C M Y K

C M Y K

DRAFT LETTER OF OFFERDated: March 3, 2011

Private and ConfidentialFor Equity Shareholders of the Company Only

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLITAPPLICATION FORMS

ISSUE CLOSES ON

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The Company was incorporated on February 19, 1981 as Growel Investment Limited under Companies Act, 1956 (“Companies Act”) havingregistration number 11-23923 of 1981 with the Registrar of Companies, Mumbai, Maharashtra. The Company has received its Certificate ofCommencement of Business on March 24, 1981. The Corporate Identification Number of the Company is L45209MH1981PLC023923. Pursuantto a fresh certificate of incorporation dated November 8, 2006 issued by the Registrar of Companies, Maharashtra the name of the Company waschanged to Money Masters Investments Limited. Further, pursuant to a fresh certificate of incorporation dated June 29, 2010 issued by theRegistrar of Companies, Maharashtra the name of the Company was changed to Zodiac Ventures Limited.

Registered Office: 404, Dev Plaza, 68, S. V Road, Andheri (W), Mumbai – 400 058, IndiaTel: +91 (22) 4223 3333 Fax: +91 (22) 4223 3300 Website: www.zodiacventures.in;

(For the details of changes in the Registered Office, please refer to the chapter titled ‘History and Other Corporate Matters’beginning on page 88 of the Draft Letter of Offer)

Chief Finance Officer and Compliance Officer: Mr. Vipul KhonaTel: +91 (22) 4223 3333 Fax: +91 (22) 4223 3300 E-mail: rights@zodiacventures.in

PROMOTER: MR. JIMIT SHAH

ZODIAC VENTURES LIMITED(Formerly Money Masters Investment Limited)

INTENSIVE FISCAL SERVICES PRIVATE LIMITED131 “C” Wing, Mittal Tower, Nariman Point, Mumbai 400 021.Tel No. : +91 (22) 2287 0443 – 44 – 45Fax No. : +91 (22) 2287 0446Email : zvlrights@intensivefiscal.com,Web : www.intensivefiscal.comInvestor Grievances ID: investor@intensivefiscal.comContact Person: Mr. Brijesh Parekh / Ms. Ishita KohliSEBI Registration No.: INM000011112

SHAREX DYNAMIC (INDIA) PRIVATE LIMITEDUnit No.1, Luthra Industrial Premises,Andheri Kurla Road, Safed Pool,Andheri (East), Mumbai-400 072.Tel No. : +91 (22) 2851 5606 / 5644Fax No. : +91 (22) 2851 2858Contact Person: Mr. S. BaligaEmail address: sharexindia@vsnl.comSEBI Registration: INR000002102

REGISTRAR TO THE ISSUELEAD MANAGER TO THE ISSUE

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE COMPANY ONLY

ISSUE OF 1,55,00,000 EQUITY SHARES OF RS. 10 EACH AT PAR AGGREGATING TO RS. 15,50,00,000 TO THE EXISTINGEQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF TWENTY (20) EQUITY SHARES FOR EVERY ONE (1) EQUITYSHARE HELD ON THE RECORD DATE, [�] (THE “ISSUE”). THE ISSUE PRICE FOR EQUITY SHARES IS ONE TIME OF THE FACEVALUE OF THE EQUITY SHARE. FOR MORE DETAILS, PLEASE REFER TO THE CHAPTER TITLED “TERMS OF THE ISSUE”BEGINNING ON PAGE 185 OF THE DRAFT LETTER OF OFFER

GENERAL RISKS

Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless theycan afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investmentdecision in the Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and the Issue including therisks involved. The securities being offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India(“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of investors is invited to the statement of“Risk Factors” on page x of the Draft Letter of Offer before making an investment in this Issue.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that the Draft Letter of Offer contains all informationwith regards to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in the Draft Letter of Offeris true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein arehonestly held and that there are no other facts, the omission of which makes the Draft Letter of Offer as a whole or any such information orthe expression of any such opinions or intentions misleading in any material respect.

LISTING

The existing Equity Shares of the Company are listed on Bombay Stock Exchange Limited (BSE) – the Designated Stock Exchange for thisIssue. The Company has received in-principle approval from the BSE for listing of the Equity Shares arising from this Issue vide letter no [�]dated [�].

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TABLE OF CONTENTS

TITLE Page

SECTION I – GENERAL iii DEFINITIONS AND ABBREVIATIONS iii PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA viii FORWARD LOOKING STATEMENTS ix SECTION II –RISK FACTORS x SECTION III – INTRODUCTION 1 SUMMARY OF INDUSTRY 1 SUMMARY OF BUSINESS 4 THE ISSUE 9 SUMMARY OF FINANCIAL STATEMENTS 10 GENERAL INFORMATION 18 CAPITAL STRUCTURE 23 OBJECTS OF THE ISSUE 29 BASIS FOR ISSUE PRICE 33 STATEMENT OF TAX BENEFITS 35 SECTION IV – ABOUT US 42 INDUSTRY OVERVIEW 42 OUR BUSINESS 51 LAND RESERVES 65 KEY INDUSTRY REGULATIONS AND POLICIES 72 HISTORY AND OTHER CORPORATE MATTERS 88 OUR MANAGEMENT 93 OUR PROMOTER AND PROMOTER GROUP 103 OUR GROUP COMPANIES 106 DIVIDEND POLICY 108 SECTION V – FINANCIAL INFORMATION 109 FINANCIAL STATEMENTS 109 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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SECTION VI – LEGAL AND OTHER INFORMATION 165 OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS 165 GOVERNMENT AND STATUTORY APPROVALS 171 OTHER REGULATORY AND STATUTORY DISCLOSURES 176 STOCK MARKET DATA FOR THE EQUITY SHARES OF OUR COMPANY 184 SECTION VII – ISSUE RELATED INFORMATION 185 TERMS OF THE ISSUE 185 SECTION VIII – MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 210 SECTION IX - OTHER INFORMATION 224 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 224 DECLARATION 225

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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 chapter. COMPANY RELATED TERMS

Term Description “the Company”, “the Issuer Company”, “the Issuer” “ZVL”

Zodiac Ventures Limited unless defined otherwise

“Subsidiary”, “our Subsidiary”, “the Subsidiary”, “ZDPL”

Zodiac Developers Private Limited unless defined otherwise

“we”, “us”, “our Company” or “our”

Refers to Issuer Company, Zodiac Ventures Limited along with its Subsidiary Zodiac Developers Private Limited

Articles / Articles of Association/ AOA

The Articles of Association of the Company

Auditors The Statutory Auditor of the Company, being M/s. A. R. Sodha & Co. Board of Directors / Board/ Directors

The Board of Directors of the Company or a duly constituted committee thereof

Group Companies Companies, firms, ventures, etc. promoted by the promoter of the issuer, irrespective of whether such entities are covered under Section 370(1)(B) of the Companies Act, 1956 or not

Promoter Mr. Jimit Shah Promoter Group Such persons and entities as defined under Regulation 2 (1)(zb) of the SEBI ICDR

Regulations, 2009 Registered Office 404, Dev Plaza, 68, S. V Road, Andheri (W), Mumbai – 400 058, India Registrar of Companies / RoC Registrar of Companies, 100, Everest, Marine Drive, Mumbai, Maharashtra – 400

002, India Memorandum / Memorandum of Association/ MOA

The Memorandum of Association of the Company

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 the SEBI ICDR Regulations Allot / Allotment / Allotment of Equity Shares

Unless the context otherwise requires, the allotment of Equity Shares pursuant to the Issue

Allottees Persons to whom Equity Shares of the Company are issued pursuant to the Issue Application Money The aggregate amount payable in respect of the Equity Shares applied for in this

Issue at Issue Price Application Supported by Blocked Amount/ ASBA

An application, whether physical or electronic, used by an ASBA Applicant to apply for the Equity Shares in the Issue, together with an authorization to an SCSB to block the Application Money in the specified bank account maintained with such SCSB

ASBA Account Account maintained by an ASBA Bidder with an SCSB which will be blocked by such SCSB to the extent of the Bid Amount of the ASBA Bidder

ASBA Application Form The form, whether physical or electronic, in terms of which an ASBA Bidder shall make a Bid pursuant to the terms of the Draft Letter of Offer and which contains an authorisation to block the Bid Amount in an ASBA Account and which will be considered as the application for Allotment

ASBA Investor Eligible Equity Shareholders who intend to apply through ASBA and (a) are holding Equity Shares in dematerialised form as on the Record Date and have applied for (i) their Rights Entitlement or (ii) their Rights Entitlement and Equity Shares in addition to their Rights Entitlement, in dematerialised form; (b) have not renounced their Rights Entitlement in full or in part; (c) are not renouncees; and (d) are applying through blocking of funds in bank accounts maintained with SCSBs For the purposes of this definition, all QIB Bidders shall be considered as ASBA Investors and shall make their application through ASBA process

Banker(s) to this Issue [●] Companies Act Companies Act, 1956, as amended from time to time Composite Application Form / CAF

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

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Consolidated Certificate In case of shareholders 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/

Demographic Details The demographic details of the Applicants, including address, Bidders’ bank account details, MICR code and occupation derived by the Registrar to the Issue from the PAN, DP ID and Client ID mentioned in the Application Form, or the ASBA Form, as the case may be

Depositories Act The Depositories Act, 1996, as amended from time to time Depository / Depositories 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 or DP A depository participant as defined under the Depositories Act

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

Designated Stock Exchange/ Stock Exchange

BSE is the designated stock exchange for the purpose of this Issue

Draft Letter of Offer/ DLOF The Draft Letter of Offer dated March 3, 2011 filed with SEBI for its observations Equity Shares Equity Shares of face value of Rs. 10/- each of Zodiac Ventures Limited Equity Shareholder(s) A holder(s) of Equity Shares of the Company as on the Record Date 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 other applicable laws in India

Investor(s) The Equity Shareholders and Renouncees Issue The issue of 1,55,00,000 Equity Shares with a face value of Rs. 10 each up to Rs.

15,50,00,000 by the Company to the Equity Shareholders on rights basis in the ratio of twenty (20) Equity Shares for every one (1) Equity Share

Issue Closing Date [●] Issue Opening Date [●] Issue Price Rs. 10/- per Equity Share Issue Proceeds Proceeds to be raised by the Company through this Issue Lead Manager/ Lead Merchant Banker/Sole Merchant Banker

Intensive Fiscal Services Private Limited

Letter of Offer The Letter of Offer dated [●] 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 Net Proceeds Net proceeds of the Issue after deducting the Issue related expenses OCB A company, partnership, society or other corporate body owned directly or indirectly

to the extent of at least 60% by NRIs, including overseas trust in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Deposit) Regulations, 2000. OCBs are not allowed to invest in this Issue

Record Date [●] Registrar to the Issue or Registrar Sharex Dynamic (India) Private Limited,

Address: Unit No.1, Luthra Industrial Premises, Andheri Kurla Road, Safed Pool, Andheri (East), Mumbai- 400 072, Maharashtra, India. Tel no.: +91 (22) 2851 5606 / 5644 Fax no.: +91 (22) 2851 2858 Contact Person: Mr. S. Baliga Email address: sharexindia@vsnl.com SEBI Registration: INR000002102

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 SAF(s) Split Application Form(s) SEBI Act The Securities and Exchange Board of India Act, 1992, as amended SEBI Insider Trading Regulations Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,

1992, as amended, including instructions and clarifications issued by SEBI from time to time

SEBI Regulations / SEBI (ICDR) The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, and any

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Regulations 2009/ SEBI ICDR Regulations

amendments thereto

SEBI Takeover Regulations / Takeover Code

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

Securities Act The United States Securities Act of 1933 as amended 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

Stock Exchange Bombay Stock Exchange Limited ABBREVIATIONS

Term Description AGM Annual General Meeting AS Accounting Standard as issued by The Institute of Chartered Accountants of India BIS Bureau of Indian Standards BPLR Benchmark Prime Lending Rates BSE The Bombay Stock Exchange Limited CAGR Compounded Annual Growth Rate CDSL Central Depository Services (India) Limited CIN Corporate Identification Number CSO Central Statistical Organization DIN Director Identification Number HUF Hindu Undivided Family IMF International Monetary Fund IIP Index of Industrial Production EBIDTA Earnings Before Interest Depreciation, Tax and Amortization EGM Extra-Ordinary General Meeting EPS Earnings per Share FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999, as amended from time to time, and the

rules and regulations framed there under FII Foreign Institutional Investor Financial Year / Fiscal Year / FY The period of twelve months ended March 31 of that particular year, unless

specifically otherwise stated FIPB Foreign Investment Promotion Board GDP Gross Domestic Product GoI Government of India GoM Government of Maharashtra I.T. Act / IT Act The Income Tax Act, 1961, as amended from time to time Indian GAAP Generally Accepted Accounting Principles in India ISIN International Securities Identification Number allotted by the Depository LOF Letter of Offer MoEF Ministry of Environment and Forest MSA Act Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 MOF Act Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale,

Management and Transfer) Act, 1963 N. A. Not applicable NECS National Electronic Clearing Service NEFT National Electronic Fund Transfer NRI 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

NSDL National Securities Depositories Limited OCB(s) Overseas Corporate Body(ies) P/E ratio Price to Earnings Ratio PAN Permanent Account Number PAT Profit after Tax PR Property Report RBI Reserve Bank of India RBI Act The Reserve Bank of India Act, 1934, as amended from time to time ROC / RoC Registrar of Companies

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ROI Return on Investment RONW Return on Net-worth RTGS Real Time Gross Settlement SEBI Securities and Exchange Board of India SICA Sick Industrial Companies (Special Provisions) Act, 1985, as amended TDR Transferable Development Rights TP Act Transfer Act U.S. GAAP Generally Accepted Accounting Principles in the United States of America

BUSINESS / INDUSTRY RELATED TERMS AND ABBREVIATIONS Term Description Built - up Area FSI area developed by the Subsidiary as set out in the letter of intent approved and

provided by the MCGM, and/or the FSI area proposed to be developed by the Subsidiary and submitted to the MCGM for its approval. The Built-Up area includes a part of the Saleable Area

CC Commencement Certificate Competent Authority Slum Rehabilitation Authority (SRA) or Maharashtra Housing And Development

Authority (MHADA) or Municipal Corporation of Greater Mumbai (MCGM) or any other government authority from whom approval for development project is sought

Completed Project Projects which have been completed by the Company and/or the Subsidiary CPCB Central Pollution Control Board C.T.S. No. City Survey Number D.C. Regulations/DCR Development Control Regulations for Greater Mumbai, 1991 EIUS Environmental Improvement of Urban Slums FSI Floor Space Index, being the quotient of the ratio of the combined gross floor area of all

floors, except areas specifically exempted, to the total area of the plot IOA Intimation of Approval IOD Intimation of Disapproval JDA Joint Development Agreement Land Reserves Lands to which the Company and/or its Subsidiary and/or its Group Entities and/or Other

Development Entities have title, or land from which such entities can derive economic benefit through a documented framework (such as with third party individuals or corporate entities), or where such entities have executed a joint development agreement or an agreement to sell or a MoU or an agreement to transfer development rights

LOI Letter of Intent MCGM Municipal Corporation of Greater Mumbai MHADA Maharashtra Housing and Development Authority NBC National Building Code of India NOC No objection certificate OC Occupation Certificate Ongoing Project A project in respect of which the necessary legal documents relating to the acquisition of

land or development rights have been executed by us and/ or key land or scheme related approvals have been obtained and any one of the following activities are being undertaken (not necessarily in the sequence set out herein): (a) on-site construction of the project has commenced; (b) initial detailed design for civil and landscaping is being undertaken and work has commenced on detailed design; (c) project launch activity which includes the construction of a show residence, sales office and other supporting infrastructure at the project site has commenced; or (d) an architect has been appointed and a detailed concept design is being prepared

Planned Project A project for which land or development rights have been acquired or a memorandum of understanding or an agreement to acquire or a joint development agreement has been executed, in each case, by us, either directly or indirectly, and preliminary management development plans are complete

Saleable Area Built-Up area and certain additional FSI forming part of the sale component from which the Subsidiary derives economic benefit

Sq. Ft./ sq. ft. Square Feet Sq. Mtrs./ sq. mtrs. Square Metres SIP Slum Improvement Program SRA Slum Rehabilitation Authority SRS Slum Rehabilitation Scheme TDR Transferable Development Rights, which means, when in certain circumstances, the

development potential of land may be separated from the land itself and maybe made

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available to the owner of the land in the form of transferable development rights

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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Financial 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 Companies Act and restated in accordance with SEBI ICDR Regulations. Our current financial year commenced on April 1 and will end on March 31 of the following year. 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. There are significant differences between Indian GAAP, IFRS and U.S. GAAP. Accordingly, the degree to which the Indian GAAP financial statements included in the Draft Letter of Offer will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in the Draft Letter of Offer should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. Any percentage amounts, as set forth in the chapters Risk Factors, Our Business, Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages x, 51 and 156 respectively and elsewhere in the Draft Letter of Offer unless otherwise indicated, have been calculated on the basis of our unconsolidated summary financial statements prepared in accordance with the Indian GAAP. Currency of presentation All references to Rupees or Rs. are to Indian Rupees, the official currency of the Republic of India. The words “Lakh” or “Lac” mean “100 thousand” and the word “million” means “10 Lakh” and the word “crore” means “10 million” or “100 Lakhs” and the word “billion” means “1,000 million” or “100 crores”. Industry and market data 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. Further, the extent to which the market data presented in the Draft Letter of Offer is meaningful depends on the reader’s familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering methodologies in the industry in which we conduct our business, and methodologies and assumptions may vary widely among different industry sources. Due to possibly flawed or ineffective collection methods or discrepancies between published information and market practice and other problems, the statistics herein may be inaccurate or may not be comparable to statistics produced elsewhere and should not be unduly relied upon. Further, there is no assurance that they are stated or compiled on the same basis or with the same degree of accuracy as may be the case elsewhere.

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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; • Conflicts of interest with affiliated companies, the Group Entities and other related parties; • Our ability to complete development and construction of projects in timely manner; • The outcome of legal or regulatory proceedings that we are or might become involved in; • Contingent liabilities, environmental problems and uninsured losses; • Changes in government policies and regulatory actions that apply to or affect our business; • Other factors beyond our control; and • Our ability to manage risks that arise from these factors. • Changes in political and social conditions in India the monetary policies of India and other countries,

inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; • 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 chapters titled “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages x, 51,156 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

An investment in Equity Shares involves a high degree of risk. You should carefully consider all of the information in the Draft Letter of Offer, including the risks and uncertainties described below, before making an investment in the Company’s Equity Shares. To obtain a complete understanding of the Company, you should read this chapter in conjunction with the chapters titled “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages 51 and 156 respectively of the Draft Letter of Offer as well as the other financial and statistical information contained in the Draft Letter of Offer. If any of the following risks occur, our business, financial condition and results of operations could suffer, the trading price of the Company’s Equity Shares could decline, and you may lose all or part of your investment. Our business operations could also be affected by additional factors that are not presently known to us or that we currently consider being not material to our operations. Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any of the risks mentioned herein. If any of the following risks, or other risks that are not currently known or are now deemed immaterial, actually occur, our business, financial condition and results of operations could suffer, the trading price of the Equity Shares could decline, and you may lose all or part of your investment. The financial and other implications or material impact of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. The ordering of the risk factors is intended to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk factor over another. The Draft Letter of Offer also contains forward looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the considerations described below and elsewhere in the Draft Letter of Offer. You are advised to read the following risk factors carefully before making an investment in the Securities offered in this Issue. You must rely on your own examination of the Company and this Issue, including the risks and uncertainties involved. The Equity Share have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of the Draft Letter of Offer. Materiality: The risk factors have been determined on the basis of their materiality. The following factors have been considered for determining their materiality: Some events may not be material individually but may be found material collectively. Some events may have a material impact qualitatively instead of quantitatively. Some events may not be material at present but may have material impacts in the future. I. INTERNAL RISK FACTORS A. RISK RELATING TO THE COMPANY 1. The Company has recently ventured in to the line of real estate business, so it is difficult to estimate its

future performance. Further the Company carries out its main business activity through its Subsidiary, Zodiac Developers Private Limited.

The Company was initially incorporated as an investment company with the main object of investment into shares and other kinds of instruments. However, vide shareholder’s resolution dated May 14, 2010, it has amended its main objects and have ventured into real estate related activities. As on the date of the Draft Letter of Offer the Company does not have any projects of its own. The Company’s main source of revenue is from real estate development which includes, redevelopment of slum areas, cesses building, dilapidated building and open plots and other real estate projects undertaken by our Subsidiary, Zodiac Developers Private Limited, under the provisions of Development Control Regulations for Greater Mumbai, 1991. Our Subsidiary, Zodiac Developers Private Limited has been in the real estate business since 1995. Accordingly, the Company does not have any revenue generating operations, and any significant operating history from which the Company’s business, future prospects and viability can be evaluated. Any inability of the Company and the Subsidiary to effectively develop and operate its projects could adversely

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affect our business prospects, financial condition and results of operation. 2. The Equity Shares of the Company are illiquid and are not frequently traded on the Stock Exchange The Company has been listed on the Bombay Stock Exchange since 1981. However, as per the details of trading related to its listed Equity Shares are available only from 1991. As per the data available on BSE website since 1991, there has not been any active trading or liquid market for its Equity Shares. The Company cannot assure you that on listing of its Equity Shares after the Issue the investors will be able to sell or buy on the Stock Exchange; this may limit its investors’ ability to trade. 3. The Company has negative cash flows in the recent fiscals. The table below sets forth cash flow statement of the Company for nine months period ended December 31, 2010 and fiscals 2010, 2009, 2008, 2007 and 2006.

(Rs in Lakhs) Particulars Nine months

period ended December 31, 2010

Year ended March 31, 2010

Year ended March 31, 2009

Year ended March 31, 2008

Year ended March 31, 2007

Year ended March 31, 2006

Net cash from /(used in) Operating Activities

5.76 27.00 (3.48) (46.26) 18.86 587.73

Net cash from /(used in) Investing Activities

(86.42) 3.24 (3.12) (49.81) (25.94) 31.99

Net cash from /(used in) Financing Activities

47.65 - - 109.12 - (615.70)

Net increase/(decrease) in Cash & Cash Equivalents

(33.01) 30.24 (6.59) 13.05 (7.09) 4.03

For further details please refer to chapters titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Financial Statements” beginning on pages 156 and 109 of the Draft Letter of Offer. 4. The Company’s Chairman Mr. Ramesh Shah is involved in certain litigation.

The Company’s Chairman, Mr. Ramesh Shah is involved in certain criminal proceedings. For details related to the litigation please refer to chapter titled “Outstanding Litigations and Material Developments” on page 165 of the Draft Letter of Offer. Outstanding Litigation filed by the Company’s Chairman, Mr. Ramesh Shah Sr. No.

Case Type Numbers of Cases

Amount (to the extent quantifiable) (in Rs.)

1. Criminal Proceedings 1 Amount not quantifiable 5. If the Company fails to raise money under the Issue, it has to use alternate source to finance the

payment of the premium amount/uncalled amount to its Subsidiary. In event of delay in the payment of premium amount as set out in the “Objects of the Issue” the Company shall be liable to pay interest on the unpaid call money.

The Company has acquired ZDPL by purchase of equity shares valued at Rs. 300 per equity share (including premium of Rs. 290) out of which the Company has paid a sum of Rs. 40 per equity share (including a premium of Rs. 30 per equity share). The remaining premium of Rs. 260 per equity share shall be paid out of the proceeds of the Issue constituting Rs. 1,352 Lakhs by the Company by March 31, 2012. In the event the Company fails to pay the premium amount within the appointment day, the board of directors of the Subsidiary as authorised by its articles of association, shall be entitled to charge an interest of 15% per annum from the due day or at such lower rate as determined the board of the Subsidiary. In the event the Company fails to raise money under the Issue, it might have to pay the premium amount by using alternate source of finance or pay interest for the delay.

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6. The Company has certain contingent liabilities, primarily on account of uncalled premium payment on equity shares of Zodiac Developers Private Limited, which may adversely affect its financial condition if they were to materialise.

As on December 31, 2010, the Company had contingent liabilities aggregating to Rs. 1352.00 lakhs on account of uncalled premium on the equity shares to be paid to Zodiac Developers Private Limited. If this contingent liability was to materialise, it may lead to substantial liability and may have a material adverse effect the financial condition of the Company. For details on contingent liabilities, please refer to chapter tilted “Financial Statements” beginning on page 109 of the Draft Letter of Offer. 7. The Company has availed unsecured loan which may be demanded for repayment at any time. As on December 31, 2010 the Company has availed an unsecured loan from its Chairman, Mr. Ramesh Shah of Rs. 41.33 Lakhs. There is no specific agreement or terms of repayment entered into between the Company and its Chairman. This unsecured loan may be liable for repayment on demand by the lender. For further details please refer “Financial Statements” on page 109 of the Draft Letter of Offer. 8. The Company’s Chairman, Mr. Ramesh Shah and the Managing Director, Mr. Jimit Shah have interest

in certain companies, which are engaged in similar businesses, that may create a conflict of interest with the Company. Further, the Company does not enjoy contractual protection by way of a non – compete or other agreement or arrangement with its Promoter Group Entities.

The Chairman of the Company, Mr. Ramesh Shah is also the director promoter of the Company’s Subsidiary, Zodiac Developers Private Limited. He is also the director promoter of Rananjay Developers Private Limited, Zodiac Developers India Private Limited, Priya Infra Projects Private Limited, Priya Slum Projects Private Limited, Zodiac Homemakers Private Limited, and Zodiac Realities Private Limited. Further, the Company’s Managing Director, Mr. Jimit Shah is on the board of Rananjay Developers Private Limited, Zodiac Developers India Private Limited, Zodiac Developers Private Limited and Zodiac Realities Private Limited which is engaged in the real estate business. Further, Mr. Jimit Shah has interest in property of the Gandhinagar Project which is one of the Proposed Project of our Subsidiary. As a result, conflicts of interest may arise in allocating or addressing business opportunities and strategies amongst the Company and other companies/entities in which its Chairman and Managing Directors are directors. There can be no assurance that the Chairman and/or Managing Director or any companies/entities promoted by them or on which they are directors will not compete with the Company’s existing business or any future business. Further, the Company has not entered into any non-compete or other agreement or arrangement with the above mentioned companies. For further details please refer to chapters titled “Our Promoter and Promoter Group” and “Our Business” and “Land Reserves” beginning on pages 103, 51 and 65 respectively of the Draft Letter of Offer. 9. The Registered Office of the Company from where it operates is taken on leave and license and the same

is not registered and stamped. Discontinuation of leave and license agreement may require the Company to vacate such premises which may disrupt its operations.

The premises where the Registered Office is situated is not owned by the Company. It has entered into a leave and license agreement for a period of four years with effect from December 1, 2010. If the owner of the premise of the Registered Office terminates the agreement under which it occupies the premises or refuses to renew the agreement on terms and conditions that are unfavourable to it, the Company may suffer a disruption in its operations. The leave and license deed entered into by the Company for its Registered Office is not stamped and/or registered. The potential consequence of this could be that the said leave and license 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 disrupt its operations. For further information please refer paragraph titled “Property” beginning under chapter titled “Our Business” beginning on page 51 of the Draft Letter of Offer. 10. The Company does not own the trademark and logo “Zodiac”. It may be unable to adequately protect its

intellectual property. Furthermore, the Company may be subject to claims alleging breach of third party intellectual property rights.

The Company has applied for registration of its trademark and logo “Zodiac” under the provisions of the Trademarks Act, 1999; however, the same has not been registered in its name. Hence, the Company does not enjoy the statutory protections accorded to a registered trademark. There can be no assurance that it will be able

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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, the Company cannot assure you that any application for registration of its trademark in the future will be granted by the relevant authorities in a timely manner or at all. The Company’s efforts to protect its intellectual property may not be adequate and may lead to erosion of its business value and its operations could be adversely affected. It 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. The Company may not be able to detect any unauthorized use or take appropriate and timely steps to enforce or protect its intellectual property. 11. The success of the Company largely depends on the experience of its Promoter and key managerial

personnel and its ability to attract and retain them. Any loss of its key managerial personnel could affect the timely completion of its projects.

The Company depends significantly on the expertise, experience and continued efforts of its Promoter and Managing Director, Mr. Jimit Shah and Chairman, Mr. Ramesh Shah who jointly have over 25 years of experience in real estate business. Further, it has fairly experienced key managerial personnel who manage the day to day operations of its real estate business. If the Promoter or Chairman fails to continue to be a part of the Company or one or more members of its key managerial personnel are unable or unwilling to continue in his/her present position, it could be difficult to find a replacement. The business could thereby be adversely affected. Opportunities for key managerial personnel in the real estate industry are intense and it is possible that it may not be able to retain its existing key managerial personnel or may fail to attract/ retain new employees at equivalent positions in the future. As such, any loss of key managerial personnel could adversely affect timely completion of its project and operations which in turn will affect its financial condition. For further details of the Promoter and Chairman and the key managerial personnel of the Company please refer to the chapter titled ‘Our Management’ beginning on page 93 of the Draft Letter of Offer. 12. The Promoter and Directors may have interest in the Company. The Promoter and Directors (other than independent directors) may be deemed to be interested to the extent of the Equity Shares held by them, or their relatives or their Group Entities, and benefits deriving from their directorship in the Company. The Promoter and Directors (other than independent directors) are interested in the transactions entered into between the Company and themselves as well as between the Company and the Promoter Group entities/ Group Entities. The Independent Directors are interested to the extent of sitting fees payable to them for attending Board Meetings. For further details, please refer to the chapters titled ‘Our Business’ and ‘Our Promoter and Promoter Group’, beginning on pages 51 and 103, respectively of the Draft Letter of Offer and the chapter titled ‘Financial Statements-Related Party Transactions’ beginning on page 126 and 149 of the Draft Letter of Offer. 13. Post this Issue, the Promoter and Promoter Group will continue to hold majority shares in the Company. Post this Issue, the Promoter and Promoter Group will collectively own [●] % of the Equity Share capital of the Company. Accordingly, the Promoter and the Promoter Group will continue to have control over the Company’s business including matters relating to any sale of all or substantially all of its assets, the timing and distribution of dividends and the election, termination or appointment of its officers and directors. This control could delay, defer, or prevent a change in control in the Company, impede a merger, consolidation, takeover or other business combination involving the Company, or discourage potential acquirers from making an offer or otherwise attempting to obtain control over the Company even if it is in its best interest. The Promoter and Promoter Group may also influence its material policies in a manner that could conflict with the interests of its other shareholders. 14. The real estate business for which the Company intends to raise money through the Issue has not

contributed to any revenues of the Company in the previous years. The Company has recently ventured into real estate business following the amendment to its main objects vide shareholder’s resolution dated May 14, 2010. As this is a new line of business of the Company, the industry segment for which the proceeds of Issue are to be utilised has not contributed to its revenues previously. 15. The Company may face risks associated with potential acquisitions, investments, strategic partnerships

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or other ventures that could adversely affect its results of operations. The Company may acquire or make investments in complementary businesses, technology, services or products or enter into strategic partnerships with parties who can provide access to those assets, if appropriate opportunities arise. It may not identify suitable acquisition, investment or strategic partnership, candidates, or if it does identify suitable candidates, it may not complete those transactions on commercially acceptable terms or at all. If the Company acquires another company, it could have difficulty in assimilating that company’s personnel, operations, technology and software. In addition, the key personnel of the acquired company may decide not to work for the Company. If the Company makes other types of acquisitions, it could have difficulty in integrating the acquired products, services or technologies into its operations. These difficulties could disrupt our ongoing business, distract its management and employees and increase its expenses. 16. The Company inability to effectively implement its growth strategies or manage its growth could have an

adverse effect on its business, results of operations and financial condition. A principal component of the Company’s strategy is to continue to grow, organically as well as inorganically, by expanding the size and geographical scope of its existing businesses, as well as the development of new businesses. This growth strategy will place significant demands on its management, financial and other resources. It will require the Company to continuously develop and improve its operational, financial and internal controls. Continuous expansion increases the challenges involved in financial management, recruitment, training and retaining high quality human resources, preserving its culture, values and entrepreneurial environment, and developing and improving its internal administrative infrastructure. Any inability on the Company’s part to manage such growth could disrupt its business prospects and adversely affect its results of operations and financial condition. 17. The Company does not have a fixed dividend policy and it has paid dividend only for the last fiscal and

this is not an indication of its dividend policy in the future. The Company does not have a fixed dividend policy. Though the Company has paid dividend in the last fiscal, this is not an indication of its dividend policy in the future. In addition, it has negative cash flows from operating and investing activities previously. Its ability to declare dividends in relation to its Equity Shares will also depend on its future financial performance which, in turn, depends on the successful implementation of its strategy and on financial, competitive, regulatory, and other factors, general economic conditions, demand and fares, costs of materials and other factors specific to the industry, many of which are beyond the Company’s control. Volatile conditions in the Indian securities market may affect the price or liquidity of the Equity Shares. Additionally, the terms of any financing the Company obtains in the future, may contain restrictive covenants which may also affect some of the rights of its shareholders, including the payment of the dividend. 18. The Company does not made any alternate arrangements for meeting its working capital requirements.

Any shortfall in raising / meeting the same could adversely affect its operations and financial performance.

As on the date of the Draft Letter of Offer, the Company has not entered into any arrangements for borrowings, bank finance or institutional finance with regards to its 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. The Company cannot assure you that it will be able to obtain financial assistance for the purpose of meeting its working capital requirements. Any inability on the part of the Company to meet the working capital requirements could severely hamper its operations and thus adversely affect its profitability and results of operations. 19. The Company has not entered into any definitive agreements to monitor the utilization of the Issue

proceeds. The deployment of funds as stated in the chapter titled “Objects of the Issue” beginning on page 29 of the Draft Letter of Offer is entirely at the discretion of the Company and is not subject to monitoring by any independent agency. The Company has not entered into any definitive agreements to utilise a portion of the Issue proceeds. All the figures included under the chapter titled “Objects of the Issue” beginning on page 29 of the Draft Letter of Offer are based on its own estimates. In the event it is unable to utilize the net proceeds of the issue for the objects specified herein, the Company shall, with the approval of its shareholders, deploy the funds for other business purposes in accordance with section 61 of the Companies Act.

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B. RISK RELATED TO OUR SUBSIDIARY AND OUR BUSINESS 1. Our Subsidiary is mainly in the business of real estate development which has a long gestation period

from the date of obtaining the consent of the slum dwellers/tenants/owners to redevelop the property until the final completion date of the project.

Our Subsidiary is mainly in the business of real estate development which includes redevelopment of slum area, cessed and dilapidated building and construction on open plots under the provisions of Development Control Regulations for Greater Mumbai, 1991. As on the date of the Draft Letter of Offer, our Subsidiary, has completed three residential projects; project Jupiter and project Venus situated at Vile Parle and project Kushinara at Pali Hill. Further, our Subsidiary has one Ongoing slum rehabilitation project and three Proposed residential redevelopment projects. The entire process of obtaining the consent of the slum dwellers, in the case of slum rehabilitation project/tenants/owners, in case redevelopment of cessed, dilapidated building, or other redevelopment building as the case maybe, which is the first step towards commencement of the redevelopment project and the subsequent approval of the SRA or the concerned authority, as the case maybe, no objection letter from the land owner and the final commencement and completion of the project, is long and time consuming. Our Subsidiary has obtained the consents of more than 70% of the slum dwellers/tenants for its Ongoing and Proposed Projects viz; Hanuman Nagar Project in 1997, Babu Genu Nagar Project in 1998 and Indira Nagar Project in 2006. The commencement of projects may be delayed due inability to obtain the consents/approvals/NoC on time. In addition, our Subsidiary may face litigation from some of the slum dwellers/tenants/owners who may object to the entire project which would lead to further delay. The Hanuman Nagar Project which received consent from over 70% of its slum dwellers was delayed due to litigation by few of the slum dwellers, who objected to the redevelopment project. The final clearance to go ahead with the project was finally received in 2008, by the court order passed in favour of our Subsidiary. Any such delay in the completion of our Subsidiary’s projects by our Subsidiary may impact its financial condition. For details related to its projects please refer to chapter titled “Our Business” on page 51 of the Draft Letter of Offer. For details related to the regulation and policies applicable to real estate sector please refer to chapter titled “Key Industry Regulations and Policies” beginning on page 72 of the Draft Letter of Offer. 2. Our Subsidiary’s operations are significantly concentrated in Mumbai. Further, any failure to expand

our Subsidiary’s operations may restrict the growth and adversely affect the business of our Subsidiary. As on the date of the Draft Letter of Offer, our Subsidiary’s operations are mainly focused in Mumbai. As such, a substantial portion of our Subsidiary’s revenues are generated from operations in these areas. In the event of failure of our Subsidiary to expand its operations to other locations, or procure new projects or land in strategic position in Mumbai will impact our Subsidiary’s business which will in turn impact our financial position. 3. Our real estate projects are prone to litigation. Our Subsidiary is mainly in the business of real estate development which includes redevelopment of slum area, cessed and dilapidated building and construction on open plots under the provisions of Development Control Regulations for Greater Mumbai, 1991. The nature of its redevelopment projects is such that it is prone to various litigations as it involves seeking consent of large number of slum dwellers/tenants/owners. Though the redevelopment scheme could be approved by the majority slum dwellers/residents/tenants/owners, the minority members or a single individual can dispute the same and stall the project for their/his own interest. For instance, the commencement of our Subsidiary’s Hanuman Nagar Project was delayed by over ten years due to various litigations instituted by some of the slum dwellers. Similar incidents could delay the implementations of the Proposed Projects being undertaken by our Subsidiary and could lead to increase in the project cost. 4. Our Subsidiary is involved in certain legal proceedings, which are pending at different stages of

adjudication before the Judicial / Statutory authorities. Any rulings by such authorities against our Subsidiary may have an adverse material impact on their operations.

A summary of the pending proceedings is set forth below:

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a. Litigation / Proceedings filed against our Subsidiary, Zodiac Developers Private Limited Sr. No.

Case Type Numbers of Cases

Amount (to the extent quantifiable) (in Rs.)

1. Civil Proceedings 1 Amount not quantifiable 2. Tax Proceedings 1 Rs. 19,90,000 For further details of outstanding litigation pending, please refer to the chapter titled “Outstanding Litigations and Material Developments” beginning on page 165 of the Draft Letter of Offer. In the event of any legal proceedings being decided against our Subsidiary, its business, reputation and results of operations could be adversely affected. 5. Our Subsidiary’s ability to obtain suitable development sites and generate revenues could be adversely

affected by any changes to the Development Control Regulations for Greater Bombay, 1991, currently in effect in Mumbai.

Our Subsidiary’s real estate projects are governed by the Development Control Regulations for Greater Bombay, 1991 (the "DCR") promulgated by the MCGM exercising its powers under the Maharashtra Regional and Town Planning Act, 1966 (the "Town Planning Act"). For instance, in consideration for the construction of rehabilitation units for slum dwellers/tenants/owners, our Subsidiary is compensated with certain free sale component. Under the DCR, our Subsidiary is allowed to construct tenements for sale in the open market. The area allowed for sale in the open market is as set out in the DCR rules, for instance under the slum rehabilitation scheme the area of sale in the open market is equal to the area of tenements constructed for rehabilitation of slum dwellers. Our Subsidiary is required to construct the rehabilitation tenements on the plot itself. The balance FSI for the plot is allowed for construction of free sale tenements. The spill over entitlement to our Subsidiary is permissible for sale in the form of transferable development right in the open market. These transferable rights can be utilised on other development project elsewhere in the city subject to zoning regulation under the DCR. Our Subsidiary’s ability to obtain suitable sites for its projects in Mumbai in the future, and its cost of acquiring development rights over such sites, could be adversely affected by any changes to the Slum Rehabilitation Scheme, the DCR, and Town Planning Act, any other regulations governing such matters or any changes in their interpretation or implementation. If the slum rehabilitation schemes under Section 33(10) and development of cessed and dilapidated building under section 33(7) and 33(9) of the DCR were to significantly change or be terminated, our Subsidiary may be required to purchase developable land from third parties at significantly increased cost, and may not be able to acquire development rights over sufficient suitable land at acceptable cost for our future development projects. For details related to the regulation and policies for real estate sector please refer to chapter titled “Key Industry Regulations and Policies” under the Draft Letter of Offer. 6. Volatility in real estate prices. Real estate prices are highly volatile and are dependent on various external factors such as supply and demand, performance of domestic and global financial markets, interest rate fixed by banks on house loans, inflation. Any fluctuations in the abovementioned factors may impact the purchase and sale of the real estate prices. Volatility in this sector hence impacts our Subsidiary’s financial position and profitability. 7. Our Subsidiary’s revenues could be adversely affected by changes in the TDR regime in Mumbai. Our Subsidiary and other developers are subject to regulations in effect in the Mumbai area which limits the floor space index on plots to specified amounts, calculated as a ratio to the land surface of each plot. Our Subsidiary also sometimes receives TDRs as compensation for construction of permanent alternate accommodation for slum dwellers/tenants/owners. TDRs are generated in the event the applicable planning and land use regulations for a particular plot do not allow full utilization of the generated development rights. The TDRs can be utilised in other project or sold to third parties. Our Subsidiary may acquire TDRs as a result of its involvement in rehabilitation projects. In the past, our Subsidiary has derived revenues from sales of TDRs to third parties. Use of TDRs is subject to various rules, regulations and conditions, which may be modified by the government from time to time. For example, in Mumbai, TDR's can be utilized by the buyer only in areas that are north of the developed land from where the TDRs are generated. However, if the regulations were changed to disallow the sale or utilisation of TDRs, and/or planning and land use regulations in Mumbai were to be significantly relaxed or terminated so as to permit additional FSI to be constructed on existing plots, the TDRs it holds, or might hold in future, may become less valuable and our Subsidiary may not derive significant value

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from their sale in the future, which might affect our results of operations and financial condition. 8. Our Subsidiary’s title and development rights over land may be subject to various legal defects and the

uncertainty in the title to its real estate assets could have a material adverse impact on its current and future revenue.

A sizeable portion of our Subsidiary’s existing Land Reserves consists of land belonging to the Government/ other statutory authorities or private parties. The title to our Subsidiary’s Land Reserves may be disputed or fragmented and the land, in many cases, may have multiple owners. Also, our Subsidiary’s title and development rights over land are subject to various title-related legal defects that it may not be able to fully identify, resolve or assess. While it seeks to retain local lawyers to issue legal opinions confirming its title to lands in connection with its purchase of land from third parties, its rights in respect of these lands may be compromised by improperly executed, unregistered or insufficiently stamped conveyance instruments in the property's chain of title, unregistered encumbrances in favour of third parties, rights of adverse possessors, ownership claims of spouses or other family members of prior owners, or other title defects that it may not be aware of. Such or other title defects may result in our Subsidiary’s loss of title or development rights over land, and the cancellation of our Subsidiary’s development plans in respect of such land, thereby negatively impacting its business and financial condition. Our Subsidiary’s failure to obtain good title to a particular plot of land may materially prejudice the success of a development for which that plot is a critical part, and may cause our Subsidiary to write off substantial expenditures in respect of a project. Our Subsidiary also faces various practical difficulties in verifying the title of a prospective seller or lessor of property. Indian law, for example, recognises the ability of persons to effectuate a valid mortgage on an unregistered basis by the physical delivery of original title documents to a lender. Adverse possession under Indian law also gives rise upon 12 years’ occupation to valid ownership rights as against all parties, including government entities that are landowners, without the requirement of registration of ownership rights by the adverse possessor. Furthermore, under Indian law, a married person retains property rights in land alienated by their spouse if such married person has not consented to such alienation, effectively requiring consent by each spouse to all land transfers in order for a transferee to receive good title. In addition, Indian law recognises the concept of a Hindu Undivided Family, whereby all family members jointly own land and must consent to its transfer, including minor children, in absence of their consent a land transfer may be challenged by such non-consenting family member. Our Subsidiary’s title to land may be defective as a result of a failure on our part, or on the part of a prior transferee, to obtain the consent of all such persons. As each transfer in a chain of title may be subject to these and other various defects, our Subsidiary’s title and development rights over land may be subject to various defects, of which it may not be aware. Further, all formalities with respect registration and transfer of title may not be completed by the purchaser, which may cause delay in carrying out the title search and completing the formalities of registration and formalities of title. Our Subsidiary may face claims of third parties to ownership or use of the land after purchasing or obtaining development rights in respect of land, and where disputes cannot be resolved through accommodations with such claimants, it may lose its interest in the land. Multiple property registries exist, and verification of title is difficult. Further, property records in India have not been fully computerised and are generally maintained manually with physical records of all land related documents, which are also manually updated. This updating process may take a significant amount of time and might result in inaccuracies or errors and increase the difficulty of obtaining property records and/or materially impact our ability to rely on them. As a result, the title of the real property in which our Subsidiary may invest may not be clear or may be in doubt. Legal disputes arising in respect of land title can take several years and considerable expense to resolve if they become the subject of legal proceedings and their outcome can be uncertain. Under Indian law, a title document generally is not effective, nor may be admitted as evidence in court, unless it has been registered with the applicable land registry and applicable stamp duty has been paid in respect of such title document. The failure of prior landowners to comply with such requirements may result in our Subsidiary failing to have acquired valid title or development rights. Further, there are also requirements to cancel the title in revenue records, and failure to do so may lead to an imperfect title and challenges to title. In addition to exposing our Subsidiary to legal disputes, the uncertainty of title to land may make the acquisition and development process more complicated, impede transfer of title and adversely affect our Subsidiary’s valuations, which in turn may have a material adverse effect on our business, results of operations and financial condition.

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9. The financial condition and business prospects of our Subsidiary could be materially and adversely affected if it is unable to complete its projects as planned or if the projects experience delays.

Our Subsidiary’s main revenue is from the saleable component of its slum rehabilitation project and other developmental projects it carries. Currently, most of our Subsidiary’s saleable component is under development or have recently commenced construction. The projects under development have a long gestation period before they become operational or generate revenue or profit. Our Subsidiary may also face problems in executing the project as contracted, or executing it on a timely basis. Moreover, factors beyond our Subsidiary’s control may delay a project, including delays or failures to obtain necessary permits, authorizations, permissions, right-of-way, and other types of difficulties or obstructions. In addition, completion of our Subsidiary’s projects can be delayed by other risks, including unavailability of raw materials, increased cost of raw materials or labour costs, unfavourable financing conditions, damage or injury to third parties, interruptions to construction due to bad weather, unforeseen environmental/geological conditions, change in government policies, 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 its 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. Delays in the completion of a project can lead to delay in receiving payments from the buyers as per the schedule or may also lead to cancellation of bookings whereby it has to refund the money received from its buyers. Any such delay in payment by buyers, cancellation of bookings or disputes with the buyers, any loss of goodwill, though not quantifiable monetarily, could adversely affect our Subsidiary’s financial position. Such loss of revenue or any of the foregoing factors could materially and adversely affect our Subsidiary’s business, cash flows, revenues and earnings, reputation and prospects which in turn will affect our financial position and results of operations. 10. Our Subsidiary’s success depends on identifying suitable projects which are in demand by the relevant

buyers. Our Subsidiary’s profitability depends on identifying the projects based on demand from customers. Our Subsidiary is in the business of constructing both residential and commercial buildings. Our Subsidiary’s ability to identify suitable future projects is fundamental to its business and involves certain risks including identifying and acquiring appropriate land, meeting the demands customers for residential projects and commercial units and understanding and responding to the their expectations and demands. While, our Subsidiary has successfully identified suitable projects in the recent past, it may not be as successful in identifying suitable projects that meet market demand in the future. Any failure to identify suitable projects, build or develop saleable properties or anticipate and respond to customer demand in timely manner could have an adverse effect on the Company’s and Subsidiary’s business, financial condition and results of operations. 11. Limited supply of land, increasing competition and applicable regulations are likely to result in land

price escalation and a further shortage of developable land. Our Subsidiary’s business is mainly concentrated in Mumbai, which is already facing a severe shortage of land. Due to increased demand for land development of residential and commercial properties, our Subsidiary is experiencing increasing competition in acquiring land where it operates or proposes to operate. In addition there are certain parcels of land which has been reserved by the government authorities for various public or utility purposes on which no commercial or residential construction can be carried out adding to the shortage in land. In addition, the unavailability or shortage of suitable parcels of land for development leads to an escalation in land prices. Any such escalation in the price of developable land could materially and adversely affect our Subsidiary’s business, prospects, financial condition and results of operations. Additionally, the availability of land, its use and development, is subject to regulations by various local authorities. For example, if a specific parcel of land has been delineated as agricultural land, no commercial or residential development is permitted without the prior approval of the local authorities. For further details, please refer to the chapter titled “Key Industry Regulations and Policies” beginning on page 72 of the Draft Letter of Offer. 12. Our Subsidiary’s business is subject to extensive Government regulation and risk of adverse government

action. The real estate industry in India is heavily regulated by the GoI, State governments and local authorities.

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Property developers need to comply with a number of requirements mandated by Indian laws and regulations, including policies and procedures established by local authorities such as the requirement for transaction documents, payment of stamp duty and registration of property documents. Our Subsidiary is also subject to various land ceiling legislations that regulate the amount of land that can be held under single ownership. Additionally, in order to develop and complete a real estate project, our Subsidiary, either through architects, structural engineers or contractors, is required to obtain various approvals, permits and licences from the relevant administrative authorities at various stages of project development. The approvals, permits and licenses to be obtained vary on a case by case basis depending on the relevant applicable provisions of the DCR under which the Subsidiary carries out its development projects. In respect of its development projects, a letter of intent, layout approval, intimation of approval/ disapproval, commencement certificates, further commencement certificate and occupancy certificate for the buildings are to be issued by the Slum Rehabilitation Authority/ MCGM or MHADA of the area where the building is to be constructed. Further, depending on the type, size and/or location of the project, various no-objection certificates are required to be obtained from various authorities, including certificate from the chief fire officer, municipal corporations, Pollution Control Board, Airport Authority of India, Ministry of Tourism and Ministry of Environment and Forests etc. For Babu Genu Nagar Project, our Subsidiary has re-submitted its proposal to the MCGM and is awaiting its approval. Upon the approval of the same, further necessary permissions shall be required to be obtained. Not receiving the requisite permits and licences would adversely affect our Subsidiary’s operations, thereby having a material adverse effect on our business, results of operations and financial condition. Our Subsidiary generally applies for renewals of such approvals, permits and licenses prior to or upon their expiry. However, our Subsidiary may encounter problems in obtaining the requisite approvals, permits and licenses may experience delays in fulfilling the conditions precedent to any such approvals and our Subsidiary may not be able to adapt ourselves to new laws, regulations or policies that may come into effect from time to time with respect to the real estate sector. There may also be delays in obtaining requisite approvals. Further, some of these approvals and permissions are subject to certain conditions, both conditions precedent and conditions subsequent, and there can be no assurance that such conditions would be fulfilled. There may also be delays on the part of administrative bodies in reviewing applications and granting approvals. Further, there can be no assurance that our Subsidiary will be able to obtain all approvals, permits and licenses, that it may require in the future, or receive renewals of existing or future approvals, permits and licenses in the time frame required for our operations, or at all, or succeed in complying with all or any of the conditions thereof, which could adversely affect our business. Some of our Subsidiary’s projects are still in initial stages where it has entered into joint development agreement or have acquired rights over the land to develop it. Our Subsidiary is yet to commence the process of obtaining the requisite approvals. If our Subsidiary experiences material problems in obtaining or fail to obtain the requisite governmental approvals, the schedule of development and sale or letting of our projects could be substantially disrupted. There could be instances of non-compliances in respect of our projects, or regulatory authorities could allege non-compliance, which may subject the Company and it’s Subsidiary to regulatory action in the future, including penalties, seizure of land, stoppage of work and other legal proceedings. For further details, please refer to the chapter titled “Government and Statutory Approvals” on page 171 of the Draft Letter of Offer. 13. Our Subsidiary faces competition in its business from other real estate development firms. The real estate development industry in India, while fragmented, is highly competitive and our Subsidiary may face competition from other real estate development firms. There are a number of competitors having better financials and other resources who have achieved greater market penetration than our Subsidiary has in the markets in which it competes. Our Subsidiary’s real estate business is primary focused in Mumbai and it faces stiff competition from other large players who are concentrated in the same location due to high real estate demand. Given our Subsidiary’s strategy of expanding its business activities mainly in Western India to include real estate development in other regions, our Subsidiary may experience competition in the future from potential competitors with significant operations elsewhere in India. This may affect our relative market share and profit. In addition, land acquisition in India has historically been subject to regulatory restrictions on foreign

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investment. These restrictions have been relaxed to some extent in the last few years, but restrictions still persist, and foreign real estate developers do not yet have a significant presence in the Indian market. In the future, increased competition from foreign real estate development firms may result in increases in prices of large plots of land suitable for developments. If we and our Subsidiary are unable to compete effectively in the acquisition of suitable land with other developers, including other Indian and foreign real estate development firms with which we compete, our business and prospects will be adversely affected. 14. Our Subsidiary may undertake projects jointly with third parties, which entail certain risks. Certain of our Subsidiary’s projects may also consist of joint ventures or may be undertaken in collaboration with third parties. In projects of such nature, the title to the land may be owned by one or more of these third parties and our Subsidiary, by virtue of the development or collaboration agreements, acquire development rights to the land. Most of these collaboration agreements confer rights on our Subsidiary to construct, develop, market and sell the constructed area to third party buyers. Such collaboration agreements do not convey any interest in the immovable property (the land or the building) to our Subsidiary and only the development right is transferred to our Subsidiary. Investments through joint ventures also involve risks, including the possibility that our joint venture partners may fail to meet their financial or other obligations, causing the whole project to suffer. In relation to any project, which involves collaboration with third parties, our Subsidiary cannot assure you that these projects will be completed as scheduled or that our relations with these parties will be successful. Further, the Subsidiary’s joint venture partners may have business interests or goals that are inconsistent with its business interests or goals. Disputes that may arise between our Subsidiary and its joint venture partners may cause delay in completion, suspension or complete abandonment of the project. This may have a material adverse impact on our business, results of operations and financial condition. For details on projects developed under joint venture with third parties, please see "Our Business” on page 51 of the Draft Letter of Offer. 15. Our Subsidiary does not have any long-term contracts with its suppliers of key building materials and

are subject to the risk of short term price volati1ity and shortages of supply in respect of these materials. Increasing raw material costs could have an adverse effect on our profitability.

Our Subsidiary tends to procure the basic building materials for its projects, such as steel, cement, ready-mix concrete etc. directly from local suppliers. Our Subsidiary’s ability to develop and construct profitably is dependent upon its ability to source adequate building materials for use by construction contractors. Our Subsidiary does not have any long term contracts for any of its key building materials such as cement, sand, steel ready mix etc. 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 its raw material costs. As our Subsidiary’s real estate business is primary focussed in Mumbai, any shortage in raw material supply may affect its business. For instance, our Subsidiary mainly procures sand for its project from local suppliers who used to excavate sand from the Vaitarna River. Currently our Subsidiary is facing a shortage of sand, due to ban by the government on any further excavation. Such shortage in raw material would delay the completion of the project as per the schedule, and it may have to incur additional cost to source raw materials/transport from far away locations. Further, our Subsidiary’s development sites typically have limited storage space for supplies and therefore it is only able to purchase a limited amount of building materials for any given project at any particular time. As such, our Subsidiary is subject to the risks of short-term price volatility and shortages of supply in respect of these materials. During periods of shortages in key building materials, such as cement, steel and other raw materials, our Subsidiary may not be able to complete projects according to its previously established timelines, or at its previously estimated project cost, or at all, which could adversely affect its results of operations and financial condition. In addition, during periods of significant increases in the price of key building materials, our Subsidiary may not be able to pass price increases through to its buyers, which could reduce or eliminate the profits of the Company and Subsidiary may attain with regards to our Subsidiary’s developmental projects. Alternatively, an increase in the sale and rental prices of constructed properties reflecting the higher costs of building materials could adversely affect demand for our Subsidiary’s constructed properties. Prices of key building materials have witnessed sharp price fluctuations in the past. As our Subsidiary primarily sources its building materials from local suppliers, its supply chain may be periodically interrupted by circumstances

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beyond its control, including work stoppages and labour disputes affecting its suppliers, their distributors, or the transporters of its supplies. 16. The statements contained in the Draft Letter of Offer with regard to our Subsidiary’s Completed

Projects, Ongoing Project, Proposed Projects and the area expressed to be covered by our projects are based on management estimates and may be subject to change.

The Built-Up Area, Saleable Area and general composition of our Subsidiary’s land presented herein with regard to Completed Projects, Ongoing Project and Proposed Projects are based on management estimates. The square footage that it may develop in the future with regards to a particular property may differ from what is presented herein based on various factors such as prevailing market conditions, title defects, an inability to obtain the required regulatory approvals, and a change in the development norms (such as FSI or zoning) or our understanding of what such development norms are. Moreover, title defects may prevent our Subsidiary from having valid rights enforceable against all third parties to lands over which it believes it holds interests or development rights, rendering the management's estimates of the area and make-up of our Subsidiary’s land incorrect and subject to uncertainty. 17. Delays in the completion of the Ongoing Project and Proposed Projects or complying with the schedules

could result in cost over-runs. Property developments typically require substantial capital outlay during the construction period which may take an extended period of time to complete, and before a potential return can be generated. The time and costs required to complete a property development may be subject to substantial increases due to many factors, including shortages of, or price increases with respect to, construction materials (which may prove defective), equipment, technical skills and labor, acquisition of land, construction delays, unanticipated cost increases, changes in the regulatory environment, adverse weather conditions, third party performance risks, environmental risks, changes in market conditions, delays in obtaining the requisite approvals and permits from the relevant authorities and other unforeseeable problems and circumstances. Any of these factors may lead to delays in, or prevent the completion of the project and result in costs substantially exceeding those originally budgeted for. The cost overruns may not be adequately compensated by contractual indemnities, which may affect the Subsidiary’s financial condition and results of operations. There are no insurance policies available in India that cover cost overrun risk. In addition, any delays in completing the projects as scheduled could result in dissatisfaction among the Subsidiary’s customers, resulting in negative publicity and lack of confidence among future buyers for our Subsidiary’s projects. Additionally, it may not achieve the economic benefits expected of such projects. In the event there are any delays in the completion of such projects, our Subsidiary’s relevant approvals and leases may be terminated. 18. Our Subsidiary depends on a limited number of suppliers for its building materials. Any problems with

suppliers could have an adverse effect on its business or results of operation. Our Subsidiary purchases its building materials from a limited number of suppliers. If it experiences problems with its suppliers who are unwilling or unable to meet our Subsidiary’s purchase demands, quantity and quality requirement our Subsidiary could face disruptions in its operations. Even though our Subsidiary may be able to purchase building materials from alternative suppliers, it might be able to do so only at significant expense or encounter significant delays in doing so, causing disruption to its real estate development operations. Moreover, such alternative building materials might not meet the same quality standards as its current building materials. Such costs, lower quality and disruptions, could have an adverse effect on its business, results of operation and financial condition. 19. Our Subsidiary proposes to utilise independent construction contractors for its projects, it may not be

able to enforce terms of contracts with such independent contractors. It may be exposed to liabilities arising from defects in the work of such independent contractors.

Our Subsidiary may enter into agreement with independent contractors for the construction of all of its projects. As our Subsidiary may not be able to control these construction firms, it may face the risk of non-performance of their obligations as agreed. If a contractor fails to perform its obligations satisfactorily with regard to a project, our Subsidiary may be unable to develop the project within the intended timetable, at the intended cost, or at all. In such circumstance, our Subsidiary may be required to incur additional cost or time to develop the property in a manner consistent with its development objectives, which could result in reduced profits or in some cases, significant losses. Our Subsidiary cannot assure you that the services rendered by any of its

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independent construction contractors will always be satisfactory or match its requirements for quality and any adverse cost to the effect may have a material adverse effect on its results of operations and financial condition. Further, the contracts that our Subsidiary may enter into with them are generally inadequately stamped and are not enforceable in a court of law until such time as the outstanding stamp duty and any applicable penalty has been paid. Consequently, it may not have any legal recourse to a particular independent contractor in respect of any liability to its customers that it may incur as a result of defects in the work of such independent contractor. A lack of legal recourse to any independent contractor in respect of any liability to its buyers that it may incur as a result of defects in the work of such independent contractor may have a material adverse effect on our Subsidiary’s business, results of operations, reputation and financial condition. 20. Certain types of risks may not be covered under our Subsidiary’s existing insurance policies. Our

Subsidiary may suffer uninsured losses or experience losses exceeding its insurance limits. Our Subsidiary’s insurance coverage may not adequately protect it against possible risk of loss.

Our Subsidiary has obtained insurance cover from United India Assurance Company Limited for its projects. Our Subsidiary’s insurance policies do not cover certain risks, specifically risks relating to contractor's liability, timely project completion, loss of rent or profit, construction defects or consequential damages in the form of a tenant's lost profits. Further, any proceeds received by our Subsidiary in respect of a claim may be insufficient to cover rebuilding/repairing costs as a result of inflation, changes in building regulations, environmental issues or other factors that may be beyond its control. Our Subsidiary’s real estate projects could suffer physical damage from fire or other causes, resulting in losses, which may not be fully compensated by insurance. In addition, there are certain types of losses, such as those due to earthquakes, floods, hurricanes, terrorism or acts of war, which may be uninsurable or are not insurable at a reasonable premium. Should an uninsured loss or a loss in excess of insured limits occur, it would lose the capital invested in and the anticipated revenue from the affected property. Our Subsidiary would also remain liable for any debt or other financial obligation related to that property. Our Subsidiary cannot assure you that material losses in excess of insurance proceeds will not occur in the future. While our Subsidiary believes that it maintains insurance coverage in amounts consistent with industry norms, our Subsidiary’s insurance policies do not cover all risks. If any or all of our Subsidiary’s facilities are damaged in whole or in part and our operations are interrupted for a sustained period, there can be no assurance that our insurance policies will be adequate to cover the losses that may be incurred as a result of such interruption or the costs of repairing or replacing the damaged facilities. If our Subsidiary suffers a large uninsured loss or any insured loss suffered by it significantly exceeds its insurance coverage, our business, financial condition and results of operations may be materially and adversely affected. For further details on insurance, please refer to the chapter titled “Our Business” on page 51 of the Draft Letter of Offer. RISK RELATED TO INVESTMENT IN EQUITY SHARES 1. The Company’s future funds requirements, in the form of fresh issue of capital or securities and or loans

taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

The Company may require additional capital from time to time depending on its business needs. Any fresh issue of shares or convertible securities would dilute the shareholding of the existing shareholders and such issuance may be done on terms and conditions, which may not be favourable to the then existing shareholders. If such funds are raised in the form of loans or debt, then it may substantially increase the Company’s interest burden and decrease its cash flows, thus prejudicially affecting our profitability and ability to pay dividends to its shareholders. 2. Any sale of the Equity Shares by any of the significant shareholders of the Company may adversely

affect the trading price of the Equity Shares. Any sales of the Company’s Equity Shares by any of its significant shareholders may also adversely affect the trading price of its Equity Shares. In addition, any perception by investors that such issuances or sales might occur could also affect the trading price of the Company’s Equity Shares.

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3. The ability to sell the Company’s Equity Shares by a non-resident Indian to a resident Indian may be subject to certain pricing restrictions.

A person resident outside India (including a Non-Resident Indian) is generally permitted to transfer by way of sale the shares held by him to any other person resident in India without the prior approval of the RBI or the FIPB. However, it should be noted that the price at which the aforesaid transfer takes place must comply with the pricing guidelines prescribed by SEBI and the RBI. The RBI has published a Circular, dated October 4, 2004 and further amended vide circular dated May 4, 2010, prescribing the pricing guidelines in the case of a sale of shares by a non-resident to a resident and vice versa. 4. Investors will not be able to sell immediately on an Indian stock exchange any of the Company’s Equity

Shares they purchase in the Issue until the Issue receives the appropriate trading approvals. The Equity Shares of the Company are listed on the BSE. Pursuant to Indian regulations, certain actions must be completed before the Equity Shares can be listed and trading may commence. Investors’ book entry, or “demat”, accounts with depository participants in India are expected to be credited within two working days of the date on which the basis of allotment is approved by BSE. Thereafter, upon receipt of final approval from BSE, trading in the Equity Shares is expected to commence within seven working days of the date on which the basis of allotment is approved by the Designated Stock Exchange. The Company cannot assure its investors that its Equity Shares will be credited to investors’ demat accounts, or that trading in the Equity Shares will commence, within the time periods specified above. Any delay in obtaining the approvals would restrict the investor’s ability to sell the Equity Shares.

5. 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.

The Equity Shares of the Company are currently, 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 the Company’s Equity Shares circuit breakers will be set by the stock exchanges based on the historical volatility in the price and trading volume of the Equity Shares. The stock exchanges will not inform the Company of the percentage limit of the circuit breaker in effect from time to time and may change it without its knowledge. Circuit breaker will limit the movements in the price of the Company’s 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. 6. Conditions in the Indian securities market may affect the price or liquidity of the Equity Shares. Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. These exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Indian stock exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If similar problems occur in the future, the market price and liquidity of the Equity Shares could be adversely affected. EXTERNAL RISK FACTORS 1. Political instability or changes in the government could delay the liberalization of the Indian economy

and adversely affect economic conditions in India generally, which could impact our financial results and prospects.

Since 1991, successive Indian governments have pursued policies of economic liberalization, including significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has remained significant.

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Although the Central government has announced policies and taken initiatives that support the economic liberalization policies that have been pursued by previous governments, the rate of economic liberalization could change, and specific laws and policies affecting foreign investment and other matters affecting investment in our securities could change as well. 2. A slowdown in economic growth in India could cause our business to suffer. Our performance and growth is necessarily dependent on the health of the overall Indian economy. However, the growth in agricultural and agricultural related production in India has been variable. Any slowdown in the Indian economy or future volatility of agricultural products and commodity prices, could adversely affect our business. 3. Financial instability in other countries, including developed economies, could adversely affect the

financial markets and the trading price of the Equity Shares could decrease. Although economic conditions are different in each country, investors’ reactions to developments in one country may have an adverse effect on the securities of companies in other countries including India. A loss of investor confidence in the financial systems of other markets may cause increased volatility in Indian financial markets and the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy, including the movement of exchange rates and interest rates in India. Any financial disruption could have an adverse effect on our business, future financial performance, shareholders' equity and the price of the Company’s Equity Shares. 4. Any downgrading of India’s credit rating by an international rating agency could have an unfavourable

impact on our business. Any adverse revisions to India’s credit rating for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing is available. This could have a material adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures and the trading price of our Equity Shares. 5. The Issue Price of the Company’s Equity Shares may not be indicative of the market price of its Equity

Shares after the Issue. The Issue Price of Rs. 10 per Equity Share may not be indicative of the market price for the Company’s Equity Shares after the Issue. The market price of the 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 the 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.

6. The market price of the Equity Shares may fluctuate due to the volatility of the Indian securities market. There may not be an active or liquid market for the Company’s Equity Shares, which may cause the price of the Equity Shares to fall and may limit your ability to sell the Equity Shares. The Issue Price of the Equity Shares in this Issue will be determined by the Company in consultation with the lead manager, and it may not necessarily be indicative of the market price of the Equity Shares after this Issue is complete. You may be unable to resell your Equity Shares at or above the Issue Price and, as a result, you may lose all or part of your investment. The price at which the 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; • an assessment of our management, our past and present operations, and the prospects for, and timing of,

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our future revenues and cost structures; • the present state of our development; and • the valuation of publicly traded companies that are engaged in business activities similar to ours.

7. 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 the Company or its Subsidiary may be unfavourable and may have a material adverse effect on our business, financial condition and results of operations. 8. A third party could be prevented from acquiring control of the 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 the Company, even if it would result in the purchase of the Company’s Equity Shares at a premium to the market price or would otherwise be beneficial to the 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 the Company’s voting Equity Shares must make an open offer to acquire at least another 20% of the Company’s outstanding voting Equity Shares. A takeover offer to acquire at least another 20% of the 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 the 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 the 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. Prominent Notes

1. The net worth of the Company, before the Rights Issue (as at December 31, 2010 on standalone basis) was Rs. 184.91 lakhs and issue size being Rs.1, 550 lakhs.

2. Any clarification or information relating to this Issue shall be made available by the lead manager

and the Company to the public and investors at large and no selective or additional information would be made available only to a section of the investors in any manner. Investors may contact the Lead Manager or the Merchant Banker i.e. Intensive Fiscal Services Private Limited, and/or Ms. Anita Agrawal, Company Secretary and Mr. Vipul Khona, Chief Financial Officer and Compliance Officer and/or Sharex Dynamic (India) Private Limited, Registrar to this Issue for any complaints pertaining to this Issue at the Pre-Issue or Post-Issue stage.

3. The Group Companies have no business interest or other interest in the Company.

4. For details of transaction by the Company with the Group Company and Subsidiary in the last one

year, the nature of the transactions and the cumulative value of the transactions please refer to the chapter titled ‘Financial Statements’ beginning on page 109 of the Draft Letter of Offer.

5. The Company was incorporated on February 19, 1981 as Growel Investment Limited under the

Companies Act, 1956 having registration number 11-23923 of 1981 with the Registrar of Companies, Mumbai, Maharashtra. The Company received its Certificate of Commencement of

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Business on March 24, 1981. Pursuant to a fresh certificate of incorporation dated November 8, 2006 issued by the Registrar of Companies, Mumbai, Maharashtra the name of the Company was changed to Money Masters Investments Limited. Further, pursuant to a fresh certificate of incorporation dated June 29, 2010 issued by the Registrar of Companies, Mumbai, Maharashtra the name of the Company was changed to Zodiac Ventures Limited. The Corporate Identification Number of the Company is L45209MH1981PLC023923. Pursuant to shareholder’s resolution dated May 14, 2010, the Company has amended its main objects to enter real estate activities as a part of its main business activity. For details related to our history please refer to chapter titled “History and Other Corporate Matters” beginning on page 88 of the Draft Letter of Offer.

6. None of the Promoter, Directors and their relatives, Promoter Group or Group Companies, have

entered into any financing arrangement or have financed the purchase of securities of the Company during the last six months prior to the date of filing of the Draft Letter of Offer other than in the normal course of business.

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SECTION III – INTRODUCTION

SUMMARY OF INDUSTRY THE INDIAN REAL ESTATE SECTOR Overview Indian real estate sector plays a significant role in the country’s economy. This sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). The size is estimated at US$ 16 billion, growing at the rate of 30% per annum. Total size of the industry in terms of economic value of development activity is estimated at US$ 40-45 billion representing about 5% of India’s GDP. In the next five years, this contribution to the GDP is expected to rise to 6 per cent. It is expected to reach a size of US$ 180 billion by 2020. According to the report of the Technical Group on Estimation of Housing Shortage, an estimated shortage of 26.53 million houses during the Eleventh Five Year Plan (2007-12) provides a big investment opportunity. The real estate sector in India is on a rapid growth trajectory. The Indian real estate industry is expected to reach a size of US$ 180 billion by 2020. Growing penetration of mortgage finance into the urban housing finance market is now evident. The current contribution of real estate to India’s GDP is about 5 per cent. The gamut of the Indian real estate sector includes the development of land, commercial offices, industrial facilities, hotels, restaurants, cinemas, residential housing, trading spaces such as retail outlets and the purchase and sale of land and land development rights sector also encompass activities in the housing and construction sector. The following factors affect demand and supply in the real estate sector: Economic growth: As discussed above, the IMF projects positive growth for the Indian economy during calendar year 2010. India’s growth is expected to be faster than that of both the advanced and the developing economies as a whole (Source: IMF, World Economic Outlook Update, October 2009). Demographic profile: The earning population of India (persons in the 20-59 age bracket) is expected to increase as a percentage of overall population. This increase in expected to result in greater demand for housing. Interest rates and credit take-off: Key interest rates have been reduced by the RBI over the last year, causing a lowering of interest rates by banks, increased credit off-take and improvement in the real estate markets. The lowering of interest rates is expected to lead to increased new home purchases, since a large portion of new house acquisitions are financed through banks and financial institutions. India’s lack of dependence on foreign demand from consumers has been the key advantage for India as it has managed to avoid the severe recession that has hit most other Asian countries. Historically, the real estate sector in India was unorganized and characterized by various factors that impeded organized dealing, such as the absence of a centralized title registry providing title guarantees, a lack of uniformity in local laws and their application, non-availability of bank financing, high interest rates and transfer taxes and the lack of transparency in transaction values. In recent years, the real estate sector in India has exhibited a trend towards greater organization and transparency through various regulatory reforms such as the enactment of the Urban Land (Ceiling and Regulation) Repeal Act, 1999, modifications to the rent control statutes to provide greater protection to home owners wishing to rent out their properties, the rationalization of property taxes in a number of states, the proposed conversion of land records into electronic form and FDI being permitted in the real estate sector, subject to certain conditions, including lock-ups. Regulatory changes liberalising FDI inflows are expected to further facilitate investment in the Indian real estate sector. The Government in March 2005 amended existing legislation to allow 100% FDI in the construction business. The increase in FDI inflows is expected to help meet the demand for financing in the real estate industry. As of June 30, 2009, RBI had extended permission for corporate organisations engaged in the development of integrated townships of at least 100 acres to undertake external commercial borrowing through December 31, 2009.

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According to the report of the Technical Group on Estimation of Housing Shortage, an estimated shortage of 26.53 million houses during the Eleventh Five Year Plan (2007-12) provides a big investment opportunity. Growing penetration of mortgage finance into the urban housing finance market is now evident. According to the data released by the Department of Industrial Policy and Promotion (DIPP), housing and real estate sector including cineplex, multiplex, integrated townships and commercial complexes etc, attracted a cumulative foreign direct investment (FDI) worth US$ 8.4 billion from April 2000 to April 2010. FDI equity inflow accrued to a total of Rs. 646.6 billion from January – August 2009. FDI inflow was directed to a broad range of industries in India; however, as indicated in the table below, during the two most recent fiscal years, the housing and real estate sector attracted a significant amount of foreign investment (Rs. 126 billion in 2008-2009), second only to foreign investment in the services sector.

(Source: Department of Industrial Policy and Promotion) FDI inflows into the real estate sector dropped significantly in the last two quarters of 2008 but have recently gained momentum, with an increase of nearly 28% since the second half of 2008. The cumulative FDI inflow from April 2000-June 2009 was US$ 6,693 million in the housing and real estate sector, as shown in the table below:

(Source: Department of Industrial Policy and Promotion) As indicated in the table above, for 2009-2010, FDI inflows to the housing and real estate sector are expected to be approximately US$ 1,181 million, with Maharashtra continuing to be the most favoured location for investment amongst the institutional investors. The sector witnessed FDI amounting US$ 2.8 billion in the fiscal year 2009-10 and is expected to witness an increase of US$ 21 billion from the current values over the next 10 years. Net sales of the real estate industry shot up by 78.3% in the June 2010 quarter. The PBDIT of the industry grew by a robust 72.3%. The growth in PAT was even better at 119%. Almost 80% of real estate developed in India is residential space, the rest comprising of offices, shopping malls, hotels and hospitals. According to the Tenth Five Year Plan of India, there is a shortage of 22.4 million dwelling units. CONCLUSION The Indian real estate sector promises to be a lucrative destination for foreign investors into the country. The Indian realty sector, if channelized properly, could catapult the growth of several other sectors in India through its backward and forward linkages. However, there are potential constraints for domestic as well as foreign investments in India. Absence of a single regulator to monitor business practices prevailing in Indian real estate market is perceived to be a risk factor by investors. The SEZ guidelines which are issued by the Ministry of Commerce are constantly modified, creating uncertainty. Since the liberalization of FDI norms, significant foreign investments have flown into real estate; but availability of suitable exit options for such investments is still constrained. Maturity of the real estate markets will lead to infusion of foreign investment and adoption of

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international best practices by real estate players. Developers will get more organized, and become more transparent to avail opportunities emerging in the market. With the Indian securities market regulator SEBI allowing real estate mutual funds (REMFs) in India, equity investors will have an exit option available to them. All these factors will contribute in making the Indian real estate market more organized and structured, thus providing better investment opportunities.

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SUMMARY OF BUSINESS In this chapter, a reference to “Zodiac Ventures” or “the Company” means Zodiac Ventures Limited. Unless the context otherwise requires or implies, references to “we”, “us”, or “our” refers to Zodiac Ventures Limited and its Subsidiary (i.e. Zodiac Developers Private Limited) on a consolidated basis. COMPANY’S EVOLUTION The Company was incorporated with the main object to carry on the business in shares, securities and other investments and financing. With a view to raise finance to buy, invest in debentures, debenture stock of other companies including securities of any government authorities, bonds, certificates and to pursue business of financing the Company made its maiden public issue in the year 1981. Mr. Aman More (acting through Mr. Niraj More as the natural guardian) and M/s Radhakrishan Nandlal Private Limited the original/first promoters of the Company sold 1,33,500 Equity Shares of Rs. 10 each, representing 54.81 % of the total paid up shareholding of 2,43,570 of the Company to Mr. Hozef Darukhanawala vide Share Purchase Agreement date November 28, 2005. Subsequently on March 26, 2010, Mr. Jimit Shah, Mr. Ramesh Shah, Ms. Pushpa Shah and Ms. Yesha Shah entered into an Memorandum of Understanding with Mr. Hozef Darukhanawala to acquire 1, 04,500 Equity Shares constituting 13.48% of the total paid up shareholding of 7, 75,000 of the Company and acquired management control over the Company as set out under Section 12 of Takeover Code. The change of control has been approved by the shareholders at the extra ordinary general meeting held on May 14, 2010. Mr. Jimit Shah, Mr. Ramesh Shah, Ms. Pushpa Shah and Ms. Yesha Shah acquired controlling interest in the share capital and management of the Company with the intent of diversifying into the real estate depending upon the market conditions and available opportunities. For a brief history of the Company refer to chapter titled “History and Other Corporate Matters” on page 88 of the Draft Letter of Offer. OUR CORPORATE STRUCTURE Our corporate structure includes Zodiac Ventures as the holding company and ZDPL as its Subsidiary. Zodiac Ventures has not started any business operations yet but is considering projects in the real estate sector depending upon the market conditions and available opportunities. Zodiac Venture has forayed in to real estate business through its Subsidiary ZDPL. ZDPL was incorporated in the year 1995 with its main objects as real estate development. ZDPL commenced its first real estate development in the year 1997. Mr. Ramesh Shah and Mr. Jimit Shah, who are also the Directors of ZDPL have steered the successful completion of three residential projects by ZDPL. ZDPL has an Ongoing Project and four Planned Projects. Mr. Ramesh Shah and Mr. Jimit Shah identified ZDPL as a prolific business opportunity and decided to consolidate the business operations of both ZDPL and Zodiac Ventures. On December 15, 2010 Zodiac Ventures invested Rs. 208 lakhs to acquire 50.98% stake in ZDPL. The balance uncalled amount is to be funded through the Rights Issue. OVERVIEW We are a real estate development company operating in Mumbai. The key focus area of our business has been real estate development projects under Regulation 33(7), 33(9) and 33(10) of the Development Control Regulations for Greater Mumbai, 1991 as sanctioned by the Government of Maharashtra under section 31(1) of Maharashtra Regional and Town planning Act, 1966. Under the said regulation we reconstruct or redevelop slum areas, cessed buildings by housing societies or old buildings belonging to the Municipal Corporation of Greater Mumbai. For details related to the applicable regulations for the Company and the Subsidiary, please refer to chapter titled “Key Industry Regulations and Policies” on page 72 of the Draft Letter of Offer. As a benefit for carrying out redevelopment projects under DCR, our Subsidiary is entitled to certain additional saleable FSI depending under which scheme of DCR the Subsidiary proposes to carry out redevelopment project. Depending on the site condition these additional FSI may be utilised in the same location or TDRs may be sanctioned. The TDRs shall permit the Subsidiary to develop land in certain parts of Mumbai located outside the main project area. We undertake research for our projects prior to making any decisions to acquire, develop or sell our properties. Our operations include the identification and acquisition of land and land development rights and the planning, execution and marketing of our projects. Our primary business activity is redevelopment under Regulation

5

33(7), 33(9) and 33(10) of DCR. Currently, our projects are at various stages of development. Our participation in redevelopment projects in Mumbai has allowed us to obtain strategically located land for our real estate development projects at a lower cost than we would have otherwise incurred for the purchase of comparable, developable urban land in Mumbai. We aim to continue to acquire and develop land that we believe has locational advantages and are reasonably priced. In developing our properties we place an emphasis on architecture, infrastructure, raw materials and facilities and seek to apply aesthetic design techniques and to make the optimum use of available space. The first real estate development project was undertaken by ZDPL in the year 1997 and has completed 3 residential projects including one project on slum rehabilitation land since then. The details of which is given below: Project Type Location Built-Up

Area (Sq. ft.)2

Saleable Area

(Sq. ft.)

Project start date

Project Completion date

Jupiter Residential Vile Parle 7,517.36 9,094 March 1997 July 2001 Venus Residential Vile Parle 9,478.24 12,030 December

1999 November 2000

Kushinara(Slum Rehabilitation land)1)

Residential

Bandra 37,839.55* 21,223 June 2004 June 2009

Total 54,835.15 42,347 1. As per agreement dated April 21, 2003 between ZDPL and Samir Narain Bhojwani, both the parties have agreed that

Samir Narain Bhojwani would develop a residential complex on the said land and pay ZDPL a lump sum of Rs. 500 lakhs towards acquisition and development of said land.

2. The total Built-Up area for Project Jupiter, Venus and Kushinara is certified by independent architect M/s Consultant Combined dated February 28, 2011.

* Includes rehabilitation area.

Our projects are broadly classified as Ongoing Project, which are projects for which approval to begin construction has been granted by the Competent Authority, and Planned Project, which are projects for which (i) land has been acquired or a memorandum of understanding or development agreement has been executed; (ii) application has been made to grant CTS no. to the concerned authority; and (iii) internal project development plans are complete. Our Ongoing Project comprises of constructing a residential complex in the western suburbs of Mumbai with an aggregate area of 1, 11,934.83 sq. ft. We also have four planned projects. The estimated Saleable Area of our Ongoing and Planned projects as of January 31, 2011 is summarised in the table below:

Type Ongoing Project Location Total Built-up

area Estimated

Saleable Area Date of

Commencement Date of

Completion Residential (Slum Rehabilitation Land)

Hanuman Nagar, Juhu*

3,83,868.35** 1,11,934.83 (1) 1998(2) 2014

Sub total 3,83,868.35 1,11,934.83 Type Proposed Project

Location Estimated Saleable Area

(Sq. ft.)

Date of Commencement

Date of Completion

Residential (Redevelopment/ Reconstruction on land in possession of MCGM)

Babu Genu Nagar 7,78,870.98** 2,30,907.04 (3) 1999(4) 2015

Residential(Slum Rehabilitation Land)

Indira Nagar 1,81,319.58** 1,22,935.64 2012 2015

Residential (Redevelopment/ Reconstruction

Vile Parle (East) 16,504.88 29,708.78 2011 2014

6

on land in possession of MCGM) Residential Gandhi Nagar

Project, Bandra (East)

5,855.62 10,540.11 2011 2013

Sub total 9,82,551.06

3,94,091.57

Grant Total 13,66,419.41

5,06,026.4

1. As per agreement dated October 15, 2004 between ZDPL and Mr. Samir Narain Bhojwani, both the parties are entitled to 50% of the free sale area. The total built up area is 3, 83,868 sq. ft. of which 2, 23,869.66 sq. ft. is saleable area available to both ZDPL and Mr. Samir Narain Bhojwani and each is entitled to 1,11,934.83 sq.ft.

2. In the year 1997 SRA granted the LOI to ZDPL and Krishna Developers, whereby ZDPL and Krishna Developers entered into a JDA. In 2004, Krishna Developers resigned from the JDA. The project had received consent from over 70% of the slum dwellers, but was delayed due to litigation by few of the slum dwellers, who objected the construction. The final clearance to go ahead with the project was finally received in 2008, by the court order passed in favour of ZDPL. ZDPL recommenced the construction in January 2009.

3. As per JDA dated April 19, 2007 between ZDPL and Lokhandwala Infrastructure Private Limited, both the parties have agreed to construct a residential complex on the said land in the ratio of 44:56.

4. The project has been delayed due to pending approval of the revised Annexure II filing that was made as part of scheme for redevelopment projects. The same has been filed with the MCGM in order to include a larger plot of land in the project and to receive the approval of the same. Our Subsidiary has also entered into an MOU with Lokhandwala Infrastructure Private Limited to develop the said property. For details of the said agreement, refer to sub-heading “Joint Development Agreement for Babu Genu Nagar Project” in the chapter titled “Land Reserves” on page 65 of the Draft Letter of Offer.

* The Built-Up area has been certified by the independent architect M/s Consultant Combined dated February 28, 2011. ** Includes rehabilitation areas. We also benefit from our managements experience in the real estate sector. Mr. Ramesh Shah, a first generation entrepreneur has built ZDPL into a booming real estate development company. Mr. Ramesh Shah has a number of laurels attached to his name and is the secretary to the Slum Developers Association. Mr. Jimit Shah the second generation real estate developer who has learnt from the experience of his father Mr. Ramesh Shah and has brought in fresh ideas to the Company. Mr. Ramesh Shah and Mr. Jimit Shah share an experience of 25 years amongst themselves in the real estate business. We benefit from their knowledge of the opportunities in real estate development coupled with the capabilities in various aspects of real estate development from identification and acquisition of land, planning, execution and marketing and maintenance and management of our completed developments. OUR COMPETITIVE STRENGTHS AND STRATEGIES Principal Strengths Our principal strengths that give us a distinct set of competitive advantages are as follows: Foresight to acquire quality of Land Reserves at competitive prices and construct innovative projects Our Land Reserves enable us to maintain a consistent and significant portfolio of projects under development and therefore form an important asset for our business. Our Land Reserves are owned fully or jointly by us, enjoy locational advantages, which should enable us to undertake projects at our convenience. We acquired such land at prices, which we believe are reasonably low. Also, we utilise the experience and skills of our professional management, design, engineering and project execution teams to plan and carry out innovative developments that maximise the use of available land. Strong internal process enhancing the quality of construction We believe that the quality of our construction is in line with the best construction practices adopted in the industry. We place a special emphasis on ensuring that our quality standards are adhered to at every stage of a project. Our internal processes and methodologies ensure that various departments and employees of our Company are aware of their respective roles and obligations, and various activities of construction and development are consistent with the standards of quality that we have set for ourselves. This also ensures uniformity in all our processes.

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We employ technologically advanced tools and processes for ensuring and monitoring quality at each stage of construction including a systematic procedure to oversee onsite construction activities. The quality of each of our projects is monitored by our site supervisors headed by senior coordinators who report directly to our senior management on a day to day basis, thereby providing for quality supervision in all our projects. Professionally managed company with an experienced management and a qualified employee base We have 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 principle 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 changing demographics in the industry 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. Concentration in regional space We started our operation in the western region of India and currently our Ongoing and Planned projects are located in Mumbai, which we believe is an attractive real estate market in terms of returns on investment and depth of demand for real estate developments a cross segments and price points. We believe that we have good knowledge of the market and regulatory environment in Mumbai that assists us in identifying opportunities in Mumbai. We also believe that Mumbai’s position as the commercial capital of India, together with the demographics of the Mumbai population, with a high-income, discerning customer base and an expanding segment of young, upwardly mobile professionals provide a substantial market for our projects. Business Strategies We strive for complete transparency and satisfaction of our clients with an unwavering thrust and focus on professional excellence and integrity. In keeping with this philosophy, we will focus on increasing our Land Reserves at strategic locations as well as on capturing the significant growth opportunities across the Indian real estate spectrum. Our key strategic initiatives are described below: Continue to focus on developing projects in Mumbai Currently all our Ongoing and Planned projects are in Mumbai and we intend to continue to focus here. We believe that Mumbai is an attractive real estate market in terms of returns on investment and depth of demand for real estate developments across segments and price points. We believe that there are significant barriers to entry which favour established real estate developers. We also believe that Mumbai’s position as the commercial capital of India, together with the demographics of the Mumbai population, a high-income, discerning customer base and an expanding segment of young, upwardly mobile professionals provide a substantial market for our developments, which emphasise contemporary architecture, strong project execution and quality construction. Our development sites are located in distinct areas of Mumbai, with different target markets, and we intend to continue to tailor our projects to the particular requirements of each market. We expect there to be continued demand, in particular, for residential projects and believe that continuing to execute projects in Mumbai is critical to our growth strategy. We intend to focus on completing our existing projects in Mumbai and on developing new projects as we identify and acquire additional land for projects. We will continue to seek strategic development opportunities in Mumbai either on our own or jointly with third parties. Enter new Geographies While Mumbai remains and is expected to remain our primary focus, we are opportunity centric and have evaluated and will continue to evaluate growth opportunities in other parts of India on a case by case basis. We intend to use our experience in developing projects in Mumbai to help us to develop projects in other parts of India. We intend to focus on executing projects primarily in the residential segment in major cities. We will follow the strategy that we have already applied in Mumbai of targeting land that we believe to have locational advantages and to be reasonably priced and customers who range from high to low income. Focus on execution and maintain high quality standards We intend to continue to scale up the size of our operations and our project teams. We recognise the importance

8

of delivering quality projects on a timely basis in order to maximize buyer satisfaction. We intend to increase the scale of our business by acquiring land for development in the near- to medium-term while staying focused on quality. We have purchased and will continue to acquire land for development by making upfront payments for the land; we also look to develop projects through alternative structures that reduce our upfront capital commitment. We also intend to continue to further enhance our architectural, design, construction, and development capabilities to enable us to provide innovative, modern and quality products and services to our customers. We plan to outsource a substantial part of the design and construction activities related to our projects to international and domestic firms who specialize in these areas. Diversifying the portfolio of projects undertaken by us We intend to diversify the portfolio of projects undertaken by us by developing commercial properties including hotels, integrated townships, IT parks, infrastructure projects in addition to continuing the development of residential projects. Our strategy is to position ourselves to capitalize on the development and construction opportunities generated by various sectors of the Indian economy.

9

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 185 of the Draft Letter of Offer.

Equity Shares proposed to be issued by the Company

1,55,00,000 Rights Equity Shares aggregating to Rs. 1,550 Lakhs

Rights Entitlement for Equity Shares 20 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

7,75,000 Equity Shares

Equity Shares outstanding after the Issue

1,62,75,000 Equity Shares*

Use of Issue Proceeds For further information, please refer to the chapter titled “Objects of the Issue” beginning on page 29 of the Draft Letter of Offer.

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

10

SUMMARY OF FINANCIAL STATEMENTS

The following tables set forth our selected historical financial information derived from our consolidated financial statements for the nine months period ended December 31, 2010and standalone financial statements for the nine months period ended December 31, 2010, Fiscal 2010, 2009, 2008, 2007 and 2006, all prepared in accordance with Indian GAAP, the Companies Act and the SEBI ICDR Regulations as described in the reports of the auditors included in chapter titled “Financial Statements” on page 109 of the Draft Letter of Offer and this table should be read in construction with the financial statements mentioned therein and the notes thereto. CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES AS RESTATED

(Rs. In Lakhs) As at Particulars 31.12.20l0

A TANGIBLE ASSETS Fixed Assets Gross Block 283.37 Less: Accumulated Depreciation 85.52 Net Block 197.85 Less: Revaluation Reserve - Net Block after adjustment of Revaluation Reserve 197.85 Capital Work In Progress - Total 197.85

B INTANGIBLE ASSETS Gross Block 54.48 Less: Amortisation - Net Block 54.48 Capital Work In Progress - Total 54.48

C INVESTMENTS 1.00 D DEFERRED TAX ASSET - E CURRENT ASSETS, LOANS &ADVANCES Inventories 3,467.53 Sundry Debtors 6.93 Cash & Bank Balances 116.20 Loans & Advances 236.04 Other Current Assets Total 3,826.70

F LIABILITIES AND PROVISIONS Secured Loans 111.13 Unsecured Loans 426.49 Deferred Tax Liability 7.01 Current Liabilities 3,193.88 Provisions 10.70 Total 3,749.22

G MINORITY INTEREST 147.62 H NET WORTH (A + B + C+D+E-F-G) 183.21 Net Worth Represented by Equity Share Capital 77.50 Preference Share Capital - Reserve & Surplus - Share Premium 45.86 - Capital Reserve - Debenture Redemption Reserve - Other Reserve (Other than Revaluation Reserve) - Surplus/(Deficit) in P & L Nc 61.55 Less: Miscellaneous Expenses Not W/off (1.70)

I NETWORTH 183.21

11

CONSOLIDATED SUMMARY STATEMENT OF PROFIT & LOSSES AS RESTATED:

(Rs. in Lakhs) For the nine months

period ended Particulars 31.12.2010 Income Sales & Operating Incomes Of products manufactured by the Company - Of products traded by the Company - Other Income 45.16 Increase / (Decrease) in Stock Total Income 45.16 Expenditure Raw Material Consumed / Cost of Traded Goods - Payment & Provision for Employees 12.66 Administrative & Other Expenses 5.26 Selling & Distribution Expenses 1.80 Financial Charges - Depreciation & Amortization - Total Expenditure 19.73 Profit before tax and extraordinary items 25.43 Add / (Less) : Extraordinary Items - Profit Before Tax after extraordinary items 25.43 Add / (Less) : Provision for Tax Current Tax (7.24) Earlier Years (1.18) Deferred Tax Liability / (Assets) 1.56 Profit After Tax and extraordinary items as per Audited Accounts (A) 18.57 Less: Minority Interest (3.88) Profit After Tax and minority interest as per Audited Accounts (A) 14.69 Impact of Change in Accounting Policies and Estimates - Excess/(Short) Provision for Taxation 1.18 Share of Minority in Excess/ (Short) Provision of Taxation (0.58) Total Impact of Adjustment - Total Adjustments net of tax impact 0.60 Net Profit as Restated 15.29 Surplus/(Deficit) brought forward from previous years 50.89 Balance available for appropriations, as restated 66.19 Appropriation Share of Pre-Acquisition Profit transferred to Cost Of Capital (4.64) Balance Carried forward as restated 61.55

12

CONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS FROM RESTATED

FINANCIALSTATEMENTS

(Rs. in Lakhs) For the nine months

period ended Particulars 31.12.2010

A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before taxation and extra ordinary items 25.43

Adjustment for: Depreciation & Amortization Finance Charges/Interest (Net) Provision for diminution in value of investments Foreign Exchange Gain/(loss) Fixed Assets W /off Profit on Sale of Investment (27.90) Interest/ Dividend Received. (0.68) Loss on Sale of Fixed Assets Misc. Expenses Amortization Cash generated from operations before working capital changes (3.15) Increase/Decrease in trade receivables (4.49) Increase/ Decrease in loans & advances (19.63) Increase/Decrease in Inventories (413.99) Increase/Decrease in trade payables &others 447.30

Cash Generated from/ (used in) Operations 6.04 Direct tax Paid (Net of Excess/surplus provision) (13.85) Interest Paid - Net Cash Flow before extra ordinary items (7.81) Extraordinary Items Net Cash Flow from/ (used in) Operating Activities (7.81) B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (46.49) Sale of Investments 148.90 Interest Received 0.68 Net Cash Flow from/ (used in) Investing Activities 103.09 C. CASH FLOW FROM FINANCING ACTIVITIES Share issue expenses (14.60) Proceeds from Secured Loans 29.32 Proceeds from Unsecured Loans 41.33 Repayment of Unsecured Loans (86.11) Dividend Paid (9.07) Proceeds from Share issue to Minority 3.21 Net Cash from/ (used in) Financial Activities (35.91) NET INCREASE /(-) DECREASE IN CASH AND CASH EQUIVALENTS 59.36 OPENING BALANCE IN CASH AND CASH EQUIVALENTS 56.84 CLOSING BALANCE IN CASH AND CASH EQUIVALENTS 116.20 Components of Cash & Cash Equivalents - Cash in hand 12.98 - Cash/bank Balance with bank (current account) 3.22 -Balance with bank on deposit account 100.00

CASH AND CASH EQUIVALENTS 116.20

13

STANDALONE SUMMARY STATEMENTOF ASSETS AND LIABILITIES AS RESTATED

(Rs. In Lakhs)

Particulars

As at

31.12.2010 31.03.2010 31.03.200 31.03.2008 31.03.2007 31.03.2006

A TANGIBLE ASSETSFixed Assets Gross Block - - - - - -Less: Accumulated Depreciation - - - - - -

Net Block - - - - - -Less: Revaluation Reserve - - - - - -

Net Block after adjustment of Revaluation Reserve

- - - - - -

Capital Work In Progress - - - - - -Total - - - - - -B INTANGIBLEASSETS Total - - - - - -C INVESTMENTS 208.00 121.00 141.00 141.00 46.00 -D DEFERRED TAX ASSET /MAT CREDIT

1.98 - - - - -

E CURRENT ASSETS, LOANS & ADVANCES

Inventories - - - - - -Sundry Debtors - - - - - -Cash & Bank Balances 5.39 38.38 8.15 14.74 1.69 8.77Loans & Advances 16.21 41.94 40.85 26.22 23.86 62.51Other Current Assets - - - - - -Total 21.60 80.33 48.99 40.96 25.54 71.29F LIABILITIESAND PROVISIONS

Secured Loans - - - - - -Unsecured Loans 41.33 - - - - -Deferred Tax Liability - - - - - -Current Liabilities 1.89 0.05 0.05 0.14 0.37 0.21Provisions 3.45 14.43 4.42 1.57 3.13 3.95Total 46.67 14.48 4.47 1.71 3.50 4.17G NET WORTH(A+B +C+D+E-F)

184.91 186.85 185.53 180.25 68.04 67.12

Net Worth Represented by Equity Share Capital 77.50 77.50 77.50 77.50 24.36 24.36Preference Share Capital - - - - - -Reserve & Surplus -Share Premium 45.86 58.46 58.46 58.46 - --Surplus/(Deficit)in P&L A/c 61.55 50.89 49.57 44.30 43.69 42.76 Less: Miscellaneous Expenses Not - - - - -

H NET WORTH 184.91 186.85 185.53 180.25 68.04 67.12

14

STANDALONE SUMMARY STATEMENT OF PROFIT & LOSSES AS RESTATED (Rs. In Lakhs)

Particulars For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Income Sales & Operating Incomes ofproducts manufactured by the Company

- - - - - -

Of products traded by the Company

- - - - - -

Other Income 28.58 19.24 11.88 9.26 3.15 44.36 Increase / (Decrease)in Stock - - - - - - Total Income 28.58 19.24 11.88 9.26 3.15 44.36 Expenditure Raw Material Consumed / Costof Traded Goods

- - - - - -

Payment & Provision for Employees

12.66 - 1.81 1.67 1.33 2.04

Administrative & Other Expenses

5.26 3.49 1.94 5.48 0.89 13.19

Financial Charges - - - - - 0.15 Depreciation & Amortization - - - - - 0.97 Total Expenditure 17.93 3.49 3.75 7.15 2.22 16.35 Profit before tax andextraordinary items

10.65 15.75 8.13 2.11 0.92 28.01

Add / (Less): ExtraordinaryItems

-

- - - - -

Profit Before Tax afterextraordinary items

10.65 15.75 8.13 2.11 0.92 28.01

Add / (Less): Provision for Tax Current Tax 1.98 5.36 2.83 1.46 0.41 2.35 Fringe Benefit Tax - - 0.03 0.03 - 0.03 MAT Credit Entitlement (1.98) - - - - - Profit After Tax andextraordinary items as perAudited Accounts (A)

10.65 10.39 5.27 0.62 0.51 25.63

Impact of Change in AccountingPolicies and Estimates

- - - - - -

Excess/(Short)Provision forTaxation

- -

0.01 (0.41) 0.68

Prior Period Adjustments - - - - - - Total Impact of Adjustment - - - 0.01 (0.41) 0.68 Total Adjustments net of taximpact

- - - - - -

Net Profit as Restated 10.65 10.39 5.27 0.61 0.92 24.95 Surplus/(Deficit)brought forward from previous years

50.89 49.57 44.30 43.69 42.76 17.81

Balance available forappropriations, as restated

61.55 59.96 49.57 44.30 43.69 42.76

Appropriation Proposed Dividend on Equityshares

- 7.75 - - - -

Tax on Dividend - 1.32 -

15

Particulars For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Balance Carried forward asrestated

61.55 50.89 49.57 44.30 43.69 42.76

16

STANDALONE SUMMARY STATEMENT OF CASH FLOWS FROM RESTATED FINANCIAL STATEMENTS

(Rs. In Lakhs) Particulars

For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before taxation and extraordinary items

10.65 15.75 8.13 2.11 0.92 28.01

Adjustment for: Depreciation & Amortization - - - - - 0.97Finance Charges/Interest (Net) - - - - - 0.15Recoverable Advances w/off - - - - - 10.45Fixed Assets W/off - - - - - -Share issue expenses - - - 2.48 - -Profit/Loss on Sale of Investment (27.90) (1.11)Interest/ Dividend Received (0.68) (3.24) (6.88) (4.19) (3.06) (5.85)Profit/Loss on Sale of Fixed - - - - - (1.63)Misc. Expenses Amortization - - - - - -Cash generated from/(used in) operations before working capital changes

(17.93) 12.51 1.25 0.41 (2.13) 31.00

(Increase)/Decrease in trade receivables

- - - - - -

(Increase)/ Decrease in loans & advances

25.73 16.93 (2.97) (45.74) 19.75 475.50

Increase/(Decrease)in Inventories - - - - - 79.15Increase/(Decrease)in trade Payables & Others

3.31 (0.08) (0.08) (0.19) 0.17 (0.59)

Cash Generated from/(used in) Operations

11.11 29.36 (1.79) (45.52) 17.79 585.06

Direct tax Paid (Net of Excess/surplus provision)

5.36 2.36 1.68 0.73 (1.07) (2.67)

Interest Paid - - - - - -Net Cash Flow before extraordinary items

5.76 27.00 (3.48) (46.26) 18.86 587.73

Extraordinary Items - - - - - -Net Cash Flow from/(used in)Operating Activities

5.76 27.00 (3.48) (46.26) 18.86 587.73

B. CASH FLOW FROM INVESTING ACTIVITIES

Sale of investments 120.90 - - - - 7.19Investment in subsidiary (208.00) - - - - -Purchase of Investment (NET) - - (10.00) (54.00) (29.00) -Proceeds from sale of fixed assets - - - - - 18.95Interest Received 0.68 3.24 6.88 4.19 3.06 5.50Dividend Received - - - - - 0.36Net Cash from/(used in) Investing Activities

(86.42) 3.24 (3.12) (49.81) (25.94) 31.99

C.CASH FLOW FROM FINANCING ACTIVITIES Proceeds from issuance of share capital(including Share Premium)

- - - 109.12 - -

Refund of share application money 28.00 - - - - -

17

Particulars

For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Share issue expenses (12.60) - - - - -Proceeds from Unsecured loans 41.33 - - - - -Repayment of Unsecured Loans - - - - - (615.54)Finance Charges paid - - - - - (0.15)Dividend Paid (7.75) - - - - -Dividend Distribution Tax (1.32) - - - - -Borrowing(Net) - - - - - -Net Cash from/( used in) Financing Activities

47.65 - - 109.12 - (615.70)

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

(33.01) 30.24 (6.59) 13.05 (7.09) 4.03

OPENING BALANCE IN CASH AND CASH EQUIVALENTS

38.38 8.15 14.74 1.69 8.77 4.75

CLOSING BALANCE IN CASH AND CASH EQUIVALENTS

5.39 38.38 8.15 14.74 1.69 8.78

Components of Cash & Cash -Cash in hand 5.30 7.45 6.45 4.06 0.41 0.21-Cash/bank Balance with 0.09 30.93 1.69 10.68 1.28 8.57-Balance with bank on deposit CASH AND CASHEQUIVALENTS

5.39 38.38 8.15 14.74 1.69 8.77

Note: Figures in brackets represent the outflow of cash. Cash Flow Statement has been prepared using indirect method as per Accounting Standard 3 -Cash Flow Statements issued by ICAI

18

GENERAL INFORMATION

Dear Equity Shareholder(s), Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on July 20, 2010 and November 2, 2010 and subsequently by the shareholders vide Postal Ballot on December 10, 2010, it has been decided to make the following Rights Issue to the Equity Shareholders of the Company, with a right to renounce: ISSUE OF 1, 55, 00,000 EQUITY SHARES WITH A FACE VALUE OF RS. 10/- EACH AT PAR AGGREGATING TO RS. 15,50,00,000/- RUPEES FIFTEEN CRORES FIFTY LAKHS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF TWENTY (20) 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. THE ENTIRE ISSUE PRICE FOR THE EQUITY SHARES WILL BE PAID ON APPLICATION. FOR MORE DETAILS, SEE CHAPTER TITLED “TERMS OF THE ISSUE” BEGINNING ON PAGE 185 OF THE DRAFT LETTER OF OFFER. Registered and Corporate Office Zodiac Ventures Limited 404, Dev Plaza, 68, S. V Road Andheri (W), Mumbai – 400 058, Maharashtra, India. Tel No.: +91 (22) 4223 3333 Fax No.: +91 (22) 4223 3300 Email: rights@zodiacventures.in Registration No.: 11-23923 of 1981 Corporate Identification No.: L45209MH1981PLC023923 For details of the changes to the registered office, please refer to the chapter titled “History and Other Corporate Matters” beginning on page 88. Registrar of Companies, Maharashtra 100, Everest, Marine drive Mumbai- 400 002, Maharashtra, India Board of Directors The Board of Directors of the Company as on the date of filing of the Draft Letter of Offer with SEBI is as follows:

Name and Designation Designation Age (years)

Director Identification Number

Address

Mr. Jimit Shah Managing Director 28 01580796 8/9, 505 Jupiter, Swami Narayan Mandir Road, Off Azad Road, Ville Parle (East), Mumbai- 400 057

Mr. Ramesh Shah Chairman and Whole-time director

50 01580767 8/9, 505 Jupiter, Swami Narayan Mandir Road, Off Azad Road, Ville Parle (East), Mumbai- 400 057

Mrs. Sunita Shah Additional and Non-Executive Director

32 03099290 8/9, 505 Jupiter, Swami Narayan Mandir Road, Off Azad Road, Ville Parle (East),

19

Name and Designation Designation Age (years)

Director Identification Number

Address

Mumbai- 400 057

Dr. Anil Ghagare Independent and Non-Executive Director

58 03197982 Saket Tower No. 1, Flat No. 1204, Near Kalwa Bridge, Kisan Koli Marg, Thane (W), Thane, Maharashtra - 400601

Mr. Aakash Parikh Independent and Non-Executive Director

27 02582311 424, Shantikunj, Shraddhanand Road, Matunga, Mumbai - 400019

Mr. Litesh Gada Independent and Non-Executive Director

28 03307067 13, Chandratej Dattapada Road, Borivali (East), Mumbai – 400066

For further details of the Directors, see “Our Management” on page 93. Company Secretary Mrs. Anita Agrawal Address: 404, Dev Plaza, 68, S. V Road, Andheri (W), Mumbai – 400 058, Maharashtra, India. Tel No.: +91 (22) 4223 3333 Fax No.: +91 (22) 4223 3300 Email: anita@zodiacventures.in Compliance Officer Mr. Vipul Khona Address: 404, Dev Plaza, 68, S. V Road, Andheri (W), Mumbai – 400 058, Maharashtra, India. Tel No.: +91 (22) 4223 3333 Fax No.: +91 (22) 4223 3300 Email: rights@zodiacventures.in Note: Investors are advised to contact the Registrar to the Issue or the Compliance Officer in case of any pre- Issue or post-Issue related problems such as non-receipt of Letter of Offer, letter of Allotment, split application forms, share certificate(s) or Refund Orders. All grievances related to ASBA process may be addressed to the Registrar to the Issue with a copy to the SCSBs, giving full details such as name, address of the applicant, ASBA Account number and the designated branch of the SCSBs where the CAF, or the plain paper application, as the case may be, was submitted by ASBA investors. Lead Manager to the Issue Intensive Fiscal Services Private Limited 131, C Wing, Mittal Tower, 13th Floor, Nariman Point, Mumbai – 400 021, Maharashtra, India. Tel. No.: +91 (22) 2287 0443/44/45 Fax No.: +91 (22) 2287 0446 Email: zvlrights@intensivefiscal.com Investor Grievance ID: investor@intensivefiscal.com

20

Website: www.intensivefiscal.com Contact Person: Mr. Brijesh Parekh / Ms. Ishita Kohli SEBI Registration Number: INM000011112 For all the Issue related queries and for redressal of complaints, investors may also write to the Lead Manager. Registrar to the Issue Sharex Dynamic (India) Private Limited Address: Unit No.1, Luthra Industrial Premises, Andheri Kurla Road, Safed Pool, Andheri (East), Mumbai-400 072, Maharashtra, India. Tel No.: +91 (22) 2851 5606 / 5644 Fax No.: +91 (22) 2851 2858 Contact Person: Mr. S. Baliga Email: sharexindia@vsnl.com SEBI Registration: INR000002102 Legal Advisor to the Issue M/s. Crawford Bayley & Co. Advocates and Solicitors Address: State Bank Buildings, 4th floor N.G.N Vaidya Marg, Fort, Mumbai – 400 023, Maharashtra, India. Tel No.: +91 (22) 2266 8000 Fax No.: +91 (22) 2266 3978 E-mail: sanjay.asher@crawfordbayley.com Statutory Auditor of the Company M/s. A. R. Sodha & Co. Address: 101, Ashiana, 11th Road, TPS III, Opp. BMC Hospital, Santacruz (E), Mumbai - 400 055, Maharashtra, India. Tel No.: +91(22) 2610 2465/2611 6901 Fax No.: +91(22) 2610 1228 Contact Person: Mr. Amrish R. Sodha Email: ars@arsodha.com Firm Registration No: FRN110324W The Auditors holds the Peer Review Certificate dated July 20, 2010, issued by Peer Review Board, the Institute of Chartered Accountants of India, New Delhi. Bankers to the Company The Company has current accounts with the following banks: The Cosmos Co-Operative Bank Limited -Pune Address: Ground Floor, Dev Plaza, 68, S.V. Road, Andheri (W), Mumbai – 400 058,

21

Maharashtra, India. Tel No.: +91 (22) 2671 8471 Fax No.: +91 (22) 2671 8472 Email: sanjay.punekar@cosmosbank.in Website: http://www.cosmosbank.com/ Contact Person: Mr. Sanjay Punekar Bankers to the Issue/Escrow Collection Banks [●] 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 fulfil 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 This being an Issue of Equity Shares for less than Rs. 500 Crores, appointment of monitoring agency in terms of sub-regulation (1) of Regulation 16 of the SEBI (ICDR) Regulations 2009 is not required. The 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 the Company. Declaration by Board on creation of separate account The Board of Directors declare 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 the Company has not entered into any underwriting arrangement.

22

Self-Certified Syndicate Banks The lists of Banks who have been notified by SEBI to act as SCSBs are provided at http://www.sebi.gov.in. For details on designated branches of SCSBs collecting the ASBA form, please refer the above mentioned SEBI link. Issue Grading As the Issue is a rights offering, grading of this Issue is not required. Expert Except for the Auditors report as provided in the Draft Letter of Offer, the Company have not obtained any expert opinions. Subscription to the Issue by the Promoter and Promoter Group The Promoter has undertaken vide his undertaking dated March 1, 2011 to fully subscribe for their Rights Entitlement. The 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, the 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 the section “Basis of Allotment” under the chapter titled “Terms of the Issue” on page 185 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.

23

CAPITAL STRUCTURE

The capital structure of the 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 2,00,00,000 Equity Shares of Rs. 10/- each 2,000.00 B. Issued, Equity Share Capital 7,75000 Equity Shares of Rs. 10/- each 77.50 Subscribed and Paid up, Equity Share Capital 7,75000 Equity Shares of Rs. 10/- each 77.50 C. Present Issue being offered to the Equity Shareholders through the Draft Letter of Offer

1,55,00,000 Equity Shares of Rs. 10/- each at par i.e. at an Issue Price of Rs.10 each

1,550.00 1,550.00

D. Issued, subscribed and paid up capital after the Issue

1,62,75,000 Equity Shares of Rs. 10/- each fully paid up

1,627.50 1,627.50

E. Securities premium account Before the Rights Issue 49.36 After the Rights Issue 49.36

Changes in the authorised share capital

a. The authorised share capital of the Company on incorporation was Rs. 25, 00,000/- divided into 2,

50,000 Equity Shares of Rs. 10 each. b. The authorised share capital of the Company was subsequently increased to Rs. 2, 00, 00,000/- divided

into 20, 00,000 Equity Shares of Rs. 10 each by shareholders resolution dated November 30, 2006. c. Subsequently the authorized share capital of the Company was increased to Rs. 15, 00, 00,000/- divided

in 1, 50, and 00,000 Equity Shares of Rs. 10 each by shareholding resolution dated May 14, 2010. d. The authorized share capital was further increased to Rs. 20,00,00,000/- divided into 2,00,00,000 Equity

Shares of Rs. 10 each by the shareholders vide Postal Ballot on December 10, 2010.

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 20, 2010 and November 2, 2010 and subsequently by the shareholders vide postal ballot on December 10, 2010. Notes to the Capital Structure: 1. Share capital history a. Equity share capital history of the Company

Date of Allotment

Equity Shares

Number of

Equity Shares

Face Value

Issue Price Consideration

Nature of Allotment

Cumulative number of

Equity Shares

Cumulative Equity Share

Capital (Rs.)

Cumulative Share Premium

(Rs.)

February 19, 1981

70 10 10 Cash Initial allotment to subscription to the Memorandum (1)

70 700 Nil

April 28, 1981

93,500 10 10 Cash Preferential allotment (2)

93,570 9,35,700 Nil

August 22, 1981

1,50,000 10 10 Cash Equity allotted pursuant to initial public offer (3)

2,43,570 24,35,700 Nil

24

Date of Allotment

Equity Shares

Number of

Equity Shares

Face Value

Issue Price Consideration

Nature of Allotment

Cumulative number of

Equity Shares

Cumulative Equity Share

Capital (Rs.)

Cumulative Share Premium

(Rs.)

September 26, 2007

5,31,430 10 21 (including premium of

Rs. 11)

Cash Preferential allotment (4)

7,75,000 77,50,000 58,45,730

(1)An initial allotment of 10 Equity Shares each was made in favour of Mr. Banwarilal B. Banagira; Mr. Nandlal B. Nathuramkar, Mr. Ramesh R. Bajaria, Mr. Suresh M. Chandra Gupta, Mr. Sushil N. Tiberwala Mr. Gokul Chand B. Morarka and Mr. Suresh Pareek aggregating to 70 Equity Shares. (2) Preferential issue of 93,500 Equity Shares to 50 shareholders at a price of Rs. 10 per equity share. (3) Initial public offering of 1, 50,000 Equity Shares at a price of Rs. 10 per equity share. (4) Preferential allotment of 5,31,430equity share at Rs. 21 per equity share to Mr. Suyash Pandey (1,00,000), Mr. Ken Gosh (75,000), Acroplis (75,000), Deadline Advertising Private Limited (75,000), Ms. Manisha Choksey (50,000), Mr. June Malhotra (37,500), Mr. Vinodkumar Malhotra (37,500), Ms. Sonal Muni (25,000), Ms. Durriya Bengali (10,000), Mr. Yusuf Bengali (10,000), Mr. Lakshminivas Modani (6,430), Mr. Shabbir Lakdawala (5,000). 2. Promoter’s build up a. Equity share capital history of the Promoter

Name of

the Promoter

Date of Acquisition/Allotment/

transfer#

No. of Equity Shares

Face Value (Rs.)

Issue/Acquisition/Transfer

Price per Equity Share

(Rs.)@

Nature of Consideration

Reason for Allotment

Mr. Jimit Shah *

May 14, 2010

20,000 10 30 Cash Acquisition of control of the Company by the Promoter and his associates under Section 12 of Takeover Code.

* Mr. Jimit Shah (20,000 Equity Shares) along with Mr. Ramesh Shah (46,000 Equity Shares), Mrs. Pushpa Shah (25,000 Equity Shares) and Ms. Yesha Shah (13,500 Equity Shares) acquired 13.48% controlling stake in the Company aggregating to 1, 04,500 Equity Shares from erstwhile promoter Mr. Hozef Darukhanawala under regulation 12 of the Takeover Code and the same has been approved by the shareholders vide postal ballot on May 14, 2010. # The Equity Shares were fully paid up at the time of allotment. @ The cost of acquisition excludes the stamp duty paid, if any.

b. Promoter’s contribution and lock in of promoter shareholding

This Issue being a rights issue, promoter contribution and lock-in of promoter shareholding as set out in Part III and Part IV of SEBI ICDR Regulations is not applicable as per Regulation 34(c) of SEBI ICDR Regulations.

3. Shareholding Pattern

a. The shareholding pattern of the Company as on December 31, 2010 and the expected shareholding pattern

post the Rights Issue is as follows: Code Category of Shareholder No. of Equity

Shares % of Holding

(A) Shareholding of Promoter and Promoter Group (1) Indian (a) Individuals/ Hindu Undivided Family 104,500 13.48 (b) Central Government/ State Government(s) - - (c) Bodies Corporate - - (d) Financial Institutions/ banks - - (e) Trusts - - Sub-Total (A)(1) 104,500 13.48

25

(2) Foreign - - (a) Individuals (Non-Resident Individuals/ Foreign

non Individuals) - -

(b) Bodies Corporate - - (c) Institutions - - (d) Any other (specify) - - Sub-Total (A)(2) - - Total Shareholding of Promoter and Promoter

Group (A)= (A)(1)+(A)(2) 104,500 13.48

(B) Public Shareholding - - (1) Institutions - - (a) Mutual Funds/ UTI - - (b) Financial Institutions/ Banks - - (c) Central Government/ State Government(s) - - (d) Venture Capital Funds - - (e) Insurance Companies - - (f) Foreign Institution Investors - - (g) Foreign Venture Capital Investors - - (h) Any Other (specify)-Trusts - - Sub-Total (B)(1) - - (2) Non-institutions - - (a) Bodies Corporate - - (b) Individuals - - - i) Individual shareholders holding nominal share

capital upto Rs. 1 lakh. 1,94,970 25.16

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

4,75,530 61.36

(c) Any Other - Foreign Body Corporates - - Sub-Total (B)(2) 670,500 86.52 Total public shareholding (B)= (B)(1)+(B)(2) 670,500 86.52 TOTAL (A)+(B) 775,000 100.00 (C) Shares held by Custodians and against which

Depository Receipts have been issued

GRAND TOTAL (A)+(B)+(C) 775,000 100.00 4. Details of the shareholding of the Promoter and Promoter Group.

Pre-Issue Post-Issue

No. of Equity Shares

% No. of Equity Shares

%

A. Promoters Mr. Jimit Shah 20,000 2.58 [●] [●] Sub-Total 20,000 2.58 [●] [●] B. Promoter Group Mr. Ramesh Shah 46,000 5.93 [●] [●] Mrs. Pushpa Shah 25,000 3.22

[●] [●]Ms. Yesha Shah 13,500 1.74

[●] [●]Total (A+B) 1,04,500 13.48 [●] [●]

5. Details of shareholding by the Key Managerial Personnel in the Company

Except for Mr. Vipul Khona who owns 20,000 shares of the Company, none of its Key Managerial Personnel own Equity Shares of the Company.

6. Top ten shareholders The list of the top ten shareholders of the Company and the number of Equity Shares held by them is provided below: (a) The top ten shareholders of the Company and the number of Equity Shares held by them as on the date

of filing the Draft Letter of Offer are as follows:

26

Sr. No. Shareholder No. of Equity Shares Held Pre Issue % 1. Mr. Ramesh Shah 46,000 5.94 2. Mrs. Daksha Patel 37,500 4.84 3. Mr. Paresh A. Patel 27,030 3.49 4. Ms. Kalpana Pradip Shah 26,000 3.35 5. Mr. Ketan Rasiklal Seth 25,000 3.23 6. Mr. Narendra K Jajoo 25,000 3.23 7. Mrs. Pushpa Shah 25,000 3.23 8. Mr. Pravin N Shah 24,000 3.10 9. Mr. Gautam Shah 21,500 2.77 10. Mr. Shailesh Mithani 21,000 2.71

Total 2,78,030 35.89 (b) The top ten shareholders of the Company and the number of Equity Shares held by them ten days prior

to filing of the Draft Letter of Offer are as follows:

Sr. No. Shareholder No. of Equity Shares Held Pre Issue % 1. Mr. Ramesh Shah 46,000 5.94 2. Mrs. Daksha Patel 37,500 4.84 3. Mr. Paresh A. Patel 27,030 3.49 4. Ms. Kalpana Pradip Shah 26,000 3.35 5. Mr. Ketan Rasiklal Seth 25,000 3.23 6. Mr. Narendra K Jajoo 25,000 3.23 7. Mrs. Pushpa Shah 25,000 3.23 8. Mr. Pravin N Shah 24,000 3.10 9. Mr. Gautam Shah 21,500 2.77 10. Mr. Shailesh Mithani 21,000 2.71

Total 2,78,030 35.89

(c) The top ten shareholders of the Company and the number of Equity Shares held by them as of two years prior to filing the Draft Letter of Offer are as follows:

Sr. No. Shareholder No. of Equity Shares Held Pre Issue % 1. Mr. Hozef Darukhanawala 1,82,190 23.50 2. Mr. Suyash S Pandey 1,00,000 12.90 3. Mr. Ken Ghosh 75,000 9.67 4. Aacropolis 75,000 9.67 5. Deadline Advertising Private Limited 75,000 9.67 6. Ms. Manisha Choksey 50,000 6.45 7. Mr. June Malhotra 37,500 4.83 8. Mr. Vinodkumar Malhotra 37,500 4.83 9. Ms. Sonal Muni 25,000 3.22 10. Mr. Pramod Basrur 25,000 3.22

Total 482,192 87.96

7. There has been no financing arrangement whereby the Company, promoter group, Promoters, Directors and their relatives have financed the purchase by any other person of securities of the Company during the six months immediately preceding the date of the Draft Letter of offer.

8. The Company, its Promoter, Promoter Group, its Directors and the Lead Manager to this Issue have not

entered into any buy-back arrangements or any other arrangements for purchase of Equity Shares issued by the Company through the Draft Letter of Offer. Further the Company has not entered into any safety net arrangement.

9. There has been no purchase or sale of Equity Shares by the Promoter Group and/or by the directors of the

Company who is also Promoter of the Company and by directors of the Company and their immediate relatives (as defined under sub-clause (ii) of clause (zc) of sub-regulation (10 of regulation (2) of SEBI ICDR Regulations) within six months immediately preceding the date of the Draft Letter of Offer.

10. The Company has not issued any Equity Shares for consideration other than cash. 11. The securities being offered in the Issue are on fully paid – up basis.

27

12. All the existing Equity Shares of the Company are fully paid –up. 13. The Company does not have any ESOP/ESOS scheme as on date. 14. Total number of members of the Company as on February 25, 2011 is 236. 15. 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. 16. Except preferential allotment made on September 26, 2007 according to SEBI ICDR Regulations to certain

shareholders as stated in “Notes to Capital Structure- Share Capital History” above there has been no preferential allotment or bonus issue of specified securities or qualified institutional placement made by the Company since its listing.

17. There would be no further issue of capital whether by way of issue of bonus shares, preferential allotment,

rights issue or in any other manner during the period commencing from submission of the Draft Letter of Offer until the Equity Shares issued are listed or application moneys refunded on account of failure of Issue. 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.

18. The Company presently does not intend to alter its capital structure for a period of six months from the Bid/

Issue Opening Date, by way of split or consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares) on a preferential basis or issue of bonus or rights or further public issue of Equity Shares or qualified institutions placement or otherwise, or if the Company enters into acquisitions, joint ventures or other arrangements, subject to necessary approvals, consider raising additional capital to fund such activity or use Equity Shares as currency for acquisition or participation in such joint ventures.

19. The Equity Shareholders do not hold any warrants, options or any other convertible instruments which

would entitle them to acquire further Equity Shares. 20. 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. 21. The Company has never revalued its assets and has never issued any Equity Shares out of revaluation

reserves. 22. The Promoter has undertaken vide his undertaking dated March 1, 2011 to fully subscribe for their Rights

Entitlement. The 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 the 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” under the chapter titled “Terms of the Issue” on page 185 of the Draft Letter of Offer.

23. We have not allotted any Equity Shares in terms of any scheme approved under Sections 391-394 of the

Companies Act. 24. 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.

28

25. The Promoter has not pledged any shares held in the Company. 26. The Lead Manager to the Issue does not hold any Equity Shares in the Company.

29

OBJECTS OF THE ISSUE

The objects of this Issue are to meet the following: • To part finance investment in the Subsidiary, Zodiac Developers Private Limited to acquire 50.98% stake in

its equity capital for funding acquisition of land and land development rights and development of real estate; • General corporate purposes The main objects clause and objects incidental or ancillary to the main clause of the Memorandum of Association of the Company enables it to undertake the existing activities and the activities for which the funds are being raised by it through this Issue. Further, the Company confirms that the activities carried out by it to date have been in accordance with the objects clause of its Memorandum of Association. The details of the proceeds of the Issue are summarised in the table below:

(Rs. in lakhs) Particulars Amount Issue Proceeds 1,550 Issue related expenses 25 Net Proceeds 1,525

Fund Requirement

The following table summarises the intended use and deployment of the Net Proceeds: ` (Rs. in lakhs)

Sr. No.

Particulars Total Cost

Funds deployed in the financial year ending 2011-12

A. Investment in Subsidiary, ZDPL 1,352 1,352 B. General corporate purpose 173 173

TOTAL 1,525 1,525 Means of Finance The entire requirement of funds is proposed to be funded through the proceeds of the Issue. In case of shortfall, if any, the same shall be met out of internal accruals. The fund requirements are based on internal management estimates and have not been appraised by any bank or financial institution or any other independent agency. These are based on current conditions and are subject to change on account of changes in external circumstances or costs, business situations etc. The Company operates in an evolving, increasingly competitive and dynamic market and may have to revise its estimates from time to time on account of new projects, modifications in existing planned developments and the initiatives which it may pursue, including any industry consolidation opportunities, such as acquisition. It may also reallocate expenditure to newer projects or those with earlier completion dates in the case of delays in its ongoing and planned projects. Consequently, the fund requirements of the Company may also change accordingly. Any such change in its plans may require rescheduling of its expenditure programs, starting projects which are not currently planned, discontinuing projects which are currently planned and increasing or decreasing in the expenditure for a particular project or land acquisition or land development rights in relation to current plans, at the discretion of the management of its Company. In case of any shortfall or cost overruns, the Company intends to meet its estimated expenditure from internal accruals through cash flow from its operations, and debt, as required. Details of the Objects A. Investment in our Subsidiary, Zodiac Developers Private Limited

Substantial part of the objects of the Issue is proposed to be utilised towards part financing our investment in the share capital of our Subsidiary, Zodiac Developers Private Limited. ZDPL was incorporated in the year 1995 and has been developing real estate since 1997. Till date it has completed 3 residential projects and has an Ongoing Project and 4 Planned Projects the details of which are given as under:

30

Completed Projects Project Type Location Built-Up Area

(Sq. ft.) Saleable Area

(Sq. ft.) Project start

date Project

Completion date Jupiter Residential Vile Parle 7,517.36 9,094 March 1997 July 2001 Venus Residential Vile Parle 9,478.24 12,030 December

1999 November 2000

Kushinara Residential (Slum

Rehabilitation land)

Bandra 37,839.55 21,223 June 2004 June 2009

Total 54,835.15 42,347

Type Ongoing Project

Location Estimated Built-up area

Estimated Saleable Area

Date of Commencement

Date of Completion

Residential (Slum Rehabilitation Land)

Hanuman Nagar, Juhu 3,83,868.35 1,11,934.83 1998 2014

Sub total 3,83,868.35 1,11,934.83 Type Proposed Project

Location Estimated Built-Up area

Estimated Saleable Area (Sq. ft.)

Date of Commencement

Date of Completion

Residential (Redevelopment/ Reconstruction on land in possession of MCGM)

Babu Genu Nagar 7,78,870.98 2,30,907.04 1999(4) 2015

Residential(Slum Rehabilitation Land)

Indira Nagar 1,81,319.58 1,22,935.64 2012 2015

Residential (Redevelopment/ Reconstruction on land in possession of MCGM)

Vile Parle (East) 16,504.88 29,708.78 2011 2014

Residential Bandra (East) 5,855.62 10,540.11 2011 2013 Total 9,82,551.06

3,94,091.57

The Company’s Promoter Mr. Jimit Shah and its Chairman Mr. Ramesh Shah have identified a business opportunity in ZDPL which have certain profitable Ongoing Project and plans to invest in it. As per the valuation report of Navin Nishar & Associates dated January 28, 2010 the enterprise value of ZDPL is Rs. 6,649 lakhs and the per share value is Rs. 651 per share, however our Board has decided to acquire 50.98% stake in its equity capital @ Rs. 300/- per share. Nature of benefits to accrue to the Company as a result of investment in ZDPL

Through the acquisition of equity share in ZDPL the following benefits are expected to accrue:

• As ZDPL, is our Subsidiary, to consolidate its financial and business operations with that of the Company. • The Company by virtue of the holding Company of ZDPL shall have effective control over ZDPL, which is

engaged in construction development of the Company’s key projects stated above. • The Company shall derive benefits from our Subsidiary, to the extent of its shareholding in the Subsidiary. • Any growth in the business of our Subsidiary will bring in larger dividends or higher valuation of the

equity investments of ZVL.

The consideration to be paid by the Company for the aforesaid acquisition of 50.98% stake is Rs. 1,560 Lakhs valued at Rs. 300 per share of ZDPL. As on December 15, 2010, the Company has deployed Rs. 208 Lakhs at Rs. 40/- per share, of which Rs. 10/- per share is paid towards its face value and Rs. 30/- per share towards the premium. The balance uncalled amount of Rs. 1,352 Lakhs is proposed to be funded through the proceeds of the Issue.

The investment will be utilized for acquisition of land and land development rights and development of real estate of the Subsidiary. The Company aims to strengthen Zodiac Developers Private Limited’s position in existing markets and also make in-roads into new markets, which are in line with its strategy of building land reserves.

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Requirement of funds in Zodiac Developers Private Limited for development of real estate projects The Company proposes to invest Rs. 1,352 Lakhs from the Net Proceeds of the Issue in Zodiac Developers Private Limited to fund its Ongoing Project as well as Planned Projects. The total funds required for the new projects have not been appraised by any appraising agency. ZDPL intends to undertake real estate development activities in order to capitalize the growth and development opportunities available in this sector. The real estate development sector has shown an increase in demand in the past few years. With the increased economic activities and the surging growth rate, the requirement for housing units is showing a healthy trend particularly in metros and other cities. The Government is also encouraging house ownership by providing tax benefits and the financial sector is playing a key role by providing adequate resources. B. General Corporate Purpose The Company, in accordance with the policies set up by its Board, will retain flexibility in applying Rs. 173 Lakhs out of the Issue Proceeds, for general corporate purposes, expansion of its operations domestically and/or internationally through organic or inorganic route, as may be available. The Company’s management, in accordance with the policies of its 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. In case of a shortfall in the Issue Proceeds of the Issue, the Company’s management may explore a range of options including utilizing its internal accruals or seeking debt from future lenders. The management expects that such alternate arrangements would be available to fund any such shortfall. The management, in accordance with the policies of its Board, will have flexibility in utilizing the proceeds earmarked for general corporate purposes C. Issue Expenses The expenses for this Issue include Lead Managers fees, printing and distribution expenses, legal fees, registrar fees, depository charges and listing fees to the Stock Exchanges, among others. The total expenses for this Issue are estimated to be approximately Rs. 25 lakhs as per the following break up:

(Rs. In Lakhs) Activity Expenses Lead management and Legal Fees 21.00Printing and stationery (including courier and transportation charges and Registrar Fees) 1.00Others (Advertisement, listing costs, etc.) 3.00Total 25.00 Appraisal None of the Objects have been appraised by any bank or financial institution or any other independent third party organization. Funds deployed The Company has not deployed any funds towards any of the above mentioned activities till date. Schedule of Implementation The proceeds of the Issue shall be utilized for the objects specified above. As estimated by the Company’s management, the entire proceeds from the Issue will be utilized in the financial year 2011-12. Bridge loans or any other financial arrangements The Company has not raised any bridge loans against the Issue Proceeds, further the Company has not made any other financial arrangements, which are to be repaid from the Issue Proceeds

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Interim Use of Proceeds The management of the Company, in accordance with policies established by its Board from time to time, will have flexibility in deploying the Issue Proceeds. Pending utilization for the purposes described above, the intends to invest the funds in high quality liquid instruments including money market mutual funds, deposits with banks, for the necessary duration or for reducing overdrafts. The Company confirms that pending utilization of the Issue proceeds; it shall not use the funds for any investments in the equity markets. Monitoring of Utilization of Funds The Board will monitor the utilization of the Issue Proceeds. As per Clause 49 of the listing agreements with the Stock Exchange, the Company shall disclose to its Audit Committee, the uses / applications of funds on a quarterly basis as a part of our quarterly declaration of financial results. Further, the Company shall, on a quarterly basis, prepare a statement indicating material deviations, if any, in the use of Issue proceeds. Such statement shall be furnished to the Stock Exchange along with the interim and / or annual financial statements and shall be published in the newspapers simultaneously with the interim or annual financial results, after placing it before our Audit Committee. No part of the Issue Proceeds will be paid as consideration to Promoter, Directors, Key Managerial Personnel, Associates and Group Companies, except to the extent of amount as invested in our Subsidiary as stated in the Objects of the Issue or as incurred in the normal 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 chapter for fiscal 2008, 2009 and 2010 are derived from the Company’s restated audited summary financial statements, prepared in accordance with Indian GAAP and the Companies Act and restated in accordance with the SEBI Regulations. You should read the following summary with the chapter titled “Risk Factors”, “Our Business” and “Financial Information” on pages x, 51 and 109 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.

Specific attention of the investors is drawn to the chapter titled “Risk Factors” and “Financial Information” on pages x and 109 respectively, of the Draft Letter of Offer to have a more informed view about the investment proposition.

Qualitative Factors

• Foresight to acquire quality of Land Reserves at competitive prices and construct innovative projects • Strong internal process enhancing the quality of construction • Professionally managed company with an experienced management and a qualified employee base • Concentration in regional space

For further details regarding some of the qualitative factors, please refer to chapter titled “Our Business” beginning on page 51 of the Draft Letter of Offer.

Quantitative Factors

Information presented in this chapter is derived from our restated audited financial statements.

1. Weighted Average Earnings Per Share (Basic EPS)

Period Consolidated

(Rs.) Standalone

(Rs.) Weight

FY 2007-08 NA 0.12 1 FY 2008-09 NA 0.68 2 FY 2009-10 NA 1.34 3 Weighted Average 0.92 December 31, 2010 1.97 1.37 -

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

Particulars Consolidated Standalone P/E ratio based on Basic EPS of Rs 1.34 for Fiscal 2010 NA 7.46 P/E ratio based on Weighted Average EPS of Rs. 0.92 NA 10.91 P/E ratio based on Basic EPS of Rs 1.37(standalone) and Rs. 1.97(consolidated) for nine months period ended December 31, 2010

5.07 7.29

Peer Group

Particulars P/E Ratio Industry P/E# Highest (Sunteck Realty Ltd.) 397.80 Lowest (Marathon NextGen Realty Ltd.) 3.00 Average 16.90 Source: Capital Market volume no. XXV/25 dated February07-20, 2011, Industry-Construction

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3. Weighted Average Return On Net Worth

Period Consolidated (%) Standalone (%) Weight

FY 2007-08 NA 0.34 1 FY 2008-09 NA 2.84 2 FY 2009-10 NA 5.56 3 Weighted Average 3.78 December 31, 2010 8.35 5.76 -

4. The minimum return on increased net worth required to maintain pre-Issue EPS (Standalone) of Rs. 1.34 as

on March 31, 2010 is 12.56%.

5. Net Asset Value (NAV)

Particulars NAV (Rs.) As on March 31, 2009 (Standalone) 23.94 As on March 31, 2010 (Standalone) 24.11 Post - Rights Issue (Assuming 100% Subscription) 11.21 Issue Price Rs. 10

6. Comparison with other listed companies

Sales (Rs. in Cr)

EPS (Rs.)

P/E Return On Net Worth

(%)

Book Value Per Share (Rs.)

Face Value (Rs.)

Ansal Properties & Infrastructure Ltd.

723.50 4.00 9.00 5.80 96.60 5

D.S. Kulkarni Developers Ltd.

151.00 8.30 8.80 5.00 173.60 10

Marathon NextGen Realty Ltd.

213.20 77.90 3.00 61.60 163.00 10

Ashiana Housing Ltd. 105.40 18.40 6.70 33.40 65.20 10 Ganesh Housing Corporation Ltd.

100.60 14.30 8.30 9.90 153.50 10

# Source: Capital Market volume no. XXV/25 dated February 07-20, 2011, Industry-Construction In view of the reasons mentioned above, the 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 Zodiac Ventures Limited 404, Dev Plaza, 68, S.V. Road, Andheri (W), Mumbai- 400 058 Sub: Rights Issue of your Company Dear Sirs, We hereby certify that the enclosed annexure states the possible tax benefits available to Zodiac Ventures Limited (the “Company”) and to the Shareholders of the Company under the provisions of the Income Tax Act, 1961 (provisions of Finance Act, 2010), and other direct and indirect tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its Shareholders to derive 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 fulfil. The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. 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. A shareholder is advised to consider in his/her/its own case, the tax implications of an investment in the equity shares particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the benefits, which an investor can avail. We do not express any opinion or provide any assurance as to whether: The Company or its shareholders will continue to obtain these benefits in future; or the conditions prescribed for availing the benefits have been / would be met with. The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. This report is intended solely for your information and for the inclusion in the offer Document in connection with the proposed rights issue of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent. For A. R. Sodha & Co. Chartered Accountants FRN 110324W A. R. Sodha (Partner) M. No.: 31878 Date: December 24, 2010 Place: Mumbai

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TAX BENEFITS The tax benefits listed below are the possible benefits available under the current tax laws in India. Several of these benefits are dependent on the Company or its Shareholders fulfilling the conditions prescribed under the relevant tax laws. 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 it faces in the future, it may not choose to fulfil. SPECIAL TAX BENEFITS There are no such special tax benefits available to Zodiac Venture Limited and its Shareholders. GENERAL TAX BENEFITS As per the existing provisions of the IT Act and other laws, as applicable for the time being in force, the following general tax benefits and deductions are and will, inter alia, be available to the Company and its prospective shareholders. The below mentioned general tax benefits will be available to any company or its shareholders upon satisfaction of certain conditions under the relevant provisions of the IT Act and other laws. BENEFITS AVAILABLE UNDER THE INCOME TAX ACT, 1961 TO THE COMPANY: Dividends exempt under Section 10(34) 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, 2003 is completely exempt from tax in the hands of the Company, under section 10(34) of the IT Act. Income from units of Mutual Funds exempt under Section 10(35) The Company will be eligible for exemption of income received from units of mutual funds specified under Section 10(23D) of the Act, income received in respect of units from the Administrator of specified undertaking and income received in respect of units from the specified company in accordance with and subject to the provisions of Section 10(35) of the Act. Premium Paid on Health Insurance under Section 36(1) (ib) In terms of section 36(1)(ib) of the Act, with effect from April 1, 2007, the amount of any premium paid by cheque by the assessee as an employer to effect or to keep in force an insurance on the health of his employees under a scheme framed in this behalf by –

• the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalization) Act,1972 and approved by the Central Government; or

• any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 is deductible expenditure and will accordingly apply in relation to the assessment year 2009-10 and subsequent years.

Exemption of Long-Term Capital Gain under Section 10(38) According to section 10(38) of the Act, long-term capital gains on sale of equity shares or units of an equity-oriented fund where the transaction of sale is chargeable to Securities Transaction Tax (“STT”) shall be exempt from tax. However, the aforesaid income shall be taken into account in computing the book profit and income tax payable under section 115JB. Exemption of Long Term Capital Gain under Section 54EC According to the provisions of section 54EC of the Act and subject to the conditions specified therein, capital

37

gains not exempt under section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds, subject to a ceiling of Rs. 50 lakhs, within six months from the date of transfer. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. Lower Tax Rate under Section 111A on Short-Term Capital Gains As per the provisions of Section 111A of the Act, short-term capital gains on sale of equity shares or units of an equity oriented fund where the transaction of sale is chargeable to Securities Transaction Tax (“STT”) shall be subject to tax at a rate of 15 per cent (plus applicable surcharge and education cess). 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). Benefits under Section 115JAA Under Section 115JAA (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 10 years succeeding the year in which the MAT becomes allowable. Minimum Alternate Tax (“MAT”) under Section 115JB Under Section 115JB of the Act, in case of a company, if the tax payable on the total income as computed under the normal provision of Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the April 1, 2001 is less than seven and one half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable for the relevant previous year shall be seven and one-half per cent of such book profit. For the Assessment Year 2007-08, if the tax payable on the total income as computed under the Income-tax Act is less than 10% of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable shall be ten percent of such book profit. For the Assessment Year 2010-11, if the tax payable on the total income as computed under the Income-tax Act is less than 15% of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable shall be fifteen percent of such book profit. However, with effect from April 1,2011 i.e., in relation to the Assessment Year 2011-12 and subsequent years, if the tax payable on the total income as computed under the Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the April 1, 2011 is less than 18% of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable for the relevant previous year shall be eighteen per cent of such book profit. BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS: Exemption under Section 10(34) Dividend (whether interim or final) declared, distributed or paid by the Company is completely exempt from tax in the hands of the shareholders of the Company as per the provisions of Section 10(34) of the IT Act. Exemption of Long-Term Capital Gain under Section 10(38) Under Section 10(38) of the Act, long term capital gain arising to the shareholder from transfer of a long term

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capital asset being an equity share in the company or unit of an equity oriented mutual fund (i.e. capital asset held for the period of twelve months or more) entered into in a recognized stock exchange in India and being such a transaction, which is chargeable to Securities Transaction Tax, shall be exempt from tax. Exemption of Long Term Capital Gain under Section 54EC According to the provisions of Section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under Section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds, subject to a ceiling of Rs. 50 lakhs, within six months from the date of transfer. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. Exemption of Long term Capital Gain under Section 54F According to the provisions of Section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains arising on transfer of a long term capital asset ((not covered by sections 10(38)) and not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. For this 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. Lower Tax Rate under Section 111A on Short-Term Capital Gains As per the provisions of Section 111A of the Act, short-term capital gains on sale of equity shares where the transaction of sale is chargeable to Securities Transaction Tax shall be subject to tax at a rate of 15% plus applicable surcharge and education cess). 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 or zero coupon bond, 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). BENEFITS AVAILABLE TO NON RESIDENTS/ NON-RESIDENT INDIAN SHAREHOLDERS (OTHER THAN MUTUAL FUNDS, FIIS AND FOREIGN VENTURE CAPITAL INVESTORS) Exemption under Section 10(34) Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to in Section 115-O of the Act is exempt from income tax in the hands of the shareholders. Exemption under Section 10(38) Under Section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or unit is chargeable to Securities Transaction Tax. Exemption of Long Term Capital Gain under Section 54EC According to the provisions of Section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under Section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds, subject to a ceiling of Rs. 50 lakhs, within six months from the date of transfer. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital

39

gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. Exemption of Long Term Capital Gain under Section 54F According to the provisions of Section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains arising on transfer of a long term capital asset ((not covered by Sections 10(38)) and not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. For this 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. Lower Tax Rate under Section 111A on Short-Term Capital Gains Under Section 111A of the Act and other relevant provisions of the Act, short-term capital gains (i.e., if shares are held for a period not exceeding 12 months) arising on transfer of equity share in the Company would be taxable at a rate of 15% (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to securities transaction tax. Short-term capital gains arising from transfer of shares in a Company, other than those covered by Section 111A of the Act, would be subject to tax as calculated under the normal provisions of the Act. Lower Tax Rate under Section 112 on Long-Term Capital Gains Under Section 112 of the Act and other relevant provisions of the Act, long term capital gains, (other than those exempt under Section 10(38) of the Act) arising on transfer of shares in the Company, would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess) after indexation. The amount of such tax should however be limited to 10% (plus applicable surcharge and education cess) without indexation, at the option of the shareholder, if the transfer is made after listing of shares. Where shares of the Company have been subscribed in convertible foreign exchange, Non- Resident Indians (i.e. an individual being a citizen of India or person of Indian origin who is not a resident) have the option of being governed by the provisions of Chapter XII-A of the Act, which inter alia entitles them to the following benefits: Under Section 115E, where the total income of a non-resident Indian includes any income from investment such income shall be taxed at a concessional rate of 20 per cent (plus applicable surcharge and education cess). Also, where shares in the company are subscribed for, in convertible foreign exchange by a Non-Resident India, long-term capital gains arising to the non-resident Indian shall be taxed at a concessional rate of 10 percent (plus applicable surcharge and education cess). The benefit of indexation of cost and the protection against risk of foreign exchange fluctuation would not be available. Under provisions of Section 115F of the Act, long term capital gains (in cases not covered under Section 10(38) of the Act) arising to a non-resident Indian from the transfer of shares of the Company subscribed to in convertible Foreign Exchange shall be exempt from Income tax, if the net consideration is reinvested in specified assets or in any savings certificates referred to in Section 10(4B), within six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition. Under provisions of Section 115G of the Act, it shall not be necessary for a Non- Resident Indian to furnish his return of income under Section 139(1) if his income chargeable under the Act consists of only investment income or long term capital gains or both; arising out of assets acquired, purchased or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from as per the provisions of Chapter XVII-B of the Act. As per Section 90(2) of the Act, provisions of the Double Taxation Avoidance Agreement between India and the country of residence of the Non-Resident/ Non- Resident India would prevail over the provisions of the Act to the extent they are more beneficial to the Non-Resident/ Non-Resident India.

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BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FIIs’) Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to in Section 115-O of the Act is exempt from income tax in the hands of the shareholders. Under Section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or unit is chargeable to Securities Transaction Tax. However, the aforesaid income shall be taken into account in computing the Book profit and income tax payable under section 115JB. According to the provisions of Section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under Section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds, subject to a ceiling of Rs. 50 lakhs, within six months from the date of transfer. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. The income by way of short term capital gains or long term capital gains (in cases not covered under Section 10(38) of the Act) realized by FIIs on sale of securities the company would be taxed at the following rates as per Section 115 AD of the Act. Short term capital gains, other than those referred to under Section 111A of the Act shall be taxed @ 30% (plus applicable surcharge and education cess). Short term capital gains, referred to under Section 111A of the Act shall be taxed @ 15 (plus applicable surcharge and education cess) Long Term capital gains @ 10% (plus applicable surcharge and education cess) (without cost indexation) It may be noted here that the benefits of indexation and foreign currency fluctuation protection as provided by Section 48 of the Act are not applicable. As per Section 90(2) of the Act, provisions of the Double Taxation Avoidance Agreement between India and the country of residence of the FII would prevail over the provisions of the Act to the extent they are more beneficial to the FII. BENEFITS AVAILABLE TO MUTUAL FUNDS As per the provisions of Section 10(23D) of the Act, any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there under, Mutual Funds set up by public sector banks or public financial institutions or authorized by the Reserve Bank of India would be exempt from income tax. However, the Mutual Funds shall be liable to pay tax on distributed income to unit holders under Section 115R of the Act. BENEFITS AVAILABLE UNDER THE WEALTH TAX ACT, 1957 Shares of the Company held by the shareholder will not be treated as an asset within the meaning of Section 2(ea) of Wealth Tax Act, 1957, hence no Wealth Tax will be payable on the market value of shares of the Company held by the shareholder of the Company. Notes: 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 above Statement of Possible Direct Tax Benefits sets out the possible tax benefits available to the Company and its shareholders under the current tax laws as amended by the Finance Act, 2010 presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws;

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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, 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; In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile; and The stated benefits will be available only to the sole/first named holder in case the shares are held by joint shareholders. In view of the individual nature of tax consequences, each investor is advised to consult his/her own tax advisor with respect to specific tax consequences of his/her participation in the issue. A. R. Sodha & Co. Chartered Accountants FRN 110324W A. R. Sodha (Partner) M. No.: 31878 Date: December 24, 2010 Place: Mumbai

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SECTION IV – ABOUT US

INDUSTRY OVERVIEW

The information in this chapter is derived from various government publications, industry sources and other public sources. Neither the Company, the Lead Manager, nor any other persons connected with the Issue have verified this information or makes any representation to the accuracy of this information. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but that their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and, accordingly, investment decisions should not be based on such information The Indian Economy India is the world’s largest democracy in terms of population, with India’s National Commission on Population estimating a population of 1,164 million people as of September 02, 2010. (Source: http://populationcommission.nic.in/) The Reserve Bank had projected the real GDP growth for 2009-10 at 7.5 per cent. The advance estimates released by the Central Statistical Organization (CSO) in early February 2010 placed the real GDP growth during 2009-10 at 7.2 per cent. The final real GDP growth for 2009-10 may settle between 7.2 and 7.5 per cent. (Source: RBI Annual Policy Statement for the Year 2010-11) India has also emerged as a leading destination for foreign investment in the same time as its economy is experiencing strong growth momentum. The growth is attributed to its stable political outlook, growing foreign exchange reserves, sustained growth in services and industrial sectors, young demographic profile and regulated financial environment. Further underlying the growth fundamentals are positive economic indicators such as a stable 7%-8% annual Gross Domestic Product (GDP) growth, rising foreign exchange reserves (as of Aug 27, 2010 US$ 282.842 billion), positive FDI equity inflow (estimated to be US$ 5.80 billion for 2010-11 (up to June 2010 Provisional), and more than 20% growth in exports per annum. As per data from RBI Annual Policy Statement for the Year 2010-11, the uptrend in industrial activity has continued. The index of industrial production (IIP) recorded a growth of 17.6 per cent in December 2009, 16.7 per cent in January 2010 and 15.1 per cent in February 2010. The recovery has also become more broad-based with 14 out of 17 industry groups recording accelerated growth during April 2009-February 2010. The sharp pick-up in the growth of the capital goods sector, in double digits since September 2009, points to the revival of investment activity. After a continuous decline for eleven months, imports expanded by 2.6 per cent in November 2009, 32.4 per cent in December 2009, 35.5 per cent in January 2010 and 66.4 per cent in February 2010. The acceleration in non-oil imports since November 2009 further evidences recovery in domestic demand. After contracting for twelve straight months, exports have turned around since October 2009 reflecting revival of external demand. Various lead indicators of service sector activity also suggest increased economic activity. On the whole, the economic recovery, which began around the second quarter of 2009-10, has since shown sustained improvement.

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GROWTH RATE OF REAL GDP@

Table 1: Economic Growth indicators (Source: Central Statistical Organisation; RBI Q2 review 2009-10) However, the developments on the inflation front are worrisome. The headline inflation, as measured by year-on-year variation in Wholesale Price Index (WPI), accelerated from 0.5 per cent in September 2009 to 9.9 per cent in March 2010, exceeding the Reserve Bank’s baseline projection of 8.5 per cent for March 2010 set out in the Third Quarter Review. Year-on-year WPI non-food manufactured products (weight: 52.2 per cent) inflation, which was (-) 0.4 per cent in November 2009, turned marginally positive to 0.7 per cent in December 2009 and rose sharply thereafter to 3.3 per cent in January 2010 and further to 4.7 per cent in March 2010. Year-on-year fuel price inflation also surged from (-) 0.7 per cent in November 2009 to 5.9 per cent in December 2009, to 8.1 per cent in January 2010 and further to 12.7 per cent in March 2010. Despite some seasonal moderation, food price inflation remains elevated. (Source: RBI Annual Policy Statement for the Year 2010-11) THE INDIAN REAL ESTATE SECTOR Overview Indian real estate sector plays a significant role in the country’s economy. This sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). The size is estimated at US$ 16 billion, growing at the rate of 30% per annum. Total size of the industry in terms of economic value of development activity is estimated at US$ 40-45 billion representing about 5% of India’s GDP. In the next five years, this contribution to the GDP is expected to rise to 6 per cent. It is expected to reach a size of US$ 180 billion by 2020. According to the report of the Technical Group on Estimation of Housing Shortage, an estimated shortage of 26.53 million houses during the Eleventh Five Year Plan (2007-12) provides a big investment opportunity. The real estate sector in India is on a rapid growth trajectory. The Indian real estate industry is expected to reach a size of US$ 180 billion by 2020. Growing penetration of mortgage finance into the urban housing finance market is now evident. The current contribution of real estate to India’s GDP is about 5 per cent. The gamut of the Indian real estate sector includes the development of land, commercial offices, industrial facilities, hotels, restaurants, cinemas, residential housing, trading spaces such as retail outlets and the purchase and sale of land and land development rights sector also encompass activities in the housing and construction sector. The following factors affect demand and supply in the real estate sector: Economic growth: As discussed above, the IMF projects positive growth for the Indian economy during calendar year 2010. India’s growth is expected to be faster than that of both the advanced and the developing economies as a whole (Source: IMF, World Economic Outlook Update, October 2009).

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Demographic profile: The earning population of India (persons in the 20-59 age bracket) is expected to increase as a percentage of overall population. This increase in expected to result in greater demand for housing. Interest rates and credit take-off: Key interest rates have been reduced by the RBI over the last year, causing a lowering of interest rates by banks, increased credit off-take and improvement in the real estate markets. The lowering of interest rates is expected to lead to increased new home purchases, since a large portion of new house acquisitions are financed through banks and financial institutions. India’s lack of dependence on foreign demand from consumers has been the key advantage for India as it has managed to avoid the severe recession that has hit most other Asian countries. Historically, the real estate sector in India was unorganized and characterized by various factors that impeded organized dealing, such as the absence of a centralized title registry providing title guarantees, a lack of uniformity in local laws and their application, non-availability of bank financing, high interest rates and transfer taxes and the lack of transparency in transaction values. In recent years, the real estate sector in India has exhibited a trend towards greater organization and transparency through various regulatory reforms such as the enactment of the Urban Land (Ceiling and Regulation) Repeal Act, 1999, modifications to the rent control statutes to provide greater protection to home owners wishing to rent out their properties, the rationalization of property taxes in a number of states, the proposed conversion of land records into electronic form and FDI being permitted in the real estate sector, subject to certain conditions, including lock-ups. Regulatory changes liberalising FDI inflows are expected to further facilitate investment in the Indian real estate sector. The Government in March 2005 amended existing legislation to allow 100% FDI in the construction business. The increase in FDI inflows is expected to help meet the demand for financing in the real estate industry. As of June 30, 2009, RBI had extended permission for corporate organisations engaged in the development of integrated townships of at least 100 acres to undertake external commercial borrowing through December 31, 2009. According to the report of the Technical Group on Estimation of Housing Shortage, an estimated shortage of 26.53 million houses during the Eleventh Five Year Plan (2007-12) provides a big investment opportunity. Growing penetration of mortgage finance into the urban housing finance market is now evident. According to the data released by the Department of Industrial Policy and Promotion (DIPP), housing and real estate sector including cineplex, multiplex, integrated townships and commercial complexes etc, attracted a cumulative foreign direct investment (FDI) worth US$ 8.4 billion from April 2000 to April 2010. FDI equity inflow accrued to a total of Rs. 646.6 billion from January – August 2009. FDI inflow was directed to a broad range of industries in India; however, as indicated in the table below, during the two most recent fiscal years, the housing and real estate sector attracted a significant amount of foreign investment (Rs. 126 billion in 2008-2009), second only to foreign investment in the services sector.

(Source: Department of Industrial Policy and Promotion) FDI inflows into the real estate sector dropped significantly in the last two quarters of 2008 but have recently gained momentum, with an increase of nearly 28% since the second half of 2008. The cumulative FDI inflow from April 2000-June 2009 was US$ 6,693 million in the housing and real estate sector, as shown in the table below:

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(Source: Department of Industrial Policy and Promotion) As indicated in the table above, for 2009-2010, FDI inflows to the housing and real estate sector are expected to be approximately US$ 1,181 million, with Maharashtra continuing to be the most favoured location for investment amongst the institutional investors. The sector witnessed FDI amounting US$ 2.8 billion in the fiscal year 2009-10 and is expected to witness an increase of US$ 21 billion from the current values over the next 10 years. Net sales of the real estate industry shot up by 78.3% in the June 2010 quarter. The PBDIT of the industry grew by a robust 72.3%. The growth in PAT was even better at 119%. Almost 80% of real estate developed in India is residential space, the rest comprising of offices, shopping malls, hotels and hospitals. According to the Tenth Five Year Plan of India, there is a shortage of 22.4 million dwelling units. Property prices to stabilize in second half of 2010-11 Real Estate Property prices are expected to stabilize in the second half of 2010-11 across major Indian cities. After the hike of an average 25-30 per cent in most cities in the last one year, prices have already reached the peak levels that were last seen in 2007-08, especially in metros like Mumbai, Delhi and the NCR region. As prices are already sky high, we believe that a further appreciation of even 5-10 per cent will make residential property unaffordable, which can drive away home buyers and stymie the recovery in the real estate sector. In August 2010, most banks hiked their benchmark prime lending rates (BPLRs) by around 50 basis points. This hike will make home loans costlier. However, we do not expect this to have any significant impact on demand for residential property. This is because the general affordability has increased on account of an improvement in job scenario and an increase in tax slabs in the budget for 2010-11. Moreover, banks have kept the base rate, which will be charged to the new customers, unchanged. Demand for property across India is expected to surge in the coming 2-3 months on account of festive season, when developers achieve the highest sales volumes. If real estate companies refrain from raising property rates very sharply, they are expected to register a robust growth in sales in the December 2010 quarter. Key Characteristics of the Real Estate Sector The Indian real estate sector has traditionally been dominated by a number of small regional or local players with limited levels of expertise. The sector has previously seen limited inflow of institutional capital and had used high net-worth individuals and other informal sources of financing as the major source of funding, which lead to low levels of transparency. However, this is rapidly changing as the sector is witnessing higher growth rates and significantly improved quality expectations as India becomes more integrated with the global economy. The growth witnessed by the Indian real estate sector is mainly influenced by the high GDP growth of India, increased urbanization, an expanding middle class as well as growth across various sectors such as IT/ITES, retail, consumer durables, automobiles, telecom, banking, insurance, tourism, hospitality and logistics. Some of the key characteristics of the Indian real estate sector are: • Highly fragmented market dominated by regional real estate developers – Rapid growth in the last decade has seen the emergence of larger players that have differentiated themselves through superior execution and branding. While the larger regional players are now initiating efforts to develop a broader geographic presence, their home markets continue to generate a majority of their profitability. • Lack of clarity in land title – A significant number of land plots in India do not have clear title because of disorganized land registries, a problem which is compounded by judicial delays in resolving ownership issues. • High transaction costs – The sector has traditionally been burdened with high transaction costs as a result of stamp duty on transfers of title to property which varies state by state.

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• Local know-how is a critical success factor in the development phase – One of the key reasons for the emergence of local developers is the critical importance of local knowledge and relationships in ensuring successful and timely development of real estate projects. Property is a State-governed subject in India and the applicable rules and regulations vary from State to State. • Enhanced role of mortgage financing – Over the last five years, a significant portion of new acquisitions, particularly in the larger cities in India, have been financed through banks and financial institutions. This trend has been aided by a sharp decline in interest rates and broad availability of financing products, due to aggressive marketing and product development by financial institutions. • Sector governance issues – As a result of high transaction costs, real estate transactions in India often require large amounts of cash and lead to efforts to avoid taxes by using inefficient business structuring. In addition, the complex regulatory conditions and lack of clarity in land titles lead to a greater risk that real estate participants will try to improperly influence government officials. Government Initiatives The government has introduced many progressive measures to unlock the potential of the sector and also to meet the increasing demand levels.

• 100 per cent FDI allowed in townships, housing, built-up infrastructure and construction development projects through the automatic route, subject to guidelines as prescribed by DIPP

• 100 per cent FDI is allowed under the automatic route in development of Special Economic Zones (SEZ), subject to the provisions of Special Economic Zones Act 2005 and the SEZ Policy of the Department of Commerce

• FDI is not allowed in Real Estate Business

In the Union Budget 2010-11, the Finance Minister made the following announcements with regard to the real estate sector:

• Allocation for urban development was increased by more than 75 per cent from US$ 660.3 million to US$ 1.17 billion in 2010-11

• Allocation for housing and urban poverty alleviation was raised from US$ 183.4 million to US$ 215.8 million in 2010-11

• Scheme of 1 per cent interest subvention on housing loan up to US$ 21,576 where the cost of the house does not exceed US$ 43,153 announced in the last budget has been extended up to March 31, 2011 and US$ 151 million has been earmarked for this scheme for 2010-11

• US$ 274 million has been allocated for Rajiv Awas Yojna, as compared to US$ 32.4 million last year • Meanwhile, the Reserve Bank of India (RBI) has revised the norms for urban cooperative banks for

giving loans to the housing and real estate (RE) segment. Now, urban banks can use up to 15 per cent of deposits to provide housing, real estate and CRE loans. Earlier, the RBI norm permitted them to use up to 15 per cent of deposits for giving advances to housing loans and other block capital loans.

(Source: India Brand Equity Foundation) Reforms in the Indian Real Estate Market In recent years various reforms have been initiated at the central as well as state levels which have led to greater organisation and transparency in the real estate sector. These include: • Enactment by the central government of the Urban Land (Ceiling and Regulation) Repeal Act, 1999; • Modifications in rent control statutes to provide greater protection to home owners wishing to rent out their

properties; • Rationalisation of property taxes in a number of states; • The proposed conversion of land records into electronic form; and • FDI being permitted in the real estate sector, subject to certain conditions, including lock-ups. In addition, a proposed Real Estate (Regulation of Development) Bill will be reviewed by the central government during the upcoming parliamentary session and is expected to enhance transparency in the real estate industry by introducing a regulatory authority and an appellate tribunal to regulate, centralise and promote planned and healthy development, construction and sale of real estate. This Bill also lays down guidelines for real estate developers and builders and establishes a rating system based on financial strength,

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past performance, scale of operations and management. KEY SEGMENTS OF INDIAN REAL ESTATE The Residential Segment The residential segment consists of the development of apartments, houses and plotted developments in urban and rural areas. The pan-Indian demand for residential housing will be over approximately 7.5 million units by 2013, across all categories including Economically Weaker Sections ("EWS"), affordable, mid- and luxury segments. Further, it is estimated that residential demand for the top seven Indian cities will be approximately 4.5 million units by 2013. Of the total expected demand across India, 43% is likely to be generated by in cities such as Bangalore, Mumbai and NCR. It is estimated that Mumbai is likely to witness the highest cumulative demand of 1.6 million units by 2013 due to various development projects and increased urbanisation in the city. The affordable and mid-segments of the market are likely to constitute 85% of the total residential demand, and will be the primary focus of most developers. The growth in the residential real estate market in India has been largely driven by rising disposable incomes, rapidly growing middle class, youth population, low interest rates, fiscal incentives on both interest and principal payments for housing loans, heightened customer expectations, and increased urbanization. The Budget 2010-11 has given sops to the realty sector. Developers of affordable housing projects (units of 1,000-1,500 sq ft) have been granted a tax holiday on profits from projects initiated in the financial year 2007-08. Such projects would have to be completed before March 1, 2012. At the same time, the finance minister allocated US$ 207 million to grant a 1 per cent interest subsidy on home loans up to US$ 20,691 provided the cost of the home is not more than US$ 41,382. This subsidy is expected to give a further boost to the housing sector. Demand in the Indian residential segment has consistently outpaced supply as a result of India’s favourable demographics, which has led to a housing shortage. Due to a demand and supply mismatch India is expected to face housing over the coming years. Immediate housing shortage is caused by oversupply in the premium segment and a substantial shortage in affordable housing for mid-income and low income households, meaning that supply does not cater to where the potential demand lies. The key demand drivers in the residential segment are summarized below: • India’s Economic growth has led to increase in Disposable Income, which in turn has enhanced the

aspirations to own homes. • Urban population expected to touch 590 million by 2030. India has witnessed increasing urbanization, with

the urban population increasing from 18% of total population in 1961 to approximately 28% of total population by 2001. (Source: India Census)

• Average increase in number of nuclear families estimated to be over 300 million (middle class population) • Number of rich household growing at a compound annual growth rate ("CAGR") of 21% • Increasing working age population (almost 64% in 16-64 age group) • Fiscal Incentives and Easy availability of Housing finance. • Shortage of Affordable housing. Residential Market Recovery As a result of the global economic slowdown, the residential markets experienced a turbulent time in the second half of 2008, with end-user affordability reaching new lows, developers refusing to reduce prices and sales coming to a halt. However, since the beginning of 2009, the situation has improved, with an increasing amount of new launches and a healthy absorption rate. The main factors behind this recovery are rationalisation of prices by developers, easing credit markets and improving economic conditions. The Commercial Segment The demand for commercial office space will be 196 million sq. ft. by 2013, with seven major cities, including Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune accounting for approximately 80% of the demand. Established commercial centres are expected to remain slower in growth than their tier 2 counterparts. Cumulative demand among the tier 1 cities of Mumbai, NCR and Bangalore will account for 42% of total

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demand, with Mumbai and NCR accounting for 24 and 25 million sq. ft. of office space demand through 2009-2013, respectively. The Retail Segment The cumulative demand for retail space across India will reach 43 million sq. ft. by 2013, of which the top seven cities in India are likely to account for nearly 34.6 million sq. ft. This demand is expected to be concentrated in Bangalore, Mumbai and NCR which will constitute approximately 46%of the total estimated pan-Indian demand between 2009 and 2013. Pune is expected to record the highest compound annual growth (due to the limited stock of operational malls and favourable demographic profile within Pune), whilst Bangalore, Mumbai and NCR are expected to experience the highest demand, together comprising approximately 20 million sq. ft. of retail space. According to the Investment Commission of India, organised retail is expected to grow from 5% to 15.5% by 2016, which highlights the potential for pan India expansion amongst retailers. Hospitality Segment A strong domestic economy, business opportunities, initiatives to liberalise foreign investment and especially the efforts of India’s Ministry of Tourism to communicate the “Incredible India” campaign have together contributed to a robust demand for hospitality space in major cities across India. The demand for hotel rooms continues to be dependent on domestic business and leisure travelers, as well as on the significant increase in foreign travelers coming to India. The hospitality industry in India suffered recently due to the global economic recession, the recent global swine flu epidemic and the terrorist attacks in Mumbai, all of which led to a decline in the number of business travelers within and to India and tourists visiting India. Nevertheless, the total number of international tourist arrivals began to show growth in June 2009. THE CITY OF MUMBAI Mumbai is the capital city of Maharashtra and has a population of 11.9 million (per the 2001 census). The Mumbai Metropolitan Region covering the city, the surrounding suburbs and municipal councils, has a population of 18.9 million. Mumbai has witnessed an increase in its population in the island city as well as the surrounding municipal corporations of Thane, Navi Mumbai and Bhiwandi-Nizampur that form part of the larger agglomeration, the Mumbai Metropolitan Region. Due to the city’s geographical layout, the city’s growth has been restricted vertically and to its north. The rapid growth in population has led to a shortage of housing and informal and poor quality housing. (Source: Official website of Mumbai Metropolitan Region Development Authority) Residential Segment The Mumbai residential market has witnessed a transition in the profile of residential developments over the past two years. This can be attributed to the fluctuations and uncertainty caused by the impact of the global slowdown on the financial capital of the country.

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Home to the Reserve Bank of India, the National Stock Exchange and the Bombay Stock Exchange in addition to numerous multinational companies entering the Indian market, this city has seen a change in demographic profiles and thus a shift in residential trends. In the past few years, factors such as double income families, higher disposable income and easy availability of home loans have encouraged buyers to aspire for a higher level of luxury, be it in the heart of Mumbai or the outskirts. Maharashtra continues to be the most favoured location for investment amongst the institutional investors followed by the NCR and Karnataka, which have also attracted substantial investments. The improvement in overall economic sentiment and increasing liquidity is due to the recent rebound in the stock markets, which has marginally renewed confidence in the residential market. After witnessing a slump from January to September 2009, Mumbai witnessed some increase in demand in the residential sector. Additionally, an increasing focus has been on producing affordable housing for low and middle income groups resulted in the launch of several affordable housing projects, most of which are concentrated in far peripheral locations of Mumbai. The residential demand for India’s seven major cities (these being Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, the NCR and Pune) is estimated to be 4.5 million units by 2013. Of the total expected demand across India, 43% is likely to be generated in Tier I cities, such as Bengaluru, Mumbai and the NCR. Mumbai is expected to witness the highest cumulative demand of 1.6 million units by 2013. The affordable and mid segment category is likely to constitute 85% of the total residential demand and will be the primary focus for the majority of developers. As opposed to the previous quarter, during which the consolidation process began and prices largely stabilized, Q3 2009 witnessed price increase across premium and relatively lower end micro markets around India. For example, prices in the posh South Mumbai micro market increased by an average of 15% during Q3 2009. During the same period, in the significantly less expensive micro market of Andheri, prices increased by an average of 20%. Such price increases were fuelled by improved demand, particularly from the mid income segment. The formation of a stable Central Government back in May instigated a sense of calm that was supplemented by an improving job market, cheaper home loans and continued infrastructure initiatives. The affordable housing initiative, which came to prominence as a consequence of the property slump, continued to gather momentum during Q3 2009 on the back of Central Government initiatives, namely time bound income tax exemptions to developers of affordable projects and a 1% interest subsidy on loans up to Rs.1 million for properties costing up to Rs.2 million.

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Currently, the Mumbai residential market can be divided into 6 micro-markets, namely the Island city, the Western Suburbs, the Central Suburbs, the Extended Suburbs, Thane and Navi Mumbai. All these markets will witness an infusion of approximately 80.61 million sq.ft, comprising around 72,906 units of new residential space by the end of 2011. Out of the total upcoming supply, 46% will be available in 2010. This can be attributed to the delay caused to most projects that were estimated to be completed in 2008 and 2009. CONCLUSION The Indian real estate sector promises to be a lucrative destination for foreign investors into the country. The Indian realty sector, if channelized properly, could catapult the growth of several other sectors in India through its backward and forward linkages. However, there are potential constraints for domestic as well as foreign investments in India. Absence of a single regulator to monitor business practices prevailing in Indian real estate market is perceived to be a risk factor by investors. The SEZ guidelines which are issued by the Ministry of Commerce are constantly modified, creating uncertainty. Since the liberalization of FDI norms, significant foreign investments have flown into real estate; but availability of suitable exit options for such investments is still constrained. Maturity of the real estate markets will lead to infusion of foreign investment and adoption of international best practices by real estate players. Developers will get more organized, and become more transparent to avail opportunities emerging in the market. With the Indian securities market regulator SEBI allowing real estate mutual funds (REMFs) in India, equity investors will have an exit option available to them. All these factors will contribute in making the Indian real estate market more organized and structured, thus providing better investment opportunities.

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OUR BUSINESS

In this chapter, a reference to “Zodiac Ventures” or “the Company” means Zodiac Ventures Limited. Unless the context otherwise requires or implies, references to “we”, “us”, or “our” refers to Zodiac Ventures Limited and its Subsidiary (i.e. Zodiac Developers Private Limited) on a consolidated basis. COMPANY’S EVOLUTION The Company was incorporated with the main object to carry on the business in shares, securities and other investments and financing. With a view to raise finance to buy, invest in debentures, debenture stock of other companies including securities of any government authorities, bonds, certificates and to pursue business of financing the Company made its maiden public issue in the year 1981. Mr. Aman More (acting through Mr. Niraj More as the natural guardian) and M/s Radhakrishan Nandlal Private Limited the original/first promoters of the Company sold 1,33,500 Equity Shares of Rs. 10 each, representing 54.81 % of the total paid up shareholding of 2,43,570 of the Company to Mr. Hozef Darukhanawala vide Share Purchase Agreement date November 28, 2005. Subsequently on March 26, 2010, Mr. Jimit Shah, Mr. Ramesh Shah, Ms. Pushpa Shah and Ms. Yesha Shah entered into an Memorandum of Understanding with Mr. Hozef Darukhanawala to acquire 1, 04,500 Equity Shares constituting 13.48% of the total paid up shareholding of 7, 75,000 of the Company and acquired management control over the Company as set out under Section 12 of Takeover Code. The change of control has been approved by the shareholders at the extra ordinary general meeting held on May 14, 2010. Mr. Jimit Shah, Mr. Ramesh Shah, Ms. Pushpa Shah and Ms. Yesha Shah acquired controlling interest in the share capital and management of the Company with the intent of diversifying into the real estate depending upon the market conditions and available opportunities. For a brief history of the Company refer to chapter titled “History and Other Corporate Matters” on page 88 of the Draft Letter of Offer. OUR CORPORATE STRUCTURE Our corporate structure includes Zodiac Ventures as the holding company and ZDPL as its Subsidiary. Zodiac Ventures has not started any business operations yet but is considering projects in the real estate sector depending upon the market conditions and available opportunities. Zodiac Venture has forayed in to real estate business through its Subsidiary ZDPL. ZDPL was incorporated in the year 1995 with its main objects as real estate development. ZDPL commenced its first real estate development in the year 1997. Mr. Ramesh Shah and Mr. Jimit Shah, who are also the Directors of ZDPL have steered the successful completion of three residential projects by ZDPL. ZDPL has an Ongoing Project and four Planned Projects. Mr. Ramesh Shah and Mr. Jimit Shah identified ZDPL as a prolific business opportunity and decided to consolidate the business operations of both ZDPL and Zodiac Ventures. On December 15, 2010 Zodiac Ventures has invested Rs. 208 lakhs to acquire 50.98% stake in ZDPL. The balance uncalled amount is to be funded through the Rights Issue. OVERVIEW We are a real estate development company operating in Mumbai. The key focus area of our business has been real estate development projects under Regulation 33(7), 33(9) and 33(10) of the Development Control Regulations for Greater Mumbai, 1991 as sanctioned by the Government of Maharashtra under section 31(1) of Maharashtra Regional and Town planning Act, 1966. Under the said regulation we reconstruct or redevelop slum areas, cessed buildings by housing societies or old buildings belonging to the Municipal Corporation of Greater Mumbai. For details related to the applicable regulations for the Company and the Subsidiary, please refer to chapter titled “Key Industry Regulations and Policies” on page 72 of the Draft Letter of Offer. As a benefit for carrying out redevelopment projects under DCR, our Subsidiary is entitled to certain additional saleable FSI depending under which scheme of DCR the Subsidiary proposes to carry out redevelopment project. Depending on the site condition these additional FSI may be utilised in the same location or TDRs may be sanctioned. The TDRs shall permit the Subsidiary to develop land in certain parts of Mumbai located outside the main project area. We undertake research for our projects prior to making any decisions to acquire, develop or sell our properties. Our operations include the identification and acquisition of land and land development rights and the planning,

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execution and marketing of our projects. Our primary business activity is redevelopment under Regulation 33(7), 33(9) and 33(10) of DCR. Currently, our projects are at various stages of development. Our participation in redevelopment projects in Mumbai has allowed us to obtain strategically located land for our real estate development projects at a lower cost than we would have otherwise incurred for the purchase of comparable, developable urban land in Mumbai. We aim to continue to acquire and develop land that we believe has locational advantages and are reasonably priced. In developing our properties we place an emphasis on architecture, infrastructure, raw materials and facilities and seek to apply aesthetic design techniques and to make the optimum use of available space. The first real estate development project was undertaken by ZDPL in the year 1997 and has completed 3 residential projects including one project on slum rehabilitation land since then. The details of which is given below: Project Type Location Built-Up

Area (Sq. ft.)2

Saleable Area

(Sq. ft.)

Project start date

Project Completion date

Jupiter Residential Vile Parle 7,517.36 9,094 March 1997 July 2001 Venus Residential Vile Parle 9,478.24 12,030 December

1999 November 2000

Kushinara(Slum Rehabilitation land)1)

Residential

Bandra 37,839.55* 21,223 June 2004 June 2009

Total 54,835.15 42,347 1. As per agreement dated April 21, 2003 between ZDPL and Samir Narain Bhojwani, both the parties have agreed that

Samir Narain Bhojwani would develop a residential complex on the said land and pay ZDPL a lump sum of Rs. 500 lakhs towards acquisition and development of said land.

2. The total Built-Up area for Project Jupiter, Venus and Kushinara is certified by independent architect M/s Consultant Combined dated February 28, 2011.

* The Built-Up area includes rehabilitation area.

Our projects are broadly classified as Ongoing Project, which are projects for which approval to begin construction has been granted by the Competent Authority, and Planned Projects, which are projects for which (i) land has been acquired or a memorandum of understanding or development agreement has been executed; (ii) application has been made to grant CTS no. to the concerned authority; and (iii) internal project development plans are complete. Our Ongoing Project comprises of constructing a residential complex in the western suburbs of Mumbai with an aggregate area of 1,11,934.83 sq. ft. We also have four planned projects. The estimated Saleable Area of our Ongoing and Planned projects as of January 31, 2011 is summarised in the table below:

Type Ongoing Project Location Estimated

Built-up area Estimated

Saleable Area Date of

Commencement Date of

Completion Residential (Slum Rehabilitation Land)

Hanuman Nagar, Juhu*

3,83,868.35** 1,11,934.83 (1) 1998(2) 2014

Sub total 3,83,868.35 1,11,934.83 Type Proposed Project

Location Estimated Built-up area

Estimated Saleable Area

(Sq. ft.)

Date of Commencement

Date of Completion

Residential (Redevelopment/ Reconstruction on land in possession of MCGM)

Babu Genu Nagar 7,78,870.98** 2,30,907.04 (3) 1999(4) 2015

Residential(Slum Rehabilitation Land)

Indira Nagar 1,81,319.58** 1,22,935.64 2012 2015

Residential (Redevelopment/

Vile Parle (East) 16,504.88 29,708.78 2011 2014

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Type Ongoing Project Location Estimated

Built-up area Estimated

Saleable Area Date of

Commencement Date of

Completion Reconstruction on land in possession of MCGM) Residential Gandhi Nagar

Project, Bandra (East)

5,855.62 10,540.11 2011 2013

Sub total 9,82,551.06

3,94,091.57

Grant Total 13,66,419.41

5,06,026.40

1. As per agreement dated October 15, 2004 between ZDPL and Mr. Samir Narain Bhojwani, both the parties are entitled to 50% of the free sale area. The total built up area is 3,83,868 sq. ft. of which 2,23,869.66 sq. ft. is saleable area available to both ZDPL and Mr. Samir Narain Bhojwani and each is entitled to 1,11,934.83 sq.ft.

2. In the year 1997 SRA granted the LOI to ZDPL and Krishna Developers, whereby ZDPL and Krishna Developers entered into a JDA. In 2004, Krishna Developers resigned from the JDA. The project had received consent from over 70% of the slum dwellers, but was delayed due to litigation by few of the slum dwellers, who objected the construction. The final clearance to go ahead with the project was finally received in 2008, by the court order passed in favour of ZDPL. ZDPL recommenced the construction in January 2009.

3. As per JDA dated April 19, 2007 between ZDPL and Lokhandwala Infrastructure Private Limited, both the parties have agreed to construct a residential complex on the said land in the ratio of 44:56.

4. The project has been delayed due to pending approval of the revised Annexure II filing that was made as part of scheme for redevelopment projects. The same has been filed with the MCGM in order to include a larger plot of land in the project and to receive the approval of the same. Our Subsidiary has also entered into an MOU with Lokhandwala Infrastructure Private Limited to develop the said property. For details of the said agreement, refer to sub-heading “Joint Development Agreement for Babu Genu Nagar Project” in the chapter titled “Land Reserves” on page 65 of the Draft Letter of Offer.

* The Built-Up area has been certified by the independent architect M/s Consultant Combined dated February 28, 2011. ** The Built-Up area includes rehabilitation areas. We also benefit from our managements experience in the real estate sector. Mr. Ramesh Shah, a first generation entrepreneur has built ZDPL into a booming real estate development company. Mr. Ramesh Shah has a number of laurels attached to his name and is the secretary to the Slum Developers Association. Mr. Jimit Shah the second generation real estate developer who has learnt from the experience of his father Mr. Ramesh Shah and has brought in fresh ideas to the Company. Mr. Ramesh Shah and Mr. Jimit Shah share an experience of 25 years amongst themselves in the real estate business. We benefit from their knowledge of the opportunities in real estate development coupled with the capabilities in various aspects of real estate development from identification and acquisition of land, planning, execution and marketing and maintenance and management of our completed developments. OUR COMPETITIVE STRENGTHS AND STRATEGIES Principal Strengths Our principal strengths that give us a distinct set of competitive advantages are as follows: Foresight to acquire quality of Land Reserves at competitive prices and construct innovative projects Our Land Reserves enable us to maintain a consistent and significant portfolio of projects under development and therefore form an important asset for our business. Our Land Reserves are owned fully or jointly by us, enjoy locational advantages, which should enable us to undertake projects at our convenience. We acquired such land at prices, which we believe are reasonably low. Also, we utilise the experience and skills of our professional management, design, engineering and project execution teams to plan and carry out innovative developments that maximise the use of available land. Strong internal process enhancing the quality of construction We believe that the quality of our construction is in line with the best construction practices adopted in the industry. We place a special emphasis on ensuring that our quality standards are adhered to at every stage of a project. Our internal processes and methodologies ensure that various departments and employees of our

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Company are aware of their respective roles and obligations, and various activities of construction and development are consistent with the standards of quality that we have set for ourselves. This also ensures uniformity in all our processes. We employ technologically advanced tools and processes for ensuring and monitoring quality at each stage of construction including a systematic procedure to oversee onsite construction activities. The quality of each of our projects is monitored by our site supervisors headed by senior coordinators who report directly to our senior management on a day to day basis, thereby providing for quality supervision in all our projects. Professionally managed company with an experienced management and a qualified employee base We have 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 principle 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 changing demographics in the industry 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. Concentration in regional space We started our operation in the western region of India and currently our Ongoing and Planned projects are located in Mumbai, which we believe is an attractive real estate market in terms of returns on investment and depth of demand for real estate developments a cross segments and price points. We believe that we have good knowledge of the market and regulatory environment in Mumbai that assists us in identifying opportunities in Mumbai. We also believe that Mumbai’s position as the commercial capital of India, together with the demographics of the Mumbai population, with a high-income, discerning customer base and an expanding segment of young, upwardly mobile professionals provide a substantial market for our projects. Business Strategies We strive for complete transparency and satisfaction of our clients with an unwavering thrust and focus on professional excellence and integrity. In keeping with this philosophy, we will focus on increasing our land reserves at strategic locations as well as on capturing the significant growth opportunities across the Indian real estate spectrum. Our key strategic initiatives are described below: Continue to focus on developing projects in Mumbai Currently all our Ongoing and Planned projects are in Mumbai and we intend to continue to focus here. We believe that Mumbai is an attractive real estate market in terms of returns on investment and depth of demand for real estate developments across segments and price points. We believe that there are significant barriers to entry which favour established real estate developers. We also believe that Mumbai’s position as the commercial capital of India, together with the demographics of the Mumbai population, a high-income, discerning customer base and an expanding segment of young, upwardly mobile professionals provide a substantial market for our developments, which emphasise contemporary architecture, strong project execution and quality construction. Our development sites are located in distinct areas of Mumbai, with different target markets, and we intend to continue to tailor our projects to the particular requirements of each market. We expect there to be continued demand, in particular, for residential projects and believe that continuing to execute projects in Mumbai is critical to our growth strategy. We intend to focus on completing our existing projects in Mumbai and on developing new projects as we identify and acquire additional land for projects. We will continue to seek strategic development opportunities in Mumbai either on our own or jointly with third parties. Enter new Geographies While Mumbai remains and is expected to remain our primary focus, we are opportunity centric and have evaluated and will continue to evaluate growth opportunities in other parts of India on a case by case basis. We intend to use our experience in developing projects in Mumbai to help us to develop projects in other parts of India. We intend to focus on executing projects primarily in the residential segment in major cities. We will follow the strategy that we have already applied in Mumbai of targeting land that we believe to have locational advantages and to be reasonably priced and customers who range from high to low income.

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Focus on execution and maintain high quality standards We intend to continue to scale up the size of our operations and our project teams. We recognise the importance of delivering quality projects on a timely basis in order to maximize buyer satisfaction. We intend to increase the scale of our business by acquiring land for development in the near- to medium-term while staying focused on quality. We have purchased and will continue to acquire land for development by making upfront payments for the land, we also look to develop projects through alternative structures that reduce our upfront capital commitment. We also intend to continue to further enhance our architectural, design, construction, and development capabilities to enable us to provide innovative, modern and quality products and services to our customers. We plan to outsource a substantial part of the design and construction activities related to our projects to international and domestic firms who specialize in these areas. Diversifying the portfolio of projects undertaken by us We intend to diversify the portfolio of projects undertaken by us by developing commercial properties including hotels, integrated townships, IT parks, infrastructure projects in addition to continuing the development of residential projects. Our strategy is to position ourselves to capitalize on the development and construction opportunities generated by various sectors of the Indian economy. BUSINESS MODEL AND METHODOLOGY Our business operations We are a real estate development company primarily operating in Mumbai, focused on residential projects developments. We currently follow a sale model for our residential projects. Our residential projects We have completed three residential projects of Built-Up area of 54,835.15 sq. ft. and Saleable Area of 42,347 sq.ft and currently have one Ongoing and four Proposed residential projects, which we expect to provide a total Built-Up Area of 13,66,419.41 and Saleable Area of approximately 5,06,026.40 sq. ft. For these projects, our focus is on developing residential apartment complexes for sale. We believe this sale model for our residential projects provides a good source of cash flow which is linked to the strength of the real estate market and helps to maintain a strong balance sheet. We generally launch such projects and commence the sales process for a portion of the total number of units to be sold around the time of commencing construction. Our residential projects, as of January 31, 2011, are summarised in the following table:

Project Type Location Built-Up Area

(Sq. ft.)2

Saleable Area

(Sq. ft.)

Project start date

Project Completion date

Jupiter Residential Vile Parle 7,517.36 9,094 March 1997 July 2001 Venus Residential Vile Parle 9,478.24 12,030 December 1999 November 2000 Kushinara(Slum Rehabilitation land)1)

Residential

Bandra 37,839.55* 21,223 June 2004 June 2009

Total 54,835.15 42,347 1. As per agreement dated April 21, 2003 between ZDPL and Samir Narain Bhojwani, both the parties have agreed that

Samir Narain Bhojwani would develop a residential complex on the said land and pay ZDPL a lump sum of Rs. 500 lakhs towards acquisition and development of said land.

2. The total Built-Up area for Project Jupiter, Venus and Kushinara is certified by independent architect M/s Consultant Combined dated February 28, 2011.

* The Built-Up area includes rehabilitation area Our Completed Projects Jupiter, Vile Parle, Mumbai Jupiter is a residential apartment project offering 1-2 BHK units located at Vile Parle (East). This project is strategically located in the high growth corridor on the Western Express Highway. The site has excellent connectivity to road networks, suburban rail networks and domestic and international airports. The project commenced in March 1997, with the initial development plan of 4 storied. With the utilization of TDR purchased, this project was remodeled to include additional 3 floors which were completed in July 2001.

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Amenities offered to residents include modern materials, fixtures and fittings, including vitrified flooring and granite kitchen work, common and individual parking space, firefighting system and decorative entrance lobby. All units under “Jupiter” have been sold. Venus, Vile Parle, Mumbai Venus is a residential apartment project offering 2 BHK units covering located at Vile Parle (East). This project is strategically located in the high growth corridor on the Western Express Highway. The site has excellent connectivity to road networks, suburban rail networks and domestic and international airports. The project commenced in December 1999 and completed in November 2000. Amenities offered to residents include modern materials, fixtures and fittings, including vitrified flooring and granite kitchen work, common and individual parking space, firefighting system and decorative entrance lobby. All units under “Venus” have been sold. Kushinara, Pali Hill, Mumbai Kushinara is a residential apartment project offering 13 units located at Pali Hill, Khar. The project offers a tower of 13 floors with a private apartment on each floor. This project is strategically located in the premium area of Mumbai Suburban District. The site has excellent connectivity to road networks, suburban rail networks and domestic and international airports. As per agreement dated April 21, 2003 between ZDPL and Samir Narain Bhojwani, both the parties have agreed that Samir Narain Bhojwani would develop a residential complex on the said land and pay ZDPL a lump sum of Rs. 500 lakhs towards acquisition and development of said land. The project commenced in the June 2004 and completed in January 2007. Amenities offered to residents include play areas, recreational facility, common and individual parking space, fire fighting system and double height entrance lobby. All units under “Kushinara” have been sold. Our Ongoing Project

Project Name Development Site /Location

Estimated Built-Up area

(Sq. ft.)*

Estimated Saleable Area (sq.

Ft.)

Actual or Estimated

Construction Commencement

Date

Actual or Estimated

Completion Date

Hanuman Nagar (Slum Rehabilitation Land)

Juhu 3,83,868.35(3) 1,11,934.83(1) 1998(2) March 2013

1. As per agreement dated October 15, 2004 between ZDPL and Mr. Samir Narain Bhojwani, both the parties are entitled to 50% of the free sale area. The total built up area is 3, 83,868 sq. ft. of which 2, 23,869.66 sq. ft. is saleable area available to both ZDPL and Mr. Samir Narain Bhojwani and each is entitled to 1,11,934.83 sq.ft.

2. In the year 1997 SRA granted the LOI to ZDPL and Krishna Developers, whereby ZDPL and Krishna Developers entered into a JDA. In 2004, Krishna Developers resigned from the JDA. The project had received consent from over 70% of the slum dwellers, but was delayed due to litigation by few of the slum dwellers, who objected the construction. The final clearance to go ahead with the project was finally received in 2008, by the court order passed in favour of ZDPL. ZDPL recommenced the construction in January 2009.

3. The Built-Up area includes the rehabilitation area. * The Built-Up area has been certified by the independent architect M/s Consultant Combined dated February 28, 2011.

Hanuman Nagar Project ZDPL plans to develop a residential project offering premium residential apartments 4/5 BHK units. The project offers 71 luxurious abodes in three wings over 12 floors with two 4/5 BHK apartments on each level. Each apartment offers a panoramic view has its own private car parking. Amenities to be offered to residents will be entrance lobby, club house with swimming pool, jogging track and gymnasium. In the year 1997 under JDA between ZDPL and Krishna Developers acquired the said property. The project had received consent from over 70% of the slum dwellers. The construction was commenced in 1998, but was delayed due to litigation by few of the slum dwellers, who objected the construction. In 2004, Krishna Developers resigned from the JDA. On October 15, 2004 ZDPL entered into an agreement with Samir Narain Bhojwani to jointly develop the said property. As per the agreement both the parties are entitled to 50% of the

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free sale area. The final clearance to go ahead with the project was received in 2008, by the court order passed in favour of ZDPL. ZDPL along with Samir Narain Bhojwani recommenced the construction in January 2009 and expects to complete construction by March 2013. Our Proposed Projects We have development rights over (i) slum rehabilitation land owned by the applicable slum rehabilitation authorities (ii) buildings by housing societies or old buildings belonging to the Municipal Corporation of Greater Mumbai and (iii) land acquired by us from third parties; which is set forth in the table below:

Type Proposed Project Location Estimated

Built-Up area Estimated

Saleable Area (Sq. ft.)

Date of Commencement

Date of Completion

Residential (Redevelopment/ Reconstruction on land in possession of MCGM)

Babu Genu Nagar 7,78,870.98* 2,30,907.04 (1) 1999(2) 2015

Residential(Slum Rehabilitation Land)

Indira Nagar 1,81,319.58* 1,22,935.64 2012 2015

Residential (Redevelopment/ Reconstruction on land in possession of MCGM)

Vile Parle (East) 16,504.88 29,708.78 2011 2014

Residential Gandhi Nagar Project, Bandra (East)

5,855.62 10,540.11 2011 2013

Sub total 9,82,551.06

3,94,091.57

Grant Total 13,66,419.41

5,06,026.40

1. As per JDA dated April 19, 2007 between ZDPL and Lokhandwala Infrastructure Private Limited, both the parties have agreed to construct a residential complex on the said land in the ratio of 44:56.

2. The project has been delayed due to pending approval of the revised Annexure II filing that was made as part of scheme for redevelopment projects. The same has been filed with the MCGM in order to include a larger plot of land in the project and to receive the approval of the same. Our Subsidiary has also entered into an MOU with Lokhandwala Infrastructure Private Limited to develop the said property. For details of the said agreement, refer to sub-heading “Joint Development Agreement for Babu Genu Nagar Project” in the chapter titled “Land Reserves” on page 65 of the Draft Letter of Offer.

* The Built-Up area includes rehabilitation areas. Our project execution methodology We undertake projects under the Regulation 33(7), 33(9) and 33(10) of DCR. The detail of the mode of executing our project under the relevant regulation is explained as follows: A. Execution methodology for undertaking projects under Regulation 33(10) of DCR through SRS: The slum rehabilitation activity is implemented under regulation 33(10) of Development Control Regulation for Greater Mumbai under the Maharashtra Regional and Town Planning Act, 1966. The SRS is implemented by Slum Rehabilitation Authority the competent authority constituted under the Slum Areas (Improvement and Redevelopment) Act, 1971, which is vested with the powers of formulating scheme for rehabilitation of specific slum areas. The actual implementation of the SRS scheme is carried out under specific regulation 33(10) of DCR. The slum rehabilitation shall be carried out on those areas declared as slum areas by competent authority. We utilise in our business a five-part execution methodology for our projects that consists of: (i) Initial Stage of land identification and acquisition, (ii) Second Stage of the obtaining of consents, authorizations and approvals required for development, (iii) Third Stage of project preparation,

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(iv) Fourth Stage of project management and execution; and (v) Fifth Stage of marketing and post completion. A summary of the activities involved in these five phases of project development are set out in the following chart:

All slums and pavements whose inhabitants’ names and structures appear in the electoral roll prepared with reference to January 1, 1995 or a date prior thereto and who are actual occupants of the hutments are eligible for the slum rehabilitation scheme. At least 70% of the eligible hutment dwellers in a slum or pavement in a viable stretch at one place must agree to join the rehabilitation scheme and come together to form a co-operative housing society of all eligible hutment dwellers through a resolution to that effect. For details related to

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regulation applicable to slum rehabilitation, please refer to chapter titled “Key Industry Regulation and Policies” beginning on page 72 of the Draft Letter of Offer. B. Execution methodology for undertaking reconstruction under 33(7) and 33(9) of DCR for cessed and

dilapidated buildings: We utilise in our business a five-part execution methodology for our projects that consists of

(i) Initial Stage of land identification and acquisition, (ii) Second Stage of the obtaining of consents, authorizations and approvals required for development, (iii) Third Stage of project preparation, (iv) Fourth Stage of project management and execution and marketing & post completion.

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A summary of the activities involved in these four phases of project development are set out in the following chart:

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Process

As per Regulation 33(7) and 33(9) of the Development Control Regulations for Greater Mumbai, we can reconstruct or redevelop cessed buildings by housing societies or old buildings belonging to the Municipal Corporation of Greater Mumbai or Maharashtra Housing Development & Area Development Authority. Under the said regulation, upon the consent of 70% of tenants, namely those who have been occupants of the flats, a developer may present redevelopment plans to the MCGM/ MHADA, as appropriate, for governmental review and approval. Initially eligibility of tenants i.e. Annexure II is approved by the Competent Authority i.e. MCGM/MHADA as case may be. Accordingly on the basis of Annexure II issued by the authority, the developers submits its layout proposal based on which the authority notifies its approval by providing the developer with “Letter of Intent” setting forth the area on which the development of residential space for the tenants will occur and the area that the developer is entitled to develop for its own purposes. Accordingly layout for the scheme is approved which, specifies the developers building plan and exact location and size of the rehab building for the tenant and sale building. Pursuant to this, “Intimation of Approval” for individual buildings is issued and, re-construction on the site must commence within 90 days of approval. For details related to the process of approvals refer to chapter titled “Key Industry Regulations and Policies” beginning on page 72 of the Draft Letter of Offer. C. Execution methodology for undertaking projects through private purchases of land: We have developed a methodical process for development of real estate projects which is illustrated below: Identification of

Identification of land and its acquisition The most crucial aspect of real estate development business is the ability to assess the potential of a location after evaluating its demographic trends. Prior to undertaking each project, we conduct due diligence and assessment exercises in relation to immovable properties and financial viability of the project. We also conduct a financial analysis during this phase to assess the returns we can expect to generate from the potential project. Once we have identified a plot that may be suitable for development, we, together with our lawyers, conduct due diligence investigations in respect of land that we desire to develop, including a review of land records, planning records and ownership records, and publish a notice in newspapers requesting any persons claiming ownership of the land to state their claims. We also use our experience to evaluate locations where we can gain a first mover advantage. We also use the feedback that we receive from customers, along with our relationships with property consultants, constructors, sub-contractors and suppliers to assess future market demand and industry outlook. The next step, after area identification, involves identifying the type of project to be undertaken in that particular area and deciding the scale of the project. The final decision on the location, nature, financial feasibility and scale of each project is taken by our senior management. Assuming that our investigations show no significant problems with the identified land, we will enter into negotiations to seek to reach a preliminary agreement with the landowners, either to acquire the underlying land ourselves or to enter into a development agreement with them. This preliminary agreement will usually be memorialised in a memorandum of understanding. Formal conveyance of land by the seller (at which time stamp duty becomes payable) is completed only shortly before construction is due to start and after all requisite governmental consents and approvals have been obtained.

Identification of land

and its acquisition

Obtaining Consents Planning and

Designing

Execution

Sales and Marketing

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Obtaining consents To determine the feasibility of an area for the implementation of a project, we believe that it is imperative to understand the legal regime governing land development in the location. We also evaluate the factors which affect obtaining of the approvals required for the implementation of the project. The approvals generally required for a real estate development project include approvals for conversion of agricultural land to non-agricultural land, where applicable, approvals of lay outs and approvals for certain infrastructure facilities such as power and water. For example, constructing individual buildings requires a building plan. Similarly, approvals from the fire authorities are required for buildings above a certain stipulated height. Building completion certificates are obtained from the appropriate authorities after the projects have been completed in accordance with applicable law. We are experienced in working with governmental authorities to obtain such approvals. This experience has given us a good understanding of the regulatory framework in which we operate, thereby enabling us to obtain requisite government approvals on a timely basis and to obtain approval for the development of the maximum permitted square footage given the size of each plot. For details related to approvals obtained for our projects refer to chapter titled “Government and Statutory Approvals” beginning on page 171 of the Draft Letter of Offer. Planning and designing Shortly after we have identified a potential development site, we evaluate and estimate the costs which will be incurred in relation to each project and establish a timetable for project development and completion. This process is undertaken by our engineers, who receive input from our technical staff in relation to estimated sub-contracting costs and supply and raw materials costs. At this stage, depending on the size of the project, we may approach third parties to enter into a joint venture or partnership in respect of a project. Identification of, and negotiations with, these third parties is carried out by the management. Also, at this stage we obtain financing for the project. The finance team, and ultimately the chief finance officer in consultation with the management, is responsible for obtaining all financing, for each project. We employ experienced team of architects and, after a detailed review of the site parameters, project cost estimate and project development timetable, we formalise an architectural brief which is subsequently finalised either internally or with selected external architects and consultants, depending on the size and complexity of the project. Mr. Ramesh Shah, in particular, involves himself in selecting the design for a project, and remains involved in approving all aspects of the selected design. Execution Once the design and the estimates for the project have been finalized, we set up a project monitoring team under the supervision of a site engineer who is the central co-coordinating person, and who reports to our senior management. We tend to procure the basic building materials for our projects, such as steel and concrete, directly from Indian suppliers. We have suppliers that we regularly use and with whom we have good, long-standing working relationships. Most of the building materials we procure are sourced from India. We closely monitor the development process, construction quality, safety, actual and estimated project costs and construction schedules of our projects. In particular, we endeavour to maintain high health and safety standards in all our real estate developments and place great emphasis on the safety of our employees, contractors, contractors and the general public. Our site office and engineering department is ultimately responsible for site safety during project execution. Sales and Marketing Our marketing team is responsible for procuring customers, both sales and rental, for the units in our developments and for conducting pre-sales. We do not, however, engage on an exclusive basis the services of any real estate brokerage or mortgage lender in connection with the sale or lease of our developments. In connection with our pre-sales of residential units, we require that customers pay advances on the purchase price, which advances our residential customers are required to increase in amount as we progress through various milestones or stages of construction of their residential unit. Our marketing team is responsible for the booking of sales once customers are identified and collects all customer deposits.

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We seek to foster good relations with our customers and to keep in touch with them by sending periodic newsletters and mail. In each of our developments we will provide all of our customers with a pre-occupancy inspection with our site engineer as well as with a customer survey encouraging constructive feedback on our developments. We actively follow up with the collection of these surveys. We provide property management services for a limited time until co-operative resident associations are formed for the relevant residential project. TRANSFERABLE DEVELOPMENT RIGHTS Our Subsidiary also sometimes receives TDRs in the form of FSI as compensation for construction of permanent alternate accommodation for slum dwellers/tenants/owners. TDRs are generated in the event the applicable planning and land use regulations for a particular plot do not allow full utilization of the generated development rights. Such compensation will entitle the Subsidiary to FSI in the form of a Development Right Certificate (DRC) which he may use himself or transfer to any other person. The TDRs can be utilised in other project or sold to third parties. Our Subsidiary may acquire TDRs as a result of its involvement in rehabilitation projects. In the past, our Subsidiary has derived revenues from sales of TDRs to third parties. In Mumbai, TDR's can be utilized by the buyer only in areas that are north of the developed land from where the TDRs are generated. For risks related to TDRs please refer to chapter titled “Risk Factors” beginning on x of the Draft Letter of Offer. HEALTH, SAFETY AND ENVIRONMENT We are committed to complying with applicable health, safety and environmental regulations and other requirements in our operations. To help ensure effective implementation of our safety policies and practices, at the beginning of every property development we identify potential material hazards, evaluate material risks and institute, implement and monitor appropriate risk mitigation measures. We believe that accidents and occupational health hazards can be significantly reduced through the systematic analysis and control of risks and by providing appropriate training to management, employees and sub-contractors. As a real estate developer in India, we are subject to various mandatory national, state and municipal environmental laws and regulations. Our operations are also subject to inspection by government officials with regard to various environmental issues, and we are required to obtain clearance from the MOEF in respect of each of our projects. In addition to compliance with the requisite environmental laws and regulations, we have adopted various technologies for energy and water conservation in our projects, such as rainwater harvesting and sewage treatment plants. EMPLOYEES Zodiac Venture’s work force consists of permanent employees as well as contract labour. The breakdown of its employees as on January 31, 2011 by business activity is summarised in the following table: Business Activity No. of Employees Key Managerial Personnel 7 Others 5 TOTAL 12 The employees are not covered by any collective bargaining agreements. We have not experienced any material strikes, work stoppages, labour disputes or actions by or with our employees, and we consider our relationship with our employees to be good. As part of our strategy to improve operational efficiency, we regularly organize in-house and external training programs for the employees. Employees in India enjoy certain statutory rights, which prevent them from being dismissed or made redundant, except in limited circumstances. Training and Development Our success depends to a large extent on our ability to recruit, train and retain high quality professionals. Accordingly, we place special emphasis on the human resources function in our organization. Our selection criteria include among other factors, academic qualifications and performance of the candidates rounds of interviews conducted by us.

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Training is provided to the employees to help them render their services better. Continuous training, the opportunity to work on challenging tasks and job rotation are part of our talent retention strategy. COMPETITION We face competition from various domestic and international property developers. Moreover, as we seek to diversify into new geographies, we face the risk that some of our competitors have a pan-India presence while our other competitors have a strong presence in certain regional markets. Our competitors include both large corporate and small real estate developers in the regions where we operate. Our key competitors include real estate developers such as Akruti City limited, Ansal Properties Infrastructure Limited, D.S. Kulkarni Developers Limited, HDIL, Marathon NextGen Realty Limited, Ashiana Housing Limited and Ganesh Housing Corporation Limited. INTELLECTUAL PROPERTY We do not own any intellectual property as on the date of filing of Draft Letter of Offer. However, the Company has made an application before the Trademark Registry which is pending registration of its trademark “ZODIAC” under Class 35 and 37. For details of approvals relating to intellectual property, see “Government and Statutory Approvals” on page 171. INSURANCE Our Subsidiary’s operations are subject to hazards inherent in the real estate industry, such as work accidents, fires, earthquakes, floods and other force majeure events, acts of terrorism and explosions, including hazards that may cause injury and loss of life, severe damage to the destruction of property and equipment and environmental damage. Our Subsidiary has obtained standard fire and special perils policies from United India Insurance Company Limited to cover risk or loss to its building, stock. The insurance policy is valid until December 21, 2011. This insurance policy is only for its Ongoing Project, Hanuman Nagar Project, Juhu, and Mumbai. We generally maintain insurance covering our assets and operations at levels that we believe to be appropriate. We also maintain a workmen’s compensation policy which covers our employees for any injury or disease suffered in the course of their employment. However this insurance coverage might not be adequate to cover all losses that would be incurred by the Subsidiary. For risks related to its insurance coverage, please refer chapter titled “Risk Factors” beginning on page x of the Draft Letter of Offer. PROPERTY As on the date of filing of the Draft Letter of Offer, the Company does not own any property of its own. The Company’s registered office situated at 404, Dev Plaza, 68, S. V. Road, Andheri (W), Mumbai – 400 058 is occupied on a leave and license basis for a period of 4 years commencing from December 1, 2010 and terminating on November 30, 2014. For details related to the use of the premises on leave and license basis please refer to chapter titled “Risk Factors” beginning on page x of the Draft Letter of Offer. Further all our projects are carried out by our Subsidiary, for property and project related to the Subsidiary, please refer to Chapter titled “Land Reserves” beginning on page 65 of the Draft Letter of Offer. With respect to Land Reserves of our Subsidiary please refer to chapter titled “Land Reserves” beginning on page 65 of the Draft Letter of Offer.

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LAND RESERVES

Our Land Reserves are lands to which the Company and/or our Subsidiary in which we have a stake, have title, sole development rights, development rights or other interest. These also include lands from which the Company can derive economic benefits through a documented framework or lands in relation to which our Company and/or our Subsidiary or other entities have executed a joint development agreement or an MoU to enter into a joint development agreement or an agreement to sell and does not include lands over which our Completed Projects are situated.

As of January 31, 2011, our Land Reserves aggregated to approximately 13, 66,419.41 sq. ft. of Built-Up area and approximately 5, 06,026.40 sq. ft. of Saleable Area. Our Land Reserves are located in and around Mumbai.

Sr. No.

Land Bank/ Land Reserves (Category wise)

Total Built-Up Area

(Sq. ft.)

% of Total Built-Up Area

Estimated Saleable area

(Sq. ft.)

% of Saleable area

i. Land owned by the Company 1. Directly by the company NIL NIL NIL NIL 2. Through its Subsidiary- Vile Parle (East)

16,504.88 1.21 29,708.78 5.87

3. Through entities other than (1) and (2) above

NIL NIL NIL NIL

ii. Land over which the Company has sole development rights:1. Directly by the Company NIL NIL NIL NIL 2. Through its Subsidiary – Indira Nagar Project

1,81,319.58* 13.27 1,22,935.64 24.29

Gandhi Nagar Project, Bandra East 5,855.62 0.43 10,540.11 2.08 Total 1,87,175.20 13.70 1,33,475.75 26.37 3. Through entities other than (1) and (2) above

NIL NIL NIL NIL

iii. Memorandum of Understanding/Agreements to acquire/ letters of acceptance to which company and/ or its subsidiaries and/ or its group companies are parties, of which: 1. Land subject to government Allocation

NIL NIL NIL NIL

2. Land subject to private Acquisition

NIL NIL NIL NIL

A. Sub-total (i) +(ii)+(iii): 2,03,680.08 14.91 1,63,184.53 32.24 Joint developments with partners

iv. Land for which joint development agreements have been entered into:# 1. Directly by the company NIL NIL NIL NIL 2. Through its Subsidiary- Hanuman Nagar Project

3,83,868.35* 28.09 1,11,934.83 22.12

Babu Genu Nagar 7,78,870.98* 57.00 2,30,907.04 45.63 Total 11,62,739.33 85.09 3,42,841.87 67.75 3. Through entities other than (1) and (2) above

NIL NIL NIL NIL

v. Proportionate interest in lands owned indirectly by the company through joint ventures

NIL NIL NIL NIL

B. Sub-total ( iv) +(v) : 11,62,739.33 85.09 3,42,841.87 67.75 C. Total A+B : 13,66,419.41 100.00 5,06,026.40 100.00

* The Built-Up area has been certified by independent architect M/s Combined Consultants dated February 28, 2011. The total Built-Up area includes rehabilitation area. # The total area calculated is % area held by ZDPL under joint agreements

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i. (2) Land owned by the Company through its Subsidiary:

Project Name

Location Of land

Date of Agreement

Total Built-Up Area

(in sq. ft.)

Total Saleable Area (in sq.ft)

Vile Parle (East) Vile Parle (East), Plot No. 348, Vile Parle

July 31, 1997 16,504.88 29,708.78 September 10, 1996 May 16, 1996 December 14, 1995

Vile Parle (East) Project

a. Deed of Conveyance dated July 31, 1997

A Deed of Conveyance dated July 31, 1997 was executed in favour of our Subsidiary by Mrs. Anita Hermy D’Souza, Mr. Earland Hermy D’Souza, Mr. Everard Hermy D’Souza and Ms. Mitchell Hermy D’Souza (“the Vendors”). The Vendors are entitled to 1/5th undivided share title of land or ground bearing Survey No. 120, Hissa No. 14, C.T.S. No. 1813 and 1813/1, Original Plot No. 329 and Final Plot No. 348, admeasuring 8,252.44 sq. ft. In TPS No. V, Vile Parle (E), Mumbai 400 057. The said Deed of Conveyance has been executed in pursuance of an Agreement dated January 27, 1996 and in consideration of a sum of Rs. 90,000/- paid by our Subsidiary to the Vendors as earnest money on the execution of the Agreement dated January 26, 1996 and a further sum of Rs. 4,10,000/- .

b. Deed of Conveyance dated September 10, 1996

A Deed of Conveyance dated September 10, 1996 was executed in favour of our Subsidiary by Mrs. Cecilia A. Pereira (“the Vendor”). The Vendor is entitled to 1/5th undivided share title of land or ground bearing Survey No. 120, Hissa No. 14, C.T.S. No. 1813 and 1813/1, Original Plot No. 329 and Final Plot No. 348, admeasuring 8,252.44 sq. ft. In TPS No. V, Vile Parle (E), Mumbai 400 057. The said Deed of Conveyance has been executed in pursuance of an Agreement dated January 25, 1996 and in consideration of a sum of Rs. 5,00,000/- . c. Deed of Conveyance dated May 16, 1996

A Deed of Conveyance dated May 16, 1996 was executed in favour of our Subsidiary by Mrs. Beatrice E. Misquitta (“the Vendor”). The Vendor is entitled to 1/5th undivided share title of land or ground bearing Survey No. 120, Hissa No. 14, C.T.S. No. 1813 and 1813/1, Original Plot No. 329 and Final Plot No. 348, admeasuring 8,252.44 sq. ft. In TPS No. V, Vile Parle (E), Mumbai 400 057. The said Deed of Conveyance has been executed in pursuance of an Agreement dated January 26, 1996 and in consideration of a sum of Rs. 50,000/- paid by our Subsidiary to the Vendor as earnest money on the execution of the Agreement dated January 26, 1996 and a further sum of Rs. 4,50,000/- .

d. Deed of Conveyance dated December 14, 1995

A Deed of Conveyance dated December 14, 1995 was executed in favour of our Subsidiary by Ms. Irene John D’Souza (“the Vendor”). The Vendor is entitled to 1/5th undivided share title of land or ground bearing Survey No. 120, Hissa No. 14, C.T.S. No. 1813 and 1813/1, Original Plot No. 329 and Final Plot No. 348, admeasuring 8,252.44 sq. ft. In TPS No. V, Vile Parle (E), Mumbai 400 057. The said Deed of Conveyance has been executed in pursuance of an Agreement dated December 12, 1995 and in consideration of a sum of Rs. 2,00,000/- .

ii. (2) Land over which the Company has sole development rights through its Subsidiary:

Project Name Location of Land Date of Agreement

Land held by Total Built-Up Area (in

sq. ft.)

Total Saleable Area (Sq.Ft)

Indira Nagar Project

Indira Nagar, Mumbai

December 26, 2006

ZDPL 1,81,319.58 1,22,935.64

Gandhi Nagar Project

Gandhi Nagar, Bandra (East), Mumbai

January 16, 2009

Mr. Jimit Shah, Mr.

Vipul Khona,

5,855.62 10,540.11

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Project Name Location of Land Date of Agreement

Land held by Total Built-Up Area (in

sq. ft.)

Total Saleable Area (Sq.Ft)

Mr. Ajit Pandurang Sawant and Mr. Ashwin

Viraji Shah (as eligible

members authorised to construct on the said land)

A. Indira Nagar Project Agreement between our Subsidiary and Members of Indira Nagar SRA No. 2, Co-operative Housing Society (“society”) dated December 26, 2006 Our Subsidiary has entered into an agreement with the chawl committee of the society, for redevelopment of nalla land under government redevelopment scheme introduced vide Gazette on June 16, 1992 wherein the said chawl area was declared as type 1 slum. The agreement is with regard land admeasuring 60,444.70 sq. ft. and all the part and parcel of the land situated at Indira Nagar Co-operative Housing Society Limited, CTS Nalla Land, Khandubai Desai Road, V. M Road, Vile Parle (W), Taluka Andheri, Mumbai 400 056. The following are the material covenants of the agreement:

1. As per the agreement, ZDPL has agreed to carry the project of redevelopment of the said plot of land and all that part and parcel thereof.

2. ZDPL shall not be entitled for any refund of the settlement amount paid to the slum dwellers in case the project is left incomplete or could not be completed due to any unforeseen reason.

3. The agreement further provides that the slum dwellers shall be provided accommodation at the same location in the same project.

B. Gandhinagar Project (Bandra East) a. Deed of Lease dated January 16, 2009 between Maharashtra Housing Development & Area

Development Authority (“MHADA”) and Ajit Pandurang Sawant (Lessee)

The lessee was allotted 2,927.81 sq. ft. of plot land bearing S. No 341, adjacent to building No. 77 & 78, Gandhi Nagar, Bandra (E), Mumbai 400 051 in the registration sub-district of Bandra for the purposes of constructing a residential building on lease for a period of 30 years. The lease agreement is renewable after the expiry of lease period at the option of MHADA on the terms and conditions as it may deem fit. The lease was entered into for a consideration of Rs. 18, 41, 712/- being the premium amount, Rs. 5,75,538/- being the capitalised amount for lease and Rs. 30/- being the nominal lease rent. As per Schedule II of the said lease agreement, the eligible members for the construction of the said premises are Mr. Jimit Shah, Mr. Vipul Khona, Mr. Ajit Pandurang Sawant, and Mr. Ashwin Viraji Shah.

The following are the material covenants of the agreement: 1. The lessee shall take the land in its present condition and incur all expenditure if any at its own cost and

to use the said plot of land for bonafide purpose of constructing and maintaining a residential building for him and other three members as mentioned in Schedule II of the lease agreement and duly authorised by the MHADA.

2. The lessee shall abide by the rules and regulations of the Government Municipal Corporation of Greater Bombay.

3. The lessee shall bear pay and discharge all the present and future rate taxes cesses assessment duties impositions and outgoing payable to the municipal authority.

4. The lessee shall not assign sublet, underlet or otherwise transfer in any other manner including parting with the possession of the whole or any part of the said land or its interest thereunder.

5. The lessee shall utilize the existing FSI (1 at the time of execution of the lease agreement) and any future increase in FSI shall be the property of MHADA and a request for utilisation of such increased FSI shall be made to MHADA by the lessee.

6. Of the total tenements to be constructed by the lessee, 10% shall be reserved for government

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officers/employees who will be nominated by the Government of Maharashtra.

b. Agreement dated January 11, 2011 between Mt. Ajit Pandurang Sawant (“Lessor”), Zodiac Developers Private Limited (“Developer”) and Mr. Vipul Khona, Mr. Jimit R. Khona, Mr. Jimit Shah, Mr. Aswin Viraj Shah (all four members referred as “Confirming Parties”) Pursuant to lease of 30 years granted to the Lessor by MHADA by agreement dated January 16, 2009, the Lessor along with the Confirming Parties have entered into “Development Agreement” with the Subsidiary to develop the leased land situated at No 341, adjacent to building No. 77 & 78, Gandhi Nagar, Bandra (E), Mumbai 400 051 (“Gandhinagar Property”). The main terms of the agreement are as set out below: a. The Developer shall develop Gandhinagar Property, with the consent of the Lessor and the Confirming

Party and shall be responsible for obtaining all consent related to the development of the Gandhinagar Property from MHADA and other regulatory authorities.

b. Any additional construction or increase in the tenements or increase in the eligible members will require the consent of the MHADA.

c. The Developer shall be entitled to benefit of the additional FSI and such other benefits that may be granted with respect to the Gandhi agar Property as per the prevailing laws from time to time.

d. The Developers shall be entitled to develop the full Gandhinagar Property including the use of the entire FSI permitted under the rules and regulations and to lad the external TDR purchased by the Developer from outside source, in addition to the TDR generated from the Gandhinagar Property as per the plans sanctioned and amended by MHADA.

e. Developer shall be entitled to sell, allow use of, or let out, deal with or dispose off the premises in the building constructed on the Gandhinagar Property to any person it desires.

iv. (2) Land for which joint development agreements has been entered into through its Subsidiary:

Project Name

Location of Land

Date of Agreement

Land held by

Total Built-Up

Area (in sq. ft.)

Total Saleable Area (in sq. ft.)

Hanuman Nagar Gulmohar Road, Andheri (W), Mumbai

October 15, 2004

ZDPL 3,83,868.35 1,11,934.83

Babu Genu Nagar D. P. Wadi, Ghodepdev, Mumbai

April 19, 2007

ZDPL 7,78,870.98 2,30,907.04

a. Hanumanagar Project Agreement for the Hanuman Nagar Project An agreement dated October 15, 2004 was entered into between our Subsidiary and Mr. Samir Narain Bhojwani, the Joint Developer (“JD”). Our Subsidiary is the duly authorised developer of lands bearing C.T.S. Nos. 454 and 464(Pt.) and Nallah Lands of Village Vile Parle (W) at “Hanuman Nagar”, Gulmohar Road, Near Irla Nala, Andheri (W), of Juhu Hanuman Nagar 1 S.R.A. C.H.S. Ltd. and Hanuman Nagar S.R.A. C.H.S. Ltd. (“Society”) admeasuring 1, 97,035.02 sq. ft., for SRA. In accordance with the Letter of Intent bearing No. SRA/Ch.E/75/KW/MHL/LOI dated April 3, 2004 of the First Property issued by the Executive Engineer – I.S.R.A. (Slum Rehabilitation Authority) for a Free Sale FSI of 17,011.49 sq. mtrs. And the same is valid and subsisting. Our Subsidiary intends to develop the said Property by amalgamating S.R.S. and by utilizing free sale component area for construction of a proposed Shopping Mall and Commercial Centre of minimum FSI of about 2,26,044 sq. ft. The other covenants of the agreement inter alia include:

1. In consideration of the JD agreeing to construct and complete the Free Sale Component Building/s at the

cost of The JD for proposed Shopping Mall/Commercial Centre on the larger property and paying refundable deposits to our Subsidiary, the JD shall be entitled to 50% of the constructed area in the Free Sale Component Buildings.

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2. In consideration of our Subsidiary making available the Property 1 and 2 and minimum FSI of 2,26,044 sq. ft. FSI for development thereon, Zodiac will be entitled to retain 50% of the constructed area in the Free Sale Component Buildings free of cost.

3. Additional Free Sale FSI over and above the said minimum FSI of 2, 26,044 sq. ft. which may be available in respect of the larger property shall be shared equally between the parties.

4. Our Subsidiary has agreed not to transfer the shareholding nor amalgamate our Subsidiary or merge it with any other Company or apply for voluntary winding up till the larger property is fully developed and the JD has recovered all the deposits paid by the JD to our Subsidiary.

Development Agreement for the Hanuman Nagar Project Our Subsidiary (“Developer”) entered into a Development Agreement (“Agreement”) with the Administrative Board of Juhu Hanuman Nagar – 1 – SRA CHS Limited (“Society”). The Agreement is with regard to all that is piece or parcel of land or ground admeasuring 2,51,210.23 sq. ft, or thereabouts being CTS No. 445, 464 & 484 (Pt.) of Village Vile Parle, Taluka Andheri, situate, lying and being at Irla, Vile Parle (W), Mumbai 400 058 in the registration district of Bandra, Mumbai Suburban District. The terms of the Agreement inter alia include:

1. The Developer has agreed to allot to all the non-residents Tenants/ Users/ Occupants, whose list of names is certified by the Competent Authority, the flats admeasuring carpet area of 225 sq. ft. free of cost to the Slum Dwellers. The Developer has also agreed to allot flats to the Traders/ Tenants/ Users/ Occupants/ Residents, having carpet area upto the area which is in their possession subject to a maximum of 430 sq. ft.

2. The Developer shall also construct Shops/ Flats/ Garages/ Parking/ Spaces/ Terraces, etc. as they may deem fit and proper and will have the rights to use thereof and/or sell the constructed area and/or to dispose the FSI and/or sell the other areas and/or to dispose it by sale to private parties at such price and terms and conditions as the Developer deems fit. It will be the right of the Developer to exclude the society therefrom.

3. The purchasers of such premises shall pay to the Developer a sum of Rs. 260/- (Rs. 250/- towards share capital and Rs. 10/- towards entrance fee). The Developer shall enter the purchaser as a Member.

4. The Society shall compel the occupant/ tenants/ users/ residents to shift to such transit accommodation having a unit area admeasuring 125 sq. ft. and having electricity and common water and drainage facilities and after completion of the construction by the Developers, the society will compel them to shift to the new residential building within 7 days from the date of notice in writing given by the Developers.

5. The Developer shall complete the construction within 3 years of date of receipt of commencement certificate unless any delay is caused due to circumstances out of the Developer’s control for which the Developer shall not be responsible.

Development Agreement for the Hanuman Nagar Project Our Subsidiary (“Developer”) entered into a Development Agreement (“Agreement”) dated March 27, 1996 with the Administrative Board of Juhu Hanuman Nagar – SRA CHS Limited (“Society”). The Agreement is with regard to all that is piece or parcel of land or ground admeasuring 51,483.24 sq. ft. or thereabouts being CTS No. 455 of Village Vile Parle, Taluka Andheri, situate, lying and being at Irla, Vile Parle (W), Mumbai 400 058 in the registration district of Bandra, Mumbai Suburban District. The terms of the Agreement inter alia include:

1. The Developer has agreed to allot to all the non-residents Tenants/ Users/ Occupants, whose list of names is certified by the Competent Authority, the flats admeasuring carpet area of 225 sq. ft. free of cost to the Slum Dwellers. The Developer has also agreed to allot flats to the Traders/ Tenants/ Users/ Occupants/ Residents, having carpet area upto the area which is in their possession subject to a maximum of 430 sq. ft.

2. The Developer shall also construct Shops/ Flats/ Garages/ Parking/ Spaces/ Terraces, etc. as they may deem fit and proper and will have the rights to use thereof and/or sell the constructed area and/or to dispose the FSI and/or sell the other areas and/or to dispose it by sale to private parties at such price and terms and conditions as the Developer deems fit. It will be the right of the Developer to exclude the society therefrom.

3. The purchasers of such premises shall pay to the Developer a sum of Rs. 260/- (Rs. 250/- towards share capital and Rs. 10/- towards entrance fee). The Developer shall enter the purchaser as a Member.

4. The Society shall compel the occupant/ tenants/ users/ residents to shift to such transit accommodation having a unit area admeasuring 125 sq. ft. and having electricity and common water and drainage

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facilities and after completion of the construction by the Developers, the society will compel them to shift to the new residential building within 7 days from the date of notice in writing given by the Developers.

The Developer shall complete the construction within 3 years of date of receipt of commencement certificate unless any delay is caused due to circumstances out of the Developer’s control for which the Developer shall not be responsible. b. Babu Genu Nagar Project Joint Development Agreement for Babu Genu Nagar Project This Joint Development Agreement (“JDA”) dated April 19, 2007 was entered into between Our Subsidiary and Lokhandwala Infrastructure Pvt. Ltd. (“LIPL”). The JDA is with regard to all that is piece and parcel of land, ground, hereditaments and premises admeasuring 3,12,156 sq. ft., or thereabouts bearing C.T.S. No. 720 of Mazgaon Division under “E” Ward situate lying and being at D.P. Wadi, Ghodepdev (“Property”) and all that is piece and parcel of municipal land or ground admeasuring 1,02,258 sq. ft., or thereabouts alongwith the structures standing thereon and bearing C.T.S. No. 720 (pt) of Mazgaon Division under “E” Ward in the situate lying and being at D.P. Wadi, Ghodepdev and forming part of the property (“Part”). The terms of the Agreement inter alia include:

(a) That our Subsidiary and LIPL agree to acquire and develop the Property and construct buildings for rehabilitating the eligible occupants as well as buildings for sale in the open market and share the free sale component areas in the ratio of 44:56, i.e., 44% to our Subsidiary and 56% to LIPL.

(b) That the parties agree to develop, in phase 1 of the project, the Part, by demolishing the structures thereon and constructing buildings for the rehabilitation of the eligible occupants and the said occupants viz., 1 Steel Factory, 1 Steel Factory Godown and 1 Bakery and buildings for free sale in the open market by utilizing the entire FSI including TDR FSI available.

(c) The parties have agreed to jointly carry out development of the said property by constructing buildings for rehabilitating the eligible members of Hutama Babu Genu Co-operative Housing Society (Proposed) and Kapreshwar Co-operative Housing Society (Proposed) (“BGS”).

(d) That all further approvals and consents in respect of BGS be obtained in the name of our Subsidiary. The costs for obtaining such approvals and consents shall be shared in the ratio of 44:56.

(e) The parties have agreed that LIPL shall bear and pay all the costs, charges (official), expenses including out-of-pocket expenses for obtaining all permissions, approvals and sanctions upto the stage of C.C. of the 1st rehabilitation and sale building is issued either by the Municipal Corporation of Greater Mumbai (“MCGM”) or any other concerned authority subject to an expense not exceeding Rs. 1, 35, 00,000/-. Any expenses in excess of this amount shall be shared by the parties in the ratio of 44:56.

(f) That the onus of vacating the said occupants viz., 1 Steel Factory, 1 Steel Factory Godown and 1 Bakery shall lie on LIPL occupying an aggregate area of 16232.11 sq. ft, or thereabouts.

(g) That the parties shall appoint contractors to carry out construction and shall contribute in the ratio of 44:56.

(h) That simultaneously with the execution of the JDA, the parties shall open a separate joint Bank account and shall deposit such money as shall be mutually agreed in the ratio of 44:56.

(i) That the parties shall have a share in the ratio of 44:56 in respect of the property or any other benefit available in respect thereof.

(j) That within a period of 30 days of the plans being sanctioned in respect of the free sale building/s, the parties shall earmark the premises coming to their respective share in the proposed new building/s to be constructed. The premises shall be distributed in the said Ratio as far as possible.

(k) That on demarcation of their respective allocations each of the parties shall be entitled to dispose of the flats/shops/offices/premises or otherwise deal with them in any manner they deem fit.

(l) That the draft Agreement for Sale that may be entered into by respective parties shall be prepared by the Advocates and Solicitors of our Subsidiary and approved by those of the LIPL.

(m) That simultaneously with the demarcation of their respective allocations, the parties hereto shall execute irrevocable Powers of Attorney in favour of the other so that the parties hereto are able to market their respective allocations and sign the Agreement for and on behalf of the Other Party as “Confirming Party”.

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Development Agreement for Babu Genu Nagar Project Our Subsidiary (“Developer”) entered into a Development Agreement (“Agreement”) dated January 20, 1996 with the Administrative Board of the proposed Hutatma Babu Genu CHS Society (the “Society”). The Agreement is with regard to all that is piece or parcel of land or ground admeasuring 75,348 sq. ft. or thereabouts being C.T.S. No. 720 (pt.) of Mazagaon Division under “E” Ward in the situate lying and being at D. P. Wadi, Ghodepdev admeasuring approximately 75,348 sq. ft. The terms of the Agreement inter alia include: 1. The Developer has agreed to allot to all the eligible non-residents tenants/users/ occupants, whose list of

names is certified by the competent authority, the flats admeasuring carpet area 0f 225 sq. ft. free of cost to the slum dwellers. The Developer has also agreed to allot flats to the traders/ tenants/ users/ occupants/ residents, having carpet area upto the area which is in their possession subject to a maximum of 430 sq. ft.

2. The Developer shall also construct shops/ flats/ garages/ parking/ spaces/ terraces, etc. as they may deem fit and sell the other shares and/ or to dispose it by sale to private parties at such price and terms and conditions as the Developer deems it. It will be the right of the Developer to exclude the society therefrom.

3. The purchasers of such premises shall pay to the Developer a sum of Rs. 260/- (Rs. 250/- towards share capital and Rs. 100/- towards entrance fee). The Developer shall enter the purchaser as a member.

4. The Society shall compel the occupant/tenants/users/residents to shift to such transit accommodation having a unit area admeasuring 125 sq. ft. and having electricity and common water and drainage facilities and after completion of construction by the developers, the Society shall compel them to shift them to the new residential building within 7 days from the date of notice in writing given by the Developers.

The Developer shall complete the construction within 3 years of date of receipt of the commencement certificate unless any delay is caused due to circumstances out of the Developer’s control for which the Developers shall not be responsible.

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KEY INDUSTRY REGULATIONS AND POLICIES

The following description is a summary of the relevant regulations and policies as prescribed by the government. The information detailed in this chapter has been obtained from the various legislations that are available in the public domain. The regulations set out below are not exhaustive, and are only intended to provide general information to the investors and are neither designed nor intended to be a substitute for professional legal advice. In this chapter, unless the context requires otherwise, any reference to our company refers to our Company. No action or omission should be taken or contemplated based on the contents below without independent verification with each prospective investors’ legal advisors, and any prospective investor who does without such independent verification and based on the contents herein below would do so at his/her/its sole risk and without recourse to our Company or the Lead Manager or any other person or entity whatsoever. Our Company is engaged in the business of real estate development. Since or business involves the acquisition of land, we are subject to a number of Central and State Legislations which regulate the substantive as well as procedural aspects of the acquisition, development and transfer of land including the construction of housing and commercial establishments. Additionally, our projects require, at various stages of completion, the sanction of the concerned authorities under the relevant state legislations and local bye-laws. The regulations governing the real estate development industry in India are highly fragmented, as each State prescribes its own regulations. In this chapter, we will be limiting our discussion to the laws and regulations passed by the Union of India and the Maharashtra State Legislature. At the very outset, our Company is subject to Central and State laws providing for acquisition of land, its transfer and other related aspects like registration of land, payment of stamp duty. We would also be subject to laws providing for the regulation and supervision of building and residential premises and certain other State specific laws. Given below is a brief description of the various legislations, including central and State legislations that are currently applicable to the business carried on by us. 1. Constitution of India In accordance with the Constitution of India, the Union is a Federal State. The States are given the exclusive power to legislate on those matters which are contained in List II of Schedule VII of the Constitution (“State List”). Similarly, the Central Legislature, i.e., the Parliament is empowered to legislate on those matters mentioned in List I of Schedule VII (“Union List”). Further, those matters contained in List III are concurrent, i.e., laws on those subjects can be passed by both the Central as well as the State Legislatures (“Concurrent List”). Enumerated below are certain important entries in relation to land which appear in the Union and the State lists. 1.1. Union List Entry 86 of the Union list is grants the power to the Central Legislature to pass laws in relation to “Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies”. Further entry 87 grants the power to the Union to make laws imposing “Estate duty in respect of property other than agricultural land”. 1.2. State List Entry 18 of the State List vests the power to make laws relating to “land that is to say right in or over the land, land tenures including the relation of landlord and tenant, and the collection of rents, transfer and alienation of agricultural lands; land improvement and agricultural loans; colonization” with the State Legislature. Further entry 49 empowers the State to pass legislations in relation to “taxes on land and buildings”. Therefore, as provided for in the Constitution of India, as regards lands in specific and real estate in general, the same are governed both by the laws enacted by the States as well as by the Central Government.

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2. Laws Enacted by the Union of India 2.1. Transfer of Property Act, 1884 The Transfer of Property Act (“TP Act”) is an enactment which pertains to the various methods in which transfer of property including transfer of immovable property or any interest in relation to that property, between individuals, firms and companies takes place. This mode of transfer between individuals, firms etc. is governed by the provisions of the TP Act, as opposed to the transfer of property or interest by the operation of law. The TP Act recognizes, among others, the following forms in which the interest in 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.

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

The TP Act also stipulates the general principles relating to the transfer of property including, among other things, identifying the 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. 2.2. Indian Easements Act, 1882 (“Easements Act”) The right of easements is derived from the ownership of property and is governed by the Easements Act. The right of easement has been defined under the Easement Act to mean a right which the owner or occupier of land possesses over the land of another for the beneficial enjoyment of his own land. Such a right may allow the owner of the land to do and continue to prevent something being done, in or upon the land which is not his own. Under the Easements Act, a license is defined as a right to use property without any interest created in favour of the licensee, as opposed to a lease, which creates an interest in favour of the lessee. The period and the incident upon which a license may be revoked may be provided in the license agreement entered into between the licensor and the licensee. In accordance with the provisions of the Easements Act, easement 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; or (d) by local custom. 2.3. The Indian Stamp Act, 1899 (“Stamp Act”) Stamp duty in relation to certain specified categories of instruments as specified under Entry 91 of the Union list, is governed by the provisions of the Stamp Act which is enacted by the Central Government. The Stamp Act stipulates that Stamp Duty is payable on all instruments/ documents evidencing a transfer or the creation or extinguishment of any right, title or interest in immovable 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 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. 2.4. Registration Act, 1908 (“Registration Act”) The Registration Act has been enacted with the object of providing public notice of the execution of documents affecting a transfer of any interest in an immovable property. The purpose of the Registration Act is the

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conservation of evidence, assurances, title, and publication of documents and prevention of fraud. It lays down in detail, the formalities for registering an instrument. Section 17 of the Registration Act identifies documents for which registration is compulsory and includes among other things, any non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, in immovable property of the value of one hundred rupees or more, and a lease of immovable property for any term exceeding eleven months or reserving a yearly rent. A document which is compulsorily registrable under the Registration Act, if not registered will not affect the property comprised in it, nor will it be treated 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 under the T.P. Act or as collateral). The amount of the fees under the Registration Act for the purpose of registration, vary from State to State. Service Tax

Service tax levy on sale of flats have become effective from July 1, 2010. The Finance Act, 2010, has been amended by inclusion of two new explanations to section 65(105) (zzq) and section 65(105) (zzzh) to expand the scope of “commercial or industrial construction” and “construction of complex” categories to cover sale of under construction commercial units/flats in service tax net. Under the new amendment the builder is deemed to be service provider with respect to under construction units and is levied service tax for any sale of under construction units on the full or part consideration received by such builder before completion of the building. Under new explanation to section 65(105) (zzq), the builder is liable to pay service tax of 10.30% on the consideration amount on any sale of flats/units having preferential location (any location which has extra advantage which attracts extra payment over and above the basic sale price). In case of other construction a service tax of 2.575% shall be payable on the sale price. 3. Laws for Classification of Land User Usually, land is publicly classified under one or more categories, such as residential, commercial, agricultural, etc. Land classified under a specified category is to be used only for such purpose. In order to use land for any other purpose, prior permission from the relevant revenue, municipal or planning authorities would be required. Where the land is originally classified as agricultural land, in order to use the land for any other purpose, the land is required to be converted or alienated for non-agricultural purposes. In addition, the Maharashtra State government has imposed various restrictions on the transfer of property which vary from other States. 3.1 Development of Agricultural Land The acquisition of agricultural land is regulated by state land reform laws, which prescribe limits up to which an entity may acquire agricultural land. Any transfer of land which results in the aggregate land holdings of the acquirer in the state to exceed this ceiling is void, and the surplus land is deemed, from the date of the transfer, to have been vested in the State government free of all encumbrances. Certain States also prohibit the acquisition of agricultural land by non-agriculturists. When a local or planning authority earmarks certain areas for non-agricultural use such as, townships and commercial complexes, agricultural lands may be acquired for such specified development. After obtaining a conversion certificate from the appropriate authority with respect to a change in use of the land from agricultural to non-agricultural, the ceiling limits in relation to agricultural lands will not be applicable. Appropriate licenses would need to be obtained for development of land. While granting licenses for development, the authorities generally levy proportional development charges for the provision of services such as laying down of main lines, drainage, sewerage, water supply and electricity. Such licences require approvals of layout plans for development and building plans for construction activities. The transfer of agricultural land is subject to laws enacted by the appropriate state legislature. The licences are transferable on permission of the appropriate authority. Similar to urban development laws, approvals of the layout plans and building plans, if applicable, need to be obtained. 3.2 Land Use Planning Land use planning and its regulations, including the formulation of regulations for building constructions, form a vital part of the urban planning and development process. Various enactments, rules and regulations have been made by the Government, concerned State Governments, planning authorities, municipal corporations and

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municipalities, village panchayats, etc. which deal with the acquisition, ownership, possession, development, zoning and usage of land. All relevant applicable laws, rules and regulations have to be taken into consideration by any person or entity proposing to enter into any real estate development or construction activity in this sector in India. Various enactments, rules and regulations have been made by the central government, concerned state governments and other authorised agencies and bodies such as the Ministry of Urban Development, State Land Development and/or Planning Boards, local/municipal or village authorities, which deal with the acquisition, ownership, possession, development, zoning, planning, management and taxation of land and real estate. All applicable laws, rules and regulations have to be taken into consideration by any person or entity proposing to enter into any real estate development or construction activity in this sector in India. 3.3 Building Consents Each state and city has its own set of laws for construction, which govern planned development (such as floor area ratio or floor space index limits, set-backs, height restrictions etc.). The various authorities that govern building activities in states include the town and country planning department, municipal corporations. Any application for undertaking any construction or development activity has to be made to the town planning authority, municipality, municipal corporation, village panchayat, etc. as the case may be, who has jurisdiction to sanction such construction. The Town and Country Planning Department prepares the schemes and projects of various agencies so as to improve living and working environments and to provide planned and developed sites for residential, commercial and industrial purposes. The municipal corporations regulate building development and construction norms. For example, building plans are required to be approved by the relevant municipal authority. The Urban Arts Commission advises the relevant State Government in the matter of preserving, developing and maintaining the aesthetic quality of urban and environmental design in some states and also provides advice and guidance to any local body with respect to building or engineering operations or any development proposal which affects or is likely to affect the skyline or the aesthetic quality of the surroundings or any public amenity provided therein. Under certain State laws, the local body, before it accords its approval for building operations, engineering operations or development proposals, is obliged to refer all such operations to the Urban Arts Commission and seek its approval for the project. Additionally, certain approvals and consents may also be required from various other departments, such as the Pollution Control Board, Fire Services Department, the Airports Authority of India, and the Archaeological Survey of India etc.

3.4 National Building Code (“NBC”)

The National Building Code of India (NBC), a comprehensive building Code, was formulated by the Bureau of Indian Standards (BIS), as a national instrument to provide guidelines for regulating the building construction activities across the country. The Code primarily contains administrative regulations, development control rules and general building requirements like fire safety requirements, stipulations regarding materials, structural design and construction (including safety); and building and plumbing services. The Code was first published in 1970 at the instance of the Planning Commission and has subsequently been revised from time to time to keep abreast with the developments in the field of building construction. It is designed as a Model Code for adoption by all agencies in building construction works by the Public Works Departments, other government construction departments, local bodies or private construction agencies. 3.5 The Land Acquisition Act, 1894 (“Land Acquisition Act”) Land holdings are subject to the Land Acquisition Act which provides for the compulsory acquisition of land by the Central Government or appropriate State Government for public purposes, including planned development and town and rural planning. However, any person having an interest in such land has the right to object to such compulsory acquisition and has the right to compensation. In addition, certain states have amended the central statute and framed their own rules for compulsory land acquisition. Our Company has to abide by the State legislations in those states in which it conducts its business, in addition to the Central legislation. The GoI is empowered to acquire and seize any property, upon observance of the due process of law. The key legislation relating to the expropriation of property is the Land Acquisition Act, 1894 (the “Land Acquisition Act”). Under the provisions of the Land Acquisition Act, land in any locality can be acquired compulsorily by

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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 Land Acquisition 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; provision of land for town or rural planning; provision of land for the planned development of such land from public funds pursuant to any scheme or policy of the Government and subsequent disposal thereof in whole or in part by ease, 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 the 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. Any person having an interest in such land has the right to object and the right to 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. 3.6 Environmental Regulations The real estate sector is also subject to central, state and local regulations which are designed to protect the environment. Among other things, these laws regulate the environmental impact of construction and development activities, emission of air pollutants and discharge of chemicals into surrounding water bodies. These various environmental laws give primary environmental oversight authority to the Ministry of Environment and Forest (“MoEF”), the Central Pollution Control Board (the “CPCB”) and the respective State Pollution Control Boards. The CPCB is the law enforcing body at the national level. It enforces environmental legislation, coordinates the activities of State Pollution Control Committees, establishes environmental standards and plans and executes a nationwide programme for the prevention, control and abatement of pollution. 3.7 The Ministry of Environment and Forests The MoEF is the key national regulatory agency responsible for policy formulation, planning and co-ordination of all issues related to environmental protection. The Environment Impact Assessment Notification S.O. 60(E), issued on 27th January 1994 (the “1994 notification”) under the provisions of the Environment (Protection) Act, 1986, as amended (the “EPA”), prescribes that new construction products that have an investment of more than Rs.500 million require prior environmental clearance of the MoEF. The environmental clearance must be obtained from the MoEF according to the procedure specified in the 1994 Notification. No construction work, preliminary or other, relating to the setting up of a project can be undertaken until such clearance is obtained. The application to the MoEF is required to be accompanied by a project report which should include, inter alia, an Environmental Impact Assessment Report and an Environment Management Plan. The Impact Assessment Authority evaluates the report and plan submitted. Such assessment is required to be completed within a period of 90 days from receipt of the requisite documents from the project developer/manager. Thereafter, a public hearing has to be completed and a decision conveyed within 30 days. The clearance granted is valid for a period of five years from the commencement of the construction or operation of the project. The project developer/manager concerned is required to submit a half yearly report to the Impact Assessment Authority to enable it to monitor effectively the implementation of the recommendations and conditions subject to which the environmental clearance has been given. If no comments from the Impact Assessment Authority are received within the time limits outlined above, the project will be deemed to have been approved by the project developer/manager. On 14th September 2006 the Environmental Impact Assessment Notification S.O. 1533 (the “2006 Notification”) was issued in super session of the 1994 Notification. Under the 2006 Notification, the environmental clearance process for new projects consists of four stages – screening, scoping, public consultation and appraisal. After completion of public consultation, the applicant is required to make appropriate changes in the draft Environment Impact Assessment Report and the Environment Management Plan. The final Environment Impact Assessment Report has to be submitted to the concerned regulatory authority for appraisal. The regulatory authority is required to give its decision within 105 days of the receipt of the final Environment Impact Assessment Report.

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4. Labour Regulations 4.1 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 Workers 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 Shops and Commercial Establishments Acts. 4.2 Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (“Construction Workers Act”) The Construction Workers Act is a social welfare legislation which aims to provide certain benefits as enumerated in the Construction Workers Act to the workers engaged in establishments that use manual labour for purposes of construction activities. This statute aims to provide for regulation of employment & conditions of service of the building and other construction workers as also their safety, health and welfare measures in every establishment which employs or has employed ten or more workers. This Act exempts those residential houses constructed for own purposes at a cost of not exceeding Rs. 10 lacs and such other activities to which the provision of Factories Act, 1948 and Mines Act, 1952 apply. This Act provides for an Advisory Committee at the Central and the State levels to advise the Governments concerned on such matters arising out of the administration of the Act as may be referred to it. It also provides for registration of each establishment within a period of sixty days from the commencement of work to ensure that there are no malpractices and to discourage non-compliance of law by circumventing. The Construction Workers Act also provides for the regulatory regime to establish “Boards” at the Central and the State level, to regulate the functioning of its provisions. 4.3 The Minimum Wages Act (“Minimum Wages Act”) The Minimum Wages Act provides for the fixing of appropriate minimum wages for workers involved in the various scheduled industries as specified in the Minimum Wages Act. The schedule of the Minimum Wages Act refers to employment on the construction or maintenance of roads or in building operations. 5. Laws Specific to the State of Maharashtra 5.1 The Institutional and Legal Framework of Current Slum Upgrading in Mumbai The institutional and legal framework for current slum upgrading policy in Mumbai has been laid down by a Committee under the Chairmanship of D. K. Afzalpurkar, a senior bureaucrat, in 1995. The group had amongst its members, government officials, representatives of the housing industry, and architects as also the Director of SPARC. Assuming family size to be 5, this meant building 800,000 -1,000,000 houses (including transit tenements) over a period of 5-6 years. The study group was set up to devise a framework to implement the election promise. A Slum Rehabilitation Authority (SRA) was set up by amending the Slum Area (Improvement, Clearance and Rehabilitation) Act of 1971. This was to be the single coordinating authority while there would be multiple executing agencies like developers, public bodies, NGOs, cooperative housing societies of slum dwellers and the like. For slum areas, the SRA was made the Planning Authority with powers to make changes in the Development Plan of the city, grant building permissions and so on. Since these powers belonged to the Municipal Corporation of Greater Mumbai, necessary changes were made in the Bombay Municipal Corporation Act and the Maharashtra Regional Town Planning Act. Such was the legislative and institutional framework laid out by the Committee. The SRA was to be headed by a Minister (today it is the Chief Minister) and was to have a senior bureaucrat as the Chief Executive. All slum and pavement families who could establish that their names were on the electoral rolls of 1/1/95 were to be held eligible to get a free 225 sq. ft. tenement. In addition, the developer was to pay a sum of Rs.20, 000 per family which was to go into a corpus, the interest upon which was to help defray monthly outgoings for maintenance as well as municipal taxes. It was expected that the developer would make sufficient profits from sale of extra tenements to provide both a free tenement and the corpus of Rs.20, 000 per family mentioned above.

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Municipal taxes were pegged at 20% of the existing rates to lessen the burden on the slum family, with a provision to increase them gradually over a period of time. Commercial areas like shops and restaurants would also be given floor space equal to the existing area or 225 sq. ft., whichever was less, free of cost. The redevelopment of slums in situ was to be the guiding principle and main strategy of the programme. During redevelopment of the slum, the families living there could either find alternative accommodation on their own or be regrouped on the site itself or be accommodated in transit camps to be provided by the developer. Where relocation was inescapable, care was to be taken to see that as far as possible, the new sites were on the same railway line (Mumbai has an extensive suburban railway system). 5.2 Urban Development Laws State legislations provide for the planned development of urban areas and the establishment of regional and local development authorities charged with the responsibility of planning and development of urban areas within their jurisdiction. Real estate projects have to be planned and developed in conformity with the norms established by these laws and the regulations made thereunder and require sanctions from the government departments and developmental authorities at various stages. Where projects are undertaken on lands which form part of the approved layout plans and/or fall within municipal limits of a town, generally the building plans of the projects have to be approved by the concerned municipal or developmental authority. Building plans are required to be approved for each building within the project area. Clearances with respect to other aspects of development such as fire, civil aviation and pollution control are required from appropriate authorities, depending on the nature, size and height of the projects. The approvals granted by the authorities generally prescribe a time limit for completion of the projects. These time limits are renewable upon payment of a prescribed fee. The regulations provide for obtaining a completion/occupancy certificate upon completion of the project.

5.3 The Bombay Stamp Act, 1958 Stamp duty on instruments in the state of Maharashtra is governed by the Bombay Stamp Act. Under this Act, stamp duty is payable on documents/instruments by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded. All instruments chargeable with duty and executed by any person are required to be stamped before or at the time of execution or immediately thereafter on the next working day following the day of execution. The Act authorizes the State Government to call for examination of any instrument to satisfy itself that the market value of the property referred therein has been truly set forth and the duty paid on it is adequate. Instruments not duly stamped are incapable of being admitted in court as evidence of the transaction in question. The State Government has the authority to impound insufficiently stamped documents. 5.4 The Centrally Funded Environmental Improvement of Urban Slums (EIUS), 1970 In 1970 the Slum Improvement Program (SIP) was launched with the mandate to provide water supply, toilets, roads, drainage and streetlights for slum dwellers. The scheme included provision of community taps, community latrines, construction of pathways and drains and provision of streetlights. The scheme was financed by grants from the central government. Slum Improvements began in 1972 under the Central Scheme of Environmental Improvement of Urban Slums. A separate mechanism, the Maharashtra Slum Improvement Board was set up by the state government in 1974 to co-ordinate this work. This was later merged with MHADA, when the Maharashtra Housing and Area Development Authority (MHADA) was set up in 1977. MHADA improved slums on government and private land whereas slums on corporation land were improved by MCGM. 5.5 The Maharashtra Vacant Lands (Prohibition of Unauthorised Structures and Summary Eviction) Act, 1975 In an effort to prevent a further proliferation of squatter settlements, the state government enacted the Vacant Lands Act. According to the Act, all lands encroached by squatters can be considered vacant, all slums covered by the Act are temporary and can be removed, police can be mobilized for eviction and alternative accommodation has to be provided. Squatters have to pay ‘compensation’ for unauthorized occupation of land. Due to these provisions, courts could not move against evictions. With the help of this act many demolitions were carried out in different parts of the city. The offence of unauthorized occupation was non-bailable. After the slum census in 1976, the government made a policy of protection, removal, rehabilitation and improvement.

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For the vigilance of open lands and for the recovery of compensation and service charges the government appointed a Controller of Slums at the rank of District Collector. The rates of compensation were revised only in 1987 (based on the recommendations of Jankhanwala Committee). The rates of compensation included service charges, compensation for occupying land and nominal taxes, with different rates for residential, commercial and industrial uses in different cities of the state. 5.6 Maharashtra Rent Control Act, 1999 In order to encourage construction of new houses by assuring a fair return and to unify, consolidate and amend the laws prevailing in the different parts of the State relating to the control of rents, repairs of certain premises and of eviction, the Maharashtra Rent Control Act, 1999 is enacted. 5.7 The Bombay Provincial Municipal Corporation Act, 1949 The object of enactment of the Bombay Provincial Municipal Corporation Act, 1949 was the establishment of Municipal Corporations for certain cities in the Province of Bombay, for e.g., Ahmedabad, Pune, etc. 5.8 The Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 The Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 ("MOF Act") applies throughout the State of Maharashtra. The MOF Act seeks to regulate the promotion of construction, sale, management and transfer of flats purchased on ownership basis by laying down the rights and liabilities of the promoter/builders and the flat purchasers. The provisions of the MOF Act apply to promoter/ developers who intend to construct a block or building of flats on ownership basis. Under the rules framed under the MOF Act, a model form of agreement to be entered into between promoter/ developers and purchasers of flats has been prescribed. Under the MOF Act, the promoter / developer is required to make certain disclosures regarding the marketability of the title of the property/land on which the flats are constructed or proposed to be constructed, disclose the specifications of the building, give inspection of the approved plans of the building and development permission granted by the local planning authority, and is required to execute the Agreement as per the terms and conditions of the model Agreement prepared by the State Government under the above Act.

Pursuant to an amendment dated May 12, 2008 to the MOF Act, the flats are eligible to be sold on the basis of carpet area only. The said carpet area includes the area of balcony of such flat. However, the promoters are allowed to separately charge for the common areas and facilities in proportion to the carpet area of the flat.

5. 9 Maharashtra Tax on Buildings (with Larger Residential Premises) Act, 1979 The Maharashtra Tax on Buildings (with Larger Residential Premises) Act, 1979 was enacted with the object of the Maharashtra Tax on Buildings (with Larger Residential Premises) Act 1979 is to levy a tax so that there is a check on extravagant use of available living space, particularly residential accommodation. 5.10 The Maharashtra Cooperative Societies Act, 1960 The Maharashtra Cooperative Societies Act, 1960 has been enacted with a view to providing for the orderly development of cooperative movement in the State of Maharashtra in accordance with the relevant Directive Principles of State Policy enunciated in the Constitution of India.

5.11 Bombay Municipal Corporation Act, 1888 The Bombay Municipal Corporation Act, 1888 has been enacted to regulate the municipal administration of the city of Bombay (now Mumbai) and to secure the due administration of municipal funds. 5.12 The Maharashtra Housing and Area Development Act, 1976 The MHAD Act, 1976 provided for the creation of the Maharashtra Housing & Area Development Authority (“MHADA”)- an apex public body that is responsible for the integration of the activities and functions performed by former regional statutory bodies to provide for comprehensive, co-ordinate approach to the

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problems of housing. The Act amalgamated the regional statutory Housing Bodies into a single body to manage the housing, restructuring and develop schemes and solutions to issues like pollution, ecology, over-crowding and other problems. Under this Act, the MHADA is divided into Mumbai Repairs and Reconstruction Board, Mumbai Slum Improvement Board and Regional Boards that cater to the areas like Nasik, Pune, Aurangabad, Konkan, Nagpur, etc. 5.13 The Maharashtra Housing and Area Development (Maharashtra Slum Improvement Fund) Rules, 1988 These Rules were made in exercise of the power conferred by sub-section (1) and Clause (xvi) of sub-section (2) of Section 184, read with sub-section (1) and (2) of Section 117 of the Maharashtra Housing and Area Development Act, 1976. Pursuant to the Rules, the Maharashtra Slum Improvement Fund was created and maintained. The fund consists of: a) The service charge recovered from occupiers under Section 114 of the Maharashtra Housing and Area

Development Act, 1976; and b) An annual contribution from Government and local authorities under Section 118. The fund is to be utilized for the following: a) Payment of Grant-in-Aid to the Municipal Corporation or Municipal Councils for carrying out such

improvement works of providing civic amenities to the occupants of the slum areas, b) Expenditure on staff of improvement of slums, and c) Any other purposes provided by the Government from time to time for rehabilitation and improvement of

slum areas.

5.14 The Maharashtra Apartment Ownership Act, 1970 The Maharashtra Apartment Ownership Act, 1970 has been enacted to provide for ownership of an individual apartment in a building and to make such apartment heritable and transferable property. 5.15 Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 The Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 ("MSA Act") was amended in 1995 to provide for the creation of a Slum Rehabilitation Authority, a Body that has been made responsible for preparing a general slum rehabilitation scheme and implementation of it. The aim of this legislation is to provide for improvement and clearance of slum areas in the State and their redevelopment and also provide for the protection of occupiers from eviction and distress warrants. 5.16 Maharashtra Regional and Town Planning Act, 1966 The object of the Maharashtra Tax on Buildings (with Larger Residential Premises) Act 1979 is to levy a tax so that there is a check on extravagant use of available living space, particularly residential accommodation. This statute was enacted in supersession of the Maharashtra Tax on Residential Premises Act, 1974, which was struck down by the Bombay High Court as it was found to be violative of Article 14 of the Constitution. 5.16.1 Development Control Regulations for Greater Mumbai, 1991 (Development Control Regulations) The Urban Development Department of the Government of Maharashtra sanctioned the Development Control Regulations (“D.C. Regulations” or the “Regulations”) for Greater Mumbai under Section 31(1) of the Maharashtra Regional and Town Planning Act, 1966 and the same was made operative in 1991. The DCR apply to building activity and development work in areas under the entire jurisdiction of the Municipal Corporation of Greater Mumbai. The objective of the Regulations is to ensure health and safety of the occupants of individual buildings and the neighbourhood. It is a textual translation of the development strategy adopted by the city planners for the growth and development of the city of Mumbai over a stipulated period.

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1. Regulation 33 and sub-clause (7): Grant of Floor Space Index to existing buildings of certain societies:

Categories of cessed buildings in the Island city:

Category Year of Construction

A Before to 01.09.1940

B Between 01.09.1940 to 31.12.1950

C Between 01.01.1951 to 30.09.1996

Source: - MHADA website (as on 08.06.2006) Regulation 33(7) provides for reconstruction or redevelopment of cessed buildings in the island city by Co-operative Housing Societies of existing tenants or by Co-operative Housing Societies of landlords and/or occupiers of a cessed buildings falling under ‘A’ category in Mumbai, which attract the provisions of MHADA Act, 1976 and reconstruction or redevelopment of the buildings constructed prior to 1940, belonging to the MCGM, Department of Police, Police Housing Corporation, Jail & Home Guards of Government of Maharashtra (“certain societies”). The Floor Space Index (F.S.I.) for the abovementioned buildings shall be 3.00 on the gross plot area or the F.S.I. required for rehabilitation of existing tenants + 50% incentive F.S.I., whichever is more. In any proposal of maximum 3.00 F.S.I. the permissible maximum F.S.I. over and above “rehab + incentive” shall be shared in terms of built up area between MCGM/MHADA and private developer in Joint Venture in the ratio of 1:0.5. It is to be noted that the development of land for certain societies, defined above, would be considered only after due approval of the Committee appointed by the Government. However the first proviso to Regulation 33(7) states that MHADA/MCGM shall be eligible to get additional F.S.I. over the otherwise permissible F.S.I. as described above, after obtaining prior approval of the Government. With respect to reconstruction or redevelopment scheme of ‘B’ category cessed buildings undertaken by the Landlord and/or Co-operative Housing Societies of Landlord and/or occupiers, the total F.S.I. shall be the F.S.I. required for the rehabilitation of the existing occupiers + 50% incentive F.S.I. and in case of composite redevelopment of ‘A’, ‘B’ and ‘C’ category buildings declared as dangerous buildings by the MHADA before the monsoon of 1997, F.S.I. available will be as applicable for ‘A’ category cessed buildings. In cases of composite redevelopment undertaken by the different landlords and/or co-operative housing societies of landlords and/or occupiers jointly of 2 or more plots but not less than 5 plots with ‘A’, ‘B’ and ‘C’ category cessed buildings the F.S.I. permissible will be 3.00 or F.S.I. required for rehabilitation of existing occupiers + 60% incentive F.S.I. , whichever is more. Provided however if the number of plots jointly undertaken for re-development is six or more, F.S.I. 3.00 or F.S.I. required for rehabilitation of occupiers + 70% incentive F.S.I., whichever is more will be available. With respect to buildings that have been declared as unsafe by MHADA prior to monsoon of 1997, the abovementioned F.S.I. will be available irrespective of category of cessed buildings. The Municipal Corporation of Greater Mumbai has also issued a policy circular under No. HE/121/DPC/GIN of 16.4.2000 in this regard. Procedure-

a. A written consent of 70% of the occupiers of the old building and all the occupiers is necessary for construction of a new building under Regulation 33(7) and (9). However in the event MHADA / MCGM undertakes development directly then consent of 70% tenants/occupiers is not required.

b. Each occupant will be rehabilitated and shall be given a carpet area for residential purposes in the old building, ranging from a minimum of 300 sq.ft (27.88 sq. mt.) and/or maximum carpet area upto 753 sq.ft. (70 sq. mt.) as provided in the MHADA Act, 1976 and in case of a non-residential occupier the carpet area will be equivalent to the area occupied in the old building. In case of redevelopment of buildings undertaken by MHADA, carpet area shall be at the discretion of MHADA. Mumbai Repairs and Reconstruction Board/MHADA/MCGM as the case maybe, shall certify a list according to which the tenements in the reconstructed building shall be allotted by the landlord/occupants of the Co-operative Housing Societies. The occupier may be allowed to declare whether the tenement is residential or non-residential on production of sufficient proof.

c. The abovementioned F.S.I. will be allowed by the Commissioner only after the Mumbai Repairs and Reconstruction Board is satisfied that the said redevelopment proposal fulfills all conditions to be eligible for the benefits under these regulations. Furthermore as the permissible F.S.I. is dependent upon the number of occupiers and the actual area occupied by them, no new tenancy created after June 13, 1996 shall be considered. Unauthorized constructions made in the cessed buildings will not be considered while calculating the existing F.S.I.

d. Initially eligibility of tenants is approved by the MHADA/MCGM as case may be and a “Letter of Intent” is issued accordingly, setting forth the area on which the development of residential space for

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the tenants will occur and the area that the developer is entitled to develop for its own purposes. Re-construction on the site must commence within 90 days of the intimation of approval.

e. Existing tenants can be shifted from any plot under non-buildable reservations admeasuring upto 5382 sq. ft. (500 sq.mts.)

f. For other buildable reservations on lands where Section 31 guidelines under Maharashtra Regional and Town planning Act are not available, built-up area of either 15% or 25% of the entire plot under reservation, whichever is less, shall be made available free of cost for the MCGM or for any other appropriate Authority.

g. Temporary transit camps are permitted on the same land or land situated elsewhere belonging to the same owner/developer with concessions under SRS project under Regulations 33(10) of these Regulations. These camps however must be demolished within one month from the date of occupation certificate granted by the MCGM for the reconstructed buildings.

h. As compensation for the construction of new housing for former tenants, the MHADA/MCGM grants the real estate developer the right to develop/construct a building/s on the cleared land freed by such redevelopment as sale building/s, the developer may then occupy, sell or lease units/flats in these buildings for its benefits.

i. With respect to land developed by the developer for his own purposes, a long-term lease shall be entered into by the developer (or a cooperative society comprising persons to whom the units have been sold) and the relevant land owning authority whose lands had been occupied by tenants. The term of the lease may be further extended for additional periods of time at such rental amounts as determined by the relevant land owning authority. With regard to the part of the former land handed over to the former tenants, leases are entered into by the relevant land owning authority and a cooperative association required to be established by each developer to represent the former tenants.

j. In the event any F.S.I. for the plot remains unutilized then the same is shared between the MHADA/MCGM and the developers in the ratio of 2:1 with the developer securing 33.33% for his own sale.

2. Regulation 33 and sub-clause (9): Reconstruction under the Urban Renewal Scheme: The Government intends to incentivise redevelopment of old and dilapidated buildings through a ‘cluster approach’ under the Urban Renewal Scheme and to encourage development projects through joint ventures in which MHADA along with the tenants, landlords and private developers can work together towards redevelopment of cluster. As a result Regulation 33(9) was amended vide an Urban Development Departments Notification No. TPB 4307/2346/CR-106/2008/UD-11 dated March 02, 2009 (“said notification”) to now cover reconstruction or redevelopment of cessed buildings and Urban Renewal Scheme on extensive area, which are undertaken by (a) the MHADA/MCGM, either departmentally or through any suitable agency or (b) MHADA/MCGM jointly with land owners and/or Co-operative Housing Societies of tenants/occupiers of buildings or Developer or Co-operative Housing Society of hutment dwellers therein, (c) independently by land owners and/or Co-operative Housing Societies of tenants/occupiers of buildings or Developer. The sub-clause specifies the F.S.I. for the above situations to be 4.00 or the F.S.I. required for rehabilitation of existing tenants/occupiers + incentive F.S.I. as given in Appendix-III-A, whichever is more. Appendix III-A introduced by the said notification is quite detailed and thereunder the “Urban Renewal Scheme” has been defined to mean any scheme in the Island City of the Mumbai having a minimum area of 43,056 sq.ft. (4000 sq.mtrs.) bounded by existing distinguishing physical boundaries such as roads, nallas, railway lines etc. and consisting of structures like cessed buildings of ‘A’, ‘B’ & ‘C’ categories, buildings erected before September 30, 1969 and acquired by MHADA under MHADA Act, 1976, all buildings belonging to the Government, MCGM and MHADA, that are constructed prior to September 30, 1969 and having built up area upto 21,528 sq. ft. (2000 sq.mt.) and other buildings erected before September 30, 1969 which are, by reason of dis-repair or have structural / sanitary defects and are unfit for human habitation etc. Procedure vides the Urban Development Departments Notification No. TPB 4307/2346/CR-106/2008/UD-11 dated March 02, 2009- a) Each occupant/tenant will be rehabilitated and given the carpet area occupied by him for residential

purpose in the old building ranging from a minimum of 300 sq. ft. (27.88 sq.mt.) to a maximum area equivalent to the area occupied in the old building. In case of non-residential occupier, the area to be given in the reconstructed building will be equivalent to the area occupied in the old building. The proviso clarifies that if the carpet area for the residential purpose exceeds 753 sq.ft. (70 sq.mt.) the cost of construction shall be paid by the tenant/occupant to the developer. This cost of construction shall be fixed by Govt. from time to time. However, the carpet area exceeding 753sq.ft. (70 sq.mt.) shall be considered for rehab F.S.I. but shall not be considered for incentive F.S.I.

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b) The slum dwellers shall be eligible for the area admissible as per Regulation 33(10) of the DCR. c) It is to be noted that if some areas are previously developed/ are in the process of development, under the

different provisions of the DCR, such areas can be included in cluster for the purpose of calculation of area of cluster. However, such area should not exceed 25% of total plot area and it shall be necessary to obtain consent of owner/owners of such areas to become part of the cluster.

d) The F.S.I. for rehabilitation of the existing tenants/occupiers in a redevelopment / reconstructed building, owners share, MHADA/MCGM’s share and incentive F.S.I. shall be on gross plot area excluding reservations/designations, but including the built up area under reservation/designation.

Provided that in all the projects undertaken jointly with the land owners and/or Co-op. HSG Societies of tenants/occupiers of the buildings or Developer or Co-op. Housing Society of hutment dwellers where the rehab F.S.I. exceeds 2.50, MHADA/MCGM shall get 5% of built up area for F.S.I. 4.00 free of cost. This additional area shall be included in rehabilitation area and incentive to the extent of 50% shall be available for this area. e) The incentive F.S.I. admissible against the F.S.I. required for rehab shall be as under :

i. Where the total area of amalgamated plots is between 43,056- 86,112 sq.ft. then the incentive F.S.I. admissible will be 55%.

ii. Where the total area of amalgamated plots is between 86,113- 129,168 sq.ft. then the incentive F.S.I. admissible will be 65%.

iii. Where the total area of amalgamated plot is above 129,169- 172,224 sq.ft. then the incentive F.S.I. admissible will be 70%.

iv. Where the total area of amalgamated plot is above 172,225- 215,280 sq.ft. then the incentive F.S.I. admissible will be 75%.

v. Where the total area of amalgamated plot is more than 215,280 sq.ft. then the incentive F.S.I. admissible will be 80%. If any new area is added and there is change in the slab prescribed above, the incentive F.S.I. for the additional area in the changed slab shall be determined as per the area falling in the next slab. However, augmentation of area of cluster is not allowed after completion of scheme.

f) In the proposal of maximum 4.00 F.S.I. the permissible maximum F.S.I. over and above “rehab + incentive” shall be shared in terms of built up area between MCGM/MHADA (in proportionate to their plot areas) and private developer in Joint Venture in the ratio of 1:0:5.

g) From the entire F.S.I. as explained immediately above, entire rehab and MHADA’s share shall be allowed to be utilized on plot/plots under redevelopment scheme.

h) Provision has been made for construction or reconstruction of slums/buildings falling under reservations. i) 30% of the incentive F.S.I. can be used for non-residential purposes otherwise permissible in the DCR. j) An amount of Rs.5000/- per sq.mt. shall be paid by the owner/developer/society as additional development

cess for the built up area over and above the normally permissible F.S.I., for the rehabilitation and free sale components.

k) Certain building and other requirements have been relaxed with respect to tenement of 300 sq.ft. (27.88 sq.mt.) area for rehabilitation/additional tenement to be given to Repairs Board/Mumbai Board/MCGM.

l) A High Power Committee (HPC) will be constituted which will approve the schemes with the previous sanction of the Govt. under Regulation 33(9). On approval by this High Power Committee, the proposal will be submitted to MCGM for approval of plans. The Govt. will have the powers for any relaxations/modifications in the rules. Separate guidelines will be issued for the HPC. A Corpus fund is to be created by the Developer which will take care of the maintenance of the building for a period of 10 years, to be decided by the High Power Committee.

m) Lastly, those schemes for which approval has been given under Regulation 33(7) and for which work has not yet started, can be considered for approval under Regulation 33(9) provided they satisfy all the conditions for approval under Regulation 33(9).

5.17 Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 The Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 ("MSA Act") was amended in 1995 to provide for the creation of a Slum Rehabilitation Authority, a body that has been made responsible for preparing a general slum rehabilitation scheme and implementation of it. The aim of this legislation is to provide for improvement and clearance of slum areas in the State and their redevelopment and also provide for the protection of occupiers from eviction and distress warrants. 5.17.1 Slum Rehabilitation Authority The Slum Rehabilitation Authority (“SRA”) was created in 1995, introducing new policies which recognised the rights of any slum and pavement dweller who could prove residence in the city of Mumbai on January 01, 1995 to ‘avail of an alternate permanent accommodation’. A slum landowner, a co-operative society of slum

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dwellers, an NGO or any real estate developer having individual agreements with at least 70% of eligible slum dwellers is entitled to become a developer. These housing units are to be provided free of cost to slum dwellers occupying the land. Ergo, the policy works by giving incentives to developers in the form of development rights. The amount of development rights generated by a project is dependent on the location of the plot and the building design. Developers may use development rights in excess of those needed to build free housing units to construct additional housing and/or commercial units for sale if space allows, and/or to sell the rights as TDR on the open market.

5.17.2. The Slum Rehabilitation Scheme of the Government of Maharashtra The Slum Rehabilitation Authority has formulated the Slum Rehabilitation Scheme (“SRS”) and it is implemented specifically under Regulation 33(10) of the D.C. Regulations, 1991. This scheme is carried out on those areas declared as slum areas by the SRA. In addition, the SRA can denotify a slum rehabilitation area, on being satisfied of such necessity or when directed by the State Government. Regulation 33(10) focuses on rehabilitation of slum dwellers through owners/developers/co-operative housing societies with a floor space index of up to 3.00 and prescribes the eligibility criteria for a redevelopment scheme and has clearly defined terms like ‘Slum’, ‘Pavement’ and ‘Structure of hut’. Provisions of Appendix IV shall be attracted for eligible hutment-dwellers, in the slum or on the pavement, who in exchange for their structure, shall be given free of cost a residential tenement having a carpet area of 269 sq.ft. (25 sq.mt.) including balcony, bath and water closet, but excluding common areas. This holds true for even those structures having residential areas more than 269 sq.ft. In respect of eligible commercial tenements, equivalent area is allotted to the dweller, as was occupied prior to the development. With respect to lands required for vital urgent public utility/purpose or on hazardous locations, pavement-dwellers and hutment dwellers shall not be rehabilitated in-situ but in other available plots and in accordance with these Regulations.

Salient Features of the Slum Rehabilitation Scheme: 1. All slum dwellers whose names appear in the electoral roll of January 1, 1995 or prior electoral roll and

who are presently residing in huts would be eligible to claim free tenement under the rehabilitation scheme. This shall be on the basis of a tenement in exchange for an independently numbered structure. Thus even if the name of the owner of the structure appears on the electoral rolls for the structure, and he is not the actual occupant, then he shall have no right whatsoever to the reconstructed tenement against that structure.

2. Only the actual occupants of the hutment will be considered eligible. 3. At least 70% of the eligible hutment dwellers in a slum or pavement must agree to join the

rehabilitation scheme and come together to form a co-operative housing society of all eligible hutment dwellers through a resolution to that effect.

4. The reconstructed tenement shall be owned by the hutment dweller and his/her spouse conjointly, and the same shall be entered in the records of the co-operative housing society and share certificates and all other relevant documents.

5. It is the responsibility of the co-operative housing society of slum-dwellers to appoint a competent developer to act as a promoter for the rehabilitation program. The society itself or the developer can take up slum rehabilitation scheme as a promoter.

6. The promoter/builder has to enter into an agreement with every eligible slum-dweller before presenting the slum rehabilitation proposal to Slum Rehabilitation Authority (“SRA”) for approval. The following agreements are necessary to be entered into:

• Consent-cum-agreement between the promoter and the slum dwellers; • Development Rights/Agreement to lease between the promoter and the land owning authority; • Lease Agreement between the Land owning authority and the co-operative society of slum

dwellers; • Lease Agreement between the land owning authority and the co-operative society of free-sale

tenement buyers. 7. It is the responsibility of the promoter to appoint an architect in consultation with the proposed co-

operative housing society of slum-dwellers to prepare the plans of development of the slum area. The promoter is also required to submit the building plan, layout plan, Property Report (“PR”) Card along with details of ownership of land, details of the plot area, details of the existing hutments and their types, computation of tenement density, extent and type of reservations, amenities, FSI available, number of tenements to be constructed including the calculation of Transfer Development Rights (“TDR”), etc. to the Slum Rehabilitation Authority along with an application for the slum rehabilitation scheme.

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8. It is then the responsibility of the SRA to scrutinize the proposal and sanction the rehabilitation scheme. The SRA is required to approve the scheme within a time limit of 30 days. In the event of a failure by the SRA to do so, the approval shall be deemed to have been given, provided the project is in accordance with the provisions of the Scheme.

9. The SRA issues a letter of intent to the developer conveying the approval to the scheme, approval to the layout, building wise Intimation of approval (I.O.A.) and commencement certificate in relation to the rehabilitation component and thereafter in relation to the proportionate free sale component.

10. Eligible hutment dwellers are allotted in exchange for their structure, free of cost, a residential tenement having a carpet area of 269 sq. ft.

11. The developer should register the society of slum dwellers to be re-housed under the Slum Rehabilitation Scheme after completion of the project.

12. The rehabilitation tenements cannot be sold/leased/assigned/transferred in any manner for 10 years from the date of taking over possession except to legal heirs without the prior permission of SPA.

13. Ownership and Terms of Lease- The part of Government/ MCGM / MHADA land on which the rehabilitation component of the SRS will be constructed shall be leased to the Co-operative Housing Society of the slum dwellers on 30 years lease at the lease rent of Rs.1001 for 43,056 sq.ft. (4000 sq.mt.) of land or part thereof and renewable for a further period of 30 years. The same conditions apply for land under the free sale component and it shall be leased directly to the Society/Association of the purchasers in the free sale component and not through the society of hutment dwellers, and pending the formation of such Society/Association it shall be leased to the Developer. The said lease deed shall be executed within 60 days from the date of building permission being issued.

14. Automatic cancellation of Vacant Land Tenure- If any land or part of any land on which slum is located is under vacant land tenure the said tenure/lease created by the MCGM or the Municipal Commissioner shall stand automatically terminated as soon as slum rehabilitation scheme, which is a public purpose, on such land is prepared and submitted for approval to the SRA.

15. In consideration of the developer providing tenements to the slum dwellers free of cost, the Developer is permitted to construct and sell separate structures in the plot. The ratio between the rehabilitation component and the sale component varies from 1:1 to 1:1.33, depending upon the location of the project.

5.18 The Maharashtra Agricultural Lands (Ceilings on Holdings) Act, 1961(the “Ceilings Act”) During the Second Five-Year Plan of the independent government, the Planning Commission made recommendations on laws to redistribute land in India more evenly. The objective was to bring distributive justice to the economy, contrary to how the colonial system had operated. It was necessary to reduce economic inequalities and also to create a more labour-intensive economic system, despite the movement towards machine agriculture in other parts of the world. Large holdings invite mechanization and low employment opportunities. With low per capita land availability, only a labour intensive system can reduce unemployment in India. Moreover, efficiency in terms of productivity can increase when the operation is intensive rather than extensive. The Act was passed because for securing the distribution of agricultural land as best to sub serve the common good, it was felt to be expedient in the public interest to impose a maximum limit (or ceiling) on the holdings of agricultural land in the State of Maharashtra to provide for the acquisition of land held in excess of the Ceiling and for the distribution thereof to landless and other persons. The Act was also passed to provide for the full and efficient use of the land for agriculture and for its efficient management through corporations and for matters connected thereto. 5.19 Maharashtra Value Added Tax Act, 2002 VAT of 1% on the contract price of the flat as mentioned in the sale agreement would be payable by the buyer with effect from April 1, 2010. 6. Regulation regarding Borrowings by Real Estate Companies 6.1 Domestic lending to Property Developers Real estate and housing are among the fastest growing sectors in India and raising credit/loans from Banks and other Financial Institutions is one of the major sources of financing real estate and housing projects. Although there are no restrictions on a real estate company's ability to undertake debt obligations from domestic banks and financial institutions, the RBI issued a circular dated March 1, 2006 (RBI/2005-06/310 DBOD.BP.BC. 65/08.12.01/2005-06) cautioning the Banks to curb excessively risky lending by exercising selectivity and

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strengthening the loan approval process. RBI advised the banks to ensure that the borrowers have obtained prior permission from the government/ local governments/other statutory authorities for the projects, wherever required, during the appraisal of loan proposals.

RBI also issued the Master Circular on Housing Finance dated July 1, 2010 (RBI/ 2010-11/63 DBOD. No.DIR. (HSG). BC. 07/08.12.001/2010-11), outlining the general Guidelines to be followed by Banks while lending to real estate projects. The Master Circular encouraged Banks to grant term loans to Private Builders given the importance of the role played by private builders as providers of construction services in the housing field. The Master Circular specified that commercial banks may extend credit to private developers on commercial terms by way of loans linked to each specific project. The RBI has advised the banks to adhere to the National Building Code formulated by the Bureau of Indian Standards in view of the importance of the safety of buildings against natural disasters.

The Master Circular also lists out those housing/construction activities that are eligible for Bank credit. They are:

(i) Loans to individuals for purchase/construction of dwelling unit per family and loans given for repairs to the damaged dwelling units of families;

(ii) Housing finance provided by banks for which refinance is availed of from National Housing Bank (NHB);

(iii) Investment in the guarantee/non-guaranteed bonds and debentures of NHB/HUDCO in the primary market, provided investment in non-guaranteed bonds is made only if guaranteed bonds are not available;

(iv) Finance provided for construction of residential houses to be constructed by public housing agencies like HUDCO, Housing Boards, local bodies, individuals, co-operative societies, employers, priority being accorded for financing construction of houses meant for economically weaker sections, low income group and middle income group;

(v) Finance for construction of educational, health, social, cultural or other institutions/centres, which are part of a housing project and which are necessary for the development of settlements or townships;

(vi) Finance for shopping complexes, markets and such other centres catering to the day to day needs of the residents of the housing colonies and forming part of a housing project;

(vii) Finance for construction meant for improving the conditions in slum areas for which credit may be extended directly to the slum-dwellers on the guarantee of the Government, or indirectly to them through the State Governments.

(viii) Bank credit given for slum improvement schemes to be implemented by Slum Clearance Boards and other public agencies;

(ix) Finance provided to- a. the bodies constituted for undertaking repairs to houses, and b. the owners of building/house/flat, whether occupied by themselves or by tenants, to meet the

need-based requirements for their repairs/additions, after satisfying themselves regarding the estimated cost (for which requisite certificate should be obtained from an Engineer/Architect, wherever necessary) and obtaining such security as deemed appropriate.

7. The Draft Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2008

SEBI has recently released a draft of the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2008 (the “Draft REITs Regulations”) for public comment. The Draft REITs Regulations seek to regulate a real estate investment trust (“REIT”). The Draft REITs Regulations contemplate a public offer of real estate investment instruments or units and listing of such units by a REIT if such trust is registered with SEBI under the regulations and complies with applicable laws. Under the Draft REITs Regulations, the REIT schemes are required to be managed by a real estate investment management company registered with SEBI. The Draft REITs Regulations specify, among other things, certain conditions for eligibility of grant of SEBI registration to a REIT and a real estate investment management company; the terms and conditions to be complied with by a REIT and a real estate investment management company; and the rights and obligations of a REIT and a real estate investment management company.

In addition, the Draft REITs Regulations prohibit a REIT from launching a scheme unless it has obtained a rating for such scheme from a credit rating agency and such scheme has been appraised by an appraising agency. The Draft REITs Regulations also contemplate filing of an offer document providing details of the

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scheme with SEBI and the subsequent issue of the offer document to the public. A scheme is not permitted to be open for subscription by the public for more than 90 days. A REIT is required to issue unit certificates to the applicant whose application is accepted not later than six weeks from the date of closure of the subscription and complete the listing of the units of each scheme on the stock exchanges mentioned in the offer document not later than six weeks from the date of closure of the scheme.

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HISTORY AND OTHER CORPORATE MATTERS Brief History The Company was incorporated on February 19, 1981 as Growel Investment Limited under the Companies Act, 1956 having registration number 11-23923 of 1981 with the Registrar of Companies, Mumbai, Maharashtra. The Company received its Certificate of Commencement of Business on March 24, 1981. The Corporate Identification Number is L45209MH1981PLC023923. Pursuant to a fresh certificate of incorporation dated November 8, 2006 issued by the Registrar of Companies, Mumbai, Maharashtra the name of the Company was changed to Money Masters Investments Limited. Further, pursuant to a Fresh Certificate of Incorporation dated June 29, 2010 issued by the Registrar of Companies, Mumbai, Maharashtra the name of the Company was changed to Zodiac Ventures Limited. The registered office of the Company is situated at 404, Dev Plaza, 68, S.V. Road, Andheri (W), Mumbai- 400 058. The Company was incorporated with the main object to carry on business in shares, securities and other investments and financing. With a view to raise finance to buy, invest in debentures, debenture stock of other companies including securities of any government authorities, bonds, certificates and to pursue business of financing the Company made its maiden public issue in the year 1981 and the Equity Shares of the Company got listed on the Bombay Stock Exchange on September 15, 1981. The 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. Mr. Aman More (acting through Mr. Niraj More as the natural guardian) and M/s Radhakrishan Nandlal Private Limited the original/first promoters of the Company sold 1,33,500 Equity Shares of Rs. 10 each, representing 54.81 % of the total shareholding of the Company to Mr. Hozef Darukhanawala vide Share Purchase Agreement dated November 28, 2005. Following acquisition of 54.81% stake Mr. Hozef Darukhanawala made an offer to acquire additional 20% shareholding in the Company in compliance with the Takeover Code and took over the controlling interest of the Company. Subsequently on March 26, 2010, Mr. Jimit Shah, along with Mr. Ramesh Shah, Mrs. Pushpa Shah, and Ms. Yesha Shah entered into an Memorandum of Understanding with Mr. Hozef Darukhanawala to acquire 1,04,500 Equity Shares constituting 13.48% of the total shareholding of the Company and acquired management control over the Company as set out under Regulation 12 of Takeover Code. The change of control has been approved by the shareholders at the extra ordinary general meeting held on May 14, 2010. Mr. Jimit Shah, Mr. Ramesh Shah, Mrs. Pushpa Shah and Ms. Yesha Shah acquired controlling interest in the share capital and management of the Company with the intent of diversifying into real estate business. Major Events/ Milestones of the Company:

Year Major Event

1981 Incorporation of Zodiac Ventures Limited as Growel Investment Ltd. 2005 Acquisition of the controlling interest of the Company by Mr. Hozef Darukhanawala 2010 Acquisition of the controlling interest of the Company by Mr. Jimit Shah and others

Following the acquisition of control by Mr. Jimit Shah and others, the Company has changed its objects from being an investment company to a real estate development company Zodiac Developers Private Limited became a Subsidiary of Zodiac Ventures Limited

Changes in the Registered Office

Date of the resolution

From To Reason

May 25, 2006

Growel House, Akurli Road, Kandivali (East), Mumbai, Maharashtra

I-18, Ground Floor, Rizvi Park, S.V. Road, Santacruz (W), Mumbai, Maharashtra

Change in control of the Company

May 21, 2010

I-18, Ground Floor, Rizvi Park, S.V. Road, Santacruz (W), Mumbai, Maharashtra

404, Dev Plaza, 68, S.V. Road, Andheri (W), Mumbai- 400 058, Maharashtra

Change in control of the Company

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Main Objects of the Company The Company’s main objects as set out in the Memorandum of Association of the Company are as under:

1. To carry on the business of builders, constructors, developers, architects, contractors and sub- contractors in the field of civil, engineering, infrastructure, power, irrigation, water supply, oil and gas pipeline, bridges, flyovers, roads, dams, tunnels, metros, houses, lands, buildings, sheds, slum rehabilitations, urban developments or any other property and developers of modern multi-dimensional residential town ship, commercial complexes and providers of hi-tech infrastructural facilities, telecommunication facilities including but not limited to optical fibre telephone exchanges, earth stations, bandwidth date communications facilities, power, roads, water and drainage systems;

2. To build, construct, commercialize, convert, develop, design, demolish, deal, erect, establish, fabricate,

finance, furnish, hire, improve, lease, license, manage, maintain, repair, remodel, recondition, renovate and sell hotels, taverns, restaurants, food courts, cafeterias, bars, resorts, refreshment rooms, boarding and lodging, housekeepers, motels, guesthouses, clubs, shopping malls, theatres and cinemas, entrainment and sports complex, entertainment multiplexes, places of amusement recreations, amusement parks, recreation centres, pubs, discotheques, swimming pools, fitness and health clubs, banquet halls, marriage halls, hospitals, schools, super markets, hyper markets, departmental stores, places of worship, highways, roads, paths, streets, sideways, courts, alleys, pavements, bridges, lands and to do other similar construction, levelling or paving work and for these purposes to purchase take on leases or otherwise acquire and hold any lands and prepare layout thereon or buildings of any tenure or description wherever situate and to the business of real estate developers, construction and estate agents, property dealers and to carry out such other related activities in India or any other part of the world.

3. To construct, execute, carry out, equip, support, maintain, operate, improve, work, develop, administer,

manage, control and superintend within or outside the country or anywhere in the world all kinds of works, public, or otherwise buildings, houses and other constructions or conveniences of all kinds, which expression in this memorandum includes roads, railways and tramways, docks, harbours, piers, wharves, canals, serial runways and hangers, airports, reservoirs, embankments, irrigations, reclamation, improvements, sewage, sanitary, water, gas, electronic light, telephonic, telegraphic and power supply works and hotels, cold storages, warehouses, public and other buildings and all other works and conveniences of public or private utility, to apply or otherwise acquire any contracts, decrease, concessions for or in relation to the construction, execution, carrying out equipment, improvement, administration or control of all such works and conveniences as aforesaid and to undertake, execute, carry out, dispose of or otherwise turn to account the same;

4. To construct, purchase, develop, or otherwise acquire, foreclose, purchase on auction, hire, lease, sell

or sell on hire purchase system any buildings, houses, bungalows, factories, sheds, recreational clubs and facilities including golf courses, sports and social clubs, trade premises, plant, machinery, public buildings, lands, farms, or any other kind of asset, estate or property (movable or immovable rights) or chose in auction and to carry on the business as proprietors, developers, builders, managers, operators, hirers and dealers of land and all kinds of movable and immovable properties; and

5. To carry on the business and run consultancy services including architectural and technical services in

layout, plans, blue prints, designs for the purpose of construction and building of houses, bungalows, residential apartments, hotels, holiday resorts, motel, factories, commercial premises, gardens, dams, canals, bridges, civil works, townships, tenements, housing schemes, co-operative societies, hospital and nursing home.

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

Date of shareholder’s

approval

Changes in the Memorandum of Association

September 29, 2006

Alteration in name clause of MoA The name clause of MoA name of the Company from Growel Investments Limited to Money

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Date of shareholder’s

approval

Changes in the Memorandum of Association

Masters Investment Limited.

November 30, 2006

Alteration of capital clause in MoA Clause V of the MoA was amended to increase the authorised share capital of the Company. Accordingly, the authorised share capital was increased from Rs. 25,00,000 consisting of 2,50,000 Equity Shares of Rs. 10 each to Rs. 2,00,00,000 consisting of 20,00,000 Equity Shares of Rs. 10 each.

May 14, 2010

Alteration of capital clause in MoA Clause V of the MoA was amended to increase the authorised share capital of the Company. Accordingly, the authorised share capital was increased from Rs. 2,00,00,000 consisting of 20,00,000 Equity Shares of Rs. 10 each to Rs. 15,00,00,000 consisting of 1,50,00,000 Equity Shares of Rs. 10 each. Alteration of main objects clause The Main Objects Clause of the MoA was amended by insertion of new Part A with respect to Objects Clause III stating as follows:

1. To carry on the business of builders, constructors, developers, architects, contractors and sub- contractors in the field of civil, engineering, infrastructure, power, irrigation, water supply, oil and gas pipeline, bridges, flyovers, roads, dams, tunnels, metros, houses, lands, buildings, sheds, slum rehabilitations, urban developments or any other property and developers of modern multi-dimensional residential town ship, commercial complexes and providers of hi-tech infrastructural facilities, telecommunication facilities including but not limited to optical fibre telephone exchanges, earth stations, bandwidth date communications facilities, power, roads, water and drainage systems;

2. To build, construct, commercialize, convert, develop, design, demolish, deal, erect,

establish, fabricate, finance, furnish, hire, improve, lease, license, manage, maintain, repair, remodel, recondition, renovate and sell hotels, taverns, restaurants, food courts, cafeterias, bars, resorts, refreshment rooms, boarding and lodging, housekeepers, motels, guesthouses, clubs, shopping malls, theatres and cinemas, entrainment and sports complex, entertainment multiplexes, places of amusement recreations, amusement parks, recreation centres, pubs, discotheques, swimming pools, fitness and health clubs, banquet halls, marriage halls, hospitals, schools, super markets, hyper markets, departmental stores, places of worship, highways, roads, paths, streets, sideways, courts, alleys, pavements, bridges, lands and to do other similar construction, levelling or paving work and for these purposes to purchase take on leases or otherwise acquire and hold any lands and prepare layout thereon or buildings of any tenure or description wherever situate and to the business of real estate developers, construction and estate agents, property dealers and to carry out such other related activities in India or any other part of the world.

3. To construct, execute, carry out, equip, support, maintain, operate, improve, work,

develop, administer, manage, control and superintend within or outside the country or anywhere in the world all kinds of works, public, or otherwise buildings, houses and other constructions or conveniences of all kinds, which expression in this memorandum includes roads, railways and tramways, docks, harbours, piers, wharves, canals, serial runways and hangers, airports, reservoirs, embankments, irrigations, reclamation, improvements, sewage, sanitary, water, gas, electronic light, telephonic, telegraphic and power supply works and hotels, cold storages, warehouses, public and other buildings and all other works and conveniences of public or private utility, to apply or otherwise acquire any contracts, decrease, concessions for or in relation to the construction, execution, carrying out equipment, improvement, administration or control of all such works and conveniences as aforesaid and to undertake, execute, carry out, dispose of or otherwise turn to account the same;

4. To construct, purchase, develop, or otherwise acquire, foreclose, purchase on auction,

hire, lease, sell or sell on hire purchase system any buildings, houses, bungalows, factories, sheds, recreational clubs and facilities including golf courses, sports and social clubs, trade premises, plant, machinery, public buildings, lands, farms, or any

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Date of shareholder’s

approval

Changes in the Memorandum of Association

other kind of asset, estate or property (movable or immovable rights) or chose in auction and to carry on the business as proprietors, developers, builders, managers, operators, hirers and dealers of land and all kinds of movable and immovable properties;

5. To carry on the business and run consultancy services including architectural and technical services in layout, plans, blue prints, designs for the purpose of construction and building of houses, bungalows, residential apartments, hotels, holiday resorts, motel, factories, commercial premises, gardens, dams, canals, bridges, civil works, townships, tenements, housing schemes, co-operative societies, hospital and nursing home.

It was further resolved to adopt the new set of “Objects incidental or ancillary to the main object” and “other objects” in the MoA, accordingly. Alteration in name clause of MoA Change in the name of the Company from Money Masters Investment Limited to Zodiac Ventures Limited.

December 10, 2010 Alteration of capital clause in MoA Clause V of the MoA was amended to increase the authorised share capital of the Company. Accordingly, the authorised share capital was increased from Rs. 15,00,00,000 consisting of 1,50,00,000 Equity Shares of Rs. 10 each to Rs. 20,00,00,000 consisting of 2,00,00,000 Equity Shares of Rs. 10 each.

Subsidiaries of the Company and their business The Company has one Subsidiary the details of which are disclosed below: Zodiac Developers Private Limited Zodiac Developers Private Limited was incorporated on March 23, 1995 under the Companies Act, with RoC, Mumbai, as a private limited company. The registered office of Zodiac Developers Private Limited is situated at 404, Dev Plaza, 68, S. V. Road, Andheri (W), Mumbai- 400 058. Zodiac Developers Private Limited is currently engaged in the business of real estate. For further details on the projects undertaken by the Subsidiary, refer to chapter titled “Our Business” on page 51 of the Draft Letter of Offer. Shareholding Pattern Equity shareholders of Zodiac Developers Private Limited as on the date of the Draft Letter of Offer is:

Shareholders No. of Equity Shares % shareholding Mr. Jimit Shah 3,000 0.29 Mr. Ramesh Shah 2,53,800 24.88 Mrs. Pushpa Shah 2,38,170 23.35 Ms. Yesha Shah 2,000 0.20 Ramesh Shah HUF 2,000 0.20 Ms. Bhanumati Shah 1,030 0.10 Zodiac Ventures Limited 5,20,000 50.98

Total 10,20,000 100.00 Note: Mr. Jimit Shah, Ms. Yesha Shah, Ramesh Shah HUF, Bhanumati Shah, Zodiac Ventures Limited were allotted 3000, 2000, 2000, 1030 and 520000 shares respectively vide Board Resolution dated December 15, 2010. Except as disclosed herein, there has been no change in the capital structure of ZDPL in the last 6 months. Audited Financial Information

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

2008 2009 2010 Equity Capital 25.41 25.41 49.20 Reserves and Surplus (excluding revaluation reserve) 16.32 18.24 32.81 Sales/ Income 13.96 11.90 17.89

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Profit / (Loss) after tax 5.82 1.92 8.56 Earnings per share (In Rs.) 2.29 0.75 1.74 Diluted Earnings per share (In Rs) 2.29 0.75 1.74 Net Asset Value Per Share (Rs.) 16.42 17.18 16.67 Board of Directors Directors as on the date of the Draft Letter of Offer: 1. Mr. Ramesh Shah; 2. Mrs. Pushpa Shah; 3. Mr. Jimit Shah; and 4. Mr. Aakash Parikh (Independent Director). Zodiac Developers Private Limited is an unlisted company and it has not made any public issue (including any rights issue to the public) in the preceding three years. It has not become a sick company under the meaning of SICA is not under winding up and does not have a negative net worth. The Shareholding of Zodiac Ventures Limited in Zodiac Developers Private Limited is 50.98%. For details regarding shareholders of the Subsidiary, refer to chapter titled “Capital Structure” on page 23 of the Draft Letter of Offer. Holding Company The Company does not have any holding Company. However it is the holding company and parent company of Zodiac Developers Private Limited, which is its subsidiary with effect from December 15, 2010. Number of Members / Shareholders of the Company Total number of members of the Company as on the date of the Draft Letter of Offer is 236. Collaboration The Company has not entered into any collaboration with any third party as per clause (Viii) (B) (1) (c) of Part A, Schedule VIII of the SEBI ICDR Regulations.

Shareholders’ Agreement There is no subsisting shareholders’ agreement entered into between the shareholders of the Company. Other Agreements Except the contracts/ agreements entered into in the ordinary course of business carried on or intended to be carried on by the Company, the Company has not entered into any other Agreement/ Contract. Financial / Strategic Partners/Joint Ventures The Company does not have any financial/ strategic partners as on the date of filing of the Draft Letter of Offer. Not has the Company entered into any joint ventures with third parties. Injunction or restraining orders The Company is not operating under any injunction or restraining order. For details related to litigation or notices issued against the Company refer to chapter titled “Outstanding Litigation and Material Developments” beginning on page 165 of the Draft Letter of Offer. Raising of capital in form of equity or debt For details relating to the borrowing power of the Company refer to chapter titled “Financial Statements” on page 109 of the Draft Letter of Offer

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OUR MANAGEMENT

Under the Articles, the Company is required to have not less than three Directors and not more than twelve Directors (including the Nominee Director(s)), subject to Section 252 and 259 of the Companies Act. Currently, the Company has six Directors out of which three are independent Directors. The composition of the Board of Directors is governed by the provisions of the Companies Act and the Listing Agreement with the Stock Exchange and the norms of the code of corporate governance as applicable to listed companies in India. Board of Directors As on the date of the Draft Letter of Offer, the 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-operative

societies

Details of current and past

directorship(s) in listed companies

1. Mr. Jimit Shah Designation: Managing Director Father’s name: Mr. Ramesh Shah Residential Address: 8/9, 505 Jupiter, Swami Narayan Mandir, Off Azad Road, Ville Parle (East), Mumbai- 400 057 Nationality: Indian Occupation: Business DIN: 01580796

28 years

Date of appointment: November 2, 2010 Director Since: May 21, 2010 Managing Director Since: November 2, 2010 Term: Commencing from November 2, 2010 to November 1, 2013

Companies

1. Zodiac Developers Private Limited

2. Zodiac Realties Private Limited

3. Zodiac Developers India Private Limited

4. Rananjay Developers Private Limited

5. Zodiac Home Makers Private Limited

Trusts: 1. Zodiac Foundation

HUF

1. Jimit R. Shah HUF

2. Ramesh V. Shah HUF

Whose shares have been/were suspended from being traded on the BSE/NSE: Nil Which have been/were delisted from the stock exchange(s): Nil

2. Mr. Ramesh Shah Designation: Chairman and Whole Time Director Father’s name: Mr. Virji Shah Residential Address: 8/9, 505 Jupiter, Swami Narayan Mandir, Off Azad Road, Ville Parle (East), Mumbai- 400 057 Nationality: Indian Occupation: Business DIN: 01580767

50 years

Date of appointment: November 2, 2010 Director Since: May 21, 2010 Whole Time Director Since: November 2, 2010 Term: Commencing from November 2, 2010 to November 1, 2013

Companies

1. Zodiac Developers Private Limited

2. Zodiac Homemakers Private Limited

3. Zodiac Realties Private Limited

4. Zodiac Developers India Private Limited

5. Priya Infraprojects Private Limited

6. Rananjay Developers Private Limited

7. Priya Slum Projects Private Limited

Trusts: 1. Zodiac Foundation

Whose shares have been/were suspended from being traded on the BSE/NSE: Nil Which have been/were delisted from the stock exchange(s): Nil

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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-operative

societies

Details of current and past

directorship(s) in listed companies

Partnerships:

1. Janata Sales Corporation

2. Jimit Associates

3. Zodiac Book Manufacturing Company

HUFs:

1. Ramesh V. Shah HUF

3. Mrs. Sunita Shah Designation: Additional Director Father’s name: Mr. Mangilalji T. Jogani Residential Address: 8/9, 505 Jupiter, Swami Narayan Mandir, Off Azad Road, Ville Parle (East), Mumbai- 400 057 Nationality: Indian Occupation: Business DIN:03099290

32 years

Date of appointment: November 2, 2010 Term: Commencing from November 2, 2010 to the next Annual General Meeting of the Company

Trusts:

1. Zodiac Foundation

HUFs:

1. Ramesh V. Shah HUF

2. Jimit R. Shah HUF

Whose shares have been/were suspended from being traded on the BSE/NSE: Nil Which have been/were delisted from the stock exchange(s): Nil

4. Dr. Anil Ghagare Designation: Additional Director Father’s name: Mr. Bhaskar Madhav Ghagare Residential Address: Saket Tower No.-1, Flat No. 1204, Near Kelda Bridge, Kisan Koli Marg, Thane (W) - 400 601. Nationality: Indian Occupation: Professional DIN:03197982

58 years

Date of appointment: November 2, 2010 Term: Commencing from November 2, 2010 to the next Annual General Meeting of the Company

Nil

Whose shares have been/were suspended from being traded on the BSE/NSE: Nil Which have been/were delisted from the stock exchange(s): Nil

5. Mr. Aakash Parikh Designation: Additional Director Father’s name: Mr. Nayan Rasiklal Parikh Residential Address: 424, Shanti Kunj, Sharddhanand Road, Matunga, Mumbai 400019 Nationality: Indian Occupation: Business DIN:02582311

27 years

Date of appointment: November 2, 2010 Term: Commencing from November 2, 2010 to the next Annual General Meeting of the Company

Companies

1. Mint Financial Services Private Limited. Ltd

2. Zodiac Developers Private Limited.

Whose shares have been/were suspended from being traded on the BSE/NSE: Nil Which have been/were delisted from the stock exchange(s): Nil

95

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-operative

societies

Details of current and past

directorship(s) in listed companies

6. Mr. Litesh Gada

Designation: Additional Director Father’s name: Korshi Gada Residential Address: 13, Chandratej Dattapada Road, Borivali (E), Mumbai 400 066. Nationality: Indian Occupation: Business DIN:03307067

28 years

Date of appointment: November 2, 2010 Term: Commencing from November 2, 2010 to the next Annual General Meeting of the Company

Companies

1. Aureus Consultancy Proprietor

Whose shares have been/were suspended from being traded on the BSE/NSE: Nil Which have been/were delisted from the stock exchange(s): Nil

Brief Biography of the Directors Mr. Jimit Shah Mr. Jimit Shah, aged 28 years, is the Managing Director of the Company. He was appointed as the Managing Director of the Company vides Board Resolution dated November 2, 2010. He holds a Bachelor of Commerce degree from the University of Mumbai. He has over 10 years’ experience in the real estate business. He was appointed on the Board of Directors of Zodiac Developers Private Limited in 2001 where he gained experience and insight in the business of real estate. Under his directorship and guidance, our Subsidiary has procured a number of profitable projects. As the Managing Director of the Company, he plays an active role in the strategic plans of the Company. Mr. Ramesh Shah Mr. Ramesh Shah, aged 50 years, is the Chairman and Whole Time Director of the Company. He was appointed as the Chairman and Whole Time Director of the Company vide Board Resolution dated November 2, 2010. He holds a Bachelor in Commerce Degree from Mumbai University. He has over 27 years’ experience as an entrepreneur. He has over 15 years’ experience in the real estate sector and has overseen the completion of several projects including Jupiter, Venus and Kushinara SRA CHS Limited as well as several Ongoing Projects. He joined his family business of manufacturing stationary after graduation in 1983 and took over the control of the Company in 1985. By virtue of his foresight and business acumen he entered the real estate sector by promoting a company under the name of Zodiac Developers Private Limited in the year 1995 which is our Subsidiary. He is also an office bearer of the Slum Redevelopers’ Association. As the Chairman of the Company, he is actively involved in the implementation and is the driving force behind the projects envisaged by the Company. Mrs. Sunita Shah Mrs. Sunita Shah, aged 32 years, is a non-executive director of the Company. She was appointed as a non-executive director of the Company vides a Board Resolution dated November 2, 2010. She has a Bachelor of Architecture degree from the Maharashtra State Board of Technical Education. She has over nine years’ experience as an architect and has worked with several firms such as Pheroze Kudianawala, Architects & Engineers, Talati & Panthaky Associates Private Limited and Shilpi Creations. As a director of the Company she is actively involved in overseeing the designing and planning of projects undertaken by the Company. Dr. Anil Ghagare Dr. Anil Ghagare, aged 58 years, is an independent director of the Company. He was appointed as an independent director of the Company vides a Board Resolution dated November 2, 2010. He holds a Bachelor of Ayurvedic Medicine and Surgery degree from the Maharashtra Faculty of Ayurvedic & Uniani Systems of Medicines, Bombay. He also holds a post graduate Diploma in Medico Legal Systems form the Symbiosis

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Centre of Health Care, Pune. He is also a member of the Royal Society of Health, London. He has over 33 years’ experience in the field of medicine wherein he has also served in the past on the panel of the Employees State Insurance Scheme of the GoM and as a Medical Officer at the National Textile Corporation, a GoI enterprise. Mr. Aakash Parikh

Mr. Aakash Parikh, aged 27 years, is an independent director of the Company. He was appointed as an independent director of the Company vides a Board Resolution dated November 2, 2010. He holds a degree of Master of Business Administration (Capital Markets) from the Narsee Monjee Institute of Management Studies. He has also completed the Derivatives Market (dealer’s module), the Capital Market (dealer’s module) and the AMFI (advisors module) of the National Stock Exchange’s NSE Certificate in Financial Markets. He is a Director of a sub broking firm, Mint Financial Services which deals into stock trading, investments, advisory, financial planning and wealth management for retail and HNIs and corporate funding for Listed and unlisted companies through debt and venture funding. He has over 4 years of experience. In the past, he has worked for institutions like SBI Life Insurance as a deputy manager and at Vikram Kenia Securities Private Limited as an information analyst. As an independent director of the Company, he is actively involved with investors’ and shareholders’ related issues. Mr. Litesh Gada

Mr. Litesh Gada, aged 28 years, is an independent director of the Company. He was appointed as the director of the Company vides a Board Resolution dated November 2, 2010. He has a Bachelor of Commerce degree from the M.M. College of Arts, N.M. Institute of Science and Hazi Rashid College of Commerce, Mumbai University. He has a Master of Commerce degree from the University of Mumbai. He is also a certified Company Secretary and is a member of the Institute of Chartered Accountants of India. He has over 7 years of experience in his field of work. Family Relationship between Directors Except as stated below, none of the Directors or Key Managerial Personnel’s are “relatives”:

Name Designation Relationship with other Directors Mr. Jimit Shah Managing Director Son of Mr. Ramesh Shah and

Husband of Mrs. Sunita Shah Mr. Ramesh Shah Chairman and Whole Time Director Father of Mr. Jimit Shah and Father-

in-Law of Mrs. Sunita Shah Mrs. Sunita Shah Non- Executive Director Wife of Mr. Jimit Shah and daughter-

in-law of Mr. Ramesh Shah Arrangement or understanding with major shareholders, customers, suppliers or others None of the 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 contracts entered into by and between the Company and the Directors pursuant to which any benefits would accrue to the Directors upon termination of employment. Borrowing powers of the Board of Directors Pursuant to a Special Resolution passed through Postal Ballot dated December 10, 2010, The Directors can borrow an amount in excess of the limits specified in Section 293(1) (d) of the Companies Act, 1956 but not exceeding Rs. 100 Crores for the purpose of the company at such time and manner and upon terms and conditions as they deem fit. For further details of the provisions of the Articles of Association regarding borrowing powers, please refer to the chapter titled “Main Provisions of the Articles of Association” beginning on page 210 of the Draft Letter of Offer.

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Remuneration/Compensation of Directors Managing Director Mr. Jimit Shah, the Managing Director is not paid any remuneration pursuant to a Board Resolution dated November 2, 2010. Chairman and Whole Time Director Mr. Ramesh Shah, the Chairman cum Whole Time Director is not paid any remuneration pursuant to a Board Resolution dated November 2, 2010. Non-Executive Director Pursuant to a Board Resolution dated December 14, 2010 Mrs. Sunita Shah, the Non-Executive Director of the Company is entitled to sitting fee of Rs. 2,000/- per sitting. Independent Directors Pursuant to a Remuneration Committee Resolution dated December 14, 2010 the Independent Directors, Dr. Anil Ghagare, Mr. Aakash Parikh and Mr. Litesh Gada are entitled to sitting fees of Rs. 2,000/- per sitting. Shareholding of the Directors As per the Articles, the Directors of the Company are not required to hold any qualification shares in the Company. Save and except as below, the Directors do not hold any Equity Shares in the 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. Jimit Shah 20,000 2.58 2. Mr. Ramesh Shah 46,000 5.94 Interest of Directors The Company’s Director Mr. Jimit Shah is also the Promoter of the Company. Further the Company’s Managing Director is interest in the Gandhinagar Project which is one of the Proposed Project of our Subsidiary. As on December 31, 2010 the Company’s Chairman and Whole Time Director, Mr. Ramesh Shah, has given us a loan of Rs. 41.33 Lakhs to the Company. None of the Company’s Directors have been appointed pursuant to any understanding or arrangement with major shareholders, customers, suppliers or others. The Independent Directors may be deemed to be interested to the extent of fees payable to them for attending meetings of the Board. The Managing Director and Chairman may be deemed to be interested to the extent of Equity Shares already held by them or their relatives or bodies corporate in which they have interest in the Company and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. For details related to our Subsidiary’s projects refer to chapters tilted “Our Business” and “Land Reserves” beginning on pages 51 and 65 respectively of the Draft Letter of Offer. Further, save and except as stated in the chapters titled “Our Promoter and Promoter Group” beginning on page 103 of the Draft Letter of Offer, the Directors of the Company does not have any other interests in the Company as on the date of the Draft Letter of Offer.. The Directors are not interested in the appointment of, or acting as Registrar and Bankers to the Issue or any such intermediaries registered with SEBI.

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

Name and Designation of the Director

Date of Appointment Date of Resignation Reasons

Mr. Hozef Darukhanawala May 25, 2006 July 20, 2010 Resigned Ms. Duraiya Darukhanawala May 25, 2006 July 20, 2010 Resigned Mr. Nathmal Gokuldas Lohia May 25, 2006 May 21, 2010 Resigned Ms. Sadhana Nathmal Lohia May 25, 2006 May 21. 2010 Resigned Mr. Ratish Tagde March 26, 2010 July 19, 2010 Resigned Ms. Pushpa Shah May 21, 2010 November 02, 2010 Resigned Mr. Jimit Shah May 21, 2010 - - Mr. Ramesh Shah May 21, 2010 - - Mrs. Sunita Shah November 2, 2010 - - Mr. Litesh Gada November 2, 2010 - - Dr. Anil Ghagare November 2, 2010 - - Mr. Aakash Parikh November 2, 2010 - - Corporate Governance As on date, vide Circular No. SEBI/CFD/DIL/CG/1/2004/12/10 dated October 29, 2004, issued by SEBI, the provisions relating to corporate governance under Clause 49 of the Listing Agreement are not applicable to the Company since the paid-up capital is less than Rs. 300 Lakhs and net worth has been less than Rs. 2,500 Lakhs at all times in the history of the Company. The provisions of the Listing Agreement with respect to corporate governance will be applicable to the Company immediately upon the increase in share capital of the Company post this issue. In order to comply with these provisions, the Company has constituted the following committees:

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

Audit Committee The Audit Committee was constituted vide a resolution passed by the Board at its meeting held on December 14, 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. Litesh Gada Chairman Independent Director Mr. Ramesh Shah Member Executive Director Mr. Aakash Parikh Member Independent Director Mrs. Anita Agrawal Secretary Company Secretary 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 4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

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Role of the Audit Committee 1) Oversight of the 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) Reviewing, with the management, the annual financial statements before submission to the board for

approval, with particular reference to: a) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s

report in terms of clause (2AA) of section 217 of the Companies Act, 1956 b) Changes, if any, in accounting policies and practices and reasons for the same c) Major accounting entries involving estimates based on the exercise of judgment by management d) Significant adjustments made in the financial statements arising out of audit findings e) Compliance with listing and other legal requirements relating to financial statements f) Disclosure of any related party transactions g) Qualifications in the draft audit report

5) Reviewing, with the management, the quarterly financial statements before submission to the board for approval.

6) Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

7) Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.

8) 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.

9) Discussion with internal auditors any significant findings and follow up there on. 10) 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.

11) 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.

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

13) To review the functioning of the Whistle Blower mechanism, in case the same is existing. 14) Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading

the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.

15) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. Shareholders’/ Investors’ Grievance Committee The 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 December 14, 2010. The shareholders’ / investors’ grievance committee consists of the following Directors: Name of the Director Designation in the Committee Nature of Directorship Mr. Aakash Parikh Chairman Independent Director Mr. Jimit Shah Member Managing Director Dr. Anil Ghagare Member Independent Director The shareholders’/ investors’ grievance committee was constituted specifically to look into the redressal of shareholders and investors’ complaints like:

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1) To supervise and ensure efficient transfer of shares; 2) To attend to the shareholders’ & investors’ grievances and ensure timely reply to the grievances; 3) To approve transfers, transmissions, duplicate issue, rematerialisation, dematerialization, etc. of shares of

the company; 4) To resolve all complaints received from the investors/shareholders of the company and to place before the

board the status of various complaints/ suggestions received by the Committee. Remuneration Committee The Company has formed a remuneration committee pursuant to clause 49 of the listing agreement for looking into the fixing of remuneration payable to the employees of the Company. The remuneration committee consists of the following Directors: Name of the Director Designation in the Committee Nature of Directorship Dr. Anil Ghagare Chairman Independent Director Mrs. Sunita Shah Member Non-Executive Director Mr. Aakash Parikh Member Independent Director The functions of the remuneration committee are as follows: 1) To assist the Board in developing and administering a fair and transparent Human Resource Policies. 2) To assist the Board in appointment of Managing directors, whole time directors, managers, secretary,

additional directors, alternate directors, etc. on the Board of the Company 3) To fix the remuneration of the directors and senior management of the Company on the basis of their merit,

qualifications, performance and competence. 4) To review, approve and finalize the sitting fees payable to the directors of the Company.

Organisation Structure As on the date of the Draft Letter of Offer, the following is the organization structure of the Company:

Chairman (Mr. Ramesh Shah)

Managing Director (Mr. Jimit Shah)

Chief Engineer (Mr. Madhusudan

Bhandare)

Incharge of Procurement of Raw Materials (Mr. Nalin

Bhatt)

Chief Architect (Ms. Ashma Humne)

Chief Financial Officer (Mr. Vipul

Khona)

Company Secretary (Mrs. Anita Agrawal)

Accounts Head (Mr. Vijay Kothari)

Administrative Head (Ms. Rosy

Martin)

Board of Directors

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Key managerial personnel of the Company The Company is managed by its Board of Directors, assisted by qualified professionals, who are permanent employees of the Company with varied experience in the field of finance, compliance and marketing. All the key managerial personnel of the Company have been appointed with effect from August 1, 2010, hence, the remuneration detail is provided for fiscal 2010-11. Mr. Vipul Khona, aged 45 years, is the Chief Financial Officer of the Company with an overall responsibility of looking into the status of the financial matters of the Company and also planning and scheduling the implementation of projects, vendor identification and selection as well as overall logistics. He holds a Bachelor in Engineering (Computers) degree from the Ramrao Aadik College of Engineering. He was associated with ZDPL since 1995 and has been employed with the Company since August 1, 2010. He has an experience of over 15 years in the field of real estate business and has worked with a number of other Companies including, Vasant Enterprises and Vishal Enterprises. Since August 1, 2010, he has been paid an annual remuneration of Rs. 8, 60,000/-. Mr. Vijay Kothari, aged 35 years, is the Accounts Head of the Company. He is responsible for maintaining accounts and income tax related compliances of the Company. He was associated with ZDPL since 2006 and has been in the employment of the Company since August 1, 2010. He has an experience of over 18 years in the field of accounts and has worked as accounts head with fashion floor for over 15 years. Since August 1, 2010, he has been paid an annual remuneration of Rs. 2, 34,000/-. Ms. Ashma A. Humne, aged 30 years, is the Chief Architect of the Company with an overall responsibility of project planning and design. She is a Bachelor in Architecture from the Manoharbhai Patel Institute of Engineering & Technology, Gondia, and Nagpur University. She has been associated with the Company since August 1, 2010. She has an experience of over five years and has worked with a number of reputed Architecture Firms including space moulders, Design Consultancy Organisation from 2005 – 2008 as well as Architect Manish Shah and Associates since 2008. She has worked on over ten different projects and has varied experience in the field. Since August 1, 2010, she has been paid an annual remuneration of Rs. 6, 50,000/-. Mr. Madhusudan Bhandare, aged 49 years, is the Chief Engineer of the Company with an overall responsibility of the day-to-day management and implementation of projects. He has a Diploma of Licentiate of Civil & Sanitary Engineering from the Veermata Jijabai Technological Institute (erstwhile Victoria Jubilee Technological Institute). He has been associated with ZDPL since 1999 and has been in the employment of the Company since August 1, 2010. He has an experience of over 27 years and has worked with a number of reputed Firms and Companies in various capacities. He has worked on numerous different projects during his career. Since August 1, 2010, he has been paid an annual remuneration of Rs. 4, 22,500/-. Mr. Nalin Bhatt, aged 64 years, is in charge of Procurement of Raw Materials for the Company with an overall responsibility of procuring raw materials for the projects undertaken by the Company. He has been associated with ZDPL since 1995 and has been in the employment of the Company since August 1, 2010. He has an experience of over 35 years in the field of procurement of raw materials for real estate projects. In the past, he has been associated with reputed companies like Nissan Motors in Muscat as a spare part executive from 1982 till 1987 and as a factory-in-charge of Sara Colours at Thane from 1989 till 1994 apart from others. Since August 1, 2010, he has been paid an annual remuneration of Rs. 2, 08,000/-. Ms. Rosy Martin, aged 32 years, is the Administrative Manager of the Company with an overall responsibility of handling the day to day administrative work. She has been associated with ZDPL since 2004 and has been employed by the Company since August 1, 2010. She has an experience of over 10 years in the field of human resource and administration. In the past, she has been associated with Zamir Enterprises for 6 years. Since August 1, 2010, she has been paid an annual remuneration of Rs. 1, 17,000/-. Mrs. Anita Agrawal, aged 34, years is the full time Company Secretary of the Company. She holds Bachelor’s in Law degree from Jitendra Chauhan College of Law, Mumbai and is also a qualified company secretary. She has over 10 years of experience as legal officer and company secretary. She has previously worked at Philips India Limited, SI Group-India Limited, Global Towers Limited and Convexity Solutions and Advisors Private Limited. She has been appointed as the Company Secretary of the Company with effect from November 2, 2010 and is entitled to an annual remuneration of Rs. 3, 25,000/-

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Bonus or profit sharing plan for the key managerial personnel There is no profit sharing plan for the key managerial personnel. Changes in key managerial employees All the key managerial personnel have been appointed in the financial year 2010 – 2011. Hence, there has been no change therein. Employees Scheme of Employee Stock Option or Employee Stock Purchase The 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. Shareholding of key managerial personnel of Company Mr. Vipul Khona, the Chief Financial Officer and Compliance Officer of the Company, holds 20,000 Equity Shares constituting 2.58% of the pre-issue shareholding of the Company. Further none of the key managerial personnel of the Company are related to each other.

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OUR PROMOTER AND PROMOTER GROUP

Promoter of the Company The Company is promoted by Mr. Jimit Shah Brief profile of the Promoter

Mr. Jimit Shah, aged 28 years, is the Managing Director of the Company. Mr. Jimit Shah has a Bachelor of Commerce degree from the University of Mumbai. Mr. Jimit Shah currently resides at 8/9, 505 Jupiter, Swami Narayan Mandir Road, Off Azad Road, Ville Parle (East), Mumbai- 400 057

Voter Identity number: Not Available Driving license number: MH0220100104347

The Company confirms that the Permanent Account Number, bank account number and passport number of the Promoter have been submitted to Stock Exchange at the time of filing the Draft Letter of Offer with the Stock Exchange. For further details pertaining to Mr. Jimit Shah, please refer to the chapter titled “Our Management” beginning on page 93 of the Draft Letter of Offer. Relationship of the Promoter with the Directors and the key managerial personnel of the Company The Promoter is related to the Company’s Directors within the meaning of Section 6 of the Companies Act. The details of relationship of the Promoter with other Directors of the Company are set out below:

Name Designation Relationship with other Directors Mr. Jimit Shah Managing Director Son of Mr. Ramesh Shah and

Husband of Mrs. Sunita Shah Mr. Ramesh Shah Chairman and Whole Time Director Father of Mr. Jimit Shah and Father-

in-Law of Mrs. Sunita Shah Mrs. Sunita Shah Non- Executive Director Wife of Mr. Jimit Shah and daughter-

in-law of Mr. Ramesh Shah The Promoter is not related to any of the Company’s Key Managerial Personnel. Details of change in control of the Company Mr. Aman More (acting through Mr. Niraj More as the natural guardian) and M/s Radhakrishan Nandlal Private Limited the original/first promoters of the Company sold 1, 33,500 Equity Shares of Rs. 10 each, representing 54.81 % of the total shareholding of the Company to Mr. Hozef Darukhanawala vide Share Purchase Agreement dated November 28, 2005. Following acquisition of 54.81% stake Mr. Hozef Darukhanawala made an offer to acquire additional 20% shareholding in the Company in compliance with the Takeover Code and took over the controlling interest of the Company. Subsequently on March 26, 2010, Mr. Jimit Shah along with Mrs. Pushpa Shah, Mr. Ramesh Shah and Ms. Yesha Shah entered into an Memorandum of Understanding with Mr. Hozef Darukhanawala to acquire 1,04,500 Equity Shares constituting 13.48% of the total shareholding of the Company and acquired management control over the Company as set out under Regulation 12 of Takeover Code. The change of control has been approved by the shareholders at the extra ordinary general meeting held on May 14, 2010. For more details on the history of business of the Company refer to chapter tilted “History and Other Corporate Matters” beginning on page 88 of the Draft Letter of Offer.

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Promoter’s experience in the current line of business The Company’s Promoter, Mr. Jimit Shah, has over 10 years’ experience in the line of business, that is, construction and slum redevelopment related activities. The real estate business of the Company would be managed by the Promoter with the assistance of the Management and experienced Key Managerial Personnel. Common Pursuits The following are the Promoter Group Companies, which are in the same lime of business as the Company:

1. Zodiac Developers Private Limited; 2. Rananjay Developers Private Limited; 3. Zodiac Developers India Private Limited; 4. Priya Infra Projects Private Limited; 5. Priya Slum Projects Private Limited; 6. Zodiac Homemakers Private Limited; 7. Zodiac Realities Private Limited; and 8. Zodiac Realities Private Limited.

Interest of the Promoter in the Company Mr. Jimit Shah holds Equity Shares, in the Company and is therefore interested to the extent of their shareholding and the dividend declared, if any, by the Company. The Promoter does not have any interest in any property acquired by or proposed to be acquired by the Company since incorporation. However, Mr. Jimit Shah has interest in the property of the Gandhinagar Project, which is one of the proposed projects of the Subsidiary. For details related to our projects refer to chapters titled “Our Business” and “Land Reserves” beginning on pages 51 and 65 respectively of the Draft Letter of Offer. Further, save and except as stated otherwise in the chapters titled “Our Business” and “Our Management” and the chapter titled ‘Financial Statements’ beginning on pages 51, 93 and 109 respectively, of the Draft Letter of Offer, and to the extent of Equity Shares held by him in the Company, the Promoter does not have any other interests in the Company as on the date of the Draft Letter of Offer. Payment or Benefit to the Promoter

Except as stated in the chapter titled “Financial Statements - Related Party Disclosures” beginning on page 126 and 149 and in the chapter titled “Our Management” beginning on page 93, of the Draft Letter of Offer there has been no payment of benefits to the Promoter since the date of incorporation of the Company.

There is no bonus or profit sharing plan for the Promoter. Confirmations by the Promoter The Company’s Promoter including relatives of Promoter 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 are pending against them and the Promoter including relatives of Promoter have been restricted from accessing the capital markets for any reasons, by SEBI or any other authorities. Related Party Transactions

Except as disclosed in the “Financial Statements” beginning on page 109 of the Draft Letter of Offer the Company has not entered into any related party transactions with the Promoter or Group Companies. Acquisition of control by the present promoter On March 26, 2010, Mr. Jimit Shah along with Mr. Ramesh Shah, Mrs. Pushpa Shah and Ms. Yesha Shah entered into an Memorandum of Understanding with Mr. Hozef Darukhanawala to acquire 1,04,500 Equity Shares constituting 13.48% of the total shareholding of the Company and acquired management control over the Company as set out under Regulation 12 of Takeover Code. The change of control has been approved by the shareholders at the extra ordinary general meeting held on May 14, 2010.

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Promoter Group Individuals The following natural persons (being the immediate relative of the Promoter) form part of the Promoter Group: Relatives of Mr. Jimit Shah

Name Relationship with Mr. Jimit Shah Mr. Ramesh Shah Father Mrs. Sunita Shah Wife Mrs. Pushpa Shah Mother Ms. Yesha Shah Sister Mr. Mangilalji Tickuchandji Father-in-law Mrs. Satu Jogani Mother-in-law Mr. Kunal Jogani Brother-in-law Mr. Vishal Jogani Brother-in-law Entities forming part of the Promoter Group As specified in clause 2 (zb) of the SEBI ICDR Regulation, the companies, HUFs, partnership firms and other entities, other than the entities described in details in chapter titled ‘History and Other Corporate Matters’ on page 88, that form part of the Promoter Group are as follows: The companies that form part of the Promoter Group are as follows:

Sr. No. Name 1. Zodiac Developers Private Limited 2. Ranajay Developers Private Limited 3. Zodiac Developers India Private Limited 4. Zodiac Realties Private Limited 5. Zodiac Homemakers Private Limited 6. Priya Infra Projects Limited 7. Priya Slum Projects Private Limited 8. Zodiac Capital Private Limited 9. Nikita Properties Limited

The partnership firms that form part of the Promoter Group are as follows:

Sr. No. Name

1. Jimit Associates 2. Janta Sales Corporation 3. Zodiac Book Mfg. Co. 4. Nikita Associates 5. Nikita Construction Co. 6. Shree Nikita Construction Co. 7. V. K. Developers

The proprietorship firms that form part of the Promoter Group are as follows:

Sr. No. Name

1. Vishal Enterprises 2. Jogani Associates 3. Nikita Finance Co. 4. Nikita Enterprises 5. Vishal Construction Co.

The HUFs that form part of the Promoter Group are as follows:

Sr. No. Name 1. Ramesh V Shah HUF 2. Jimit R Shah HUF 3. Mangilal T. Jogani HUF

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OUR GROUP COMPANIES

The words “group companies” shall mean companies, firms, ventures, etc. promoted by the promoters of the issuer, irrespective of whether such entities are covered under section 370(1)(B) of the Companies Act, 1956 or not. Except as disclosed below there are no companies, firms or other ventures promoted by the Promoter of the Company that form a part of the Group Companies as specified in the SEBI ICDR Regulations. A. The details of the Group Companies/entities promoted by the Promoter are as follows: 1. Zodiac Foundation Zodiac Foundation was established as a public charitable trust by a trust deed dated May 31, 2010 by Mr. Ramesh Shah, the settlor of the Zodiac Foundation. The corpus of Zodiac Foundation is Rs. 9,900/-. The office of Zodiac Foundation is located at 404, Dev Plaza, 68, S. V Road, Andheri (W), Mumbai – 400 058. Trustees as on the date of the Draft Letter of Offer: 1. Mr. Ramesh Shah; 2. Mr. Jimit Shah; 3. Mrs. Pushpa Shah; 4. Mrs. Sunita Shah; 5. Ms. Yesha Shah; 6. Mrs. Bhanumati Shah; and, 7. Mr. Vipul Khona Zodiac Foundation was set up in the year 2010 and hence, financial data is not available for the same. 2. Jimit R. Shah HUF Jimit R. Shah HUF was formed on August 21, 2008, with Mr. Jimit Shah as its Karta. Members as on the date of the Draft Letter of Offer The members of Jimit R. Shah HUF are as under:

a. Mr. Jimit R. Shah b. Mrs. Sunita J. Shah c. Ms. Ziya J. Shah

Financial Information Jimit R. Shah HUF has no business and operation of its own, and thus there are no financials. B. Group Companies which have negative net worth/have become sick industrial undertakings/under winding-up None of the Group companies have a negative net worth or have become sick industrial undertakings or under winding-up. Sales and purchases between our Company and Group Companies/associate companies For details of transactions with related parties, see the chapter titled “Financial Statements-Related Party Transactions” beginning on page 126 and 149 of the Draft Letter of Offer Business interest of Group Companies / associate companies in the Company Except as stated in this chapter, the Group Company does not have any business interest in the Company.

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Interest of Group Companies in promotion of the Issuer The Group Company/Entities have no interest in the promotion of the Company. Interest of Group Companies in the properties of the Issuer Except as stated in the chapter tilted “Land Reserves” beginning on page 65 of the Draft Letter of Offer, where the real estate projects are carried out by the Subsidiary, none of the Group Company/Entities have any interest in the properties acquired by the Company or proposed to be acquired by it. The Company has not sold or leased any of its properties to its Group Company. Payment of benefit to our Group Company Except as stated in the chapter titled “Financial Statements- Related Party Transactions” beginning on page 126 and 149 of the Draft Letter of Offer, there has been no payment of benefits to the group company during the two years prior to the filing of the Draft Letter of Offer.

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DIVIDEND POLICY

The declaration and payment of dividend will be recommended by the Board of Directors and approved by the shareholders of the 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 the Board of Directors. The Board of Directors may also from time to time pay interim dividend. The table below provides information of dividends declared by the Company during the last five Fiscals.

Description Year ended March 31,

2010 2009 2008 2007 2006 Face value of Equity Shares (Rs.) 10 Nil Nil Nil NilDividend (Rs.) 7,75,000 Nil Nil Nil NilDividend tax (Rs.) 1,31,711 Nil Nil Nil NilDividend per Equity Share (Rs.) final 1 Nil Nil Nil NilDividend rate (%) 10 Nil Nil Nil Nil The amounts paid as dividends in the past are not necessarily indicative of the dividend policy or dividend amounts, if any, in the future.

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SECTION V – FINANCIAL INFORMATION

FINANCIAL STATEMENTS To, The Board of Directors, Zodiac Ventures Ltd. Mumbai

Dear Sirs,

Re: Proposed Rights Issue of Equity Shares of Zodiac Ventures Limited We have examined and found correct the annexed consolidated restated summary statements of Zodiac Ventures Limited and its subsidiaries for the nine months period ended December 31, 2010 prepared by the Company and approved by its Board of Directors. At the date of signing this report, we have not come across 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 Equity shares of the Company.

• The terms of reference given vide the Company’s letter dated 26th November, 2010 requesting us to carry out work in Connection with the Issue as aforesaid, we report that:-

1. The consolidated summary statement of assets and liabilities, as restated, of the Company and its

subsidiaries as at December 31, 2010 are as set out in Annexure 1 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 4 to this report.

2. The consolidated summary statement of Profit and Loss, as restated of the Company and its subsidiaries for the nine months period ended December 31, 2010 are as set out in Annexure 2 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 4 to this report.

3. We have examined the consolidated summary statement of cash flow, as restated relating to the Company and its subsidiaries for the nine months period ended December 31, 2010 appearing in Annexure 3 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 4 to this report.

These consolidated summary statements have been prepared by the Company and approved by its Board of Directors (these statements are herein collectively referred to as the “Consolidated Restated Summary Statements”. These statements have been extracted from the audited consolidated financial statement of the Company for the respective period. Audit of the consolidated financial statements for the nine months period ended December 31, 2010 have been conducted by us. This consolidated financial statement include the financial statements of Subsidiary with total assets of Rs. 4005.75 lakhs and Total Revenue of Rs.16.57 Lakhs which has been audited by Navin Nishar & Associates Chartered Accountants and we have relied upon their Report and in so far it relates to the amounts included in respect of Subsidiary, is based solely on the report of Navin Nishar & Associates Chartered Accountants.

The Consolidated Restated Summary Statements of the Company as included in this report as at and for the nine

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months period ended December 31, 2010 are based on the consolidated audited financial statements of the Company which were audited by us for the said period as set out in Annexure 1, 2 and 3 of this report are after making such adjustments and regrouping as in our opinion were appropriate.

Based on the above we are of the opinion that the Consolidated Restated Summary Statements have been made after incorporating:

(i) Adjustments for the changes in accounting policies retrospectively in respective financial period 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 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 and its subsidiaries proposed to be included in the Draft Letter of Offer as approved by you and annexed to this report. Sr. No. Details of Annexure Annexure

1. Consolidated Summary Statement of Assets and Liabilities, as Restated Annexure 1 2. Consolidated Summary Statement of Profit and Loss A/c, as Restated Annexure 2 3. Consolidated Summary Statement of Cash Flow Statement, as Restated Annexure 3 4. Consolidated Significant Accounting Policies and Notes to Accounts Annexure 4 5. Consolidated Statement of Sundry Debtors, as Restated Annexure 5 6. Consolidated Statement of Current Liabilities & Provisions, as Restated Annexure 6 7. Consolidated Statement of Loans and Advances, as Restated Annexure 7 8. Consolidated Statement of other current assets, as Restated Annexure 8 9. Consolidated Statement of Secured Loans, as Restated Annexure 9 10. Consolidated Statement of Unsecured Loans, as Restated Annexure 10 11. Consolidated Statement of Operating Income, as Restated Annexure 11 12. Consolidated Statement of Other Income, as Restated Annexure 12 13. Consolidated Statement of Contingent Liabilities, as Restated Annexure 13 14. Consolidated Statement of Accounting Ratios, as Restated Annexure 14 15. Consolidated Statement of Capitalisation, as Restated Annexure 15 16. Consolidated Statement of Tax Shelters, as Restated Annexure 16 17. Consolidated Statement of Investments, as Restated Annexure 17 18. Consolidated Statement of Related Parties and Transactions , as Restated Annexure 18 19. Consolidated Statement of Dividend Declared, as Restated Annexure 19 20. Consolidated Statement of Segment Reporting, as Restated Annexure 20 21. Consolidated Statement of Reserves & Surplus, as Restated Annexure 21

In our opinion the above financial information of the Company read with Significant Accounting Policies and Notes to Accounts enclosed in Annexure 4 to this report 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 Offer Document 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.

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FOR A. R. Sodha & Co.

CHARTERED ACCOUNTANTS Firm’s Registration No: 110324W A. R. Sodha Partner Membership No: 31878

Place: Mumbai Date: January 17, 2011

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ANNEXURE-1 CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES AS RESTATED

As at Particulars 31.12.20l0

A TANGIBLE ASSETS Fixed Assets Gross Block 283.37 Less: Accumulated Depreciation 85.52 Net Block 197.85 Less: Revaluation Reserve - Net Block after adjustment of Revaluation Reserve 197.85 Capital Work In Progress - Total 197.85

B INTANGIBLE ASSETS Gross Block 54.48 Less: Amortisation - Net Block 54.48 Capital Work In Progress - Total 54.48

C INVESTMENTS 1.00 D DEFERRED TAX ASSET - E CURRENT ASSETS, LOANS &ADVANCES Inventories 3,467.53 Sundry Debtors 6.93 Cash & Bank Balances 116.20 Loans & Advances 236.04 Other Current Assets Total 3,826.70

F LIABILITIES AND PROVISIONS Secured Loans 111.13 Unsecured Loans 426.49 Deferred Tax Liability 7.01 Current Liabilities 3,193.88 Provisions 10.70 Total 3,749.22

G MINORITY INTEREST 147.62 H NET WORTH (A + B + C+D+E-F-G) 183.21 Net Worth Represented by Equity Share Capital 77.50 Preference Share Capital - Reserve & Surplus - Share Premium 45.86 - Capital Reserve - Debenture Redemption Reserve - Other Reserve (Other than Revaluation Reserve) - Surplus/(Deficit) in P & L Nc 61.55 Less: Miscellaneous Expenses Not W/off (1.70)

I NETWORTH 183.21

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ANNEXURE-2

CONSOLIDATED SUMMARY STATEMENT OF PROFIT & LOSSES AS RESTATED:

(Rs. in Lakhs) For the nine months

period ended Particulars 31.12.2010 Income Sales & Operating Incomes Of products manufactured by the Company - Of products traded by the Company - Other Income 45.16 Increase / (Decrease) in Stock Total Income 45.16 Expenditure Raw Material Consumed / Cost of Traded Goods - Payment & Provision for Employees 12.66 Administrative & Other Expenses 5.26 Selling & Distribution Expenses 1.80 Financial Charges - Depreciation & Amortization - Total Expenditure 19.73 Profit before tax and extraordinary items 25.43 Add / (Less) : Extraordinary Items - Profit Before Tax after extraordinary items 25.43 Add / (Less) : Provision for Tax Current Tax (7.24) Earlier Years (1.18) Deferred Tax Liability / (Assets) 1.56 Profit After Tax and extraordinary items as per Audited Accounts (A) 18.57 Less: Minority Interest (3.88) Profit After Tax and minority interest as per Audited Accounts (A) 14.69 Impact of Change in Accounting Policies and Estimates - Excess/(Short) Provision for Taxation 1.18 Share of Minority in Excess/ (Short) Provision of Taxation (0.58) Total Impact of Adjustment - Total Adjustments net of tax impact 0.60 Net Profit as Restated 15.29 Surplus/(Deficit) brought forward from previous years 50.89 Balance available for appropriations, as restated 66.19 Appropriation Share of Pre-Acquisition Profit transferred to Cost Of Capital (4.64) Balance Carried forward as restated 61.55

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ANNEXURE-3 CONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS FROM RESTATED FINANCIALSTATEMENTS

(Rs. in Lakhs) For the nine months

period ended Particulars 31.12.2010

A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before taxation and extra ordinary items 25.43

Adjustment for: Depreciation & Amortization Finance Charges/Interest (Net) Provision for diminution in value of investments Foreign Exchange Gain/(loss) Fixed Assets W /off Profit on Sale of Investment (27.90) Interest/ Dividend Received. (0.68) Loss on Sale of Fixed Assets Misc. Expenses Amortization Cash generated from operations before working capital changes (3.15) Increase/Decrease in trade receivables (4.49) Increase/ Decrease in loans & advances (19.63) Increase/Decrease in Inventories (413.99) Increase/Decrease in trade payables &others 447.30

Cash Generated from/ (used in) Operations 6.04 Direct tax Paid (Net of Excess/surplus provision) (13.85) Interest Paid - Net Cash Flow before extra ordinary items (7.81) Extraordinary Items Net Cash Flow from/ (used in) Operating Activities (7.81) B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (46.49) Sale of Investments 148.90 Interest Received 0.68 Net Cash Flow from/ (used in) Investing Activities 103.09 C. CASH FLOW FROM FINANCING ACTIVITIES Share issue expenses (14.60) Proceeds from Secured Loans 29.32 Proceeds from Unsecured Loans 41.33 Repayment of Unsecured Loans (86.11) Dividend Paid (9.07) Proceeds from Share issue to Minority 3.21 Net Cash from/ (used in) Financial Activities (35.91) NET INCREASE /(-) DECREASE IN CASH AND CASH EQUIVALENTS 59.36 OPENING BALANCE IN CASH AND CASH EQUIVALENTS 56.84 CLOSING BALANCE IN CASH AND CASH EQUIVALENTS 116.20 Components of Cash & Cash Equivalents - Cash in hand 12.98 - Cash/bank Balance with bank (current account) 3.22 -Balance with bank on deposit account 100.00

CASH AND CASH EQUIVALENTS 116.20

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ANNEXURE - 4 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE CONSOLIDATED RESTATED FINANCIAL STATEMENTS A. SIGNIFICANT ACCOUNTING POLICIES

1 Basis of Accounting

The Consolidated Financial Statements of Zodiac Ventures Limited (“the Company” or “Parent Company”) and its domestic subsidiaries Zodiac Developers Pvt Ltd is prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the Accounting Standands 21 on "Consolidation of Financial Statement, issued by the Institute of Chartered Accountants of India to the extent possible in the same formats that adopted by the Company for its separate financial statements.

2 Principles of Consolidation a) The financial statements of the Parent Company and its Subsidiary have been combined on a line by

line basis by adding together the books values of like items of assets, liabilities, income and expenses after fully eliminating inter company balance.

b) The consolidated financial statements are prepared by adopting uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Parents company’s separate financial statements except otherwise stated elsewhere in this schedule.

c) The excess of cost to the Parent company of its investments in the subsidiaries over the Parent’s portion of equity of the Subsidiary at the date holding Subsidiary relation first come in existence is recognised in the financial statements as goodwill.

d) Minority Interests in the Consolidated financial statements is identified and recognised after tahing into consideration:

• The amount of equity attributable to minorities at the date on which investments in a Subsidiary is made.

• The minorities share of movement in equity since the date parent – Subsidiary company came into existence.

• The losses atributable to the minorities are adjusted against the Minority Interest in the equity of the Subsidiary.

• The excess of profit over the minority interest in the equity, is adjusted against Profit and Loss of the Parent Company.

3 The subsidiary considered in the consolidated financial statements is:

Name of the subsidiary Company Extent of Holding Company’s Interest

Country of Incorporation Period considered for consolidation

Zodiac Developers Pvt Ltd 50.98% India *15/12/2010 to 31/12/2010 *For the purpose of consolidation effective date is taken as 31.12.2010 4 Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets andliabilites on the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

5 Revenue Recognition a) The Company has followed the Completed Contract Method for recognition of Income and Expenses.

The Income from Sale of Flats/ Property, etc. is accounted when the Sale Deed is executed. Any amount received against Sale of Flats or Property which is under construction/ Development, the same are treated as an Advance and shown as current liabilities.

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b) All the expenses of the Company which are directly related to the particular project are directly debited to that particular project as Work in process and the General expenses which are not pertaining to any particular Project are allocated to the running projects on the basis of the total expenses incurred on that project during the year.

c) In respect of Interest Income, is recognised on a time proportion basis. d) Profit on Sale of Investments is recognized on execution of transfer deed.

6 Fixed Assets

Fixed Assets are stated at cost of acquisiton as reduced by accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

7 Depreciation Depreciation on Fixed assets has been provided on pro-rata basis proportionately for the period of use on Straight Line Method as per the rates prescribed in Schedule XIV of the Companies Act, 1956. Goodwill on Consolidation will be written off over a period of Five Years.

8 Investments Investments intended to be held for more than a year are classified as long term Investments. Long term Investments are valued at cost less permanent diminution in value, if any, in the opinion of the management. The current investments are valued at lower of cost or market value.

9 Inventory Inventories have been valued at cost or net realisable value which ever is lower.

10 Employee Benefits Employer’s Contribution to the Provident Fund & Pension fund are charged to the Profit & Loss Account of the period to which they relate.Short Term Employee Benefit payable within one year are provided on accrual basis at actual value.

11 Taxes on Income Current tax is determined as the amount of tax payable in respect of taxable income of the year. Deferred tax for the year is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized and carried forward only if there is reasonable/virtual certainity of its realisation. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternate Tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Profit & Loss Account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the period.

12 Lease Rental

Operating lease rentals are charged to profit and loss account on accrual basis.

117

13 Earnings per share Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

14 Provisions A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. In respect of reward scheme of the Company, the provision for liability is made as and when rewards are redeemed

B. NOTES TO CONSOLIDATED RESTATED FINANCIAL STATEMENTS 1 Notes on Adjustments

Summarized below are the restatements made to the audited financial statements for the respective period/years and their impact on the profit / (loss) of the Company:

Particulars For the nine months

period ended 31.12.2010 Profit/(Loss) after tax as per audited financial statements (A) 14.69 B. Adjustments a. Adjustments on account of changes in accounting policies - b. Other Material Adjustments Excess\(Short) Provision for Tax 1.18 Minority Share in Excess\(Short) Provision for Tax (0.58) Pre-tax impact of Adjustments(B) 0.60 C. Tax impact on Adjustments - Total Tax impact on Adjustments - (C) - Total Adjustments net of tax impact (B+C) (D) 0.60 Adjusted/Restated Profit/(Loss) (A+D) 15.29

Explanatory notes to the above restatements made in the audited financial statements of the Company for the respective years/period: a) Short / (Excess) provision for current tax of earlier years

The profit and loss account includes amounts paid/provided for or written back, in respect of shortfall/excess income tax arising out of assessments, appeals etc. which has now been adjusted in the respective years. Also, income tax (current tax and deferred tax) has been computed on adjustments made as detailed above and has been adjusted in the summary statement of profits and losses, as restated for the nine months period ended December 31, 2010.

2 Deferred Tax/MAT Credit Entitlement:

The Company has recognised deferred tax as required by Accounting Standard 22 "Accounting for Taxes on Income" and MAT Credit Entitlement in accordance with Guidance Note issued by Institute of Chartered Accountants of India . The major components of deferred tax assets and liabilities are as under:

Particulars As at

31.12.2010 Deferred Tax Liabilities Depreciation 0.42Total (A) 0.42Deferred Tax Assets/MAT Credit MAT Credit under Income Tax Act 1.98Total (B) Net Deferred Tax (Assets)/Liabilities (A-B) (1.56)

118

3 Segment Reporting

The company operates in a single line of business i. e. Real Estate and Real Estate Development and also in a single geographic environment within India, Hence there is no reportable segment information with respect to provision of Accounting Standard 17 “Segment Reporting”

4 Details of Payment to Auditors (Excluding Service Tax) (Rs. in Lakhs)

Particulars For the nine months period ended 31.12.2010

Audit Fees 0.79 Tax Audit Fees - Certification and Other Services - Reimbursement of Out of Pocket Expenses - Total 0.79

5 Contingent Liability and Event Occurring After Balance Sheet Date The management of the company does not anticipate any contingent liability having material effect on financial statements at the year end. To the best of knowledge of the management, there are no events occurring after latest Balance Sheet date that provides additional information materially affecting the determination of the amounts relating to conditions existing at the latest balance sheet date that requires adjustment to the assets and liabilities.

6 Current Assets/Current Liabilities

In the opinion of the Directors of the Company the Current Assets and loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet. Loans and advances and Creditors are subject to confirmation from parties and necessary adjustment if any to be made on receipt of such confirmation.

7 Comparability

This being the first year of consolidation comparative figures is not available.

119

ANNEXURE-5

CONSOLIDATED STATEMENT OF SUNDRY DEBTORS AS RESTATED

(Rs. In Lakhs) As at

Particulars 31.12.2010 Receivable other than from promoters/promoters group/directors/related parties Less than Six Months

- Considered Good 5.19 - Considered Doubtful -

More than Six Months - - Considered Good 1.74 - Considered Doubtful -

Receivable from promoters/promoters group/directors/related parties Less than Six Months

- Considered Good - - Considered Doubtful -

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

Total 6.93

ANNEXURE-6 CONSOLIDATED STATEMENT OF CURRENT LIABILITIES AND PROVISIONS AS RESTATED

(Rs. In Lakhs)

As at Particulars 31.12.2010 Current Liabilities Sundry Creditors for Goods 62.24 Sundry Creditors for Expenses 12.75 Advance Against Booking of Flats 1,418.46 Security Deposit from Contractor 1,695.21 Others 5.22 Provisions Provision for Taxation 9.24 Provision for Expenses 1.47 Total 3,204.59

120

ANNEXURE-7

CONSOLIDATED DETAILS OF LOANS & ADVANCES AS RESTATED

(Rs. In Lakhs)

As at

Particulars 31.12.2010 Advances Recoverable in Cash or In Kind or Value to be Received 202.40 Deposits 33.65 Total 236.04

ANNEXURE-8

CONSOLIDATED DETAILS OF OTHER CURRENT ASSETS AS RESTATED

(Rs. In Lakhs)

As at Particulars 31.12.2010 Nil - Total -

121

ANNEXURE-9

CONSOLIDATED STATEMENT OF SECURED LOANS AS RESTATED:

(Rs. In Lakhs) As at

Particulars 31.12.2010 TERM LOAN - WORKING CAPITAL FACILITY Cash Credit Facility 90.13 VEHICLE LOAN Car Loan 21.00 Total 111.13

Details of secured loans as on December 31, 2010

Sr Bank name

Facility Type

Interest rate (%)

p.a.

Loan Currency

Sanctioned Amount in

Lakhs

Outstanding Loan as on 31.12.10 in

INR in Lakhs

Repayment terms as per

Loan Agreement

Security as per

the loan agreeme

nt

1 HDFC Bank Ltd.

Auto Loan 10.25 Indian Rupee

7.45 4.95 Rs. 23,575 p.m. from December 05, 2009 to November 05, 2012

Honda City Car

2 Reliance Capital Ltd.

Auto Loan 12.50 Indian Rupee

63.50 16.04 Rs.2,09,999 p.m. from October 01, 2008 to August 01, 2011

Mercedes Benz Car

3 The Cosmos Co-op. Bank Ltd.

Cash Credit

9.50 Indian Rupee

95.00 90.13 On demand Fixed Deposit of Rs. 100.00 Lakhs

ANNEXURE-10

CONSOLIDATED STATEMENT OF UNSECURED LOANS AS RESTATED

(Rs. In Lakhs)

As at Particulars 31.12.2010 1) From Promoters/Directors/Relatives Mr. Jimit R Shah 59.35 M/s Ramesh V Shah HUF 18.47 Mr. Ramesh V Shah 190.81 Ms. Pushpa Shah 141.27 Ms. Yesha R Shah 15.55 2) From Group Companies - 3) Others 1.04 Total 426.49

122

Details of unsecured loans as on December 31, 2010

Sr. Particulars of

Loan Name of Parties Outstanding Amt.

Interest Rate (%)

p.a. Repayment terms, if any

1 Short-Term Unsecured Loan Mr. Jimit R Shah 59.35 Nil

Payable on Demand

2 Short-Term Unsecured Loan

M/s Ramesh V Shah HUF 18.47 15

Payable on Demand

3 Short-Term Unsecured Loan Mr. Ramesh V Shah 190.81 Nil

Payable on Demand

4 Short-Term Unsecured Loan Ms. Pushpa Shah 141.27 Nil

Payable on Demand

5 Short-Term Unsecured Loan Ms. Yesha R Shah 15.55 15

Payable on Demand

6 Short-Term Unsecured Loan

Bombay Slum Rehabilitation 1.04 Nil

Payable on Demand

ANNEXURE-11

CONSOLIDATED STATEMENT OF OPERATING INCOME AS RESTATED

(Rs. In Lakhs) For the nine

months period endedParticulars 31.12.2010 Nil - Total -

ANNEXURE-12

CONSOLIDATED STATEMENT OF OTHER INCOME AS RESTATED

(Rs. In Lakhs)

Particulars Income

(Recurring/Non Recurring)

For the nine months period

ended 31.12.2010

Dividend Income Non Recurring 0.15 Interest Income Non Recurring 6.04 Rental Income Non Recurring 11.07 Profit on Sale of investments Non Recurring 27.90 Total 45.16 Net Profit before tax as restated 25.43 % of Net Profit before tax as restated 177.58

123

ANNEXURE-13

CONSOLIDATED STATEMENT OF CONTINGENT LIABILITIES AS RESTATED

(Rs. In Lakhs) As at

Particulars 31.12.2010 Nil - Total -

ANNEXURE-14

CONSOLIDATED SUMMARY OF ACCOUNTING RATIOS BASED ON RESTATED FINANCIAL STATEMENTS

(Rs. In Lakhs except per share data)

As at Particulars 31.12.2010 Net Profit after tax as restated 15.29 Weighted Average number of equity shares outstanding during the year / period considered for Basic/ Diluted EPS 775,000

Net Worth 183.21 Earning Per Share (EPS) Basic/ Diluted EPS (Rs.) 1.97 Return on Net Worth (%) 8.35 Net Asset Value per Equity Share (Rs.) 23.64

The Ratio has been computed as below: Net Profit after Tax as restated

-------------------------------------------------------------------

-------

(a) Earning Per Share (Rs.) Weighted Average number of Equity shares outstanding during the

year Net Profit after Tax as restated (b) Return On Net Worth (%) ------------------------------------------------------------------- Net Worth as restated Net Worth as restated (c) Net Asset Value per Share (Rs.) -------------------------------------------------------------------

Weighted Average number of Equity shares outstanding during the

year

124

ANNEXURE-15

CONSOLIDATED CAPITALISATION STATEMENT AS RESTATED AT DECEMBER 31, 2010

(Rs. In Lakhs) Pre-Issue as on December 31, Post-Issue#

Particulars 2010 Borrowings Short Term Debt 516.62 [●]Long Term Debt 21.00 [●]Total Debt 537.62 [●]Shareholders' Fund Share Capital - Equity 77.50 [●]- Preference - [●]Reserves & Surplus 109.11 [●]Total Shareholders' Funds 186.61 [●]Debt / Equity Ratio 2.88 [●]

# These figures cannot be calculated at this stage.

ANNEXURE-16 CONSOLIDATED STATEMENT OF TAX SHELTERS AS RESTATED

(Rs. In Lakhs) As at

Particulars 31.12.2010

Profit before Tax but after extraordinary items as restated (a) 25.43 Tax Rate % 30.90 Tax at Notional Rate on Profit 7.86 Adjustments: Permanent Differences : Other Disallowances 27.90 Total of Parmanent Differences (b) 27.90 Timing Differences: Advertisement Expenditure for projects (1.81) Total of Timing Differences (c) (1.81) Net Adjustments (b) + (c) 26.09 Tax Saving 8.06 Total Adjustments (d) Tax effect thereof - Proflt/floss) as per Income Tax returns (e)= (a-b-c-d) (0.66) Brought forward losses adjusted (f) - Taxable Income/(loss) (e+f) (0.66) Taxable Income/(Loss) as per MAT 10.65 Tax as per Income tax as returned 7.24 Interest u/s 234 Total Tax as per return 7.24 Carry forward business loss - Carry forward depreciation loss - Total carry forward loss as per return of the year -

125

ANNEXURE-17

CONSOLIDATED STATEMENT OF INVESTMENTS AS RESTATED (Rs. In Lakhs)

As At Particulars 31.12.2010 Long Term Investment Trade Investments-Quoted Group Companies - Others - Total (a) - Trade Investments-Unquoted Group Companies - Others - 10000 Shares in Cosmos Co-op. Bank Ltd 1.00 Total (b) 1.00 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) 1.00 Market value of quoted investments -

ANNEXURE-18

DETAILS OF RELATED PARTIES

For the nine months period ended

Particulars 31.12.2010

a. Associates M/s Money Master Leasing and Finance Ltd.

b. Key Management Personnel (KMP) Mr. Jimit Ramesh Shah Mr. Ramesh V Shah

c. Relatives of Key Management Personnel

Ms. Puspa R Shah Ms. Yesha R Shah Ms. Bhanumati V Shah M/s Ramesh V ShahHUF

d. Enterprises where Key Management Personnel excercises Significant Influence

M/s Zodiac Developers Ltd. M/s Zodiac Book Mfg Co. M/s Zodiac HomemakersPvt. Ltd. M/s Zodiac Capital Pvt. Ltd. M/s Ranajay Developers Pvt. Ltd. M/s Jimit Associates M/s Janta SalesCorporation M/s Zodiac Developers India Pvt Ltd. M/s Zodiac Realties Pvt. Ltd. M/s Priya Infra Project Ltd. M/s Priya Slum Projects Pvt. Ltd.

126

CONSOLIDATED DETAILS OF RELATED PARTY TRANSACTIONS AS RESTATED

(Rs. In Lakhs)

Particulars

For the nine months period ended 31.12.2010

a. Transactions with shareholders having substantial interest Contribution towards Joint Venture 192.50 Advance/ Loan Received 150.31 Advance Given 152.63 Labour Charges Paid 40.85 O/s. Balance in Current Liability 48.14 b. Key Managerial Personnel Advance/ Loan Received 1,176.34 O/s. Advance/ Loan Received 250.16 c. Associate Concerns Refund of Application Money 28.00 d. Transaction with Relatives of KMP Advance/ Loan Received 213.50 O/s. Advance/ Loan Received 175.29 Interest Paid 2.02

127

Name of the party Nature of Transaction

For the nine months period ended

31.12.2010 Transaction with shareholders having substantial interest

M/s Zodiac Developers Pvt. Ltd. Contribution towards Joint Venture

192.50

M/zodiac Homemakers Pvt. Ltd. Advance/ Loan Received 0.31

M/s Ranajay Developers Pvt. Ltd. Advance/ Loan Received 150.00

M/s Jimit Associates Advance Given 1.14 M/s Zodiac Realties Pvt. Ltd. Advance Given 2.00 M/s Priya Infraprojects Ltd. Advance Given 115.00 M/s Zodiac Books Mfg. Co. Advance Given 34.48

M/s Zodiac Homemakers Pvt. Ltd. Labour Charges Paid 3.35

M/s Ranajay Developers Pvt. Ltd. Labour Charges Paid 4.95

M/s Zodiac Developers India Pvt. Ltd. Labour Charges Paid 8.10

M/s Zodiac Realties Pvt. Ltd. Labour Charges Paid 7.90

M/s Priya Infraprojects Ltd. Labour Charges Paid 8.35

M/s Priya Slum Projects Pvt. Ltd. Labour Charges Paid 8.20

M/s Zodiac Homemakers Pvt Ltd. O/s. Balance in Current Liabilitv

11.39

M/s Priya Infraprojects Ltd. O/s. Balance in Current Liability

8.18

M/s Priya Slum Projects Pvt. Ltd. O/s. Balance in Current Liability

8.04

M/s Ranajay Developers Pvt. Ltd. O/s. Balance in Current Liability

4.85

M/s Zodiac Developers India Pvt. Ltd O/s. Balance in Current Liability

7.94

M/s Zodiac Realties Pvt. Ltd. O/s. Balance in Current Liability

7.74

Transaction with Key Managerial Personnel

Mr. Ramesh V Shah Advance/ Loan Received 1,118.84

Mr. Jimit R Shah Advance/ Loan Received 57.50

Mr. Ramesh V Shah O/s. Advance/ Loan Received 190.81

Mr. Jimit R Shah O/s. Advance/ Loan Received 59.35

Transaction with Associates

128

Name of the party Nature of Transaction

For the nine months period ended

31.12.2010

M/s Money Master Leasing and Finance Ltd. Refund of Application Money

28.00

Transaction with Relatives of KMP

Ms. Puspa Ramesh Shah Advance/ Loan Received 166.00

Ms. Yesha Ramesh Shah Advance/ Loan Received 15.00

M/s Ramesh V Shah HUF Advance/ Loan Received 32.50

Ms. Yesha Ramesh Shah Interest Paid 2.02

Ms. Puspa Ramesh Shah O/s. Advance/ Loan Received 141.27

Ms. Yesha Ramesh Shah O/s. Advance/ Loan Received 15.55

M/s Ramesh V Shah HUF O/s. Advance/ Loan Received I8.47

ANNEXURE-19

CONSOLIDATED STATEMENT OF DIVIDEND DECLARED AS RESTATED

(Rs. In Lakhs) Particulars As at

31.12.2010Equity Dividend

Equity Share Capital - Rate of Dividend - Amount of Dividend - Tax on dividend -

ANNEXURE-20 SEGMENT REPORTING The company operates in a single line of business i. e. Real Estate and Real Estate Development and also in a single geographic environment within India, Hence there is no reportable segment information with respect to provision of Accounting Standard 17 “Segment Reporting” issued by ICAI. ANNEXURE-21

CONSOLIDATED STATEMENT OF RESERVES AND SURPLUS AS RESTATED

(Rs. in Lakhs) As at

Particulars 31.12.2010 Securities Premium Account Opening Balance 58.46 Add: Additions during the year - Less: Expenses for increasing authorized share capital written off 12.60 Closing Balance 45.86 Surplus as per Profit and Loss Account 61.55 Total 107.41

129

STANDALONE FINANCIAL STATEMENTS Auditor’s Report as required by Part II of Schedule II to the Companies Act, 1956. To, The Board of Directors, Zodiac Ventures Ltd, Mumbai Dear Sirs, Re: Proposed Rights Issue of Zodiac Ventures Limited We have examined and found correct the annexed Standalone Restated Summary Statements of Zodiac Ventures Limited(formerly known as Money Masters Investment Limited)for the nine months period ended December 31, 2010 and the financial 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 doesn’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 have not come across 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 26th November, 2010 requesting us to carry out work in connection with the Issue as aforesaid, we report that:-

1. The Standalone Summary Statement of Assets and Liabilities, as restated, of the Company for the nine months period ended December 31, 2010 and the financial years ended March 31, 2010, 2009, 2008, 2007 and 2006 are as set out in Annexure 1 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 4 to this report. 4. The Standalone Summary Statement of Profit and Loss, as restated of the Company for the nine months period ended on December 31, 2010 and the financial years ended March 31, 2010, 2009, 2008, 2007 and 2006 are as set out in Annexure 2 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 4 to this report. 5. We have examined the Standalone Summary Statement of Cash flow, as restated relating to the Company for nine months period ended on December 31, 2010 and the financial years ended March 31, 2010, 2009, 2008, 2007 and 2006 appearing in Annexure 3 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 4 to this report. These statements have been prepared by the Company and approved by its Board of Directors (these statements are herein collectively referred to as the “Standalone Restated Summary Statements”. These statements have been extracted from the Audited Financial Statements of the Company for the respective period/years. Audit of the financial statements for the nine months period ended on December 31, 2010 has been conducted by us and audit for the financial year ended March 31, 2010, has been conducted by Statutory Auditors, H.T.

130

Merchant & Co., Chartered Accountant. Further, financial statements for the year ended March 31, 2010 have been reaudited by us as required under the SEBI ICDR Regulations. Audit of the financial statements for the years ended March 31, 2009 and 2008 have been conducted by Statutory Auditors H. T. Merchant & Co., Chartered Accountants. Audit of the financial statements for the year ended March 31, 2007 have been conducted by Statutory Auditors R. R. Muni & Co., Chartered Accountants. Audit of the financial statements for the year ended March 31, 2006 have been conducted by Statutory Auditors M. M. Nissim & Co., Chartered Accountants. 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, H.T. Merchant & Co ., Chartered Accountant, for the years ended March 31, 2009 and 2008 which were audited by Statutory Auditors H. T. Merchant & Co., Chartered Accountants, for the year ended March 31, 2007 which were audited by Statutory Auditors R. R. Muni & Co., Chartered Accountants and for the year ended March 31, 2006 which were audited by Statutory Auditors M. M. Nissim & Co., Chartered Accountants and whose Auditors’ report has been relied upon by us for the said periods. • The Standalone Restated Summary Statements of the Company as included in this report for the financial

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 nine months period ended December 31, 2010 examined by us as set out in Annexure 1, 2 and 3 of this report are after making such adjustments and regrouping as in our opinion were appropriate.

• 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 nine months period ended December 31, 2010 and for the financial years ended March 31, 2010, 2009, 2008, 2007 and 2006 we are of the opinion that the Standalone 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, and Abridged Letter of Offer, as approved by you and annexed to this report. In respect of the financial years ended 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 Standalone Restated Financial Statements of the Company:- Sr. No. Details of Annexure Annexure

1. Standalone Summary Statement of Assets and Liabilities, as Restated Annexure 1 2. Standalone Summary Statement of Profit and Loss A/c, as Restated Annexure 2 3. Standalone Summary Statement of Cash Flow Statement, as Restated Annexure 3 4. Standalone Significant Accounting Policies and Notes to Accounts Annexure 4 5. Standalone Statement of Sundry Debtors, as Restated Annexure 5 6. Standalone Statement of Current Liabilities & Provision, as Restated Annexure 6 7. Standalone Statement of Loans and Advances, as Restated Annexure 7 8. Standalone Statement of other current assets, as Restated Annexure 8 9. Standalone Statement of Secured Loans, as Restated Annexure 9 10. Standalone Statement of Unsecured Loans, as Restated Annexure 10 11. Standalone Statement of Operating Income, as Restated Annexure 11 12. Standalone Statement of Other Income, as Restated Annexure 12 13. Standalone Statement of Contingent Liabilities, as Restated Annexure 13 14. Standalone Statement of Accounting Ratios, as Restated Annexure 14 15. Standalone Statement of Capitalisation , as Restated Annexure 15 16. Standalone Statement of Tax Shelters , as Restated Annexure 16 17. Standalone Statement of Investments , as Restated Annexure 17

131

Sr. No. Details of Annexure Annexure 18. Standalone Statement of Related Parties and Transactions, as Restated Annexure 18 19. Standalone Statement of Dividend Declared, as Restated Annexure 19 20. Standalone Statement of Segment Reporting, as Restated Annexure 20 21. Standalone Statement of Reserves & Surplus, as Restated Annexure 21

In our opinion the above Financial Information of the Company read with Significant Accounting Policies and Notes to Accounts enclosed in Annexure 4 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 nine months period ended December 31, 2010 and financial 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. For, A. R. Sodha & Co. Chartered Accountants FRN 110324W A. R. Sodha Partner M. No.: 31878 Place: Mumbai Date: January 17, 2011

132

ANNEXURE-1

STANDALONE SUMMARY STATEMENTOF ASSETSAND LIABILITIES AS RESTATED

(Rs. In Lakhs)

Particulars

As at

31.12.2010 31.03.2010 31.03.2009 31.03.200 31.03.2007 31.03.2006

A TANGIBLE ASSETSFixed Assets Gross Block - - - - - -Less: Accumulated Depreciation - - - - - -

Net Block - - - - - -Less: Revaluation Reserve - - - - - -

Net Block after adjustment of Revaluation Reserve

- - - - - -

Capital Work In Progress - - - - - -Total - - - - - -B INTANGIBLEASSETS Total - - - - - -C INVESTMENTS 208.00 121.00 141.00 141.00 46.00 -D DEFERRED TAX ASSET /MAT CREDIT

1.98 - - - - -

E CURRENT ASSETS, LOANS & ADVANCES

Inventories - - - - - -Sundry Debtors - - - - - -Cash & Bank Balances 5.39 38.38 8.15 14.74 1.69 8.77Loans & Advances 16.21 41.94 40.85 26.22 23.86 62.51Other Current Assets - - - - - -Total 21.60 80.33 48.99 40.96 25.54 71.29F LIABILITIESAND PROVISIONS

Secured Loans - - - - - -Unsecured Loans 41.33 - - - - -Deferred Tax Liability - - - - - -Current Liabilities 1.89 0.05 0.05 0.14 0.37 0.21Provisions 3.45 14.43 4.42 1.57 3.13 3.95Total 46.67 14.48 4.47 1.71 3.50 4.17G NET WORTH(A+B +C+D+E-F)

184.91 186.85 185.53 180.25 68.04 67.12

Net Worth Represented by Equity Share Capital 77.50 77.50 77.50 77.50 24.36 24.36Preference Share Capital - - - - - -Reserve & Surplus -Share Premium 45.86 58.46 58.46 58.46 - --Surplus/(Deficit)in P&L A/c 61.55 50.89 49.57 44.30 43.69 42.76 Less: Miscellaneous Expenses Not - - - - -

H NET WORTH 184.91 186.85 185.53 180.25 68.04 67.12

133

ANNEXURE-2

STANDALONE SUMMARY STATEMENT OF PROFIT & LOSSES AS RESTATED

(Rs. In Lakhs)

Particulars For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Income Sales & Operating Incomes ofproducts manufactured by the Company

- - - - - -

Of products traded by the Company

- - - - - -

Other Income 28.58 19.24 11.88 9.26 3.15 44.36 Increase / (Decrease)in Stock - - - - - - Total Income 28.58 19.24 11.88 9.26 3.15 44.36 Expenditure Raw Material Consumed / Costof Traded Goods

- - - - - -

Payment & Provision for Employees

12.66 - 1.81 1.67 1.33 2.04

Administrative & Other Expenses

5.26 3.49 1.94 5.48 0.89 13.19

Financial Charges - - - - - 0.15 Depreciation & Amortization - - - - - 0.97 Total Expenditure 17.93 3.49 3.75 7.15 2.22 16.35 Profit before tax andextraordinary items

10.65 15.75 8.13 2.11 0.92 28.01

Add / (Less): ExtraordinaryItems

-

- - - - -

Profit Before Tax afterextraordinary items

10.65 15.75 8.13 2.11 0.92 28.01

Add / (Less): Provision for Tax Current Tax 1.98 5.36 2.83 1.46 0.41 2.35 Fringe Benefit Tax - - 0.03 0.03 - 0.03 MAT Credit Entitlement (1.98) - - - - - Profit After Tax andextraordinary items as perAudited Accounts (A)

10.65 10.39 5.27 0.62 0.51 25.63

Impact of Change in AccountingPolicies and Estimates

- - - - - -

Excess/(Short)Provision forTaxation

- -

0.01 (0.41) 0.68

Prior Period Adjustments - - - - - - Total Impact of Adjustment - - - 0.01 (0.41) 0.68 Total Adjustments net of taximpact

- - - - - -

Net Profit as Restated 10.65 10.39 5.27 0.61 0.92 24.95 Surplus/(Deficit)brought forward from previous years

50.89 49.57 44.30 43.69 42.76 17.81

134

Particulars For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Balance available forappropriations, as restated

61.55 59.96 49.57 44.30 43.69 42.76

Appropriation Proposed Dividend on Equityshares

- 7.75 - - - -

Tax on Dividend - 1.32 -Balance Carried forward asrestated

61.55 50.89 49.57 44.30 43.69 42.76

135

ANNEXURE-3

STANDALONE SUMMARY STATEMENT OF CASH FLOWS FROM RESTATED FINANCIAL STATEMENTS

(Rs. In Lakhs)

Particulars

For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before taxation and extraordinary items

10.65 15.75 8.13 2.11 0.92 28.01

Adjustment for: Depreciation & Amortization - - - - - 0.97Finance Charges/Interest (Net) - - - - - 0.15Recoverable Advances w/off - - - - - 10.45Fixed Assets W/off - - - - - -Share issue expenses - - - 2.48 - -Profit/Loss on Sale of Investment (27.90) (1.11)Interest/ Dividend Received (0.68) (3.24) (6.88) (4.19) (3.06) (5.85)Profit/Loss on Sale of Fixed Assets - - - - - (1.63)Misc. Expenses Amortization - - - - - -Cash generated from/(used in) operations before working capital changes

(17.93) 12.51 1.25 0.41 (2.13) 31.00

(Increase)/Decrease in trade receivables

- - - - - -

(Increase)/ Decrease in loans & advances

25.73 16.93 (2.97) (45.74) 19.75 475.50

Increase/(Decrease)in Inventories - - - - - 79.15Increase/(Decrease)in trade Payables & Others

3.31 (0.08) (0.08) (0.19) 0.17 (0.59)

Cash Generated from/(used in) Operations

11.11 29.36 (1.79) (45.52) 17.79 585.06

Direct tax Paid (Net of Excess/surplus provision)

5.36 2.36 1.68 0.73 (1.07) (2.67)

Interest Paid - - - - - -Net Cash Flow before extraordinary items

5.76 27.00 (3.48) (46.26) 18.86 587.73

Extraordinary Items - - - - - -Net Cash Flow from/(used in)Operating Activities

5.76 27.00 (3.48) (46.26) 18.86 587.73

B. CASH FLOW FROM INVESTING ACTIVITIES

Sale of investments 120.90 - - - - 7.19Investment in subsidiary (208.00) - - - - -Purchase of Investment (NET) - - (10.00) (54.00) (29.00) -Proceeds from sale of fixed assets - - - - - 18.95Interest Received 0.68 3.24 6.88 4.19 3.06 5.50Dividend Received - - - - - 0.36Net Cash from/(used in) Investing Activities

(86.42) 3.24 (3.12) (49.81) (25.94) 31.99

C.CASH FLOW FROM FINANCING ACTIVITIES

136

Particulars

For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Proceeds from issuance of share capital(including Share Premium)

- - - 109.12 - -

Refund of share application money 28.00 - - - - -Share issue expenses (12.60) - - - - -Proceeds from Unsecured loans 41.33 - - - - -Repayment of Unsecured Loans - - - - - (615.54)Finance Charges paid - - - - - (0.15)Dividend Paid (7.75) - - - - -Dividend Distribution Tax (1.32) - - - - -Borrowing(Net) - - - - - -Net Cash from/( used in) Financing Activities

47.65 - - 109.12 - (615.70)

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

(33.01) 30.24 (6.59) 13.05 (7.09) 4.03

OPENING BALANCE IN CASH AND CASH EQUIVALENTS

38.38 8.15 14.74 1.69 8.77 4.75

CLOSING BALANCE IN CASH AND CASH EQUIVALENTS

5.39 38.38 8.15 14.74 1.69 8.78

Components of Cash & Cash -Cash in hand 5.30 7.45 6.45 4.06 0.41 0.21-Cash/bank Balance with 0.09 30.93 1.69 10.68 1.28 8.57-Balance with bank on deposit CASH AND CASHEQUIVALENTS

5.39 38.38 8.15 14.74 1.69 8.77

Note: Figures in Brackets represent the outflow of cash. - - - - Cash Flow Statement has been prepared using indirect method as per Accounting Standard 3 -Cash Flow Statements issued by ICAI

137

ANNEXURE – 4 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE STANDALONE RESTATED FINANCIAL STATEMENTS A. SIGNIFICANT ACCOUNTING POLICIES 1 GENERAL

a) The accounts have been prepared on historical cost basis ignoring changes, if any, in the purchasing

power of money and on accounting principles of going concern.

b) All revenues and expenses are generally accounted on accrual basis.

c) Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles.

2 USE OF ESTIMATE The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets & Liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3 REVENUE RECONGNITION Profit on Sale of Investments is recognized on execution of transfer deed.

4 INVESTMENTS Long term Investments are stated at Cost less any diminution, other than temporary, determined in the opinion of management.

5 EXPENSES Material known Expenses are provided for on the basis of available information / estimates.

6 EMPLOYEE BENEFITS The Statutory enactments relating to payment of Provident Fund, ESIC and Gratuity to employees are not applicable to the company. The company does not have any scheme for retirement benefits for its employee and as such no provision towards retirement benefits to employees is considered necessary.

7 TAXES ON INCOME Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternate Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Profit & Loss Account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the period.

8 EARNING PER SHARE

Basic Earnings Per share is calculated by dividing Net Profit Attributable to equity shareholders by weighted average number of equity shares outstanding during the year.

138

9 PROVISIONS

A provision is recognised when the company has a present obligation as a result of past event & it is

probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

B.NOTES TO STANDALONE RESTATED FINANCIAL STATEMENTS 10 Notes on Adjustments

Summarized below are the restatements made to the audited financial statements for the respective period/years and their impact on the profit / (loss) of the Company:

Particulars

For the nine months

period ended December 31, 2010

For The Year Ended March 31,

2010 2009 2008 2007 2006

Profit/(Loss) after tax as per auditedfinancial statements (A)

10.65

10.39

5.27

0.62

0.51

25.63

B. Adjustments a. Adjustments on account of changes in accounting policiesNil - - - - - -

b. Other Material Adjustments Excess\(Short) Provision for Tax - - - 0.01 (0.41) 0.68

Total - - - 0.01 (0.41) 0.68 Pre-tax impact of Adjustments - (B) - - - 0.01 (0.41) 0.68

C. Tax impact on Adjustments Nil - - - - - - Total Tax impact on Adjustments - (C) - - - - - -

Total Adjustments net of tax impact(B+C) (D)

-

-

-

0.01

(0.41)

0.68

Adjusted/Restated Profit/(Loss) (A+D) 10.65 10.39 5.27 0.61 0.92 24.95

Explanatory notes to the above restatements made in the audited financial statements of the Company for the respective years/period: b) Short / (Excess) provision for current tax of earlier years The profit and loss account of some years includes amounts paid/provided for or written back, in respect of shortfall/excess income tax arising out of assessments, appeals etc. which has now been adjusted in the respective years. Also, income tax (current tax and deferred tax) has been computed on adjustments made as detailed above and has been adjusted in the summary statement of profits and losses, as restated for the years/period ended March 30, 2006, 2007, 2008, 2009, 2010 and December 31, 2010. The effect of adjustments relating to financial years ending prior to March 31, 2006 has been adjusted against the Accumulated Profit and Loss balance as at April 1, 2005.

139

Reconciliation of Profit & Loss Account as at April 01, 2005

(Rs. In Lakhs) Particulars Amount

Net Profit as per audited Profit & Loss account 18.67 Adjustments for - Adjustment for prior period items Adjustments for Excess/(Short) Tax Provision (0.86) Adjustments Total (0.86) Net Profit as per restated summary statements 17.81

11 Material Regrouping

a) Upto the year ended March 31, 2010, share application money (paid) was classified as advances for Proposed Investments and grouped under the head “Loans and Advances”. As the Nature of the same was Investment in the Statement of Assets and Liabilities as restated, for the years ended March 31, 2006, 2007, 2008, 2009 and 2010, such share application money has been regrouped under Investment and disclosed accordingly.

b) Due to change in main object of the company Interest Income has been regrouped under head “Other Income” from the head “Income from Operations” for financial year 2005-06 to 2009-10.

c) Due to change in main object of the company net impact Rs.34.91 lakhs of Sales, Purchase and closing stock of Shares and Securities has been shown as other income for financial year 2005-06.

12 Details of Payment to Auditors (Excluding Service Tax)

(Rs. in Lakhs)

Particulars

For the nine

months period ended

Year ended 31st March

31.12.2010 2006 2007 2008 2009 2010 Audit Fees 0.60 0.20 0.35 0.05 0.05 0.05 Tax Audit Fees - - - - - - Certification and Other Services - - - - - - Reimbursement of Out of Pocket Expenses - - - - - - Total 0.60 0.20 0.35 0.05 0.05 0.05 13 Deferred Tax/MAT Credit Entitlement

The Company has recognised deferred tax as required by Accounting Standard 22 "Accounting for Taxes on Income" and MAT Credit Entitlement in accordance with Guidance Note issued by Institute of Chartered Accountants of India . The major components of deferred tax assets and liabilities are as under:

Particulars As at As at 31st March

31.12.2010 2010 2009 2008 2007 2006 Deferred Tax Liabilities - - - - - - Deferred Tax Assets/MAT Credit MAT Credit 1.98 - - - - -

Net Deferred Tax (Assets)/Liabilities (1.98)

- - - - -

140

14 Segment Reporting

The company operates in a single line of business i. e. Real Estate and Real Estate Development and also in a single geographic environment within India, Hence there is no reportable segment information with respect to provision of Accounting Standard 17 “Segment Reporting”

15 Contingent Liability and Event Occurring After Balance Sheet Date

Uncalled premium on shares of Zodiac Developers Private Limited amounting to Rs. 13,52,00,000/-. The management of the company does not anticipate any contingent liability having material effect on financial statements at the year end other than sated above.

To the best of knowledge of the management, there are no events occurring after latest Balance Sheet date that provides additional information materially affecting the determination of the amounts relating to conditions existing at the latest balance sheet date that requires adjustment to the assets and liabilities.

16 Current Assets/Current Liabilities

In the opinion of the Directors of the Company the Current Assets and loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

Loans and advances and Creditors are subject to confirmation from parties and necessary adjustment if any to be made on receipt of such confirmation.

17 Comparability

The figures for the nine months period ended December 31, 2010 are not comparable with figures for all previous financial years.

18 Previous year’s figures have been re-grouped and / or reclassified wherever necessary to made comparable

with current year. ANNEXURE-5

STANDALONE STATEMENT OF SUNDRY DEBTORS AS RESTATED

(Rs. In Lakhs) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.20 31.03.2006Receivable other than frompromoters/promoters group/directors/related parties

Less than Six Months - - - - - - -Considered Good - - - - - - -Considered Doubtful - - - - - - More than Six Months - - - - - - -Considered Good - - - - - - -Considered Doubtful - - - - - - Receivable frompromoters/promoters group/directors/related parties

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

141

ANNEXURE-6

STANDALONE STATEMENT OF CURRENT LIABILITIES AND PROVISIONS AS RESTATED

(Rs. In Lakhs) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Current Liabilities Sundry Creditors 1.89 0.05 0.05 0.14 0.37 0.21Provisions Tax 1.98 5.36 4.34 1.51 3.13 3.95Proposed Dividend - 7.75 - - - -Dividend Distribution Tax - 1.30 - - - -Others 1.47 0.00 0.08 0.07 - -Total 5.34 14.46 4.47 1.71 3.50 4.17

ANNEXURE-7

STANDALONE DETAILS OF LOANS & ADVANCES AS RESTATED

(Rs. In Lakhs) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Subsidiary/Associates/JV/CompanyUnder Same Management

Money Master Leasing and FinanceLtd.

- - - - - 9.00

Grauer & Weil(India)Ltd - - - - - 34.00TDS/Advance Tax 0.04 0.59 2.56 0.91 3.28 4.51Others 16.17 41.36 38.29 25.32 20.57 15.00Total 16.21 41.94 40.85 26.22 23.86 62.51

ANNEXURE-8

STANDALONE DETAILSOF OTHERCURRENTASSETSASRESTATED

(Rs. In Lakhs)

Particulars As at 31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Nil - - - - - -

Total - - - - - -

ANNEXURE-9

STANDALONE STATEMENT OF SECURED LOANS AS RESTATED

(Rs. In Lakhs) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Nil - - - - - - Total - - - - - -

142

ANNEXURE-10

STANDALONE STATEMENT OF UNSECURED LOANS AS RESTATED

(Rs. In Lakhs)

Particulars As at31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

1) From Promoters/ Directors/Relatives

Ramesh Shah 41.33 - - - - -2) From Group Companies

Nil - - - - - -

3) Others Nil - - - - - -Total 41.33 - - - - -

Details of current unsecured loans as on December 31, 2010

Sr. Particulars of Loan

Name of Parties Outstanding Amt. (Rs. in Lakhs)

Interest Rate p.a. Repayment terms, if any

1 Short-Term Unsecured Loan Mr. Ramesh V Shah 41.33 Nil On Demand

ANNEXURE-11

STANDALONE STATEMENT OF OPERATING INCOME AS RESTATED

(Rs. In Lakhs) Particulars For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Nil - - - - - - Total - - - - - -

143

ANNEXURE-12

STANDALONE STATEMENT OF OTHER INCOME AS RESTATED

(Rs. In Lakhs) Particulars Nature of

Income For the

nine months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Insurance Claim Receipts

Non Recurring

- - - - - 0.37

Dividend Income Non Recurring

- - - - - 0.36

Interest Income Non Recurring

0.68 3.24 6.88 4.19 3.06 5.50

Professional Fees Non Recurring

- - 5.00 5.00 - -

Commission Income Non Recurring

- 16.00 - - - -

Misc Income Non Recurring

- - - 0.07 0.09 0.26

Rental Income Non Recurring

- - - - - 0.24

Profit on Sale of fixed assets

Non Recurring

- - - - - 1.63

Profit on Sale of investments

Non Recurring

27.90 - - - - 1.11

Profit from Share Trading

Non Recurring

- - - - - 34.91

Total 28.58 19.24 11.88 9.26 3.15 44.36 Net Profit before tax as restated

10.65 10.39 5.27 0.61 0.92 24.95

% of Net Profit before tax as restated

268.27 185.13 225.39 1,522.00 340.59 177.81

ANNEXURE-13

STANDALONE STATEMENTOFCONTINGENTLIABILITIESASRESTATED

(Rs. In Lakhs)

Particulars As at31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

For Uncalled Premiumon Share of ZodiacDevelopers PrivateLimited

1352.00 - - - - -

144

ANNEXURE-14

STANDALONE SUMMARY OF ACCOUNTING RATIOS BASED ON RESTATED FINANCIAL

STATEMENTS

(Rs. in Lakhs except per share data) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Net Profit after tax as restated 10.65 10.39 5.27 0.61 0.92 24.95

Weighted Average number of equity shares Outstanding during the year/ period considered for Basic EPS/Diluted EPS

775000 775000 775000 516545 243570 243570

Net Worth 184.91 186.87 185.53 180.25 68.04 67.12Earning Per Share (EPS) Basic/Diluted EPS(Rs.) 1.37 1.34 0.68 0.12 0.38 10.24Return on Net Worth (%) 5.76 5.56 2.84 0.34 1.36 37.17Net Asset Value per EquityShare (Rs.)

23.86 24.11 23.94 34.90 27.94 27.56

The Ratio has been computed as below: Net Profit after Tax as restated

----------------------------------------------------------------------

-----

(a) Earning Per Share (Rs.) Weighted Average number of Equity shares outstanding during the

year Net Profit after Tax as restated

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

----- Net Worth as restated Net Worth as restated (c) Net Asset Value per Share (Rs.)

-----------------------------------------------------------------------

Weighted Average number of Equity shares outstanding during the

year

145

ANNEXURE-15

STANDALONE CAPITALISATION STATEMENT AS RESTATED AT DECEMBER 31, 2010

(Rs. In Lakhs)

Particulars

Pre-issue Post-Issue# As on

December31, 2010 Borrowings Short Term Debt 41.33 [●]

Long Term Debt - [●]

Total Debt 41.33 [●]

Shareholders' Fund Share Capital -Equity 77.50 [●]

-Preference - [●]

Reserves & Surplus 107.41 [●]

Total Shareholders' Funds 184.91 [●]

Debt/ Equity Ratio 0.22 [●]

# These figures cannot be calculated at this stage

146

ANNEXURE-16

STANDALONE STATEMENT OF TAX SHELTERS AS RESTATED (Rs. In Lakhs) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Profit before Tax but afterextraordinary items asrestated (a)

10.65

15.75

8.13

2.11

0.92

28.01

Tax Rate 30.90 30.90 30.90 30.90 33.66 33.66Tax at Notional Rate onProfit

3.29 4.87 2.51 0.65 0.31 9.43

Adjustments Permanent Differences Disallowance u/s.37 - (0.57) (0.48) (2.48) - 2.01 Exempt Income - - - - - 0.36 Other Disallowances 27.90 - - - - (11.56) Disallowance - - - - (0.39) - Total of PermanentDifferences (b)

27.90 (0.57) (0.48) (2.48) (0.39) (9.19)

Timing Differences Nil - - - - - - Total of TimingDifferences (c)

- - - - - -

Net Adjustments (b)+(c) 27.90 (0.57) (0.48) (2.48) (0.39) (9.19)Tax Saving 8.62 (0.18) (0.15) (0.77) (0.13) (3.09)Total Adjustments (d) - - Tax effect thereof - - Profit/(loss)as per IncomeTax returns (e)=(a-b-c-d)

(17.25) 16.32 8.61 4.59 1.31 37.20

Brought forward lossesadjusted (f)

- - - - (1.31) (36.25)

Taxable Income/(loss) (e+f) (17.25) 16.32 8.61 4.59 0.00 0.95Taxable Income/(loss)as perMAT

10.65 15.75 8.13 2.11 0.92 27.65

Tax as per Income tax asreturned

1.98 5.04 2.66 1.42 0.10 2.32

Interest u/s234 - 0.31 0.17 0.06 - 0.02Total Tax as per return 1.98 5.35 2.83 1.48 0.10 2.34Carry forward business loss - - - - - -Carry forward depreciation - - - - 5.06 6.38Total carry forward loss asper return of the year

- - - - 5.06 6.38

147

ANNEXURE-17

STANDALONE STATEMENT OF INVESTMENTS AS RESTATED

(Rs. In Lakhs) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Long Term InvestmentsTrade Investments-Quoted Group Companies - - - - - -Others - - - - - -Total (a) - - - - - -Trade Investments-Unquoted

Group Companies - - - - - -Others - - - - - -Total (b) - - - - - -Non-Trade Investments-Unquoted

Group Companies - - - - - -Money Master Leasing & Finance Ltd

- 93.00 93.00 83.00 29.00 -

Share Application Money Master Leasing &Finance Ltd.

-

28.00

48.00

58.00

17.00

-

Zodiac Developers Pvt Ltd 208.00 - - - - -Total (c) 208.00 121.00 141.00 141.00 46.00 -Immovable Properties - - - - - -Total (d) - - - - - -Less: Provision for diminutionin investments(e)

- - - - - -

Total (a+b+c+d-e) 208.00 121.00 141.00 141.00 46.00 -

148

ANNEXURE-18 DETAILS OF RELATED PARTIES Particulars For the

nine months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 a. Associates M/s Money

Master Leasing and Finance Ltd.

M/s Money Master Leasing and Finance Ltd.

M/s Money Master Leasing and Finance Ltd.

M/s Money Master Leasing and Finance Ltd.

M/s Money Master Leasing and Finance Ltd.

M/s Growel Softech Ltd.

M/s Growel Geoma (I) Ltd.

b. Key Management Personnel

Mr. Jimit Ramesh Shah

Mr. Hozef Darukhanwala

Mr. Hozef Darukhanwala

Mr. Hozef Darukhanwala

Mr. Hozef Darukhanwala

Mr. Umesh kumar N More

Mr. Ramesh V Shah

Mr. Nirajkumar U More

Ms. Pallvi N More

Mr. Abhishek More

Mr. Vinod Haritwal

c. Relatives/ Enterprises where Key Management Personnel exercises Significant Influence

M/s Zodiac Developers Pvt. Ltd.

Mr. Premlata More

Master Aman More

M/s Bombay Paints Ltd

M/s Digikore Designs Ltd

M/s Grauer & Weil (India) Ltd.

M/s Poona Bottling Co. Ltd

M/s Growel Projects Ltd

M/s Waluj Bevereges Ltd

M/s Gorab Investments Pvt Ltd

M/s Shree MPJ Cements Works Pvt Ltd

M/s Ridhi Sidhi Ltd

d. Subsidiary M/s Zodiac Developers

- - - - -

149

Pvt. Ltd.

DETAILS OF RELATED PARTY TRANSACTIONS AS RESTATED

(Rs. in Lakhs) Particulars

For the nine

months period ended

Year Ended

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 a. Shareholders havingsubstantial interest

Contribution towards JointVenture

192.50 - - - - -

b. Key ManagerialPersonnel

Loan Taken 47.83 - - - - - Outstanding Balance of LoanTaken

41.33 - - - - -

c. Transaction withCompanies in which KMPhas substantial interest

Rent paid - - - - - 0.58 Rent received - - - - - 0.24 Interest received - - - - - 1.31 Discounting charges - - - - - 0.26 Interest paid - - - - - 0.15 Sale of Shares - - - - - 60.98 Sale of Assets - - - - - 18.95 Sale of Investments - - - - - 7.25 Loans/advances given - - - - - 85.75 Loans/Deposits repaid - - - - - 1,143.45 Loans/Deposits taken - - - - - 0.16 Outstanding Balance ofLoans/advances given

- - - - - 34.00

d. Associate Concerns Investment Made - - - 95.00 46.00 - Refund of application Money 28.00 20.00 - - - - Interest Received - - - - - 2.68 Loans and Advances Given - - - - - 3.29 Loans/advances repaid - - - - - 53.60 e. Subsidiary Capital Contribution 208.00 - - - - -

150

(Rs. in Lakhs) Transaction with related parties

Nature of Transaction

For the nine

months period ended

Year Ended

Name of the party 31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006Transactions with Shareholders having substantial interest

M/s Zodiac Developers Pvt Ltd Contribution towards Joint Venture

192.50- - - - -

Transactions with Key Managerial Personnel Mr. Ramesh V Shah Loan Taken 47.83

- - - - -Mr. Ramesh V Shah Outstanding

Balance Loan Taken

41.33- - - - -

Transactions with associate Concerns M/sMoneyMasterLeasing and Finance Ltd.

Investment Made - - - 95.00 46.00

M/s Money Master Leasing and Finance Ltd.

Refund of Application Money

28.00 20.00- - - -

M/s Growel Softech Ltd. Interest received - - - - -

2.68

M/s Growel Softech Ltd. Loans/advances given - - - - -

3.29

M/s Growel Softech Ltd. Loans/advances repaid - - - - -

53.60

Transactions with Companies in which KMP has substantial interest

M/s Grauer &Weil(India)Ltd. Rent paid - - - - -

0.58

M/s Grauer & Weil(India)Ltd. Rent received - - - - -

0.24

Others* Interest received - - - - -

1.31

Others* Discounting charges - - - - -

0.26

M/s Grauer & Weil(India)Ltd. Interest paid - - - - -

0.15

Others* Sale of Shares - - - - -

60.98

Others* Sale of Assets - - - - -

18.95

Others* Sale of Investments - - - - -

7.25

Others* Loans/advances given - - - - -

85.75

Others* Loans/advances repaid - - - - -

527.75

M/s Grauer &Weil(India)Ltd. Loans/Deposits taken - - - - -

0.16

M/s Poona Bottling Co. Ltd. Loans/Deposit repaid - - - - -

542.51

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Transaction with related parties

Nature of Transaction

For the nine

months period ended

Year Ended

Name of the party 31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006M/s Waluj Beverages Pvt. Ltd. Loans/Deposits

repaid - - - - - 60.79

M/s Grauer &Weil(India)Ltd. Loans/Deposits repaid - - - - -

11.20

M/s Shree MPJ Cement Works Pvt Ltd.

Loans/Deposits repaid - - - - -

1.20

M/s Grauer &Weil(India)Ltd. Outstanding Balance in Loan/advances given

- - - - - 34.00

Transactions with subsidiaries

M/s Zodiac Developers Pvt. Ltd. Capital Contribution 208.00 - - - -

-

*Due to change in management control in Financial Year 2005-06 party wise details for some related party transactions were not available and hence the same has been reported as "Others" in above statement

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ANNEXURE-19

STANDALONE STATEMENT OF DIVIDEND DECLARED AS RESTATED

(Rs. in Lakhs) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Equity Dividend Equity Share Capital 77.50 77.50 77.50 77.50 24.36 24.36Rate of Dividend - 10.00 - - - - Amount of Dividend - 7.75 - - - - Tax on dividend - 1.30 - - - -

ANNEXURE-20

SEGMENT REPORTING The company operates in a single line of business i. e. Real Estate and Real Estate Development and also in a single geographic environment within India, Hence there is no reportable segment information with respect to provision of Accounting Standard 17 “Segment Reporting” issued by ICAI.

ANNEXURE-21

STANDALONE STATEMENTOF RESERVESANDSURPLUSASRESTATED

(Rs. in Lakhs) Particulars

As at 31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Securities Premium Account

Opening Balance 58.46 58.46 58.46 - - - Add: Additions during the year

- - 58.46

Less-Expenses for increasing authorized share capital written off

12.60

-

-

-

-

-

Closing Balance 45.86 58.46 58.46 58.46 - - Surplus as per Profit and Loss Account

61.55 50.91 49.57 44.30 43.69 42.76

Total 107.41 109.37 108.03 102.75 43.69 42.76

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Limited Review Report for the Quarter ended December 31, 2010

We have reviewed the accompanying statement of Un-audited financial results of Zodiac Ventures Ltd. for quarter ended December 31, 2010 except for the disclosures regarding `Public Shareholding' and 'Promoter and Promoter Group Shareholding' which have been traced from disclosures made by the management and have not been audited by us. This statement is the responsibility of the Company's Management and has been approved by the Board of Directors/ Committee of Board of Directors. Our responsibility is to issue a report on these financial statements based on our review.

We conducted our review in accordance with the Standard on Review Engagement (SRE) 2400, engagements to Review Financial Statements issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

Based on our review conducted nothing has come to our notice that causes us to believe that the accompanying statement of un-audited financial results prepared in accordance with the applicable accounting standards and other recognized accounting practices and policies has not disclosed the information required to be disclosed in terms of Clause 41 of Listing Agreement including the manner in which it is to be disclosed or that it contains any material misstatement.

For, A. R. Sodha & Co. Chartered Accountants FRN 110324W

A. R. Sodha Partner M. No.: 31878 Date: February 15, 2011 Place: Mumbai

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Standalone Unaudited Financial Results for the Quarter Ended December 31, 2010 (Rs. in Lakhs)

Sr. no.

Financial Results For the three months period

ended on December 31,

2010 1 Net Sales/Income from Operations - 2 Other Operating Income - 3 Net Income from Operation (1+2) - 4 Expenditure

a) Increase/decrease in stock in trade & Work in progress - b) Consumption of raw materials - c) Purchase of traded goods - d) Employees cost 7.62 e) Depreciation - f) Other expenditure 2.72 Total Expenditure 10.34

5 Profit from Operations before Other Income, Interest & Exceptional Items (3-4)

(10.34)

6 Other Income - 7 Profit before Interest & Exceptional Items (5+6) (10.34) 8 Interest - 9 Profit/(Loss) after interest but before exceptional items (7-8) (10.34) 10 Exceptional Items - 11 Profit/ Loss from ordinary activities before tax (9-10) (10.34) 12 Tax Expenses

a) Current Tax (1.92) b) Deferred Tax - c) Mat Credit Entitlement 1.92 Total Tax Expenses -

13 Net Profit / Loss from ordinary activities after tax (11-12) (10.34) 14 Extra-ordinary items (Net of Tax Expense) - 15 Net Profit / Loss for the period (13-14) (10.34) 16 Paid-up Equity Share Capital of Rs. 10/- Each 77.50 17 Reserve excluding Revaluation Reserves as per balance sheet of previous

accounting year -

18 Earning per share (EPS) (a) Basic and diluted EPS for the period, for the year to date and for the previous year (not annualized)

(1.33)

(b) Basic and diluted EPS after extraordinary items for the period, for the year to date and for the previous year (not annualized)

(1.33)

19 Public Shareholding - No. of Shares 670,500 - Percentage of Shareholding 86.52%

20 Promoters and promoter group Shareholding a) Pledged/Encumbered - Number of Shares Nil - Percentage of Shares (as a % of the total shareholding of promoters and promoter group)

Nil

- Percentage of shares (as a% of the total share capital of the Company Nil b) Non-encumbered - Number of Shares 104,500 - Percentage of Shares (as a % of the total shareholding of promoters and promoter group)

100%

- Percentage of shares (as a% of the total share capital of the Company 13.48%

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Notes: 1. The above unaudited financial results have been approved and taken on record by the Board of Directors at its meeting held on January 28, 2011. 2. Previous year’s figures have been regrouped/rearranged wherever necessary. 3. The Company has not received any investor complaints during the quarter ended Dece,ber 31, 2010. No complaints were pending at the beginning and at the end of the quarter. 4. The Company operates in one segment only i.e. Construction & Realty Development. 5. Zodiac Developers Private Limited has become a Subsidiary Company of Zodiac Ventures Limited during the quarter ended December 31, 2010.

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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 on page 109 of chapter titled “Financial Information”. You are also advised to read the chapter titled “Risk Factors” on page x 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 chapter 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. In this chapter only, any reference to “we”, “us” or “our” refers to Zodiac Ventures Limited.

SIGNIFICANT ACCOUNTING POLICIES TO THE STANDALONE RESTATED FINANCIAL

STATEMENTS 1 General

a) The accounts have been prepared on historical cost basis ignoring changes, if any, in the purchasing

power of money and on accounting principles of going concern.

b) All revenues and expenses are generally accounted on accrual basis.

c) Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles.

2 Use Of Estimate The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets & Liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3 Revenue Recognition Profit on Sale of Investments is recognized on execution of transfer deed.

4 Investments Long term Investments are stated at Cost less any diminution, other than temporary, determined in the opinion of management.

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

6 Employee Benefits The Statutory enactments relating to payment of Provident Fund, ESIC and Gratuity to employees are not applicable to the company. The company does not have any scheme for retirement benefits for its employee and as such no provision towards retirement benefits to employees is considered necessary.

7 Taxes on Income Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternate Tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of

157

India, the said asset is created by way of credit to the Profit & Loss Account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the period.

8 Earnings Per Share

Basic Earnings Per share is calculated by dividing Net Profit Attributable to equity shareholders by weighted average number of equity shares outstanding during the year.

9 Provisions

A provision is recognised when the company has a present obligation as a result of past event & it is

probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

SIGNIFICANT ACCOUNTING POLICIES TO THE CONSOLIDATED RESTATED FINANCIAL

STATEMENTS

1 Basis of Accounting

The Consolidated Financial Statements of Zodiac Ventures Limited (“the Company” or “Parent Company”) and its domestic subsidiaries Zodiac Developers Pvt Ltd is prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the Accounting Standands 21 on "Consolidation of Financial Statement, issued by the Institute of Chartered Accountants of India to the extent possible in the same formats that adopted by the Company for its separate financial statements.

2 Principles of Consolidation

a) The financial statements of the Parent Company and its Subsidiary have been combined on a line by

line basis by adding together the books values of like items of assets, liabilities, income and expenses after fully eliminating inter company balance.

b) The consolidated financial statements are prepared by adopting uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Parents company’s separate financial statements except otherwise stated elsewhere in this schedule.

c) The excess of cost to the Parent company of its investments in the subsidiaries over the Parent’s portion of equity of the subsidiary at the date holding subsidiary relation first come in existence is recognised in the financial statements as goodwill.

d) Minority Interests in the Consolidated financial statements is identified and recognised after tahing into consideration: • The amount of equity attributable to minorities at the date on which investments in a subsidiary is

made. • The minorities share of movement in equity since the date parent – subsidiary company came into

existence. • The losses atributable to the minorities are adjusted against the Minority Interest in the equity of

the subsidiary. • The excess of profit over the minority interest in the equity, is adjusted against Profit and Loss of

the Parent Company.

3 The subsidiary considered in the consolidated financial statements is:

158

Name of the subsidiary Company

Extent of Holding Company’s Interest

Country of Incorporation

Period considered for consolidation

Zodiac Developers Pvt Ltd 50.98% India *15.12.2010 to 31.12.2010

*For the purpose of consolidation effective date is taken as 31.12.2010 4 Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets andliabilites on the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

5 Revenue Recognition

a) The Company has followed the Completed Contract Method for recognition of Income and Expenses. The Income from Sale of Flats/ Property, etc. is accounted when the Sale Deed is executed. Any amount received against Sale of Flats or Property which is under construction/ Development, the same are treated as an Advance and shown as current liabilities.

b) All the expenses of the Company which are directly related to the particular project are directly debited to that particular project as Work in process and the General expenses which are not pertaining to any particular Project are allocated to the running projects on the basis of the total expenses incurred on that project during the year.

c) In respect of Interest Income, is recognised on a time proportion basis. d) Profit on Sale of Investments is recognized on execution of transfer deed.

6 Fixed Assets

Fixed Assets are stated at cost of acquisiton as reduced by accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

7 Depreciation

Depreciation on Fixed assets has been provided on pro-rata basis proportionately for the period of use on Straight Line Method as per the rates prescribed in Schedule XIV of the Companies Act, 1956. Goodwill on Consolidation will be written off over a period of Five Years.

8 Investments

Investments intended to be held for more than a year are classified as long term Investments. Long term Investments are valued at cost less permanent diminution in value, if any, in the opinion of the management. The current investments are valued at lower of cost or market value.

9 Inventory

Inventories have been valued at cost or net realisable value which ever is lower.

10 Employee Benefits

Employer’s Contribution to the Provident Fund & Pension fund are charged to the Profit & Loss Account of the period to which they relate. Short Term Employee Benefit payable within one year are provided on accrual basis at actual value.

11 Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income of the year. Deferred tax for the year is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized and carried

159

forward only if there is reasonable/virtual certainity of its realisation.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternate Tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Profit & Loss Account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the period.

12 Lease Rental

Operating lease rentals are charged to profit and loss account on accrual basis.

13 Earnings per share Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

14 Provisions A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. In respect of reward scheme of the Company, the provision for liability is made as and when rewards are redeemed

OUR RESULTS OF OPERATIONS Summary of Major Items of Income and Expenditure Income The income is mainly generated from construction and other related activities. Other Income Our Company’s other income comprises of interest and commission received. Expenditure Our Company’s expenditure includes Personnel Expenses, Administrative Expenses, Selling & Distribution Expenses, Financial Charges and Depreciation & Amortization etc. Significant Development Subsequent to Last Financial Period There has been no significant development in the since its last audited financial statements. 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; • 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;

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Consolidated Financial Information The table below sets forth various items from our Company’s restated financial information for the nine months period ended December 31, 2010: Particulars

For the nine months period ended 31.12.2010

Income Sales - Other Income 45.16 Total Income 45.16 Expenditure Payment & Provision for Employees 12.66 Administrative & Other Expenses 5.26 Selling & Distribution Expenses 1.80 Total Expenditure 19.73 Profit/(Loss) Before Tax and extraordinary items 25.43 Add / (Less) : Extraordinary Items - Profit/ (Loss) Before Tax and after extraordinary items 25.43 Add / (Less) : Provision for Tax Current Tax (0.24) Earlier Years Tax (1.18) Deferred Tax Liability / (Assets) 1.56 Profit/ (Loss) After Tax and extraordinary items 18.57 Less: Minority Interest (3.88) Profit/ (Loss) After Tax and minority interest 14.69 Add/(Less): Excess/(Short)Provision for Taxation 1.18 Share of Minority in Excess/ (Short) Provision of Taxation (0.58)

Adjustment net of tax impact 0.60 Net Profit, as restated 15.29 Review for the nine months period ended December 31, 2010 Income During the nine months period ended December 31, 2010, our Company had not pursued any business operations and hence we had not generated any income. Other Income Our Company generated other income of Rs.45.16 Lakhs for the nine months period ended December 31, 2010. The other income mainly comprises of interest income, rental income, interest on fixed deposits, dividend and profit earned on sale of investment. Expenditure Payment & Provision for Employees Our Company has incurred employees’ related expenses of Rs. 12.66 Lakhs for the nine months period ended December 31, 2010. Administrative & Other Expenses Our Company has incurred Administrative and other expenses of Rs. 5.26 Lakhs for the nine months period ended December 31, 2010. Selling & Distribution Expenses Our Company has incurred Selling & Distribution expenses of Rs. 1.80Lakhsfor the nine months period ended December 31, 2010. Profit/(Loss) Before Tax and after extraordinary items Our Company’s profit before tax and after extraordinary items was Rs.25.43Lakhsfor the nine months period ended December 31, 2010. Profit/ (Loss) After Tax and minority interest Our Company’s profit after tax and minority interest was Rs.14.69Lakhsfor the nine months period ended December 31, 2010.

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Net Profit, as restated Our Company’s restated net profit was Rs. 15.29Lakhsfor the nine months period ended December 31, 2010. Standalone Financial Information The table below sets forth various items from our Company’s restated financial information for the nine months period ended December 31, 2010 and for the years ended March 31, 2010, 2009, 2008, 2007 and 2006:

(Rs. in lakhs) Particulars

For the nine months period

ended Year Ended 31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Income Sales - - - - - - Other Income 28.58 19.24 11.88 9.26 3.15 44.36 Total Income 28.58 19.24 11.88 9.26 3.15 44.36 Expenditure Payment & Provision for Employees 12.66 - 1.81 1.67 1.33 2.04 Administrative & Other Expenses

5.26 3.49 1.94 5.48 0.89 13.19

Financial Charges - - - - - 0.15 Depreciation & Amortization - - - - - 0.97 Total Expenditure 17.93 3.49 3.75 7.15 2.22 16.35 Profit/(Loss) Before Tax and extraordinary items

10.65 15.75 8.13 2.11 0.92 28.01

Add / (Less) : Extraordinary Items - - - - - - Profit/ (Loss) Before Tax and after extraordinary items

10.65 15.75 8.13 2.11 0.92 28.01

Add / (Less) : Provision for Tax Current Tax 1.98 5.36 2.83 1.46 0.41 2.35 Fringe Benefit Tax - 0.03 0.03 - 0.03 MAT Credit (1.98) - - - - - Profit/ (Loss) After Tax and extraordinary items

10.65 10.39 5.27 0.62 0.51 25.63

Add/(Less): Excess/(Short)Provision for Taxation

- - - 0.01 (0.41) 0.68

Net Profit, as restated 10.65 10.39 5.27 0.61 0.92 24.95 Review for the nine months period ended December 31, 2010 Income During the nine months period ended December 31, 2010, our Company had not pursued any business operations and hence we had not generated any income. Other Income Our Company generated other income of Rs. 28.58 Lakhs for the nine months period ended December 31, 2010. The other income mainly comprises of interest income and profit earned on sale of investment during such period. Expenditure Payment & Provision for Employees Our Company has incurred employees’ related expenses of Rs. 12.66 Lakhs for the nine months period ended December 31, 2010. Administrative & Other Expenses Our Company has incurred Administrative and other expenses of Rs. 5.26 Lakhs for the nine months period ended December 31, 2010.

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Profit/(Loss) Before Tax and after extraordinary items Our Company’s profit before tax and after extraordinary items was Rs. 10.65 Lakhs for the nine months period ended December 31, 2010. Net Profit, as restated Our Company’s restated net profit was Rs. 10.65Lakhsfor the nine months period ended December 31, 2010. Comparison of Fiscal 2010 and Fiscal 2009 Income During the Fiscal 2010, our Company had not pursued any business operations and hence we had not generated any income in the Fiscal 2010. Other Income Our other income was increased from Rs. 11.88 Lakhs in Fiscal 2009 to Rs. 19.24 Lakhs in Fiscal 2010. The increase in other income was primarily due to receipt of commission income in Fiscal 2010. Expenditure Payment & Provision for Employees We had not incurred employee related expenses in Fiscal 2010. Administrative & Other Expenses Our Administrative and other expenses were increased from Rs. 1.94 in Fiscal 2009 to Rs. 3.49 Lakhs in Fiscal 2010. The increase in administrative and other expenses was primarily due to rise in legal & professional charges during Fiscal 2010. Profit/(Loss) Before Tax and after extraordinary items Principally due to reasons described above, our Company’s profit before tax and after extraordinary items was increased from Rs. 8.13 Lakhs in Fiscal 2009 to Rs. 15.75 Lakhs in Fiscal 2010. Net Profit, as restated Principally due to reasons described above, our Company’s restated net profit was increased from Rs.5.27Lakhs in Fiscal 2009 to Rs. 10.39 Lakhs in Fiscal 2010. Comparison of Fiscal 2009 and Fiscal 2008 Income During the Fiscal 2009, our Company had not pursued any business operations and hence we had not generated any income in the Fiscal 2009. Other Income Our other income was increased from Rs. 9.26 Lakhs in Fiscal 2008 to Rs. 11.88 Lakhs in Fiscal 2009. The increase in other income was primarily due to increase in interest received in Fiscal 2009. Expenditure Payment & Provision for Employees Our employees related expenses were increased from Rs. 1.67 Lakhs in Fiscal 2008 to Rs. 1.81 Lakhs in Fiscal 2009.The increase in such expenses was primarily due to increase in salary and related expenses. Administrative & Other Expenses Our Administrative and other expenses were decreased from Rs. 5.48 Lakhs in Fiscal 2008 to Rs. 1.94 Lakhs in Fiscal 2009 due to reduction in legal expenses. Profit/(Loss) Before Tax and after extraordinary items Principally due to reasons described above, our Company’s profit before tax and after extraordinary items was increased from Rs. 2.11 Lakhs in Fiscal 2008 to Rs. 8.13 Lakhs in Fiscal 2009. Profit/ (Loss) After Tax and extraordinary items Principally due to reasons described above, our Company’s profit after tax and extraordinary items was increased from Rs. 0.93 Lakhs in Fiscal 2008 to Rs. 4.47 Lakhs in Fiscal 2009.

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Net Profit, as restated Principally due to reasons described above, our Company’s restated net profit was increased from Rs. 0.61 Lakhs in Fiscal 2008 to Rs. 5.27 Lakhs in Fiscal 2009. Comparison of Fiscal 2008 and Fiscal 2007 Income During the Fiscal 2008, our Company had not pursued any business operations and hence we had not generated any income in the Fiscal 2008. Other Income Our other income was increased from Rs. 3.15 Lakhs in Fiscal 2007 to Rs. 9.26 Lakhs in Fiscal 2008. The increase in other income was primarily due to rise in interest income received during such period. Expenditure Payment & Provision for Employees Our employees related expenses were increased from Rs. 1.33 Lakhs in Fiscal 2007 to Rs. 1.67 Lakhs in Fiscal 2008.The increase in such expenses was primarily due to increase in salary and welfare related expenses. Administrative & Other Expenses Our Administrative and other expenses were increased from Rs. 0.89 Lakhs in Fiscal 2007 to Rs. 5.48 Lakhs in Fiscal 2008. The increase in administrative and other expenses was primarily due to share issue expenses incurred in Fiscal 2008. Profit/(Loss) Before Tax and after extraordinary items Principally due to reasons described above, our Company’s profit before tax and after extraordinary items was increased from Rs. 0.92 Lakhs in Fiscal 2007 to Rs. 2.11 Lakhs in Fiscal 2008. Net Profit, as restated Principally due to reasons described above, our Company’s restated net profit was decreased from Rs. 0.92 Lakhs in Fiscal 2007 to Rs. 0.61 Lakhs in Fiscal 2008. OVERVIEW Business Overview For business overview please refer the chapter titled “Our Business” on page 51 of the Draft Letter of Offer. 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 chapters entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, on pages x and 156 respectively 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 chapter 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

164

Other than as described in the chapter entitled “Risk Factors” on page x 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 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 chapter titled “Industry Overview” beginning on page 42 of the Draft Letter of Offer.

7. Status of any publicly announced new products or business segments Please refer to the chapter titled “Our Business” beginning on page 51 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.

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 due to our arrangements under our concession and license agreements, 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

Except as stated below there are no outstanding litigation, suits, criminal or civil prosecutions, statutory or legal proceedings including those for economic offences, tax liabilities, show cause notices or legal notices pending against the Company, Directors and the Promoter or ventures with which the Promoter were associated in the past (in case the Promoter’s names continue to be associated with the particular litigation), and there are no defaults including non-payment of statutory dues, over-dues to banks/financial institutions, defaults against banks/financial institutions, defaults in dues payable to holders of any debenture, bonds and fixed deposits issued by the Company, defaults in creation of full security as per the terms of issue/other liabilities, proceedings initiated for economic/civil/any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule XIII of the Companies Act) other than unclaimed liabilities of the Company except as stated below, and no disciplinary action has been taken by SEBI or any stock exchange against the Company, its Directors, Promoter or group companies with which the Promoter were associated in the past but are no longer associated (in case the Promoter’s names continues to be associated with the particular litigation). Unless stated to the contrary, the information provided below is as of the date of the Draft Letter of Offer. Neither the Company nor its Promoter or Directors or group companies with which the Promoter were associated in the past but are no longer associated (in case the Promoter’s names continues to be associated with the particular litigation), have been declared as wilful defaulters by the RBI, or any other Governmental authority other than as disclosed below and there are no violations of securities laws committed by them in the past or pending against them. 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 GoI, Ministry of Finance is set forth below: Working Results of the Company

Un-audited Financial Information for the ten months period ended January 30, 2011

(Rs. in lakhs)

Particulars Amount

Operating Income Nil

Other Income 28.58

Total Income 28.58

Estimated Net Profit (excluding depreciation and taxes) 5.44

Provision for Depreciation Nil

Provision for Tax Nil

Estimated Net Profit 5.44 I. Contingent liabilities not provided for as of December 31, 2010 The Company’s contingent liability for the nine months period ended December 31, 2010 is as set out below.

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(Rs. In Lakhs) Particulars As at

31.12.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 For Uncalled Premium on Share of Zodiac Developers Private Limited

1352.00 - - - - -

II. Litigation involving the Company:

A. Outstanding litigation and Material Developments/Proceedings involving/ affecting the Company

1. Outstanding Litigation/ Proceedings filed against the Company There are no outstanding legal proceedings filed against the Company. 2. Outstanding Litigation/ Proceedings filed by the Company There are no outstanding legal proceedings filed by the Company. B. Proceedings initiated against the Company for economic or civil offences There are no proceedings initiated against the Company for any economic or civil offences. C. Details of past penalties imposed on the Company There are no past penalties imposed on the Company. D. Adverse findings in respect to the Company as regards compliance with the securities laws There is no proceeding/adverse finding in respect of the persons/entities connected with the Company as regards compliance with the securities laws. E. Outstanding litigation defaults etc. pertaining to matters likely to affect operations and finances of

the Company, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act

Except as disclosed in this chapter, there are no outstanding litigation defaults etc. pertaining to matters likely to affect operations and finances of the Company, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act. F. Disciplinary action taken by the Board/ stock exchanges against the Company There are no disciplinary actions taken by the Board/ stock exchanges against the Company. G. Potential litigation against the Company There are no potential litigations against the Company that it is currently aware of or in connection with which, it has received notice. H. Outstanding dues to small scale undertaking(s) or any other creditors There are no outstanding dues above Rs. 1,00,000 to small scale undertaking(s) or any other creditors by the Company, for more than 30 days.

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I. Outstanding Litigation against other companies whose outcome could have an adverse effect on the Company

There are no outstanding litigation, suits, criminal or civil prosecutions, statutory or legal proceedings including those for economic offences, tax liabilities, show cause notices or legal notices pending against any company whose outcome could have a material adverse effect on the position of the Company. III. Litigation against the Directors of the Company A. Outstanding Litigation and Material Developments/Proceedings against the Directors There are no outstanding litigation involving the Directors of the Company including criminal prosecutions or civil proceedings involving the Directors, and there are no material defaults, non-payment of statutory dues, over dues to banks/financial institutions or defaults against banks/financial institutions by the Directors (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of part 1 of Schedule XIII of the Companies Act). B. Outstanding Litigation and Material Developments/Proceedings filed by the Directors of the

Company Except as disclosed below there are no litigation proceedings initiated by the Directors of the Company.

Criminal Proceedings

Mr. Ramesh Shah, the Chairman and Whole Time Director of the Company has filed a criminal complaint bearing CC. No. 128/PW/2010 (original C.R. No. 149 of 1998) dated November 6, 1998 before the Metropolitan Magistrate, 6th Court, Mazagaon, Mumbai. The complaint was filed with regard to demands for extortion of money by the accused, one Mr. Parag Kotadia and his associates. The accused, Mr. Kotadia filed an application for grant of anticipatory bail before the Hon’ble Court vide Anticipatory Bail Application No. 1489 of 1998. The Senior Inspector of Police, Kalachowky Police Station opposed the same vide his letter dated November 26, 1998 to the Public Prosecutor for Greater Mumbai. The matter is presently pending before the said Court.

C. Proceedings initiated against the Directors for economic and civil offences There are no proceedings initiated against the Directors for any economic and civil offences. D. Details of past penalties imposed on the Directors of the Company There are no past penalties imposed on the Directors.

E. Criminal/ civil prosecutions against the Directors for any litigation towards tax liabilities There are no criminal/ civil prosecutions against the Directors for any litigation towards tax liabilities.

F. Disciplinary action taken by the Board/ stock exchanges against the Directors

There are no disciplinary actions taken by the Board/ stock exchanges against the Directors.

IV. Litigation Involving our Subsidiary

Except as stated in this chapter, there are no outstanding litigations involving our Subsidiary, including criminal prosecutions or civil proceedings involving our Subsidiary, and there are no defaults, including tax liabilities, prosecutions under any enactment in respect to Schedule XIII of the Companies Act, 1956.the Company

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A. Outstanding Litigation/ Proceedings filed against our Subsidiary Civil Proceedings Shri. Vile Parel Kelvani Mandal has filed a writ petition bearing ST No. 2732 of 2010 before the High Court of Bombay against our Subsidiary (Respondent No.5). The petitioner Shri. Vile Parel Kelvani Mandal is society registered under the Society Registration Act, 1860 and a public charitable trust registered under the Bombay Trust Act, 1950, which manages various educational institutions including the one next to which our Subsidiary is coming up with its Proposed Project. The petitioner has filed the current petition challenging the order/no objection certificate received by our Subsidiary by Municipal Corporation of Greater Mumbai (named as Respondent 1) to change the course of the Irla Nalla as illegal and unlawful as any such change in the course of the nalla shall damage the building managed by the appellant. The petition is pending admission before the High Court of Mumbai and the next date of hearing is to be fixed. Tax Proceedings Our Subsidiary has filed an appeal before the Commissioner of Income Tax (Appeals), Mumbai bearing no. CIT (A) 13/Addl. 7(3)67/08/07 challenging the notice issued by the Assessment Officer dated December 31, 2007 under section 143(3) of the I.T. Act. The assessment order stated that the Subsidiary had received a sum of a total sum of Rs. 19,90,000/- from one of its director Mr. Ramesh Shah in tranches of Rs. 20,000 each for the assessment year 2005-2006 thereby violating section 269SS of I.T. Act and the is liable for penalty proceedings under section 271 (D)(2) of I.T Act. The Commissioner of Income Tax (Appeals), Mumbai vide its order dated August 28, 2010 dismissed the appeal filed by the Subsidiary. Our Subsidiary has preferred a further appeal on December 28, 2010 challenging the order of Commissioner of Income Tax before the Hon’ble Income Tax Appellate Tribunal (“ITAT”). B. Outstanding Litigation/ Proceedings filed by our Subsidiary There are no outstanding legal proceedings filed by our Subsidiary. V. Outstanding Litigation and Material Developments/Proceedings involving the Promoter of the

Company There is no outstanding litigation involving the Promoter of the Company, including criminal prosecutions or civil proceedings involving the Promoter, and there are no material defaults, non-payment of statutory dues, over dues to banks/financial institutions or defaults against banks/financial institutions and dues towards instrument holders such as debt instrument holders, fixed deposits and arrears on cumulative preference shares by the Promoter (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of part 1 of Schedule XIII of the Companies Act. A. Litigation involving Promoter 1. Outstanding Litigation and Material Developments/Proceedings against the Promoter of the

Company There is no outstanding litigation against the Promoter. 2. Outstanding Litigation and Material Developments/Proceedings filed by the Promoter of the

Company There is no outstanding litigation initiated by the Promoter. B. Details of past penalties imposed on the Promoter of the Company There are no past penalties imposed on the Promoter. C. Proceedings initiated against the Promoter of the Company for economic offences or civil offences There are no proceedings initiated against the Promoter for any economic offences or civil offences.

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D. Disciplinary Action taken by the Securities and Exchange Board of India/stock exchanges against

the Promoter No disciplinary action has been taken against the Promoter by SEBI or any recognised Stock Exchange. E. Litigation/Defaults in respect of companies/firms/ventures with which the Promoter were

associated in the Past There is no outstanding litigation/defaults in respect of Group Companies with which the Promoter were associated in the past (in case their name continues to be associated with the particular litigation). F. Violations of Securities Laws There is no proceeding/ adverse finding in respect of the persons/entities connected with the Promoter as regards compliance with the securities laws. G. Litigations against the Promoters involving violation of statutory regulations or alleging criminal

offence There are no litigations against the Promoter of the Company involving violation of statutory regulations or alleging criminal offence VI. Litigation involving the Group Companies and entities There are no litigation involving the Group Companies and entities.

A. Outstanding Litigation/ Proceedings filed against the Group Companies There are no outstanding legal proceedings filed against the Group Companies B. Outstanding Litigation/ Proceedings filed by the Group Companies There are no outstanding legal proceedings filed by the Group Companies C. Proceedings initiated for economic offences against the Group Companies There are no proceedings for economic offences against the Group Companies D. Litigations/ defaults/ over dues or labour problems/ closure etc. faced by the Group Companies There are no litigations / defaults/ over dues or labour problems/ closure etc. faced by the Group Companies. E. Disciplinary action taken by the Securities and Exchange Board of India/stock exchanges against the

Group Companies There are no disciplinary actions taken by the Securities and Exchange Board of India/stock exchanges against the Group Companies (irrespective of the fact whether they are companies under the same management with the issuer company as per section 370 (1B) of the Companies Act, 1956) F. Adverse findings in respect of the persons/entities connected with the issuer/promoter/group

companies as regards compliance with the securities laws There are no adverse findings in respect of the persons/entities connected with the issuer/promoter/group companies as regards compliance with the securities laws G. Outstanding dues to small scale undertaking(s) or any other creditors There are no dues above Rs. 1,00,000 to small scale undertaking(s) or any other creditors by the Company,

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which is outstanding for more than 30 days. VII. Material Developments since the Last Balance Sheet Date The Company has acquired control over our Subsidiary, ZDPL vide resolution dated December 14, 2010. For further details refer the chapter titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 156 appearing in the Draft Letter of Offer.

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GOVERNMENT AND STATUTORY APPROVALS

We have received the necessary consents, licenses, permissions and approvals from the Government and various governmental agencies required for our present business (as applicable on date of the Draft Letter of Offer) and except as mentioned below, no further approvals are required for carrying on our present business. In view of the approvals listed below, we can undertake this Issue and our current/proposed business activities and no further major approvals from any governmental or regulatory authority or any other entity are required to undertake the Issue or continue our business activities. Unless otherwise stated, these approvals are all valid as of the date of the Draft Letter of Offer. The main objects clause of the Memorandum of Association and objects incidental to the main objects enable our Company to carry out its existing activities. The following statement sets out the details of licenses, permissions and approvals taken by our Company under various central and state laws for carrying out its business.

APPROVALS FOR THE ISSUE

I. Approvals related to the Issue

1. In – principal approval from the Bombay Stock Exchange Limited dated [●].

2. 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 20, 2010 and November 2, 2010 and subsequently by the shareholders vide Postal Ballot on December 10, 2010.

A. Corporate approvals

1. Certificate of incorporation dated February 19, 1981 issued in the name of Growel Investments Limited by

the Registrar of Companies, Maharashtra, at Mumbai. 2. Fresh Certificate of Incorporation issued by the Registrar of Companies, Mumbai in respect of change of

name from Growel Investments Limited to Money Masters Investment Limited dated November 8, 2006. Fresh Certificate of Incorporation issued by the Registrar of Companies, Mumbai in respect of change of name from Money Masters Investment Limited to Zodiac Ventures Limited dated June 29, 2010. The CIN of the Company is L45209MH1981PLC023923.

3. Certificate of Commencement of Business dated March 24, 1981 issued to the Company by the Registrar of

Companies, Maharashtra, at Mumbai

4. The Company’s PAN is AAACG0547K. The same is valid until cancelled.

5. The Company’s TAN is MUMG08870B. The same is valid until cancelled. 6. Certificate of Enrolment bearing number 27315218911P dated August 21, 2009 issued to the Company by

Professional Tax Officer, Enrolment Registration, Mumbai, under the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.

B. Shop and Establishment License

1. Establishment Registration Certificate of Establishment dated December 29, 2010 bearing number 760169424 issued by the Shop Inspector, Bombay Shops and Establishments Act, Mumbai as per the provisions of the Bombay Shops and Establishments Act, 1948 and the Maharashtra Shops and Establishments Rules, 1961 for the Registered Office of the Company. The certificate is valid till December 31, 2013.

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C. Business Approvals for our Subsidiary (Zodiac Developers Private Limited) for its various Projects Approvals under the Slum Rehabilitation Scheme

Zodiac Developers Private Limited is primarily into developing plots under the Slum Rehabilitation Scheme in the area of Mumbai and Greater Mumbai. The Maharashtra Government has set up the Slum Rehabilitation Authority under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971. The Slum Rehabilitation Authority is the statutory body that is responsible for providing sanctions and approvals for Slum Rehabilitation Schemes. The Maharashtra Government has promulgated the Development Control Regulations for Greater Mumbai, 1991 under the Maharashtra Regional and Town Planning Act, 1966. The Development Control Regulation No. 33(10) provides for redevelopment of slums through promoters like owners/developers/co-operative housing societies of slum-dwellers/non-governmental organizations. The Development Control Regulations specify the approvals and consents that are required to be obtained by the promoters/builders proposing to develop plots under the Slum Rehabilitation Scheme. The specific approvals and consents required to be obtained under the Slum Rehabilitation Scheme are as provided below: 1. The promoter/developer has to obtain the consent of the Co-operative Housing Society of the hutment dwellers

and atleast 70% of those eligible hutment dwellers are required to provide their consent for the promoter to develop the land under the Slum Rehabilitation Scheme. The promoter/developer is then required to prepare a list of slum dwellers agreeing to participate in the scheme and enter into individual agreements with them;

2. The promoter/developer submits the proposal along with the project plan to the Slum Rehabilitation Authority for scrutiny;

3. The Slum Rehabilitation Authority issues a Letter of Intent, Intimation of Approval and Commencement Certificate up to the plinth level for the first building after satisfying itself about the particulars of the plan and the feasibility of the project, along with such conditions as it may deem fit;

4. Further permission to carry out construction is given by the SRA after carrying out checks on the plinth dimensions; Approvals for construction of additional buildings under both the rehabilitation and sale components are granted as and when their construction is undertaken by the promoter/builder.

5. After the completion of construction of the building the architect is required to submit the building completion certificate to the SRA;

6. Upon carrying out the inspection of the buildings for compliance with the conditions specified in the Letter of Intent and Intimation of Approval, the Occupation Certificate is granted, permitting the occupants to take possession.

In addition to these approvals under the Slum Rehabilitation Scheme, the promoter/builder will also be required to obtain approvals from the Ministry of Environment and Forests for environmental clearance, Directorate General of Civil Aviation, Fire and Safety Department, Maharashtra Water and Sewerage Board, Maharashtra State Electricity Board, among other government agencies. Provided below is a project wise list of the approvals received by Zodiac Developers Private Limited. C.I. Hanuman Nagar Project

a) Approvals for the scheme in its entirety

Sr. No.

Description Issuing Authority

Reference Date of Issue

Date of Expiry

1. Letter of Intent to M/s. Krishna Developers and Zodiac Developers Private Limited

Slum Rehabilitation Authority

SRA/Ch.E/75/KW/MHL/LOI March 10, 1998

Not Applicable

2. NOC for the proposed Drainage Arrangement for Building No. 1 for Juhu Hanuman Nagar CHS

Slum Rehabilitation Authority

SRA/ENG/480/KW/ML/AP February 3, 2000

Not Applicable

3. Letter to M/s Consultants Combined, seeking compliance for NOC

Tree Authority, Brihanmumbai Mahanagarpalika

DYSG/TA/1893/MC/OD./ July 30, 2002

Not Applicable

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Sr. No.

Description Issuing Authority

Reference Date of Issue

Date of Expiry

4. Part Drainage Completion Certificate for the Hanuman Nagar Scheme

Executive Engineer (Sewerage Project) Planning II (W.S), Brihanmumbai Mahanagarpalika

Not Applicable December 20, 2002

-

5. Letter of Intent Slum Rehabilitation Authority

SRA/Ch.E/75/KW/MHL/LOI April 3, 2004

Not Applicable

6. Permission to train/cover the existing Irla Nalla for the Hanuman Nagar Scheme

Dy. Chief Engineer (Storm Water Drains) Western Suburbs Planning Cell

Dy.ChE/SWD/2260/Planning Cell

November 21, 2007. Renewed on February 22, 2010.

Not Applicable

7. No Objection Certificate for Height Clearance

Airports Authority of India

BT-1/N.O.C.C/CS /MUM/08/591/2803-06

July 22, 2009

Not Applicable

8. Revised Letter of Intent Slum Rehabilitation Authority

SRA/CHE/75/KW/MHL/LOI April 06, 2010

Not Applicable

9. Environmental Clearance

Secretary, Environment Department

SEAC-2010/CR.90/TC.2 November 22, 2010

Not Applicable

b) Building 1:

Sr. No.

Description Issuing Authority

Reference Date of Issue

Date of Expiry

1. Permission for cutting of trees for the proposed SRA building no. 1 for Juhu Hanuman Nagar Co-op. Housing Society

Brihanmumbai Mahanagarpalika

DYSG/TA/MC/09 May 31, 2000

Not Applicable

2. IOD for Rehabilitation Building 1

Slum Rehabilitation Authority

SRA/ENG/480/KW/MHL/AP

June 7, 2000

Not Applicable

3. License to work the lift for Building No. 1, Hanuman Nagar Co-op. Housing Society

Govt. of Maharashtra, Industries, Energy and Labour Department

III/I/11651 December 16, 2005

Not Applicable

4. Full Occupancy Certificate for Rehabilitation Building 1

Slum Rehabilitation Authority

SRA/ENG/480/KW/MHL/AP/OCC

June 16, 2006

Not Applicable

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c) Building 2:

Sr. No.

Description Issuing Authority

Reference Date of Issue

Date of Expiry

1. IOD for Rehabilitation Building 2

Slum Rehabilitation Authority

SRA/ENG/472/KW/MHL/AP September 21, 1999

Not Applicable

2. Permission for cutting of trees coming in the way of proposed SRA building no. 2 for Juhu Hanuman Nagar Co-op. Housing Society

Brihanmumbai Mahanagarpalika

DYSG/TA/MC/20 August 10, 2000

Not Applicable

3. Full Occupancy Certificate for Rehabilitation Building 2

Slum Rehabilitation Authority

SRA/ENG/472/KW/MHL/AP October 24, 2005

Not Applicable

d) Building 3:

Sr. No.

Description Issuing Authority

Reference Date of Issue

Date of Expiry

1. IOD for Rehabilitation Building 3

Slum Rehabilitation Authority

SRA/CE/284/KW/MHL/AP June 22, 1998

Not Applicable

2. Permission for cutting of trees for the proposed SRA building no. 1 for Juhu Hanuman Nagar Co-op. Housing Society

Brihanmumbai Mahanagarpalika

DYSG/TA/1953/MC June 7, 1999

Not Applicable

3. Full Occupancy Certificate for Rehabilitation Building 3

Slum Rehabilitation Authority

SRA/ENG/284/KW/MHL/AP/OCC

November 07, 2000

Not Applicable

e) Building 5:

Sr. No.

Description Issuing Authority

Reference Date of Issue

Date of Expiry

1. No Objection Certificate for the proposed high rise residential building (Rehabilitation Building 5)

Mumbai Fire Brigade, Municipal Corporation of Greater Mumbai

FB/HR/WS/185 June 08, 2010

Not Applicable

2. IOD for building 5 Slum Rehabilitation Authority

SRA/ENG/2412/KW/MHL/AP December 9, 2010

Not Applicable

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f) Building 7:

Sr. No.

Description Issuing Authority

Reference Date of Issue

Date of Expiry

1. IOD for building 7 Slum Rehabilitation Authority

SRA/ENG/2453/KW/MHL/AP December 24, 2010

Not Applicable

2. No Objection Certificate for the proposed high rise residential building comprising Sale part (Wing A, wing B, Wing C) and Rehabilitation Building part

Mumbai Fire Brigade, Municipal Corporation of Greater Mumbai

FB/HR/WS/558 October 26, 2010

Not Applicable

Note: 1. Construction of Building 4 is being undertaken by Krishna Developers and hence, we do not have approvals for the

same. 2. Construction of Building 6 has not yet begun and hence, we do not have approvals for the same.

C.II. Proposed Slum Rehabilitation Scheme Project at Babu Genu Nagar Sr. No.

Description Issuing Authority Reference Date of Issue

Date of Expiry

1. No Objection Certificate in the form of Annexure II

Brihanmumbai Mahanagarpalika

Estates/8700/33(7)/28 January 01, 2000

Not Applicable

C. III. Proposed Slum Rehabilitation Scheme Project at Indira Nagar

No approvals have yet been received by our Subsidiary as the project is not underway.

II. Contract Labour Certificate of Registration under Contract Labour (Regulation & Abolition) Act, 1970 issued by the Assistant Commissioner of Labour. The certificate is valid till December 31, 2011. III. License which have been applied for but yet not been approved/ granted

The Company has applied for the registration of our Logo “ZODIAC” as a trademark before the Trademarks Registry vide application no. 2066364 dated December 13, 2010 under class 37.

With respect to Subsidiary’s other projects, the Subsidiary is just completed entering into joint development agreement and acquisition of land and hence is yet to make application to the relevant authorities. For details related to our Subsidiary’s business and project, please refer to chapters titled “Our Business” and “Land Reserves” beginning on pages 51 and 65 respectively of the Draft Letter of Offer.

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority of the Issue Pursuant to the resolution passed by the Board of Directors of the Company, at its meeting held on July 20, 2010 and November 2, 2010, it has been decided to make the following Rights Issue to the Equity Shareholders of the Company, with a right to renounce. Prohibition by SEBI Neither the Company, nor the Directors, Promoter or the Promoter Group have been prohibited from accessing or operating in the capital markets or have been restrained from buying, selling or dealing in securities under any order or direction passed by SEBI. Except for Ms. Yesha Shah (Promoter group-Individual) who is the director of Zodiac Capital Private Limited which is registered as an “Authorized Person” with Bombay Stock Exchange and Mr. Aakash Parikh who is the director of Mint Financial Services Private Limited, a company registered as a sub-broker with SEBI under SEBI (Stock Brokers and Sub-Brokers) Regulation, 1992, none of the Directors of the Company or Promoter Group are associated with securities market in any manner. 1. Zodiac Capital Private Limited

Ms. Yesha Shah (Promoter Group Individual) Director BSE Registration No. AP0102750102086 Category of registration Registered as Authorized Person with Bombay Stock

Exchange under SEBI Circular No. MIRSD/DR/Cir-16/09 dated November 6, 2009.

Details of any enquiry/investigation conducted by SEBI at any time Nil Penalty imposed by SEBI, if any

Nil 2. Mint Financial Services Private Limited

Mr. Aakash Parikh (Director of the Issuer Company) Director SEBI Registration Bombay Stock Exchange

Sub-broker: INS018794631/01-9758 National Stock Exchange Sub-broker: INS238429232/23-09758

Category of registration Sub-Broker Details of any enquiry/investigation conducted by SEBI at any time Nil Penalty imposed by SEBI, if any

Nil None of the Directors/ Promoter Group are in any manner and SEBI has not initiated action against any entities of the Directors. Prohibition by RBI The Company confirms that its Directors, Promoter and the Promoter Group entities 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. Eligibility for the Issue The Company is an existing company registered under the Companies Act whose Equity Shares are listed on the Stock Exchange. It is eligible to offer this Issue in terms of Chapter IV of the SEBI ICDR Regulations.

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Compliance with Part A of Schedule VIII of the SEBI ICDR Regulations Pursuant to Schedule VIII, Part E (3)(a), a listed issuer whose management has undergone change pursuant to acquisition of control in accordance with the provisions of Takeover Code and is making rights issue of specified securities for the first time subsequent to the change should comply with Schedule VIII of Part A. The Company is in compliance with the provisions specified in Part A of Schedule VIII of the SEBI ICDR Regulations. 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 MARCH 3, 2011 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:

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

178

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;

v. WE CERTIFY THAT THE WRITTEN CONSENT FROM PROMOTER HAS BEEN

OBTAINED FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO FORM PART OF PROMOTERS CONTRIBUTION SUBJECT 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 PROMOTER’S 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 PROMOTER’S 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.

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

The 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 the Company and that anyone placing reliance on any other source of information including the Company’s website www.zodiacventures.in 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 the Company and Lead Manager

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and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company, and 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 Mumbai, India only. 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, SEBI Bhavan, C4-A, G Block, Bandra Kurla Complex Bandra (East), Mumbai 400 050, 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.

Disclaimer clause of the BSE 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

The Company has entered into a tripartite agreement among the NSDL, the Company and Registrar dated February 18, 2009.

The Company has entered into a tripartite agreement among the CDSL, the Company and the Registrar dated November 5, 2008.

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 approval 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 Exchanges 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

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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 the 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. M/s. A. R. Sodha and Co., Chartered Accountants, the Auditors of the Company have given their written consent for the inclusion of their 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 the Company’s knowledge there are no other consents required for making this issue, however, should the need arise, necessary consents shall be obtained by the Company. Issue expenses

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

(Rs. in lakhs) Activity Expenses Lead management and Legal Fees 21.00Printing and stationery (including courier and transportation charges and Registrar Fees) 1.00Others (Advertisement, listing costs, etc.) 3.00Total 25.00 Stock market data for the listed Equity Shares of the Company For the Stock market data for the listed Equity Shares of the Company, please refer to Chapter “Stock Market Data for the Equity Shares of the Company” at page 184 of the Draft Letter of Offer. 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 January 4, 2011 and as stated in the Agreement executed between the 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 the Registered Office of the Company. The total fees payable to the Registrar will be as per the MOU dated January 4, 2011 and as stated in the Agreement executed between the Company and Registrar, copy of which is available for inspection at the Registered Office.

Investor Grievances and Redressal System

The Company has adequate arrangements for redressal of investor complaints as well as well-arranged correspondence system developed for letters of routine nature. The Company’s investor grievances arising out of the Issue will be handled by Sharex Dynamic (India) Private Limited, the Registrar to the Issue and our Compliance Officer Mr. Vipul Khona. The Registrar to the Issue will have a separate team of personnel handling only our post-Issue correspondence. The agreement between the Company 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 CAF serial number, amount paid on application and the name of the bank and the branch where the application

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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 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 endeavour of the Registrar to attend to them as expeditiously as possible. All investor grievances received by the Company are and will be handled by the Registrar and Share Transfer agent in consultation with our Compliance Officer. For details of the Shareholders/ Investors Grievances Committee refer to chapter titled “Our Management” beginning on page 93 of the Draft Letter of Offer. The Company has not received any investor complaints during the three years preceding the filing of the draft offer document with the Board. As on the date of the Draft Letter of Officer we do not have any pending shareholder / investor complaints. The details of our Registrar to the Issue and our Compliance Officer is as follows: Registrar to the Issue Sharex Dynamic (India) Private Limited Address:- Unit No.1, Luthra Industrial Premises, Andheri Kurla Road, Safed Pool, Andheri (East), Mumbai-400072. Tel no.: 022 28515606 / 5644 Fax no.: 022 2851 2858 Contact Person: Mr. S. Baliga Email address: sharexindia@vsnl.com SEBI Registration: INR000002102 Investors may contact the Compliance Officer in case– of any pre- Issue/ post -Issue related problems such as non-receipt of allotment advice/share certificates/ demat credit/refund orders etc. His address is as follows: Compliance Officer Mr. Vipul Khona Address: 404, Dev Plaza, 68, S. V Road, Andheri (W), Mumbai – 400 058 Tel No.: +91 22 42233333 Fax No.: +91 22 42233300 E mail: rights@zodiacventures.in Changes in Auditors during the last three years For the Financial Years 2007-08, 2008-2009 and 2009-10, M/s. Hemant Merchant & Co., Chartered Accountants, 4, Sai Manzil, 1st Floor, 18 Altamount Road, Mumbai-400026were the auditors of the company. For the Financial Year 2010-2011, M/s. A R Sodha & Co., Chartered Accounts, Address: 101, Ashiana, 11th Road, TPS III, Opp. BMC Hospital, Santacruz(E), Mumbai 400 055, Tel no.: +91- 22- 26102465/26116901, Fax no.: +91- 22- 26101228, have been appointed as the Statutory Auditors of the Company. Previous public/rights issues by the Company in the last five years The Company has not made any previous rights or public issues in India or abroad in the five years preceding the date of the Draft Letter of Offer.

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Outstanding debentures or bonds and redeemable preference shares There are no outstanding debentures or bonds and redeemable preference shares issued by the as on the date of the Draft Letter of Offer. Previous Issue of securities other than cash The Company has not issued Equity Shares for consideration other than cash or out of revaluation reserves. Commission or brokerage on previous issues As the Company has not made any previous rights or public issues in India or abroad in the five years preceding the date of the Draft Letter of Offer, the Company has not paid any commission or brokerage on previous issues with respect to these five years. Promise versus Performance by the Company, Group Companies, Subsidiaries, Associate Companies In the last 10 years from the date of filing of the Draft letter of Offer, the Company, its Group Companies, Subsidiary and Associate Companies have not undertaken any issue, hence details of Promise verses Performance is not applicable. Capitalisation of Reserves or Profits The 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 the Company‘s fixed assets for the last five years. Additional Subscription by the Promoter The Promoter of the Company has undertaken vide his under taking dated March 1, 2010 to fully subscribe for their Rights Entitlement. The 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 The 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 193 under the chapter titled “Terms of the Issue” on beginning on page 185 of the Draft Letter of Offer.

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STOCK MARKET DATA FOR THE EQUITY SHARES OF OUR COMPANY

As the Company’s Equity Shares are infrequently traded on the BSE, the Company’s stock market data has been given. The high and low closing prices recorded on BSE for the preceding three years and the number of shares traded on the days the high and low prices were recorded are stated below: Year High Low Total Avg.

Price* (Rs.)

Price (Rs.)

Date Volume Price (Rs.)

Date Volume Volume

2008 There has been on trading the Equity Shares of the Company in the year 2008, hence no information has been provided.

2009 6.30 November 25,

2009 100

6.30 November 25,

2009 100 100

6.30

2010 6.61 February 01, 2010 6000

6.61 February 01,

2010 6000 6000

6.61 (Source : BSE Official Website i.e. www.bseindia.com) *The average price has been computed based on the average of the daily closing prices of the Equity Shares. The details of the share prices on the BSE during last six months are as follows: There has been on trading the Equity Shares of the Company in the last six months from the date of the Draft Letter of Offer, hence no information has been provided. There has been no trading on the Equity Shares of the Company on BSE on July 21, 2010, the day immediately following the day on which the Board meeting was held to finalize the offer price for this Issue. The week end closing prices of the Equity Shares for last four weeks on BSE are provided in the table below: There has been on trading the Equity Shares of the Company in the last six months from the date of the Draft Letter of Offer, hence no information has been provided.

The highest and lowest prices of the Equity Shares on BSE for last four weeks are provided in the table below: There has been on trading the Equity Shares of the Company in the last four weeks from the date of the Draft Letter of Offer, hence no information has been provided.

(Source : BSE Official Website i.e. www.bseindia.com)

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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 the 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 the 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 the Company held on July 20, 2010 and November 2, 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 the 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 the 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 twenty (20) 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 the Company are tradable only in dematerialized form, and the market lot is one. In case of holding of Equity Shares in physical form, the Company would issue to the allottees separate certificate for the Equity Shares allotted on rights basis with a split performance. The Company would issue one certificate for the entire allotment. However, the Company would issue split certificates on written requests from the shareholders. The Company shall not charge a fee for splitting any of the share certificates. Investors may please note that the Equity Shares of the 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

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entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the Registered Office of the Company or such other person at such addresses as may be notified by the Company. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has/have already registered the nomination with the Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the allotment of Equity Shares is in dematerialized form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective Depository Participant of the applicant would prevail. If the applicant wishes 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 the Company

4. Additional Subscription by the Promoter The Promoter of the Company has undertaken to fully subscribe for their Rights Entitlement. The 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. The Promoter has provided an undertaking dated March 1, 2011 to the Company to apply to additional Equity Shares in the Issue, to the extent of the unsubscribed portion. 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 the 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 chapter titled “Terms of the Issue” on page 185 of the Draft Letter of Offer. 5. Notices All notices to the Equity Shareholder(s) required to be given by the 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 The Company’s existing Equity Shares are currently traded on the BSE under the ISIN INE945J01019. 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 INE945J01019 for fully paid Equity Shares of the Company. All steps for the completion of the necessary formalities for listing and commencement of trading of the Equity Shares

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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. The Company is making this Issue on a rights basis to the Eligible Equity Shareholders of the 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. Arrangements for disposal of odd lots Since the market lot for the 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 twenty (20) Equity Shares for every one (1) Equity Share held on the Record Date. 3. Fractional entitlements Since the ratio in case of the Company is twenty (20) Equity Shares for every one (1) Equity Share, and there will be 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 193 as contained in the chapter titled “Issue Related Information” beginning on page 184 of the Draft Letter of Offer. Renouncees who have subscribed for all the Equity Shares renounced in their favour may also apply for additional Equity Shares. 5. Issue Price Each Equity Share is being offered at 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. 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. FSCBC 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 the 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 the 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.

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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. 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. For details related to application under ASBA, please refer to “Terms of the Issue- Procedure for Application through ASBA Process” on page 194 of the Draft Letter of Offer. 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” on page 193 under this chapter titled “Terms of the Issue” on page 185 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 193 under the chapter titled “Terms of the Issue” beginning on page 185 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 the Company shall not allot and/or register any Equity Shares, in favor of:

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• 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). 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 the Company. Renouncees who have subscribed for all the Equity Shares renounced in their favor may also apply for additional Equity Shares. 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 the 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)

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

Complete and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand it over to the renouncee. The renouncee must complete and sign Part C. (All joint renouncees must sign)

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one) 2. More than one person

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 renouncees. 2. Each of the renouncees 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 the 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 the 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 203 under this chapter titled “Terms of the Issue” on page 185 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. The 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 Mumbai which should be drawn in favor of Banker to the Issue crossed account payee only and marked "Zodiac Ventures Limited - Rights Issue - 2011" in case of resident shareholders 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 super scribed "Zodiac Ventures Limited - Rights Issue - 2011" in case of resident shareholders. The application on plain paper, duly signed by the applicant(s) including joint holders, in the same order as per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars: 1. Name of Issuer, Zodiac Ventures 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. In case of Equity Shares allotted in demat code, the bank account details

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will be obtained from the information available with the depositories; 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 the Company. 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, the Company and/or any Director of the 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 the 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 Resident Equity Shareholders / Applicants 1. Applicants who are applying through CAF and residing at places where the bank collection centres have been opened by the 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-operative bank), for the full application amount favouring "Zodiac Ventures Limited - Rights Issue - 2011" 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 “Zodiac Ventures Limited - Rights Issue - 2011” and marked ‘A/c Payee only’ payable at Mumbai directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. The 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 “Zodiac Ventures Limited - Rights Issue – 2011” and marked ‘A/c Payee only’ payable at Mumbai directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. The Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

V. Basis of Allotment Subject to the provisions contained in the Letter of Offer, the Articles of Association of the 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. (b) Since the ratio in case of the Company is twenty (20) Equity Shares for every one (1) fully paid-up

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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/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 23 of the Draft Letter of Offer. The Promoter of the Company has undertaken to fully subscribe for their Rights Entitlement. The 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. The Promoter has provided an under taking dated March 1, 2011 to the Company to apply to the additional Equity Shares in the Issue, to the extent of the unsubscribed portion of the Issue. 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 the 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 193 under the chapter titled “Terms of the Issue” beginning on page 185 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 the Company, in such manner as they think most beneficial to the Company and the decision of the Board of the 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. The 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. The Company shall retain no oversubscription. VI. Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the ASBA Process. The Company and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Letter of Offer.

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Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and to ensure that the CAF is correctly filled up. The lists of banks who have been notified by the SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in. For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link. Equity Shareholders who are eligible to apply under the ASBA Process The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Equity Shareholders of the Company on the Record Date and who:

• Are holding the Equity Shares in dematerialised form and have applied towards his/her Rights Entitlements or additional Equity Shares in the Issue in dematerialised form;

• Have not renounced his/her Rights Entitlements in full or in part; • Are not a Renouncee; • Are applying through a bank account maintained with one of the SCSBs.

CAF The Registrar will despatch the CAF to all Equity Shareholders as per their Rights 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 or in plain paper application and indicate that they wish to apply through the ASBA payment mechanism. On submission of the CAF after selecting the ASBA Option in Part A or plain paper applications indicating application through the ASBA payment mechanism, the Equity Shareholders are deemed to have authorized (i) the SCSB to do all acts as are necessary to make the CAF in the Issue, including blocking or unblocking of funds in the bank account maintained with the SCSB specified in the CAF or the plain paper, transfer of funds to the separate bank account maintained by the Company as per the provisions of section 73(3) of the Companies Act, on receipt of instruction from the Registrar to the Issue after finalization of the basis of Allotment; and (ii) the Registrar to the Issue to issue instructions to the SCSB to remove the block on the funds in the bank account specified in the CAF or plain paper, upon finalization of the basis of Allotment and to transfer the requisite funds to the separate bank account maintained by the Company as per the provisions of Section 73(3) of the Companies Act. Application in electronic mode will only be available with such SCSB who provides such facility. The Equity Shareholder shall submit the CAF / plain paper application 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. However, no more than five (5) applications (including CAF and plain paper application) can be submitted per bank account in the Issue. In case of withdrawal / failure of the Issue, the Lead Manager, through the Registrar to the Issue, shall notify the SCSBs to unblock the blocked amount of the Equity Shareholder applying through ASBA within one (1) day from the day of receipt of such notification. Acceptance of the Issue You may accept the Issue and apply for the Equity Shares either in full or in part, without renouncing the balance, by filling Part A of the respective CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard. Mode of payment The Equity Shareholder applying under the ASBA Process agrees to block the entire amount payable on application with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB.

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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 Registrars. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per Registrar‘s instruction allocable to the Equity Shareholders applying under the ASBA Process from bank account with the SCSB mentioned by the Equity Shareholder in the CAF. This amount will be transferred in terms of the SEBI (ICDR) Regulations, into the separate bank account maintained by the Company as per the provisions of Section 73(3) of the Companies Act. The balance amount remaining after the finalization of the basis of allotment shall be either unblocked by the SCSBs or refunded to the Investors by the Registrar on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Managers to the respective SCSB. The Equity Shareholders applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the submission of the CAF. The SCSB may reject the application at the time of acceptance of CAF if (i) the bank account with the SCSB details of which have been provided by the Equity Shareholder in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF or (ii) more than five (5) applications (including CAF and plain paper application) are submitted per account held with the SCSB in the Issue. Subsequent to the acceptance of the application by the SCSB, the Company would have a right to reject the application only on technical grounds. Options available to the Equity Shareholders applying under the ASBA Process The summary of options available to the Equity Shareholders is presented below. You may exercise any of the following options with regard to the Equity Shares, using the respective CAFs received from Registrar: Option Available Action Required 1. Accept whole or part of your Rights Entitlement

without renouncing the balance. Fill in and sign Part A of the CAF (All joint holders must sign)

2. Accept your Rights Entitlement in full and apply for additional Equity Shares

Fill in and sign Part A of the CAF including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

The Equity Shareholder applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary details. However, in cases where this option is not selected, but the CAF is tendered to the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if the Equity Shareholder has selected to apply through the ASBA process option. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are entitled too, provided that you have applied for all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under the chapter titled “Basis of Allotment” under this chapter titled “Terms of the Issue” on page 185. If you desire to apply for additional Equity Shares please indicate your requirement in the place provided for additional Securities in Part A of the CAF. Renunciation under the ASBA Process Renouncees cannot participate in the ASBA Process.

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Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is applying under the ASBA Process may make an application to subscribe to the Issue on plain paper. Equity Shareholders applying on the basis of a plain paper application are required to indicate their choice of applying under the ASBA Process. The envelope should be superscribed - “Zodiac Ventures Limited– Rights Issue” and should be postmarked in India. The application on plain paper, duly signed by the Investors including joint holders, in the same order as per specimen recorded with the Company, must reach the Designated Branch / corporate branch of the SCSBs before the Issue Closing Date and should contain the following particulars:

• Name of Issuer, being Zodiac Ventures Limited; • Name and address of the Equity Shareholder including joint holders; • Registered Folio Number / DP and Client ID no.; • Number of Equity Shares held as on Record Date; • Number of Equity Shares entitled; • Number of Equity Shares applied for; • Number of additional Equity Shares applied for, if any; • Total number of Equity Shares applied for; • Total amount paid at the rate of Rs. 10 per Equity Share; • Particulars of cheque / draft; • Except for applications on behalf of the Central or State Government and the officials appointed by the

courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue;

• Authorizing such SCSB to block an amount equivalent to the amount payable on the application in such bank account maintained with the same SCSB;

Option to receive securities in dematerialized form EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE BEING HELD ON RECORD DATE. General instructions for Equity Shareholders applying under the ASBA Process

a. Please read the instructions printed on the respective CAF carefully.

b. Application should be made on the printed CAF only and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected. The CAF / plain paper application must be filled in English.

c. The CAF / plain paper application 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 I.T Act, irrespective of the amount of the application.

e. Except for applications on behalf of the Central or State Government and the officials appointed by the courts, CAFs / plain paper applications without PAN will be considered incomplete and are liable to be rejected.

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f. 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.

g. Signatures should be either in English or Hindi or in any other language specified in the Eighth

Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his / her official seal. The Equity Shareholders must sign the CAF / plain paper application as per the specimen signature recorded with the Company or Depositories.

h. In case of joint holders, all joint holders must sign the relevant part of the CAF / plain paper application

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.

i. All communication in connection with application for the Equity Shares, including any change in

address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number.

j. Only the person or persons to whom the Equity Shares 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. In case of non-receipt of the CAF, the application can be made on plain paper indicating application through the ASBA payment mechanism with all necessary details as indicated under the heading “Application on Plain Paper” on page 197 under this chapter titled “Terms of the Issue” beginning on page 185.

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 / plain paper application are submitted at the SCSBs and details of the correct

bank account have been provided in the CAF.

e. Ensure that there are sufficient funds (equal to {number of Equity Shares as the case may be applied for} X {Issue Price of Equity Shares, 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.

f. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on

application mentioned in the CAF / plain paper application, in the bank account maintained with the respective SCSB, of which details are provided in the CAF / plain paper application and have signed the same.

g. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF / plain

paper application in physical form or electronic mode.

h. Except for applications on behalf of the Central or State Government and the officials appointed by the courts, each applicant should mention their PAN allotted under the I.T Act.

i. Ensure that the name(s) given in the CAF / plain paper application is exactly the same as the name(s) in

which the beneficiary account is held with the Depository Participant. In case the CAF / plain paper

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application 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 / plain paper application.

j. Ensure that the Demographic Details are updated, true and correct, in all respects.

Don’ts:

a. Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.

b. Do not pay the amount payable on application in cash, by money order or by postal order.

c. Do not send your physical CAFs / plain paper applications to the Lead Manager to the 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.

d. Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this

ground.

e. Do not instruct your respective banks to release the funds blocked under the ASBA Process.

f. Do not submit more than five (5) applications (including CAF and plain paper application) per bank account maintained with the SCSB for the Issue.

Grounds for Technical Rejection under the ASBA Process In addition to the grounds listed under “Grounds for Technical Rejection” on page 199 under this chapter titled “Terms of the Issue” on page 185, applications under the ABSA Process are liable to be rejected on the following grounds:

a. Application for Rights Entitlements or additional shares in physical form.

b. DP ID and Client ID mentioned in CAF / plain paper application not matching with the DP ID and Client ID records available with the Registrar.

c. Sending CAF / plain paper application to the Lead Manager / Registrar / collecting bank (assuming that such collecting bank is not a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company.

d. Renouncee applying under the ASBA Process.

e. Insufficient funds are available with the SCSB for blocking the amount.

f. Funds in the bank account with the SCSB whose details are mentioned in the CAF / plain paper application having been frozen pursuant to regulatory orders.

g. Account holder not signing the CAF / plain paper application or declaration mentioned therein.

h. Submitting the GIR number instead of the PAN.

i. Application on split form.

j. Do not submit more than five (5) applications (including CAF and plain paper application) per bank account maintained with the SCSB for the Issue.

Depository account and bank details for Equity Shareholders applying under the ASBA Process IT IS MANDATORY FOR ALL THE EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANTS NAME, DEPOSITORY PARTICIPANT IDENTIFICATION

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NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF / PLAIN PAPER APPLICATION. EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF / PLAIN PAPER APPLICATION IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF / PLAIN PAPER APPLICATION 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 / PLAIN PAPER APPLICATION. Equity Shareholders applying under the ASBA Process should note that on the basis of name of these Equity Shareholders, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF / plain paper application, the Registrar to the Issue will obtain from the Depository demographic details of these Equity Shareholders such as address, bank account details for printing on refund orders and occupation (“Demographic Details”). Hence, Equity Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF / plain paper application. These Demographic Details would be used for all correspondence with such Equity Shareholders including mailing of the letters intimating unblock of bank account of the respective Equity Shareholder. The Demographic Details given by Equity Shareholders in the CAF / plain paper application would not be used for any other purposes by the Registrar to the Issue. Hence, Equity Shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAFs / plain paper applications, the Equity Shareholders applying under the ASBA Process would be deemed to have authorized the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of the Equity Shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. Refunds, if any, will be made directly to the bank account in the SCSB and which details are provided in the CAF/plain paper application and not the bank account linked to the DP ID. Equity Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of bank account may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Equity Shareholder in the CAF / plain paper application 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 Equity Shareholders applying under the ASBA Process and none of the Company, the SCSBs or the Lead Managers shall be liable to compensate the Equity Shareholder applying under the ASBA Process for any losses caused 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 (3) parameters, namely, names of the Equity Shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected. Transfer of Funds The Registrar to the Issue shall instruct the relevant SCSB to unblock the funds in the relevant ASBA bank accounts for (i) transfer of requisite funds to the separate bank account maintained by the Company as per the provisions of section 73(3) of the Companies Act, (ii) rejected / unsuccessful ASBAs. In case of failure or withdrawal of the Issue, on receipt of appropriate instructions from the Lead Manager through the Registrar to the Issue, the SCSBs shall unblock the bank accounts latest by the next day of receipt of such information. VII. 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

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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 the Company becomes liable to pay it, 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. 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. In case of those Equity Shareholders or applicants who have opted to receive the Equity Shares in physical form and in respect of which the 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. 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: 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. 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. 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.

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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. 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. 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. Interest in case of delay in dispatch of allotment letters/ refund orders The 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 the Company becomes liable to pay it, the 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 the Company issued through this Issue in physical or demat form. Applicants to the Equity Shares of the Company issued through this Issue shall be allotted the securities in dematerialized (electronic) form at the option of the applicant. The Company has signed agreements dated February 18, 2009 and November 5, 2008 with NDSL and CDSL respectively, which enables the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates. In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain space for indicating number of shares applied for in demat and physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. 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 the 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.

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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 the Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with the Company). In case of Investors having various folios in the 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 the 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 the Company are not dematerialized. Nonetheless, it should be ensured that the Depository Account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of the Company.

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 dematerialized form would be paid

to those Equity Shareholders whose names appear in the list of beneficial owners given by the depository participant to the Company as on the Record Date.

VIII. General instructions for applicants (b) Application should be made on the printed CAF, provided by the Company except as mentioned under

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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 the Company or Lead Manager to the Issue. Applicants residing at places other than cities where the branches of the Bankers to the Issue have been authorized by the Company for collecting applications, will have to make payment by Demand Draft payable at Mumbai 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.

(a) 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 organizations submit sufficient documentary evidence to support the veracity of their claim for such exemption.

(b) 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 the 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

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documents are already registered with the Company, the same need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue 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 the 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 the Company; Sharex Dynamic (India) Private Limited, 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. (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.

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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;

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 the 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.

Payment by Stockinvest In terms of RBI Circular DBOD No. FSCBC 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

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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. The 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. The 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.

General Applications should be made only on the prescribed CAFs provided by the 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 the 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 Mumbai. 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 the Company shall have any responsibility and undertake any liability for the same. Hence, applicants should carefully fill their Depository Account details in

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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 ‘Zodiac Ventures Limited - Rights Issue’ on the envelope) to the Registrar to the Issue at the following address:

Sharex Dynamic (India) Private Limited Address:- Unit No.1, Luthra Industrial Premises, Andheri Kurla Road, Safed Pool, Andheri (East), Mumbai-400072. Tel no.: 022 28515606 / 5644 Fax no.: 022 2851 2858 Contact Person: Mr. S. Baliga Email address: sharexindia@vsnl.com SEBI Registration: INR000002102 It is to be specifically noted that this Issue of Equity Shares is subject to the chapter titled “Risk Factors” beginning on page x of the Draft Letter of Offer

3. The 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. Underwriting The company has not currently entered into any stand by undertaking arrangement

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 utilized out of the Issue shall be disclosed under an appropriate separate head in

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the balance sheet of the Company indicating the purpose for which such moneys have been utilized. (iii) Details of all such un-utilized moneys out of the Issue, if any, shall be disclosed under an appropriate

separate head in the balance sheet of the Company indicating the form in which such un-utilized moneys have been invested.

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.

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

a. The complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily.

b. 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.

c. 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.

d. 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.

e. The certificates of the securities/ refund orders to the applicants shall be dispatched within the specified

time.

f. No further issue of securities affecting equity capital of the 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.

g. 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.

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SECTION VIII – MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

Table “A”

Article 1 No regulations contained in Table A, in the First Schedule to the Companies Act, 1956 shall apply to this Company, but the regulations for the management of the Company and for the observance of the members thereof and their representatives shall subject to any exercise of the statutory powers of the Company with reference to the repeal or alteration of or addition to, by Special Resolution, as prescribed by the said Companies Act, 1956, be such as are contained in these Articles. Capital and Increase and Reduction of Capital Authorized Capital Article 3 provides as follows: (a) The Authorized share capital of the Company is as per clause V of the Memorandum of Association of the Company. b) The minimum paid-up capital of the Company shall be Rs. 5,00,000/- (Rupees Five Lakhs). Increase of Capital by the Company and how carried into effect Article 4 provides that the Company in General Meeting may, from time to time, increase the Capital by the creation of new shares, such increase to be of such aggregate amount and to be divided into share of such respective amounts as the resolution shall prescribe. Subject to the provisions of the Act, any shares of the original or increased capital shall be issued upon such terms and conditions and with such rights and privileges attached thereto, as the General meeting resolving upon the creation thereof shall direct, and if no direction be given, as the Directors shall determine and in particular such shares may be issued with a preferential or qualified right to dividends, and in the distribution of assets of the Company, and with a right of voting at General Meetings of the Company. The Company has also power to issue further shares as non-voting right shares subject to compliance of various provisions of the Companies Act, 1956 in this regard. New capital same as existing Article 5 provides that, except so far as otherwise provided by the conditions of issue or by these presents, any capital raised by the creation of new shares shall be considered as part of the existing capital and shall be subject to the provisions herein contained. Power to Issue Preference Shares Article 6 provides that subject to the provisions of Section 80 of the Act, the Company shall have the power to issue preference shares, which are liable to be redeemed, and the resolution authorizing such issue shall prescribe the manner, terms and conditions of redemption. Reduction of Capital Article 8 provides that the Company may from time to time by Special Resolution, reduce its Capital and any capital Redemption Account or Premium Account in any manner for the time being authorised by law and in particular, capital may be paid off on the footing that it may be called upon again or otherwise. Consolidation, Division, Sub-Division and Cancellation of Shares Article 9 provides that subject to the provision of Section 94 of the Act, the Company in General Meeting, may from time to time subdivide consolidate its shares or any of them and the resolution whereby any shares is sub-divided may determine that, as between the holders of the shares resulting from such sub-division, one or more of such shares shall have some preference or special advantage as regards dividend, capital or otherwise over or as compared with the others or other. Subject as aforesaid, the Company in General Meeting may also cancel shares which have not been taken or agreed to be taken by any person and diminish the amount of its shares capital by the amount of the Shares so cancelled.

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Modification of Rights Article 10 provides that whenever the Capital, by reason of the issue of preference shares or otherwise, is divided into different classes of shares, all or any of the rights and privileges attached to each class may subject to the provisions of Section 106 and 107 of the Act be modified, commuted, affected or abrogated, or dealt with by agreement between the Company and any person purporting to contract on behalf of that class, provided such agreement is ratified in writing by holders of at least 3/4ths in nominal value of the issued shares of the class or is confirmed by a special resolution passed at a separate General Meeting of the holders of shares of that class. Shares and Certificates Restriction of Allotment and Return of Allotment Article 13 provides that the Board of directors shall observe the restriction as to allotment of shares to the public contained in section 69 and 70 of the Act, and shall cause to be made the return as to allotment provided for in Section 75 of the Act. Further Issue of Shares Article 14 provides as follows: (1) Where it is proposed to increase the subscribed capital of the Company by allotment of further shares whether out of unissued share capital of out of increased share capital, then: (a) Such further shares shall be offered to the persons, who, at the date of the offer are holders of the Equity Shares of the Company in proportion, as nearly as circumstances admit, to the capital paid-up, on those shares, at that date; (b) Such offer shall be made by a notice specifying the number of shares offered and limiting a time not being less than thirty days from the date of the offer within which the offer, if not accepted, will be deemed to have been declined; (c) The offer aforesaid shall be deemed to include a right exercisable by the persons concerned to renounce the shares offered to them in favour of any other person and the notice referred to in sub-clause (b) hereof shall contain a statement of this right; (d) After the expiry of the time specified in the aforesaid notice, or on receipt of earlier intimation from the persons to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose them of in such manner as they may think most beneficial to the Company. (2) Notwithstanding anything contained in sub-clause (1) hereof, of further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in clause (a) sub-clause 1 hereof) in any manner whatsoever: (a) If a special resolution to that effect is passed by the Company in general meeting; or (b) Where no such special resolution is passed, if the votes cast (whether on a show of hands, or on a poll, as the case may be) in favour of the proposal contained in the resolution moved in that general meeting (including the casting vote if any, of the Chairman) by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf that the proposal is most beneficial to the Company. Increase in Subscribed Capital Article 15 provides that subject to the provision of Section 81 of the Act, the Company may increase its subscribed capital by allotment of further shares whether out of unissued share capital or out of increased share capital. The Company in General Meeting may, subject to the provisions of Section 81 of the Act, determine that any shares (whether forming part of the original capital or of any increases capital of the Company) shall be offered to such person (whether member or not) in such proportion and on such terms and conditions and either (subject to compliance with the provisions of Section 78 and 79 of the Act) at a premium or at par or at a discount, as such General Meeting shall determine and with full power to give any person (whether a member or not) the option to call for or be allotted shares of any class of the Company either (subject to compliance with the provisions of Section 78 and 79 of the Act) at a premium or at par or at a discount, such option being exercisable at such time and for such consideration as may be directed by such General Meeting or the Company in General Meeting may make any other provisions whatsoever for the issue, allotment or disposal of any shares.

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Application of Premium received on Shares Article 16 provides as follows: (1) Whether the Company issue Shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium on these shares shall be transferred to an account, to be called “SHARE PREMIUM ACCOUNT” and the provisions of the Act relating to the reduction of the share capital of the Company shall, except as provided in this article, apply as if the share premium account were paid up share capital of the Company. (2) The Share Premium Account may, notwithstanding anything in clause (1) hereof be applied by the Company:

(a) In paying up unissued shares of the Company, to be issued to the members of the Company, as, fully paid Bonus Shares; (b) In writing off the preliminary expenses of the Company; (c) In writing off the expenses of or the commission paid or discount allowed, on any issue of shares or debentures of the Company.

Shares at a Discount Article 17 provides as follows: The Company may issue at a discount shares in the Company of a class already issued if the following conditions are fulfilled, namely: (1) The issue of the shares at a discount is authorised by a resolution passed by the Company in general meeting and sanctioned by the Company Law Board; (2) The resolution specifying the maximum rate of discount (not exceeding 10 % or such higher percentage as the Central Government may permit in any special case) at which the shares are to issued; and (3) The shares to be issued at a discount are issued within two months after the date on which the issue is sanctioned by the Company Law Board or within such extended time as the Company Law Board may allow. Shares at the control of Directors Article 18 provides that subject to the provisions of these Articles and of the Act, the shares shall be under the control of the Directors; who may allot or otherwise dispose of the same to such persons in such proportion on such terms and conditions and at such times as the Directors think fit and subject to the sanction of the Company in general meeting with full power, to give any person the option to call for or be allotted shares of any class of the Company either (subject to compliance with the provisions of Section 78 and 79 of the Act) at a premium or at par or such at a discount and such option being exercisable for such time and for such consideration as the Directors think fit. Share Certificates Article 22 provides as follows: (a) Every member or allottee of share shall be entitled, without payment to receive one or more certificates in marketable lots for all the shares of the same class registered in his name. Every share certificate shall specify the name of the person in whose favour it is issued, the share certificate number and the distinctive number(s) to which it relates and the amount paid up thereon. Such certificate shall be issued only if conformity with the provisions of the Companies (issue of Share Certificates) Rules, 1960 in pursuance of a Resolution passed by the Board and on surrender to the Company of its Letter of Allotment or its fractional coupons of requisite value, save in cases where letters of allotment have not been issued or of issues against letters of acceptance or of renunciation or in cases of issue of Bonus Shares. PROVIDED THAT if the letter of allotment is lost or destroyed the Board may impose such reasonable terms, if any, as it thinks fit, as to evidence and indemnity and the payment of out-of - pocket expenses incurred by the Company in investigating the evidence. The certificate of title shall be issued under the seal of the Company and shall be signed in conformity with the provisions of Companies (Issue of Share Certificates) Rules, 1960 or any statutory modification or re-enactment thereof for the time being in force. Printing of blank forms to be used for issue of share certificates and maintenance of books and documents relating to issue of Share Certificates shall be completed and kept ready for delivery within three months after the allotment and within one month after the application for the registration of the transfer of any such shares.

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(b) Any two or more joint allottees of a share shall, for the purpose of this Article be treated as a single member, and the Certificate of any share, which may be subject of joint ownership, may be delivered to any one or such joint owners on behalf of all of them. For any further certificate the Board shall be entitled, but shall not be bound to prescribe a charge not exceeding Rs.2. The Company shall comply with the provisions of section 113 of the Act. Renewal of Share Certificates, New Certificates Article 23 provides as follows: (a) No certificate or any share or shares shall be issued either in exchange for those which are sub-divided or are consolidated or in replacement of those which are defaced, torn or old decrepit worn out, or the cages on the reverse for recording transfers have been fully utilized, unless the letter of allotment or such shares or the certificate in lieu of which it is issued is surrendered to the Company. (b) When a new share certificate has been issued in pursuance of clause (a) of this Article it shall state on the face of it and against the stub or counter foil to the effect that it is "issued in lieu of share certificate No.----subdivided/replaced/ or consolidation of shares". (c) If a share certificate is lost or destroyed, a new certificate in lieu thereof shall be issued only with the prior consent of the Board or of the person authorised by the Board to issue such certificate and on such terms, if any, as to evidence and indemnity and as to the payment of out-of-pocket expenses incurred by the Company in investigating evidence, as the Board thinks fit. (d) When a new share certificate has been issued in pursuance of clause (c) of this Article, it shall state on the face of it and against the stub or counter-foil to the effect that it is “Duplicate issued in lieu of share certificate No.-----”. The word “Duplicate” shall be stamped or punched in bold letters across the face of the share certificate. (e) When a new share certificate has been issued in pursuance of clause (a) or clause (c) of this Article, particulars of every such share certificate shall be entered in a Register of Renewed and Duplicate certificates indicating against the names of the persons to whom the certificates is issued, the number and date of issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the Register of Members by suitable cross reference in the “Remarks” column. (f) All blank forms to be issued for issue of share certificates shall be printed and the printing shall be done only on the authority of a resolution of the Board. The blank forms shall be consecutively machine-numbered and the forms and the blocks, engraving, facsimiles and hues relating to the printing of such forms shall be kept in the custody of the Secretary or such other person as the Board may appoint for the purpose; and the Secretary or the person aforesaid shall be responsible for rendering an account of those forms to the Board. (g) The Managing Director of the Company for the time being or if the Company has no Managing Director, every Director of the Company shall be responsible for the maintenance, preservation and safe custody of all books and documents relating to the issue of share certificate except the blank forms of share certificates referred to in clause (f) hereinabove. (h) All books referred to in clause (g) hereinabove shall preserved in good order permanently. The First Name of Joint Holders deemed Sole Holders Article 24 provides that if any share stands in the names of two or more persons, the person first names in the Register shall as regards receipt of dividends of bonus of service of notices and all or any other mattes connected with the Company, except voting as meetings, and the transfer of the shares, be deemed the sole holder thereof but the joint - holders of a share shall be severally as well as jointly liable for the payment of all instalments and calls due in respect of such share. Company not to recognize any interest in shares other than of Registered Holders Article 25 provides as follows: (1) Except as ordered by a Court of competent jurisdiction or as by law required, the Company shall not be bound to recognize any equitable contingent, future or partial interest in any share, or (except only as is by these Articles otherwise expressly provided) any right in respect of a share other than an absolute right thereto, in accordance with these Articles, in the person from time to time registered as the holders thereof, but the Board shall be at liberty at their sole discretion to register any share in the joint names of any two or more persons but not exceeding 3 persons or the survivors of them. Trust not recognized

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(2) Save as in the Act or in these Articles otherwise provided, the Company shall be entitled to treat the persons, whose name appears on the Register of Members as the holders 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 recognise and benami, trust or equitable, contingent, future or partial or other claim or claims or right to or interest in such share on the part of any other person whether or not it shall have express or limited notice thereof. The provisions of Section 153 of the Act shall apply. (3) Shares may be registered in the name of an incorporated Company or other body corporate but not in the name of a minor (except in case where they are fully paid) or in the name of a person of unsound mind or in the name of any firm or partnership. Underwriting and Brokerage Commission Article 26 provides that subject to the provisions of Section 76 of the Act the Company may at any time pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares or debentures in the Company, or procuring, or agreeing to procure subscriptions (whether absolutely or conditionally) for any shares or debentures in the Company. Brokerage Article 27 provides that the Company may a reasonable sum for brokerage on any issue of shares or debentures. Interest out of Capital Article 28 provides that where any shares are issued for the purpose of raising money to defray the expenses of construction of any works or building, or the provisions of any plant, which cannot be made profitable for a lengthy period, the Company may pay interest on so much of that share capital as is for the time being paid up, for the period, at the rate and subject to the conditions and restrictions contained in Section 208 of the Act, and may charge the same to capital as part of the cost of construction of the works or building or the provision of plant. Calls Article 29 provides that the Board may, from time to time, subject to the terms on which any shares may have been issued and subject to the conditions of allotment by a resolution passed at a meeting of the Board (and not by circular resolution) make such call as it thinks fit upon the members in respect of all moneys unpaid on the shares held by them respectively and each member shall pay the amount of every call so made on him to the person or persons and at the time and places appointed by the Board. A call may be made payable in instalments. Lien Article 37 provides that 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 proceeding of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares and no equitable interest in any shares shall be created except upon the footing and upon the condition that Article 21 hereof is to have full effect. Any such lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed, the registration of a transfer shall operate as a waiver of the Company’s lien, if any, on such shares. Forfeiture of Shares If Money payable on share not paid notice to be given Article 40 provides that if any member fails to pay any call or instalment of a call on or before the date appointed for the payment of the same or such extension thereof as aforesaid, the Board may at any time thereafter during such time as the call or instalment remains unpaid, give notice to him requiring him to pay the

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same together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment. In default of payment shares to be forfeited Article 42 provides that if the requirements of any such notice as aforesaid shall not be complied with, every or any share in respect of which such notice has been given, at any time thereafter before payment of all calls or instalment, interest and expenses due in respect thereof, be forfeited, by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared or any moneys payable in respect of the forfeited shares and not actually paid before the forfeiture. Transfer and Transmission of shares Form, Application, Execution of Transfer Article 53 provides that the shares in the Company may be transferred by an instrument in writing in the prescribed formally stamped and delivered to the Company within the prescribed period. The Instrument of transfer shall be accompanied by such evidence as the Board may require proving the title of the transferor and his right to transfer the shares and every registered instrument of transfer shall remain in the custody of the Company until destroyed by order of the Board. The transferor shall be deemed to be the holder of such shares until the name of the transferee shall have been entered in the Register of Members in respect thereof. Before the registration of a transfer the certificate or certificates of the shares must be delivered to the Company. Directors may refuse to Register Transfers Article 55 provides that subject to the provisions of Section 111 of the Act, the Board may decline to register or acknowledge any transfer of shares, whether fully paid or not (notwithstanding that the proposed transferee be already a member); provided registration of transfer shall not be refused on the ground that the transferor alone or jointly with any other person or persons is indebted to the Company on any account whatsoever. Death of one or more joint holders of shares Article 56 provides that subject to Article 25 hereof in the case of the death of any one or more of the persons named in the Register of Members as the joint-holders of any shares, the survivor or survivors shall be the only persons recognized by the Company as having any title to or interest in such share, but nothing herein contained shall be taken to release the estate of a deceased joint-holder from any liability on any shares held by him jointly with any other person. No Transfers to Certain Persons Article 58 provides that no share shall in any circumstances be transferred to any minor, infant, insolvent or person of unsound mind. Transmission Clause Article 59 provides that subject to the provisions of the Act and Articles 57 and 58 any person becoming entitled to shares in consequence of the death, lunacy, bankruptcy or insolvency of any member, or by any lawful means other than by a transfer in accordance with these Articles, may, with the consent of the Board, upon producing such evidence that he sustains the character in respect of which he proposes to act under this Article or of such title as the Board thinks sufficient, either be registered himself as the holder of the shares or elect to have some person nominated by him and approved by the Board registered as such holder; provided nevertheless, that if such person shall elect to have his nominee registered, he shall testify the election by executing in favour of his nominee an Instrument of transfer in accordance with the provisions herein contained, and until he does so, he shall not be freed from any liability in respect of the shares. Person entitled may receive dividend without being registered as member Article 60 provides that a person entitled to a share by transmission shall, subject to the right of the Directors to retain such dividends or money as hereinafter provided be entitled to receive, and may give a discharge for, any dividends or other moneys payable in respect of the share.

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Fee on Transfer and Transmission of Shares Article 61 provides that there shall be paid to the Company in respect of the transfer or of any number of shares such fee, if any, as the Directors may require, subject to the rules, regulations of Stock Exchange or the Statue concerned. No fees shall be charge for transmission of shares. Share Warrants Power to Issue Share Warrants Article 63 provides that the Company may issue share warrants subject to and in accordance with the provisions of Section 114& 115, accordingly the Board may in its discretion, with respect to any shares which may is the person registered as holder of the share, and authenticated by such evidence 9if any) as the Board may, from time to time, require as to the identity of the person signing the application and on receiving the certificate (if any) of the share, and the amount of the stamp duty on the warrant and such fees as the Board may, from time to time, required, issue a share warrant. Deposit of Share Warrant Article 64 provides as follows: (1) The bearer of a share warrant may, at any time, deposit the warrant at the office of the Company, and so long as the warrant stays so deposited, the depositor shall have the same right or signing a requisition for calling a meeting of the Company, of attending and voting and excising other privileges of the member at any meeting held after the expiry of two clear days from the time of deposit, as if his name were inserted in the Register of Members as the holder of the share include in the deposited warrant. (2) Not more than one person shall be recognised as depositor of the share warrant. (3) The Company shall, on two days written notice, return the deposited share warrant to the depositor. Privileges and Disabilities of the Holder of the Share Warrant Article 65 provides the following: (1) Subject as herein otherwise expressly provided, no person shall, as bearer of a share warrant, sign a requisition for calling a meeting of the Company, or attend or vote or exercise any privileges of a member at a meeting of the Company, or be entitled to receive any notice from the Company. (2) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if he were named in the Register of members as the holder of the shares included in the warrant, and the shall be a member of the Company. Issue of New Share Warrants or Coupons Article 66 provides that the Board may, from time to time, make bye laws as to the terms on which (if it shall think fit) a new share warrant or coupon may be issued by way of renewal in case of defacement, loss or destruction. Borrowing Powers Article 67 provides that any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and may be issued on condition that they shall be convertible into shares of any denomination, and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares and attending (but not voting) at general meetings, appointment of directors and otherwise. Debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in general meeting accorded by a Special Resolution. Power to Borrow Article 69 provides that Subject to Section 292 and 293 (1)(d) of the Act, the Directors may, from time to time, at their discretion raise or borrow, or secure the repayment of any sum or sums of money for the purpose of the Company at such time or in such manner and upon such terms and conditions in all respects as they think fit and

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in particular, by any promissory note or by opening current accounts, or by receiving deposits and advances, with or without security, or by the issue of bonds, perpetual or redeemable debentures or debenture stock of the Company charged upon all or any part of the property of the Company (both present and future) including its uncalled capital, for the time being, or by mortgaging or charging or pledging any lands, building, goods or other property and securities of the Company or by such other means as may seem expedient to them. Mortgage of Uncalled Capital Article 73 provides that if any uncalled capital of the Company is included in or charged by any mortgage or other security, the Directors may, by instrument under the Company’s Seal authorize the person in whose favour the mortgage or security is executed or any other person in trust for him, to make calls on the members in respect of such uncalled capital and the provisions hereinbefore contained in regard to calls shall, mutatis mutandis, apply to made exercisable either conditional, or unconditionally and either presently or continently, and either to the exclusion of the Directors' powers or otherwise and shall be assignable if expressed so to do. Conversion of share into stock and reconversion Article 76 provides that the Company in general meeting may convert any paid-up shares into stock, and when any shares have been converted into stock, the several holders of such stock may henceforth transfer their respective interest therein, or any part of such interest, in the same manner and subject to the same regulations as, and subject to which shares from which the stock arose might have been transferred, if no such conversion had taken place, or as near thereto as circumstances will admit. The Company may at any time reconvert any stock into paid-up shares of any denomination. Rights of Stock Holders Article 77 provides that the holders of stock shall, according to the amount of stock held by them, have the same rights, privileges and advantages as regards dividends, voting at meetings of the Company, and other matters, as if they held the shares from which the stock arose; but no such privilege or advantage (except participation in the dividends and profits of the Company and in the assets at winding-up) shall be conferred by an amount of stock which would not, if existing in shares have conferred that privilege or advantage. Meeting of Members General Meetings Article 78 provides that all General Meeting other than Annual General Meetings shall be called Extra-ordinary General Meetings. Notice of General Meetings Article 80 provides that save as provided in sub-section (2) of Section 171 of the Act, not less than twenty-one days’ notice shall be given of every general meeting of the Company. Every notice of a meeting shall specify the place and the day and hour of the meeting and shall contain a statement of the business to be transacted there at. Quorum at General Meetings Article 83 provides that five members present in person shall be a quorum for a General Meeting. Chairman of General Meetings Article 84 provides that the Chairman (if any) of the Board of Directors shall be entitled to take the chair at every General Meeting, whether Annual or Extra-ordinary. If there be no such Chairman, or if at any meeting he shall not be present within fifteen minutes of the time appointed for holding such meeting, then the he shall be unable or unwilling to take the Chair, then the members present shall elect another Director as Chairman and if no Director be present or if all the Directors present decline to take the Chair, then the members present shall elect one of their number to be Chairman.

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Special Notice Article 90 provides that where by any provision contained in the Act or in these Articles, special notice is required of any resolution, notice of the intention to move the resolution shall be given to the Company not less than fourteen days before the meeting at which the notice is to be served or deemed to be served and the day of the meeting. The Company shall immediately after the notice of the intention to move any resolution has been received by it, give its members notice of the resolution in the same manner as it has given notice of the meeting, or if that is not practicable, shall give them notice thereof either by advertisement in a newspaper having an appropriate circulation or in any mode allowed by these Articles, not less than seven days before the meeting. Votes of Members Restriction on exercise of voting rights of members who have not paid Article 92 provides that no member shall be entitled to vote either personally or by proxy at any General Meeting or Meeting of a class of shareholders either upon a show of hands or upon a poll in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the Company has and has exercised, any right to lien. Number of Votes to which entitled Article 93 provides that subject to the provisions of these Articles and without prejudice to any special privileges or restrictions as to voting for the time being attached to any class of shares for the time being forming part of the capital of the Company, every member, not disqualified by the last preceding Articles shall be entitled to be present, and to speak and vote at such meeting, and on a show of hands every member present in person shall have one vote and upon a poll the voting right of every member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. Votes of Joint Members Article 95 provides that if there be joint registered holders of any share, any one of such persons may vote at any meeting or may appoint another person (whether a member or not) as his proxy in respect of such share, as if he were solely entitled thereto but the proxy so appointed shall not have any right to speak at the meeting and, if more than one of such joint-holders be present at any meeting, that one of the persons so present whose name stands higher on the Register shall alone be entitled to speak and to vote in respect of such shares, but the other or others of the joint-holders shall be entitled to be present at the meeting. Several executors or administrators of a deceased member in whose name shares stand shall for the purpose of these Articles be deemed joint-holders thereof. Validation of votes given by proxy notwithstanding revocation of authority Article 100 provides that a vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding previous death or insanity of the principle, or revocation of the proxy or of any power of attorney under which such proxy was signed, or the transfer of the shares in respect of which the vote is given, provided that no intimation in writing of the death or insanity, revocation or transfer shall have been received by the Company at its Registered office before the meeting. Directors Maximum Number of Directors Article 102 provides that until otherwise determined by a General Meeting of the Company and subject to the provisions of Section 252 of the Act, the number of Directors shall not be less than three nor more than twelve (including the "Nominee Director (s)", if any, appointed under Article 106). First Directors The Following persons shall be First Director of the Company:-

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(1) Mr. Banwarilal B. Bagaria (2) Mr. Nandlal B. Nathuramka (3) Mr. Suresh R. Pareek Nominee Directors Article 107 provides the following: (1) Subject to the provisions of Section 255 of the Act, whenever the Directors enter into a contract with any Government, Central, State, or local, or any person or persons for borrowing any money or for providing any guarantee or security or for technical collaboration or assistance or for underwriting or enter into any other arrangement whatsoever, the Directors shall have, subject to the provisions of Section 255 of the Act, the power to agree that such Government, person or persons shall have the right to appoint or nominate by a notice in writing addressed to the Company one or such conditions as may be mentioned in the Agreement and that such Director or Directors may not be liable to retire nor be required to hold any qualification shares. The Directors may also agree that any such Director or Directors may be removed from time to time by the Government, person or persons entitled to appoint or nominate them and such person or persons may appoint another or others in his or their place and also fill in any vacancy, which may occur as a result of any such Director or Directors ceasing to hold that office for any reason whatever. The Directors so appointed or nominated shall be entitled to exercise and enjoy all or any of the rights and privileges exercised and enjoyed by the Directors of the Company including the payment of remuneration and travelling expenses to such Director or Directors as may be agreed by the Company with such person or persons aforesaid. (2) If it is provided by the Trust Deed, securing or otherwise, in connection with any issue of debentures of the Company, that any person or persons shall have power to nominate a Director of the Company, then in the case of any and every such issue of debentures, the person or persons having such power may exercise such power from time to time and appoint a Director accordingly. Any Director so appointed is herein referred to as "Debenture Director". A Debenture Director may be removed from office at any time by the person or persons in whom for the time being is vested the power under which he is appointed and another Director may be appointed in his place. A Debenture Director shall not be bound to hold any qualification shares. Alternate Directors Article 108 provides that the Board may appoint an Alternate Director to act for a Director (hereinafter called "the Original Director") during his absence for a period of not less than three months from the State in which the meetings of the Board are ordinarily held. An Alternate Director appointed under this Article shall not be required to acquire and hold qualification shares and shall not hold office for a period longer than that permissible to the Original Director in whose place he has been appointed and shall vacate office if and when the Original Director returns to that State. If the term of office of the Original Director is determined before he so returns to that State, any provisions in the Act or in these Articles for the automatic re-appointment of retiring Directors in default of another appointment shall apply to the Original Director and not to the Alternate Director. Additional Directors Article 109 provides that subject to the provisions of Sections 260 and 264, the Board shall have the power at any time and from time to time to appoint any other qualified person to be an additional Director, but so that the total number of Directors shall not at any time exceed the maximum fixed under Article 84. Any such additional Director shall hold office only up to the date of the next Annual General Meeting. Remuneration Article 111 provides that subject to the provisions of the Act, a Director, who is neither in the whole time employment of the Company nor a Managing Director, may be paid remuneration either: 1. by way of monthly, quarterly or annual payment with the approval of the Central Government; or 2. by way of commission if the Company by a Special Resolution authorises such payment. Travelling Expenses incurred by Directors on Companies’ business Article 112 provides that the Board may allow and pay to any Director, who is not a bonafide resident of the

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place where the meetings of the Board are ordinarily held and who shall come to such place for the purpose of attending any meeting, such sum as prescribed by law and as the Board may consider fair compensation for travelling, boarding, loading and other expenses, in addition to his fee for attending such meeting as above specified; and if any Director be called upon to go or reside out of the ordinary place of his residence on the Company’s business, he shall be entitled to be repaid and reimbursed any travelling or other expenses incurred in connection with business of the Company. Directors may act notwithstanding vacancy Article 113 provides that the continuing Directors may act notwithstanding any vacancy in their body if, and so long as their number is reduced below the minimum number fixed by Article 103 hereof the continuing Directors not being less than two may act for the purpose of increasing the number of Directors to that number, or a summoning a General Meeting, but for no other purpose. Disclosure of Interest by Director Article 114 provides as follows: (1) Every Director of the Company who is in any way whether directly or indirectly, concerned or interested in a contract or arrangement or proposed contract or arrangement, entered into or to be entered into, by or on behalf of the Company, shall disclose the nature of his concern or interest at a meeting of the Board of Directors in the manner provided in Section 299(2) of the Act. (2) (a) In case of a proposed contract or arrangement, the disclosure required to be made by a Director under Sub-clause (1) shall be made at the meeting of the Board at which the question of entering into the contract or arrangement is first taken into consideration, or if the Director was not, at the date of the meeting concerned or interested in the proposed contract or arrangement, at the first meeting of the Board held after he be so concerned or interested; (b) In the case of any other contract or arrangement, the required disclosure shall be made at the first meeting of the Board held after the Director becomes concerned or interested in the contract or arrangement. (3) (a) For the purpose of Sub-clause (1) and (2) a general notice given to the Board by a Director, the effect that he is Director or a member of a specified body corporate or is a member of a specified firm and is to be regarded as concerned or interested in any contract or arrangement which may, after the date of the notice, be entered into with that body corporate or firm, shall be deemed to be sufficient disclosure of concern or interest in relation to nay contract or arrangement so made; (b) Any such general notice shall expire at the end of the financial year in which it is given, but may be renewed for further period of one financial year at a time by a fresh notice given in the last month of the financial year in which it would otherwise expire; (c) No such general notice, and no renewal thereof, shall be of effect unless either it is given at a meeting of the Board or the Directors concerned takes reasonable steps to secure that it is brought up and read at the first meeting of the Board after it is given; (d) Nothing in this Article shall apply to any contract or arrangement entered into or to be entered into between the Company and any other company where any one or more of the Directors of the Company together holds or hold not more than two percent after paid up share capital in the other Company. Consent to act as Director Article 115 provides that a person other than a Director re-appointed after retirement by rotation or immediately on the expiry of his term of office, or an Additional or Alternate Director, or a person filling a causal vacancy in the office of a Director under Section 262 of the Act, appointed as a Director or re-appointed as an Additional or Alternate Director immediately on the expiry of his term of office, shall not act as a Director of the Company, unless he has within thirty days of his appointment signed and filed with the Registrar his consent in writing to act as such Director. Managing Director Appointment of Managing Director Article 117 provides that subject to the provisions of the Act, the Board of Directors shall have power to appoint from time to time one or more of its members as Managing/Whole-time Director/s of the Company for such term not exceeding five years at a time as they may think fit to manage the affairs and business of the Company.

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Managing Director to be Director Article 118 provides that a Managing Director shall ipso facto and immediately cease to be a Managing Director if he ceases to hold the office of a Director. Proceedings of the Board of Directors Meeting of Directors Article 119 provides that the Directors may meet together as a board for the dispatch of business from time to time, and shall so meet at least once in every three months and at least four such meetings shall be held in every year. The Directors may adjourn and otherwise regulate their meetings as they think fit. Notice of Meetings Article 120 provides that prior notice of every meeting of the Board shall be given in writing to every Director for the time being in India and at his usual address in India to every other Director and in addition, to every Director resident outside India, written notice shall be at his usual address outside India. Notice may be given by telegram, cable, telex or other means of communication to any Director who is not in India and the same shall be confirmed by a Notice sent by registered air-mail. Quorum Article 121 provides that subject to section 287 of the Act, the quorum for a meeting of the Board shall be one-third of its total strength (excluding Directors if any, whose places may be vacant at the time), any fraction contained in that one-third being rounded off as one), or two Directors, whichever is higher. Provided, further that where at any time the number of interested Directors exceeds or is equal to two-thirds of the total strength the number of remain Directors, that is to say, the number of Directors who are not interested, present at the meeting being not less than two shall be quorum during such time. If a meeting of the Board shall cannot be held for want of a quorum, then the meeting shall automatically stand adjourned to such other date and time (if any) as may be fixed by the Chairman not being later than seven days from the date originally fixed for the meeting. Powers of Board Meeting Article 123 provides that a meeting of the Board for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, power and discretion’s which by or under the Act or the Articles of the Company are for the time being vested in or exercisable by the Board generally. Directors may appoint Committee Article 124 provides that subject to the restriction contained in Section 292 of the Act the Board may delegate any of its powers to Committees of the Board consisting of such member or members of its body as it think fit, and it may from time to time revoke and discharge any such Committee of the Board either wholly or in part and either as to persons or purposes, but every Committee of the Board so formed shall in the exercise of the powers so delegated confirm to any regulations that may from time to time be imposed on it by the Board. All acts done by any such Committee of the Board in conformity with such regulations and in fulfilment of the purposes of their appointment but not otherwise shall have the force and effects as if done by the Board. The meetings and proceeding of any such Committee of the Board shall be governed by the provisions herein contained for regulating the meetings and proceeding of the Directors, so far as the same are applicable by the Directors as herein mentioned. Act of Board or Committee valid notwithstanding defect in appointment Article 126 provides that all acts done by any meeting of the Board or by a Committee of the Board, or by any person acting as a Director shall notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of such Director or persons acting as aforesaid, or that they or any of them were disqualified or had vacated office or that the appointment of any of them had been terminated by virtue of any

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provisions contained in the Act or in these Articles, be as valid as if every such person had been duly appointed, and was qualified to be a Director and had not vacated his office or his appointment had not been terminated. Dematerialization of Shares Power of the Company to Dematerialize Securities Article 127 provides the following: Notwithstanding anything contained in these Articles, the Company shall be entitled to dematerialize its securities in a dematerialized form pursuant to the Depositories Act, 1996. Option for investors Every person subscribing to securities offered by the Company shall have the option to receive security certificates or to hold the securities with a depository. Such a person who is the beneficial owner of the securities can at any time opt out of a depository. If permitted by the law, in respect of any security in the manner provided by the Depositories Act, and the Company shall, in the manner and within the time prescribed, issue to the beneficial owner the required certificates of securities. If a person opts to hold his security with a depository, the Company shall intimate such depository the details of allotment of the security and on receipt of the information the depository shall enter in its record the name of the allottee as the beneficial owner of the security. Securities in depositories to be in fungible form All securities held by a depository shall be dematerialized and be in fungible form. Nothing contained in sections 153, 153A, 153B, 187C and 372A of the Act, shall apply to a depository in respect of the securities held by it on behalf of the beneficial owners. Transfer of securities Nothing contained in section 108 of the Act or these Articles, shall apply to a transfer of securities effected by a transferor and transferee both of whom are entered as beneficial owners in the records of a depository. Register and Index of beneficial owners The Register and Index of beneficial owners maintained by a depository under Depositories Act, 1996 shall be deemed to be the Register and Index of members and security holders for the purposes of these Articles. Secretary Article 128 provides that the Directors may from time to time appoint a Secretary and, at their discretion, remove any such Secretary, to perform any functions which by the Act, are to be performed by the Secretary. The Directors may also at any time appoint any person or persons (who need not be the Secretary), to keep the registers required to be kept by the Company. Dividends The Company in General Meeting may declare dividends Article 132 provides that the Company in General Meeting may declare dividends to be paid to members according to their respective rights, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend. The Company may declare additional dividend to that declared at the Annual General Meeting, in relation to any year by an Extra-ordinary general meeting. Dividend out of profits only Article 133 provides that no dividend shall be declared or paid otherwise by the Company for any financial year out of profits for that year arrived at after providing for depreciation in accordance with the provisions of Section 205 of the Act except after the transfer to the reserves of the Company of such percentage of profits for that year as may be prescribed.

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Interim Dividend Article 134 provides that the Board may, from time to time, pay to the Members such interim dividend as in their judgement the position of the Company justifies. Capital paid in advance at interest not to earn dividend Article 135 provides that where Capital is paid in advance of calls, such capital may carry interest but shall not in respect thereof confer a right to dividend or participate in profits. Effect of transfer of share Article 137 provides that subject to the provisions of Section 205A of the Act the Board may retain the dividends payable upon shares in respect of which any person is under Article 53 entitled or which any person under that Article is entitled to transfer, until such person shall become a Member, in respect of such shares or shall duly transfer the same. Dividend to joint holders Article 138 provides that any one of several persons who are registered as the joint-holders of any share may give effectual receipts for all dividends or bonus and payments on account of dividends or bonus or other moneys payable in respect of such shares. Dividend and call together Article 143 provides that any General Meeting declaring a dividend may on the recommendation of the Director make a call on the members of such amount as the meeting fixes, but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend; and the dividend may, if so arranged between the Company and the member, be set off against the calls. Capitalization of Profits Article 144 provides that the Company in General meeting may resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of the Reserve Fund, or any Capital Redemption Reserve Account, or in the hands of the Company and available for dividend (or representing premium received on the issue of shares and standing to the credit of the Share Premium Account) be capitalized and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportions on the footing that they become entitled thereto as capital and that all or any part of such capitalized fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide, any unissued share or debentures or debenture-stock of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any unissued shares or debentures or debenture-stock and that such distribution or payment shall be accepted by such shareholders in full satisfaction of their interest in the said capitalized sum; Provided that a Share Premium Account and a Capital Redemption Reserve Account may, for the purposes of this Article only be applied in the paying of any unissued shares to be issued to members of the Company as fully paid bonus shares. (b) A General Meeting may resolve that any surplus moneys arising from the realization of any capital assets of the Company, or any investments representing the same or any other undistributed profits of the Company not subject to charge for income-tax be distributed among the members on the footing that they receive the same as capital.

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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 the 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 the Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered and Corporate Office of the Company situated at 404, Dev Plaza, S. V Road, Andheri (W), Mumbai – 400 058, India, from 10.30 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 January 4, 2011 between the Company, and the Lead Manager. 2. Memorandum of Understanding dated March 1, 2011, between the Company and the Registrar. B. Material Documents 1. Certificate of incorporation of the Company dated February 19, 1981.

2. Fresh Certificate of Incorporation consequent upon change of name dated November 8, 2006 and June 29,

2010. 3. Certified copy of the Memorandum of Association and Articles of Association of the Company as amended

from time to time. 4. The resolution of the Board dated July 20, 2010 and November 2, 2010 authorizing this Issue. 5. Board resolution dated November 2, 2010 for appointment of the Managing Director of the Company, Mr.

Jimit Shah. 6. Due Diligence Certificate dated March 3, 2011 to SEBI from the Lead Manager. 7. Copy of the tax benefit report dated December 24, 2010 from the Statutory Auditor in this case being M/s.

A. R. Sodha & Co.

8. Reports of the Auditors, M/s A. R. Sodha & Company, dated January 17, 2011 regarding restated financials of the Company for the nine months period ended December 31, 2010 and for the years ended March 31, 2006, 2007, 2008, 2009 and 2010.

9. Consents in writing of: the Directors; the Compliance Officer, the Auditors; Bankers to the 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. In-principle listing approval from BSE dated [●]. 12. Tripartite agreement among the NSDL, the Company and Registrar dated February 18, 2009.

13. Tripartite agreement among the CDSL, the Company and the Registrar dated November 5, 2008. 14. Copy of the Prospectus dated 1981 with respect to the Initial Public Offering made by the Company in the

year 1981. 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 the 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 We hereby certify that 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.

Name Signature

Mr. Ramesh Shah Chairman and Whole Time Director

__________________________

Mr. Jimit Shah Managing Director

__________________________

Mrs. Sunita Shah Director

__________________________

Dr. Anil Ghagare Independent Director

__________________________

Mr. Aakash Parikh Independent Director

__________________________

Mr. Litesh Gada Independent Director

__________________________

Mrs. Anita Agrawal Company Secretary

__________________________

Mr. Vipul Khona Chief Financial Officer and Compliance Officer

__________________________

Place: Mumbai Date: March 3, 2011