1. DRAFT SEBI TAKEOVER REGULATIONS OVERVIEW AND INDUSTRY PERSPECTIVE 15/07/2011

2. AGENDA 15/07/2011 1. Need of SEBI Takeover Regulations 2. Salient Features of Proposed Takeover Regulations and Industry Perspective 2.1. Key Definitions 2.2. Initial Threshold and Creeping Acquisition 2.3. Open Offer and its Related Concepts 2.4. Exemptions-Automatic and Approval Route 3. Conclusion

4. SALIENT FEATURES OF PROPOSED TAKEOVER REGULATIONS AND INDUSTRY PERSPECTIVE 15/07/2011

5. 15/07/2011 KEY DEFINITIONS

6. 15/07/2011 ACQUIRER Means any person who Directly or indirectly , acquires or agrees to acquire whether or Himself through With person acting in concert with him shares or voting rights in, or control over a target company by or The proposed regulations recognize a person as acquirer even where the acquisition whether of shares or voting rights or control has been made by him through person acting in concert with him i.e. through Special Purpose Vehicle or through the controlling entities.

8. CHANGE IN CONTROL 15/07/2011 Regulation 12 of the existing SEBI Takeover Regulations allows for the change in control without giving the open offer provided that the approval of shareholders has been obtained by way of special resolution through postal. Now the only Route available for Change in Control is way of Open Offer to the shareholders of Target Company. In other words, now only the monetary power will help in the acquisition of control i.e. through open offer to the 100% public shareholders of the Target Company.

12. IDENTIFIED DATE 15/07/2011 Specified Date Identified Date Means the date falling on the tenth business day prior to the commencement of the tendering period. Means a date which shall not be later than the thirtieth day from the date of the public announcement.

13. 15/07/2011 INITIAL THRESHOLD AND CREEPING ACQUISITION

16. 15/07/2011 PROMOTER HOLDING IN LISTED COMPANIES Source: TRAC Report Total Promoter Holding (%) Companies With Promoter Holding Between Market Cap Range (Rs. Mn) No. of Companies Mean Median 0-15% 15-20% 20-25% 25-30% 0-500 2,477 (61.1%) 45.50% 46.40% 274 (11.1%) 87 (3.5%) 97 (3.9%) 138 (5.6%) 500-2,000 649 (16.0%) 52.60% 54.90% 34 (5.2%) 19 (2.90%) 12 (1.8%) 19 (2.9%) 2,000-5,000 312 (7.7%) 54.30% 55.00% 10 (3.2%) 8 (2.6%) 1 (0.3%) 10 (3.2%) 5,000-10,000 157 (3.9%) 52.20% 54.50% 5 (3.2%) 1 (0.6%) 3 (1.9%) 8 (5.1%) 10,000 and above 459 (11.3%) 55.20% 54.30% 15 (3.3%) 5 (1.1%) 11 (2.4%) 16 (3.5%) Overall 4,054 (100%) 48.90% 50.50% 340 (8.4%) 120 (3.0%) 124 (3.1%) 191 (4.7%)

17. CREEPING ACQUISITION 15/07/2011

19. 15/07/2011 OPEN OFFER AND ITS RELATED CONCEPTS

20. INCREASE IN OFFER SIZE 15/07/2011

22. 15/07/2011 OFFER SIZE ANALYSIS Source: TRAC Report Offer size (% of total equity capital of Target Company) FY Total <=20% >20% 2006-07 89 77 12 2007-08 118 100 18 2008-09 113 95 18 2009-10 75 65 10 Total 395 337 58 % of Cases 100% 85.32% 14.68%

23. VOLUNTARY OPEN OFFER 15/07/2011

24. FREEDOM TO COMPLETE ACQUISITION UNDER SPA 15/07/2011 This provision will allow the acquire to have the representation in the Target Company even before the completion of open offer and to exercise the control over it. Existing Regulations Proposed Regulations Not allowed to complete the acquisition of shares or voting rights in, or control over, the target company under any agreement attracting the obligation to make an open offer for acquiring shares until the completion of offer formalities. Completion of acquisition under any agreement attracting the obligation to make an open offer for acquiring shares allowed after a period of 21 days subject to acquirer depositing 100% consideration payable under the open offer.

25. TAKEOVER OF SMALL COMPANY 15/07/2011 In line with Delisting Regulations, there is a need for separate provisions for Takeover of Small Company

26. ACQUISITION FROM OTHER COMPETING ACQUIRER 15/07/2011 The new provision will help in removing the obstacle which arise in the matter of battle for Great Offshore Limited when ABG Shipyard wants to sell the shares receive in the offer to Bharati Shipyard.

27. NON COMPETE FEES 15/07/2011 More beneficial for the shareholders as they will be entitled to get the same price as have been received by the promoters/sellers from the acquirer.

28. INDUSTRY PERSPECTIVE 15/07/2011 Shareholder Promoter Investor Investor + Management+ Control Thus, Payment of Non compete fees or control premium should be allowed.

29. OPTION TO WITHDRAW SHARES 15/07/2011 The option available to the shareholders to withdraw the shares tendered in the Open Offer has been taken back considering the point that in the proposed regulations, the last of upward revision by the acquirer is prior to the opening of Offer Period.

30. NO INDUCTION ON BOARD 15/07/2011 Prohibition on the Induction of new director on the board of the Target Company during the pendency of the competing offer

31. RECOMMENDATION BY INDEPENDENT DIRECTORS 15/07/2011 Board of Target Company to Constitute a committee of Independent Directors to provide written reasoned recommendations on the Open Offer to the shareholders of the Target Company and publication of such recommendation.

32. REDUCTION IN TIME LINE 15/07/2011 The timeline for completion of the open offer has been reduced from 95 calendar days To 57 Business Days

33. 15/07/2011 EXEMPTIONS

35. 15/07/2011 NEW EXEMPTIONS INTRODUCED Increase in shareholding pursuant to Buy Back

37. ISSUE 15/07/2011 Simultaneously with the Buy Back and CDR, Increase in Shareholding pursuant to Forfeiture of shares should also be exempted .

39. EXEMPTION FROM SEBI (APPROVAL ROUTE) 15/07/2011

40. 15/07/2011 CONCLUSION

43. 15/07/2011 Pavan Kumar Vijay Managing Director Corporate Professionals Capital Private Limited SEBI Registered Merchant Banker THANK YOU