investment in infrastructure from 1999-2000 onwards and investment in infrastructure as a percentage of GDP, are provided in the graphs below.

(Source: Private Participation in Infrastructure, Planning Commission Report, June 2009)

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(Source: Development of Infrastructure- Planning Commission) The investment required by the Central and State Governments and the private sector in each of the ten major physical infrastructure sectors for sustaining a growth rate of 9% in GDP over the Eleventh Plan (2007– 08 to 2011–12) and corresponding to the quantitative targets for the Eleventh Plan as presented in box below:

(Source: CSO for 2006-07, and computations of the Planning Commission) A comparative picture of the sector-specific allocations in these two Plan periods is given in Table below. Compared with investment levels achieved in the Tenth Plan period, the expected infrastructure investment in the Eleventh Plan is 2.36 times the amount of Rs 871445 crore or US$ 217.86 billion at constant 2006–07 price. GOVERNMENT INITIATIVES The government has announced several incentives to attract private sector participation. These include:

• Government to bear the cost of the project feasibility study, land for the right of way and way side amenities, shifting of utilities, environment clearance, cutting of trees, etc.

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• Foreign Direct Investment up to 100 per cent in road sector. • Provision of subsidy up to 40 per cent of project cost to make projects viable. The quantum of subsidy to be

decided on a case-to-case basis. • 100 per cent tax exemption in any consecutive 10 years out of 20 years after commissioning of the project. • Duty free import of high capacity and modern road construction equipments. • Declaration of the road sector as an industry. • Easier external commercial borrowing norms. • Right to retain Toll • The government has also announced an increase in the overseas borrowing amount of infrastructure sectors, to

US$ 500 million from US$ 100 million. • In order to tide over the shortage of funds, the road transport and highways ministry has proposed priority sector

status for road development, allowing private highway developers more funds from banks. • In Budget 2010-11, the allocation for road transport has been increased by over 13 per cent from US$ 3.8 billion

to US$ 4.3 billion. • Moreover as per the Economic Survey, the Ministry of Road Transport and Highways, with a view to expediting

the progress of the NHDP, has set a target of completion of 20 km of national highways per day, which translates to 35,000 km at the rate of 7,000 km per year during the next five years (2009-14). (Source: India Brand Equity Foundation, www.ibef.org, accessed on June 24 2010)

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SUMMARY BUSINESS

Our Evolution Our Company was incorporated with the main object to carry on the business of leasing and hire purchase. With a view to pursue business in financial services, primarily leasing and hire purchase, our Company made its maiden public issue in the year 1983 and the equity shares of our Company got listed on the Bombay Stock Exchange on March 12, 1984. Our Company is not a non banking finance company (NBFC) and is not registered with the Reserve Bank of India (RBI). Also it is not registered with SEBI in any capacity. In March 2001, the first promoters of our Company sold off their controlling interest to Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan. Further, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan took over the controlling interest in the share capital and management of our Company for the benefits of listing status, easier finance raising, etc. and with the intent to diversify the activities of our Company into the application software such as accounting, inventory, order management, manufacturing, CRM etc. In January 2009, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan sold their controlling interest in our Company to 3A Capital Services Limited and Mr. Rajan Shah. Further, 3A Capital Services Limited and Mr. Rajan Shah made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Rajan Shah, promoter director of 3A Capital Services Limited, acquired the controlling interest in the share capital and management of our Company with the intent of expanding its activities, business into financing, investment and trading of shares and securities etc. Thereafter vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited and Mr. Rajan Shah, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. M. Srinivasa Reddy acquired the controlling interest in the share capital and management of our Company as he proposes to diversify the business activities of our Company in the field of power, infrastructure, mining and other related / unrelated areas depending upon the market conditions and available opportunities. Mr. Reddy is a graduate in Mechanical Engineering from Nagarjuna University. Post graduation he started marketing / distribution of FMCG products whilst sourcing them from various manufacturers. Having established a distribution network, Mr. Reddy started a manufacturing plant with hygienic facilities. With a keen sense of entrepreneurship, he is the driving force behind the success of Farmax India Limited and the implementation of the projects envisaged by our Company. Business Overview We have recently ventured into infrastructure, construction and related activities. The market for the Company’s service i.e. construction and infrastructure development is directly linked with the economic development in the country, as construction is the key step for any development. We are currently providing our services to various private companies that can be later extended to Governmental as well as Public Private Partnership projects. Our projects currently extend to 3 states in India that are focused on the following areas: • Land Development • Construction and Civil Work • Roads Major Work Order Received by the Company

Client State Name of the Contract

Value (Rs.)

Date of allotment

Start Date Duration of Work

Trinethra Infra Ventures Limited

Andhra Pradesh

Land Development

15,01,50,000/- 01/06/2010 1/7/2010 18 months


Orissa Construction 15,00,00,000/- 01/06/2010 20/7/2010 30 months

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Sanjeevan Enterprises

Karnataka Road Construction material supply

21,72,00,000/- 09/06/2010 11/06/2010 12 months

TOTAL 51,73,50,000/- Our Competitive Strengths Contracts in hand Vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited and Mr. Rajan Shah, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. M. Srinivasa Reddy acquired the controlling interest in the share capital and management of our Company as he proposes to diversify the business activities of our Company in the field of power, infrastructure, mining and other related / unrelated areas depending upon the market conditions and available opportunities. As on June 30, 2010 we have order book of Rs. 5,173.50 lakhs in infrastructure, construction and related activities. Proven track record of Promoter Our Promoter Mr. M. Srinivasa Reddy, is a Mechanical Engineer. Mr. M. Srinivasa Reddy is a Mechanical Engineer by qualification. Post graduation, Mr. Reddy began his career by marketing / distributing FMCG products sourced from various manufacturers. Making the most of his knowledge of the various markets and the experience gained while setting up the marketing network across different areas he conceived the idea of starting a FMCG manufacturing plant and promoted Farmax India Limited which is listed on Indian Stock Exchange. With a keen sense of entrepreneurship, he is the driving force behind the successful implementation of Farmax India Limited. As the company grew in size, his knowledge and experience helped to develop his own network. Capitalising on this, as well as the emerging opportunities in infrastructure, construction and related activities, he is now venturing into them through our Company Professionally managed company with an experienced management and a qualified employee base Our Company has a balanced mix of youth and experience, comprising of a strong and young management team coupled with experienced seniors that provides a blend of old school principles as well as young and fresh ideas. We have a qualified and motivated workforce consisting of managers, engineer, technical staff and non-technical staff. The skill sets of our employees give us the flexibility to adapt to the needs of our clients and the technical requirements of the various projects that we undertake. We are dedicated to the professional development of our employees and continue to invest in them to ensure that they have the necessary skills. Our management team is well qualified and experienced and is responsible for the growth in our business operations. Business Strategy To pursue continuous marketing & corporate brand building We plan to make ourselves visible to a large audience that will enable us to get more contracts as well as bid for larger contracts. We intend to position ourselves in the market through communication and promotional initiatives such as advertisements in print media, hoardings, televisions, organizing events, participation in industry events, public relations and investor relations efforts. For the said purpose we propose to spend Rs. 362.80 lakhs for further details please refer to the chapter titled “Objects of the Issue” on page 41 of the Draft Letter of Offer. Continue to enhance our project execution capabilities We intend to focus on performance and project execution in order to maximize client satisfaction and margins. We will leverage technologies, designs and project management tools to increase productivity and maximize asset utilization in capital intensive activities. We will optimize operating and overhead costs to maximize our operating margins. Our ability to effectively manage projects will be crucial to our continued success as a recognised infrastructure company. We believe that we are able to distinguish ourselves from our competitors because of our management strength, construction, operation and maintenance capabilities. We intend to continuously strengthen our execution capabilities by adding to our existing pool of engineers, attracting new graduates, and facilitating continuous learning. Focus on BOT Contracts The Company at present has not executed any BOT project. The Company intends to focus on executing different BOT projects. Most of BOT contracts are obtained through a competitive bidding process. In selecting contractors for a major

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project, clients generally limit the tenders to the contractors who are pre-qualified based on several criteria including experience, technological capacity and performance, reputation of quality, financial strength, net worth, bonding capacity and size of previous contracts executed and competitive price/bid. The Company is improving on its pre-qualification criteria to enable it to bid for BOT projects. Improve the execution capabilities The Company aims to improve its execution capabilities to execute larger number of projects at a time. With this view, the Company is constantly strengthening its capabilities to enable it to execute various projects at a time. To operate into diversified sectors The Company aims to operate into diversified sectors such as townships, offices, houses and other buildings, urban infrastructure, highways, roads, power systems, etc. which will mitigate business risk in case of slowdown in any one particular field in the future. Expanding geographical reach Currently our projects extend to three states in India. We believe that, the fastest way to accelerate profitable growth is by expanding into new geographies. Hence, we plan to foray into the under developed regions in the country because of the relatively high population growth and unaddressed market needs.

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THE ISSUE

The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in its entirety by, more detailed information in the chapter titled “Terms of the Issue” beginning on page 144 of the Draft Letter of Offer.

Rights Equity Shares proposed to be issued by the Company

2,88,00,000 Rights Equity Shares

Rights Entitlement for Equity Shares 120 Rights Equity Shares for every 1 Equity Share held on the Record Date

Record Date [●] Issue Price per Rights Equity Share Rs. 10/-

Face Value per Rights Equity Share Rs. 10/- Equity Shares outstanding prior the Issue 2,40,000 Equity Shares

Equity Shares outstanding after the Issue 2,90,40,000 Equity Shares*

Use of Issue Proceeds For further information, please refer to the chapter titled “Objects of the Issue” beginning on page 41 of the Draft Letter of Offer.

*assuming that the Equity Shares being offered through this Issue are fully subscribed

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SELECTED FINANCIAL STATEMENTS The following tables set forth summary financial information derived from our restated audited financial statements as of and for the fiscal year ended March 31 2010, March 31, 2009, March 31, 2008, March 31, 2007 and March 31, 2006. Our restated audited financial statements have been prepared in accordance with Indian GAAP, the Act and the SEBI Regulations and are presented in the section titled “Financial Statements” on page 108 of the Draft Letter of Offer. The summary financial information presented below should be read in conjunction with restated audited financial statements, the notes thereto and section titled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” on page 124 of the Draft Letter of Offer. We don’t have any subsidiary; hence we are giving standalone data.

STATEMENT OF ASSETS AND LIABILITIES AS RESTATED

(Rs. in lakhs)

Particulars Year Ended March 31,

2010 2009 2008 2007 2006 A TANGIBLE ASSETS

Fixed Assets Gross Block 15.63 15.40 15.40 14.00 14.00Less : Accumulated Depreciation 15.40 13.96 13.73 11.35 9.08Net Block 0.22 1.44 1.67 2.65 4.92Less : Revaluation Reserve - - - -Net Block after adjustment ofRevaluation Reserve 0.22 1.44 1.67 2.65 4.92Capital Work In Progress - - - - Total 0.22 1.44 1.67 2.65 4.92

B INTANGIBLE ASSETS - - - -Gross Block Less : Amortisation Net Block Capital Work In Progress Total

C INVESTMENTS - - - - D DEFERRED TAX ASSET - - - 2.96E CURRENT ASSETS, LOANS &ADVANCES

Inventories Sundry Debtors* Cash & Bank Balances 0.26 0.00 0.17 0.23 0.17Loans & Advances 31.64 - 1.35 2.50 3.47Other Current Assets Total 31.90 0.00 1.52 2.73 3.64

F LIABILITIES AND PROVISIONS Secured Loans - - - - Unsecured Loans - - - - Deferred Tax Liability - - - - Current Liabilities 43.47 0.05 1.09 0.60 0.32Provisions - - Total 43.47 0.05 1.09 0.60 0.32

H NET WORTH (A + B + C+D+E-F) (11.35) 1.39 2.10 4.79 11.20Net Worth Represented by Equity Share Capital 24.00 24.00 24.00 24.00 24.00Preference Share Capital - - - - Reserve & Surplus - - - -

- Share Premium - - - -- Capital Reserve - - - -- Debenture Redemption Reserve - - - -- Other Reserve (Other thanRevaluation Reserve) - - - -

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2010 2009 2008 2007 2006 - Surplus/(Deficit) in P & L A/c (35.35) (22.61) (21.90) (19.21) (12.80)

Less : Miscellaneous Expenses NotW/off - - - -

I NET WORTH (11.35) 1.39 2.10 4.79 11.20

STANDALONE STATEMENT OF PROFIT & LOSSES AS RESTATED: (Rs. in lakhs)

Particulars Year Ended March 31, 2010 2009 2008 2007 2006

Income Sales & Operating Incomes Of products

manufactured by The Company 46.90 - - - -

Of products traded by The Company - - - - Other Income 0.74 - - - - Increase / (Decrease) in Stock - - - Total Income 47.64 - - - - Expenditure Raw Material Consumed / Cost of TradedGoods 40.66 - - - -

Manufacturing Expenses - - - - - Payment & Provision for Employess - - - - - Administrative & Other Expenses 0.72 0.48 0.30 1.18 1.23Selling & Distribution Expenses - - - - - Financial Charges 0.00 - - - - Depreciation & Amortization 19.00 0.23 2.39 2.27 2.27Total Expenditure 60.38 0.71 2.69 3.45 3.50Profit before tax and extraordinary items (12.75) (0.71) (2.69) (3.45) (3.50)Add / (Less) : Extraordinary Items - - - - - Profit Before Tax after extraordinaryitems (12.75) (0.71) (2.69) (3.45) (3.50)

Add / (Less) : Provision for Tax - - - - - Current Tax - - - - - Earlier Years - - - - - Deferred Tax Liability / (Assets) - - - 3.72 -

Profit After Tax and extraordinary items as per Audited Accounts (A)

(12.75) (0.71) (2.69) (7.18) (3.50)

Impact of Change in Accounting Policies and Estimates

- - - - -

Excess/(Short) Provision for Taxation - - - - - Prior Period Adjustments - - - - -Total Impact of Adjustment - - - - - Total Adjustments net of tax impact - - - - - Net Profit as Restated (12.75) (0.71) (2.69) (7.18) (3.50)Surplus/(Deficit) brought forward fromprevious years

(22.61) (21.90) (19.21) (12.03) (9.30)

Balance available for appropriations, asrestated (35.35) (22.61) (21.90) (19.21) (12.80)

Appropriation - - - - - Proposed Dividend on Equity shares - - - - - Proposed Dividend on Preference shares - - - - - Tax on Dividend - - - - - Transfer to Capital Reserve - - - - - Transfer to Debenture Redemption Reserve - - - - - Transfer to General Reserve - - - - - Balance Carried forward as restated (35.35) (22.61) (21.90) (19.21) (12.80)

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STATEMENT OF CASH FLOWS FROM RESTATED FINANCIAL STATEMENTS (Rs. in lakhs)


2010 2009 2008 2007 2006 A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before taxation and extraordinary items (12.75) (0.71) (2.69) (3.45) (3.50)

Adjustment for : Depreciation & Amortization

1.45 0.23 2.38 2.27 2.27

Finance Charges/Interest - - - - -Provision for diminution in value ofinvestments

- - - - -

Foreign Exchange Gain/(loss) - - - - -Fixed Assets W/off - - - - -Loss on Sale of Investment - - - - -Interest/ Dividend Received. - - - - -Loss on Sale of Fixed Assets - - - - -Misc. Expenses Amortization 17.55 Cash generated from operations before

working capital changes 6.25 (0.48) (0.31) (1.18) (1.22)

Increase/Decrease in trade receivables - - - - -Increase/ Decrease in loans & advances - 1.35 1.15 0.97 1.33Increase/Decrease in Inventories - - - - -Increase/Decrease in trade Payables &Others

14.87 (1.04) 0.48 0.27 (0.10)

Cash Generated from Operations 21.12 (0.17) 1.33 0.06 0.01Direct tax Paid (Net of Excess/surplusprovision)

- - - - -

Interest Paid - - - - -Net Cash Flow before extraordinaryitems

21.12 (0.17) 1.33 0.06 0.01

Extraordinary Items - - - - -Net Cash from Operating Activities 21.12 (0.17) 1.33 0.06 0.01

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (0.23) - - - -Pre-Operative/Misc. Expenditure andproject Expenses -

- - - -

Sale of investments - - - - -Profit/(loss) on Sale of investments - - - - -Investment in subsidiary - - - - -Sale of investment in subsidiary - - - - -Purchase of Investment (NET) - - - - -Proceeds from sale of fixed assets - - - - -Interest Received - - - - -Interest Received on bank Deposits - - - - -Inter Corporate Deposit etc. (31.64) - - - -Dividend Received - - - - -Net Cash from Investing Activities (31.86) - - - -C. CASH FLOW FROM

FINANCING ACTIVITIES

Proceeds from issuance of share capital 11.00 - - - -Refund of share application money - - - - -Share issue expenses - - - - -Proceeds from Secured loans - - - - -Proceeds from Unsecured loans - - - - -Repayment of Secured Loans - - - - -

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Repayment of Unsecured Loans - - - - -Finance Charges paid - - - - -Dividend Paid - - - - -Borrowing (Net) - - - - -Net Cash from/used from financialactivities

11.00 - - - -

NET INCREASE /(-) DECREASE IN CASH AND CASH EQUIVALENTS

0.26 (0.17) 1.33 0.06 0.01

OPENING BALANCE IN CASH AND CASH EQUIVALENTS

0.00 0.17 0.23 0.16 0.16

CLOSING BALANCE IN CASH AND CASH EQUIVALENTS 0.26 0.00 0.17 0.23 0.17

Components of Cash & Cash Equivalents

- Cash in hand 0.13 0.00 0.15 0.23 0.15- Cash/bank Balance with bank (currentaccount)

0.13 0.02 0.00 0.02

-Balance with bank on deposit account CASH AND CASH EQUIVALENTS 0.26 0.00 0.17 0.23 0.17 Note:

1) Figures in Brackets represent the outflow of cash. 2) There is a difference of Rs.10,000 in the cash balance in the Audited Financial Statements for the year 2005-

06 and in the previous year's Figures mentioned in A 2006-07. This is occurred due to non-accounting of payment voucher in respect of Audit Fee paid . This is considered as IOU and included in the cash balance for of Audit for the year 2006-07, the payment of Rs.10,000 was adjusted in the previous year's figures cash balance on availability of voucher for the payment of audit Restated cash flow summary statements. Cash Flow Statement has been prepared using indirect method as per Accounting Standard 3 - Cash Flow Statements issued by ICAI.

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GENERAL INFORMATION

Dear Equity Shareholder(s), Pursuant to the resolution passed by the Board of Directors of our Company at its meeting held on July 07, 2010, it has been decided to make the following Rights Issue to the Equity Shareholders of our Company, with a right to renounce: ISSUE OF 2,88,00,000 EQUITY SHARES WITH A FACE VALUE OF RS. 10/- EACH AT PAR AGGREGATING TO RS. 28,80,00,000 LAKHS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF ONE HUNDRED TWENTY (120) EQUITY SHARES FOR EVERY ONE (1) EQUITY SHARE HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, i.e. [●] (THE “ISSUE”). THE ISSUE PRICE IS ONE TIME OF THE FACE VALUE OF THE EQUITY SHARES. Registered Office Remidicherla Infra & Power Limited Remidicherla House, CPR Brundavan, Flat number 401, near Nectar Garden, Madhapur, Hyderabad – 500 081 Andhra Pradesh India. Tel No.: +91 40 40176880 Fax No.: +91 40 40176881 Email: [email protected] Website: www.remidicherlapower.com Registration No.: 30538 of 1985 Corporate Identification No.: L40102AP2002PLC039031 Registrar of Companies, Andhra Pradesh 2nd floor, CPWD Building, Kendriya Sadan, Sultan Bazar, Koti, Hyderabad – 500195, Andhra Pradesh, India Our Board of Directors Our Board of Directors as on the date of filing of the Draft Letter of Offer with SEBI is as follows: Sr. No. Names of the Directors Designation

1. Mr. M. Srinivasa Reddy Managing Director 2. Ms. Priyanka Palacharla Executive Director 3. Mr. P. Kamala Kumar Independent Director 4. Mr. S. Koti Reddy Independent Director 5. Mr. I Srinivasa Raju Independent Director 6. Mr. S Krishna Kanth Verma Independent Director 7. Mr. Mudunuri Veera Venkata Ramana

Varma Independent Director

8. Ms. Swapna Chaparala Independent Director Brief Biography of our Directors Mr. M. Srinivas Reddy, Managing Director Mr. M. Srinivas Reddy, 38 years, is a graduate in Mechanical Engineering from Nagarjuna University, Andra Pradesh. Post graduation, Mr. Reddy began his career by marketing / distributing FMCG products sourced from various manufacturers. In 2003 he ventured into manufacturing FMCG products, namely vermicelli and toothpaste, by setting up a manufacturing plant with superior hygienic facilities, sales of which were supported by his existing distribution

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network. With a keen sense of entrepreneurship, he is the driving force behind the success of Farmax India Limited and implementation of the projects envisaged by our Company. Ms. P. Priyanka, Executive Director Ms. P. Priyanka, 24 years, is a Master in Business Administration from the Department of Business and Management Studies, Andhra University, Visakhapatnam and a Bachelor of Science from Gayathri Vidhya Parishad, Vizag. Ms. Priyanka has two years of experience in the retail industry. She worked with Hyderabad Central Mall as Unit Marketing head for a period of one year prior to joining our Company. Mr. P. Kamala Kumar, Independent Director Mr. P. Kamala Kumar, 73 years, is a graduate in Electrical Engineering from the College of Engineering, Kakinada, a fellow member of the Institution of Engineers (India) and a Chartered Engineer. Mr. Kumar has rich experience in the field of electricity / power of over four decades. He has worked on several Government Projects in various capacities. Mr. Kumar began his carrier in 1956 as a junior engineer with the Government Electricity Department and went on to becoming a Chief Engineer with the Andhra Pradesh State Electricity Board (APSEB). Post superannuation in 1992 Mr. Kumar was appointed as consultant by APSEB during which period he suggested and implemented various measures for maximization of generation at various power stations. Mr. Kumar is presently engaged in concluding agreements for development of wind energy projects in Tamil Nadu and finalization of CDM proposals for Carbon Credits as well as concluding agreements for development of 1X30+1X10 MW Hydro Power station in Kerala. Mr. S. K. Reddy, Independent Director

Mr. S. K. Reddy, 73 years, is a Bachelor of Arts (Honours) from A.U. Waltair University, Visakhapatnam, Andhra Pradesh and M. Sc. (statistics) from A.U. Waltair University, Visakhapatnam, Andhra Pradesh. In 1973 Mr. Reddy did his M.A. in Physics from Delhi University in 1973 and a diploma in Labour Laws and Personnel Management from Indian Law Institute Delhi in 1980. Mr. Reddy worked as a lecturer for mathematics and statistics in S.B. College, Gulbarga during the period 1960 – 1961. In 1970 Mr. Reddy joined the Government of India as the senior scientific officer. Thereafter Mr. Reddy went on to join the Rural Electrification Corporation, a Government of India undertaking. Mr. Reddy was the manager of AES Schools for a period of ten years from 1973 to 1983. Post retirement he worked for a period of three years as a Director to the Blooms College of Computer Science and Hotel Management, Andhra Pradesh from 1996 to 1999. Mr. I. Srinivas Raju, Independent Director Mr. I. Srinivas Raju, 45 years, is a certified cost accountant from the Institute of Cost and Works Accountants of India and a Master in Commerce from Andhra University. He has over two decades of experience in Finance and Accounting. Mr. Raju has been associated with Venkat Sai Securities Private Limited as Director (Finance and Accounting) since 2000. Wherein he is responsible for a wide gamut of services, including but not limited to, budgeting, forecasting, cost and credit control, margin analysis, costing and profitability, etc. Mr. Krishna Kant Varma, Independent Director Mr. Krishna Kant Varma, 31 years, has done his Masters in Business Administration from Swiss Mananagement School, Switzerland. Mr. Varma is associated with SVMM Minning Limited as Director (Sales and Marketing) wherein he is responsible for, amongst several responsibilities, he is also responsible for sales and marketing, export and import operations and customer relationship management. Mr. Varma was previously associated with Aviva Company wherein he was responsible for sales and marketing. Mr. Mudunuri Veera Venkata Ramana Varma, Independant Director Mudunuri Veera Venkata Ramana Varma, 46 years, has graduated in Commerce from Andhra University. He has an overall experience of 23 years. Mr. Varma, with his entrepreneurial instinct started electrical and electronics small scale industry immediately after graduation in 1985. As part of his strategic future business plan, he changed his career line and joined as Manager in Kernex Micro Systems Ltd. in 1991. In the year 1995, Mr. Varma started his own IT company. Mr. Varma has placed number of IT professionals across globe. Significant achievement is ramping-up team 300+ skilled professionals in 2 months time frame. In the year 2004, he joined Genex Technologies Private Limited as Director overseeing Sales, Operations and HR functions.

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Ms. Swapna Chaparala, Independent Director Ms. Swapna Chaparala, 30 years, is a Master in Business Administration and a Bachelor in Commerce. In 1997, Ms. Chaparala completed her Diploma in Information Systems and Management from Aptech, Hyderabad. She is currently associated with the Australia New Zealand Banking Group (ANZ), since July 2008, wherein, amongst many other responsibilities, she manages daily operations of the department to best achieve sales and service targets. Prior to joining ANZ, she was associated with Primus Telecom as a Business Analyst (Customer Service and Sales). For a detailed profile of our Board of Directors, please refer to the chapter titled ‘Our Management’ beginning on page 85 of the Draft Letter of Offer. Company Secretary and Compliance Officer Mr. Premaraju Satish Remidicherla House, CPR Brundavan, Flat number 401, Near Nectar Garden, Madhapur, Hyderabad – 500 081 Andhra Pradesh. India. Tel No.: +91 40 40176880 Fax No.: +91 40 40176881 Email: [email protected] Investors may contact the Compliance Officer for any pre – Issue / post – Issue related matter such as non-receipt of letters of allotment / share certificates / refund orders, etc. SCSB under ASBA The list of SCSBs registered with SEBI is available on the website of SEBI. Lead Manager to the Issue Intensive Fiscal Services Private Limited 131, C Wing, Mittal Tower, 13 th Floor, Nariman Point, Mumbai – 400 021, Maharashtra, India Tel. No.: +91 22 2287 0443/44/45 Fax No.: +91 22 2287 0446 E-mail: [email protected] Investor Grieveance ID: [email protected] Website: www.intensivefiscal.com Contact Person: Mr. Brijesh Parekh / Ms. Ishita Kohli SEBI Registration Number: INM000011112 Registrar to the Issue Venture Capital and Corporate Investments Pvt. Ltd. 2-10-167, Bharat Nagar, Hyderabad 500 018 Andhra Pradesh India. Tel:- 26387281/82/83 Fax:- 26387384 Email: [email protected] Website: www.vccilindia.com Contact Person: Mr. P. V. Srinivas

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SEBI Registration: INR 000001385 Legal Advisor to the Lead Manager M/s. Crawford Bayley & Co. Advocates and Solicitors State Bank Buildings, 4th floor N.G.N Vaidya Marg, Fort, Mumbai – 400 023 Tel: +91 – 22 –2266 8000 Fax: +91 – 22 – 2266 3978 E-mail: [email protected] Statutory Auditor of the Company Mr. S. Kishore Kumar Chartered Accountant Flat no. 101, Lakshmi Residency, 7-1-55/1 Dharam Karan Road, Ameerpet, Hyderabad – 500 016. Tel: +91 040 30523765 Email: [email protected] Contact Person: Mr. S. Kishore Kumar Independent Auditor (Peer Review Certified)* M/s. K. Prahlada Rao & Co. Chartered Accountants 1-1-401/2/A, Gandhi Nagar, Hyderabad- 500 080. Tel: + 91 040 66661496 Fax: +91 040 27662749 E-mail: [email protected] Contact Person: Mr. K. Prahlada Rao. * M/s. K. Prahlada Rao & Co. holds a peer reviewed certificate dated January 27, 2005 issued by the Institute of

Chartered Accountants of India. Bankers to the Company Our Company has current accounts with the following banks: Union Bank of India 1st Floor, Prabha Plaza, Door No.- 10-9/2 Begumpet Airport Main Road, Hyderabad 500 001. Tel no.: 040 23460140 Fax no.: 040 23460141 Contact Person : Mr. Ramana Email address: [email protected]

Axis Bank Limited MIG-9, Dharamareddy Colony, Opp. Police Station, KPHB Colony, Kukatpally, Hyderabad – 500 072. Tel no.: 040 23058603 Fax no.: 040 23051694 Contact Person: V. Prabhakar Reddy Email address: [email protected]

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Statement of Allocation of Responsibilities Intensive Fiscal Services Private Limited is the sole Lead Manager to the Issue. Their responsibilities are as under:

Sr. No. Activities

1. Capital structuring with relative components and formalities such as type of instruments, etc. 2. Drafting and Design of the Letter of Offer and of advertisement /publicity material including newspaper

advertisements and brochure / memorandum containing salient features of the Letter of Offer. 3. Marketing of the Issue which will cover, inter alia, formulating marketing strategies, preparation of

publicity budget, arrangements for selection of (i) ad-media and (ii) bankers to the issue. 4. Selection of various agencies connected with the issue, namely Registrars to the Issue, printers, and

advertising agency. 5. The post-issue activities will involve essential follow-up steps, which must include finalization of basis of

allotment / weeding out of multiple applications, listing of instruments and dispatch of certificates and refunds, with the various agencies connected with the work such as registrars to the issue, bankers to the issue, and bank handling refund business. Even if many of these post-issue activities would be handled by other intermediaries, the designated Lead Merchant Banker shall be responsible for ensuring that these agencies fulfill their functions and enable him to discharge this responsibility through suitable agreements with the issuer company.

6. Ensuring compliance with the SEBI (ICDR) Regulations 2009 and other requirements and formalities specified by SEBI and the recognized stock exchanges where specified securities being offered are proposed to be listed.

Credit Rating This being an issue of Equity Shares, no credit rating is required. Monitoring Agency As this being an Issue of Equity Shares for less than Rs. 50,000 lakhs appointment of monitoring agency in terms of sub-regulation (1) of Regulation 16 of the SEBI (ICDR) Regulations 2009 is not required. Our Board will monitor the use of proceeds of this Issue as per clause 49 of the Listing Agreement. Debenture Trustee Since this is not a debenture issue, appointment of debenture trustee is not required. Appraising Entity The present issue is not being appraised by any appraising agency. The objects of this Issue and means of finance therefore are based on internal estimates of our Company. Issue Schedule

Issue Opening Date: [●] Last date for receiving requests for SAFs: [●]Issue Closing Date: [●]

Declaration by Board on creation of separate account The Board of Directors declares that funds received against this Issue will be transferred to a separate bank account other than the bank account referred to sub-section (3) of Section 73 of the Act. Underwriting This issue is not underwritten and our Company has not entered into any underwriting arrangement.

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Minimum Subscription If our Company does not receive the minimum subscription of 90% of the Issue, or the subscription level falls below 90%, after the Issue Closing Date on account of cheques being returned unpaid or withdrawal of applications, our Company shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days after our Company becomes liable to pay the subscription amount (i.e. 15 days after the Issue Closing Date), our Company will pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Act. Underwriting / stand by Support This issue of equity shares is not being underwritten and/or no standby support is being sought for the said issue. Subscription to the Issue by the Promoters and the Promoter Group Our Promoter has undertaken vide his undertaking dated July 7, 2010 to fully subscribe for their Rights Entitlement. Our Promoter reserves his right to subscribe for his Rights Entitlement either by himself and/or through one or more entities controlled by him. He has also undertaken to apply for Equity Shares in addition to his Rights Entitlement to the extent of any undersubscribed portion of the Issue, subject to obtaining any approvals required under applicable law, to ensure that at least 90% of the Issue is subscribed. Such subscription for Equity Shares over and above his Rights Entitlement, if allotted, may result in an increase in his percentage shareholding above his current percentage shareholding. Further, such acquisition by him of additional Equity Shares shall (i) not result in a change of control of the management of the Company; and (ii) be exempt from the applicability of Regulations 11 and 12 of the Takeover Code in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Presently our Company is complying with clause 40A of the Listing Agreement and the minimum public shareholding required to be maintained for continuous listing is 25% of the total paid up equity capital. For further details of under subscription and allotment to the Promoter Group, please refer to “Basis of Allotment” below under this section titled “Terms of the Issue” on page 144 of the Draft Letter of Offer. In case the permission to deal in and for an official quotation of the Equity Shares is not granted by the Stock Exchange, the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance of the Letter of Offer and if such money is not repaid within eight days after the day from which the Issuer is liable to repay it, the Issuer shall pay interest as prescribed under Section 73(2) / 73(2A) of the Act. Principal terms of loan and assets charged as security As on date of the Draft Letter of Offer we do not have any outstanding loan.

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CAPITAL STRUCTURE

The Capital Structure of our Company and related information as on date of the Draft Letter of Offer is set forth below:

(Rs in lakhs) Particulars Aggregate value at

Face Value Aggregate value at Issue Price

A. Authorized Share Capital 3,00,00,000 Equity Shares of Rs. 10/- each 3,000 B. Issued, Equity Share Capital 2,40,000 Equity Shares of Rs. 10/- each 24 Subscribed and Paid up, Equity Share Capital 2,40,000 Equity Shares of Rs. 10/- each 24 C. Present Issue being offered to the Equity Shareholders through the Draft Letter of Offer

2,88,00,000 Equity Shares of Rs. 10/- each at par i.e. at an Issue Price of Rs. 10/- each

2,880 2,880

D. Issued, subscribed and paid up capital after the Issue 2,90,40,000 Equity Shares of Rs. 10/- each fully paid up 2,904 2,904 E. Securities premium account Before the Rights Issue Nil After the Rights Issue Nil

The present Issue of Equity Shares has been authorized by the resolution passed by the Board of Directors of the Company at their meeting held on July 7, 2010. Notes to the Capital Structure: 1 Details of increase in authorized share capital of our Company since incorporation is as under:

Sr. No. Date of Shareholders Meeting

Increase in Authorized Share Capital (in Rs.)

From To 1. On Incorporation - 1,00,000 2. October 22, 1983 100,000 25,00,000 3. May 09, 1992 25,00,000 1,25,00,000 4. September 30,1996 1,25,00,000 3,00,00,000 5. January 28, 2010 3,00,00,000 30,00,00,000

2 The existing share capital has been subscribed and allotted as under:

Date of allotment of fully Paid-up Equity Shares

No. of Equity Shares Allotted

% of shares issued

Cumulative number of Equity Shares

Face Value (Rs.)

Securities Premium (Rs.)

Issue Price (Rs.)

Mode of allotment

Cumulative Paid-up Capital (Rs.)

Reasons for Allotment

August 1, 1983

7 0.01 7 10/- 0 10/- Cash 70 Subscription to Memorandum

January 25, 1984

2,39,993 99.99 2,40,000 10/- 0 10/- Cash 24,00,000 Public offer

_____________________________________________________________________________________________

36

3 Our Shareholding Pattern The shareholding pattern of our Company as on June 30, 2010 and the expected shareholding pattern post the Rights Issue is as follows:

Code Category of

Shareholder Number of shareholders

Total number of shares Pre- Issue

Total shareholding as a percentage of the total number of shares

Total number of shares Post- Issue

Total shareholding

as a percentage of total number of shares

Shares Pledged or otherwise encumbered

(A) Shareholding of Promoter and Promoter Group

(1) Indian (a) Individuals/ Hindu

Undivided Family 1 1,79,051 74.60 [●] [●] 0

(b) Central Government/ State Government(s)

0 0 0.00 [●] [●] 0

(c) Bodies Corporate 0 0 0.00 [●] [●] 0 (d) Financial

Institutions/ banks 0 0 0.00 [●] [●] 0

(e) Trusts 0 0 0.00 [●] [●] 0 Sub-Total (A)(1) 1 1,79,051 74.60 [●] [●] 0 (2) Foreign (a) Individuals (Non-

Resident Individuals/ Foreign non Individuals)

0

0 0.00 [●] [●] 0

(b) Bodies Corporate 0 0 0.00 [●] [●] 0 (c) Institutions 0 0 0.00 [●] [●] 0 (d) Any other (specify) 0 0 0.00 [●] [●] 0 Sub-Total (A)(2) 0 0 0.00 [●] [●] 0 Total Shareholding

of Promoter and Promoter Group (A)= (A)(1)+(A)(2)

1 1,79,051 74.60 [●] [●] 0

(B) Public Shareholding

(1) Institutions (a) Mutual Funds/ UTI 0 0 0.00 [●] [●] 0 (b) Financial

Institutions/ Banks 0 0 0.00 [●] [●] 0

(c) Central Government/ State Government(s)

0 0 0.00 [●] [●] 0

(d) Venture Capital Funds

0 0 0.00 [●] [●] 0

(e) Insurance Companies

0 0 0.00 [●] [●] 0

(f) Foreign Institution Investors

0 0 0.00 [●] [●] 0

(g) Foreign Venture Capital Investors

0 0 0.00 [●] [●] 0

(h) Any Other (specify)-Trusts

0 0 0.00 [●] [●] 0

Sub-Total (B)(1) 0 0 0.00 [●] [●] 0(2) Non-institutions (a) Bodies Corporate 0 0 0.00 [●] [●] 0 (b) Individuals - 0 i) Individual 34 60,949 25.40 [●] [●] 0

______________________________________________________________________________________________

37

shareholders holding nominal share capital upto Rs. 1 lakh.

ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh.

0 0 0.00 [●] [●] 0

(c) Any Other - Foreign Body Corporates

0 0 0.00 [●] [●] 0

Sub-Total (B)(2) 34 60,949 25.40 [●] [●] 0 Total public

shareholding (B)= (B)(1)+(B)(2)

34 60,949 25.40 [●] [●] 0

TOTAL (A)+(B) 35 2,40,000 25.40 [●] [●] 0 (C) Shares held by

Custodians and against which Depository Receipts have been issued

0 0 0.00 [●] [●] 0

GRAND TOTAL (A)+(B)+(C)

35 2,40,000 100.00 [●] [●] 0

4 Shareholding of Promoter and Promoter Group in our Company as on June 30, 2010

Category No. of Equity Shares held Pre-Issue

Percentage of Pre-Issue capital

No. of Equity Shares Post Rights Issue

Percentage of Post Rights Issue capital

(assuming allotment of all Equity Shares

offered) A. Promoter Mr. M. Srinivasa Reddy 1,79,051 74.60 [●] [●] Sub-Total (A) 1,79,051 74.60 [●] [●] B. Promoter Group NIL 0 0 [●] [●] Sub-Total (B) 0 0 [●] [●] Total Holding of Promoter and Promoter Group (A+B)

1,79,051 74.60 [●] [●]

5 Details of the shareholders holding more than 1% of the total number of equity shares of our Company as

on June 30, 2010

Sr. No Name of Shareholder Number of Shares

% holding

Total number of shares

Post- Issue

Total shareholding

as a percentage of total number

of shares 1. Mr. M Srinivasa Reddy 1,79,051 74.60 [●] [●]

6 Details of our Promoter Capital Built-up

Name of the Promoter

Date on which Equity Shares were allotted/transferred/subdivided and made fully paid-up

No. of Equity Shares

Face Value

(in Rs.)

Issue/ transfer

price (in Rs.)

Nature of

Consideration

% of Pre-

Issue paid-up capital

% of Post-Issue paid-

up capita

l

Mode of Acquisitio

n

Lock-in

period

Mr. M April 15, 2010 1,79,051 10/- 9/- Cash 74.60 [●] Purchased May

_____________________________________________________________________________________________

38

Name of the Promoter

Date on which Equity Shares were allotted/transferred/subdivided and made fully paid-up

No. of Equity Shares

Face Value

(in Rs.)

Issue/ transfer

price (in Rs.)

Nature of

Consideration

% of Pre-

Issue paid-up capital

% of Post-Issue paid-

up capita

l

Mode of Acquisitio

n

Lock-in

period

Srinivasa Reddy

from 3A Capital Services Limited & Mr. Rajan Shah*

18, 2010

to Augus

t 18, 2010

* Pursuant to the Share Purchase Agreement (SPA) entered into by and between Mr. M Srinivasa Reddy and 3A Capital Services Limited & Mr. Rajan Shah on January 30, 2010. For further details, please refer to the section titled “History and Other Corporate Matters” on page 81 of the Draft Letter of Offer.

7 None of our Promoter or Promoter Group, Directors or their relatives have financed the purchase by any other

person of securities of our Company other than in the normal course of the business of the financing entity during the period of six months immediately preceding the date of filing of the Draft Letter of Offer with SEBI.

8 Our Company has not issued any Equity Shares for consideration other than cash.

9 Our Company, our Directors, our Promoter and the Lead Manager to this Issue have not entered into any buy-back,

standby, safety net facility or similar arrangements for any securities being issued through the Letter of Offer.

10 The securities being offered in the Issue are on fully paid – up basis. 11 All the existing equity shares of our Company are fully paid –up. 12 Top Ten Shareholders of our Company and their shareholding is set forth below:

i. Top ten shareholders of our Company as on the date of filing of the Draft Letter of Offer with SEBI

Sr. No. Name of Shareholder Shareholding % of Equity Share Capital

1. Mr. M Srinivasa Reddy 1,79,051 74.60 2. Mr. Hitesh V Raja 2,300 0.96 3. Mr. Gopakumar G. 2,000 0.83 4. Mr.Sindhu Gopakumar 2,000 0.83 5. Mr. Sanjay Bhosle 2,000 0.83 6. Mr. Hiral Shah 2,000 0.83 7. Mr. Ashish Shah 2,000 0.83 8. Mr. Sanjeev Shah 2,000 0.83 9. Mr.Kantilal K Raja 2,000 0.83 10. Mr. Hiren K Raja 2,000 0.83 TOTAL 1,97,351 82.22

Note: In addition to the shareholders mentioned in serial number 3 to 10 above, Jigna Raja, Bhanuben B Thakkar, Pravin K Raja, Charu P Raja, Vinay P Raja, Anjali C Mehta, Vitaldas K Raja HUF, Lajja H Raja holds 2000 equity shares each of our Company.

ii. Top ten shareholders of our Company as on ten days prior to the date of filing of the Draft Letter

of Offer with SEBI


1. Mr. M Srinivasa Reddy 1,79,051 74.60 2. Mr. Hitesh V Raja 2,300 0.96 3. Mr. Gopakumar G. 2,000 0.83

______________________________________________________________________________________________

39

4. Mr.Sindhu Gopakumar 2,000 0.83 5. Mr. Sanjay Bhosle 2,000 0.83 6. Mr. Hiral Shah 2,000 0.83 7. Mr. Ashish Shah 2,000 0.83 8. Mr. Sanjeev Shah 2,000 0.83 9. Mr.Kantilal Raja 2,000 0.83 10. Mr. Hiren Raja 2,000 0.83 TOTAL 1,97,351 82.22

Note: In addition to the shareholders mentioned in serial number 3 to 10 above, Jigna Raja, Bhanuben B Thakkar, Pravin K Raja, Charu P Raja, Vinay P Raja, Anjali C Mehta, Vitaldas K Raja HUF, Lajja H Raja holds 2000 equity shares each of our Company. iii. Top ten shareholders of our Company two years prior to the date of filing of the Draft Letter of

Offer with SEBI


1. Mr. Mir Hasanain Ali Khan 94,351 39.31 2. Mr. Mir Ahmed Ali Khan 82,150 34.23 3. Mr. Hitesh Raja 2,300 0.96 4. Mr. Sindhu Gopakumar 2,000 0.83 5. Mr. Sanjay Bhosle 2,000 0.83 6. Mr. Hiral Shah 2,000 0.83 7. Mr. Ashish Shah 2,000 0.83 8. Mr. Sanjeev Shah 2,000 0.83 9. Mr. Kantilal Raja 2,000 0.83 10. Mr. Hiren Raja 2,000 0.83 TOTAL 1,97,651 80.33

Note: In addition to the shareholders mentioned in serial number 4 to 10 above, Hitesh V. Raja, Anjali C. Mehta, Ashish Shah, Bhanuben B. Thakkar, Charu P. Raja, Gopakumar, Hiral Shah, Hiren K. Raja, Jigna Raja, Kantilal K. Raja, Lajja H. Raja, Pravin K. Raja, Sanjay Bhosle, Sanjeev Shah, Sindhu Gopakumar, Vinay P. Raja, Vithaldas K Raja (HUF) held 2000 equity shares each of our Company.

13 Our Company does not have any ESOP/ESOS scheme as on date. 14 Total number of members of our Company as on June 30, 2010 is 35. 15 The present Issue being a Rights Issue, as per Regulation 34(c) of the SEBI Regulations, the requirement of

promoter’ contribution and lock-in are not applicable. 16 The Company has not availed of “bridge loans” to be repaid from the proceeds of the Issue for incurring expenditure

on the Objects of the Issue. 17 The terms of issue to Non-Resident Investors have been presented under the section “Terms of the Issue” on page

144 of the Draft Letter of Offer. 18 At any given time, there shall be only one denomination of the Equity Shares of the Company and the Company

shall comply with such disclosure and accounting norms specified by SEBI from time to time. 19 We presently do not have any intention or proposal to alter our capital structure for a period of six months from the

date of opening of this Issue, by way of split / consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into exchangeable, directly or indirectly, for our Equity Shares) whether preferential or otherwise, except that if we enter into acquisition(s) or joint venture(s), we may consider additional capital to fund such activities or to use Equity Shares as a currency for acquisition or participation in such joint ventures.

20 Our Equity Shareholders do not hold any warrants, options or any other convertible instruments which would entitle

them to acquire further Equity Shares.

_____________________________________________________________________________________________

40

21 Our Promoter has brought in an amount of Rs. 250.00 lakhs as share application money towards part of his Rights Entitlement in the Issue, which will be adjusted against the total amount payable. The details of the share application money brought in by the promoter are as under:

Name of the Promoter Amount (Rs. in lakhs) Mr. M Srinivasa Reddy 250.00

22 The Issue will remain open for a minimum of 15 days. However, the Board will have the right to extend the Issue

period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date. 23 Our Company has never revalued our assets and has never issued any Equity Shares out of revaluation reserves. 24 Our Promoter has undertaken vide his undertaking dated July 7, 2010 to fully subscribe for their Rights Entitlement.

Our Promoter reserves his right to subscribe for his Rights Entitlement either by himself and/or through one or more entities controlled by him. He has also undertaken to apply for Equity Shares in addition to his Rights Entitlement to the extent of any undersubscribed portion of the Issue, subject to obtaining any approvals required under applicable law, to ensure that at least 90% of the Issue is subscribed. Such subscription for Equity Shares over and above his Rights Entitlement, if allotted, may result in an increase in his percentage shareholding above his current percentage shareholding. Further, such acquisition by him of additional Equity Shares shall (i) not result in a change of control of the management of the Company; and (ii) be exempt from the applicability of Regulations 11 and 12 of the Takeover Code in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Presently our Company is complying with clause 40A of the Listing Agreement and the minimum public shareholding required to be maintained for continuous listing is 25% of the total paid up equity capital. For further details of under subscription and allotment to the Promoter Group, please refer to “Basis of Allotment” on page 156 under this section titled “Terms of the Issue” on page 144 of the Draft Letter of Offer.

25 There has been no allotment of Equity Shares that is at a price lower than the Issue Price within the last twelve (12)

months from the date of the Draft Letter of Offer. 26 Save and except as mentioned below, our Promoter, Promoter Group and Directors and their immediate relatives

have not purchased, sold, or financed the purchase or sale of any securities of our Company in past six (6) months preceding the date of filing of the Draft Letter of Offer with SEBI.

Sr. No.

Name of the person / entity

Promoter / Director / Promoter Group / Director of Promoter Group

Number of Equity Shares

Transfer / Allotment

Date of Transfer / Allotment

1. Mr. M Srinivasa Reddy Promoter 1,79,051 Transfer* (Purchase)

April 15, 2010

*Pursuant to the Share Purchase Agreement (SPA) entered into by and between Mr. M Srinivasa Reddy and 3A Capital Services Limited & Mr. Rajan Shah on January 30, 2010. For further details, please refer to the section titled “History and Other Corporate Matters” on page 81 of the Draft Letter of Offer. 27 Our Promoter has not pledged any shares held in our Company. Except as stated under none of the shares held by

our Promoter and Promoter Group are under lock in and or have encumbrance on it.

Sr. No.

Name of the person / entity

Promoter / Promoter Group Number of Equity Shares

Lock-in / Encumbrance

Lock in period

1. Mr. M Srinivasa Reddy Promoter 1,79,051 Lock-In May 18, 2010 to August 18, 2010

______________________________________________________________________________________________

41

OBJECTS OF THE ISSUE

The activities for which funds are being raised by our Company are:

• To finance the procurement of capital equipment;

• Deposit for leasing of equipment;

• Acquisition of land for parking and maintenance of our equipment;

• Corporate brand building & advertisement;

• ERP implementation;

• Setting up of an additional office space;

• General corporate purposes; and

• Issue related expenses.

The main object clause of our Memorandum of Association enables us to undertake our existing activities. Further, the main objects of our Company enable us to carry on the activities for which the funds are being raised by us in the Issue. Fund Requirement: The total fund requirement and utilization of Issue Proceeds will be as per the table set forth below:

(Rs. in lakhs) Sr. No.

Particulars Total Estimated Cost

Fund Deployed* (As on July 22, 2010)

Amount estimated to be utilized through the Issue Proceeds of this Issue

Estimated utilization of funds in FY 2010-2011

1. To finance the procurement of capital equipment 1,486.00 - 1,486.00 1,486.00 2. Deposit for leasing of equipment 123.00 123.00 - - 3. Acquisition of land for parking and maintenance of our

equipment 270.00 50.00 220.00 220.00

4. Corporate Brand building & Advertisement 362.80 - 362.80 362.80 5. ERP Implementation 192.40 - 192.40 192.40 6. Setting up of an additional office space 179.50 18.00 161.50 161.50 7. General Corporate Purpose 227.05 227.05 227.058. Issue Related Expenses 39.25 39.25 39.25 Total 2,880.00 191.00 2,689.00 2,689.00 *Funds Deployed As per the certificate dated July 22, 2010 by Mr. S. Kishor Kumar, Chartered Accountant, we have received Rs. 250.00 lakhs as Share Application Money forming part of Promoters rights issue entitlement. The following amount has been deployed towards our project:

Sr. No. Particulars Amount (Rs. in lakhs) 1. Acquisition of land to set up storage facility for construction equipment 50.00 2. Deposit for Equipment Leasing 123.00 3. Setting up of Corporate Office 18.00 Total 191.00

The details of each the above points are as under: 1. To finance the procurement of capital equipment

Our Company is in the business of infrastructure, construction and related activities and requires investment in capital equipment on a regular basis. In order to meet our growth plans, we propose to make substantial investments in capital equipment. The Company intends to purchase capital equipment to the tune of Rs. 1,486 lakhs. We believe that owning the said equipment will enable us to mobilize our resources and render services to our clients in a faster, more efficient

_____________________________________________________________________________________________

42

and cost effective manner. The Company would also be able to claim tax benefits. The equipment proposed to be acquired are ready to use and can be put in operation at any of the working sites of our Company after the procurement. Acquisition of equipment would not only reduce the cash outflow in the form of hire charges but also enable the company to bid for bigger capital equipment intensive contracts. Following are details of the equipments and their estimated costs.

Sr. No.

Name of Equipment, Number, Description

Supplier’s Name

Date of Quotation

Quotation Ref No

Quantity Required

Amount (Rs in Lakhs)

1 Tractor 4019/1 3300 mm 130"WP Chassis fitted with H series 6 DTI BS II Diesel engine. Make Ashok Leyland.

Automotive Manufacturers Private Limited

June 24, 2010

1011-1977 5 77.87

2 Tractor 2214/18S 4572mm 180" WB 6*2 goods chassis fitted with H series 6 DTI BS II Diesel engine. Make Ashok Leyland


June 24, 2010

1011-1975 5 69.8

3 Tractor 1612 4330 mm 170.5" WB goods chassis fitted with H series 6 ETI BS II Diesel engine. Make Ashok Leyland


June 24, 2010

1011- 1974 2 20.8

4 Taurus 2518 T/4 6*4 150 "WB Tipper Chassis fitted with H series 6 DTI BS II Diesel engine. Make Ashok Leyland


June 24, 2010

1011-1983 15 325.98

5 Taurus 2518 T/4 6*4 150 "WB Tipper Chassis fitted with H series 6 DTI BS II Diesel engine. Make Ashok Leyland


June 24, 2010

1011-1980 15 288.05

6 Comet CT-1613H/1-3607 mm (142") WP Tipper chassis fitted with 'H' Series 6 DTI BS II Diesel engine. Make Ashok Leyland


June 24, 2010

1011-1988 15 204.22

7 Comet CT-1613H/1-3607 mm (142") WP Tipper chassis fitted with 'H' Series 6 DTI BS II Diesel engine.


June 24, 2010

1011-1986 15 172.32

8 Crushing Plant for 200TPH (6 Nos) M/S Deepa Machinery Mfg Private Limited

June 24, 2010

HYD/RPL/10/AVBR

1 145.13

a Primary Jaw crusher (48x36) M/S Deepa Machinery Mfg Private Limited

June 24, 2010

HYD/RPL/10/AVBR

1 49.00

b Grizzly Feeder (6200mm*1500mm) M/S Deepa Machinery Mfg Private Limited

June 24, 2010

HYD/RPL/10/AVBR

1 14.00

c Secondary Crushers M/S Deepa Machinery Mfg Private Limited

June 24, 2010

HYD/RPL/10/AVBR

6 57.00

d Vibro Feeder M/S Deepa Machinery Mfg Private Limited

June 24, 2010

HYD/RPL/10/AVBR

6 9.00

9 Crushing Plant for 100TPH M/S Deepa Machinery Mfg Private Limited

June 24, 2010

HYD/RPL/10/AVBR

1 41.06

a Primary Jaw crusher (36x30) M/S Deepa Machinery Mfg Private Limited

June 24, 2010

HYD/RPL/10/AVBR

1 29.00

______________________________________________________________________________________________

43

b Grizzly Feeder (4450mm*1210mm) M/S Deepa Machinery Mfg Private Limited

June 24, 2010

HYD/RPL/10/AVBR

1 07.50

10 JCB Robot Model 170 MGB Motor and Auto Agencies Private Limited

May 21, 2010

MGB/SSL-170/HYDMVR/10/69

1 14.6

11 JCB VIBROMAX VM 850 Tan drum roller

JCB India Limited

June 25, 2010

JCB/VMT8050/10/MVR/42

1 24.45

12 JCB VIBROMAX VM 115 single drum soil compactor

JCB India Limited

June 25, 2010

JCB/VM115/10/MVR/42

1 22.53

13 JCB JS 140 tracked excavator JCB India Limited

June 25, 2010

HO/JS - 200/HYD/MVR/10/42

1 35.27

14 JCB JS200 HD with long carriage excavator

JCB India Limited

June 25, 2010

HO/JS - 200/HYD/MVR/10/42

1 43.92

TOTAL 1,486.00 All of the above equipments includes service tax, cess and transportation costs. None of the equipment described above, is used or second hand in nature, and we do not propose to purchase any used or second hand equipment. 2. Deposit for leasing of equipment We have currently leased the following equipment from Mahalakshmi Infra Projects (India) Private Limited for a period of 12 months from the date of agreement i.e. June 24, 2010 for a monthly lease rental of Rs. 8,33,333/-. Our Company has already paid a refundable security deposit of Rs. 123 lakhs towards leasing of the following equipment out of share application money brought by our Promoter: Sr. No. Name of Equipment Quantity 1. GJJ- Spartan Tower Crane 45M/6Tonne 2 2. Suspended Platform MCWP 2 3. Escorts Pick & Carry Crane 2 4. JCB 0.32CUM-4DX 5 5. JCB 1.7 CUM- 430Z 2 6. Mahindra Tractor 4T 2 7. Eicher Tipper 8.5 Terra 4 8. Eicher Tipper 25 Terra 2 9. KOEL 70 KVA Generator 1 3. Acquisition of land for parking and maintenance of our equipment

Vide an agreement dated July 7, 2010 entered into between our Company and Mr. Shyam Sunder Daliya our Company has purchased land situated at Survey No. 4750, Shambipur (Village), Qutubullapur (Mandal), Ranga Reddy District, Andhra Pradesh. Our Company has acquired the said land for the purpose of parking and maintenance of our equipment. This facility will provide flexibility to our Company to manage the deployment of the equipment for specific projects. Our Company has already made a payment of Rs. 50 lakhs towards the acquisition of the said land out of the share application money brought in by our Promoter. 4. Corporate Brand Building & Advertisement We have recently ventured into infrastructure, construction and related activities. As such we require to develop our corporate image for the purpose of achieving greater recognization. We aim to achieve the same through various communication and promotional initiatives such as advertisements in print media, hoardings, televisions, organizing events, participation in industry events, public relations and investor relations efforts. The Management is in coordination with various public relation agencies and has received an estimate of Rs. 362.80 lakhs from Media House vide its quotation dated July 5, 2010.

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44

5. ERP Implementation Enterprise resource planning (“ERP systems”) is an integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Our ERP system would be built on a centralized database and utilize a common computing platform. An ERP system would greatly benefit our organization as it would enable us to keep a track on our human resources, materials as well as machinery which would be deployed across the country. Typically, various material and equipment are required for the purpose of completing projects. Similar projects require material and particular equipment at different stages. An ERP system would enable us to monitor the development of our projects and sourcing materials and deploying equipment so as to achieve least downtime and optimum cost efficiency. As per quotation received from Ranklin Solutions Limited dated June 21, 2010 the cost of design, development, testing, production support and enhancement for Employee Portal Application (EPA), Personal Information System (PIS), Commercial Billing Application (CBA) which involves using technologies like Java, J2EE on frontend and Oracle 10g on backend database is Rs. 192.40 lakhs. 6. Setting up of an additional office space In order to facilitate smooth functioning of our business activities as well as timely co-ordination for undertaking of our projects, we plan to set up an additional office space at municipal No. 8-2-293/82/A/732-A/1 on part of plot number 732-A, in the layout of Jubilee Hills Cooperative House Building Society Limited, IVth floor, road number 36, Madhapur Road, Jubilee Hills, Hyderabad. Our Company has entered into a lease agreement with Mr. S. Pulla Reddy, Mr. M Malla Reddy, Mr. M Koti Reddy, Mr. M Krishna Reddy, Mrs. S. Malleswari dated July 7, 2010 for leasing of the property admeasuring 6,635 sq ft., for a period of 5 years effective from July 1, 2010. The monthly rent of the above mentioned property is Rs. 6,63,500/-. We have paid Rs. 18 lakhs out of the share application money brought in by our Promoter as advance for obtaining the said property on lease. The cost of corporate office interior decoration is estimated by Architect Firm M/s At Edge at Rs.161.50 lakhs. The project envisages civil work, architecture and interior decoration which includes the cost of plastering, flooring, ceiling, painting, sanitation, fixed furniture, loose furniture, storage, Electrical works, networking, Computers peripherals & related accessories. 7. General Corporate Purpose We, in accordance with the policies set up by our Board, will retain flexibility in applying the remaining Issue Proceeds, for general corporate purposes, expansion of our operations, additional capital expenditure, meeting exigencies and contingencies of business and other corporate expenses. Our management, in accordance with the policies of our Board, in response to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan from time to time and consequently our funding requirement and deployment of funds may also change.

8. Issue related Expenses The details of the estimated Issue related expenses are as follows:

(Rs. in lakhs) Activity Estimated

expenses

As a % of the total estimated Issue expenses

As a % of the total Issue size

Fees payable to the Lead Manager, Legal Advisors and other fees

25.00 63.70 0.86

Advertising and marketing expenses 5.00 12.74 0.17 Printing & Distribution (including courier and transportation charges)

0.25 0.64 0.09

Others (Registrar’s fees, Listing Charges, SEBI Fees, Taxes etc.)

6.00 15.29 0.21

Misc. Expenses 3.00 7.64 0.10 Total estimated Issue expenses 39.25 100 1.36

In case of a shortfall in the Issue Proceeds of the Issue, our management may explore a range of options including seeking debt from banks / financial institutions / other sources. Our management expects that such alternate arrangements would be available to fund any such shortfall. Our management, in accordance with the policies of our Board, will have flexibility in utilizing the proceeds earmarked for general corporate purposes

______________________________________________________________________________________________

45

The fund requirement and deployment are based on internal management estimates and have not been appraised by any bank or financial institution. These are based on the current status of our business and are subject to change in light of variations in external circumstances or costs, or in our financial condition, business or strategy, as discussed further below. Our management, in response to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan from time to time and consequently our funding requirements and deployment of funds may also change. This may also include rescheduling the proposed utilization of Issue proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilization of Issue Proceeds. Means of Finance

(Rs. in lakhs) Sr. No. Particulars Amount

1. Issue Proceeds 2,880.00 Total 2,880.00 The Issue Proceeds will not be utilized towards financing the working capital requirement and the same will be met through tie-ups with lenders as and when the requirement arises. Appraisal None of the Objects have been appraised by any bank or financial institution or any other independent third party organization. Schedule of Implementation The proceeds of the issue shall be utilized for the objects specified above. As estimated by our Management, the entire proceeds from the rights issue will be utilized in the financial year 2010-2011. Bridge loans We have not raised any bridge loans against the Issue Proceeds. Interim use of funds The management of our Company, in accordance with the policies established by our Board from time to time, will have flexibility in deploying the Issue Proceeds. Pending utilization for the purposes described above, our Company intends to invest the funds in high quality interest bearing liquid instruments including Mutual Funds, deposits with banks, for the necessary duration or for reducing overdrafts. Such investments would be in accordance with investment policies approved by our Board from time to time. Our 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 Our Board shall monitor the utilisation of the Issue Proceeds. 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 disclosed as per the disclosure requirements of our listing agreements with the Stock Exchanges. Our Company shall disclose to the Audit Committee, the uses and application of funds under the heads as specified above, on a quarterly basis as a part of the quarterly declaration of financial results. Further, on an annual basis, our Company shall prepare a statement of funds utilized for purposes other than those stated in the Draft Letter of Offer, if any, and place it before the Audit Committee. Such disclosure shall be made only till such time that the full money raised through the Issue has not been fully spent. This statement shall be certified by the statutory auditors of our Company. The Audit Committee shall make appropriate recommendations to the Board to take up steps in this matter. Interest of Directors or Key Management Personnel in the Objects of the Issue No part of the Issue Proceeds will be paid by us as consideration to our Promoter, Directors, associates, group companies or key management personnel except in the usual course of business.

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BASIS FOR ISSUE PRICE

The issue price has been determined by the Company, in consultation with the Lead Manager, on the basis of market conditions and on the basis of the following quantitative and qualitative factors. The information presented in this section is for fiscal 2007-08, 2008-09 and 2009-10 are derived from the Company’s restated audited summary financial statements, prepared in accordance with Indian GAAP and the Act and restated in accordance with the SEBI Regulations. You should read the following summary with the sections titled “Risk Factors”, “Our Business” and “Financial Statements” on pages ix, 65 and 108 respectively, of the Draft Letter of Offer, to get a more informed view before making an investment decision. The trading price of the equity shares could decline and you may lose all or part of your investments. Qualitative Factors a. Technical Expertise b. Internal Control Systems c. Professionally managed company with an experienced management and a qualified employee base For further details regarding some of the qualitative factors, please refer to Sections titled “Our Business – Competitive Strengths” on page 68 of the Draft Letter of Offer. Quantitative Factors Information presented in this section is derived from our restated audited financial statements. 1. Weighted Average Earnings Per Share (Basic EPS)

Period EPS(Rs.) Weight FY 2007-08 (1.12) 1 FY 2008-09 (0.30) 2 FY 2009-10 (5.31) 2 Weighted Average (2.47) -

2. Price/Earning (P/E) ratio in relation to Issue Price of Rs. 10/

The P/E ratio cannot be determined as the EPS for the period ending March 31, 2010 is negative

Peer Group

Particulars P/E Ratio Industry P/E# Highest (Sunteck Realty Ltd.) 565.5 Lowest (Eldeco Housing & Industries Ltd.) 3.9 Average 27 # Source: Capital Market Volume XXV/09 dated June 28 - July 11, 2010

3. Weighted Average Return On Average Net Worth

Period Return on Net Worth (%)

Weight

FY 2007-08 (128.10) 1 FY 2008-09 (51.08) 2 FY 2009-2010 (112.33 ) 2 Weighted Average (90.98) -

4. The minimum return on increased net worth required to maintain pre-Issue EPS: Not Applicable

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5. Net Asset Value (NAV)

Particulars NAV (Rs.) As on March 31, 2009 0.58As on March 31, 2010 (4.73)Post - Rights Issue (Assuming 100% Subscript ion) 9.88Issue Price 10

6. Comparison with other listed companies

Sales (Rs. in Lakhs)

EPS (Rs.) P/E Return On Net Worth (%)

Book Value Per Share (Rs.)

Face Value (Rs.)

J Kumar Infraprojects Ltd. 73120.0 25.2 8.1 24.1 112.1 10 MBL Infrastructures Ltd. 62890.0 19.5 11.4 31.5 132.4 10 KNR Constructions Ltd. 70870.0 17.9 10.4 17.8 109.2 10

# Source: Capital Market Volume XXV/09 dated June 28 - July 11, 2010 In view of the reasons mentioned above, our Company and the Lead Manager are of the opinion that the Issue price of Rs. 10/- is reasonable and justified.

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STATEMENT OF TAX BENEFITS

To The Board of Directors Remidicherla Infra and Power Limited Remidicherla House CPR Brundavan Flat No.401, near Nectar Gardens Madhapur Hyderabad – 500 081

Dear Sirs,

Statement of Possible Tax Benefits available to the Company and its shareholders

We hereby report that the enclosed statement states the possible tax benefits available to the Company under the Income-tax Act, 1961 amended by Finance Bill 2010, presently in force in India and to the shareholders of the Company under the Income tax Act, 1961, Wealth Tax Act, 1957 and the Gift Tax Act, 1958, presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the statute. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill. The benefits discussed in the enclosed statement 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. We do not express any opinion or provide any assurance as to whether:

i. the Company or its shareholders will continue to obtain these benefits in future; or

ii. the conditions prescribed for availing the benefits have been / would be met with. The contents of the enclosed statement are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. S.KISHORE KUMAR Chartered Accountant Membership No. : 029750 Place: Hyderabad Date: July 8, 2010

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STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO REMIDICHERLA INFRA AND POWER LIMITED (“THE COMPANY”) AND IT’S SHAREHOLDERS

(I) SPECIAL TAX BENEFITS AVAILABLE TO REMIDICHERLA INFRA AND POWER LIMITED AND ITS SHAREHOLDERS

No special tax benefits are available to Remidicherla Infra and Power Limited and its shareholders.

(II) GENERAL TAX BENEFITS AVAILABLE TO REMIDICHERLA INFRA AND POWER LIMITED AND

ITS SHAREHOLDERS

BENEFITS AVAILABLE TO THE COMPANY UNDER THE INCOME TAX ACT, 1961 1. Dividend exempt under Section 10(34) Under Section 10(34) to be read with Section 115(O) of the Act, dividend income (whether interim or final) in the hands of the company as distributed or paid by any other Company on or after April 1, 2004 is completely exempt from tax in the hands of the Company. 2. Exemption under Section 10(35) Under section 10(35) of the Act, the income received by the Company from distribution made by any mutual fund specified under section 10(23D) of the Act in respect of which tax is paid by such mutual fund u/s. 115R of the Act or from the Administration of the specified undertaking or from the specified companies is exempt from tax. 3. Exemption under Section 10(23G) In accordance with and subject to the provisions of section 10(23G) of the Act, the Company will be eligible to claim exemption on any income by way of dividends (other than dividends exempt under section 10(34) of the Act), interest or long term capital gains from investments made by way of shares or long-term finance in specified enterprise, wholly engaged in specified business or projects and which have been approved by the Central Government. 4. Lower Tax Rate under Section 112 on Long Term Capital Gains As per the provisions of Section 112 of the Act, long –term gains that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the provision to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge and education cess). 5. Exemption of Long Term Capital Gain under section 10(38) As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction Tax. However, income by way of long-term capital gain of a company shall be taken into account in computing the book profit and income-tax payable under section 115JB.

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6. Lower Tax Rate under Section 111A on Short Term Capital Gains As per the provisions of section 111A, Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stock exchange or from the sale of units of equity oriented mutual fund shall be subject to tax @ 15 percent provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax. 7. Exemption of Long Term Capital Gain under Section 54EC In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the Company would be entitled to exemption from tax on gains arising from transfer of the long term capital asset (not covered by section 10(36) and section 10(38) if such capital gain is invested in any of the long – term specified assets in the manner prescribed in the said section. Where the long term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the long term specified asset is transferred or converted into money. 8. Preliminary Expenses under Section 35D In accordance with and subject to the provisions of section 35D of the Income tax Act, the company will be entitled to amortize, over a period of five years, all expenditure in connection with the proposed public issue subject to the overall limit specified in the said section. 9. Depreciation under Section 32 In accordance with and subject to the provisions of section 32 of the Income tax Act, the company will be allowed to claim depreciation on specified tangible and intangible assets as per the rates specified. Besides normal depreciation, the company, in terms of section 32(1) (iia), shall be entitled to claim depreciation @ 20 percent of actual cost on new plant and machinery acquired after 31st March, 2005. 10. Deduction of donation under section 80G As per the provisions of section 80G of the Act, deduction will be available in respect of the amounts contributed as donations to various charitable institutions and funds covered under that section subject to fulfillment of conditions specified therein. 11. Deduction of profit from business as specified under Section80IB(11A) Under sub-section 11A of section 80IB of the Act, the company shall be entitled to claim the deduction from profits and gains derived from the business of Processing, Preservation and Packaging of fruits and vegetables or from the integrated business of handling, storage and transportation of food grains to the extent of hundred percent of the profits and gains derived from such undertaking for five assessment years beginning with the initial assessment year and thereafter thirty percent of the profits and gains derived from the operation of such business in a manner that the total period of deduction does not exceed ten consecutive assessment years and subject to fulfillment of the condition that it begins to operate such business on or after the 1st day of April, 2001. 12. MAT Credit under Section 115 JAA (1A) Under Section 115 JAA (1A) of the Act, tax credit shall be allowed of any tax paid (MAT) under Section 115JB of the Act. Credit eligible for carry forward is the difference between MAT paid and the tax computed as per the normal provisions of the Act. Such MAT credit shall not be available for set-off beyond seven years succeeding the year in which the MAT becomes allowable.

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BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS UNDER THE INCOME TAX ACT, 1961 1. Dividend Exempt under Section 10(34) Under Section 10(34) to be read with Section 115O of the Act, dividend (whether interim of final) declared, distributed or paid by the Company on or after April 1, 2004 is completely exempt from tax in the hands of the shareholders of the Company. 2. Lower Tax Rate under Section 112 on Long Term Capital Gains As per the provisions of Section 112 of the Act, long-term gains that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at concessional rate of 10 percent (plus applicable surcharge and education cess). 3. Lower Tax rate under Section 111A on Short Term Capital Gains As per the provisions of section 111A, Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stock exchange or from the sale of units of equity oriented mutual fund shall be subject to tax @ 15 percent provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax. 4. Exemption of Long Term Capital Gain under section 10(38) As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction tax. 5. Exemption of Long Term Capital Gain under Section 54EC In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the shareholders would be entitled to exemption from tax on long term capital gains not covered by sections 10(36) and 10(38) arising on transfer of their shares in the Company if such capital gain is invested in any of the long term specified assets in the manner prescribed in the said section. Where the long term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the specified asset is transferred or converted into money. 6. Exemption under section 54F In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains not covered by sections10(36) and 10(38) on the sale of shares in the Company upon investment of net consideration in purchase/construction of a residential house. If part of net consideration is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax on proportionate basis. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is

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transferred. 7. Deduction of Security Transaction Tax under section 36(1)(xv) Under section 36(1)(xv) of the Act, the amount of Security Transaction Tax paid by an assessee in respect of taxable securities transactions offered to tax as “Profits and gains of Business or Profession” shall be allowable as a deduction against such Business Income. BENEFITS AVAILABLE TO NON-RESIDENT INDIAN SHAREHOLDERS 1. Dividend Exempt under Section 10(34) Under Section 10(34) to be read with Section 115O of the Act, dividend (whether interim or final) declared, distributed or paid by the Company on or after 1st April 2004 is completely exempt from tax in the hands of the shareholders of the Company. 2. Lower Tax Rate under Section 112 on Long Term Capital Gains As per the provisions of Section 112 of the Act, long term gains that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge and education cess). 3. Lower Tax rate under Section 111A on Short Term Capital Gains As per the provisions of section 111A, Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stock exchange or from the sale of units of equity oriented mutual fund shall be subject to tax @ 15 percent provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax. 4. Options available under the Act Where shares have been subscribed to in convertible foreign exchange - Option of taxation under Chapter XII – A of the Act: Non-Resident Indians [as defined in Section 115C (e) of the Act], being shareholders of an Indian Company, have the option of being governed by the provisions of Chapter XII – A of the Act, which interalia entitles them to the following benefits in respect of income from shares of and Indian company acquired, purchased or subscribed to in convertible foreign exchange: i) According to the provisions of section 115D read with Section 115E of the Act and subject to the conditions specified therein, long term capital gains arising on transfer of an Indian company’s shares, will be subject to tax at the rate of 10 percent (plus applicable surcharge and education cess), without indexation benefit. ii) According to the provisions of section 115F of the Act and subject to the conditions specified therein, gains arising on transfer of a long term capital asset being shares in an Indian company shall not be chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period of six months in any specified asset or savings certificates referred to in section 10(4B) of the Act. If part of such net consideration is invested within the prescribed period of six months in any specified asset or savings certificates referred to in Section 10(4B) of the Act then such gains would not be chargeable to tax on a proportionate basis. For this

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purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. Further, if the specified asset or savings certificate in which the investment has been made is transferred within a period of three years from the date of investment, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such specified asset or savings certificate are transferred. iii) As per the provisions of Section 115G of the Act, Non- Resident Indians are not obliged to file a return of income under Section 139(1) of the Act, if their only source of income is income from investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act. iv) Under Section 115H of the Act where the Non-Resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year under Section 139 of the Act to the effect that the provisions of the Chapter XII-A shall continue to apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money. v) As per the provisions of Section 115I of the Act, a Non- Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under Section 139 of the Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act. 5. Exemption of Long Term Capital gain under Section 10(38) As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognized stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such takes place after 1st of October 2004 and such sale is subject to Securities Transaction Tax. 6. Exemption of Long Term Capital gain under Section 54EC In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the shareholders would be entitled to exemption from tax on long term capital gains (not covered by sections 10(36) and 10(38) arising on transfer of their shares in the Company if such capital gain is invested in any of the Long Term specified assets in the manner prescribed in the said section. Where the long-term specified asset is transferred or converted into money at any time within period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the specified asset is transferred or converted into money. 7. Exemption under Section 54F In case of a shareholder being an individual or a Hindu Undivided family, in accordance with and subject to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains (not covered by sections 10(36) and 10(38) on the sale of shares in the Company upon investment of net consideration in purchase / construction of a residential house. If part of net consideration is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax on proportionate basis. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is transferred.

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8. Tax Treaty Benefits As per the provisions of Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the Non-Resident. BENEFITS AVAILABLE TO OTHER NON-RESIDENTS 1. Dividend Exempt under Section 10(34) Under Section 10(34) to be read with Section 1150 of the Act, dividend (whether interim or final) declared, distributed or paid by the Company on or after 1st April 2004 is completely exempt from tax in the hands of the shareholders of the Company. 2. Lower Tax Rate under Section 112 on Long Term Capital Gains As per the provisions of Section 112 of the Act, long-term gains that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the provision to Section 112(1), if the tax on Long term capital gains resulting on transfer of listed securities or units, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent rate of 10 percent (plus applicable surcharge and education cess.) 3. Lower Tax Rate Under Section 111A on Short Term Capital Gains As per the provisions of Section 111A, Short Term Capital gains arising from the transfer of Equity Shares in any company through a recognised stock exchange or from the sale of units of equity oriented mutual fund shall be subject to tax @ 15 percent provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax. 4. Exemption of Long Term Capital Gain under Section 10(38) As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction Tax. 5. Exemption of Long Term Capital Gain Under Section 54EC In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the shareholders would be entitled to exemption from tax on long term capital gains (not covered by sections 10(36) and 10(38) arising on transfer of their shares in the Company if such capital gain is invested in any of the long term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the specified asset is transferred or converted into money. 6. Exemption under Section 54F In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains not covered by sections 10(36) and 10(38) on the sale of shares in the Company upon investment of net consideration is invested of net consideration in purchase / construction of a residential house. If part of net consideration is invested within prescribed period in a residential house, then such gains would not be

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chargeable to tax on proportionate basis. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is transferred. 7. Tax Treaty Benefits As per the provisions of Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the Non – Resident. BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FII’) 1. Dividend Exempt Under Section 10(34) Under Section 10(34) to be read with Section 115O of the Act, dividend (whether interim or final) declared, distributed or paid by the company on or after 1st April 2004 is completely exempt from tax in the hands of the shareholders of the Company. 2. Benefits of taxability of Capital Gain In case of a shareholder being a Foreign Institutional Investor (FII), in accordance with and subject to the conditions and to the extent specified in Section 115AD of the Act, tax on long term capital gain (not covered by sections 10(36) and 10(38) will be 10 percent and on short term capital gain will be 30 percent as increased by surcharge and education cess at an appropriate rate on the tax so computed in either case. However short term capital gains on sale of Equity Shares of a company through a recognized stock exchange or a unit of an equity oriented mutual fund effected on or affect 1st October 2004 and subject to Securities Transaction Tax shall be taxed @ 15 percent as per the provisions of Section 111A. It is to be noted that the benefits of Indexation and foreign currency fluctuation protection as provided by Section 48 of the Act are not available to FII. 3. Exemption of Long Term Capital Gain under Section 10(38) As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st October 2004 and such sale is subject to Securities Transaction Tax. 4. Exemption under Section 54F In case of shareholder being an individual or Hindu undivided Family, in accordance with and subject to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains not covered by sections 10(36) and 10(38) on the sale of shares in the Company upon investment of net consideration in purchase / construction of a residential house. If part of net consideration is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax on proportionate basis. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year which such residential house is transferred. 5. Tax Treaty Benefits As per the provisions of Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the Non-Resident.

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BENEFITS AVAILABLE TO MUTUAL FUNDS In case of a shareholder being a Mutual fund, as per the provisions of Section 10(23D) of the Act, any income of mutual Funds registered under the Securities and Exchange Board of Indian Act, 1992 or Regulations made there under, Mutual Funds set up by public sector banks or public financial institutions and Mutual funds authorised by the Reserve Bank of India would be exempt from Income Tax, subject to the conditions as the Central Government may by notification in the Official Gazette specify in this behalf. BENEFITS AVAILABLE TO VENTURE CAPITAL COMPANIES / FUNDS In case of a shareholder being a Venture Capital Company / Fund, as per the provisions of Section 10(23FB) of the Act, any income of Venture Capital Companies / Funds registered with the Securities and Exchange Board of India, would exempt from Income Tax, subject to the conditions specified. BENEFITS AVAILABLE UNDER THE WEALTH TAX ACT, 1957 Asset as defined under Section 2(EA) of the Wealth Tax Act, 1957 does not include shares in companies and hence, shares are not liable to wealth tax. BENEFITS AVAILABLE UNDER THE GIFT – TAX ACT, 1958 Gift Tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares will not attract gift tax. The above Statement of Possible Direct Tax Benefits Sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of Equity Shares. The statements made above are based on the tax laws in force and as interpreted by the relevant taxation authorities as of date. Investors are advised to consult their tax advisors with respect to the tax consequences of the purchase, ownership and disposal of equity shares.

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SECTION IV – ABOUT US

INDUSTRY OVERVIEW

The information presented in this section has been obtained from publicly available documents from various sources including industry websites and publications and from government estimates like NHAI website, Economic Survey 2007 -2008, 2008- 2009, etc. and management views. Industry websites and publications generally state that the information contained therein has been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe industry, market and government data used in the Draft Letter of Offer is reliable and that website data is as current as practicable, these have not been independently verified. OVERVIEW OF THE INDIAN ECONOMY India is the fifth largest economy in the world, on a PPP basis, after the European Union, the United States, China and Japan, according to the CIA World Factbook. India with a population of over 1.15 billion people, has GDP of approximately Rs.33,393.75 billion in 2008, according to the Reserve Bank of India‘s Handbook of Statistics on the Indian Economy 2008-2009, dated September 15, 2009. The following table presents a comparison of India‘s real GDP growth rate with the real GDP growth rate of certain other countries (in percentages).

Countries 2004 2005 2006 2007 2008 2009 (Estimated)

2010 (Estimated)

Australia 3.8 2.8 2.8 4.0 2.4 0.7 2.0 Brazil 5.7 3.2 4.0 5.7 5.1 (0.7) 3.5 China 10.1 10.4 11.6 13.0 9.0 8.5 9.0 India 7.9 9.2 9.8 9.4 7.3 5.4 6.4 Japan 2.7 1.9 2.0 2.3 (0.7) (5.4) 1.7 Korea South

4.6 4.0 5.2 5.1 2.2 (1.0) 3.6

Malaysia 6.8 5.3 5.8 6.2 4.6 (3.6) 2.5 Russia 7.2 6.4 7.7 8.1 5.6 (7.5) 1.5 Thailand 6.3 4.6 5.2 4.9 2.6 (3.5) 3.7 UK 3.0 2.2 2.9 2.6 0.7 (4.4) 0.9 USA 3.6 3.1 3.7 2.1 0.4 (2.7) 1.5

(Source: IMF World Economic Outlook, October 2009) INFRASTRUCTURE IN INDIA AND PRIVATE PARTICIPATION The fast growth of the economy in recent years has placed increasing stress on physical infrastructure such as electricity, railways, roads, ports, airports, irrigation, and urban and rural water supply and sanitation, all of which already suffer from a substantial deficit from the past in terms of capacities as well as efficiencies in the delivery of critical infrastructure services. The pattern of inclusive growth of the economy projected for the Eleventh Plan, with GDP growth averaging 9% per year can be achieved only if this infrastructure deficit can be overcome and adequate investment takes place to support higher growth and an improved quality of life for both urban and rural communities. According to the Planning Commission, Government of India, inadequate infrastructure constitutes a significant constraint in India’s growth potential and improvement in physical infrastructure has emerged as a high priority area. Increased private participation would be necessary for mobilizing the resources needed to bridge the infrastructure deficit. The Eleventh Five Year Plan (2007-2012) the ("Eleventh Plan"), therefore, recognizes that adequate, cost-

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effective and quality infrastructure is a pre-requisite for sustaining the growth momentum and that investment in physical infrastructure would have to be increased from approximately 5.0 percent of GDP during the Tenth Plan (2002-07) (the "Tenth Plan") to 9.0 percent of GDP by the end of the Eleventh Plan. The investment in infrastructure during the Tenth Plan was Rs. 8,877,940.00 million which constituted 5.07 percent of GDP. This included Rs. 1,752,030.00 million of investment by the private sector. To overcome the infrastructure deficit, the Eleventh Plan projects an investment of Rs. 20,561,500.00 million which would imply an investment of 7.6 percent of GDP during the Eleventh Plan and 9.0 percent of GDP in the terminal year of the Eleventh Plan (2011-12). This includes public sector investment of Rs. 7,656,220.00 million in the Central Government projects and Rs. 6,709,370.00 million in the State Government projects, leaving the remaining Rs. 6,195,910.00 million, to be invested by the private sector. Private capital is thus expected to fund approximately 30 percent of the total investment during the Eleventh Plan, as compared to 20 percent realized during the Tenth Plan. The total investment in infrastructure from 1999-2000 onwards and investment in infrastructure as a percentage of GDP, are provided in the graphs below.

(Source: Private Participation in Infrastructure, Planning Commission Report, June 2009)

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(Source: Development of Infrastructure- Planning Commission) The investment required by the Central and State Governments and the private sector in each of the ten major physical infrastructure sectors for sustaining a growth rate of 9% in GDP over the Eleventh Plan (2007– 08 to 2011–12) and corresponding to the quantitative targets for the Eleventh Plan as presented in box below:

(Source: CSO for 2006-07, and computations of the Planning Commission) A comparative picture of the sector-specific allocations in these two Plan periods is given in Table below. Compared with investment levels achieved in the Tenth Plan period, the expected infrastructure investment in the Eleventh Plan is 2.36 times the amount of Rs 871445 crore or US$ 217.86 billion at constant 2006–07 price. The telecom, transportation (comprising ports and airports), and storage improve their share in the total investment in the Eleventh Plan as compared to their share in the Tenth Plan. Irrigation, electricity and the transportation sectors

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comprising roads and railways are expected to invest more than double the actual absolute investment in the Eleventh Plan, but would register some decline as a proportion in the overall pie. The need for investment in the electricity sector is greater than what has been projected herein below. However, a realistic assessment suggests that even the projections, would pose serious policy and implementation challenges. If these challenges can be overcome in time, actual investments could exceed these projections.

(Source: Annual Plans and other Planning Commission Documents and CSO)

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RURAL INFRASTRUCTURE Improvement in rural infrastructure is crucial for broad-based inclusive growth of the economy and for bridging the rural urban divide. The government has launched in 2005, a special program, Bharat Nirman, for upgradation of rural infrastructure which aims to provide electricity to the remaining 1,25,000 villages and to 23 million households; to connect the remaining 66,802 habitations with all weather roads and construct 1,46,185 km of new rural roads network; to provide drinking water to 55,067 uncovered habitations; to provide irrigation to an additional 10 million hectares; and connect the remaining 66,822 villages with telephones. It is estimated that out of the total projected investment of Rs 14,36,559 crore to be incurred by the Centre and the states in the Eleventh Plan, Rs 4,35,349 crore (or 30.3%) would be spent exclusively towards improvement of rural infrastructure. The distribution across sectors is indicated in Table below:

(Source: Computation of the Planning Commission) INFRASTRUCTURE SECTOR Construction Industry The development of physical infrastructure in the country and, consequently, the construction sector has been in focus during the last decade. The increasing significance of construction activities in the growth of the economy was also evident during the course of implementation of the Tenth Plan with areas such as transportation, irrigation, housing, urban development, and civil aviation having received greater importance. It is well established that the influence of the construction industry spans across several sub-sectors of the economy as well as the infrastructure development, such as industrial and mining infrastructure, highways, roads, ports, railways, airports, power systems, irrigation and agriculture systems, telecommunication systems, hospitals, schools, townships, offices, houses and other buildings; urban infrastructure, including water supply, sewerage, and drainage, and rural infrastructure. Thus, it becomes the basic input for socio-economic development. (Source: www.cidc.in as assessed on 24 June 2010) Construction sector may be broadly classified into the following categories:

• Real estate construction investments (i.e. residential and commercial construction) • Infrastructure construction investments (i.e. roads, urban infrastructure, power, irrigation and railways) • Industrial construction investments (i.e. steel plants, textiles plants, oil pipelines and refineres)

Roads India has the second largest road networks in the world, aggregating to about 33 lac kilometres at present. The country’s road network consists of National Highways, State Highways, Major District Roads, Other District Roads and Village Roads. The road network comprises 200 Expressways 70,548 km of National Highways 1,31,899 km of State Highways, 4,67,763 km of Major District Roads and about 26,50,000 km of Other District and Rural Roads. Out of the

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total length of National Highways, about 32 per cent is single lane/ intermediate lane, about 55 per cent is standard 2-lane and balance 13 per cent is 4-lane width or more. About 65% of freight and 80% passenger traffic is carried by the roads. National Highways constitute only about 2% of the road network but carry about 40% of the total road traffic. Number of vehicles has been growing at an average pace of 10.16% per annum over the last five years. (Source: http://www.nhai.org as assessed on 24 June 2010) The Government of India spends about $4 billion p.a. on road development. The ambitious National Highway Development Project (NHDP) of the Government is at an advanced stage of implementation. Key sub-projects under the NHDP include:

• The Golden Quadrilateral (GQ-5846 km of 4 lane highways) • North-South & East-West Corridors (NSEW-7142 km of 4 lane highways)

Among the different categories of roads, National Highways constitute around 2%, State Highways 4% while 94 per cent of the entire network comprises ODR, MDR and VR. Out of these, PWD Roads are 21%, Urban Roads 7% and the rest of the road length in India is accounted for by the rural roads. While development and maintenance of National Highways is under the purview of the Centre, all other categories of roads come under the purview of the respective States/ UT Governments with total length of about 137,711 km. The Golden Quadrilateral and NSEW projects India has a vast network of national highways that cover the length and breadth of the country. The longest National Highway is NH 7, which goes from Varanasi in Uttar Pradesh to the southernmost tip of India, Kanyakumari in Tamilnadu. It covers a distance of 2,369 kms. One of India's very famous highway projects is the Golden Quadrilateral Highway Project, connecting India's four metropolitan cities, Delhi, Mumbai, Kolkatta and Chennai. The National Highways Development Project (“NHDP”) National Highways Development Project is being implemented in 4 phases I, II ,III & V at present. The present phases under Phase I, II & III envisages improving more than 32,754 km of arterial routes of NH Network to international standards. GOVERNMENT INITIATIVES The government has announced several incentives to attract private sector participation. These include: • Government to bear the cost of the project feasibility study, land for the right of way and way side amenities,

shifting of utilities, environment clearance, cutting of trees, etc. • Foreign Direct Investment up to 100 per cent in road sector. • Provision of subsidy up to 40 per cent of project cost to make projects viable. The quantum of subsidy to be decided

on a case-to-case basis. • 100 per cent tax exemption in any consecutive 10 years out of 20 years after commissioning of the project. • Duty free import of high capacity and modern road construction equipments. • Declaration of the road sector as an industry. • Easier external commercial borrowing norms. • Right to retain Toll • The government has also announced an increase in the overseas borrowing amount of infrastructure sectors, to US$

500 million from US$ 100 million. • In order to tide over the shortage of funds, the road transport and highways ministry has proposed priority sector

status for road development, allowing private highway developers more funds from banks. • In Budget 2010-11, the allocation for road transport has been increased by over 13 per cent from US$ 3.8 billion to

US$ 4.3 billion.

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• Moreover as per the Economic Survey, the Ministry of Road Transport and Highways, with a view to expediting the progress of the NHDP, has set a target of completion of 20 km of national highways per day, which translates to 35,000 km at the rate of 7,000 km per year during the next five years (2009-14). (Source: India Brand Equity Foundation, www.ibef.org, accessed on June 24 2010)

Andhra Pradesh Road Development Corporation (APRDC) The AP Road Development Corporation was established in the year 1998 with broad motive of "Development and Maintenance of Roads in the State of Andhra Pradesh and other allied and incidental activities there to" under the above designated Road Development Corporation.

STATE ROAD NETWORK The Andhra Pradesh Roads & Buildings Department is maintaining 68,286 kms of roads comprising National Highways, State Highways, Major District Roads and Rural roads. The details of State Highways, Major District Roads and Rural roads are as under:

Sr. No. TYPE Length in Kms. 1 State Highways 10,231.00 2 Major District Roads 32,222.00 3 Rural Roads 21,186.00 5 National Highways 4,647.00 Total Road Length of R & B 68,286.00 6 Rural, Local bodies & Project Roads 1,20,282.00 Grand Total Road length in the State 1,88,568.00

Road Density: 0.69 Kms / Sq. Kms : 247.43 Kms / Lakh Population

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ROAD STATISTICS - CLASSIFICATION WISE-DISTRICTWISE In kms NAME OF DISTRICT

National Highways

State Highways

Major District Roads

Rural Roads Total

Srikakulam 173 136 862 762 1,933 Vizianagaram 122 122 852 781 1,877 Visakhapatnam 134 340 1172 658 2,304 East Godavri 262 730 1157 1471 3,620 West Godavari 196 459 1353 1100 3,109 Krishna 420 279 1861 730 3,290 Guntur 148 645 1960 769 3,522 Prakasam 174 703 1597 962 3,436 Nellore 185 905 1775 803 3,667 Cuddapah 135 791 1270 2612 4,808 Chittoor 524 295 2422 1516 4,758 Kurnool 230 789 1938 830 3,786 Anantapur 352 742 1615 843 3,553 Mahabubnagar 172 595 1356 1243 3,365 Nalgonda 214 367 2092 968 3,641 Hyderabad 37 20 152 0 208 Ranga Reddy 110 260 1164 525 2,059 Medak 148 510 1053 932 2,643 Nizamabad 169 247 823 890 2,128 Warangal 154 160 1638 547 2,499 Khammam 244 441 1428 1005 3,117 Karimnagar 80 355 1776 600 2,810 Adilabad 266 340 907 638 2,151 TOTAL 4647 10231 32222 21186 68,286 (Source: www.aproads.com as assessed on June 29, 2010)

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OUR BUSINESS

Our Evolution Our Company was incorporated with the main object to carry on the business of leasing and hire purchase. With a view to pursue business in financial services, primarily leasing and hire purchase, our Company made its maiden public issue in the year 1983 and the equity shares of our Company got listed on the Bombay Stock Exchange on March 12, 1984. Our Company is not a non banking finance company (NBFC) and is not registered with the Reserve Bank of India (RBI). Also it is not registered with SEBI in any capacity. In March 2001, the first promoters of our Company sold off their controlling interest to Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan. Further, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan took over the controlling interest in the share capital and management of our Company for the benefits of listing status, easier finance raising, etc. and with the intent to diversify the activities of our Company into the application software such as accounting, inventory, order management, manufacturing, CRM etc. In January 2009, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan sold their controlling interest in our Company to 3A Capital Services Limited and Mr. Rajan Shah. Further, 3A Capital Services Limited and Mr. Rajan Shah made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Rajan Shah, promoter director of 3A Capital Services Limited, acquired the controlling interest in the share capital and management of our Company with the intent of expanding its activities, business into financing, investment and trading of shares and securities etc. Thereafter vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited and Mr. Rajan Shah, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. M. Srinivasa Reddy acquired the controlling interest in the share capital and management of our Company as he proposes to diversify the business activities of our Company in the field of power, infrastructure, mining and other related / unrelated areas depending upon the market conditions and available opportunities. Mr. Reddy is a graduate in Mechanical Engineering from Nagarjuna University. Post graduation he started marketing / distribution of FMCG products whilst sourcing them from various manufacturers. Having established a distribution network, Mr. Reddy started a manufacturing plant with hygienic facilities. With a keen sense of entrepreneurship, he is the driving force behind the success of Farmax India Limited and the implementation of the projects envisaged by our Company. Business Overview We have recently ventured into infrastructure, construction and related activities. The market for the Company’s service i.e. construction and infrastructure development is directly linked with the economic development in the country, as construction is the key step for any development. We are currently providing our services to various private companies that can be later extended to Governmental as well as Public Private Partnership projects. Our projects currently extend to 3 states in India that are focused on the following areas: • Land Development • Construction and Civil Work • Roads

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Major Work Order Received by the Company


Value (Rs.)

Date of allotment



Andhra Pradesh

Land Development

15,01,50,000/- 01/06/2010 1/7/2010 18 months





21,72,00,000/- 09/06/2010 11/06/2010 12 months

TOTAL 51,73,50,000/-

• Roads India possesses the second largest road network in the world across approximately 3.3 million km, creating a significant opportunity in the area of road construction. When a road is built, the surface is dug-out down to the designed depth of the intended road. Preparation is carried out on the ground now exposed below (such as compaction). The road itself will then be built up above, usually consisting of four layers: -

-------------------------------------- Surface Course

-------------------------------------- Binder Course

-------------------------------------- Base

-------------------------------------- Sub - Base

-------------------------------------- Capping

- - - - - - - - - - - - - - - - Sub - Grade

Flexible Road

Structure

The sub-grade is the ground below the road layers which is exposed once the ground has been dug out ready to build the road. The top level of this is termed the formation. The capping is a layer added above the sub-grade to protect it in new constructions. In this case, the top layer of the capping will constitute the formation. The four (typically) layers of the road above are termed (bottom to top) sub-base, base, binder course and surface course.

The Sub-base The sub-base is laid as soon as possible after final stripping to formation level, to prevent damage from rain or sun baking which could cause surface cracks. The fact that this is required when roads are constructed, emphasizes the importance of backfilling excavations quickly and properly and preventing ingress of moisture. The most commonly used material for use in sub-bases is termed Type 1. This is an unbound material made from crushed rock, crushed slag, crushed concrete, recycled aggregates or well burnt non-plastic shale. It contains particles of various sizes, the percentage of each size being within a defined range. Up to 10% may be natural sand. The predefined and calculated range of material sizes contained means that once compacted, it will resist further movement within its structure. In other words, it tends not to sink with time (though it will sink if not compacted properly when laid). Other materials used for the construction of sub-bases include bituminous-bound materials and concrete and cement-bound materials, including wet-lean concrete.

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Sub-base and Base materials Again, Type 1 is most commonly used. Other materials include Type 2 and Type 3. Slag bound material is known as Wet Mix. It is a plant manufactured granular aggregate. It must be laid and compacted quickly, as this must take place within 6 hours of the GBS and activator components. Various other materials are less commonly used. All materials on arrival from the plant must be protected from the weather, as drying or wetting changes the composition. They must be spread evenly. They are laid in layers of 110mm - 225mm compacted thickness, the thickness of the layers being gauged by various means including pegs and lines, sight rails and a guide wire. In initial build and reinstatement, the thickness of the layers depends on the compaction plant being used. Bituminous base materials are either dense base macadam or rolled asphalt. Various concrete and cement - bound materials are used, the specifications for these being different to those applying for sub-base materials. We have received an order worth Rs. 2,172 lakhs from Sanjeevan Enterprises for the supply of GSB and wet mix used in construction of roads. We have, recently started the work and have deployed equipment and labour towards this.

• Construction and Civil Work We are developing skill set in providing construction services for a diverse range of infrastructure projects. We believe that these would continue to be a significant growth driver for us. We also, provide engineering and construction services for civil work projects. We have received orders aggregating Rs. 1,500.00 lakhs from Trinethra Infra Ventures Limited for civil work and construction of apartments at Bhubaneshwar.

• Land Development We alter the landscape in any number of ways such as changing landforms from a natural or semi-natural state for a purpose such as agriculture or housing. We have received work order for earth excavation worth Rs. 1,501.50 lakhs from Trinethra Infra Ventures Limited situated at Pendurth, Visakhapatnam. We have also received an order from AMR Construction worth Rs. 1,346.34 lakhs for land development of agricultural land. The portfolio of land development project includes civil works like earth excavation, leveling and other related activities. We have, recently started the work and have deployed equipment and labour towards this. The various stages involved in project management are detailed below:- STAGE I Receipt of contract • Expression of interest - called for by the project owner • Site visit • Post-qualification/ Technical documentation • Award of the contract • Signing of the contract

STAGE II Project Execution • Preparing the Project Cost and Analysis for execution, detailed execution plan, detailed resource plan and

expenditure plan • Kick-off meetings

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• Mobilization of resources • Purchase of materials required in the project • Execution of the project as per execution plan STAGE III Completion of Project • Implement all project completion activities to the satisfaction of the client. • Receipt of final bill • Handing over the site • Implementing Defect Liability • Receive the final money The process in construction starts from the stage of application for contract and ends at the completion of project. Once the Company receives the contract from the prospective client, a survey is conducted at the proposed site by a team of engineers, as regards the availability of basic amenities near the site, availability of labour, distance from the sources of raw material and other related factors. On the basis of the survey and keeping in view factors such as site conditions, time schedule and other terms and conditions of the contract, the value of the contract is estimated and tendering is done. Once the contract is awarded to the Company, a project team is constituted to execute each project as per the terms and conditions of the contract. The relevant drawings other details of the project are procured and based on the requirements, the labourer are appointed, raw materials are purchased, labour is deployed and necessary arrangements are made for machines, power and water. The actual construction process begins with soil testing and includes land development, road, development, masonry, concrete reinforcing, mixer operations, plumbing, plaster work, finishing etc. Each stage of construction activity is closely monitored for quality and timely execution of work. Our supervisors oversee and ensure the quality of the work done. The work done by the Company is duly certified by the clients and interim payments are released to the Company on that basis. After completion of the entire project, the bills are settled. Our Competitive Strengths We believe that our competitive strengths are as follows: Contracts in hand Vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited and Mr. Rajan Shah, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. M. Srinivasa Reddy acquired the controlling interest in the share capital and management of our Company as he proposes to diversify the business activities of our Company in the field of power, infrastructure, mining and other related / unrelated areas depending upon the market conditions and available opportunities. As on June 30, 2010 we have order book of Rs. 5,173.50 lakhs in infrastructure, construction and related activities. Proven track record of Promoter Our Promoter Mr. M. Srinivasa Reddy, is a Mechanical Engineer. Mr. M. Srinivasa Reddy is a Mechanical Engineer by qualification. Post graduation, Mr. Reddy began his career by marketing / distributing FMCG products sourced from various manufacturers. Making the most of his knowledge of the various markets and the experience gained while setting up the marketing network across different areas he conceived the idea of starting a FMCG manufacturing plant and promoted Farmax India Limited which is listed on Indian Stock Exchange. With a keen sense of entrepreneurship, he is the driving force behind the successful implementation of Farmax India Limited. As the company grew in size, his

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knowledge and experience helped to develop his own network. Capitalising on this, as well as the emerging opportunities in infrastructure, construction and related activities, he is now venturing into them through our Company Professionally managed company with an experienced management and a qualified employee base Our Company has a balanced mix of youth and experience, comprising of a strong and young management team coupled with experienced seniors that provides a blend of old school principles as well as young and fresh ideas. We have a qualified and motivated workforce consisting of managers, engineer, technical staff and non-technical staff. The skill sets of our employees give us the flexibility to adapt to the needs of our clients and the technical requirements of the various projects that we undertake. We are dedicated to the professional development of our employees and continue to invest in them to ensure that they have the necessary skills. Our management team is well qualified and experienced and is responsible for the growth in our business operations. Business Strategy To pursue continuous marketing & corporate brand building We plan to make ourselves visible to a large audience that will enable us to get more contracts as well as bid for larger contracts. We intend to position ourselves in the market through communication and promotional initiatives such as advertisements in print media, hoardings, televisions, organizing events, participation in industry events, public relations and investor relations efforts. For the said purpose we propose to spend Rs. 362.80 lakhs for further details please refer to the chapter titled “Objects of the Issue” on page 41 of the Draft Letter of Offer. Continue to enhance our project execution capabilities We intend to focus on performance and project execution in order to maximize client satisfaction and margins. We will leverage technologies, designs and project management tools to increase productivity and maximize asset utilization in capital intensive activities. We will optimize operating and overhead costs to maximize our operating margins. Our ability to effectively manage projects will be crucial to our continued success as a recognised infrastructure company. We believe that we are able to distinguish ourselves from our competitors because of our management strength, construction, operation and maintenance capabilities. We intend to continuously strengthen our execution capabilities by adding to our existing pool of engineers, attracting new graduates, and facilitating continuous learning. Focus on BOT Contracts The Company at present has not executed any BOT project. The Company intends to focus on executing different BOT projects. Most of BOT contracts are obtained through a competitive bidding process. In selecting contractors for a major project, clients generally limit the tenders to the contractors who are pre-qualified based on several criteria including experience, technological capacity and performance, reputation of quality, financial strength, net worth, bonding capacity and size of previous contracts executed and competitive price/bid. The Company is improving on its pre-qualification criteria to enable it to bid for BOT projects. Improve the execution capabilities The Company aims to improve its execution capabilities to execute larger number of projects at a time. With this view, the Company is constantly strengthening its capabilities to enable it to execute various projects at a time. To operate into diversified sectors The Company aims to operate into diversified sectors such as townships, offices, houses and other buildings, urban infrastructure, highways, roads, power systems, etc. which will mitigate business risk in case of slowdown in any one particular field in the future.

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Expanding geographical reach Currently our projects extend to three states in India. We believe that, the fastest way to accelerate profitable growth is by expanding into new geographies. Hence, we plan to foray into the under developed regions in the country because of the relatively high population growth and unaddressed market needs. Business Development Keeping in mind the objects of the company prospective contracts are identified by our top management by looking at notices inviting tenders published in newspapers, journals, websites etc. or in case of limited tenders by way of communication from the clients. Our business development team keeps a track of the prospective projects and the prospective clients by going through the notices inviting tenders, meeting the clients etc. Sometimes services of specialized consultants are taken to explore and identify the projects. Competition We face a lot of competition from both domestic as well as international players. While service quality, technical ability, reputation, experience, equipment, finance, health and safety records and the availability of skilled personnel are key factors in client decisions among competitors, price is often the deciding factor in most tender awards. Our key competitors are J. Kumar Infra Projects Limited, KNR Constructions Limited, MSK Projects India Limited, PBA Infrastructure Limited, MBL Infrastructure Limited to name a few. Some of our competitors may have significantly greater resources than those available to us. For details on risks relating to our competition, see the section entitled “Risk Factors” on page ix of the Draft Letter of Offer. Equipment The Company is in the business of infrastructure, construction and other related activities, and requires investment in capital equipments on a regular basis. The Company currently has taken a number of equipments on lease. The Company intends to purchase capital equipments to the tune of Rs. 1486.00 lakhs, as this would substantially lower the revenue expenditure and enable the company to use the equipments optimally. The Company would also be able to claim tax benefits. The equipment proposed to be acquired are ready to use and can be put in operation at any of the working sites of the company after the procurement. Acquisition of the equipment would not only reduce the cash outflow in the form of hire charges but also enable the company to bid for larger capital equipment intensive contracts. In case of long term contracts the use of our own equipment is a more viable option as hired equipments have a higher occurrence of breakdown due to poor maintenance by its lessors. Joint Venture Arrangements The Company has not entered into any joint venture as on the date of the Draft Letter of Offer. Infrastructure Property Our Company operates from the following premises:

I. Details of freehold properties:

1. Our Company utilizes the property for commercial purposes and more particularly for the purpose of parking and maintenance of our equipment:

Particulars Description Nature Agreement of Sale dated July 7, 2010

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Consideration Rs. 2,70,00,000/- Stamp Duty Rs. 100/- Vendor Mr. Shyam Sunder Daliya Description All that dry agricultural land in plot bearing numbers 35, 57, 58, 63, 64, 65, 66, 80, 81 and 82,

total admeasuring 2,928 square yards or equivalent to 2,449 square metres, covered by survey numbers 47, 48, 52 and 53, covered under GHMC limits, KVR lay out, situated at Shambupur village, Bowrampet Gram Panchayat, Quthbullapur Mandal, R.R. District, Andhra Pradesh.

II. Leasehold properties / Properties on Leave and license:

1. Our Company utilizes the property for commercial purposes and more particularly as our Company’s Registered office:

Particulars Description Nature Lease Deed dated March 1, 2010 Period The agreement is for a period from March 1, 2010 till February 28, 2015 i.e. (5 years) Rent Monthly rent of Rs. 18,000/- and security deposit of Rs. 36,000/-. Stamp Duty and Registration Charges

Rs. 50/-

Lessor Mr. M. Malla Reddy Description Plot No. 401, CPR Brindavan, Opp. Necter Gardens, Madhapur, Hyderabad, Andhra Pradesh Terms and Termination

1. In case the Licensee defaults in payment of monthly compensation or commits breach of any terms of the agreement, then the Licensor shall terminate this agreement by giving the Licensee one month written notice for the same.

2. Licensee can terminate this agreement by giving the Licensor one month’s written notice. 3. Licensor shall refund the security deposit to the Licensee on termination or early termination

of the agreement and simultaneously the Licensee shall handover peaceful and vacant possession of the premises to the Licensor.

4. The licensee may sub-let or assign the premises or transfer the benefits of the agreement to any other person or party.

2. Our Company utilizes the property for commercial purposes and more particularly as an additional office space: Particulars Description Nature Lease Deed dated July 7, 2010 Period The agreement is for a period from July 1, 2010 till June 30, 2015 i.e. (5 years) Rent Monthly rent of Rs. 6,63,500/- and security deposit of Rs. 80,00,000/-. Stamp Duty and Registration Charges

Rs. 100/-

Lessor Mr. S. Pulla Reddy, Mr. M. Malla Reddy, Mr. M. Koti Reddy, Mr. M Krishna Reddy and Ms. S. Malleswari

Description Municipal No. 8-2-293/82/A/732-A/1 on part of plot number 732-A, in the layout of Jubilee Hills Cooperative House Building Society Limited, IVth floor, road number 36, Madhapur Road, Jubilee Hills, Hyderabad, Andhra Pradesh

Terms and Termination

1. In case the Licensee defaults in payment of monthly compensation or commits breach of any terms of the agreement, then the Licensor shall terminate this agreement by giving the Licensee one month written notice for the same.

2. Licensee can terminate this agreement by giving the Licensor one month’s written notice. 3. Licensor shall refund the security deposit to the Licensee on termination or early termination

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of the agreement and simultaneously the Licensee shall handover peaceful and vacant possession of the premises to the Licensor.

4. The licensee may sub-let or assign the premises or transfer the benefits of the agreement to any other person or party.

Raw materials / Consumables / Bought outs The major raw materials are stone aggregates, cement, steel, diesel etc. Our Company will follow a centralized purchase system for raw material through its purchase department. As stone aggregate is a critical raw material having captive capability ensures availability of this bulk raw material at a cheaper cost. We have already placed orders for installation of crushers to produce stone aggregates. Producing aggregates in-house enables us to control and ensure the quality and timely delivery required for the projects. For some of the projects, our Company is required to purchase specific equipments and components, which are key inputs for project implementation. These are called bought outs. This may include but not be limited to metal beam crash barrier, gabions, road marking, sign boards, gantry mounted sign boards etc. Majority of the bought outs are technology specific. As the project defines the list of bought outs which may vary from project to project, the above mentioned items do not form a comprehensive list of bought outs. Utilities Water Water requirement is largely project specific and is procured locally by way of establishing bore wells. The Company will hire water tankers to transport the same to the projects sites. Electricity Power is required at site for running various machinery and equipment and also for lighting. Generally power requirements are met at site through normal distribution channels such as State Electricity Boards or are generated through DG sets. Human Resource We believe that our employees are the key to the success of our business. We focus on hiring and retaining employees and workers who have prior experience in the construction industry. We view this process as a necessary tool to maximize the performance of our employees. Our senior management team consists of experienced individuals with diverse skills in manufacturing, engineering, international business and finance. As of July 9, 2010 our Company’s work force consists of 17 permanent employees. Apart from above our Company also avails the services of architects, structural engineers, electrical consultants, plumbing consultants, landscaping designers, etc. on contract basis. Our permanent employees include personnel engaged in our management, administration, planning, purchase, finance, sales and marketing, projects, and legal functions. The breakup of our employees is as set forth below: Name of Department No of Employees Key Managerial Personnel 8 Other Employees 9 Total 17

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Our contractual workforce consists of drivers, housekeeping personnel and skilled, unskilled and semi-skilled workers. Our employees are not represented by unions and they do not have collective bargaining agreements. We also hire local labour on a daily wage basis. Such labour is not hired pursuant to any contract or understanding. Health, Safety and Environment Protection The company recognizes and takes care of its corporate responsibility for safety and environment protection. A few measures undertaken are:-

• Promotion and development of consciousness for safety and environment protection among all personnel. • Implementation of safety and Environment protection system through regular training and compliance test. • Organizing meetings and seminars • Taking various safety and Environment protection measures

Necessary safety provisions are taken by us such as warning signs, providing of safety helmets, safety boots, safety equipments, fire fighting equipments, etc. The work is mainly mechanized and there is no involvement of child labour.

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KEY INDUSTRY REGULATIONS AND POLICIES

Our Company is engaged in the business of infrastructure development. Our projects require, at various stages, the sanction of the concerned authorities under the relevant state legislation and local bye-laws. The following is an overview of the important laws and regulations which are relevant to our business. The regulations set out below are not exhaustive, and are only intended to provide general information to Bidders and is neither designed nor intended to be a substitute for professional legal advice. Taxation statutes such as the Income Tax Act, 1961, Central Sales Tax Act, 1956 and applicable local sales tax statutes, labour regulations such as the Employees’ State Insurance Act, 1948 and the Employees’ Provident Fund and Miscellaneous Act, 1952, and other miscellaneous regulations and statutes such as the Trade Marks Act, 1999 apply to us as they do to any other Indian company. The statements below are based on the current provisions of Indian law, and the judicial and administrative interpretations thereof, which are subject to change or modification by subsequent legislative, regulatory, administrative or judicial decisions. For details of government approvals obtained by us, see the section titled “Government and Statutory Approvals” on page 133 of the Draft Letter of Offer. LAWS RELATING TO LAND ACQUISITION Land Acquisition Act, 1894 (the “LA Act”) The GoI and the state governments are empowered to acquire and take possession of any property for public purpose, however, the courts in India have, through numerous decisions stipulated that any property acquired by the government must satisfy the due process of law. The key legislation relating to the acquisition of property is the LA Act. Under the provisions of the LA Act, land in any locality can be acquired compulsorily by the government whenever it appears to the government that it is needed or is likely to be needed for any public purpose or for use by a corporate body. Under the LA Act, the term “public purpose” has been defined to include, among other things:

• the provision of village sites, or the extension, planned development or improvement of existing village sites; • the provision of land for town or rural planning; • the provision of land for its planned development from public funds in pursuance of any scheme or policy of

government and subsequent disposal thereof in whole or in part by lease, assignment or outright sale with the object of securing further development as planned;

• the provision of land for any other scheme of development sponsored by government, or, with the prior approval of the appropriate government, by a local authority; and

• the provision of any premises or building for locating a public office, but does not include acquisition of land for companies.

The LA Act lays down the procedures which are required to be compulsorily followed by the GoI or any of the state governments, during the process of acquisition of land under the LA Act. The procedure for acquisition, as mentioned in the LA Act, can be summarised as follows:

• identification of land; • notification of land; • declaration of land; • acquisition of land; and • payment and ownership of land.

Any person having an interest in the land being acquired by the Government has the right to object and the right to receive compensation. The value of compensation for the property acquired depends on several factors, which, among other things, include the market value of the land and damage sustained by the person in terms of loss of profits. Such a person has the right to approach the courts. However, the land owner can raise objections in respect of land acquisition

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in relation to the amount of compensation. The land owner cannot challenge the acquisition of land under the LA Act and will have to explore other options once the declaration under the LA Act is notified in the Official Gazette. Urban Land (Ceiling and Regulation) Act, 1976 (the “ULCA”) The ULCA prescribes the limits to urban areas that can be acquired by a single entity. The ULCA allows the government to take over a person’s property and fixes ceilings on vacant and urban land. Under the ULCA, excess vacant land is required to be surrendered to a competent authority for a minimum level of compensation. Alternatively, the competent authority has been empowered to allow the land to be developed for permitted purposes. Even though the ULCA has been repealed, it remains in force in certain States like Haryana, Punjab, Uttar Pradesh, Gujarat, Karnataka, Madhya Pradesh, Rajasthan, Orissa and the Union Territories. LAWS REGULATING TRANSFER OF PROPERTY Transfer of Property Act, 1882 (the “TP Act”) The TP Act details the general principles relating to transfer of property, including among other things, identifying categories of property that are capable of being transferred, the persons competent to transfer property, the validity of restrictions and conditions imposed on the transfer and the creation of contingent and vested interest in the property. A person who has invested in immovable property or has any share or interest in the property is presumed to have notice of the title of any other person in residence. The TP Act recognizes, among other things, the following forms in which an interest in an immoveable property may be transferred:

• Sale: the transfer of ownership in property for a price paid or promised to be paid. • Mortgage: the transfer of an interest in property for the purpose of securing the payment of a loan, existing or

future debt, or performance of an engagement which gives rise to a pecuniary liability. The TP Act recognizes several forms of mortgages over a property.

• Charges: transactions including the creation of security over property for payment of money to another which are not classifiable as a mortgage. Charges can be created either by an operation of law, e.g., decree of the court attaching to specified immoveable property or by an act of the parties.

• Leases: the transfer of a right to enjoy property for consideration paid or rendered periodically or on specified occasions.

In addition to the above, the owner of property is entitled to enjoy or transfer the right to use or derive benefit from that property (the “Usufruct”). A lessee of property may also enjoy the benefits arising out of land. The owner of immoveable property may also create a right over the Usufruct of that property by creation of a usufructuary mortgage. Further, it may be noted that with regards to the transfer of any interest in a property, the transferor transfers such interest, including any incidents, in the property, which he is capable of passing and under law, he cannot transfer a better title than he himself possesses. In India, subject to necessary documentation, the title to the structure attached to the immoveable property can be conveyed separately from the title to the underlying immoveable property. Co-Ownership and Joint Ownership If a co-owner’s share in the property is ascertainable, it would be termed as co-ownership, in the absence of which, it will be termed as joint ownership. Further, the law also recognizes joint possession by lessors. The TP Act recognizes co-ownership and joint ownership of property. One of the co-owners of a property may transfer its interest in the property and the transferee in such case acquires the transferor’s right to joint possession or other common or part enjoyment of the property. The transferee in such cases also acquires the right to enforce the partition of the property. Leasehold Rights

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As noted above, a lease creates a tenancy right in favour of the lessee to enjoy property subject to a lease. The term of the lease and the mode of termination of the lease can be determined by the parties. Under the lease of a property, the lessee has a right of enjoyment of the property without interruption, provided that the lessee continues to pay the rent reserved by the lease agreement and performs other terms and conditions binding on the lessee. Sub-leases or transfer of the interests held by a lessee to another person is usually regulated by the terms of the head lease. Further, the TP Act stipulates that a lessee shall not erect any permanent structures on leased property without the consent of the lessor, except where such fixture is for an agricultural purpose. However, the TP Act does not prohibit the assignment of lease agreements, though this may be restricted by the terms of the lease. Indian Easements Act, 1882 (the “Easements Act”) The law relating to easements and licences in property is governed by the Easements Act. The right of easement has been defined under the Easements Act to mean a right which the owner or occupier of any land possesses over the land of another for beneficial enjoyment of his land. Such right may allow the owner of the land to do and continue to do something or to prevent and continue to prevent something being done, in or upon any parcel of land which is not his own. Easementary rights may be acquired or created by (a) an express grant; or (b) a grant or reservation implied from a certain transfer of property; or (c) by prescription, on account of long use, for a period of twenty years without interruption; or (d) local custom. The Registration Act, 1908 (the “Registration Act”) The Registration Act details the formalities for registering an instrument. Section 17 of the Registration Act identifies documents for which registration is compulsory and includes, inter alia, any non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish, whether in the present or in future, any right, title or interest, whether vested or contingent, in immovable property of the value of Rs. 100 or more, and a lease of immovable property for any term exceeding one year or reserving a yearly rent. The Registration Act also stipulates the time for registration, the place for registration and the persons who may present documents for registration. Any document which is required to be compulsorily registered but is not registered will not affect the subject property, nor be received as evidence of any transaction affecting such property (except as evidence of a contract in a suit for specific performance or as evidence of part performance of a contract under the TP Act or as evidence of any collateral transaction not required to be effected by registered instrument), unless it has been registered. The Indian Stamp Act, 1899 (the “Stamp Act”) Stamp duty is payable on all instruments/ documents evidencing a transfer or creation or extinguishment of any right, title or interest in immoveable property. The Stamp Act provides for the imposition of stamp duty at the specified rates on instruments listed in Schedule I of the Stamp Act. However, under the Constitution of India, the states are also empowered to prescribe or alter the stamp duty payable on such documents executed within the state. Instruments chargeable to duty under the Stamp Act but which have not been duly stamped, are incapable of being admitted in court as evidence of the transaction contained therein. The Stamp Act also provides for impounding of instruments by certain specified authorities and bodies and imposition of penalties, for instruments which are not sufficiently stamped or not stamped at all. Instruments which have not been properly stamped instruments can be validated by paying a penalty of up to 10 times of the total duty payable on such instruments.

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LAWS RELATING TO EMPLOYMENT The employment of construction workers is regulated by a wide variety of generally applicable labour laws, including the Contract Labour (Regulation and Abolition) Act, 1970, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, the Payment of Wages Act, 1936, the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, the Factories Act, 1948, the Employees’ State Insurance Act, 1948, the Employees’ Provident Funds Miscellaneous Provisions Act, 1952, the Payment of Gratuity Act, 1972 and the various Shops and Commercial Establishments Acts. The Minimum Wages Act, 1948 State governments may stipulate the minimum wages applicable to a particular industry. The minimum wages may consist of a basic rate of wages and a special allowance, or a basic rate of wages and the cash value of the concessions in respect of supplies of essential commodities, or an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any. Workmen are required to be paid for overtime at overtime rates stipulated by the appropriate government. Contravention of the provisions of this legislation may result in imprisonment for a term of up to six months or a fine up to Rs. 500 or both. The Contract Labour (Regulation and Abolition) Act, 1970 (the “CLRA”) The CLRA requires establishments that employ or have employed on any day in the previous 12 months, 20 or more workmen as contract labour to be registered and prescribes certain obligations with respect to the welfare and health of contract labour. The CLRA places an obligation on the principal employer of an establishment to which the CLRA applies to make an application for registration of the establishment. In the absence of registration, contract labour cannot be employed in the establishment. Likewise, every contractor to whom the CLRA applies is required to obtain a licence and not to undertake or execute any work through contract labour except under and in accordance with the licence issued. To ensure the welfare and health of contract labour, the CLRA imposes certain obligations on the contractor including the establishment of canteens, rest rooms, washing facilities, first aid facilities, provision of drinking water and payment of wages. In the event that the contractor fails to provide these amenities, the principal employer is under an obligation to provide these facilities within a prescribed time period. A person in contravention of the provisions of the CLRA may be punished with a fine or imprisonment, or both. The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (the “Construction Workers Act”) The Construction Workers Act provides for the establishment of ‘Boards’ at the state level to regulate the administration of the Construction Workers Act. All enterprises involved in construction are required to be registered within 60 days from the commencement of the construction works. The Construction Workers Act also provides for regulation of employment and conditions of service of building and other construction workers including safety, health and welfare measures in every establishment which employs or employed during the preceding year, 10 or more workers in building or other construction work. However, it does not apply in respect of residential houses constructed for one’s own purpose at a cost of less than Rs. One million and in respect of other activities to which the provisions of the Factories Act, 1948 and the Mines Act, 1952 apply. Every employer must give notice of commencement of building or other construction work within 60 days from the commencement of the construction works.

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Comprehensive health and safety measures for construction workers have been provided through the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Central Rules, 1998. The Construction Workers Act provides for constitution of safety committees in every establishment employing 500 or more workers with equal representation from workers and employers in addition to appointment of safety officers qualified in the field. Any violation of the provisions for safety measures is punishable with a fine or imprisonment or both. The Payment of Gratuity Act, 1972 (the “Gratuity Act”) The Gratuity Act establishes a scheme for the payment of gratuity to employees engaged in every factory, mine, oil field, plantation, port and railway company, every shop or establishment in which ten or more persons are employed or were employed on any day of the preceding twelve months and in such other establishments in which ten or more persons are employed or were employed on any day of the preceding twelve months, as the central government may, by notification, specify. Penalties are prescribed for non-compliance with statutory provisions. Under the Gratuity Act, an employee who has been in continuous service for a period of five years will be eligible for gratuity upon his retirement, resignation, superannuation, death or disablement due to accident or disease. However, the entitlement to gratuity in the event of death or disablement will not be contingent upon an employee having completed five years of continuous service. The maximum amount of gratuity payable may not exceed Rs. 0.35 million. Employees State Insurance Act, 1948 (the “ESI Act”) 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. It applies to, inter alia, seasonal power using factories employing ten or more persons and non-power using factories employing 20 or more persons. Every factory or establishment to which the ESI Act applies is required to be registered in the manner prescribed in the ESI Act. Under the ESI Act every employee (including casual and temporary employees), whether employed directly or through a contractor, who is in receipt of wages upto Rs. 7,500 per month is entitled to be insured. In respect of such employees, both the employer and the employee must make certain contributions to the Employee State Insurance Corporation. Currently, the employee’s contribution rate is 1.75% of the wages and that of employer’s is 4.75% of the wages paid/payable in respect of the employee in every wage period. The ESI Act states that a principal employer, who has paid contribution in respect of an employee employed by or through an immediate employer, shall be entitled to recover the amount of the contribution so paid from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payable by the immediate employer. Employees Provident Fund and Miscellaneous Provisions Act, 1952 (the “EPF Act”) The EPF Act provides for the institution of compulsory provident fund, pension fund and deposit linked insurance funds for the benefit of employees in factories and other establishments. A liability is placed both on the employer and the employee to make certain contributions to the funds mentioned above. Payment of Bonus Act, 1965 (the “Bonus Act”) Pursuant to the Bonus Act 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 Bonus Act by a company is punishable with imprisonment for a term of up to six months or a fine of up to Rs.1,000 or both, against persons in charge of, and responsible to the company for the conduct of the business of the company at the time of contravention.

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Inter-state Migrant Workers Act, 1979 The Inter-state Migrant Workers Act, 1979 applies to any establishment or contractor who employees five or more inter-state migrant workmen (whether or not in addition to other workmen) on any day of the preceding twelve months. An ‘inter-state migrant workman’ is defined under Section 2(e) to include any person who is recruited by or through a contractor in one state under an agreement or other arrangement for employment in an establishment in another state, whether with or without the knowledge of the principal employer in relation to such establishment. All such establishments employing migrant workers must be registered otherwise such workmen cannot be employed by them. 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 a service recipient and pay such tax to the government. Several taxable services are enumerated under these service tax provisions which include construction services, including construction of residential and commercial complexes. Value Added Tax (“VAT”) VAT is charged by laws enacted by each state on a sale of goods effected in the relevant states. In the case of construction contracts, VAT is charged on the value of property in goods transferred contracts. VAT is payable on road construction contracts. VAT is not chargeable on the value of services which do not involve a transfer of goods. Regulations regarding foreign investment Foreign investment in Indian securities is governed by the provisions of the FEMA read with the applicable FEMA Regulations. The DIPP has issued ‘Circular 1 of 2010’ (the “FDI Circular”) which consolidates the policy framework on FDI, with effect from April 1, 2010. The FDI Circular consolidates and subsumes all the press notes, press releases, clarifications on FDI issued by DIPP as on March 31, 2010. All the press notes, press releases, clarifications on FDI issued by DIPP as on March 31, 2010 stand rescinded as on March 31, 2010. Foreign investment is permitted (except in the prohibited sectors) in Indian companies either through the automatic route or the approval route, depending upon the sector in which foreign investment is sought to be made. Under the approval route, prior approval of the GoI through FIPB is required. FDI for the items or activities that cannot be brought in under the automatic route may be brought in through the approval route. Where FDI is allowed on an automatic basis without the approval of the FIPB, the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. In cases where FIPB approval is obtained, no approval of the RBI is required except with respect to fixing the issuance price, although a declaration in the prescribed form, detailing the foreign investment, must be filed with the RBI once the foreign investment is made in the Indian company. Investment by FIIs FIIs including institutions such as pension funds, mutual funds, investment trusts, insurance and reinsurance companies, international or multilateral organizations or their agencies, foreign governmental agencies, sovereign wealth funds, foreign central banks, asset management companies, investment managers or advisors, banks, trustees, endowment funds, university funds, foundation or charitable trusts or societies and institutional portfolio managers can invest in all the securities traded on the primary and secondary markets in India. FIIs are required to obtain an initial registration from the SEBI and a general permission from the RBI to engage in transactions regulated under the FEMA. FIIs must also comply with the provisions of the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as amended from time to time (“FII Regulations”). The initial registration and the RBI’s general permission together enable the registered FII to buy (subject to the ownership restrictions discussed below) and sell freely, securities issued by Indian companies, to realize capital gains or investments made through the initial amount invested in India, to subscribe or renounce rights issues for shares, to appoint a domestic custodian for custody of

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investments held and to repatriate the capital, capital gains, dividends, income received by way of interest and any compensation received towards sale or renunciation of rights issues of shares. FIIs are permitted to purchase shares of an Indian company through public/private placement under:

• Regulation 5 (1) of the FEMA Regulations, subject to terms and conditions specified under Schedule 1 of the FEMA Regulations (“FDI Route”).

• Regulation 5 (2) of the FEMA Regulations subject to terms and conditions specified under Schedule 2 of the FEMA Regulations (“PIS Route”).

In case of investments under FDI Route, investments are made either directly to the company account, or through a foreign currency denominated account maintained by the FII with an authorised dealer, wherein Form FC-GPR is required to be filed by the company. Form FC-GPR is a filing requirement essentially for investments made by non-residents under the ‘automatic route’ or ‘approval route’ falling under Schedule 1 of the FEMA Regulations. In case of investments under the PIS Route, investments are made through special non-resident rupee account, wherein Form LEC (FII) is required to be filed by the designated bank of the FII concerned. Form LEC (FII) is essentially a filing requirement for FII investment (both in the primary as well as the secondary market) made through the PIS Route. Foreign investment under the FDI Route is restricted/ prohibited in sectors provided in part A and part B of Annexure A to Schedule 1 of the FEMA Regulations. Ownership Restrictions of FIIs No single FII can hold more that 10% of our Company’s post-Issue paid-up share capital. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of the total paid-up share capital of our Company or 5% of our paid-up share capital of our Company in case such sub-account is a foreign corporate or an individual. In accordance with the foreign investment limits applicable to us, the total foreign investment including FII investment cannot exceed 24% of our total issued capital unless approved by the shareholders of our Company. Subject to compliance with all applicable Indian laws, rules, regulations guidelines and approvals in terms of Regulation 15A(1) of the FII Regulations, an FII may issue, deal or hold, offshore derivative instruments such as “Participatory Notes”, equity-linked notes or any other similar instruments against underlying securities listed or proposed to be listed on any stock exchange in India only in favour of those entities which are regulated by any relevant regulatory authorities in the countries of their incorporation or establishment subject to compliance of “know your client” requirements. An FII or their Sub-Account shall also ensure that no further downstream issue or transfer of any instrument referred to hereinabove is made to any person other than a regulated entity. FIIs and their Sub-Accounts are not allowed to issue offshore derivative instruments with underlying as derivatives.

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HISTORY AND OTHER CORPORATE MATTERS Brief History Our Company was incorporated on August 1, 1983, under the Act in the name and style of Star Leasing Company Limited vide registration number 30538 of 1983 with the Registrar of Companies, Maharashtra. We received our Certificate of Commencement of Business on September 20, 1983. Our Corporate Identification Number is L40102AP2002PLC039031. Pursuant to a Fresh Certificate of Incorporation dated December 31, 1996 issued by the Registrar of Companies, Gujarat, Dadra & Nagar Haveli the name of our Company was changed to Star Leasing Limited. Further, pursuant to a Fresh Certificate of Incorporation dated February 8, 2010 issued by the Assistant Registrar of Companies, Andhra Pradesh the name of our Company was changed to Remidicherla Power Limited. Further, pursuant to a Fresh Certificate of Incorporation dated July 7, 2010 issued by the Deputy Registrar of Companies, Andhra Pradesh the name of our Company was changed to Remidicherla Infra & Power Limited. The registered office of our Company is situated at Remidicherla House, CPR Brundavan, flat number 401, near Nectar Garden, Hyderabad – 500 081. Our Company was incorporated with the main object to carry on the business of leasing and hire purchase. With a view to pursue business in financial services, primarily leasing and hire purchase, our Company made its maiden public issue in the year 1983 and the equity shares of our Company got listed on the Bombay Stock Exchange on March 12, 1984. Our Company is not a non banking finance company (NBFC) and is not registered with the Reserve Bank of India (RBI). Also it is not registered with SEBI in any capacity. In March 2001, the first promoters of our Company sold off their controlling interest to Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan. Further, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan took over the controlling interest in the share capital and management of our Company for the benefits of listing status, easier finance raising, etc. and with the intent to diversify the activities of our Company into the application software such as accounting, inventory, order management, manufacturing, CRM etc. In January 2009, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan sold their controlling interest in our Company to 3A Capital Services Limited and Mr. Rajan Shah. Further, 3A Capital Services Limited and Mr. Rajan Shah made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Rajan Shah, promoter director of 3A Capital Services Limited, acquired the controlling interest in the share capital and management of our Company with the intent of expanding its activities, business into financing, investment and trading of shares and securities etc. Thereafter vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited and Mr. Rajan Shah, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. M. Srinivasa Reddy acquired the controlling interest in the share capital and management of our Company as he proposes to diversify the business activities of our Company in the field of power, infrastructure, mining and other related / unrelated areas depending upon the market conditions and available opportunities. To take a step ahead, our management has changed the name of our Company to “Remidicherla Infra & Power Limited” which is evidenced by a fresh certificate of incorporation consequent upon change of name dated July 7, 2010 issued by

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the Deputy Registrar of Companies of Andhra Pradesh. Also our Company has changed its objects to enable it to enter into the areas of infrastructure, power generation, mining, etc. BSE had suspended trading of the equity shares of our Company with effect from January 14, 2003 due to the non compliance of clauses of listing agreement by our Company. With reference to the same, on February 2, 2009 BSE had informed our Company to comply with Clause 31, 35, 41, 47 and 55 of the listing agreement. Our Company had made submission to the BSE on February 6, 2009. Pursuant to the submission made by our Company BSE vide its letter No.DCS/COMP/OT/KK/443/2009-10 dated March 19, 2010 and notice dated May 12, 2010; Number 20100512-21 revoked the suspension of trading of securities of our Company with effect from, May 18, 2010. The 1,79,051 equity shares of our Company held by Mr. M Srinivasa Reddy are locked-in with effect from May 18, 2010 to August 15, 2010. Milestones of our Company:

Year Event 1983 Our Company was incorporated in the name and style of Star Leasing Company Limited. 1983 Initial Public Offering of 2,40,000 equity shares of Rs.10/- each at par by our Company. 1984 Listing of the equity shares of our Company on the BSE. 1995 Change in Registered office of our Company from the state of Maharastra to Gujarat. 1996 Name of our Company was changed to Star Leasing Limited from Star Leasing Company Limited. 2001 Acquisition of controlling interest in the share capital of our Company by Mr. Mir Ahmed Ali Khan &

Mr. Mir Hasnain Ali Khan. 2002 Change in Registered office of our Company from the state of Gujarat to Andhra Pradesh. 2003 BSE had suspended trading of the equity shares of our Company with effect from January 14, 2003. 2009 Acquisition of controlling interest in the share capital of our Company by 3A Capital Services Limited

& Mr. Rajan Shah. 2010

Acquisition of controlling interest in the share capital of our Company by Mr. M. Srinivasa Reddy. Name of the Company changed to Remidicherla Power Limited from Star Leasing Limited and then to Remidicherla Infra & Power Limited from Remidicherla Power Limited. BSE revoked the suspension of trading of the equity shares of our Company with effect from May 18,2010. Diversified the activities of our company into Infrastructure viz., Power, Infrastructure, Mining, etc.

Changes in our Registered Office

Date From To Reason August 1 1985

172/74, Hornby Building, 2nd Floor Dr. D. N. Road, Fort, Bombay 400 001.

3, A. K. Naik Marg, Office No 32A, 2nd Floor, Next to New Empire Theatre, Bombay 400 001.

Smooth functioning of the administration and secretarial activities of our Company.

March 1, 1989

3, A. K. Naik Marg, Office No 32A, 2nd Floor, Next to New Empire Theatre, Bombay - 400 001

3rd Floor, 11 Shivsadan, 131, Netaji Subhash Road, Bombay - 400 020.

Smooth functioning of the administration and secretarial activities of our Company.

September 13, 1995

3rd Floor, 11 Shivsadan, 131, Netaji Subhash Road, Bombay - 400 020.

B-1, Regency Park, Near Kalyan Society, Ellisbridge, Ahmedabad - 380 006.

Change in controlling interest in the share capital of our Company.

May 27 2002

B-1, Regency Park, Near Kalyan Society, Ellisbridge, Ahmedabad - 380 006.

6-3-659, Kapadia lane, Somajiguda, Hyderabad – 500 082.


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April 30 2010

6-3-659, Kapadia lane, Somajiguda, Hyderabad – 500 082.

Remidicherla House, CPR Brundavan, flat number 401, near Nectar Garden, Hyderabad – 500 081.


Our Main Objects The Company’s main objects as set out in the Memorandum of Association of the Company are as under: 1) To carry on in India or elsewhere the business to generate, receive, produce, improve, buy, sell, resell, acquire, use,

transmit, accumulate, employ, distribute, develop, handle, protect, supply and to act as agent, broker, representative, consultants, collaborator, or otherwise to deal in electric power in all its branches of such place or places as may be permitted by appropriate authorities by establishments of thermal power plants, hydraulic power plants, and other power plants based on any source of energy as may be developed or invented in future.

2) To setup, plan, promote, generate, distribute, take on lease or on hire, acquire by purchase in bulk, develop, and

accumulate power by wind and / or by any other means and to construct, lay down, establish, fix and carry out necessary power stations and projects and deal in equipment, spare parts, accessories, appliances of all types, required for generating, distributing, supplying, accumulating, banking, transmitting and selling electricity, power or energy for all purposes, water storage, and to undertake execution of civil, electrical and mechanical construction of all types necessary or useful for or in connection with dealing in or installing turbines, power generators, pumps, treatment plants, and construction and maintenance of any electrical installation for the transmission of use of electric power for all purposes and distribution thereof and to process, make, market, use, sell and dispose of ash or any other material produced as a result of the above activities and to prepare, manufacture, sell and deal in any products capable of being produced from such ash or such other materials.

3) To construct, lay down, establish, promote, erect, build, install, commission, carry out and run all necessary power

substations, workshops, repair shops, wires, cables, transmission lines, accumulators, street lights for the purpose of conservation, distribution, and supply of electricity of participating industries, state electricity boards and other boards for industrial, commercial, domestic, public and other purposes and also to provide regular services for repairing and maintenance of all distribution and supply lines.

4) To carry on all or any of the businesses of constructing buildings, roads, bridges, dams, ports and working as

builders and contractors, architects, decorators and manufacturers and processors of and dealers in all kinds of building materials including bricks, tiles, marbles, hard ware, cement, sanitary goods, road making materials and of acting as estate agents, brokers, managers of estates and properties and of acquiring premises on lease and giving them on sub lease.

5) To purchase, hold, take on lease or exchange, take on mortgage and give on mortgage, hire or otherwise acquire and

hold or deal in any movable or immovable property including lands, buildings, houses, flats, bungalows, shops, offices, godowns, patents, licences, and any rights, interests and privileges therein and to develop and turn them to account or let them out on rent.

6) To carry on all or any of the business of mining, refining and preparing for market ores, minerals, metals and

substances of every kind and description, and processing them and trading in them and their products and by-products.

The existing and proposed activities of our Company are within the scope of the objects clause of the Memorandum of Association.

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Amendments to the Memorandum of Association Since our incorporation, the following changes have been made to our Memorandum of Association:

Date Changes October 22, 1983 The authorised share capital of our Company was increased from Rs.1,00,000/- to Rs.

25,00,000/- by creation of 2,40,000 equity shares of Rs.10/- each. May 09, 1992 The authorised share capital of our Company was increased from Rs. 25,00,000/- to Rs.

1,25,00,000/- by creation of 10,00,000 equity shares of Rs.10/- each. September 30, 1996

The authorised share capital of our Company was increased from Rs. 1,25,00,000/- to Rs. 3,00,00,000/- by creation of 17,50,000 equity shares of Rs.10/- each.

January 28, 2010 Alteration in the Object Clause of Memorandum Of Association diversifying the activities of our Company into Infrastructure viz., Power, Infrastructure, Mining, etc.

January 28, 2010 The authorised share capital of our Company was increased from Rs.3,00,00,000/- to Rs.30,00,00,000/- by creation of 2,70,00,000 equity shares of Rs.10/- each.

Subsidiaries of our Company and their business As on date of filing of the Draft Letter of Offer, our Company does not have any subsidiaries. Number of Members / Shareholders of our Company Total number of Members of our Company as on June 30, 2010 is 35. Shareholders’ Agreement There are no subsisting shareholders’ agreement entered into between the shareholders of our Company. Other Agreements Except the Contracts / Agreements entered into in the ordinary course of business carried on or intended to be carried on by our Company, our Company has not entered into any other Agreement / Contract. Financial / Strategic Partners Our Company does not have any Financial / Strategic Partners as on the date of filing of the Draft Letter of Offer.

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OUR MANAGEMENT

Under our Articles, our Company is required to have not less than three Directors and not more than ten Directors. As on the date of the Draft Letter of Offer, our Board comprises of eight Directors. Our Board As on the date of the Draft Letter of Offer, our Board comprises of:

Sr. No.

Name, Designation, Father’s name, Address, Nationality,

Occupation and DIN

Age Date of Appointment as Director and Term

Details of other Directorships / partnerships / co-orporative

societies 1. Mr. M. Srinivas Reddy

Designation: Managing Director Father’s name: Mr. M. Venki Reddy Residential Address: H. No. 397, K P HB Colony, Hyderabad – 500 072 Nationality: Indian Occupation: Business DIN: 00882956

57 Date of appointment: July 7, 2010 Term: Five years commencing from July 7, 2010

1. Farmax India Limited 2. Taruni Dairy Prodcuts Private

Limited

2. Ms. P. Priyanka Designation: Executive Director Father’s name: P. Pattabhi Ramayya Residential Address: 6-62,PriyaGarden, Adavivaram, Visakhapatnam, 530 028 Nationality: Indian Occupation: Business DIN: 02925766

24 Date of appointment: January 4, 2010 Term: Liable to retire by rotation

NIL

3. Mr. P. Kamala Kumar Designation: Independent Director Father’s name: Mr. P Narasimha

73 Date of appointment: April 30, 2010 Term: Liable to retire by rotation

NIL

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Sr. No.


Occupation and DIN



societies Rao Residential Address: 10-3-14/A/1/1, Mehdipatnam, Humayun Nagar, Hyderabad 500 028 Nationality: Indian Occupation: Professional DIN: 03054991

4. Mr. S. Koti Reddy Designation: Independent Director Father’s name: Mr. S. Pulla Reddy Residential Address: 7-1-618/Ev/107, Annapura block II Vindhya, Ameerpet, S. R. Nagar, Hyderabad – 500 038 Nationality: Indian Occupation: Business DIN: 03055201


NIL

5. Mr. I. Srinivas Raju Designation: Independent Director Father’s name: Mr. Bhachubhai B. Rita Residential Address: 102, Vijaya complex, 414/3RT, S R Nagar, Hyderabad - 500 038 Nationality: Indian Occupation: Business DIN: 00991361


1. Farmax India Limited 2. Sri Venkat Sai Securities Private

Limited

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Sr. No.


Occupation and DIN



societies 6. Mr. S. Krishna Kant Varma

Designation: Independent Director Father’s name: Mr. S. Rama Krishnam Raju Residential Address: 8-2-335/1, Road no. 3, Banjara Hills, Hyderabad – 500 034 Nationality: Indian Occupation: Business DIN: 03055150


NIL

7. Mr. Mudunuri Veera Venkata Ramana Varma Designation: Independent Director Father’s name: M. Sivaramabhadra Raju Residential Address: Plot no, 259, 202, Saraswathi Nivas, Srinivasa Colony (West), Ameerpet, Hyderabad – 500 035 Nationality: Indian Occupation: Business DIN: 01915394


1. Infogenex Technologies Private Limited

2. Genex Technologies Private Limited

8. Ms. Swapna Chaparala Designation: Independent Director Father’s name: Mohan Bhuvana Chaparala Residential Address: 4/3 Rose Street, Clayton, Vic – 3168. Nationality: Indian

30 Date of appointment: July 7, 2010 Term: Liable to retire by rotation

NIL

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Sr. No.


Occupation and DIN



societies Occupation: Professional DIN: 03121470

Relationship between our Directors None of our Directors or Key Managerial Personnel are “relatives” within the meaning of Section 6 of the Act. Brief Biography of our Directors Mr. M. Srinivas Reddy, Managing Director Mr. M. Srinivas Reddy, 38 years, is a graduate in Mechanical Engineering from Nagarjuna University, Andra Pradesh. Post graduation, Mr. Reddy began his career by marketing / distributing FMCG products sourced from various manufacturers. In 2003 he ventured into manufacturing FMCG products, namely vermicelli and toothpaste, by setting up a manufacturing plant with superior hygienic facilities, sales of which were supported by his existing distribution network. With a keen sense of entrepreneurship, he is the driving force behind the success of Farmax India Limited and implementation of the projects envisaged by our Company. Ms. P. Priyanka, Executive Director Ms. P. Priyanka, 24 years, is a Master in Business Administration from the Department of Business and Management Studies, Andhra University, Visakhapatnam and a Bachelor of Science from Gayathri Vidhya Parishad, Vizag. Ms. Priyanka has two years of experience in the retail industry. She worked with Hyderabad Central Mall as Unit Marketing head for a period of one year prior to joining our Company. Mr. P. Kamala Kumar, Independent Director Mr. P. Kamala Kumar, 73 years, is a graduate in Electrical Engineering from the College of Engineering, Kakinada, a fellow member of the Institution of Engineers (India) and a Chartered Engineer. Mr. Kumar has rich experience in the field of electricity / power of over four decades. He has worked on several Government Projects in various capacities. Mr. Kumar began his carrier in 1956 as a junior engineer with the Government Electricity Department and went on to becoming a Chief Engineer with the Andhra Pradesh State Electricity Board (APSEB). Post superannuation in 1992 Mr. Kumar was appointed as consultant by APSEB during which period he suggested and implemented various measures for maximization of generation at various power stations. Mr. Kumar is presently engaged in concluding agreements for development of wind energy projects in Tamil Nadu and finalization of CDM proposals for Carbon Credits as well as concluding agreements for development of 1X30+1X10 MW Hydro Power station in Kerala. Mr. S. K. Reddy, Independent Director

Mr. S. K. Reddy, 73 years, is a Bachelor of Arts (Honours) from A.U. Waltair University, Visakhapatnam, Andhra Pradesh and M. Sc. (statistics) from A.U. Waltair University, Visakhapatnam, Andhra Pradesh. In 1973 Mr. Reddy did his M.A. in Physics from Delhi University in 1973 and a diploma in Labour Laws and Personnel Management from Indian Law Institute Delhi in 1980. Mr. Reddy worked as a lecturer for mathematics and statistics in S.B. College, Gulbarga during the period 1960 – 1961. In 1970 Mr. Reddy joined the Government of India as the senior scientific officer. Thereafter Mr. Reddy went on to join the Rural Electrification Corporation, a Government of India undertaking. Mr. Reddy was the manager of AES Schools for a period of ten years from 1973 to 1983. Post retirement he worked for a period of three years as a Director to the Blooms College of Computer Science and Hotel Management, Andhra

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Pradesh from 1996 to 1999. Mr. I. Srinivas Raju, Independent Director Mr. I. Srinivas Raju, 45 years, is a certified cost accountant from the Institute of Cost and Works Accountants of India and a Master in Commerce from Andhra University. He has over two decades of experience in Finance and Accounting. Mr. Raju has been associated with Venkat Sai Securities Private Limited as Director (Finance and Accounting) since 2000. Wherein he is responsible for a wide gamut of services, including but not limited to, budgeting, forecasting, cost and credit control, margin analysis, costing and profitability, etc. Mr. Krishna Kant Varma, Independent Director Mr. Krishna Kant Varma, 31 years, has done his Masters in Business Administration from Swiss Mananagement School, Switzerland. Mr. Varma is associated with SVMM Minning Limited as Director (Sales and Marketing) wherein he is responsible for, amongst several responsibilities, he is also responsible for sales and marketing, export and import operations and customer relationship management. Mr. Varma was previously associated with Aviva Company wherein he was responsible for sales and marketing. Mr. Mudunuri Veera Venkata Ramana Varma, Independant Director Mudunuri Veera Venkata Ramana Varma, 46 years, has graduated in Commerce from Andhra University. He has an overall experience of 23 years. Mr. Varma, with his entrepreneurial instinct started electrical and electronics small scale industry immediately after graduation in 1985. As part of his strategic future business plan, he changed his career line and joined as Manager in Kernex Micro Systems Ltd. in 1991. In the year 1995, Mr. Varma started his own IT company. Mr. Varma has placed number of IT professionals across globe. Significant achievement is ramping-up team 300+ skilled professionals in 2 months time frame. In the year 2004, he joined Genex Technologies Private Limited as Director overseeing Sales, Operations and HR functions. Ms. Swapna Chaparala, Independent Director Ms. Swapna Chaparala, 30 years, is a Master in Business Administration and a Bachelor in Commerce. In 1997, Ms. Chaparala completed her Diploma in Information Systems and Management from Aptech, Hyderabad. She is currently associated with the Australia New Zealand Banking Group (ANZ), since July 2008, wherein, amongst many other responsibilities, she manages daily operations of the department to best achieve sales and service targets. Prior to joining ANZ, she was associated with Primus Telecom as a Business Analyst (Customer Service and Sales). Arrangement or understanding None of our Directors or members of senior management have been appointed pursuant to any arrangement or understanding with major shareholders, customers, suppliers or others. Service Contracts As on the date of the Draft Letter of Offer, there is no service contract entered into by and between our Company and our Directors pursuant to which any benefits would accrue to our Directors upon termination of employment. Borrowing powers of our Board of Directors Our Directors can borrow such sums as and when required which do not exceed the paid up share capital and the free reserves of our Company from time to time. For further details of the provisions of our Articles of Association regarding borrowing powers, please refer to the section titled ‘Main Provisions of the Articles of Association’ beginning on page 172 of the Draft Letter of Offer.

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Remuneration/Compensation of Directors (i) Executive Directors Mr. M. Srinivasa Reddy, Managing Director, has been appointed on the Board of Directors of our Company as per the Articles of Association of our Company. He was appointed as Managing Director vide Board resolution dated July 7, 2010 for a term of 5(five) years. Mr. M. Srinivasa Reddy does not draw any remuneration from our Company. Ms. P. Priyanka, Executive Director, has been appointed on the Board of Directors of our Company as per the Articles of Association of our Company. She was appointed vide Board resolution dated January 4, 2010 and is liable to retire by rotation. Ms. Priyanka is drawing a monthly remuneration of Rs. 75,000/- from our Company. (ii) Independent Directors: Our Independent Directors are entitled to sitting fees for attending meetings of the Board, or of any committee of the Board. Currently, the sitting fees payable by our Company to our Directors is Rs. 1,000/- for every meeting of the Board attended by them and Rs. 1,000/- for every meeting of the committee of the Board attended by them. Shareholding of Our Directors As per our Articles, our Directors are not required to hold any qualification shares in our Company. Save and except as below, our Directors do not hold any Equity Shares in our Company as on the date of filing of the Draft Letter of Offer. Sr. No.

Name of the Directors Number of Equity Shares % of pre issue equity share capital

1. Mr. M. Srinivas Reddy 1,79,051 74.60 Interest of 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 or a committee thereof as well as to the extent of remuneration payable to them for their services as executive directors of our 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 in our Company, or that may be subscribed for and allotted to them, out of the present Issue and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. Further, save and except as stated otherwise on page 70 under the heading titled ‘Property’ in the chapter titled ‘Our Business’ beginning on page 65 of the Draft Letter of Offer, page 90 under the headings titled ‘Shareholding of our Directors’ and page 90 under the heading titled ‘Interest of Directors’ in the chapter titled ‘Our Management’ beginning on page 85 of the Draft Letter of Offer,“Financial Statements – Annexure 16” on page 122 of the Draft Letter of Offer, and “Interest of our Promoters” on page 97 in the chapter titled “Our Promoter” beginning on page 96 of the Draft Letter of Offer, our Directors do not have any other interests in our Company as on the date of filing of the Draft Letter of Offer with SEBI. Our Directors are not interested in the appointment of, or acting as Underwriters, Registrar and Bankers to the Issue or any such intermediaries registered with SEBI.

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Changes in our Board of Directors during the last three years The following are the changes in our Board of Directors during the last three years:

Name and Designation of the Director Date of Appointment

Date of Resignation

Reasons

Mr. Mir Ahmed Ali Khan 19/07/2001 15/06/2009 Due to change in management of the company Mr. Mir Mehdi Ali Khan 31/01/2003 14/05/2009 Due to change in management of the company Mr. Mir Hasnain Ali Khan 19/07/2001 14/05/2009 Due to change in management of the company Mrs. Rasheeda Fathima 31/01/2003 14/05/2009 Due to change in management of the company Mr. Madan Kumar Chary 19/07/2001 15/06/2009 Due to change in management of the company Mr. Rajan M Shah 14/05/2009 30/04/2010 Due to change in management of the company Mrs. Bhavna R Shah 14/05/2009 30/04/2010 Due to change in management of the company Mr. Manubhai Shah 07/07/2009 30/04/2010 Due to change in management of the company Mr.Chirag A Mehta 15/06/2009 30/04/2010 Due to change in management of the company Mr.Hitesh V Raja 07/07/2009 30/04/2010 Due to change in management of the company Mr.Dinesh M Patel 07/07/2009 30/04/2010 Due to change in management of the company Ms.P Priyanka 04/01/2010 - Due to change in management of the company Mr.M Srinivas Reddy 30/04/2010 - Due to change in management of the company Mr. S K Reddy 30/04/2010 - Due to change in management of the company Mr. I Shrinivas Raju 30/04/2010 - Due to change in management of the company Mr. Kamal Kumar 30/04/2010 - Due to change in management of the company Mr. Krishna Kant Varma 30/04/2010 - Due to change in management of the company Mudunuri Veera Venkata Ramana Varma 30/04/2010 - Due to change in management of the company Ms. Swapna Chaparala 07/07/2010 Due to change in management of the company Organisation Structure As on the date of the Draft Letter of Offer, the following is the organization structure of our Company:

Board of Directors

Mr. M. Srinivas Reddy (Managing Director)

Mr. Chinnari Rajasekhar

(Chief Financial Officer)

Mr. Pemmaraju Satish

(Company Secretary and Compliance

Officer)

Ms. I. Lalitha (Quantity Survering Engineer)

Ms. Pratipati Rama Shalini

(Human Resource

Management)

Ms. Priyanka Palacharla (Executive Director)

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Corporate Governance The provisions of the Listing Agreement / SEBI (ICDR) Regulations with respect to corporate governance will be applicable to our Company immediately upon the listing of our Company’s Equity Shares on the Stock Exchanges. In order to comply with these provisions, we have constituted the following committees:

1. Audit Committee 2. Remuneration Committee 3. Shareholders' / Investors' Grievance Committee

Audit Committee The Audit Committee was constituted vide a resolution passed by the Board at its meeting held on May 26, 2010. The terms of reference of the audit committee covers the matters specified under Section 292A of the Act. The committee is responsible for effective supervision of the financial operations and ensuring that financial, accounting activities and operating controls are exercised as per the laid down policies and procedures. The current terms of reference of the Audit Committee are in compliance with the requirements of clause 49 of the Listing Agreement as well as Section 292 A of the Act. These broadly include approval of internal audit programme, review of financial reporting systems, internal control systems, ensuring compliance with statutory and regulatory provisions, discussions on quarterly, half yearly and annual financial results, interaction with senior management, statutory and internal auditors, recommendation for re-appointment of statutory auditors etc. The audit committee consists of the following Directors: Name of the Director Designation in the Committee Nature of Directorship Mr. S. K. Reddy Chairman Independent Director Mr. I. Srinivasa Reddy Member Independent Director Mudunuri Veera Venkata Ramana Varma

Member Independent Director

Powers of the Audit Committee 1. To investigate any activity within its terms of reference; 2. To seek information from any employee; 3. To obtain outside legal or other professional advice; and 4. To secure attendance of outsiders with reasonable expertise, if considered necessary.

Role of the Audit Committee 1) Overseeing our Company’s financial reporting process and the disclosure of its financial information to ensure that

the financial statement is correct, sufficient and credible. 2) 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. 3) Approval of payment to statutory auditors for any other services rendered by the statutory auditors. 4) Appointment, removal and terms of remuneration of internal auditors 5) Reviewing, with the management, the annual financial statements before submission to the Board for approval, with

particular reference to: • Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report

in terms of clause (2AA) of Section 217 of the Act; • 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;

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93

• Compliance with listing and other legal requirements relating to the financial statements; • Disclosure of any related party transactions; • Qualifications in the draft audit report.

6) Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval. 7) Monitoring the use of the proceeds of the proposed initial public offering of our Company. 8) Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal

control systems. 9) 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.

10) Discussions with internal auditors on any significant findings and follow up thereon. 11) Reviewing internal audit reports and adequacy of the internal control systems. 12) Reviewing management letters / letters of internal control weaknesses issued by the statutory auditors 13) 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.

14) 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.

15) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of nonpayment of declared dividends) and creditors.

16) To review the functioning of the whistle blower mechanism, when the same is adopted by our Company and is existing.

17) Carrying out any other function as may be statutorily required to be carried out by the Audit Committee. Remuneration / Compensation Committee Our Company has constituted a Remuneration / Compensation Committee pursuant to the requirement of Schedule XIII of the Act for approving remuneration to the executive Directors. This Remuneration / Compensation Committee, while approving minimum remuneration under Schedule XIII, takes into account the financial position of our Company, trends in industries, Director's qualifications, experience, past performance, past remuneration etc. The remuneration committee was constituted vide a resolution passed by the Board at its meeting held on May 26, 2010. The Remuneration / Compensation Committee consist of the following Directors: Name of the Director Designation in the Committee Nature of Directorship Mr. S. K. Reddy Chairman Independent Director Mr. I Srinivasa Raju Member Independent Director Mr. P. Kamla Kumar Member Independent Director The terms of reference of the Remuneration / Compensation Committee of our Company include: 1) To recommend to the Board, the remuneration packages of our Company’s Managing / Joint Managing / Deputy

Managing / Whole time / Executive Directors, including all elements of remuneration package (i.e. salary, benefits, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefits, details of fixed component and performance linked incentives along with the performance criteria, service contracts, notice period, severance fees etc.);

2) To be authorised at its duly constituted meeting to determine on behalf of the Board of Directors and on behalf of the shareholders with agreed terms of reference, our Company’s policy on specific remuneration packages for Company’s Managing / Joint Managing / Deputy Managing / Wholetime / Executive Directors, including pension rights and any compensation payment;

3) To implement, supervise and administer any share or stock option scheme of our Company

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Shareholders' Grievance Committee Our Company has formed a Shareholders' / Investors' Grievance Committee pursuant to clause 49 of the listing agreement for looking into the redressal of shareholders' complaints like transfer of shares, non-receipt of balance sheet etc. The Shareholders' / Investors' Grievance Committee was constituted vide a resolution passed by the Board at its meeting held on May 26, 2010. The Shareholders' / Investors' Grievance Committee’ consists of the following Directors: Name of the Director Designation in the Committee Nature of Directorship Mr. M Srinivasa Reddy Chairman Managing Director Ms. P Priyanka Member Executive Director Mr. I Srinivasa Raju Member Independent Director The Shareholders' / Investors' Grievance Committee was constituted specifically to look into the redressal of shareholders and investors’ complaints like: 1) Efficient transfer of shares; including review of cases for refusal of transfer / transmission of shares and debentures; 2) Redressal of shareholder and investor complaints like transfer of shares, non-receipt of balance sheet, non-receipt of

declared dividends etc.; 3) Issue of duplicate / split / consolidated share certificates; 4) Allotment and listing of shares; 5) Reference to statutory and regulatory authorities regarding investor grievances; and 6) Ensure proper and timely attendance and redressal of investor queries and grievances. Our Key Managerial Personnel Our Company is managed by its Board of Directors, assisted by qualified professionals, who are permanent employees of our Company with vast experience in the field of finance, compliance and marketing. Mr. Chinnari Rajasekhar, aged 33 years, is the Chief Financial Officer of our Company. He is a Chartered Accountant from the Institute of Chartered Accountants of India. Mr. Rajasekhar is an I.C.W.A. from the Institute of Cost and Works Accountant of India and a Bachelor of Science from the Berhampur University, Berhampur. He has an overall experience of over three years in the field of finance and accountancy. Prior to joining our Company, Mr. Rajasekhar worked with Great India Mining Private Limited as Manager (Accounts), wherein he was responsible for overall Accounts and Finance for the period May, 2009 – April, 2010. He has also worked with Simhapuri Energy Private Limited as Assistant Manager (Finance and Accounts) wherein he was responsible for overall accounts and finance operations of the company for the period March 2008 – April 2009. Since June 30, 2010, he has been paid a monthly remuneration of Rs. 80,000. Mr. Pemmaraju Satish, aged 39 years, is the Company secretary and Compliance Officer of our Company. He is a Master in Business Administration in finance and human resource management from Indira Gandhi National Open University, M. Phil (Commerce) from Madurai Kamaraj Univesity, an Associate Member of Company Secretaries from the Institute of Company Secretaries of India, a L.L.B. from Osmania University, Hyderabad and a Master in Commerce from Osmania University, Hyderabad. Prior to joining our Company, Mr. Satish worked with Leafin India Limited from March 1993 to May 1999 as Chief Accountants Officer. Since June 30, 2010, he has been paid a monthly remuneration of Rs. 35,000. Ms. Prathipati Rama Shalini, aged 24 years, is in charge of Human Resources of our Company. She is a Post Graduate Diploma holder in Business Management from the Ambedkar Institute of Management Studies, Visakhapatnam. She is also a a Bachelor of Science from the GVP Degree College, Visakhapatnam. Prior to joining our Company Ms. Shalini was associated with Visakha Container Terminal Private Limited, Visakhapatnam wherein she was a member of the Human Resource Management team. Since June 30, 2010, he has been paid a monthly remuneration of Rs. 25,000.

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Ms. I. Lalitha, aged 35 years, is the quantity surveying engineer of our Company. She is a Bachelor in Technology (Civil) from Osmania University. She has an overall experience of over 7 years as a quantity surveying engineer. Prior to joining our Company, Ms. Lalitha worked with Maytas Infra Limited as a quantity surveying engineer Since June 30, 2010, she has been paid a remuneration of Rs. 60,000. Shareholding of key managerial personnel None of our key managerial personnel holds any equity shares of our Company. Bonus or profit sharing plan for the key managerial personnel There is no separate bonus or profit sharing plan for our key managerial personnel by our Company. Details of loans taken by / given to key managerial personnel None of our key managerial personnel have taken / been given any loans by our Company. Changes in our key managerial employees Except as stated under, there have been no changes in our Key Managerial Personnel since we acquired our Company, that is, since January 30, 2010. Employees Scheme of Employee Stock Option or Employee Stock Purchase Our Company does not have any scheme of employee stock option or employee stock purchase. Payment or Benefit to Officers of the issuer (non-salary related) No amount or benefit has been paid or given within the two preceding years or intended to be paid or given to any officer.

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OUR PROMOTER

Our Promoter Our Company is promoted by Mr. M. Srinivasa Reddy. Brief profile of our Promoter

Mr. M. Srinivasa Reddy, aged 38 years, is the Managing Director of our Company. Mr. Reddy is a graduate in Mechanical Engineering from Nagarjuna University. Post graduation he started marketing / distribution of FMCG products whilst sourcing them from various manufacturers. Having established a distribution network, Mr. Reddy started a manufacturing plant with hygienic facilities. With a keen sense of entrepreneurship, he is the driving force behind the success of Farmax India Limited and the implementation of the projects envisaged by our Company. Mr. Reddy currently resides at EWS – 941, KPHB Colony, 3rd phase, Kukatpally, Hyderabad, Andhra Pradesh – 500 072, India.

Voter Identity number: FYY1030287Driving license number: 684721997

We confirm that the Permanent Account Number, bank account number and passport number of our Promoter have been submitted to Stock Exchange at the time of filing the Draft Letter of Offer with the Stock Exchanges. For further details pertaining to Mr. M. Srinivasa Reddy, please refer to the section titled “Our Management” beginning on page 85 of the Draft Letter of Offer. Relationship of our Promoter with our Directors and our Key Managerial Personnel Our Promoter is not related to any of our Company’s Directors or Key Managerial Personnel. Acquisition of control by the current Promoter Our Company was incorporated with the main object to carry on the business of leasing and hire purchase. With a view to pursue business in financial services, primarily leasing and hire purchase, our Company made its maiden public issue in the year 1983 and the equity shares of our Company got listed on the Bombay Stock Exchange on March 12, 1984. Our Company is not a non banking finance company (NBFC) and is not registered with the Reserve Bank of India (RBI). Also it is not registered with SEBI in any capacity. In March 2001, the first promoters of our Company sold off their controlling interest to Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan. Further, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan took over the controlling interest in the share capital and management of our Company for the benefits of listing status, easier finance raising, etc. and with the intent to diversify the activities of our Company into the application software such as accounting, inventory, order management, manufacturing, CRM etc. In January 2009, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan sold their controlling interest in our Company to 3A Capital Services Limited and Mr. Rajan Shah. Further, 3A Capital Services Limited and Mr. Rajan Shah made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company.

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Mr. Rajan Shah, promoter director of 3A Capital Services Limited, acquired the controlling interest in the share capital and management of our Company with the intent of expanding its activities, business into financing, investment and trading of shares and securities etc. Thereafter vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited and Mr. Rajan Shah, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. M. Srinivasa Reddy acquired the controlling interest in the share capital and management of our Company as he proposes to diversify the business activities of our Company in the field of power, infrastructure, mining and other related / unrelated areas depending upon the market conditions and available opportunities. Our Promoter’s experience in the current line of business Our Promoter, Mr. M. Srinivasa Reddy, does not have experience in the proposed line of business, that is, Infrastructure, construction and related activities. Our Infrastructure business would be managed by our Promoter with the assistance of our Management and experienced Key Managerial Personnel. Common Pursuits There are no common pursuits between our Company and our Group Companies except as disclosed in the chapter titled “Our Promoter Group” and ”Our Group Companies” on pages 99 and 100 of the Draft Letter of Offer. Interest of Promoters Our Promoters do not have any interest:

Other than in the promotion of our Company, save and except the rent received from our Company for using the following properties:

1. Plot No. 401, CPR Brindavan, Opp. Necter Gardens, Madhapur, Hyderabad, Andhra Pradesh which has been taken on lease by our Promoter’s brother, Mr. M. Malla Reddy; and

2. Municipal No. 8-2-293/82/A/732-A/1 on part of plot number 732-A, in the layout of Jubilee Hills Cooperative House Building Society Limited, IVth floor, road number 36, Madhapur Road, Jubilee Hills, Hyderabad, Andhra Pradesh which has been taken on lease by our Promoter’s brother, Mr. M. Malla Reddy.

Further, save and except as stated otherwise in the chapters titled “Our Business” and “Our Management” and the section titled ‘Financial Statements’ beginning on pages 65, 85 and 108, respectively, of the Draft Letter of Offer, and to the extent of Equity Shares held by them, our Promoter does not have any other interests in our Company as on the date of the Draft Letter of Offer. Payment or Benefit to our Promoters

No payment has been made or benefit given to our Promoter in the two years preceding the date of the Draft Letter of Offer except as mentioned/referred to in this chapter and in the chapter titled “Our Management” and in the section titled “Financial Statements- Annexure 16” beginning on pages 85 and 122 respectively, of the Draft Letter of Offer.

There is no bonus or profit sharing plan for our Promoter.

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Related Party Transactions

For details on our related party transactions refer “Financial Statements – Annexure 16” beginning on page 122 of the Draft Letter of Offer.

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OUR PROMOTER GROUP Our Promoter and Promoter Group in terms of Regulation 2(1)(za) and 2(1)(zb) includes the following: A. Individuals related to our Promoter:

Relationship with our Promoters Mr. M. Srinivasa Reddy Father Mr. M. Venki Reddy Mother Ms. M. Mangama Spouse Ms. M. Padmavathi Brother Mr. M. Krishna Reddy

Mr.M. Malla Reddy Sister Ms. K. Vijayalakshmi

Ms. S. Malleswari Daughter Ms. M. KanakaPrudhvi Reddy Spouse’s Father Mr. Subba Reddy Spouse’s Mother Ms. K. Vijayalakshmi Spouse’s Brother Mr. K. V. Rajashekhar Reddy Spouse’s Sister Ms. K. Shravani Reddy

B. Companies, partnership firms, proprietary concerns, trusts, HUF’s related to our Promoters:

Nature of Relationship Entity Any body corporate in which 10% or more of the equity share capital is held by the Promoter or an immediate relative of the promoter or a firm or Hindu Undivided Family in which the Promoter or any one or more of his immediate relative is a member

Farmax India Limited

Any body corporate in which a body corporate as mentioned above holds 10% or more, of the equity share capital

Nil

Any HUF or firm in which the aggregate shareholding of the promoter and his immediate relatives is equal to or more than 10%

Nil

C. All persons whose shareholding is aggregated for the purpose of disclosing under the heading "shareholding of

the promoter group":

NIL

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OUR GROUP COMPANIES

As specified in the SEBI Regulations, the companies promoted by our Promoter, which comprise our Group Companies, is Farmax India Limited: Farmax India Limited Farmax India Limited (“FIL”) was incorporated as Bhagyangar Castings Limited on November 8, 1995 vide Certification of Incorporation bearing registration number 01-22190 of 1995-96, issued by the Registrar of Companies, Andhra Pradesh. A Certificate for Commencement of Business was issued by the Registrar of Companies, Andhra Pradesh on November 29, 1995. On September 28, 2007, vide Fresh Certificate of Incorporation consequent upon Change of Name issued by the Assistant Registrar of Companies, Andhra Pradesh, the name Farmax Retail (India) Limited was adopted. On November 9, 2009, vide Fresh Certificate of Incorporation consequent upon Change of Name issued by the Assistant Registrar of Companies, Andhra Pradesh, the name Farmax India Limited was adopted. The CIN of FIL is L27109AP1995PLC022190. FIL is currently engaged in the manufacture and marketing of fast moving consumer goods. Registered Office Farmax House, Alluri Trade Centre, 4th floor, Kukatpally, Hyderabad – 500 072. Board of Directors As on the date of the Draft Letter of Offer, the Board of Directors of FIL comprise of:

Sr. No. Name Designation 1. Mr. M. Srinivasa Reddy Chairman and Managing Director 2. Mr. M. Malla Reddy Executive Director3. Mr. Prasanth Reddy Executive Director4. Mr. G. Raju Executive Director5. Mr. MVR Sasthry Independent Director6. Ms. Hymavathi Independent Director7. Mr. I. Srinivas Raju Independent Director8. Mr. A.V. Rama Raju Independent Director

Interest of our Promoter As on March 31, 2010, our Promoter directly holds 46.85% of the issued and paid up capital of FIL. Except to the extent of their shareholding our Promoter have no other interest in FIL. Shareholding Pattern: The shareholding pattern as on March 31, 2010 filed with the Stock Exchanges is as under:

Category of Shareholder

No. of Shareholders

Total No. of Shares

Total No. of Shares held in Dematerialized Form

Total Shareholding as a % of total No. of Shares

Shares pledged or otherwise encumbered

As a % of (A+B)

As a % of (A+B+C)

Number of shares

As a% of Total No. of Shares

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(A) Shareholding of Promoter and Promoter Group

(1) Indian

Individuals / Hindu Undivided Family

2 14,205,000 14,205,000 56.37 56.37 - -

Sub Total 2 14,205,000 14,205,000 56.37 56.37 - -

(2) Foreign

Total shareholding of Promoter and Promoter Group (A)

2 14,205,000 14,205,000 56.37 56.37 - -

(B) Public Shareholding

(1) Institutions

(2) Non-Institutions

Bodies Corporate 79 3,587,775 3,587,775 14.24 14.24 - -

Individuals - -

Individual shareholders holding nominal share capital up to Rs. 1 lakh

614 471,112 439,306 1.87 1.87 - -

Individual shareholders holding nominal share capital in excess of Rs. 1 lakh

63 6,903,853 3,543,853 27.40 27.40 - -

Any Others (Specify) 5 32,260 32,260 0.13 0.13 - -

Non Resident Indians 5 32,260 32,260 0.13 0.13 - -

Sub Total 761 10,995,000 7,603,194 43.63 43.63 - -

Total Public shareholding (B) 761 10,995,000 7,603,194 43.63 43.63 - -

Total (A)+(B) 763 25,200,000 21,808,194 100.00 100.00 - -

(C) Shares held by Custodians and against which Depository Receipts have been issued

- - - - - - -

Total (A)+(B)+(C) 763 25,200,000 21,808,194 - 100.00 - -

Changes in capital structure There has been no change in capital structure of FIL during the preceding six months. Stock Market Data The Equity Shares of FIL are listed on BSE.

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BSE The details of the highest and lowest price on the BSE during the preceding six months are as follows:

Month High (Rs.) Low (Rs.) January 2010* 184.80 75.65 February 2010 106.40 78.00 March 2010 112.05 92.00 April 2010 138.00 101.00 May 2010 145.00 100.75 June 2010 128.95 114.10 July 2010 127.90 119.10

* On January 28, 2010 the face value of the equity shares was split from Rs. 10/- each to Rs. 5/- each. The market capitalisation on BSE based on the closing price of Rs. 124.85 per equity share, face value of Rs. 5/- each, on June 30, 2010 was Rs. 314.62 crores. Financial Performance The audited financial results of FIL for the fiscal 2010, 2009 and 2008 are as under:

(Rs. in lakhs, unless otherwise stated) Particulars For the period ended March 31,

2008 2009 2010 (Unaudited)

Income/Sales 1681.9 1990.0 181.3 Profit (Loss) after Tax 31.6 42.4 3.3 Equity share capital 1100.0 1100.0 1260.0 Reserves and surplus (excluding revaluation reserves)(1)

654.8 697.2 -

Basic and Diluted Earnings per share (Rs.)(2) 2.9 3.9 1.3 Net asset value or book value per share (Rs.)(2) 159.5 163.4 114.6

(1) Net of miscellaneous expenditure not written off. (2) Face value of each equity share is Rs.5. Details of Public Issue/Rights Issue of capital in the last three years FIL has not made any Public Issue/Rights Issue of capital in the last three years. Scheme of Amalgamation The board of directors of Farmax Health & Food Products Private Limited (“Transferor Company”) approved the Scheme of Amalgamation (the “Scheme”), under the provisions of sections 391 to 394 of the Act for the amalgamation of the Transferor Company with Farmax Retail (India) Limited (“Transferee Company”). All the shareholders of the Transferror and the Transferee companys had unanimously approved the Scheme. The Scheme was approved by the High Court of Judicature, Andhra Pradesh at Hyderabad (“Court”) on July 7, 2008. Rationale for the Scheme The sanction of the Court for the present scheme has been sought as the amalgamation would result in better and efficient utilisation of resources of the Transferor Company and the Transferee Company resulting in synergy of operations and economies of each. The Transferee Company will derive and avail the benefits of assets, reserves and

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cash flows of the Transferor Company thereby increasing its financial strength and the ability to make larger investments. Key terms and conditions of the Scheme, inter alia, are: (i) The Scheme envisages the transfer of the Undertaking (as defined below) of the Transferor Companies to the

Company pursuant to Sections 391 to 394 of the Act and other relevant provisions of the Act in the manner provided for in the Scheme, and the consequent issue of equity shares by the Company to the shareholders of the Transferor Companies as per the Share Exchange Ratio (as defined hereinafter).

(ii) The “Appointed Date” for the Scheme was April 1, 2008. (iii) The “Effective Date” for the Scheme shall mean the date on which the certified copies of the order of the Court

under section 391 to 394 of the Act are filed with the Registrar of Companies, Andhra Pradesh after obtaining the necessary consents, approvals, permissions, resolutions, agreements, sanctions and orders and if the certified copies are filed on different dates then the last of such dates.

(iv) “Undertaking” shall mean the entire undertaking of the Transferor Company as on the Appointed Date. The Scheme inter alia also provided for: a) the manner of vesting and transfer of the assets of the Undertaking of the Transferor Company in the Company; a) the transfer of contracts, deeds, bonds, agreements, schemes, arrangements and other instruments of whatsoever

nature relating to the Transferor Companies to the Company from the Appointed Date; b) the transfer of all debts, liabilities, duties and obligations of the Transferor Companies to the Company; c) the transfer of all suits, actions, appeals and proceedings of whatsoever nature by or against the Transferor

Companies to the Company; d) the manner in which Transferor Companies shall be deemed to have been carrying on all business and activities

relating between the Appointed Date and the Effective Date for and on account of, and in trust for, the Company; e) the transfer of all the staff, workmen and the employees engaged by the Transferor Companies to the Company

on terms and conditions not less favourable than those on which they are engaged in the Transferor Companies; f) provisions for the dissolution without winding up of the Transferor Companies upon the effectiveness of the

Scheme; g) The swap ratio, as per the scheme, for the shareholders of the respective companies as on the record date is as

under : issuance of two fully paid up share of face value of Rs. 10 in the Transferee Company for every one fully paid up share of face value of Rs. 10 held by such shareholder in Transferor Company,

h) provision for cancellation of the existing share certificates of any class held by the shareholders of the Transferor Companies upon the effectiveness of the Scheme;

Mechanism for redressal of investor grievance: All share related matters, namely transfer, transmission, transposition, dividend, change of name, address and signature of mandate and power of attorney, replacement, split, consolidation, dematerialisation and re-materialisation of shares, issue of duplicate certificates etc. are handled by FIL’s registrar and transfer agent being Venture Capital and Corporate Investments Private Limited (“RTA”). Investors correspond with RTA and FIL, on all share related matters. FIL has an established mechanism for investor service and grievance handling, with RTA and the compliance officer appointed by FIL. The board of directors of FIL have constituted a ‘shareholders / investor grievance committee’ which, inter alia, approves transfer and transmission of shares, issue of duplicate certificates, rematerialisation of shares and oversees and reviews all matters connected with securities transfers and other processes. It also looks into matters pertaining to redressal of shareholders’ complaints related to transfer of shares, non-receipt of declared dividend etc. It oversees performance of RTA and recommends measures for overall improvement in the quality of investor services. The summary statement of investor related transactions and details are also considered by the board of directors of FIL.

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Status of Complaints

Sr. No.

Particulars Status

1. Total number of complaints received during Fiscal 2007-08 Nil Status of the complaints received during Fiscal 2007-08 Not Applicable

2. Total number of complaints received during Fiscal 2008-09 One Status of the complaints received during Fiscal 2008-09 All resolved

3. Total number of complaints received during Fiscal 2009-10 One Status of the complaints received during Fiscal 2009-10 All resolved

4. Complaints received during April 01, 2010 till June 30, 2010 Nil Complaints resolved during April 01, 2010 till June 30, 2010 Not Applicable

5. Complaints outstanding as on June 30, 2010 Not Applicable Time normally taken for disposal of various types of investor

grievances: Approximately 15 days

Defunct / Strike-off Companies FIL is not a defunct company and no application has been made to the Registrar of Companies for striking off the name of the company, during the five years preceding the date of filing offer document with the Board. Sales and purchases between our Company and Group Companies/associate companies For details of transactions with related parties, see the section titled “Related Party Transactions” on page 107 of the Draft Letter of Offer Business interest of Group Companies / associate companies in our Company Our Company does not have any Subsidiaries. Except as stated in this section, our Group Company does not have any business interest in our Company. Interest of Group Companies in promotion of the Issuer Our Group Company has no in interest in the promotion of our Company. Interest of Group Companies in the properties of the Issuer Our Group Company has no interest in the properties acquired by our Company or proposed to be acquired by it. Our Company has not sold or leased any of its properties to its Group Company. Payment or Benefit to our Group Company Except as stated in the section titled “Related Party Transactions” on page 107 of the Draft Letter of Offer, there has been no payment of benefits to our Group Company during the two years prior to the filing of the Draft Letter of Offer. Other Confirmations Further, the Promoter, Promoter Group and Group Companies have confirmed that they have not been detained as wilful defaulters by the RBI or any other governmental authority and there are no violations of securities laws committed by them in the past or currently pending against them. None of the Promoter, Promoter Group and Group Companies has

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been (i) prohibited from accessing the capital market under any order or direction passed by SEBI or any other authority or (ii) refused listing of any of the securities issued by such entity by any stock exchange, in India or abroad.

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DIVIDEND POLICY

The declaration and payment of dividend will be recommended by our Board of Directors and approved by the shareholders of our Company at their discretion and will depend on a number of factors, including the results of operations, earnings, capital requirements and surplus, general financial conditions, contractual restrictions, applicable Indian legal restrictions and other factors considered relevant by our Board of Directors. Our Board of Directors may also from time to time pay interim dividend. Our Company has not declared any dividends since its incorporation.

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RELATED PARTY TRANSACTIONS

There are no related party transactions as of and for the fiscal year ended March 31, 2009, March 31, 2008, March 31, 2007 and March 31, 2006. For the fiscal year ended March 31, 2010, we have given an Inter Corporate Deposit of Rs. 31.63 lakhs to our Associate Company Farmax India Limited. For details of Related Party Transactions, please refer “Financial Statements – Annexure 16” on page 122 of the Draft Letter of Offer.

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SECTION V – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

Auditor’s Report as required by Part II of Schedule II to the Companies Act, 1956. To, The Board of Directors, Remidicherla Infra and Power Limited, Remidicherla House, CPR Brundavan, Flat No. 401, Near Nectar Gardens, Madhapur, Hyderabad – 500 081. Dear Sirs, Re: Proposed Rights Issue of Remidicherla Infra & Power Limited, (Previously Known as Star Leasing Limited) We have examined and found correct the annexed restated Summary of Standalone Statements of Remidicherla Infra & Power Limited (Previously Known as Star Leasing Limited) for the years ended March 31, 2010, 2009, 2008, 2007 and 2006 prepared by the Company and approved by its Board of Directors. Further we state that the company don’t have any subsidiary hence our report , restatement , reporting of financial statement is based on its standalone basis. At the date of signing this report, we are not aware of any material adjustment, which would affect the result shown by these accounts drawn up in accordance with the requirements of Part II of Schedule II to the Companies Act, 1956. In accordance with the requirements of: • Paragraph B (1) of Part II of Schedule II to the Companies Act, 1956; • Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement ) Regulations, 2009(‘the

SEBI ICDR Regulations’ )and • The Guidance Note on Reports in Company Prospectus and Guidance Note on Audit Reports/ Certificates on

Financial Information in Offer Documents issued by the Institute of Chartered Accountants of India and terms of reference received from the Company in connection with the proposed rights issue of the Company.

• The terms of reference given vide the Company’s letter dated 12.07.2010 requesting us to carry out work in connection with the Issue as aforesaid, we report that:-

1. The Summary Statement of Assets and Liabilities, as restated, of the Company as at March 31, 2010, 2009, 2008, 2007 and 2006 are as set out in Annexure I to this report after making such adjustments / restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies and Notes to Accounts as appearing in Annexure IV to this report.

2. The Summary Statement of Profit and Loss, as restated of the Company for the years ended March 31, 2010, 2009,

2008, 2007 and 2006 are as set out in Annexure II to this report. These profits have been arrived after making such adjustments / restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies and Notes to Accounts as appearing in Annexure IV to this report.

3. We have examined the Summary Statement of Cash flow, as restated relating to the Company for the years ended March 31, 2010, 2009, 2008, 2007 and 2006 appearing in Annexure III to this report after making such adjustments / restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies and Notes to Accounts as appearing in Annexure IV to this report.

These statements have been prepared by the Company and approved by its Board of Directors (these statements are

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herein collectively referred to as the “Restated Summary Statements”. These statements have been extracted from the Audited Financials Statement of the Company for the respective period/years.

Audit of the Financial Statements for the years ended March 31, 2010, has been conducted by Company’s Statutory Auditors, Kishore Kumar.S, Chartered Accountant. Audit of the Financial Statements for the years ended March 31, 2009, 2008, 2007 and 2006 have been conducted by Statutory Auditors G.R.Venkatesan & Co., Chartered Accountants. Further, Financial Statements for the year ended March 31, 2010 have been Reaudited by us as required under the SEBI ICDR Regulations. This report, in so far as it relates to the amounts included for the financial year ended March 31, 2010, is based on the Audited Financial Statements of the Company which were audited by the Statutory Auditors, Kishore Kumar.S, Chartered Accountant and for the financial years ended March 31, 2009, 2008, 2007 and 2006 have been audited by Statutory Auditors G.R.Venkatesan & Co., Chartered Accountants and whose Auditors’ report has been relied upon by us for the said periods

o The Restated Summary Statement of the Company as included in this report as at and for the years ended March 31 2010, 2009, 2008 , 2007 and 2006 are based on the Audited Financial Statements of the Company which were audited by the Statutory Auditors of the Company and whose Auditors’ report has been relied upon by us for the said years and for the year ended March 31, 2010 examined by us as set out in Annexure I, II and III of this report are after making such adjustments and regrouping as in our opinion were appropriate.

o Based on the above and also as per the reliance place by us on the Audited Financial Statements of the Company which were audited by Statutory Auditors and the Auditors’ report for the years ended March 31, 2010, 2009, 2008, 2007 and 2006 we are of the opinion that the Restated Summary Statements have been made after incorporating:

(i) Adjustments for the changes in Accounting Policies retrospectively in respective financial period/years to reflect the same accounting treatment as per changed Accounting Policy for all the reporting periods. (ii) Adjustments for the material amounts in the respective financial period/years to which they relate.

(iii) And there are no extra-ordinary items that need to be disclosed separately in the accounts and qualification adjustments.

We have examined the following Financial information relating to the Company proposed to be included in the Draft Letter of Offer, Letter of Offer, Abridged Letter of Offer, as approved by you and annexed to this report. In respect of the financial years ended March 31, 2010, 2009, 2008, 2007 and 2006 this information has been included based on the Audited Financial Statements of the Company which were audited by the Statutory Auditors of the Company and whose

Auditors’ report has been relied upon by us for the said years: Annexure of Restated Financial Statements of the Company:-

Details of Annexure Annexure 1 Summary Statement of Assets and Liabilities, as Restated Annexure 1 2 Summary Statement of Profit and Loss A/c, as Restated Annexure 2 3 Summary Statement of Cash Flow Statement, Restated Annexure 3 4 Significant Accounting Policies and Notes to Accounts Annexure 4 5 Statement of Sundry Debtors Annexure 5 6 Statement of Loans and Advances Annexure 6 7 Statement of Secured Loans Annexure 7 8 Statement of Unsecured Loans Annexure 8 9 Statement of Income from Operations Annexure 9

10 Statement of Other Income Annexure 10 11 Statement of Contingent Liabilities Annexure 11 12 Statement of Accounting Ratios Annexure 12 13 Statement of Capitalisation Annexure 13

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14 Statement of Dividend Annexure 14 15 Statement of Tax Shelters Annexure 15 16 Statement of Related Parties and Transactions Annexure 16 17 Statement of Investments Annexure 17 18 Statement of Segment Reporting Annexure 18

In our opinion the above Financial information of the Company read with Significant Accounting Policies and Notes to Accounts enclosed in Annexure IV to this report and also as per the reliance place by us on the Audited Financial Statements of the Company which were audited by the Statutory Auditors and the Auditors’ report for the years ended March 31, 2010, 2009, 2008, 2007 and 2006 after making adjustments / restatements and regroupings as considered appropriate has been prepared in accordance with paragraph B(1) Part II of Schedule II of the Companies Act and the SEBI ICDR Regulations. This report should not be in any way construed as a reissuance or redating of any of the previous audit reports issued by us or by other firm of Chartered Accountants, nor should this report be construed as a new opinion on any of the financial statements referred herein.

This report is intended solely for your information and for inclusion in the Draft Letter of Offer, Letter of Offer, Abridged Letter of Offer in connection with the specific Rights Issue of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

Place: Hyderabad

Date: 22.07.2010 For K. PRAHLADA RAO & Co., Chartered Accountants K. PRAHLADA RAO Partner Membership. No: 018477

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Annexure – 1

STATEMENT OF ASSETS AND LIABILITIES AS RESTATED

(Rs. in lakhs)

Particulars Year Ended March 31

2010 2009 2008 2007 2006 A TANGIBLE ASSETS

Fixed Assets Gross Block 15.63 15.40 15.40 14.00 14.00Less : Accumulated Depreciation 15.40 13.96 13.73 11.35 9.08Net Block 0.22 1.44 1.67 2.65 4.92Less : Revaluation Reserve - - - -Net Block after adjustment ofRevaluation Reserve 0.22 1.44 1.67 2.65 4.92Capital Work In Progress - - - - Total 0.22 1.44 1.67 2.65 4.92

B INTANGIBLE ASSETS - - - -Gross Block Less : Amortisation Net Block Capital Work In Progress Total

C INVESTMENTS - - - - D DEFERRED TAX ASSET - - - 2.96E CURRENT ASSETS, LOANS &ADVANCES

Inventories Sundry Debtors Cash & Bank Balances 0.26 0.00 0.17 0.23 0.17Loans & Advances 31.64 - 1.35 2.50 3.47Other Current Assets Total 31.90 0.00 1.52 2.73 3.64

F LIABILITIES AND PROVISIONS Secured Loans - - - - Unsecured Loans - - - - Deferred Tax Liability - - - - Current Liabilities 43.47 0.05 1.09 0.60 0.32Provisions - - Total 43.47 0.05 1.09 0.60 0.32

H NET WORTH (A + B + C+D+E-F) (11.35) 1.39 2.10 4.79 11.20Net Worth Represented by Equity Share Capital 24.00 24.00 24.00 24.00 24.00Preference Share Capital - - - - Reserve & Surplus - - - -

- Share Premium - - - -- Capital Reserve - - - -- Debenture Redemption Reserve - - - -- Other Reserve (Other than Revaluation Reserve) - - - -

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2010 2009 2008 2007 2006 - Surplus/(Deficit) in P & L A/c (35.35) (22.61) (21.90) (19.21) (12.80)

Less : Miscellaneous Expenses NotW/off - - - -

I NET WORTH (11.35) 1.39 2.10 4.79 11.20

Annexure – 2 STANDALONE STATEMENT OF PROFIT & LOSSES AS RESTATED:

(Rs. in lakhs)


Income Sales & Operating Incomes Of products

manufactured by The Company 46.90 - - - -

Of products traded by The Company - - - - Other Income 0.74 - - - - Increase / (Decrease) in Stock - - - Total Income 47.64 - - - - Expenditure Raw Material Consumed / Cost of TradedGoods 40.66 - - - -

Manufacturing Expenses - - - - - Payment & Provision for Employess - - - - - Administrative & Other Expenses 0.72 0.48 0.30 1.18 1.23Selling & Distribution Expenses - - - - - Financial Charges 0.00 - - - - Depreciation & Amortization 19.00 0.23 2.39 2.27 2.27Total Expenditure 60.38 0.71 2.69 3.45 3.50Profit before tax and extraordinary items (12.75) (0.71) (2.69) (3.45) (3.50)Add / (Less) : Extraordinary Items - - - - - Profit Before Tax after extraordinaryitems (12.75) (0.71) (2.69) (3.45) (3.50)

Add / (Less) : Provision for Tax - - - - - Current Tax - - - - - Earlier Years - - - - - Deferred Tax Liability / (Assets) - - - 3.72 -

Profit After Tax and extraordinary items as per Audited Accounts (A)

(12.75) (0.71) (2.69) (7.18) (3.50)

Impact of Change in Accounting Policies and Estimates

- - - - -

Excess/(Short) Provision for Taxation - - - - - Prior Period Adjustments - - - - -Total Impact of Adjustment - - - - - Total Adjustments net of tax impact - - - - - Net Profit as Restated (12.75) (0.71) (2.69) (7.18) (3.50)Surplus/(Deficit) brought forward from previous years

(22.61) (21.90) (19.21) (12.03) (9.30)

Balance available for appropriations, as (35.35) (22.61) (21.90) (19.21) (12.80)

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restated Appropriation - - - - - Proposed Dividend on Equity shares - - - - - Proposed Dividend on Preference shares - - - - - Tax on Dividend - - - - - Transfer to Capital Reserve - - - - - Transfer to Debenture Redemption Reserve - - - - - Transfer to General Reserve - - - - - Balance Carried forward as restated (35.35) (22.61) (21.90) (19.21) (12.80)

Annexure – 3

STATEMENT OF CASH FLOWS FROM RESTATED FINANCIAL STATEMENTS (Rs. in lakhs)


A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before taxation andextraordinary items (12.75) (0.71) (2.69) (3.45) (3.50)

Adjustment for : Depreciation & Amortization

1.45 0.23 2.38 2.27 2.27

Finance Charges/Interest - - - - -Provision for diminution in value ofinvestments

- - - - -

Foreign Exchange Gain/(loss) - - - - -Fixed Assets W/off - - - - -Loss on Sale of Investment - - - - -Interest/ Dividend Received. - - - - -Loss on Sale of Fixed Assets - - - - -Misc. Expenses Amortization 17.55 Cash generated from operations before

working capital changes 6.25 (0.48) (0.31) (1.18) (1.22)

Increase/Decrease in trade receivables - - - - -Increase/ Decrease in loans & advances - 1.35 1.15 0.97 1.33Increase/Decrease in Inventories - - - - -Increase/Decrease in trade Payables &Others

14.87 (1.04) 0.48 0.27 (0.10)

Cash Generated from Operations 21.12 (0.17) 1.33 0.06 0.01Direct tax Paid (Net of Excess/surplusprovision)

- - - - -

Interest Paid - - - - -Net Cash Flow before extraordinaryitems

21.12 (0.17) 1.33 0.06 0.01

Extraordinary Items - - - - -Net Cash from Operating Activities 21.12 (0.17) 1.33 0.06 0.01

D. CASH FLOW FROM INVESTING ACTIVITIES

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Purchase of Fixed Assets (0.23) - - - -Pre-Operative/Misc. Expenditure andproject Expenses -

- - - -

Sale of investments - - - - -Profit/(loss) on Sale of investments - - - - -Investment in subsidiary - - - - -Sale of investment in subsidiary - - - - -Purchase of Investment (NET) - - - - -Proceeds from sale of fixed assets - - - - -Interest Received - - - - -Interest Received on bank Deposits - - - - -Inter Corporate Deposit etc. (31.64) - - - -Dividend Received - - - - -Net Cash from Investing Activities (31.86) - - - -E. CASH FLOW FROM

FINANCING ACTIVITIES

Proceeds from issuance of share capital 11.00 - - - -Refund of share application money - - - - -Share issue expenses - - - - -Proceeds from Secured loans - - - - -Proceeds from Unsecured loans - - - - -Repayment of Secured Loans - - - - -Repayment of Unsecured Loans - - - - -Finance Charges paid - - - - -Dividend Paid - - - - -Borrowing (Net) - - - - -Net Cash from/used from financialactivities

11.00 - - - -

NET INCREASE /(-) DECREASE IN CASH AND CASH EQUIVALENTS

0.26 (0.17) 1.33 0.06 0.01

OPENING BALANCE IN CASH AND CASH EQUIVALENTS

0.00 0.17 0.23 0.16 0.16

CLOSING BALANCE IN CASH AND CASH EQUIVALENTS 0.26 0.00 0.17 0.23 0.17

Components of Cash & Cash Equivalents

- Cash in hand 0.13 0.00 0.15 0.23 0.15- Cash/bank Balance with bank (current account)

0.13 0.02 0.00 0.02

-Balance with bank on deposit account CASH AND CASH EQUIVALENTS 0.26 0.00 0.17 0.23 0.17Note: 1) Figures in Brackets represent the outflow of cash.

2) There is a difference of Rs.10,000 in the cash balance in the Audited Financial Statements for the year 2005-06 and in the previous year's Figures mentioned in A 2006-07. This is occurred due to non-accounting of payment voucher in respect of Audit Fee paid. This is considered as IOU and included in the cash balance for of Audit for the year 2006-07, the payment of Rs.10,000 was adjusted in the previous year's figures cash balance on availability of voucher for the payment of audit Restated cash flow summary statements. Cash Flow Statement has been prepared using indirect method as per Accounting Standard 3 - Cash Flow Statements issued by ICAI

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Annexure – 4 SIGNIFICANT ACCOUNTING POLICIES

1. Significant Accounting Policies

a. Basis of Accounting: The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. All income and expenditure having a material bearing on the financial statements are recognized on the accrual basis.

b. Fixed Assets: Fixed Assets are stated at the cost of acquisition less accumulated depreciation. c. Depreciation: Depreciation on fixed assets is provided on straight-line-method and at the rates specified in

the Schedule XIV of the Companies Act, 1956. d. Miscellaneous Expenditure: Miscellaneous expenditure comprising of preliminary expenses is amortized

over five years period.

2. Previous year figures are regrouped or reclassified wherever necessary.

3. Authorized Capital of the Company is enhanced to Rs.30.00 Crores from the existing Rs.3.00 crores vide resolution passed in the Extra-ordinary General Meeting held in the month of February 2010.

4. Directors’ Remuneration :- Nil

5. Auditors remuneration:

- Statutory audit fee: Rs. 10,000 (Previous year:Rs.5,000/-)

6. There is a change in the Management and the Company diversified its activities into infrastructure since February 2010. The production and sale of such activities cannot be expressed in any generic unit. Hence it is not possible to furnish the quantitative details and the information as required under Paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.

7. Deferred tax Assets is not recognized for the tax effect at present tax rates on the difference between taxable income

and accounting income, which is not permanent in nature in view of uncertainty in future, operations. 8. Related Party Information

Relationship: Shareholder Mr.M.Srinivasa Reddy, having substantial shareholding in the company is also a shareholder with substantial shareholding in M/s.Farmax India Limited

Transactions during the year: 1) Inter corporate Deposits: - Farmax India Limited Rs.31.64 lakhs

9. Capital Commitments: Estimated amount of contracts to be executed that are not provided for (net of advances) - NIL 10. Contingent Assets and Liabilities: There is no Contingent Asset or Liability for or against the Company nor

acknowledged as debt during the period.

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11. Particulars of employees in accordance with Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 are nil.

12. There are no outstanding over dues to small-scale industrial undertakings and/or ancillary industrial suppliers on

account of principal and /or interest at the close of the financial year. This disclosure is based on the documents/information available with the company.

13. Balance Sheet abstract and Company’s general business profile are attached separately.

14. All figures have been rounded off to the nearest rupee. 15. Foreign Currency Transactions:

The Company has no Foreign Currency Transactions during the period. Since, the Company has no Foreign Exchange Income or Expenditure, disclosures required under Schedule VI of the Companies Act, 1956 is not applicable.

16. An amount of Rs.3,51,000 being 1/5th of total ROC filing fee was shown as Miscellaneous expenditure, now total expenditure of Rs. 17,55,000 was written off as per Accounting Standard 26.

Annexure – 5

STATEMENT OF SUNDRY DEBTORS AS RESTATED (Rs. in lakhs)


Receivable other than from promoters/promoters group/directors/relatedparties

Less than Six Months - Considered Good - - - - - - Considered Doubtful - - - - -

More than Six Months - - - - Considered Good - - - - - - Considered Doubtful - - - -

Receivable from promoters/promotersgroup /directors/related parties

Less than Six Months - - - - - - Considered Good - - - - - - Considered Doubtful - - - - -

More than Six Months - - - - Considered Good - - - - - - Considered Doubtful - - - - -

Total - - - - -

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Annexure – 6 STATEMENT OF LOANS & ADVANCES AS RESTATED

(Rs. in lakhs)


2010 2009 2008 2007 2006 Advances 31.64 - - - Advance for capital goods - - 1.35 2.50 3.47 Total 31.64 - 1.35 2.50 3.47

Annexure – 7

STATEMENT OF SECURED LOANS AS RESTATED (Rs. in lakhs)


Term Loan - - - - Working Capital - - - - - Overdraft Facility - - - - - Vehicle Loan - - - - - Foreign Currency Loan - - - - - Total - - - - -

Annexure – 8

STATEMENT OF UNSECURED LOANS AS RESTATED (Rs. in lakhs)


2010 2009 2008 2007 2006 1) From Promoters/Directors/Relatives - - - - -

2) From Group Companies - - - - - 3) Others - - - - - Total - - - - -

Annexure – 9

STATEMENT OF INCOME FROM OPERATIONS AS RESTATED

(Rs. in lakhs)


2010 2009 2008 2007 2006 Export Sales - - - - - Domestic Sales- ConstructionActivity 46.90 - - - -

Other Operating Income - - - - - Total 46.90 - - - -

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Annexure – 10

STATEMENT OF OTHER INCOME AS RESTATED (Rs. in lakhs)

Particulars Nature of

Transaction Year Ended March 31

2010 2009 2008 2007 2006 Insurance Claim Receipts - - - - - Contract settlement Income

- - - - -

Dividend Income - - - - -

Interest Income Non- Recurring

0.74 - - - -

Discount on DEPB License Purchase less commission

- - - - -

Duty Draw Back - - - - - Insurance Charges Received

- - - - -

Misc Income - - - - - Rental Income - - - - - Profit on Sale of fixed assets

- - - - -

Profit on Sale of investments

- - - - -

Profit from partnership firm

- - - - -

Total 0.74 - - - - Net Profit before tax as restated

(12.75) (0.71) (2.69) (3.45) (3.49)

% of net Profit before tax as restated

(5.77) - - - -

Annexure – 11

STATEMENT OF CONTINGENT LIABILITIES AS RESTATED (Rs. in lakhs)


For letters of credit opened for whichgoods were in transit - - - - - For guarantee given to Banks - - - - - For Corporate guarantee given - - - - - For Disputed Income Tax Liabilities - - - - - For Disputed Interest on educationCess on Custom - - - - -

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Annexure – 12

STATEMENT OF ACCOUNTING RATIOS BASED ON RESTATED FINANCIAL STATEMENTS

(Amount in Rs except per share data)


2010 2009 2008 2007 2006 Net Profit after tax as restated (12.75) (0.71) (2.69) (7.18) (3.50)Weighted Average number of equityshares Outstanding during the year /period considered for Basic EPS 2.40 2.40 2.40 2.40 2.40Weighted Average number of equityshares Outstanding during the year /period considered for Diluted EPS 2.40 2.40 2.40 2.40 2.40Net Worth (11.35) 1.39 2.10 4.79 11.20Earnings Per Share (EPS) Basic EPS (Rs.) (5.31) (0.30) (1.12) (2.99) (1.46)Diluted EPS (Rs.) (5.31) (0.30) (1.12) (2.99) (1.46)Return on Net Worth (Annualized)(%) (112.33) (51.08) (128.10) (149.90) (31.25)Net Asset Value per Equity Share(Rs.) (4.73) 0.58 0.88 2.00 4.67

Notes:

The Ratio has been computed as below:

---------------------------------------------------------------------------------------- (a) Earning Per Share (Rs.) =

(b) Return On Net Worth (%) = ----------------------------------------------------------------------------------------

(c) Net Asset Value per Share (Rs.) = ----------------------------------------------------------------------------------------

Net Profit after Tax as restated

Weighted Average number of Equity shares outstanding during the year

Weighted Average number of Equity shares outstanding during the year

Net Profit after Tax as restated

Net Worth as restated

Net Worth as restated

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Annexure – 13 CAPITALISATION STATEMENT AS RESTATED

(Rs. in lakhs)

Particulars Pre-Issue Post-Issue As on March 31, 2010

Borrowings Short Term Debt - Long Term Debt - Total Debt - Shareholders' Fund Share Capital - Equity 24.00 - Preference - Reserves & Surplus* (35.35) Total Shareholders' Funds (11.35) Debt / Equity Ratio - *Miscellaneous Expenditure and debit balance of Profit and Loss A/c have been considered for working of Reserves and Surplus

Annexure – 14

STATEMENT OF DIVIDEND DECLARED AS RESTATED (Rs. in lakhs)


2010 2009 2008 2007 2006 Equity Dividend Equity Share Capital - - - - - Rate of Dividend - - - - - Amount of Dividend - - - - - Preference Dividend Preference Share Capital - - - - - Rate of Dividend - - - - - Amount of Dividend - - - - - Tax on dividend - - - - -

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Annexure –15 STATEMENT OF TAX SHELTERS AS RESTATED

(Rs. in lakhs)


2010 2009 2008 2007 2006 Profit before Tax but after extraordinary items as restated (a) (12.75) (0.71) (2.69) (3.45) (3.50)Tax Rate 30.60% 30.60% 30.60% 30.60% 30.60%Tax at Notional Rate on Profit - - - - -Adjustments : Permanent Differences : - - - - - Total of Permanent Differences (b) - - - - - Timing Differences: Depreciation as per Books of Account 1.45 0.23 2.38 2.27 2.27Depreciation as per Income Tax Act 0.26 0.62 0.51 0.22 0.54Total of Timing Differences (c) 1.19 (0.40) 1.88 2.05 1.73Net Adjustments (b) + (c) 1.19 (0.40) 1.88 2.05 2.73Tax Saving 0.36 (0.12) 0.57 0.63 0.53Total Adjustments (d) 1.55 (0.52) 2.45 2.68 2.26Tax effect thereof - - - - -Profit/(loss) as per Income Taxreturns (e)= (a-b-c-d) (11.30) - (0.30) - (1.23)Brought forward losses adjusted (f) (22.61) (21.90) (19.21) (12.03) (9.30)Taxable Income/(loss) (e+f) (33.90) (21.90) (19.51) (12.03) (10.53)Taxable Income/(loss) as per MAT 12.75 (0.71) 2.69 (3.45) (3.50)Tax as per Income tax as returned (11.30) - (.30) - (1.23)Interest u/s 234 - - - - - Total Tax as per return - - - - (1.23) Carry forward business loss (11.30) - (0.30) - (1.23)Carry forward depreciation loss Total carry forward loss as perreturn of the year (11.30) - (0.30) - (1.23)

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Annexure –16

DETAILS OF RELATED PARTY TRANSACTIONS AS RESTATED (Rs. in lakhs)


2010 2009 2008 2007 2006 a. Shareholders having substantial interest - - - - -

b. Key Managerial Personnel - - - - - c. Associate Concerns 31.64 - - - - d. Subsidiary Companies - - - - - Transaction with related parties Nature of

TransactionYear Ended March 31,

Name of the party 2010 2009 2008 2007 2006 Transaction with Shareholders having substantial interest - - - - - -

Transaction with Key ManagerialPersonnel - - - - - -

Transaction with Associate Concerns-Farmax India Limited

Inter Corporate Deposit

31.64 - - - -

Transaction with SubsidiaryCompanies - - - - - -

Annexure –17

STATEMENT OF INVESTMENTS AS RESTATED

(Rs. in lakhs)


2010 2009 2008 2007 2006 Long Term Investments - - - - - Trade Investments-Quoted Group Companies - - - - - Others - - - - - Total (a) - - - - - Trade Investments-Unquoted Group Companies - - - - - Others - - - - - Total (b) - - - - Non-Trade Investments- Quoted Group Companies - - - - - Others - - - - - Total (c) - - Immovable Properties - - - - - Total (d) - - - - - Less : Provision for diminution in investments (e) - - - - -

Total (a+b+c+d-e) - - - - - Market value of quoted investments - - - - -

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Annexure –18 SEGMENT REPORTING The company operates in a single line of business i.e. Construction and also in a single geographic environment i.e. within in India, therefore the information required under the Accounting Standard 17- Segment Reporting.

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

You should read the following discussion of our financial condition and results of operations together with our audited restated financial statements under Indian GAAP including the schedules, annexure and notes thereto and the reports thereon, which appear elsewhere in the Draft Letter of Offer in the section titled “Financial Statement”. You are also advised to read the section titled “Risk Factors” on page ix of the Draft Letter of Offer, which discusses a number of factors and contingencies that could impact our financial condition, results of operations and cash flows. Unless otherwise stated, the financial information used in this Section is derived from our audited financial statements under Indian GAAP, as restated. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the twelve months period ended March 31 of that year.

SIGNIFICANT ACCOUNTING POLICIES 1. Significant Accounting Policies

a. Basis of Accounting: The financial statements are prepared under the historical cost convention in accordance with Generally Accepted Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. All income and expenditure having a material bearing on the financial statements are recognized on the accrual basis.

b. Fixed Assets: Fixed Assets are stated at the cost of acquisition less accumulated depreciation. c. Depreciation: Depreciation on fixed assets is provided on straight-line-method and at the rates specified in the

Schedule XIV of the Companies Act, 1956. d. Miscellaneous Expenditure: Miscellaneous expenditure comprising of preliminary expenses is amortized over five

years period.

2. Previous year figures are regrouped or reclassified wherever necessary.

3. Authorized Capital of the Company is enhanced to Rs.30.00 Crores from the existing Rs.3.00 crores vide resolution passed in the Extra-ordinary General Meeting held in the month of February 2010.

4. Directors’ Remuneration :- Nil

5. Auditors remuneration:

- Statutory audit fee: Rs. 10,000 (Previous year:Rs.5,000/-)

6. There is a change in the Management and the Company diversified its activities into infrastructure since February 2010. The production and sale of such activities cannot be expressed in any generic unit. Hence it is not possible to furnish the quantitative details and the information as required under Paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.

7. Deferred tax Assets is not recognized for the tax effect at present tax rates on the difference between taxable income and

accounting income, which is not permanent in nature in view of uncertainty in future, operations. 8. Related Party Information

Relationship: Shareholder Mr.M.Srinivasa Reddy, having substantial shareholding in the company is also a shareholder with substantial shareholding in M/s.Farmax India Limited

Transactions during the year: 1) Inter corporate Deposits: - Farmax India Limited Rs.31.64 lakhs

9. Capital Commitments: Estimated amount of contracts to be executed that are not provided for (net of advances) - NIL 10. Contingent Assets and Liabilities: There is no Contingent Asset or Liability for or against the Company nor acknowledged

as debt during the period.

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11. Particulars of employees in accordance with Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 are nil.

12. There are no outstanding over dues to small-scale industrial undertakings and/or ancillary industrial suppliers on account of

principal and /or interest at the close of the financial year. This disclosure is based on the documents/information available with the company.

13. Balance Sheet abstract and Company’s general business profile are attached separately.

14. All figures have been rounded off to the nearest rupee. 15. Foreign Currency Transactions:

The Company has no Foreign Currency Transactions during the period. Since, the Company has no Foreign Exchange Income or Expenditure, disclosures required under Schedule VI of the Companies Act, 1956 is not applicable.

16. An amount of Rs.3,51,000 being 1/5th of total ROC filing fee was shown as Miscellaneous expenditure, now total expenditure of Rs. 17,55,000 was written off as per Accounting Standard 26.

OUR RESULTS OF OPERATIONS The table below sets forth various items from our Company’s restated Audited financial information for years ended March 31, 2010, 2009, 2008, 2007 and 2006:

(Rs. in lakhs)

Particulars Year Ended

31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Income Sales 46.90 - - - - Other Income 0.74 - - - - Total Income 47.64 - - - - Expenditure Cost of Construction 40.66 - - - - Administrative & Other Expenses 0.72 0.48 0.30 1.18 1.23

Financial Charges 0.00 - - - - Depreciation & Amortization 19.00 0.23 2.38 2.27 2.27 Total Expenditure 60.38 0.71 2.69 3.45 3.50 Profit/(Loss) Before Tax and extraordinary items (12.75) (0.71) (2.69) (3.45) (3.50)

Add / (Less) : Extraordinary Items - - - - - Profit/ (Loss) Before Tax after extraordinary items (12.75) (0.71) (2.69) (3.45) (3.50)

Add / (Less) : Provision for Tax - - - - - Current Tax - - - - - Deferred Tax Liability / (Assets) - - - 3.72 - Profit/ (Loss) After Tax and extraordinary items (12.75) (0.71) (2.69) (7.18) (3.50)

Summary of Major Items of Income and Expenditure Income The income from infrastructure, construction and other related activities of Rs. 46.90 lakhs was generated in the months of February and March 2010, prior to which there was no business activities in our Company. Other Income Our Company’s other income comprises of interest received arising out of the Inter-corporate loan given by our Company. Expenditure Our Company’s expenditure includes:

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• Cost of construction • Administrative and other expenses • Depreciation and amortization which comprise of depreciation of office equipment and computers and amortization of

miscellaneous expenditure. Comparison of Financial Results of 31.03.2010 and 31.03.2009 Income During the year ended 2009-10, our Company started with infrastructure, construction and related activities which led the total income of the company to increase to Rs. 46.90 lakhs as compared to NIL income for the year 2008-09 as our Company was not pursuing any business activity in the year 2008-09. Other Income Our Company generated other income of Rs. 0.74 lakhs in the year 2009-10. The increase in other income was primarily due to interest received in the year 2009-10 arising out of the Inter-corporate loan given by our Company. Expenditure Construction related expenses and administrative & Other Expenses Construction related expenses as well as administrative and other expenses were Rs. 41.39 lakhs in the year 2009-10, as compared to 0.48 lakhs in the year 2008-09. The increase was primary on account of commencement of new business activity in the year 2009-10 as compared to no business operations in the year 2008-09. Financial Charges In the year 2009-10 our Company has paid bank charges of Rs. 0.002 lakhs Depreciation & Amortization Depreciation and Amortization expenses were Rs. 19.00 lakhs in the fiscal year 2009-10 as compared to Rs. 0.23 lakhs in the year2008-09. The increase was primarily due to amortization of expenses incurred for increase in authorized capital. Profit/ (Loss) Before Tax Our Company’s loss before taxation increased from Rs. 0.71 Lakhs in the year 2008-09 to Rs. 12.75 Lakhs in the year 2009-10 due to amortization of expenses incurred for increase in authorized capital. Comparison of Financial Results of 31.03.2009 and 31.03.2008 Income During the year 2008-09, our Company had not pursued any business operations and hence we had not generated any income in the year 2008-09. Expenditure Total Expenditure Total expenses incurred during the year 2008-09 was Rs. 0.71lakhs in comparison to Rs. 2.68 lakhs during the year 2007-08 resulting in a decrease of 73.58% which was due to decrease in amount of depreciation on account of sale of fixed assets and others. While the increase of 58.78% in administrative & other expenses was due to increase in staff costs and others. Profit/ (Loss) Before Tax Our Company’s loss before taxation decreased from Rs. 2.69 lakhs in the year 2007-08 to Rs. 0.71 lakhs in the year 2008-09 due to decrease in depreciation. Comparison of Financial Results of 31.03.2008 and 31.03.2007 Income

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During the year 2007-08, our Company had not pursued any business operations and hence we had not generated any income in the year 2007-08. Total Expenditure Total expenses incurred during the year 2007-08 was Rs. 2.69 lakhs in comparison to Rs. 3.45 lakhs during the year 2006-07 due to a 22.23% decrease in amount of administrative & other expenses. Profit/ (Loss) Before Tax Our Company’s loss before taxation decreased from Rs. 3.45 lakhs in the year 2006-07 to Rs. 2.69 lakhs in the year 2007-08 due to overall decrease in administration and other expenses. OVERVIEW Our Evolution Our Company was incorporated with the main object to carry on the business of leasing and hire purchase. With a view to pursue business in financial services, primarily leasing and hire purchase, our Company made its maiden public issue in the year 1983 and the equity shares of our Company got listed on the Bombay Stock Exchange on March 12, 1984. Our Company is not a non banking finance company (NBFC) and is not registered with the Reserve Bank of India (RBI). Also it is not registered with SEBI in any capacity. In March 2001, the first promoters of our Company sold off their controlling interest to Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan. Further, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan took over the controlling interest in the share capital and management of our Company for the benefits of listing status, easier finance raising, etc. and with the intent to diversify the activities of our Company into the application software such as accounting, inventory, order management, manufacturing, CRM etc. In January 2009, Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan sold their controlling interest in our Company to 3A Capital Services Limited and Mr. Rajan Shah. Further, 3A Capital Services Limited and Mr. Rajan Shah made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. Rajan Shah, promoter director of 3A Capital Services Limited, acquired the controlling interest in the share capital and management of our Company with the intent of expanding its activities, business into financing, investment and trading of shares and securities etc. Thereafter vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited and Mr. Rajan Shah, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. M. Srinivasa Reddy acquired the controlling interest in the share capital and management of our Company as he proposes to diversify the business activities of our Company in the field of power, infrastructure, mining and other related / unrelated areas depending upon the market conditions and available opportunities. Mr. Reddy is a graduate in Mechanical Engineering from Nagarjuna University. Post graduation he started marketing / distribution of FMCG products whilst sourcing them from various manufacturers. Having established a distribution network, Mr. Reddy started a manufacturing plant with hygienic facilities. With a keen sense of entrepreneurship, he is the driving force behind the success of Farmax India Limited and the implementation of the projects envisaged by our Company. Business Overview We have recently ventured into infrastructure, construction and related activities. The market for the Company’s service i.e. construction and infrastructure development is directly linked with the economic development in the country, as construction is the key step for any development. We are currently providing our services to various private companies that can be later extended to Governmental as well as Public Private Partnership projects. Our projects currently extend to 3 states in India that are focused on the following areas: • Roads • Construction and Civil Work • Land Development

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Our Competitive Strengths Contracts in hand Vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited and Mr. Rajan Shah, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company. Mr. M. Srinivasa Reddy acquired the controlling interest in the share capital and management of our Company as he proposes to diversify the business activities of our Company in the field of power, infrastructure, mining and other related / unrelated areas depending upon the market conditions and available opportunities. As on June 30, 2010 we have order book of Rs. 5,173.50 lakhs in infrastructure, construction and related activities. Proven track record of Promoter Our Promoter Mr. M. Srinivasa Reddy, is a Mechanical Engineer. Mr. M. Srinivasa Reddy is a Mechanical Engineer by qualification. Post graduation, Mr. Reddy began his career by marketing / distributing FMCG products sourced from various manufacturers. Making the most of his knowledge of the various markets and the experience gained while setting up the marketing network across different areas he conceived the idea of starting a FMCG manufacturing plant and promoted Farmax India Limited which is listed on Indian Stock Exchange. With a keen sense of entrepreneurship, he is the driving force behind the successful implementation of Farmax India Limited. As the company grew in size, his knowledge and experience helped to develop his own network. Capitalising on this, as well as the emerging opportunities in infrastructure, construction and related activities, he is now venturing into them through our Company Professionally managed company with an experienced management and a qualified employee base Our Company has a balanced mix of youth and experience, comprising of a strong and young management team coupled with experienced seniors that provides a blend of old school principles as well as young and fresh ideas. We have a qualified and motivated workforce consisting of managers, engineer, technical staff and non-technical staff. The skill sets of our employees give us the flexibility to adapt to the needs of our clients and the technical requirements of the various projects that we undertake. We are dedicated to the professional development of our employees and continue to invest in them to ensure that they have the necessary skills. Our management team is well qualified and experienced and is responsible for the growth in our business operations. Business Strategy To pursue continuous marketing & corporate brand building We plan to make ourselves visible to a large audience that will enable us to get more contracts as well as bid for larger contracts. We intend to position ourselves in the market through communication and promotional initiatives such as advertisements in print media, hoardings, televisions, organizing events, participation in industry events, public relations and investor relations efforts. For the said purpose we propose to spend Rs. 362.80 lakhs for further details please refer to the chapter titled “Objects of the Issue” on page 41 of the Draft Letter of Offer. Continue to enhance our project execution capabilities We intend to focus on performance and project execution in order to maximize client satisfaction and margins. We will leverage technologies, designs and project management tools to increase productivity and maximize asset utilization in capital intensive activities. We will optimize operating and overhead costs to maximize our operating margins. Our ability to effectively manage projects will be crucial to our continued success as a recognised infrastructure company. We believe that we are able to distinguish ourselves from our competitors because of our management strength, construction, operation and maintenance capabilities. We intend to continuously strengthen our execution capabilities by adding to our existing pool of engineers, attracting new graduates, and facilitating continuous learning. Focus on BOT Contracts The Company at present has not executed any BOT project. The Company intends to focus on executing different BOT projects. Most of BOT contracts are obtained through a competitive bidding process. In selecting contractors for a major project, clients generally limit the tenders to the contractors who are pre-qualified based on several criteria including experience, technological capacity and performance, reputation of quality, financial strength, net worth, bonding capacity and size of previous contracts executed and competitive price/bid. The Company is improving on its pre-qualification criteria to enable it to bid for BOT projects. Improve the execution capabilities

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The Company aims to improve its execution capabilities to execute larger number of projects at a time. With this view, the Company is constantly strengthening its capabilities to enable it to execute various projects at a time. To operate into diversified sectors The Company aims to operate into diversified sectors such as townships, offices, houses and other buildings, urban infrastructure, highways, roads, power systems, etc. which will mitigate business risk in case of slowdown in any one particular field in the future. Expanding geographical reach Currently our projects extend to three states in India. We believe that, the fastest way to accelerate profitable growth is by expanding into new geographies. Hence, we plan to foray into the under developed regions in the country because of the relatively high population growth and unaddressed market needs. Significant Development Subsequent to Last Financial Period For further details please refer to chapter titled “Outstanding Litigations and Material Developments’’ on page 131 of the Draft Letter of Offer. Factors that may affect Results of Operations Except as otherwise stated in the Draft Letter of Offer, the risk factors given in the Draft Letter of Offer and the following important factors could cause actual results to differ materially from the expectations include, among others: • Change in business activities; • Promoter’s inexperience in current business activities; • General economic and business conditions; • Increasing competition in the industry; • Company’s ability to successfully implement its strategy and its growth and expansion plans; • Amount that our Company is able to realize from the clients; • Changes in laws and regulations that apply to the industry; • Changes in fiscal, economic or political conditions in India; • Increases in labour costs, raw materials prices etc;

OTHER MATTERS 1. Unusual or infrequent events or transactions

Except as described in the Draft Letter of Offer, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations Other than as described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, on page ix and 124 of the Draft Letter Of Offer respectively, to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company 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 as described in the section entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Result of Operations”, to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our company from continuing operations.

4. Future relationship between Costs and Income

Other than as described in the section entitled “Risk Factors” on page ix of the Draft Letter of Offer, to our knowledge there are no factors, which will affect the future relationship between costs and income or which are expected to have a material adverse impact on our operations and finances.

5. The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased prices

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Increases in revenues are by and large linked to increases in volume of business activity carried out by the Company.

6. Total turnover of each major industry segment in which the issuer company operates.

The Company is operating in infrastructure, construction and other related activities industry. Relevant industry data, as available, has been included in the section titled “Industry Overview” beginning on page 57 of the Draft Letter of Offer.

7. Status of any publicly announced new products or business segments

Please refer to the section titled “Our Business” beginning on page 65 of the Draft Letter of Offer.

8. The extent to which the business is seasonal. Our business is not seasonal. However, due to the difficult working conditions during the monsoon season, we try to maximize construction work during the winter, dryer periods of the year. Often this means mobilising more equipment and increasing staffing levels on construction projects during these periods. We record revenues on the percentage of completion method determined on the basis of applicable accounting standards issued by ICAI.

9. Any significant dependence on a single or few suppliers or customers There is no dependence on a single or few suppliers or customers.

10. Competitive Conditions Despite the fact that we are not affected by competition in the short-term, our results of operations could be affected by competition in the infrastructure sector in India in the future. We expect competition to intensify due to possible new entrants in the market, existing competitors further expanding their operations and our entry into new markets where we may compete with well-established infrastructure companies. This we believe may impact our financial condition and operations.

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SECTION VI – LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

There are no outstanding litigations, suits, civil or criminal prosecutions or proceedings against our Company, our Directors, our Promoter or Group Companies before any judicial, quasi-judicial, arbitral or administrative tribunals or any disputes, tax liabilities, non payment of statutory dues, overdues to banks / financial institutions, defaults against banks / financial institutions, defaults in dues towards instrument holders like debenture holders, fixed deposits, 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 imposed and irrespective of whether they are specified under paragraph (i) of Part 1 of Schedule XIII of the Act) against our Company, our Directors, our Promoter and our Group Companies. Except for what is stated below, there are no past cases in which penalties have been imposed on our Company, the Promoter, Directors, our Group Companies in the last five years and there is no outstanding litigation against any other company whose outcome could have a material adverse effect on the position of our Company. Neither our Company nor our Promoter, Directors and our Group Companies have been declared as wilful defaulters by the RBI or any other Governmental authority and there are no violations of securities laws committed by them in the past or pending against them. The Bombay Stock Exchange had vide its letter No.DCS/COMP/OT/KK/443/2009-10 dated March 19, 2010 imposed a re-instatement penalty of Rs. 2,86,840/- (Rupees Two Lakhs Eighty-six Thousand Eight Hundred Forty only) on our Company for revocation of the suspension of the treading of the Equity Shares of our Company on the BSE. The said penalty was paid by our Company vide demand draft number 007307 dated March 24, 2010 drawn on Union Bank of India for an amount of Rs. 2,86,840/- (Rupees Two Lakhs Eighty-six Thousand Eight Hundred Forty only). Pursuant to which BSE revoked the suspension of trading of securities of our Company with effect from, May 18, 2010. MATERIAL DEVELOPMENTS AFTER MARCH 31, 2010 The Information required pursuant to Circular (No. F2/5/SE/76) dated February 5, 1977, as amended by Circular (No. F2/5/SE/76) dated March 8, 1977, issued by the Government of India, Ministry of Finance is set forth below: (A) Working Results of the Company (on Standalone Basis): We do not have any subsidiary, hence we, report on

standalone basis Un-audited Financial Information for the three month period ended June 30, 2010 (Limited Review by Statutory Auditor)

(Rs. in lakhs) Particulars AmountOperating Income 507.63 Other Income 56.46 Total Income 564.09 Estimated Net Profit (excluding depreciation and taxes) 100.27 Provision for Depreciation 0.00 Provision for Tax - Estimated Net Profit 100.27

(B) Material changes and commitments since March 31, 2010.

The Directors of our Company in their opinion hereby state that there is no material development after the date of the last financial statements disclosed in the Draft Letter of Offer which is likely to materially and adversely affect or is likely to affect the trading or profitability of the Company of the value of its assets, or its ability to pay its liabilities within the next twelve months except as stated below: 1. Take over of our Company by Mr. M. Srnivasa Reddy

Vide share purchase agreement dated January 30, 2010, 3A Capital Services Limited & Mr. Rajan Shah, the then promoters of our Company, sold their controlling interest in our Company to Mr. M. Srinivasa Reddy, our Promoter. Further, Mr. M. Srinivasa Reddy made an open offer in compliance with the Takeover Code and took over the controlling interest of our Company on April 15, 2010.

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2. Revocation of suspension of our Company from BSE BSE had suspended trading of the equity shares of our Company from January 14, 2003. With effect from May 18, 2010, BSE revoked the suspension of trading of the equity shares of our Company. 3. Change in the name of our Company as well as the object clause

In order to represent the current line of business of our Company, our Company’s name was changed to “Remidicherla Infra & Power Limited” which has been approved by Registrar of Companies of Andhra Pradesh as evidenced by a fresh certificate of Incorporation consequent upon change of name dated July 7, 2010 issued by the Registrar of Company. As on June 30, 2010 the order book position of our company is Rs. 5,173.50 lakhs which is illustrated as follows:


Value (Rs.)

Date of allotment



Andhra Pradesh Land Development

15,01,50,000/- 01/06/2010 1/7/2010 18 months





21,72,00,000/- 09/06/2010 11/06/2010 12 months

TOTAL 51,73,50,000/- Mr. M. Srinivasa Reddy has bought in Rs. 250 lakhs as Share Application money towards his rights issue entitlement of which, have deployed the Rs. 191 lakhs towards the proposed Issue. The details of which are as under:

(Rs. in lakhs) Sr. No. Particulars Amount (Rs. in lakhs) 1. Acquisition of land to set up storage facility for construction equipment 50.00 2. Deposit for Equipment Leasing 123.00 3. Setting up of Corporate Office 18.00 Total 191.00

*Municipal No. 8-2-293/82/A/732-A/1 on part of plot number 732-A, in the layout of Jubilee Hills Cooperative House Building Society Limited, IVth floor, road number 36, Madhapur Road, Jubilee Hills, Hyderabad, Andhra Pradesh which has been taken on lease by our Promoter’s brother, Mr. M. Malla Reddy. For details with regards to the week-end prices of the Equity Shares on the BSE in the last four weeks together with the high and low prices kindly refer to the chapter titled “Stock Market Data For the Equity Shares of Our Company”, as appearing on page 143 of the Draft Letter of Offer.

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GOVERNMENT AND STATUTORY APPROVALS

Our Company has received the necessary consents, licenses, permissions and approvals from the Government of India and various government agencies as required for our present business activities and to undertake the Issue. Unless otherwise stated, these approvals are all valid as of the date of the Draft Letter of Offer. It must be distinctly understood that, in granting these approvals, the Government of India and various government agencies do not take any responsibility for our company’s financial soundness or for the correctness of any of the statements made or opinions expressed in this behalf. I. Issue related Approvals 1. The Board of Directors of our Company have, pursuant to a resolution dated July 7, 2010 authorised the Issue;

2. In- principle approval from the Bombay Stock Exchange Limited dated [•];

3. NSDL: ISIN No.: INE331101018.

II. Corporate Related Approvals

Sr. No.

Approval Granted Authority Date Granted Validity

1. Certificate of Incorporation as “Star Leasing Company Limited”

Registrar of Companies, Maharashtra, Mumbai

August 1, 1983 Until cancellation or winding up

2. Certificate of Commencement of Business

Registrar of Companies, Maharashtra, Mumbai

September 20, 1983

Until cancellation or winding up

3. Fresh Certificate of Incorporation as “Star Leasing Limited”

Registrar of Companies, Gujarat, Dadra & Nagar Haveli

December 31, 1996

Until cancellation or winding up

4. Fresh Certificate of Incorporation as “Remidicherla Power Limited”

Registrar of Companies, Andhra Pradesh

February 8, 2010 Until cancellation or winding up

5. Fresh Certificate of Incorporation as “Remidicherla Infra & Power Limited”

Registrar of Companies, Andhra Pradesh

July 7, 2010 Until cancellation or winding up

III. Tax Related Approvals

Sr. No.

Approval Granted Authority Reference/Registration Number

Date Granted

Validity

1. Permanent Account Number Income Tax Department

AACCS6477A NA* Until surrendered or cancelled

2. Registration under Andhra Pradesh Value Added Tax. Act, 2005 (VAT)

VAT Registering Authority, Hyderabad

28284774234 July 9, 2010

Until surrendered or cancelled

3. Central Sales Tax Registration certificate

Sales Tax Department

28284774234 (C) Not available

Until surrendered or cancelled

* Our Company has made an application on February 19, 2010 for having the name changed to Remidicherla Power Limited from Star Leasing Limited. Once we receive the revised PAN Card our Company shall make an application for the change in name to Remidicherla Infra & Power Limited. II License which have been applied for but yet not been approved/ granted

Our Company has made an application for the following licenses / approvals:

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1. Tax Deduction Account Number (“TAN”) under the IT Act to NSDL on July 9, 2010. The acknowledgement number for the said application is 02225020000744.

2. Registration under Andhra Pradesh Shops & Establishments Act, 1988 for our registered office at Remidicherla House, CPR

Brundavan, flat number 401,near Nectar Garden, Hyderabad – 500 081, India.

III License which are required but not yet applied for by our Company

Our Company has not yet applied for the following licenses / approvals:

1. Certificate of enrolment under the Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987;

2. Certificate of registration under section 69 of the Finance Act, 1994.

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority of the Issue Pursuant to the resolution passed by the Board of Directors of our Company, at its meeting held on July 7, 2010, it has been decided to make the following Rights Issue to the Equity Shareholders of our Company, with a right to renounce. Eligibility for the Issue Our Company is an existing company registered under the Act whose Equity Shares are listed on the BSE. Our Company is eligible for this Issue in terms of Regulation 4(2) of the SEBI (ICDR) Regulations, 2009. Prohibition by SEBI Our Company, its Promoter, Promoter Group, Directors and Group Companies have not been prohibited from accessing or operating in the capital markets or restrained from buying, selling or dealing in securities under any order or direction passed by the Board. None of the Directors are associated with the securities market in any manner and SEBI has not initiated action against any entities of the Directors. Prohibition by RBI We confirm that our Directors, Promoter and our Promoter Group entities have not been detained as willful defaulters by the RBI or any other governmental authority and there are no violations of securities laws committed by them in the past or currently pending against them. Disclaimer Clause of Securities and Exchange Board of India (SEBI)

AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER OF OFFER. THE LEAD MANAGER INTENSIVE FISCAL SERVICES PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SECURITIES AND EXCHANGE BOARD OF INDIA (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 DRAFT LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD MANAGER, INTENSIVE FISCAL SERVICES PRIVATE LIMITED, HAS FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED [●] WHICH READS AS FOLLOWS:

i. 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 LETTER OF OFFER PERTAINING TO THE SAID ISSUE,

ii. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, IT’S

DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE ISSUER,

WE CONFIRM THAT:

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A. THE DRAFT LETTER OF OFFER FILED WITH THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

B. ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE REGULATIONS,

GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

C. THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE

TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE ACT, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

iii. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT

LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID;

iv. WE HAVE SATISFIED OUR SELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO

FULFILL THEIR UNDERWRITING COMMITMENTS – NOT APPLICABLE; WE STATE THAT THE ISSUE HAS NOT BEEN UNDERWRITTEN;

v. WE CERTIFY THAT THE 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 LOCK-IN, SHALL NOT BE DISPOSED / SOLD / TRASFERED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING OF THE DRAFT LETTER OF OFFER WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT LETTER OF OFFER – NOT APPLICABLE;

vi. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA

(ISSUE OF CAPITAL AND DISCLOSURE REQUIRMENTS) 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 LETTER OF OFFER /LETTER OF OFFER – NOT APPLICABLE.

vii. WE UNDERTAKE THAT SUB – REGULATION (4) OF REGULATION 32 AND CLASUE (C) AND (D) OF

SUB – REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIRMENTS) 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 THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE – NOT APPLICABLE.

viii. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE

BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

ix. 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 ACT AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE DRAFT LETTER OF OFFER. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. NOTED FOR COMPLIANCE

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x. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF OFFER THAT

THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE.

xi. 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.

xii. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE 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;

b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE

AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

xiii. 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.

xiv. 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, PROMOTER EXPERIENCE, ETC. PLEASE REFER TO ANNEXURE A

xv. 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 LETTER OF OFFER WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.

THE FILING OF THE DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ISSUER FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE ACT 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 MANAGER ANY IRREGULARITIES OR LAPSES IN THE DRAFT LETTER OF OFFER.

Caution

Our Company and Lead Manager accept no responsibility for statements made otherwise than in the Draft Letter of Offer or in the advertisements or any other material issued by or at the instance of our Company and that anyone placing reliance on any other source of information including our website www.remidicherlapower.com would be doing so at his/her/their own risk.

All information shall be made available by the Lead Manager and the Issuer to the shareholders and no selective or additional information would be made available for a section of the shareholders or investors in any manner whatsoever including at presentations, research or sales reports etc.

Investors who invest in the Issue will be deemed to have been represented by our Company and Lead Manager and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of our Company, and are relying on independent advice / evaluation as to their ability and quantum of investment in this Issue.

Disclaimer in Respect of Jurisdiction

The Draft Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations hereunder.

Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Hyderabad, India only.

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Designated Stock Exchange The Designated Stock Exchange for the purpose of this Issue will be BSE. Filing The Draft Letter of Offer was filed with SEBI, D' Monte Building, 3rd Floor, 32 D' Monte Colony, TTK Road, Alwarpet, Chennai – 600 018, India for its observations. After SEBI gives its observations, the Draft Letter of Offer will be filed with the Designated Stock Exchange as per the provisions of the Act. Selling Restrictions The distribution of the Draft Letter of Offer and the Issue of Rights Equity Shares to persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons into whose possession the Draft Letter of Offer may come are required to inform themselves about and observe such restrictions. Our Company is making this Issue of Rights Equity Shares to its Eligible Equity Shareholders of and will dispatch the Letter of Offer / Abridged Letter of Offer and CAFs to the Eligible Equity Shareholders who have provided an Indian address. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer has been filed with SEBI for observations. Accordingly, the Rights Equity Shares represented thereby may not be offered or sold, directly or indirectly, and the Draft Letter of Offer may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. 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, under 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 Rights Equity Shares or the Rights Entitlements, distribute or send the same in or into the United States 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 Rights Equity Shares or the Rights Entitlements referred to in the Draft Letter of Offer. 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 the Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date. United States Restrictions NEITHER THE RIGHTS ENTITLEMENTS NOR THE EQUITY SHARES THAT MAY BE PURCHASED PURSUANT THERETO HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, RESOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OF AMERICA OR THE TERRITORIES OR POSSESSIONS THEREOF (THE “UNITED STATES” OR THE “U.S.”) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, “US PERSONS” (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT (“REGULATION S”)), EXCEPT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE RIGHTS REFERRED TO IN THE DRAFT LETTER OF OFFER ARE BEING OFFERED IN INDIA, BUT NOT IN THE UNITED STATES. THE OFFERING TO WHICH THE DRAFT LETTER OF OFFER RELATES IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, AN OFFERING OF ANY SHARES OR RIGHTS FOR SALE IN THE UNITED STATES OR AS A SOLICITATION THEREIN OF AN OFFER TO BUY ANY OF THE SAID SHARES OR RIGHTS. ACCORDINGLY, THE DRAFT LETTER OF OFFER SHOULD NOT BE FORWARDED TO OR TRANSMITTED IN OR INTO THE UNITED STATES AT ANY TIME, EXCEPT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NEITHER OUR COMPANY NOR ANY PERSON ACTING ON BEHALF OF OUR COMPANY WILL ACCEPT SUBSCRIPTIONS FROM ANY PERSON, OR THE AGENT OF ANY PERSON, WHO APPEARS TO BE, OR WHO OUR COMPANY OR ANY PERSON ACTING ON BEHALF OF OUR COMPANY HAS REASON TO BELIEVE IS, A RESIDENT OF THE UNITED STATES AND TO WHOM AN OFFER, IF MADE, WOULD RESULT IN REQUIRING REGISTRATION OF THE DRAFT LETTER OF OFFER WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

Disclaimer clause of the BSE

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As required, a copy of the Draft Letter of Offer shall be submitted to the BSE. The disclaimer clause as indicated by the BSE to us, post scrutiny of the Draft Letter of Offer, shall be included in the Letter of Offer prior to filing the Letter of Offer with the BSE.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the 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.”

Dematerialised Dealing

Our Company has entered into agreements dated [●] NSDL respectively and its Equity Shares bear the ISIN INE331101018.

Listing The existing Equity Shares are listed on BSE. The Company has made applications to BSE for permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of the Draft Letter of Offer. The Company has received in-principle approvals from the BSE vide letter dated [●]. The Company will apply to BSE for listing of the Equity Shares to be issued pursuant to this Issue. If the permission to deal in and for an official quotation of the securities is not granted by any of the Stock Exchange mentioned above, the Company shall forthwith repay, without interest, all monies received from applicants in pursuance of the Draft Letter of Offer. If such money is not paid within 8 days after the Company becomes liable to repay it, then the Company and every Director of the Company who is an officer in default shall, on and from expiry of 8 days, be jointly and severally liable to repay the money with interest as prescribed under the Section 73 of the Act.

Consents Consent in writing of the Auditors, Lead Manager, Legal Advisor to the Lead Manager, Registrar to the Issue to act in their respective capacities and of the bankers to our Company and Directors for their names to appear as such in the Draft Letter of Offer have been obtained and filed with the Stock Exchange, along with a copy of the Draft Letter of Offer and such consents have not been withdrawn up to the time of delivery of the Draft Letter of Offer for registration with the Stock Exchange. S. Kishore Kumar, Chartered Accountant, the Auditor of our Company has given his written consent for the inclusion of his Report in the form and content as appearing the Draft Letter of Offer and the consent and report has not been withdrawn upto the time of delivery of the Draft Letter of Offer for registration to the Stock Exchange. To the best of our knowledge there are no other consents required for making this issue, however, should the need arise, necessary consents shall be obtained by us. Issue expenses

The details of the estimated Issue related expenses are as follows:

(Rs. in lakhs) Activity Estimated

expenses

As a % of the total estimated Issue expenses

As a % of the total Issue size

Fees payable to the Lead Manager, Legal Advisors and other fees

25.00 63.70 0.86

Advertising and marketing expenses 5.00 12.74 0.17 Printing & Distribution (including courier and transportation charges)

0.25 0.64 0.09

Others (Registrar’s fees, Listing Charges, SEBI Fees, Taxes etc.)

6.00 15.29 0.21

Misc. Expenses 3.00 7.64 0.10 Total estimated Issue expenses 39.25 100 1.36

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Details of Fees Payable Fees Payable to the Lead Manager The total fees payable to the Lead Manager will be as per the MOU dated July 9, 2010 and as stated in the Agreement executed between our Company and Lead Manager, copy of which is available for inspection at our Registered Office. Fees Payable to the Registrars to the Issue The fees payable to the Registrars to the Issue is as set out in the relevant documents, copies of which are kept available for inspection at our Registered Office. The total fees payable to the Registrar will be as per the MOU dated July 9, 2010 and as stated in the Agreement executed between our Company and Registrar, copy of which is available for inspection at our Registered Office.

Investor Grievances and Redressal System

Our Company has adequate arrangements for redressal of Investor complaints as well as well-arranged correspondence system developed for letters of routine nature. Our Company’s investor grievances arising out of the Issue will be handled by Venture Capital & Corporate Investments Pvt. Ltd., the Registrar to the Issue. The redressal norm for response time for all correspondence including shareholders complaints is 10-12 days.

The average time taken by the Registrar for attending to routine grievances has been seven days from the date of receipt. In case of non-routine grievances where verification at other agencies is involved, it has been the endeavor of the Registrar to attend to them as expeditiously as possible. The Shareholders/ Investors Grievances Committee consist of Mr. M Srinivasa Reddy, Ms. P Priyanka, Mr. I Srinivasa Raju. All investor grievances received by our Company are and will be handled by the Registrar and Share Transfer agent in consultation with our company secretary and compliance officer. The Shareholders/ Investors Grievances Committee were constituted on May 26, 2010. The committee has met in the current year on the following dates:

FY 2010-2011 -- -- -- June 26, 2010 As on June 30, 2010 we do not have any pending shareholder / investor complaints. Registrar and Share Transfer Agents Venture Capital and Corporate Investments Pvt. Ltd. 2-10-167, Bharat Nagar, Hyderabad, Andhra Pradesh – 500 018 India. Tel:- +91 040 23818475 Fax:- +91 040 23868024 Investor Grievance Id: [email protected] Website: www.vccilindia.com Contact Person: Mr. P V Srinivas SEBI Registration: INR 000001385 Status of Complaints

Sr. No. Particulars Status 1. Total number of complaints received during Fiscal 2008 Nil 2. Status of the complaints received during Fiscal 2008 Not Applicable 3. Total number of complaints received during Fiscal 2009 Nil 4. Status of the complaints received during Fiscal 2009 Not Applicable 5. Total number of complaints received during Fiscal 2010 Nil 6. Status of the complaints received during Fiscal 2010 Not Applicable 7. Complaints received during April 01, 2010 till June 30, 2010 Nil 8. Complaints resolved during April 01, 2010 till June 30, 2010 Nil 9. Complaints outstanding as on June 30, 2010 Nil 10. Time normally taken for disposal of various types of investor

grievances: The Company endeavors to resolve the investor grievances within 12-15 days.

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Investor Grievances arising out of this Issue The investor grievances arising out of the Issue will be handled by Mr. Pemmaraju Satish, Compliance Officer and Company Secretary, and Venture Capital and Corporate Investments Pvt. Ltd., Registrars to the Issue. The Registrar to the Issue will have a separate team of personnel handling only our post-Issue correspondence. The agreement between us and the Registrar to the Issue will provide for retention of records with the Registrars for a period of at least one year from the last date of dispatch of letter of allotment/share certificates/refund order to enable the Registrars to redress grievances of Investors. All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details such as folio no., name and address, contact telephone / cell numbers, email id of the first Investors, number of shares applied for, application form serial number, amount paid on application and the name of the bank and the branch where the application was deposited, along with a photocopy of the acknowledgement slip. In case of renunciation, the details of the Renouncees should be furnished. The average time taken by the Registrar to the Issue for redressal of routine grievances will be 7 days from the date of receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the endeavour of the Registrar to the Issue to attend to them as expeditiously as possible. We undertake to resolve the Investor grievances in a time bound manner. Investors may contact the Compliance Officer / Company Secretary in case of any pre-Issue / post –Issue related problems such as non-receipt of letters of allotment / share certificates / Demat credit / refund orders etc. His address is as follows: Mr. Pemmaraju Satish Remidicherla House, CPR Brundavan, Flat No. 401, near Nectar Garden, Madhapur, Hyderabad Andhra Pradesh –500 081 India. Tel No: +91 40 40176880 Fax No. +91 40 40176881 Email: [email protected] Changes in Auditors during the last three years Till 2007-08, Kishore & Venkat Associates, Chartered Accountants (130/2RT, S. R. Nagar, Hyderabad 500 038) were the auditors of the company. From 2008-09 and onwards, CA. Kishore Kumar S (Flat # 101, Lakshmi Reseidency, D. No. 7-1-55/1, Dharam Karan Road, Ameerpet, Hyderabad - 16.) are the auditors of the company. Capitalisation of Reserves or Profits Our Company has not capitalized any of its reserves or profits for the last five years. Revaluation of Fixed Assets There has been no revaluation of our Company‘s fixed assets for the last five years. Minimum Subscription If our Company does not receive the minimum subscription of 90% of the Issue on the Issue Closing Date, our Company shall forthwith refund the entire subscription amount received within 15 days from Issue Closing Date. If there is a delay in the refund of subscription by more than eight days after the date from which our Company becomes liable to pay the subscription amount (i.e. 15 days after the Issue Closing Date or the date of refusal by the Stock Exchanges, whichever is earlier) our Company shall pay interest for the delayed period as prescribed under subsection (2) and (2A) of Section 73 of the Act. Additional Subscription by our Promoter Our Promoter has undertaken to fully subscribe for their Rights Entitlement. Our Promoter reserves his right to subscribe for his Rights Entitlement either by himself and/or through one or more entities controlled by him. He has also undertaken to apply for

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Equity Shares in addition to his Rights Entitlement to the extent of any undersubscribed portion of the Issue, subject to obtaining any approvals required under applicable law, to ensure that at least 90% of the Issue is subscribed. Such subscription for Equity Shares over and above his Rights Entitlement, if allotted, may result in an increase in his percentage shareholding above his current percentage shareholding. Further, such acquisition by him of additional Equity Shares shall (i) not result in a change of control of the management of the Company; and (ii) be exempt from the applicability of Regulations 11 and 12 of the Takeover Code in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Presently our Company is complying with clause 40A of the Listing Agreement and the minimum public shareholding required to be maintained for continuous listing is 25% of the total paid up equity capital. For further details of under subscription and allotment to the Promoter Group, please refer to “Basis of Allotment” on page 156 under the section titled “Terms of the Issue” on page 144 of the Draft Letter of Offer.

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STOCK MARKET DATA FOR THE EQUITY SHARES OF OUR COMPANY

Our Company’s Equity Shares are listed on BSE and are infrequently traded. BSE had suspended trading of the equity shares of our Company with effect from January 14, 2003 due to the non compliance of clauses of listing agreement. With reference to the same, on February 2, 2009 BSE had informed our Company to comply with Clause 47, 31, 35, 41 and 55 of the listing agreement. Our Company had made submission to the BSE on February 6, 2009. Pursuant to the submission made by our Company BSE vide its letter No.DCS/COMP/OT/KK/443/2009-10 dated March 19, 2010 and notice dated May 12, 2010; Number 20100512-21revoked the suspension of trading of securities of our Company with effect from, May 18, 2010. The monthly high and low of the closing price at the BSE during the past six months were recorded are stated below: BSE

Month High (Rs.) Low (Rs.)

January, 2010 Not Applicable Not Applicable February, 2010 Not Applicable Not Applicable March, 2010 Not Applicable Not Applicable April, 2010 Not Applicable Not Applicable May, 2010 55.71 50.00 June, 2010 56.80 56.80

(Source: www.bseindia.com ) Disclosure of information relating to the high and low closing prices recorded on the BSE for the preceding three years cannot be provided by our Company as the trading of the equity shares of our Company was suspended from January 14, 2003 to May 18, 2010. The closing price of our Equity Shares as on July 6, 2010 (the trading day immediately preceding the day on which the Board resolution was passed approving the Rights Issue) was Rs. 56.80 on the BSE. Note: High/Low prices based on closing quotations of BSE (Source: www.bseindia.com ) The week-end prices of the Equity Shares of our Company on the BSE in the last four weeks together with the high and low prices are set out below:

BSE

Week ended on Closing Price (Rs.) High (Rs.) Low (Rs.) June 25, 2010 56.80 56.80 56.80July 2, 2010 56.80 56.80 56.80July 9, 2010 56.80 56.80 56.80July 16, 2010 56.80 56.80 56.80 (Source: www.bseindia.com ) The market capitalization of our Equity Shares as on July 23, 2010 was Rs. 136.32 lakhs on the BSE based on a market price of Rs. 56.80/-. The Issue price of Rs. 10/- has been arrived at in consultation between our Company and the Lead Manager.

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SECTION VII – ISSUE RELATED INFORMATION

TERMS OF THE ISSUE

The Equity Shares are now being issued pursuant to the Rights Issue and the Equity Shares to be allotted are subject to the terms and conditions contained in the Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of our Company, approvals from the Government of India and the RBI, if applicable, the provisions of the Act, Regulations issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and/or other statutory authorities and bodies from time to time, the listing agreements entered into by our Company with the stock exchange, the terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate and rules as may be applicable and introduced from time to time. Authority for the Issue This Issue is being made pursuant to the resolution passed at the meeting of the Board of Directors of our Company held on July 7, 2010. Basis for the Issue The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held in the electronic form and on the Register of Members of our Company in respect of shares held in the physical form at the close of business hours on the Record Date, i.e., [●] fixed in consultation with the Designated Stock Exchange, BSE. Rights Entitlement Ratio: As your name appears as beneficial owner in respect of the shares held in the electronic form or appears in the register of members as an equity shareholder of our Company as on the Record Date i.e. [●]. You are entitled to the number of shares in Block I of Part A of the enclosed in the Composite Application Form. The eligible equity shareholders are entitled to one hundred twenty (120) equity shares for every one (1) equity share held on the Record Date i.e. [●] I General Terms of the Issue 1. Market lot The Equity Shares of our Company are tradable only in dematerialized form, and the market lot is one Equity Share. In case of holding of equity shares in physical form, our Company would issue to the allottees separate certificate for the Equity Shares allotted on rights basis with a split performance. Our Company would issue one certificate for the entire allotment. However, our Company would issue split certificates on written requests from the shareholders. Our Company shall not charge a fee for splitting any of the share certificates. Investors may please note that the Equity Shares of our Company can be traded on the Stock Exchange in dematerialized form only. 2. Nomination facility In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity Shares. A person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be

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made only in the prescribed form available on request at the Registered Office of our Company or such other person at such addresses as may be notified by our Company. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has/have already registered the nomination with our Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective Depository Participant of the applicant would prevail. If the applicant requires to change the nomination, they are requested to inform their respective Depository Participant. 3. Joint-Holders Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint-holders with benefits of survivorship subject to provisions contained in the Articles of Association of our Company

4. Minimum Subscription If our Company does not receive the minimum subscription of 90% of the Issue, or the subscription level falls below 90%, after the Issue Closing Date on account of cheques being returned unpaid or withdrawal of applications, our Company shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days after our Company becomes liable to pay the subscription amount (i.e. 15 days after the Issue Closing Date), our Company will pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Act. Our Promoter has undertaken to fully subscribe for their Rights Entitlement. Our Promoter reserves his right to subscribe for his Rights Entitlement either by himself and/or through one or more entities controlled by him. He has also undertaken to apply for Equity Shares in addition to his Rights Entitlement to the extent of any undersubscribed portion of the Issue, subject to obtaining any approvals required under applicable law, to ensure that at least 90% of the Issue is subscribed. Such subscription for Equity Shares over and above his Rights Entitlement, if allotted, may result in an increase in his percentage shareholding above his current percentage shareholding. Further, such acquisition by him of additional Equity Shares shall (i) not result in a change of control of the management of the Company; and (ii) be exempt from the applicability of Regulations 11 and 12 of the Takeover Code in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Presently our Company is complying with clause 40A of the Listing Agreement and the minimum public shareholding required to be maintained for continuous listing is 25% of the total paid up equity capital. For further details of under subscription and allotment to the Promoter Group, please refer to “Basis of Allotment” below under this section titled “Terms of the Issue” on page 144 of the Draft Letter of Offer. 5. Notices All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper with wide circulation at the place where the Registered Office is situated and/or will be sent by registered post or speed post to the registered holders of the Equity Share at the address registered with the registrar from time to time.

6. Listing and Trading of the Equity Shares proposed to be Issued Our Company’s existing Equity Shares are currently traded on the BSE under the ISIN INE331101018. The fully paid up Equity Shares proposed to be issued on a rights basis shall be listed and admitted for trading on the Stock Exchanges under the existing ISIN INE331101018 for fully paid Equity Shares of our Company. All steps for the completion of the necessary formalities for listing and commencement of trading of the Equity Shares pursuant to the Issue shall be taken within seven working days of the finalization of the basis of allotment. The Company has made application to the BSE seeking “in-principle” approval for the listing of the Equity Shares pursuant to the Issue in accordance of the Listing Agreement and has received such approval from the BSE pursuant to letter no. [●] dated [●]. The Company will apply to the BSE for final approval for the listing and trading of the Equity Shares. No assurance can be given regarding the active or sustained trading in the Equity Shares or the price at which the Equity Shares offered under the Issue will trade either after the listing. The distribution of the Letter of Offer and the Issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions.

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Our Company is making this Issue on a rights basis to the Eligible Equity Shareholders of our Company and will dispatch the Draft Letter of Offer / Letter of Offer / Abridged Letter of Offer and the CAF to the Eligible Equity Shareholders who have provided an Indian address. 7. Applications by non-resident Indians As per regulation 6 of Notification No. FEMA 20/200-RB dated May 3, 2000, the RBI has given general permission to Indian companies to issue rights shares to non-resident shareholders including additional shares. Applications received from NRIs and non-residents for allotment of Equity Shares shall be inter alia, subject to the conditions imposed from time to time by the RBI under the Foreign Exchange Management Act, 1999 (FEMA) in the matter of refund of application moneys, allotment of Equity Shares, issue of letter of allotment / notification No. FEMA 20/200-RB dated May 3, 2000. The Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the allotment of Equity Shares, payment of dividend etc. to the non-resident shareholders. The rights shares purchased by non-residents shall be subject to the same conditions including restrictions in regard to the repatriation as are applicable to the original shares against which Equity Shares are issued on rights basis. NRI applicants may please note that only such applications as are accompanied by payment in free foreign exchange shall be considered for allotment under the reserved category. The non-resident Indians who intend to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians and shall not use the forms meant for reserved category. Applications received from Non Resident Applicants for the allotment of Equity Shares shall, inter alia, be also subject to the conditions imposed from time to time by the RBI under FEMA in relation to the receipt and refund of Application Money, allotment of Equity Shares, issue of allotment advice/letters of allotment/Consolidated Certificates and payment of dividends. Non-Resident applicants can obtain the application form from the registered office of the Company: Remidicherla House, CPR Brundavan, flat number 401, Near Nectar Garden, Hyderabad – 500 081 India. Tel no.: +91 40 40176880 Fax No.: +91 40 40176881 Contact Person: Mr. Premmaraju Satish, Company Secretary and Compliance Officer By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, OCBs shall not be eligible to subscribe to the Equity Shares. The RBI has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated non-resident entities. Further, the RBI in its Master Circular dated July 1, 2009 has stated that OCBs are not permitted to subscribe to Equity Shares of Indian companies on rights basis under the automatic route. OCBs shall not be eligible to subscribe to the Equity Shares pursuant to the Letter of Offer unless prior approval of the RBI is obtained in this regard. Thus, OCBs desiring to participate in the Issue must obtain prior approval from the RBI. On providing such approval to the Company at its Registered Office, the OCB shall receive the Letter of Offer and the CAF. In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened for the purpose. DETAILS OF SEPARATE COLLECTING CENTRES FOR NON-RESIDENT APPLICATIONS SHALL BE PRINTED ON THE CAF. 8. Notice to Overseas Shareholders The distribution of the Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession the Letter of Offer may come are required to inform themselves about and observe such restrictions. The Company is making this Issue of Equity Shares on a rights basis to the Equity Shareholders of the Company and will dispatch the Abridged Letter of Offer and Composite Application Form to the shareholders who have an Indian address.

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No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer has been filed with SEBI for 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, except in accordance with legal requirements applicable in such jurisdiction. 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 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. 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 the Company’s affairs from the date hereof or that the information contained herein is correct as at any time subsequent to this date. No Offer in the United States The rights and the securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or any U.S. state securities laws and may not be offered, sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof (the ‘‘United States’’ or ‘‘U.S.’’) or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act (‘‘Regulation S’’)), except in a transaction exempt from the registration requirements of the Securities Act. The rights referred to in the Draft Letter of Offer are being offered in India, but not in the United States. The offering to which the Draft Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or rights for sale in the United States or as a solicitation therein of an offer to buy any of the said Equity Shares or rights. Accordingly, the Letter of Offer and the enclosed CAF should not be forwarded to or transmitted in or into the United States at any time. Neither the Company nor any person acting on behalf of the Company will accept subscriptions or renunciation from any person, or the agent of any person, who appears to be, or who the Company or any person acting on behalf of the Company has reason to believe is, either a “U.S. person” (as defined in Regulation S) or otherwise in the United States when the buy order is made. Envelopes containing a CAF should not be postmarked in the United States or otherwise dispatched from the United States or any other jurisdiction where it would be illegal to make an offer under the Letter of Offer, and all persons subscribing for the Equity Shares and wishing to hold such Equity Shares in registered form must provide an address for registration of the Equity Shares in India. The Company is making this issue of Equity Shares on a rights basis to Equity Shareholders of the Company and the Letter of Offer and CAF will be dispatched to Equity Shareholders who have an Indian address. Any person who acquires rights and the Equity Shares will be deemed to have declared, represented, warranted and agreed, (i) that it is not and that at the time of subscribing for the Equity Shares or the Rights Entitlements, it will not be, in the United States when the buy order is made, (ii) it is not a “U.S. person” (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States, and (iii) is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations. The Company reserves the right to treat as invalid any CAF which: (i) does not include the certification set out in the CAF to the effect that the subscriber is not a “U.S. person” (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States and is authorized to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations; (ii) appears to the Company or its agents to have been executed in or dispatched from the United States; (iii) where a registered Indian address is not provided; or (iv) where the Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements; and the Company shall not be bound to allot or issue any Equity Shares or Rights Entitlement in respect of any such CAF. 9. Utilisation of Issue Proceeds The Board of Directors declares that: (i) The funds received against this Issue will be transferred to a separate bank account other than the bank account referred

to sub-section (3) of Section 73 of the Act. (ii) Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in the balance sheet

of our Company indicating the purpose for which such moneys has been utilised. (iii) Details of all such un-utilised moneys out of the Issue, if any, shall be disclosed under an appropriate separate head in

the balance sheet of our Company indicating the form in which such un-utilised moneys have been invested.

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The funds received in the Issue will be kept in a separate bank account and the Company will not have any access to such funds unless only after the basis of allotment is finalized. 10. Undertakings by our Company 1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily. 2. All steps for completion of the necessary formalities for listing and commencement of trading at the Stock Exchange

where the equity shares are to be listed will be taken within seven working days of finalization of basis of allotment. 3. The funds required for dispatch of refunds to unsuccessful applications as per the modes disclosed in the Letter of Offer

shall be made available to the Registrar to the Issue. 4. Where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the investors

within 15 days of closure of the Issue giving details of the bank where refunds shall be credited along with the amount and expected date of electronic credit of refund.

5. The certificates of the securities/ refund orders to the applicants shall be dispatched within the specified time. 6. No further issue of securities affecting equity capital of our Company shall be made till the securities issued/offered

through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc. 7. Adequate arrangements shall be made to collect all Applications Supported By Blocked Amount and to consider them

similar to non – ASBA applications while finalizing the basis of allotment. 11. Arrangements for disposal of odd lots

Since the market lot for our Company’s Equity Shares is one (1), there is no question of disposal of odd lots. II Principal Terms and Conditions of the Issue of Equity Shares

1. Face value

Each Equity Share shall have the face value of Rs. 10/-.

2. Entitlement

An eligible Equity Shareholder is entitled to one hundred twenty (120) Equity Shares for every one (1) Equity Share held on the Record Date.

3. Fractional entitlements

Since the ratio in case of our Company is one hundred twenty (120) Equity Shares for every one (1) Equity Share, there will no fractional entitlements.

4. Additional Equity Shares

The Equity Shareholders are eligible to apply for additional Equity Shares over and above their Rights Entitlement provided such Equity Shareholders have applied for all the Equity Shares offered to them, without renouncing some or all of them.

The application for the additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board of Directors, in consultation, if necessary, with the Designated Stock Exchange. Where the number of additional Equity Shares applied for exceeds the number of Equity Shares available for allotment, the allotment of additional Equity Shares shall be made on a fair and equitable basis, in consultation with the Designated Stock Exchange. For further information kindly refer to “Terms of the Issue - Basis of Allotment” on page 156 as contained in the section titled “Issue Related Information” beginning on page 144 of the Draft Letter of Offer.

Renouncees who have subscribed for all the Equity Shares renounced in their favor may also apply for additional Equity Shares.

5. Issue Price

Each Equity Share is being offered at par i.e. at a price of Rs. 10/- per Equity Share.

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6. Terms of payment

The entire amount of Rs. 10/- per Equity Share shall be payable on application. The payment on Application would be applied as under:

Towards Share Capital

On Application Rs. 10/- per Equity Share

A separate cheque/demand draft pay order must accompany each Application form. Payment should be made in cash (not more than Rs.20,000) or by cheque/bank demand draft/ pay order drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub-member of the bankers clearing house located at the center where the CAF is accepted. Outstation cheques / money orders / postal orders will not be accepted and CAFs accompanied by such cheque / money orders / postal orders are liable to be rejected. Payments in cash in excess of the amount specified above will not be accepted. Pursuant to RBI Circular number DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the Stockinvest scheme has been withdrawn and accordingly, payment through Stockinvest will not be accepted in the Issue. Where an applicant has applied for additional shares and is allotted lesser number of shares than applied for, the excess application money shall be refunded. The excess application monies would be refunded within 15 days from the closure of the Issue, and if there is a delay beyond 8 days from the stipulated period, the Company and every Director of the Company who is an officer in default shall be jointly and severally liable to repay the money with interest for the delayed period, at the rates stipulated under sub-sections (2) and (2A) of section 73 of the Act.

7. Ranking of the Equity Shares

The Equity Shares shall be subject to the Memorandum and Articles of Association of our Company. The dividend payable on Equity Shares allotted in this Issue shall rank for dividend in proportion to the amount paid up. The Equity Shares allotted in this Issue, shall be pari passu with the existing Equity Shares in all respects including dividend.

8. Rights of Equity Shareholders

Subject to applicable laws, Equity Shareholders shall have the following rights: a) Right to receive dividend, if declared

b) Right to attend general meetings and exercise voting power, unless prohibited by law;

c) Right to vote on poll, either in person or proxy;

d) Right to receive offer for right shares and be allotted bonus shares if announced;

e) Right to receive surplus on liquidation;

f) Right of free transferability of share; and

g) Such other rights as may be available to a shareholder of a listed public company under the Act and our Memorandum and Articles of Association of our Company and the terms of the listing agreement with the Stock Exchange.

9. Issue of Duplicate Share Certificates

If any Share Certificate is mutilated or defaced or the pages for recording transfers of the Equity Shares are fully utilized, the Company against the surrender of such Share Certificate may replace the Share Certificate, provided that it shall be replaced as aforesaid only if the Share Certificate number and the distinctive numbers are legible. If any Share Certificate is destroyed, stolen, lost or misplaced, then upon production of proof thereof to the satisfaction of the Company and upon furnishing such indemnity/surety and/or such other documents as the Company may deem adequate, a duplicate Share Certificate shall be issued. III How to Apply? 1. Procedure for Application The CAF will be printed in black ink for all Equity Shareholders, with separate advice for Non Resident Equity Shareholders.

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The CAF consists of four parts: Part A: Form for accepting the Equity Shares offered and applying for additional Equity Shares Part B: Form for renunciation of Equity Shares; Part C: Form for application for Equity Shares by renouncees; and Part D: Form for request for split application forms. 2. Option available to the Equity Shareholders The CAF clearly indicates the number of Equity Shares that an Equity Shareholder is entitled to. An Equity Shareholder will have the following five options: A. Apply for his Rights Entitlement in full;

B. Apply for his Rights Entitlement in part (without renouncing the other part);

C. Apply for his Rights Entitlement in full and apply for additional Equity Shares;

D. Renounce his entire Rights Entitlement; or

E. Apply for his Rights Entitlement in part and renounce the other part.

Options A and B: Acceptance of the Rights Entitlement The Equity Shareholders may accept their Rights Entitlement and apply for the Equity Shares offered, either (i) in full or (ii) in part, without renouncing the other part, by completing Part A of the CAF. For details in relation to submission of the CAF and mode of payment please refer to the sub-section titled “Submission of Application and Modes of Payment for the Issue” under this section titled “Terms of the Issue” on page 144 of the Draft Letter of Offer. Option C: Acceptance of the Rights Entitlement and Application for Additional Equity Shares The Equity Shareholders are eligible to apply for additional Equity Shares, over and above their Rights Entitlements, provided that such Equity Shareholders have applied for all the Equity Shares without renouncing some or all of them in favor of any other person(s). The application for the additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board of Directors, in consultation, if necessary, with the Designated Stock Exchange. Where the number of Equity Shares applied for exceeds the number of Equity Shares available for allotment, the allotment of additional Equity Shares shall be made on a fair and equitable basis with reference to the number of Equity Shares held by the applicant on the Record Date. For details of the manner in which applications for additional Equity Shares with shall be considered and allotment completed, please refer to the sub-section titled “Basis of Allotment” on page 156 under the section titled “Terms of the Issue” on page 144 of the Draft Letter of Offer. If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional Equity Shares in Part A of the CAF. Options D and E: Renunciation of the Rights Entitlement As an Equity Shareholder, you have the right to renounce your entitlement to the Equity Shares, in full or in part, in favor of one or more persons. Your attention is drawn to the fact that our Company shall not allot and/or register any Equity Shares, in favor of: • More than three persons, including joint holders; • Partnership firms or their nominees; • Minors; • Hindu Undivided Families (HUFs); or • Trusts or societies (unless registered under the Societies Registration Act, 1860 or the Indian Trusts Act, 1882 or any other

law applicable to trusts and societies and is authorised under its constitution or bye-laws to hold equity shares of a company).

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The person(s) in whose favor any Equity Shares are renounced should complete and sign Part C of the CAF and submit the CAF to the Bankers to the Issue on or prior to the Issue Closing Date along with the Application Money. Renouncees need not be existing Equity Shareholders of our Company. Renouncees who have subscribed for all the Equity Shares renounced in their favor may also apply for additional Equity Shares Renunciation by and/or in favor of Non Residents Any renunciation (i) from a resident Indian Equity Shareholder to a Non Resident, or (ii) from a Non Resident Equity Shareholder to a resident Indian, or (iii) from a Non Resident Equity Shareholder to a Non Resident is subject to the renouncer/renouncee obtaining the necessary approvals, including from the RBI under FEMA, and such approvals should be attached to the CAF. Applications not accompanied by the aforesaid approvals are liable to be rejected. Investment by FIIs In accordance with the current regulations, the following restrictions are applicable for investment by FIIs: No single FII can hold more that 10% of our Company’s post-Issue paid-up share capital. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of the total paid-up share capital of our Company or 5% of our paid-up share capital of our Company in case such sub-account is a foreign corporate or an individual. In accordance with the foreign investment limits applicable to us, the total foreign investment including FII investment cannot exceed 24% of our total issued capital unless approved by the shareholders of our Company. Pursuant to Circular No. 14 dated September 16, 2003 issued by the RBI, OCBs have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management [Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)] Regulations, 2003. Accordingly, the existing Equity Shareholders of our Company who do not wish to subscribe for the Equity Shares being offered but wish to renounce the same in favor of one or more persons shall not renounce the same (whether for consideration or otherwise) in favor of any OCB. Procedure for Renunciation (a) To renounce the entire Rights Entitlement in favor of one renouncee If you wish to renounce the Rights Entitlement indicated in Part A, in whole, please complete Part B of the CAF and send it to the renouncee. In case of joint holding, all joint holders must sign Part B of the CAF. The renouncee should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign Part C of the CAF. Renouncees shall not be entitled to further renounce their entitlement in favor of any other person. (b) To renounce a part of the Rights Entitlement or the entire Rights Entitlement to more than one person If you wish to either (i) accept the Rights Entitlement in part and renounce the balance or (ii) renounce the entire Rights Entitlement in favor of two or more renouncees, the CAF must be first split into the requisite number of forms. For this purpose, you shall have to apply to the Registrar to the Issue. Please indicate your requirement of split application forms in the space provided for this purpose in Part D of the CAF and return the CAF to the Registrar to the Issue so as to reach them at the latest by the close of business hours on the last date for receiving requests for split application forms. On receipt of the required number of split application forms from the Registrar to the Issue, the procedure as set out in paragraph (a) above will have to be followed. In case the signature of the Equity Shareholder, who has renounced the Equity Shares, does not tally with the specimen registered with our Company, the application is liable to be rejected. A summary of the options available to the Equity Shareholders is set out below. You may exercise any of the following options with regard to the Equity Shares, using the CAF:

Option Option Available

Action Required

A. Accept your Rights Entitlement in full Complete and sign Part A. (All joint holders must sign

B. Accept your Rights Entitlement in part without renouncing the balance

Complete and sign Part A. (All joint holders must sign)

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C. Accept your Rights Entitlement in full and apply for additional Equity Shares

Complete and sign Part A including Block III relating to the acceptance of the Rights Entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

D. Renounce your Rights Entitlement in full to: 1. One person (Joint renounces are

considered as one) 2. More than one person

Complete and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand it over to the renounce. The renounce must complete and sign Part C. (All joint renounces must sign) Complete and sign Part D (all joint holders must sign) requesting for split application forms. Send the CAF to the Registrar to the issue, so as to reach the Registrar on or prior to the last date for receiving requests for split application forms. Splitting will be permitted only once Upon receipt of the split application form, take action as indicated below: 1. Complete and sign Part B indicating the number of Equity Shares renounced and hand it over to the renounces. 2. Each of the renounces should complete and sign Part C for the Equity Shares with accepted by them

E. Accept a part of your Rights Entitlement and renounce the balance to one or more person(s)

Complete and sign Part D (all joint holders must sign) requesting for split application forms. Send the CAF to the Registrar to the Issue, so as to reach the Registrar on or prior to the last date for receiving requests for split application forms, Splitting will be permitted only once. Upon receipt of the split application form, take action as indicated below

1. For the Equity Shares you wish to accept, complete and sign Part A ( All joint holders must sign)

2. For the Equity Shares you wish to renounce, complete and sign Part B indicating the number of Equity Shares with renounced and hand it over to the renounces

3. Each of the renounces should complete and sign Part C for the Equity Shares by them

3. Change and / or introduction of additional holders If you wish to apply for the Equity Shares jointly with any other person(s), not more than three, who is/are not already a joint holder(s) with you, it shall amount to a renunciation and the procedure for renunciation, as applicable, set out above will have to be followed. Even a change in the sequence of the names of joint holders shall amount to a renunciation and the procedure for renunciation, as applicable, set out above will have to be followed. Please note that: 1. Part A of the CAF must not be used by any person(s) other than those in whose favour this Issue has been made. If used, this

will render the application invalid. 2. While applying for or renouncing their Rights Entitlement, joint holders must sign in the same order and as per the specimen

signatures registered with our Company.

3. Request for split application form should be made for a minimum of one (1) Equity Share or in multiples of one (1) Equity Share;

4. Request by the applicant for the Split Application Form should reach our Company on or before [●].

5. Only the person to whom the Letter of Offer has been addressed to and not the renouncee(s) shall be entitled to renounce

and to apply for Split Application Forms. Forms once split cannot be split again.

6. Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

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7. In the case of a renunciation, the submission of the CAF to the Bankers to the Issue at the collecting branches specified on the reverse of the CAF together with Part B of the CAF duly completed shall be conclusive evidence of the right of the person applying for the Equity Shares to receive allotment of such Equity Shares.

For details on completing the CAF and other general instructions, please follow the instructions indicated on the reverse of the CAF. In addition, please refer to the sub-section titled “General Instructions for Applicants” on page 160 under this chapter titled “Terms of the Issue” on page 144 of the Draft Letter of Offer. Availability of duplicate CAF In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number / DP and Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. Thus in case the original and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of duplicate CAF in transit, if any. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with an Account Payee Cheque drawn on a local bank / Demand Draft payable at Hyderabad which should be drawn in favor of Banker to the Issue crossed account payee only and marked "Remidicherla Infra & Power Limited - Rights Issue - 2010" in case of resident shareholders and non-resident shareholders applying on non-repatriable basis and in favour of "Remidicherla Infra & Power Limited - Rights Issue - 2010 - NR" in case of non-resident shareholders applying on repatriable basis and marked “A/c Payee Only” and send the same by registered post directly to the Registrar to the Issue so as to reach them on or before the closure of the Issue. The envelope should be superscribed "Remidicherla Infra & Power Limited - Rights Issue - 2010" in case of resident shareholders and non-resident shareholders applying on non-repatriable basis, and in favour of "Remidicherla Infra & Power Limited - Rights Issue - 2010-NR" in case of non-resident shareholders applying on repatriable basis. The application on plain paper, duly signed by the applicant(s) including joint holders, in the same order as per specimen recorded with our Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars: 1. Name of Issuer, Remidicherla Infra & Power Limited; 2. Name and address of the Equity Shareholder including joint holders; 3. Registered Folio Number/ DP ID No. and Client ID No; 4. Number of shares held as on Record Date; 5. Certificate numbers and distinctive numbers, if held in physical form; 6. Number of Rights Equity Shares entitled; 7. Number of Rights Equity Shares applied for; 8. Number of additional Equity Shares applied for, if any; 9. Total number of Equity Shares applied for; 10. Total amount paid on application at the rate of Rs. 10/- per Equity Share; 11. Particulars of cheque/demand draft; 12. Savings/Current Account Number and name and address of the bank where the Equity Shareholder will be depositing the

refund order. Incase of equity shares allotted in demat code, the bank account details will be obtained from the information available with the depositories;

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13. The permanent account number (PAN) of the Equity Shareholder and where relevant, for each joint holder, except in respect of central and state government officials and officials appointed by the court (e.g. official liquidators and court receivers) who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transaction in the securities market, subject to submitting sufficient documentary evidence in support of their claim for exemption, provided that such transactions are undertaken on behalf of the central and State Government and not in their personal capacity

14. Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of our Company. 15. In case of Non Resident Shareholders, NRE/ FCNR/ NRO A/c No. Name and Address of the Bank and Branch; 16. If payment is made by a draft purchased from NRE/ FCNR/ NRO A/c No., as the case may be, an Account debit

certificate from the bank issuing the draft, confirming that the draft has been issued by debiting NRE/ FCNR/ NRO Account.

17. A representation that the Equity Shareholder is not a “U.S. Person” (as defined in Regulation S under the Securities Act);

and 18. Additionally, Non Resident applicants shall include the representation in writing that:

“I/We understand that the Rights Entitlement have been, and will be, registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) or any United States state securities laws, and may not be offered, sold, resold or otherwise transferred within the United States or to the territories or possessions thereof or to, or for the account or benefit of, “U.S. Persons” (as defined in Regulation S under the US Securities Act), except in a transaction exempt from, or in a transaction not subject to, the registration requirements of the US Securities Act. The Equity Shares referred to in this application are being offered in India but not in the United States of America. None of our Company, the Registrar, the Lead Manager or any other person acting on behalf of our Company will accept subscriptions from any person, or the agent of any person, who appears to be, or who our Company, the Registrar, the Lead Manager or any other person acting on behalf of our Company has reason to believe is, a resident of the United States and to whom an offer, if made, would result in requiring registration of this application with the United States Securities and Exchange Commission.

I/We am/are both an institutional investor and an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the US Securities Act and we have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Equity Shares, and we are, and any accounts for which we are acting are each, able to bear the economic risk of our or its investment. I/We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any jurisdiction or under any circumstances in which such offer or sale is not authorised or to any person to whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our residence. I/We understand and agree that the Equity Shares may not be reoffered, resold, pledged or otherwise transferred except in an offshore transaction in compliance with Regulation S, or otherwise pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.”

Please note that Equity Shareholders who are making an application otherwise than on a CAF (i.e., on plain paper as stated above) shall not be entitled to renounce their rights and should not utilize the CAF for any purpose, including renunciation, even if it is received subsequently. If the Equity Shareholder does not comply with any of these requirements, he/she shall face the risk of rejection of both the applications and the Application Money received shall be refunded. However, our Company and/or any Director of our Company will not be liable to pay any interest whatsoever on the Application Money so refunded. The Equity Shareholders are requested to strictly adhere to these instructions. Failure to do so could result in the application being rejected, with our Company, the Lead Manager and the Registrar not having any liability to such Equity Shareholders. IV. Submission of Application and Modes of Payment for the Issue 1. Resident Equity Shareholders / Applicants 1. Applicants who are applying through CAF and residing at places where the bank collection centres have been opened by our

Company for collecting applications, are requested to submit their applications at the corresponding collection centre together with the cash (not more than Rs. 20,000) or by cheque / bank demand draft drawn on any bank (including a co-

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operative bank), for the full application amount favouring "Remidicherla Infra & Power Limited - Rights Issue - 2010" and marked ‘A/c Payee only’.

2. Applicants who are applying through CAF and residing at places other than places where the bank collection centres have

been opened for collecting applications, are requested to send their applications together with a cheque/demand draft of amount net of bank and postal charges, for the full application amount favouring “Remidicherla Infra & Power Limited - Rights Issue - 2010” and marked ‘A/c Payee only’ payable at Hyderabad directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

3. Applicants who are applying on plain paper, are requested to send their applications on plain paper together with a local

cheque/demand draft of amount net of bank and postal charges, for the Equity Shares favouring “Remidicherla Infra & Power Limited - Rights Issue – 2010” and marked ‘A/c Payee only’ payable at Hyderabad directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

2. Non-Resident Equity Shareholders / Applicants Application with repatriation benefits Non-Resident Equity Shareholders / Applicants, applying on a repatriation basis, are required to submit the completed CAF / application on plain paper, as the case may be, alongwith the payment made through any of the following ways: 1. By Indian Rupee drafts purchased from abroad and payable at Hyderabad or funds remitted from abroad (submitted along

with Foreign Inward Remittance Certificate); or

2. By Local cheque / bank drafts remitted through normal banking channels or out of funds held in Non-Resident External Account (NRE) or FCNR Account maintained with banks authorized to deal in foreign currency in India, along with documentary evidence in support of remittance; or

3. Demand Draft / Local Cheque for the total amount payable in favour of "Remidicherla Infra & Power Limited - Rights Issue

– 2010 - NR" payable at Hyderabad and crossed ‘A/c Payee only’ 4. FIIs registered with SEBI must remit funds from special non-resident rupee deposit account. 5. For Equity Shareholders / Applicants , applying through CAF, the CAF is to be sent at the bank collection centre specified

in the CAF along with cheques/drafts in favour of "Remidicherla Infra & Power Limited - Rights Issue -2010 - NR" payable at Hyderabad and crossed ‘A/c Payee only’ for the amount payable.

6. For Equity Shareholders / Applicants, applying on a plain paper, the applications are to be directly sent to the Registrar to

the Issue by registered post along cheques/drafts in favour of "Remidicherla Infra & Power Limited - Rights Issue – 2010 - NR" payable at Hyderabad and crossed ‘A/c Payee only’ for the amount payable so as to reach them on or before the Issue Closing Date.

A separate cheque or bank draft must accompany each application form. Applicants may note that where payment is made by drafts purchased from NRE/FCNR accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/FCNR account should be enclosed with the CAF. In the absence of the above the application shall be considered incomplete and is liable to be rejected. In the case of NRIs who remit their application money from funds held in FCNR/NRE Accounts, refunds and other disbursements, if any shall be credited to such account details of which should be furnished in the appropriate columns in the CAF. In the case of NRIs who remit their application money through Indian Rupee Drafts from abroad, refunds and other disbursements, if any will be made in any convertible foreign currency at the rate of exchange prevailing at such time subject to the permission of RBI. Our Company will not be liable for any loss on account of exchange rate fluctuation for converting the Rupee amount into any convertible foreign currency or for collection charges charged by the applicant’s Bankers. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of application in transit, if any Payments through Non Resident Ordinary Account (NRO account) will not be permitted. Individual non-resident Indian applicants can obtain application form at the following address: Remidicherla House,

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CPR Brundavan, flat number 401, near Nectar Garden, Hyderabad – 500 081 India. Tel no.: +91 40 40176880 Fax No.: +91 40 40176881 Contact Person: Mr. Premmaraju Satish, Company Secretary and Compliance Officer Application without repatriation benefits

For non-residents Equity Shareholders / Applicants applying on a non-repatriation basis, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account or Rupee Draft purchased out of NRO Account. In such cases, the allotment of Equity Shares will be on non-repatriation basis. For Non Resident Equity Shareholders/Applicants, applying through CAF, the CAF is to be sent at the bank collection centre specified in the CAF along with cheques/demand drafts drawn net of bank and postal charges in favor of “Remidicherla Infra & Power Limited - Rights Issue – 2010 – NR” payable at Hyderabad and crossed ‘A/c Payee only’ for the amount payable. For Equity Shareholders/Applicants, applying on a plain paper, the applications are to be directly sent to the Registrar to the Issue by registered post along with cheques/demand drafts net of bank and postal charges drawn in favor of “Remidicherla Infra & Power Limited - Rights Issue – 2010 – NR” payable at Hyderabad so as to reach them on or before the Issue Closing Date. If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. In the absence of the above, the application shall be considered incomplete and is liable to be rejected. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of application in transit, if any Note: 1. In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in Equity

Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961. 2. In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares cannot be

remitted outside India. 3. The CAFs duly completed together with the amount payable on application must be deposited with the collecting bank

indicated on the reverse of the CAFs before the close of business hours on or before the Issue Closing Date. Separate cheque or bank draft must accompany each CAF.

4. In case of a CAF received from non-residents, allotment, refunds and other distribution, if any, will be made in accordance

with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Last date of Application The last date for submission of the duly filled in CAF is [●] i.e. the Issue Closing Date. The Issue will be kept open for a minimum of 15 (Fifteen) days and the Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (Thirty) days from the Issue Opening Date. If the CAF together with the amount payable is not received by the Banker to the Issue / Registrar to the Issue on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board, the offer contained in the Draft Letter of Offer shall be deemed to have been declined and the Board shall be at liberty to dispose of the Equity Shares hereby offered, as provided under the paragraph titled “Basis of Allotment” beginning on page 156 of the Draft Letter of Offer. V. Basis of Allotment Subject to the provisions contained in the Letter of Offer, the Articles of Association of our Company and the approval of the Designated Stock Exchange, the Board will proceed to allot our Equity Shares in the following order of priority: (a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in part and

also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in part.

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(b) Since the ratio in case of our Company is one hundred twenty (120) equity shares for every one (1) fully paid-up equity share, there will no fractional entitlements.

(c) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as part of the Issue

and have also applied for additional Equity Shares, the allotment of such additional Equity Shares will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by them on the Record Date, provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The allotment of such Equity Shares will be at the discretion of the Board/ Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and not as preferential allotment.

(d) Allotment to the renouncees who having applied for the Equity Shares renounced in their favor and have also applied

for additional Equity Shares, provided there is an under-subscribed portion after making full allotment in (a), (b) and (c) above. The allotment of such additional Equity Shares will be made on a proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation with the Designated Stock Exchange, as a part of the Issue and not as a preferential allotment.

(e) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is surplus available

after making full allotment under (a), (b), (c) and (d) above. After taking into account allotment to be made under (a) and (b) above, if there is any undersubscribed portion, the same would be available for allocation under (c), (d) and (e) above. In the event of under subscription, the Promoter Group either by themselves and/or through one or more entities controlled by them intends to apply for additional Equity Shares in accordance with the undertaking and disclosures as mentioned in the chapter titled “Capital Structure” beginning on page 35 of the Draft Letter of Offer. Our Promoter has undertaken to fully subscribe for their Rights Entitlement. Our Promoter reserves his right to subscribe for his Rights Entitlement either by himself and/or through one or more entities controlled by him. He has also undertaken to apply for Equity Shares in addition to his Rights Entitlement to the extent of any undersubscribed portion of the Issue, subject to obtaining any approvals required under applicable law, to ensure that at least 90% of the Issue is subscribed. Such subscription for Equity Shares over and above his Rights Entitlement, if allotted, may result in an increase in his percentage shareholding above his current percentage shareholding. Further, such acquisition by him of additional Equity Shares shall (i) not result in a change of control of the management of the Company; and (ii) be exempt from the applicability of Regulations 11 and 12 of the Takeover Code in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Presently our Company is complying with clause 40A of the Listing Agreement and the minimum public shareholding required to be maintained for continuous listing is 25% of the total paid up equity capital. For further details of under subscription and allotment to the Promoter Group, please refer to “Basis of Allotment” on page 156 under the section titled “Terms of the Issue” on page 144 of the Draft Letter of Offer. After such allotments as above to the Promoter Group, including the application for rights/renunciation and additional Equity Shares, any additional Equity Shares shall be disposed off by the Board of our Company, in such manner as they think most beneficial to our Company and the decision of the Board of our Company in this regard shall be final and binding. In the event of oversubscription, allotment will be made within the overall size of the Issue. Our Company expects to complete the allotment of Equity Shares within a period of 15 days from the date of closure of the Issue in accordance with the listing agreement with BSE. Our Company shall retain no oversubscription. Underwriting The company has not currently entered into any stand by undertaking arrangement VI. Allotment and Refund The Company will issue and dispatch allotment advice/letters of allotment/Share Certificates/demat credit and/or letters of regret along with refund orders or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If the amount to be refunded is not paid within eight days from the day our Company becomes liable to pay it, our Company and every Director of our Company who is an officer in default shall be jointly and severally liable to repay the money with interest for the delayed period, at the rates stipulated under sub-sections (2) and (2A) of Section 73 of the Act. In case of those Equity Shareholders or applicants who have opted to receive the Equity Shares in dematerialized form using electronic credit under the depository system, advice regarding their credit of the Equity Shares shall be given separately. Applicants 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 15 working days of closure of Issue.

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In case of those Equity Shareholders or applicants who have opted to receive the Equity Shares in physical form and in respect of which our Company issues letters of allotment, the corresponding Share Certificates will be delivered within three months from the date of allotment thereof or such extended time as may be approved by the Company Law Board under Section 113 of the Act or other applicable provisions, if any. Allottees are requested to preserve such letters of allotment, which will subsequently be exchanged for the Share Certificates. The allotment advice/letters of allotment and refund orders exceeding Rs. 1,500/- will be sent by registered post/speed post to the sole/first applicant’s registered address in India. Refund orders up to the value of Rs. 1,500/- will be sent under certificate of posting. Such refund orders will be payable at par at all places where the applications were originally accepted. The same will be marked “account payee only” and will be drawn in favor of the sole/first applicant. Adequate funds will be made available to the Registrar to the Issue for this purpose. The Company shall ensure at par facility is provided for encashment of refund orders or pay orders at the places where applications are accepted. As regards allotment/refund to Non-Residents, the following further conditions shall apply In the case of Non Resident Equity Shareholders or applicants who remit their Application Money from funds held in NRE/FCNR Accounts, refunds and/or payment of interest or dividend and other disbursements, if any, shall be credited to such accounts, the details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of Non Resident Equity Shareholders or applicants who remit their Application Money through Indian Rupee demand drafts purchased from abroad, refund and/or payment of dividend or interest and any other disbursement, shall be credited to such accounts and will be made net of bank charges or commission in US Dollars, at the rate of exchange prevailing at such time. The Company will not be responsible for any loss on account of exchange rate fluctuations for conversion of the Indian Rupee amount into US Dollars. The Share Certificate(s) will be sent by registered post to the address in India of the Non Resident Equity Shareholders or applicants. Printing of Bank Particulars on Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatorily required to be given for printing on refund orders. Bank account particulars will be printed on the refund orders/refund warrants, which can then be deposited only in the account specified. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Mode of making Refund The payment of refund, if any, would be done through any of the following modes: 1. NECS – Payment of refund would be done through NECS for Investors having an account at any centre where such facility

has been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for Investors having a bank account at any centre where NECS facility has been made available by the RBI (subject to availability of all information for crediting the refund through NECS), except where the Investor, being eligible, opts to receive refund through National Electronic Fund Transfer (“NEFT”), direct credit or RTGS.

2. NEFT – Payment of refund shall be undertaken through NEFT wherever the Investors’ bank has been assigned the Indian

Financial System Code, which can be linked to a MICR, if any, available to that particular bank branch. IFSC 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 Investors have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the Investors through this method.

3. DIRECT CREDIT – Investors having bank accounts with the Bankers to the Issue shall be eligible to receive refunds

through direct credit. Charges, if any, levied by the relevant bank(s) for the same would be borne by the Company. 4. RTGS – Investors having a bank account at any centre where such facility has been made available and whose refund

amount exceeds Rs. 1 million, have the option to receive refund through RTGS. Such eligible Investors who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through NECS. Charges, if any, levied by the refund bank(s) for the same would be borne by the Company. Charges, if any, levied by the Investor’s bank receiving the credit would be borne by the Investor.

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5. For all other Investors, including those who have not updated their bank particulars with the MICR code, the refund orders will be despatched under certificate of posting for value up to Rs. 1,500 and through Speed Post/ Registered Post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn in favour of the sole/first Investor and payable at par.

6. Credit of refunds to Investors in any other electronic manner permissible under the banking laws, which are in force, and is

permitted by the SEBI from time to time. For shareholders opting for allotment in physical mode, bank account details as mentioned in the CAF shall be considered for electronic credit or printing of refund orders, as the case may be. Refund orders will be made by cheques, pay orders or demand drafts drawn on the Refund Bank(s) and payable at par at places where the applications were received and will be marked account payee and will be drawn in the name of Sole/First Applicant. The bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Applicants. Refund payment to Non-Resident Where applications are accompanied by Indian rupee drafts purchased abroad and payable at Hyderabad (as otherwise specified in this section titled “Terms of the Issue”), refunds will be made in convertible foreign exchange equivalent to Indian rupees to be refunded. Indian rupees will be converted into foreign exchange at the rate of exchange, which is prevailing on the date of refund. The exchange rate risk on such refunds shall be borne by the concerned applicant and our Company shall not bear any part of the risk. Where the applications made are accompanied by NRE/FCNR/NRO cheques, refunds will be credited to NRE/FCNR/NRO accounts respectively, on which such cheques were drawn and details of which were provided in the CAF. Export of letters of allotment (if any)/ share certificates/ demat credit to non-resident allottees will be subject to the approval of RBI. Interest in Case of Delay in Dispatch of Allotment Letters/ Refund Orders Our Company will issue and dispatch letters of allotment/ share certificates and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period of fifteen days from the date of closure of the Issue. The dispatch of share certificates/ refund orders and demat credit will be completed and the allotment and listing documents will be submitted to the stock exchanges within two working days from the date of allotment. If such money is not repaid within 8 days from the day our Company becomes liable to pay it, our Company shall pay that money with interest at the rate of 15% per annum as stipulated under Section 73 of the Act, 1956. Option to receive Equity Shares in Dematerialized Form Applicants have an option to get the Equity Shares of our Company issued through this Issue in physical or demat form. Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialised (electronic) form at the option of the applicant. Our Company has signed agreements dated [●] with NDSL, which enables the Investors to hold and trade in securities in a dematerialised form, instead of holding the securities in the form of physical certificates. In this Issue, the allottees who have opted for Equity Shares in dematerialised form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain space for indicating number of shares applied for in demat and physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. Separate applications for securities in physical and/or dematerialized form should be made. Separate applications are made, the application for physical securities will be treated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares. The Equity Shares of our Company will be listed on the BSE. Investors may please note that the Equity Shares of the Company can be traded on the BSE only in dematerialized form. Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under: 1. Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should carry

the name of the holder in the same manner as is exhibited in the records of our Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with our Company). In case of

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Investors having various folios in our Company with different joint holders, the Investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such Beneficiary Account (s) need not adhere to this step.

2. For Equity Shareholders already holding Equity Shares of our Company in dematerialized form as on the Record Date, the

beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of Equity Shares arising out of this Issue may be made in dematerialized form even if the original Equity Shares of our Company are not dematerialized. Nonetheless, it should be ensured that the Depository Account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of our Company.

3. Responsibility for correctness of information (including applicant’s age and other details) filled in the CAF vis-à-vis such

information with the applicant’s depository participant, would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be the same as registered with the applicant’s depository participant.

4. If incomplete / incorrect beneficiary account details are given in the CAF or where the investor does not opt to receive the

Rights Equity shares in dematerialized form, the applicant will get Equity Shares in physical form. 5. Applicants must necessarily fill in the details (including the beneficiary account number or client ID number) appearing in

the CAF under the heading ‘Request for shares in Electronic Form’. 6. Applicants should ensure that the names of the Applicants and the order in which they appear in the CAF should be the

same as registered with the Applicant’s depository participant. 7. The Rights Equity Shares pursuant to this Issue allotted to investors opting for dematerialized form, would be directly

credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the applicant’s depository account.

8. Renouncees will also have to provide the necessary details about their beneficiary account for allotment of securities in this

Issue. In case these details are incomplete or incorrect, the application is liable to be rejected. 9. Renouncees can also exercise the option to receive Equity Shares in the demat form by indicating in the relevant column in

the CAF and providing the necessary details about their beneficiary account. It may be noted that Equity Share arising out of this Issue can be received in demat form even if the existing Equity Shares are held in physical form. Nonetheless, it should be ensured that the depository participant account is in the name of the Applicant(s) in the same order as per specimen signatures appearing in the records of the depository participant/Company. It may be noted that shares in electronic form can be traded only on the Stock Exchange having electronic connectivity with NSDL.

10. Dividend or other benefits with respect to the Equity Shares held in dematerialised form would be paid to those Equity

Shareholders whose names appear in the list of beneficial owners given by the depository participant to our Company as on the Record Date.

VII. General instructions for applicants (a) Please read the instructions printed on the enclosed CAF carefully. (b) Application should be made on the printed CAF, provided by our Company except as mentioned under the head

“Application on Plain Paper” and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of the Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the applicants, details of occupation, address, father’s / husband’s name must be filled in block letters.

(c) Payments should be made in cash/cheque/demand draft drawn on any bank which is situated at and is a member of sub-

member of the banker’s clearing house located at the centre where application is accepted. Outstation cheques/ demand drafts will not be accepted and application(s) accompanied by such cheques/demand drafts will be rejected. The Registrar will not accept cash along with CAF

(d) The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting Bank or to the

Registrar to the Issue and not to our Company or Lead Manager to the Issue. Applicants residing at places other than

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cities where the branches of the Bankers to the Issue have been authorised by our Company for collecting applications, will have to make payment by Demand Draft payable at Hyderabad of amount net of bank and postal charges, and send their application forms to the Registrar to the Issue by REGISTERED POST. If any portion of the CAF is / are detached or separated, such application is liable to be rejected.

(e) PAN Number: Whenever the application(s) is/are made, the applicant or in the case of an application in joint names,

each of the applicants, should mention his/her Permanent Account Number (PAN) allotted under the IT Act. The copy of the PAN card or PAN allotment letter is not required to be submitted with the CAF. Applications without this information and documents will be considered incomplete and are liable to be rejected. It is to be specifically noted that Applicant should not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. In terms of SEBI Circular bearing no. MRD/DoP/Cir-20/2008 dated June 30, 2008, certain categories of investors (namely the Central Government, State Government, and the officials appointed by the courts e.g. Official liquidator, Court receiver etc. (under the category of Government)) shall be exempted from submitting their PAN, only if such organisations submit sufficient documentary evidence to support the veracity of their claim for such exemption.

(f) Bank Account Details: It is mandatory for applicants to provide information as to their savings/current account number and the name of the bank with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Application not containing such details is liable to be rejected. SHAREHOLDERS MAY PLEASE NOTE THAT FOR SHARES HELD IN DEMAT MODE, THE BANK ACCOUNT DETAILS SHALL BE OBTAINED FROM THE DEPOSITORIES. SHAREHOLDERS MAY ENSURE THAT THE BANK ACCOUNT DETAILS ARE UPDATED WITH THE DEPOSITORIES.

(g) Payment by cash: The payment against the application should not be effected in cash if the amount to be paid is Rs.

20,000 or more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.

(h) Signatures should be either in English or Hindi or in any other language specified in the Eight Schedule to the

Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with our Company or depositories.

(i) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the

relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Issue and to sign the application and a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above referred documents are already registered with our Company, the same need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue.

(j) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the

specimen signature(s) recorded with our Company. Further, in case of joint applicants who are renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(k) Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for allotment of Equity

Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a Non-Resident or PIO/NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

(l) All communication in connection with application for the Equity Shares, including any change in address of the Equity

Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to Registrar to our Company; Venture Capital & Corporate Investments Pvt. Ltd, at 12-10-167, Bharat Nagar, Hyderabad -500018, in the case of Equity Shares held in physical form and to the respective depository participant, in case of Equity Shares held in dematerialized form.

(m) Split Application Forms cannot be re-split.

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(n) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled to obtain split forms.

(o) Applicants must write their CAF number at the back of the cheque / demand draft. (p) Only one mode of payment per application should be used. The payment must be either in cash (not more than

Rs.20,000) or by cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted.

(q) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated cheques and

postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against application in cash please refer point (f) above)

(r) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will

acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF. (s) An applicant which is a mutual fund can make a separate application in respect of each scheme of the fund and such

applications shall not be treated as multiple applications. The application made by the asset management company or custodian of a mutual fund shall clearly indicate the name of the concerned scheme for which the application is made.

Procedure for Applications by Mutual Funds A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the application is being made. Grounds For Technical Rejections Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following: 1. CAFs, which are not completed or are not accompanied with the application money payable, are liable to be rejected; 2. Amount paid does not tally with the amount payable for; 3. In case of physical shareholders, bank account details (for refund) are not given; 4. Age of first applicant not given; 5. PAN allotted under the IT Act has not been mentioned by the applicant; 6. In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant documents are

not submitted; 7. If the signature of the existing shareholder does not match with the one given on the Application Form and for

renouncees if the signature does not match with the records available with their depositories; 8. If the Applicant desires to receive Equity Shares in electronic form, but the CAF does not have the Applicant’s

depository account details; 9. CAF are not submitted by the Applicants within the time prescribed as per the CAF and the Letter of Offer; 10. Applications not duly signed by the sole/joint Applicants; 11. Applications by OCBs unless approved by RBI; 12. Applications accompanied by Stockinvest; 13. In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the

Applicants (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s identity;

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14. Applications by ineligible Non-residents on account of restriction or prohibition under applicable local laws. 15. Applications that do not include the certification set out in the CAF to the effect that the subscriber is not a U.S. Person

and is purchasing the Equity Shares in an “offshore transaction” (as defined in Regulation S), and is authorised to acquire the Equity Shares in compliance with all applicable laws and regulations; and where a registered address in India has not been provided

16. Applications where our Company believes that the CAF is incomplete or acceptance of such CAF may infringe

applicable legal or regulatory requirements; or 17. Multiple applications, including where an applicant submits a CAF and a plain paper application. Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process SEBI, by its circular dated August 20, 2009, introduced in rights issue - application supported by blocked amount wherein the application money remains in the ASBA Account until allotment. Mode of payment through ASBA in Rights Issue became effective on August 20, 2009. Since this is a new mode of payment in Rights Issues, set forth below is the procedure for applying under the ASBA procedure, for the benefit of the shareholders. This section is only to facilitate better understanding of aspects of the procedure which is specific to ASBA investors. ASBA investors should nonetheless read this document in entirety. The Company and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of the Draft Letter of Offer. Equity shareholders who are eligible to apply under the ASBA process are advised to make their independent investigations and ensure that the number of Equity Shares applied for by such equity shareholders do not exceed the applicable limits under laws or regulations. ASBA Process An ASBA Investor can submit his application through CAF/plain paper, either in physical or electronic mode, to the SCSB with whom the bank account of the ASBA Investor or bank account utilised by the ASBA Investor is maintained. The SCSB shall block an amount equal to the application amount in the ASBA Account specified in the CAF, physical or electronic, on the basis of an authorisation to this effect given by the account holder at the time of submitting the CAF. The application data shall thereafter be uploaded by the SCSB in the web enabled interface of the Stock Exchanges as prescribed under circular issued by SEBI -SEBI/CFD/DIL/DIP/38/2009/08/20 dated August 20, 2009 or in such manner as may be decided in consultation with the Stock Exchanges. The amount payable on application shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment and consequent transfer of the amount against the allocated Equity Shares to the separate account opened by the Company for Rights Issue or until failure of the Issue or until rejection of the ASBA application, as the case may be. Once the basis of Allotment is finalized, the Registrar to the Issue shall send an appropriate request to the Controlling Branch for unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful ASBA Investors to the separate account opened by the Company for Rights Issue. 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 The Lead Manager, our Company, its directors, affiliates, associates and their respective directors and officers and the Registrar to the Issue shall not take any responsibility for acts, mistakes, errors, omissions and commissions etc. in relation to applications accepted by SCSBs, Applications uploaded by SCSBs, applications accepted but not uploaded by SCSBs or applications accepted and uploaded without blocking funds in the ASBA Accounts. It shall be presumed that for applications uploaded by SCSBs, the amount payable on application has been blocked in the relevant ASBA Account. Equity Shareholders who are eligible to apply under the ASBA Process The option of applying for Equity Shares in the Issue through the ASBA Process is only available to a shareholder of the Company on the Record Date and who:

• Is holding Equity Shares in dematerialised form and has applied for entitlements or additional Equity Shares in the Issue in dematerialised form;

• Has not renounced his entitlements in full or in part;

• Is not a Renouncee to the Issue;

• Who applies through a bank account with one of the SCSBs.

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CAF The Registrar will dispatch the CAF to all Equity Shareholders as per their entitlement on the Record Date for the Issue. Those Equity Shareholders who wish to apply through the ASBA payment mechanism will have to select for this mechanism in Part A of the CAF and provide necessary details. Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in Part A of the CAF only. Application in electronic mode will only be available with such SCSB who provides such facility. The Equity Shareholder shall submit the CAF to the SCSB for authorizing such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain a duplicate CAF and wanting to apply under ASBA process may make an application to subscribe for the Issue on plain paper. The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company, must be submitted at a designated branch of a SCSB on or before the Issue Closing Date and should contain the following particulars; • Name of the issuer, being Remidicherla Infra & Power Limited; • Name and address of the Equity Shareholder, including any joint holders; • Registered folio number/DP ID number and client ID number; • Number of Equity Shares held as on the Record Date; • Rights Entitlement; • Number of Equity Shares applied for; • Number of additional Equity Shares applied for, if any; • Total number of Equity Shares applied for; • Savings/Current Account Number along with name and address of the SCSB and Branch from

which the money will be blocked ;

• The permanent account number (PAN) of the Equity Shareholder and where relevant, for each joint holder, except in respect of Central and State Government officials and officials appointed by the court (e.g., official liquidators and court receivers) who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transacting in the securities market, subject to submitting sufficient documentary evidence in support of their claim for exemption, provided that such transactions are undertaken on behalf of the Central and State Government and not in their personal capacity;

• A representation that the Equity Shareholder is not a “U.S. Person” (as defined in Regulation S under the Securities Act);

• Signature of the Equity Shareholders to appear in the same sequence and order as they appear in the records of our Company;

• Incase of Non Resident Shareholders, NRE/FCNR/NRO A/c no., Name and address of the SCSB and Branch;

• In the application, the ASBA Investor shall, inter alia, give the following confirmations/declarations: a. That he/she is an ASBA Investor as per the SEBI ICDR; and b. That he/she has authorized the SCSBs to do all acts as are necessary to make an application in the Issue, upload his/her

application data, block or unblock the funds in the ASBA Account and transfer the funds from the ASBA Account to the separate account maintained by the Company for Rights Issue after finalization of the basis of Allotment entitling the ASBA Investor to receive Equity Shares in the Issue etc.

The Equity Shareholder shall submit the plain paper application to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. If an applicant makes an application in more than one mode i.e. both in the Composite Application Form and on plain paper, then both the applications may be liable for rejection.

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The list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on the website of SEBI at www.sebi.gov.in. For details on designated branches of SCSB collecting the CAF, please refer to SEBI’s website at sebi.gov.in. Acceptance of the Issue You may accept the Issue and apply for the Equity Shares offered, either in full or in part, by filling Part A of the CAF sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard. Mode of payment The shareholder applying under the ASBA Process agrees to block the entire amount payable on application (including for additional Equity Shares, if any) with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB. After verifying that sufficient funds are available in the bank account provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per Registrar’s instruction allocable to the Shareholders applying under the ASBA Process from bank account with the SCSB mentioned by the Shareholder in the CAF. This amount will be transferred in terms of the SEBI Guidelines, into the separate bank account maintained by the Company as per the provisions of section 73(3) of the Act. The balance amount remaining after the finalisation of the basis of allotment shall be either unblocked by the SCSBs or refunded to the investors by the Registrar on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Manager to the respective SCSB. The shareholders applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the submission of the CAF. The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided by the Shareholder in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, the Company would have a right to reject the application only on technical grounds. Options available to the shareholder applying under the ASBA Process The summary of options available to the Shareholders is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the CAF received from Registrar:

Option Available Action Required 1 Accept whole or part of your entitlement without renouncing the balance.

Fill in and sign Part A of the CAF (All joint holders must sign)

2 Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A of the CAF including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

The shareholder applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary details. However, in cases where this option is not selected, but the CAF is tendered to the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if the shareholder has selected to apply through the ASBA process option. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares (as the case may be) that you are entitled too, provided that you have applied for all the Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under paragraph titled “Basis of Allotment” on page 156, as contained in the section titled “Issue Related Information”, on page 144 of the Draft Letter of Offer. If you desire to apply for additional shares, please indicate your requirement in the place provided for additional Securities in Part A of the CAF.

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Renunciation under the ASBA Process Renouncees cannot participate in the ASBA Process. Last date of Application The last date for submission of the duly filled in CAF is [●]. The Issue will be kept open for a minimum of 15 (fifteen) days and the Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date. If the CAF together with the amount payable is not received by the Bankers to the Issue/Registrar to the Issue or if the CAF is not received by the SCSB on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/Committee of Directors, the offer contained in the Letter of Offer shall be deemed to have been declined and the Board/Committee of Directors shall be at liberty to dispose of the Equity Shares hereby offered, as provided under paragraph titled “Basis of Allotment” on page 156, as contained in the section titled “Issue Related Information”, on page 144 of the Draft Letter of Offer. Option to receive Equity Shares in Dematerialized Form SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE BEING HELD ON RECORD DATE. Issuance of Intimation Letters Upon approval of the basis of Allotment by the Designated Stock Exchange, the Registrar to the Issue shall send the Controlling Branches, a list of the ASBA Investors who have been allocated Equity Shares in the Issue, along with:

• The number of Equity Shares to be allotted against each successful ASBA;

• The amount to be transferred from the ASBA Account to the separate account opened by the Company for Rights Issue, for each successful ASBA;

• The date by which the funds referred to in para above, shall be transferred to separate account opened by the Company for Rights Issue; and

• The details of rejected ASBAs, if any, along with reasons for rejection to enable SCSBs to unblock the respective ASBA Accounts.

General instructions for shareholders applying under the ASBA Process (a) Please read the instructions printed on the CAF carefully.

(b) Application should be made on the printed CAF only and should be completed in all respects. The CAF found incomplete

with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of the Letter of Offer are liable to be rejected. The CAF must be filled in English.

(c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bank account details

are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to the Company or Registrar or Lead Manager to the Issue.

(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN

number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs without PAN will be considered incomplete and are liable to be rejected.

(e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash payment is not

acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon.

(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the

Constitution of India. Thumb impression and Signatures other than in English or Hindi must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The shareholders must sign the CAF as per the specimen signature recorded with the Company/or Depositories.

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(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Company. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(h) All communication in connection with application for the Securities, including any change in address of the shareholders

should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first/sole applicant Shareholder, folio numbers and CAF number.

(i) Only the person or persons to whom Securities have been offered and not renouncee(s) shall be eligible to participate

under the ASBA process. Do’s:

a. Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in. b. Ensure that you submit your application in physical mode only. Electronic mode is only available with certain SCSBs

and not all SCSBs and you should ensure that your SCSB offers such facility to you.

c. Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only.

d. Ensure that the CAFs are submitted at the SCSBs whose details of bank account have been provided in the CAF.

e. Ensure that you have mentioned the correct bank account number in the CAF.

f. Ensure that there are sufficient funds (equal to {number of Equity Shares applied for} X {Issue Price per Equity Share

as the case may be}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB.

g. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application

mentioned in the CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.

h. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form.

i. Each applicant should mention their Permanent Account Number (“PAN”) allotted under the I. T. Act.

j. Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is held

with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF.

k. Ensure that the Demographic Details are updated, true and correct, in all respects.

Don’ts: 1. Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB. 2. Do not pay the amount payable on application in cash, by money order or by postal order. 3. Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assuming that such Collecting

Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only.

4. Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. 5. Do not instruct their respective banks to release the funds blocked under the ASBA Process. Grounds for Technical Rejection for ASBA Process: In addition to the grounds listed under paragraph titled “Grounds for Technical Rejection” mentioned on page 162 of the Draft Letter of Offer, applications under ASBA Process can be rejected on following additional grounds: a. Application on plain paper or on spilt form.

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b. Application for entitlements or additional shares in physical form. c. DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with the Registrar. d. Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not a SCSB) / to a

branch of a SCSB which is not a Designated Branch of the SCSB / Company. e. Renouncee applying under the ASBA Process. f. Insufficient funds are available with the SCSB for blocking the amount. g. Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen pursuant to

regulatory orders. h. Account holder not signing the CAF or declaration mentioned therein. COMMUNICATIONS All future communication in connection with ASBA applications made in this Issue should be addressed to the Registrar to the Issue quoting the full name of the sole or first ASBA Investor, CAF number, details of Depository Participant, number of Equity Shares applied for, date of CAF, name and address of the Designated Branch where the application was submitted and bank account number of the ASBA Account, with a copy to the relevant SCSB. The Registrar to the Issue shall obtain the required information from the SCSBs for addressing any clarifications or grievances. The SCSB shall be responsible for any damage or liability resulting from any errors, fraud or willful negligence on the part of any employee of the concerned SCSB, including its Designated Branches and the branches where the ASBA Accounts are held. ASBA Investors can contact the Compliance Officer, the Designated Branch where the application was submitted, or the Registrar to the Issue in case of any pre or post-Issue related problems such as non-receipt of credit of Allotted Equity Shares in the respective beneficiary accounts, blocking of excess Amount, etc. Disposal of Investor Grievances All grievances relating to the ASBA may be addressed to the Registrar to the Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, Amount blocked on application, bank account number of the ASBA Account number and the Designated Branch or the collection centre of the SCSB where the CAF was submitted by the ASBA Investors. Depository account and bank details for shareholders applying under the ASBA Process IT IS MANDATORY FOR ALL THE SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF. Shareholders applying under the ASBA Process should note that on the basis of name as provided by them, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the Depository their demographic details such as address, bank account details for printing on refund orders / advice and occupation (“Demographic Details”). Hence, shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF. These Demographic Details would be used for all correspondence with such shareholders including mailing of the letters intimating unblock of bank account of the respective Shareholder. The Demographic Details given by shareholders in the CAF would not be used for any other purposes by the Registrar. Hence, shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAFs, the shareholders applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records.

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Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of the shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. Refunds, if any, will be made directly to the bank account in the SCSB and which details are provided in the CAF and not the bank account linked to the DP ID. Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of bank account may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the shareholder in the CAF would be used only to ensure dispatch of letters intimating unblocking of bank account. Note that any such delay shall be at the sole risk of the shareholders applying under the ASBA Process and none of the Company, the SCSBs or the Lead Manager shall be liable to compensate the Shareholder applying under the ASBA Process for any losses caused to such Shareholder due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected. Disposal of application and application money No acknowledgment will be issued for the application moneys received by our Company. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without assigning any reason thereto. In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the applicant within fifteen days from the close of the Issue. The dispatch of share certificates/ refund orders and demat credit will be completed and the allotment and listing documents will be submitted to the stock exchanges within two working days from the date of allotment. For further instruction, please read the paragraph titled “Options available to the Equity Shareholders” beginning on page 150 of the Draft Letter of Offer carefully. General Instructions Payment by Stockinvest In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stockinvest Scheme has been withdrawn with immediate effect. Hence, payment through Stockinvest would not be accepted in this Issue Issue Period Issue Opens on [●]Last date for receiving request for Split Application Forms [●]Issue Closes on [●]

The Board may however decide to extend the Issue period as it may determine from time to time but not exceeding 30 days including the Issue Opening Date.

Allotment Schedule 1. Our Company agrees that as far as possible allotment of securities offered to the shareholders shall be made within 15 days

from the date of the closure of the Issue. 2. Our Company further agrees that it shall pay interest @ 15% per annum for the delayed period if the allotment has not been

made and/or allotment letters / the refund orders have not been dispatched to the applicants/ refund instruction beyond 8 days from the date specified above.

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General Applications should be made only on the prescribed CAFs provided by our Company and should be complete in all respects. Applications which are not complete or which are not accompanied with remittance of the proper amount calculated as aforesaid are liable to be rejected and the money paid in respect thereof will be refunded without interest. The CAF must be filled in English in BLOCK LETTERS. In case of joint holders, all joint holders must sign the CAF at the appropriate places in the same order as per specimen signatures recorded in the Register of Members of our Company / Depository. In case of renouncee(s), the name of the applicant(s), details of occupation, address and father’s/husband’s name must be filled in Block Letters. The CAF must be submitted to the Collection Centres as mentioned in the CAF/ Registrar to the Issue, as the case may be, in its entirety. If any of the parts A, B, C, D and the acknowledgement of the CAF is/are detached or separated; such applications will be rejected forthwith. Any dispute or suit or action or proceeding arising out of or in relation to the Letter of Offer or this Issue or in respect of any matter or thing contained therein and any claim by either party against the other shall be instituted or adjudicated upon or decided solely by the appropriate Court in Hyderabad. All communications in connection with your application for the Equity Shares should be addressed to the Registrars to the Issue. Shareholder’s Depository Account and Bank details Shareholder’s applying for shares in demat mode should note that on the basis of the name of the shareholder(s), Depository Participant’s Name, Depository Participant’s Identification Number and Beneficiary Account Number provided by them in the CAF, the Registrars to the Issue will obtain from the Depository the demographic details including the address, Shareholders bank account details, MICR code and occupation (hereinafter referred to as ‘Demographic Details’). These bank account details would be used for giving refunds to the shareholder(s). Hence, the shareholder(s) are requested to immediately updated their bank account details as appearing in the records of the Depository Participant. Please note that failure to do so could result in delays in dispatch / credit of refunds to the shareholder(s) at the shareholder(s) sole risk and neither the Lead Manager’s or the Registrars or the Refund Bankers nor our Company shall have any responsibility and undertake any liability for the same. Hence, applicants should carefully fill their Depository Account details in the Composite Application Form. These demographic details would be used for all correspondences with the shareholder(s) including mailing of Allotment advice and printing of bank particulars on the refund order or for refunds through electronic transfer of funds, as applicable. By signing the Composite Application Form the shareholder(s) would be deemed to have authorized the depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available in its records. In case of shareholder(s) receiving refunds through electronic transfer of funds, delivery of refund orders/allocation advice gets delayed if the same once sent to the address obtained from the depositories are returned undelivered. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY CAN BE TRADED ON THE STOCK EXCHANGE ONLY IN DEMATERIALIZED FORM. Important 1. Please read the Letter of Offer carefully before taking any action. The instructions contained in the accompanying

Composite Application Form (CAF) are an integral part of the conditions of the Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.

2. All enquiries in connection with the Letter of Offer or accompanying CAF and requests for Split Application Forms must

be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and superscribed ‘Remidicherla Infra & Power Limited - Rights Issue’ on the envelope) to the Registrar to the Issue at the following address:

Venture Capital & Corporate Investments Pvt. Ltd 12-10-167, Bharat Nagar, Hyderabad -500018 Tel : +91 040 23818475 Fax: +91 040 23868024

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E mail: [email protected] Website: www.vccilindia.com Contact Person : Mr. P. V. Srinivas

3. It is to be specifically noted that this Issue of Equity Shares is subject to the chapter entitled “Risk Factors” beginning on

page ix of the Draft Letter of Offer 4. Our Company will not be liable for any postal delays and applications received through mail after the closure of the Issue,

are liable to be rejected and returned to the applicants. The Issue will not be kept open for more than 15 days unless extended, in which case it will be kept open for a maximum of 30 days.

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SECTION VIII – MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

SHARE CAPITAL (i) The Share Capital of the Company is Rs 30,00,00,000/-(Rupees Thirty Crore Only) divided in to 3,00,00,000/-(Three Crore Only) Equity share of Rs.10/-(Rupees Ten Only) each. The Company may from time to time by ordinary resolution increase the share capital by such sum to be divided in to shares as may be specified in the resolution of Board.

The Company shall have power to issue Preference Share carrying a right to redemption out of profit which would otherwise be available for dividend out of proceeds of fresh issued of share made for the purpose of such redemption or liable to be redeemed at the Company and the Board may subject to the provision Section of the Act exercise such power in such manner as it think fit.

Subject to the provision of these Articles the share shall under the control of the Director who may allot or otherwise dispatch of the same on such terms condition and at such times as the Director think fit and with power to issue any shares as fully paid-up in consideration of services rendered to the Company in its formation or otherwise, provided that where the Director decided to increase the issued capital of the Company by the issue of further shares the provisions of section 81 of the Act, will be complied with. Provided further that the option or right to call on shares shall not give to any person except with the sanction of the Company in general meeting.

ISSUE OF SHARES AT A DISCOUNT

Subject to the provision of Section 79 of the Act, it shall be lawful for the Company to issue at a discount shares of a class already issued.

COMMISSION FOR PIACTING SHARES

The Company may subject to compliance with revision of Section 76 of Act, exercise the powers of paying commission on the issue of shares and debentures. The commission may pay or satisfied in cash or shares debentures or debentures stock of the Company.

BROKERAGE The Company may pay a reasonable sum of brokerage.

TRUST NOT RECOGNISED

Save as herein otherwise provided the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not, except as ordered by a Court of Competent jurisdiction or as by law required, be bound to recognize any trust benami or equitable or other claim to or interest in such shares on any fractional part of a share whether or not it shall have express or other notice thereof.

CERTIFICATE The certificate of title to shares shall be issued under the seal of the Company. Every member shall be entitled free of charges to one certificate for all the shares of each class registered in his name or if any member so wishes to several certificate each for one or more of such shares but in respect of each additional certificate which does not comprise shares in losts of market units or trading the Board may charges a fee of Rs.2/-or such lesser sum as the Board may determine Unless the conditional of issue of any shares otherwise provide the Company shall either within three months after the date of allotment and on surrender to the Company of its letter making the allotment or of its fractional coupons of requisite value (save in the case of issue against letters of acceptance or of renunciation or in the case of issue of bonus shares) or within one month of receipt of the application for registration of the transfer sub-division consolidation renewal or exchange of any of its shares as the case may be, complete ad have ready for delivery the certificate of such shares. Every certificate of shares shall specify the name of the person in whose favour the certificate is issued the shares to which it relates and the amount paid up thereon. Particulars of every certificate issued shall be entered in the Register maintained in the form set out in the Companies (Issue of Share Certificate) Rule, 1960. AS TO ISSUE OF NEW CERTIFICATES If any Certificate of any share or shares be surrendered to the company for sub-division or consolidation or if any certificate be defaced, torn or old. decrepit worn out or where the cages on the reverse for recording transfers have been fully utilised, then upon surrender thereof to the Company, the Board may order the same to be cancelled and may issued a new certificate in lieu

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thereof, and if any certificate be lost or destroyed then, upon proof thereof to the satisfaction of the Board and on such indemnity as the Board thinks fit being given a new certificate in lieu thereof, shall be given to party entitled to the shares to which such lost or destroyed certificate relates. Where a new certificate has been issued as aforesaid and against the stub or counterfoil that in lieu of a share certificate or is a duplicate issued for the one so replaced and, in the case of certificate issued in place of one which has been lost or destroyed the word “duplicate” shall be stamped or punched in bold letters across the face thereof. For every certificate issued under this Article, there shall be paid to the Company such out of pocket expenses incurred by the company in investigation evidence as the Board may determine. FEE ON SUBDIVISION OF SHARE ISUE OF NEW CERTIFICATES ETC No fee shall be charged for sub- division and consolidation of share and debenture certificate and for sub-division o, letters of allotment and split, consolidation, renewal and pucca transfer receipts into denominations corresponding to the market units of trading, for sub-division of renounce able letters of rights; for issue of new certificates in replacement of those which are old, decrepit or worn out, or where the cages on the reverse for recording transfers have been fully utilised. Provided that the Company may charge such fees as may be agreed by it with the stock exchange with which its, shares may be enlisted for the time being for issue of new certificates in replacement of those that are torn, defaced, lost or destroyed and for sub-division and consolidation of shares and debenture certificates and for sub-division of letter of allotment and split, consolidation, renewal and pucca transfer receipts into denominations other than those fixed for the market units of trading. JOINT HOLDERS OF SHARES Where two or more persons are registered as holders of any share they shall be deemed to hold the same as joint –tenants with benefit of survivorship subject to the provisions following and to the other provision of these Articles relating to joint-holders a) The Company shall not be bound to register more than four persons as the joint -holders of any share. b) The joint holder of a share shall be liable severally as well as jointly in respect of all payment which ought to be made in

respect of such share. c) On the death of any of such joint –holders the survivor or survivors shall be the only person/person recognised by the

company as having any title to or interest in such share but the Board may require such evidence of death as it may deem fit.

d) Only the person whose name stands first in the Register as one of the joint-holder of any share shall be entitled to delivery

of the certificate relating to such shares.

CALLS

The Director may, from time to time, subject to the terms on which any shares may have been issued, make such calls as they think fit up on the Members in respect of all moneys unpaid on the shares held by them respectively, and not by the condition of allotment there of made payable at fixed times, and each Members shall pay the amount of every call so made on him to the persons and at times and places appointed by the Director .A call may be made payable by instalments.The option or right to call of shares shall not given to any person except with sanction of the Company in general meeting.

A call shall be deemed to have been made at time when the resolution of the Directors authorising such call was passed.

Not less than 14 days notice of any shall be given specifying the time and place of payment and to whom such call shall be paid.

If any the terms of issue of any shares or otherwise, the whole or part of the amount of issued price thereof is made payable at any fixed time or by installments at fixed times, every such amount or issue price or installments thereof shall be payable as if it were a call duly made by Directors and of which due notice had been given and all the provision herein contained in respect of calls apply to such amount or issue price or installments accordingly.

If the sum payable in respect of any or installments be no paid or before the day appointed for the payment thereof the holder for the time being of the share in respect of which the call shall have been made or the installment shall in respect of which the call shall have been made or the installment shall be due, shall pay interest for the same at the rate of 12 percent per annum,from the day appointed for the payment thereof to the actual payment or at such other rate as the Directors may determine but they shall power to waive the payment thereof wholly or in part.

On the trial or hearing of any action or suit brought by the Company against any member or his reprehensive to recover any debt or money claimed to be due to the company in respect of his shares, it shall be sufficient to prove that the name of the defendant is. or was when the claim arose, on the register of the Company as a holder or one of the holders of the number of shares in respect of which such claim is made. that the resolution making the call is duly recorded in the minutes book and that

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the amount claimed is not entered as paid in the books of the Company, and it shall not be necessary to prove the appointment of the Director who made any call nor that a quorum of Director was present at the meeting at which any call was made nor that such meeting was duly convened or constituted, nor any other matte what so ever but the proof of the matters aforesaid shall be conclusive evidence of the debt.

The Board may if it think fit, receive from any Member willing to advance the same, all or any part of money due upon the share held by him beyond the sums actually called for, and upon the money so paid or satisfied in advance, or so much thereof as from time to time exceeds the amount of calls then made upon the shares in respect of which such advance has been made, the Company may pay interest at such rate not exceeding, unless the Company in General Meeting shall other wise direct,6 per cent per annum as the Member paying such sum as advance and the Board agree upon. Money so paid I excess of the amount of call shall not rank for dividends or confer a right to participate in profits. The Board may at any time repay the amount 50 advanced upon giving such member not less than three months notice in writing.

FORFEITURE AND LIEN

If any Members fails to pay any cell or installment on or before the day appointed for the payment of the same the Director may a any time thereafter during such time as the call or installment remains unpaid serve a notice on such Member requiring him to pay the same together with any interest that may have accrued and expenses that may have been incurred by Company by reasons of such non-payment.

LENGTH OF NOTICE

The notice shall name a day (not being less than 21 days from the date of the notice) and a place or places on and at which such call or installment and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the place or place appointed the shares in respect of which such call was made or installment is payable will be liable to be forfeited.

IF NOTICE NOT COMPLIED WITH SHARES MAY BE FORFEITED

If the requirement of any such notice aforesaid be not complied with, any shares in respect of which such notice has been given may, at any time thereafter before payment of all calls or instalments,interest and expenses due in respect thereof, be forfeited by a resolution of the Director to that effect. Such forfeited shall include all dividends in respect of the forfeited share not actually paid before the forfeited.

NOTICE AFTER FORFEITURE

When any share have been so forfeited, notice of the forfeiture shall be given to the Member in whose name it stood immediately prior to the forfeiture, and entry of the forfeiture with the date thereof shall forth with be made in the Register but no forfeiture shall be in any manner invalidate by any omission or neglect to give such notice or to make entry as foresaid.

FOREFEITED SHARE TO BECOME PROPERTY OF THE COMPANY Any share so forfeited shall be deemed to be the propertly of the company and the Director may sell re-allot or otherwise dispose of the same in such manner as they think fit. POWER TO ANNUAL FORFEITURE The Director may, at any time before any share so forfeited shall not be sold re-allotted or otherwise disposed of annual the forfeiture their upon such conditions as they think fit. ARRCARS TO BE PAID NOTWITH STANDING FORFEILURE The Members whose shares have been forfeited shall not with same such forfeiture, be liable to pay and shall forthwith pay to the Company all calls, installments, interest and the expenses owing upon Company of such shares at the time of forfeiture together with from the time of the forfeiture until payment at 12 or such other rate as the Director may determine may the payment thereof without any deduction value of shares at the time of forfeiture but The liability of the ex-share up on the amount not paid by the purchasers. EFFECT OF FORFEITURE. The forfeiture in and also of all claims and demands against the Company in respect of the shares, and all other right incidental to the share except only such of those rights as by these Articles are expressly Presley saved. EVIDENCE OF FORFEITURE

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A duly verified declaration in writing that the declaring is a Director of the Company and the certain shares in the Company have been duly forfeited on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the shares and the receipt of the Company for the consideration if any given for the shares on the sale or disposition there of, shall constitute a given title to such shares. COMPANY LIEN SHARES The Company shall have a first and paramount lien upon all the shares (other than fully paid up shares) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares and so equitable interest in any share shall be created except upon the footing and condition that Article 9 hereof will have full effect. And such lien shall extend to all dividends and bonuses from time to time declared in respect of such shares. Unless otherwise agreed registration of a transfer of shares shall operate as a waiver of the Company lien if any on such shares. The Directors may at any shares wholly or in part to be exempt from the provisions of this clause. INTENTION AS TO ENFORCING LIEN BY For the purpose of enforcing such lien, the Directors may sell the shares subject thereto in such manner as they think fit, but no sale shall be made until such period as aforesaid shall have elapsed and until notice in writing of the intention to sell have served on such period as aforesaid shall have elapsed and until notice in writing of the intention to sell have served on such member, his committee, curator bonus or other person recognised by the Company as entitled to represent such member and default shall have been made by him or them in the payment of the sum payable as aforesaid for seven days after such notice. The net proceeds of any such sale shall be applied in or towards satisfaction of such part of the amount in respect of which the lien exists as is presently payable by such member, and the residue (if any) paid to such member his executors, administration or other representatives or person so recognized as aforesaid. VALIDITY OF SHARES Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers by these presents given the Directors may appoint some person to execute an instrument of transfer of the shares sold and I cause person to execute an instrument of transfer of the shares sold a cause the purchasers name to be entered in the register in respect of the shares sold and after his name has been entered in the register in respect of such shares his title to such shares shall not be attend by any irregularity or invalidity in the proceedings in reference to such forfeiture, sale or disposition, nor impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively. POWER TO ISSUE NEW CERTIFICATE Where any shares under the powers in that behalf herein contained are sold by the Director and the certificate thereof has not been delivered to the Company by the Former holder of the said shares the Director may issue new certificate in lien of certificate not so delivered up. TRANSFER AND TRANSMISSION OF SHARES The instruments of transfer shall be in writing and all the provisions of section 108 of the Act and of any statutory notifications thereof for the time being shall be duly complied with in respect of all transfer of shares and registration thereof. APPLICATION FOR TRANSFER Application for the registration of the transfer of a share may be made either by the transferor or the transferee provided that, where such application is made by the transferor, no registration shall in the case of partly paid shares be effected unless the Company gives notice of the application to the transferred in the manners prescribed by the Act and subject to the provision of Articles 8, 37 and 38 hereof the Company shall unless objection is made by the transferee within two weeks from the date of receipt of the notice, enter in the register the name of the transferee in the same manner and subject to the same condition as if the application for registration was made by the transferee. NOTICE OF TRANSFER TO REGISTERED HOLDER. Before registered any transfer tendered for registration the Company may. if it so thinks fit, give notice by letter posted in the ordinary course to the registered holder that such transfer deed has been lodged and that, unless objection is taken, the transfer will be registered and if such registered holder fails to lodge an objection in writing at the office of the Company within seven days from the posting of such notice him he shall be deemed to have admitted the validity of the said transfer.

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REGISTER OF TRANSFER The Company shall keep a Register of Transfers and therein shall be fairly and distinctly entered particulars of every transfer of any share. IN WHAT CASE TO DECLINE TO REGISTER TRANSFER OF SHARES Subject to the provision of Section 111 of Act, the Board without assign any person reason for such refusal, may within one month from date on which the instrument of transfer was delivered to the Company fuse to register any transfer of a share upon which the Company has lien and in the case of a share not fully paid up, may refuse to a transfer to transferee of whom the Board does not approve. Provided that the registration of a transfer of shares shall not be refused on the ground of the ground of the transferor being either alone or jointly with any other person or person indebted to the Company on any account whatsoever. NO TRANSFER TO MINOR ETC. I. No transfer shall be made to a minor or person of unsound mind.

II. No fee shall be charged for registration of transfer, grant of probate grant of letter of administration, certificate to death or marriage, power of Attorney or similar other instruments.

WHEN INSTRUMENT OF TRANSFER TO BE RETAINED All instruments of transfer duly approved shall be retained by the Company and in case of refusal, instrument of transfer shall be returned to the person who lodges the transfer deeds. NOTICE OF REFUSAL TO REGISTER TRANSFER If the Director refuse to register the transfer of any shares than Company shall within one month from the date on which the instruments of transfer was lodged with the Company or intimation given, send to the transferor and the transferee and the transferee or the person giving intimation of such transfer notice of such refusal. POWER TO CLOSE TRANSFER BOOKS AND REGISTER On giving seven days, notice by advertisement in a news paper circulating in the District in which the office of the Company is situated the Register of Members may be closed during such time as the Director think fit not exceeding thirty days at a time. TRANSMISSION OF REGISTERED SHARES The executors or administrators or the holder of a succession certificate in respect of shares of a deceased member (not being one of several joint-holder) shall be the only person whom the Company shall recognize as having any title to the share registered in the name of such member and in case of the death of any one or more of the joint-holder of any registered shares, the survivors shall be the only persons recognised by the Company as having any title to or interest in such share but noting herein contained shall be taken to release the estate of a deceased joint – holder from any liability on shares held by him jointly with any other person, before recognizing any legal representative or heir or person otherwise claiming title to the shares the Company may require him to obtain a grant of probate or letters of administration or succession certificate, or other legal representation as the case may be from a competent Court, provided nevertheless that in any case where the Board in its absolute discretion thinks fit it shall be lawful for the Board to despense with production of probate or letters of administration or a succession certificate or such other legal representation upon such terms as to indemnity or otherwise as the Board may consider desirable. AS TO TRANSFER OF SHARE OF DECEASED OR INSOLVENT MEMBERS. Any person becoming entitled to or to transfer shares in consequence of the death or insolvency of any member of any member upon producing such evidence that he sustains the character in respect of which he proposes to act under this Articles or of his title as the Director think sufficient, may with the consent of the Director (which they shall not be under any obligation to give) be register as a member in respect of such shares or may subject to the regulations as to transfer herein before contained transfer such shares. A) This Article it’s hereinafter referred to as The Transmission Article. Subject to any other provision of these Articles, if the person so becoming entitled to shares under this or the last preceding Article shall elect to be registered as a member in respect of the share himself he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. If he shall elect to transfer to some other person he shall execute an instrument of transfer of shares. All the limitations restrictions and provision of theses Articles relating to the right to transfer and the registration of transfer of shares shall be applicable to any such notice or transfer as aforesaid. RIGHT OF EXECUTORS AND TRUSTEES

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Subject to any other provision of theses Articles if the Director in their sole discretion are satisfied in regard thereof, a person becoming entitled to a share in consequence of the death or insolvency of a member may receive and give a discharges for any dividends or other moneys payable in respect of the share. SHARE WARRANTS Subject to the provisions of Sections 114 and 115 of the Act and subject to any directions which may be given by the Company in General Meeting the Board may issue share warrants in such manner and on such terms and conditions as the Board may deem fit. In case of such issue Regulations 40 to 43 of Table ‘A’ in Schedule I to the Act, shall apply. STOCKS The Company may exercise the power of conversion of its shares into stock in that case Regulations 37 to 39 of Table ‘A’ in Schedule to the Act shall apply. ALTERATION OF CAPITAL The Company may by ordinary resolution from time to time alter the condition of the Memorandum of Association as follows. a) Increase the share capital by such amount to be divided into share of such amount as may be specified in the resolution. b) Consolidate and divide all or any of its share capital into share of large amount than its existing shares. c) Sub-divide its existing shares or any of them into shares of smaller amount than is fixed any the memorandum so 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 share from which the reduced share is derived share is derived: and

d) Cancel any share which at the is date of the passing of the resolution 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. ON WHAT CONDITION NEW SHARES MAY BE ISSUED The resolution where by any share is subdivided or consolidated may determine that, as between the member the member registered in respect of the share resulting from such subdivision or consolidation. One or more of such share shall have some preference or special advantage as regards dividends, capital, voting or otherwise over or as compared with the other or other subject nevertheless to the provisions of the Sections 86, 89 and 106 of the Act. SURRENDER Subject to the provision of section 100 to 104 inclusive of the Act, the board may accept from any member the surrender of all or any of his share on such terms and condition as shall be agreed. POWER TO MODIFY RIGHT If any time the share capital is divided into different classes of shares the right attached to any class (unless otherwise provided by the terms of issue of the share of that class) may, whether or not the Company is being wound up, be carried with consent in writing of the holders of three fourth of the issued shares of that class, or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. To every such separate meeting of the provision of these Articles, relating to General Meeting shall apply so that necessary quorum shall be two persons at least holding representing by proxy one-tenth of the issued shares of the class but that if at any adjourned meeting of such holders a quorum as above is not present, those members who are present shall be a quorum that any holders of shares of the class present in person or by proxy demand a poll and a poll shall one vote for each shares of the class of which he is holder. The Company shall comply with the provisions of Section 192 of the Act as to forwarding a copy of any such agreement or resolution to the registrar. GERNERAL MEETING The Director may, whenever they think fit call on Extract ordinary General Meeting provided however if t any time there are not in India Director capable of acting who are sufficient in number to form a quorum any Director present in India may call an Extraordinary General Meeting in the same manner as nearly a possible as that in which such a Meeting may be called by the Board.

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CALLING OF EXTRAORDINARY GENERAL MEETING ON REQUILSITION The Board of Director of the Company shall on the requisition of such Member of Member of the Company as is specified in sub-section (4) of Section 169 of the Act forthwith proceed to call an Extraordinary General Meeting of the Company and in respect of any such requisition and of any Meeting to be called pursuant thereto, all the other provision of Section 169 of the Act and of any statutory modification thereof for the time being shall apply. QUORUM The quorum for General Meting shall be five Members present in person CHAIRMAN At every General Meeting the chair shall be taken by the Chairman of the Board of Director. If at any Meeting the Chairman of the Board of Director be not present within fifteen minutes after the time appointed for holding the Meeting or though present be unwilling to act as chairman, the Member present shall choose one of the Director present to be Chairman or if no Director shall present and wiling to take the chair then the Members present shall choose one of their number, being a member entitled to vote, to be Chairman. SUFFICIENCY OF ORDINARY RESOLUTIONS Any act or resolution which, under the provisions of this Article or of the Act, is permitted shall be sufficiently so done or passed if effected by an ordinary resolution unless either the Act or the Articles specifically require such Act to be done or Resolution passed by a Special Resolution. WHEN IF QUORUM NOT PRESENT MEETING TO BE DISSOLVED AND WHEN TO BE ADJOURNED IF within half an hour from the time appointed for the Meeting a quorum be not present the Meeting if convened upon a requisition of shareholder shall be dissolved but in any other case it shall stand adjourned to the same shall be public holiday when the same time and place, unless the same shall be a public holiday when meeting shall stand adjourned to the next day not being a Public Holidays at the same time and place and if at such adjourned meeting a quorum be not present within half an hour from the time appointed for the Meeting, those Members who are present and not being less than two persons shall be quorum and may transact the business for which the meeting was called. HOW QUESTIONS OR RESOLUTIONS TO BE DECIDED AT MEETINGS In case of an equality of votes the chairman shall both on a show of hands and at a poll shall have a casting vote in addition to the vote or vote to which he may be entitled as a member. POWER TO ADJOURN GENERAL MEETING The chairman of a General Meeting may adjourn the same from time to time and from place to place but no business shall be transacted at any adjourned Meeting other than the business left un finished at the Meeting from which adjournment took place. It shall not be necessary to give notice to the Member of such adjournment or of the time. Date and place appointed for the holding of the adjourned Meeting. BUSINESS MAY PROCEED NOT WITH STANDING DEMAND OF POLL If a poll be demanded, the demand of a poll shall not prevent the continuance of a Meeting for the transaction of any business other than the question on which a poll has been demands. VOTERS OF MEMBERS i) On show of hands every Member present in person and being a holder of equity shares shall have one vote and every person

present either as proxy on behalf of a holder of equity shares or its proxy on behalf of a holding of equity shares or as duly authorised representative of a body corporate being a holder of equity shares. If he is not entitled to vote in his own rights shall have one vote.

ii) On a poll the voting rights of a holder of equity shares shall be as specified in Section 87 of the Act. iii) The voting right of the holders of the Preference shares including the Redeemable Cumulative Preference Shares shall be in

accordance with the provision of Section 87 of the Act.

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iv) No Company or body corporate shall vote by proxy so long as resolution of its Board of Director under Section 137 of Act is in force and the representative named in such resolution is present at the General Meeting at which the vote by proxy is tendered.

VOTES IN RESPECT OF DECEASED INSOLVENT AND IN SAME MEMBERS A person becoming entitled to a share shall not before being registered as a member in respect of the share entitled to exercise in respect thereof any right conferred by membership in relation to meetings of the Company. If any member be a lunatic or idiot, he may vote whether or a hands or at poll by his Committee, or other legal curator and such last mentioned persons may give their votes by proxy provided that twenty-four hours at least before the time of holding the Meeting a adjourned Meeting as the case may be, a which any such person proposes to vote he shall satisfy the Board of his rights under this unless the Board shall have previously admitted has right to vote a such Meeting in respect thereof. JOINT-HOLDERS

Where there are joint holders' of any share 'anyone of such persons may vote at any Meeting either personally or by proxy in respect of such shares as if he were solely entitled thereto and: if more than one of such joint-holders be present at any Meeting either personally or by proxy then that one of the said persons so present whose name stands prior in order on the Register in respect of such share shall alone be entitled to vote in. respect thereof. : Several executors or Administrators of deceased Member in whose name any share stands shall for the purpose of this Article be deemed joint-holder thereof. INSRUMENT APPOINTING PROXY TO IN WRITING The instrument appointing a proxy shall be in writing under the hand of the appointer or of his Attorney duly authorized in writing or if such appointer is a corporation under its common seal or the hand of its Attorney. INSTRUMENT APPOINTIG PROXY TO BE DEPOSITED AT THE OFFICE The instrument appointing a proxy and the power of Attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of authority shall be deposited at the office not less than forty-eight hours before the time appointed for holding the meeting at which the person named in the instrument proposes to vote and in default the instruments of proxy shall not be treated as valid. WHEN VOTE BY PROXY VALID THROUGH AUTHORITY REVOKED A vote given in accordance with the terms of an instrument appointing a proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the Instrument of transfer of the share in respect of which the vote is given. Provided no intimation in writing of the death, insanity, revocation or transfer of the share shall have been received at the office or by the Chairman of the Meeting before vote is given. Provided nevertheless that the Chairman of any Meeting shall be entitled to require such evidence as he may in his discretion think fit of the due execution of an instrument of proxy and that the' same has not been revoked. FORM OF INSTRUMENT APPOINTING PROXY Every instrument appointing a proxy shall, as nearly as circumstance will admit, be in the form set out in schedule IX to the Act. VALIDITY OF VOTE No objection shall be taken to the validity of any vote except at the Meeting or poll ar which such vote shall be tendered and every vote not disallowed at such Meeting or poll whether given personally or by proxy or otherwise shall be deemed valid for al purposes. RESTRICTIONS ON VOTING No Member shall be entitled to exercise any voting rights either personally or by proxy at any Meeting of Company in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regards to which the Company has exercised any right of lien.

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DIRECTOR GENERAL PROVISONS NUMBER OF DIRECTOR: Until otherwise determined by the Company in General Meeting the number of director shall not be less than three and not more than ten. First Director 1 Mr. BANSI K PATEL 2. Mr. BANSI G PATEL 3. Mr. NARENDRA TRIVEDI POWER OF DIRECTOR TO ADD ITS NUMBER The Director shall have power at any time and from time to time appoint any person as a Director as an addition to the Director but so that the total number of Director shall not at any time exceed the maximum number fixed by the Articles, any Director so appointed shall hold office only until the next Annual General Meeting of the Company and shall be eligible for re-election. SHARE QUALIFACTION OF DIRECTOR Unless otherwise determined by the Company in General Meeting a Director shall not be required to hold any share qualification. REMUNERATION a) Each director shall be entitled to be paid out the funds of the Company a fee not exceeding Rs 250/- as may be determined

from time to time by the Board for ever meeting of the Board or of committee thereof attended by him. b) The Board shall have the authority from time to time at all time to appoint whole time director and such whole time director

shall receive such remunerate for their services as may from time to time be determined by the Company in General meeting.

c) In addition to the remuneration payable to the directors the director may be paid all I traveling, hotel & other expenses properly incurred by them.

i) In attending and returning from meeting of the board of Director or any committee thereof. ii) In connection with the business of the company. iii) While on transfer or residing in any other place for the business of the company.

d) With out prejudice to the generality of the foregoing, if any director has properly performed any function in the interest of

the company at any place or on any occasion or in any manner the company shall remunerate him for such services in an appropriate manner such contract or arrangement by reason only of such Director holding that office or of the fiduciary relation thereby established.

APPOINTMENT OF DIRECTOR The Company in General Meeting, may subject to the provisions of these Articles and the Act, at any time elect any person to be a Director and may from time to time increase or reduce the number of Director and may also determine in what rotation such increased or reduced number is to g out of office. BOARD MAY FILL UP CASUAL VACANCIES If any Director appointed by the Company in General meeting vacates office as a Director before his term of office will expire in the normal course, the resulting casual vacancy may be filed up by the Board at Meeting of the Board but any person so appointed shall retain the same if no vacancy by appointing thereto any person who has been removed from office of Director under Section 284 of the Act. NOMINEE DIRECTOR Not with standing anything to the contrary contained in these Articles, so long as any moneys remain owing by the Company to any financing Corporation or Company or body (hereinafter referred to as the Financial Institutions or so ling as the Financial Institution hold any shares debentures in the Company as a result of direct subscription or under writing or conversion of

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loans/debentures into Equity Capital of the Company each. Such Financial Institutions shall have a right to appoint from time to time one or more person as Director on the Board of Director of the Company which Director is hereinafter referred to as “the Nominee Director” The Nominee Director shall not be required to hold qualification shares and shall not be liable to retire by rotation of Director. The Financial Institutions may at any time and from time to time remove the nominee Director appointed by it and may in the event of such removal and also in case of death or resignation of the Nominee Director, appoint another in his place and also fill any vacancy which may occur as a result of the Nominee Director ceasing to hold office for any reason whatsoever. Such appointment or removal shall be made in writing by the Financial Institutions and shall be delivered to the Company shall have no power to remove the Nominee Director from Office. Each such Nominee Director shall be entitled to attend all General Meetings, Board Meeting and Meeting of the Committee of which he is a Member and he and the Financial Institution appointing him shall also be entitled to receive notices of all such Meetings as also the minutes of all such Meetings. The Nominee Director shall be paid all remuneration fees, allowances, expenses and other money to which other Director are entitled subject as aforesaid the Nominee Director shall be entitled to the same right and privileges and be subject to the same obligations as any other Director of the Company. The Nominee Director shall ipso facto vacate his office immediately off or on the Financial Institutions ceasing to hold shares/debentures in the Company. ALTERNATE DIRECTOR The Board may appoint any person to act as an alternate Director for a Director during the letter absence for period of not less than three months from the state in which Meetings of the Board are ordinarily held and such appointment shall have effect and such appointee, whilst he holds office as an alternate Director shall be entitled to notice of Meetings of the Board and to attend and vote thereat accordingly but he shall ipso facto vacate office if and when the absent Director returns to state in which Meetings of the Board are accordingly held or the absent Director vacates office as a Director. ROTAION OF DIRECTOR a) Not less than two –thirds of the total number of Director shall be persons whose period of office is liable to termination by

retirement of Director by rotation.

b) At each Annual General Meeting of the Company one third of such of the Director for the time being as are liable to retire by rotation or if their number is not three or a multiple of three than the number nearest to one-third shall retire from office.

c) The Director to retire by rotation at every Annual General Meeting shall be those who have been longest in office since their

last appointment but as between persons who became Director on the same day those to retire shall in default of and subject to any agreement among themselves be determined by lot.

d) If any Annual General Meeting all the Director appointed under articles 87 and 108 hereby are not exempted from

retirement by rotation under Section 255 of the Act then to the extent permitted by the said Section the exemption shall extend to the Director or Director appointed under Article87. Subject to the foregoing provisions as between Director appointed under any of the Articles referred to above the Director or Director who shall not be liable to retire by rotation shall be determined by and in accordance with their respective seniorities as may be determined by the Board.

RETIRING DIRECTOR ELIGIBLE FOR RE-ELECTION A retiring Director shall be eligible for re-election and shall act as a Director throughout the Meeting at which he retires. Subject to any resolution for reducing the number of Director at any meeting at which election of Director ought to take place the places of the retiring Director not filled up the Meeting shall stand adjourned till the next succeeding day which is not a public holiday At the same time and place and if at the adjourned meeting the places of the retiring Director are not filled up, the retiring Director or such of them as have not had their places filled up shall (if wiling to continue in office) be deemed to have been re-elected at the adjourned meeting. PROCEEDING OF DIRECTOR The Director may meet together for the dispatch of business adjourn and otherwise regulate their meetings and proceedings as they think fit. Notice in writing of every meeting of the Director or such other officer of the Company duly authorized in this behalf to every Director for the time being in India and as his usual address in India. QUORUM The quorum for a Meeting of the Director shall be determined from time to time in accordance with provisions of Section 287 of act. If a quorum shall not be present within fifteen minutes from the time appointed for holding a meeting of the4 Director it shall be adjourned until such date and time as the Director present shall appoint.

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SUMMONING A MEETING DIRECTOR The Secretary may at any time and upon request of any two Directors shall summon a meeting of the Director. VOTING AT MEETING Subject to the provisions of Section 316, 372(5) and 386 of the Act, question arising at any meeting shall be decided by majority of votes. Each Director having one vote and in case of equality of votes the chairman shall have a second or casting vote. CHAIRMAN OF MEETING The chairman of the Board of Director shall be the Chairman of the meeting of Director. Provided that if the Chairman of the Board of Director not present within five minutes after the appointed time for holding are same the Directors present shall choose one of their number to be Chairman of such meeting. ACT OF MEETING A meeting of Director for the time being at which a quorum is present shall be competent to exercise all or any of the authorities powers and discretions by or under the Articles of the Company and the act for the time being vested in or exercisable by the Director generally. TO APPOINT COMMITTEE TO DELEGATE POWER AND REVOKE IT The Director may subject to compliance of the provisions of the Act, from time to time delegate any of their powers to committees consisting of such member or members of their body as they think it and may from time to time revoke such delegation. Any Committee so formed shall in the exercise of the powers so delegated confirm any regulations that may from time to time be imposed on it by the provision herein contained for regulating the meeting the meeting and proceeds of the Director so far as the same are applicable thereto and are not suspend by an regulation made by the Director under this Article. VALADITY All acts done at any meeting of the Director of a Committee of the Director or by any person acting as a Director shall be valid not with standing that it be afterwards discovered that there was some defect in the appointment of any such Director Committee of persons acting as aforesaid or that they or any of them were disqualified. RESOLUTION CIRCULATION A resolution may be passed by the Director of Committee thereof by circulation in accordance with provisions of Section 289 of the Act. And any such minutes of any meeting of Director or of any Committee or of the Company if purporting to signed by the Chairman of such Meeting or by the Chairman of the next succeeding meeting shall be receivable as prima facie evidence of the matter in such minutes.

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SECTION IX - OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts (not being contracts entered into in the ordinary course of business carried on by our Company or entered into more than two years before the date of the Draft Letter of Offer) which are or may be deemed material have been entered or are to be entered into by our Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered and Corporate Office of our Company situated at Remidicherla House, CPR Brundavan, flat number 401, near Nectar Garden, Hyderabad – 500 081, India, from 10.00 a.m. to 4.00 p.m., on working days from the date of the Draft Letter of Offer until the Issue Closing Date. A. Material Contracts 1. Memorandum of Understanding dated July 9, 2010 between our Company, and the Lead Manager. 2. Memorandum of Understanding dated July 9, 2010 between our Company and Venture Capital & Corporate Investments

Pvt. Ltd. Registrar to this Issue. B. Material Documents 1. Certificate of incorporation of our Company dated August 1, 1983. 2. Certified copy of the Memorandum of Association and Articles of Association of our Company as amended from time to

time. 3. The resolution of the Board dated July 7, 2010 authorizing this Issue. 4. Board resolution dated July 7, 2010 for appointment of the Managing Director of our Company, Mr. M. Srinivasa Reddy. 5. Due Diligence Certificate dated July 26, 2010 to SEBI from the Lead Manager. 6. Copy of the tax benefit report dated July 8, 2010 from the Statutory Auditor in this case being S. Kishore Kumar, Chartered

Accountant.

7. Reports of the Independent Auditors, K. Prahlada Rao & Co., Chartered Accountants, dated July 22, 2010 regarding restated financials of the Company for the years ended March 31, 2006, 2007, 2008 2009 and 2010.

8. Report of the Statutory Auditor dated July 10, 2010 in relation to the Limited Review of Financial Statements of our

Company for three months ended June 30, 2010. 9. Consents in writing of: our Directors; our Company Secretary and Compliance Officer; the Auditors; Bankers to our

Company; Lead Manager, Registrar to the Issue; Legal Advisor to the Lead Manager, to act in their respective capacities 10. SEBI Observation letter numbers [●] dated [●]. 11. Initial listing application dated [●] filed with the BSE. 12. In-principle listing approval from BSE dated [●]. 13. Tripartite agreement among the NSDL, our Company and Registrar dated . 14. Copy of the Prospectus dated November 18, 1983 with respect to the Initial Public Offering made by our Company in the

year 1984. 15. Notice by the BSE dated May 12, 2010; Number 20100512-21 revoking the suspension of trading of the equity shares of our

Company with effect from, May 18, 2010. 16. Letter of offer dated March 10, 2010 whereby Mr. M Srinivasa Reddy made an open offer to acquire 48,000 equity shares of

Rs. 10/- each of our Company. 17. Letter of offer dated February 24, 2009 whereby 3A Capital Services Limited and Mr. Rajan M. Shah made an open offer to

acquire 48,000 equity shares of Rs. 10/- each of our Company.

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18. Letter of offer dated April 17, 2001 whereby Mr. Mir Ahmed Ali Khan and Mr. Mir Hasnain Ali Khan made an open offer

to acquire 48,000 equity shares of Rs. 10/- each of our Company. Any of the contracts or documents mentioned in the Draft Letter of Offer may be amended or modified at any time if so required in the interest of our Company or if required by the other parties, without reference to the shareholders subject to compliance of the provisions contained in the Act and other relevant statutes.

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DECLARATION

No statement made in the Draft Letter of Offer contravenes any of the provisions of the Companies Act, 1956 and the rules made there under. All the legal requirements connected with the said Issue as also the guidelines / regulations, instructions, etc issued by SEBI, Government and any other competent authority in this behalf have been duly complied with. We further certify that all disclosures made in the Draft Letter of Offer are true and correct.

Signed by the Directors of our Company and our Chief Financial Officer and Company Secretary & Compliance Officer

Name Signature

Mr. M. Srinivasa Reddy Managing Director

__________________________

Ms. P. Priyanka Executive Director

__________________________

Mr. P. Kamala Kumar Independent Director

__________________________

Mr. S. Koti Reddy Independent Director

__________________________

Mr. I. Srinivasa Raju Independent Director

__________________________

Mr. S. Krishna Kant Varma Independent Director

__________________________

Mr. Mudunuri Veera Venkata Ramana Varma Independent Director

__________________________

Ms. Swapna Chaparala Independent Director

__________________________

Mr. Rajasekhar Chinnari Chief Financial Officer

__________________________

Mr. Satish Pemmaraju Company Secretary and Compliance Officer

__________________________

Place: Hyderabad Date:

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