Order in the matter of proposed acquisition of shares and voting rights of Southern Petrochemical Industries Corporation Limited by AMI Holdings Private Limited

WTM/PS/34/CFD/DCR/FEB/2013 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER In the matter of proposed acquisition of shares and voting rights of Southern Petrochemical Industries Corporation Limited by AMI Holdings Private Limited - Application filed under regulation 11 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

1. Southern Petrochemical Industries Corporation Limited (hereinafter referred to as "the Target Company") is a company incorporated under the Companies Act, 1956. The registered office of the Target Company is situated at SPIC House, 88 Mount Road, Guindy, Chennai - 600 032. The shares of the Target Company are listed on the National Stock Exchange of India Limited ("NSE").

2. Securities and Exchange Board of India (hereinafter referred to as "SEBI") received an application dated August 31, 2012 from the Target Company (as authorised), filed on behalf of AMI Holdings Private Limited (hereinafter referred to as "the proposed acquirer") seeking exemption for the proposed acquirer from complying with the provisions of Chapter II in general and regulations 3, 4 and 5 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (hereinafter referred to as "the Takeover Regulations"). According to the application, the Target Company proposes to issue 3,72,76,700 warrants to the proposed acquirer which are convertible into equity shares, in two tranches as mentioned below :

a. Tranche I - issue of 1,49,10,700 warrants (when converted into equity shares would be equivalent to 10% of the current voting capital); and b. Tranche II - issue of 2,23,66,000 warrants (when converted into equity shares would be equivalent to 15% of the current voting capital of the Target Company).

3. In terms of the application, the shareholding of the promoter/promoter group of the Target Company would increase from 41.13% to 45.98%, post conversion of warrants issued under tranche I. On issuance of the warrants in the second tranche and post conversion of those warrants into equity shares, the promoter group's holding/voting rights would further increase to 51.91%. The increase in voting rights of the promoter group would be in excess of 5% acquisition in a financial year which would require the proposed acquirer/promoter group to make a public announcement of an open offer for acquiring shares of the Target Company in accordance with the Takeover Regulations. Therefore, the application has been filed under regulation 11 of the Takeover Regulations, seeking exemption from the requirements stipulated under the provisions of the Takeover Regulations with respect to the increase in shares/ voting rights of the promoter group pursuant to the conversion of warrants ( issued in tranche II) into equity shares by the proposed acquirer.

4. The application, inter alia, stated as follows :

(i) The Target Company was incorporated in the year 1969 in the joint sector, by the private promoters namely Dr. M. A. Chidambaram Group and the Tamilnadu Industrial Development Corporation Limited, an enterprise wholly owned by the Tamil Nadu Government. (ii) The Target Company is engaged in the manufacturing and marketing of fertilisers. (iii) Over the years, the financial performance of the Target Company was adversely affected due to variety of factors including the adverse impact of the fertiliser pricing policies announced by the Government of India in the year 2002; the delay in disbursement of fertiliser subsidy by the Government and also due to nil/low yield on some of its investments. The Target Company went through financial duress, resulting in defaults in payments to its secured lenders and to the trade creditors for supplies made by them. (iv) In order to restructure its long term debts, the Target Company had in the year 2003 availed of the Corporate Debt Restructuring (CDR) Mechanism. Through the CDR Mechanism, the entire secured debt portfolio of the Target Company was restructured.

However, spiralling input cost continued to strain the operations of the Target Company leading to working capital constraints. The continued delay in reimbursement of subsidy by the Government further aggravated the situation resulting in deterioration of financial health of the target company. Further, two of the working capital lending bankers of the Target Company had filed applications before the Debts Recovery Tribunal for recovery of their dues. Due to non availability of credit and shortage of raw materials the operations of the Target Company's Ammonia and Urea plants were suspended during March 2007. Operations in these plants could be restored to normalcy only after three years. (v) The Asset Reconstruction Company India Limited (ARCIL) had acquired approximately 86%of the Target Company's secured debts by way of assignment from the previous lenders. (vi) As the original CDR proposal could not be implemented due to shortage of funds, several revised proposals were submitted to the CDR cell. As per the most recent proposal approved by the CDR Empowered Group in February 2010 as modified in July and September 2011, the Target Company was required to pay a total of ₹1425 crores to its secured creditors as against the original debt of ₹2042 crores.

One of the conditions of the revised proposal was that the waiver of the balance amount would be subject to the timely payment of the agreed dues. As of November 24, 2011, the Target Company had repaid an amount of ₹ 1284 crores to its secured creditors under the CDR settlement. (vii) Since, the Target Company was obligated to settle the dues of the secured lenders first, it could not meet its obligations towards the unsecured creditors including those who supplied raw material. Some of the unsecured creditors had approached the Hon'ble High Court of Judicature at Madras for winding up of the Target Company. (viii) Considering its financial position, the Target Company's revival would require settlement of debts and resolution of ongoing litigations and proceedings with its creditors. In order to quickly resolve the financial crisis and to protect the interest of all stakeholders, a scheme of compromise and arrangement between the Target Company and its creditors under section 391 of the Companies Act, 1956 was proposed. The purpose of the scheme was to restructure the past dues of the Target Company in order to ensure continued survival and revival in the interest of its stakeholders.

(ix) The scheme envisaged compromise with the creditors by way of full and final settlement to them. Under the scheme, the Target Company has offered three settlement options. The creditors are required, upon the scheme becoming effective, to opt for either option 1 or 2 or 3 towards full and final settlement and discharge of liabilities : Option 1 : One time settlement amount equivalent to 60% of the liability owed to the creditor by the Target Company shall be paid over a period of 11 years commencing within 45 days from the 'option expiry date' [as per the Scheme, the Target Company is required to give notice within 7 business days of the Effective Date (the date of filing of the certified court order or receipt of other approvals if any, whichever is later) of the Scheme to the creditors to exercise their options. The creditors are required to exercise their respective options within 45 days of the above notice which would be the option expiry date] of the scheme. The settlement amount is to be paid in 46 quarterly instalment. Option 2 : One time settlement amount equivalent to 22% of the liability shall be paid over a period of 3 years commencing within 45 days from the option expiry date.

The settlement amount is to be paid in 12 equal quarterly instalments. Option 3 : One time settlement amount equivalent to 18.15% of the liability to be paid within 45 days after the option expiry date of the scheme. The said scheme was consented to by the Target Company's creditors in a meeting convened on February 24, 2012 and the scheme was approved by the Hon'ble High Court of Judicature at Madras vide its order dated August 16, 2012. As per the scheme, the Target Company was required to give notice within 7 business days of the Effective Date (the date of filing of the certified court order or receipt of other approvals, if any, whichever is later) of the scheme to the creditors to exercise their option. As the certified court order was expected soon, the Target Company was required to arrange for requisite funds to meet its payment obligations under the scheme. The aforesaid scheme covers total dues of about ₹1367 crores and the amount to be paid would be determined on exercise of the options by the creditors. (x) At present, the Target Company does not have access to normal banking channels due to its continuing default in repayment obligations to its secured lenders and also due to its negative net worth.

Given the nature of the fertiliser industry and the fact that considerable working capital required for its day to day operations, the Target Company would not be able to continue operations at an optimal level and generate the necessary cash flow required to repay the secured lenders as per the scheme without further infusion of capital. Under the present circumstances, the Target Company is not in a position to go for a public or rights issue. Further institutions and third party investors are not keen in investing in the Target Company. Therefore, at this stage, the need for infusion of funds by the promoter is critical for the survival of the Target Company and is a sine-qua-non both for settlement of the existing creditors as well as for the Target Company's future survival. (xi) In order to raise the required interest free funding, the Target Company proposes to issue warrants convertible into equity shares equivalent to 25% of its current voting capital to the proposed acquirer on preferential basis to partly fund the obligations under the scheme. (xii) In order to meet the immediate funding requirements, the Target Company has proposed to issue 1,49,10,700 convertible warrants equivalent to 10% of the current voting capital, which can be converted into equity shares by the acquirer in terms of ICDR Regulations (5% each in two financial years, within 18 months of allotment of convertible warrants).

The above issue and the allotment of warrants would be made within 15 days of the passing of the special resolution, therefore by the members or receipt of other approvals, if any, whichever is later. (xiii) Since the proposed acquirer belongs to the promoter group, only warrants equivalent to 10% of the current voting capital can be converted into equity shares (5% in each financial year - warrants are to be converted into equity shares within 18 months of the allotment) as any acquisition beyond the aforesaid limit would trigger the open offer requirement under Chapter II of the Takeover Regulations. (xiv) The funds raised through issue of warrants equivalent to 10% of current voting capital would not be sufficient to meet the obligations of the Target Company under the scheme. Hence, for the survival of the Target Company additional capital is required to be raised which the proposed acquirer is willing to subscribe for. (xv) The Target Company is required to issue additional warrants/equity which would lead to the proposed acquirer making an open offer under the Takeover Regulations, which would not be in the larger interest of the Target Company under the present circumstances.

The proposed acquirer has therefore submitted the application to SEBI through the target company, seeking exemption from making an open offer while acquiring voting rights in excess of the limits stipulated under the Takeover Regulations. The Target Company would issue the additional 2,23,66,000 convertible warrants on receipt of approval of SEBI on this request or within 15 days of passing of the special resolution therefore by the members or receipt of other approvals, if any, whichever is later.

5. The Target Company has submitted that the applicability of Chapter II of the Takeover Regulations is likely to act as an impediment to the implementation of the Target Company's plan for its revival. According to it, the exemption from the strict compliance with the obligation to make an open offer would be in the interest of the public, stakeholders and the securities market. The Target Company has further submitted the following for the consideration of SEBI :

(i) The Target Company is required to arrange for interest free funds to make the payments under the Scheme to the Creditors within 45 days from the option expiry date. There is a probability that in order to realise their long over dues from the Target Company, most of the Creditors may opt for option 3. In such case, the amount required by the Target Company for immediate payments would be higher. Therefore, the issue and allotment of convertible warrants in tranche II at the earliest becomes critical for the Target Company. (ii) Infusion of funds equivalent to about ₹65 crore (against allotment of warrants and conversion into equity) by the promoter and promoter group of the Target Company at this juncture when other options of raising capital are not available would be timely and demonstrative of the faith of the promoters and promoter group in the long term viability of the Target Company's business operations and shows their commitment for the early revival of the Target Company. (iii) The specified assets on which charge is to be created pursuant to exercise option 1 or 2 includes all movable assets of the Target Company including its plant and machinery. Non availability of funds to meet the obligations of the Target Company under the Scheme would lead to its default. Upon any default, the creditors could invoke such charge leading to stoppage of operation and the winding up of the Target Company eventually. (iv) Since the proposed issue of convertible warrants are to the proposed acquirer, which is a company owned and controlled by Mr. Ashwin C Muthiah, one of the present promoters of the Target Company, there will be no change in control in the Target Company.

6. As per the application, the increase in the shareholding/voting rights of various categories of shareholders of the Target Company pursuant to (i) conversion of warrants issued in Tranche I and (ii) the issue and conversion of warrants in Tranche II, is mentioned in the Table below : Particulars Pre issue holding Post Issue Holding Post Issue Holding (1) (on conversion of (2) (on conversion of warrants issued in Tranche warrants issued in Tranche 1) 2) No. of % No. of % No. of % Shares Shares Shares

A. Promoters/Group Promoters TIDCO 8840000 5.32% 8840000 4.88% 8840000 4.34% M.A.Chidambaram Group 59554848 35.81% 74465548 41.10% 96831548 47.57% B. Public Financial Institutions and Banks 5484473 3.30% 5484473 3.03% 5484473 2.69% Foreign Institutions Investors 469563 0.28% 469563 0.26% 469563 % Bodies Corporate 19769814 11.82% 19768814 10.91% 19768814 9.71% Non Resident Indians 1222789 0.73% 1222189 0.67% 1222189 0.60% Mutual Funds/UTI 939702 0.57% 939702 0.52% 939702 0.46% Resident Individuals and Ors 52826566 31.77% 52826566 29.15% 52826566 25.95% C. Custodians for Global 17183850 10.33% 17183850 9.46% 17183850 8.42% Depository Receipts The Bank of New York Mellon Total 16,62,91,605 100.00% 18,12,00,705 100.00% 20,35,66,705 100.00%

7. The Target Company has submitted that its Board of Directors have approved the proposal to issue 3,72,76,700 convertible warrants in two tranches to the proposed acquirer on preferential basis, in a meeting held on August 27, 2012, subject to the approval of the shareholders and compliance with the relevant regulations. The conversion of the convertible warrants would be at a price of ₹17.50/- per share as the minimum average price to be allotted on conversion of warrants in terms of Regulation 76 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ('the ICDR Regulations'), works out to be ₹17.26/-per share. The Target Company has further submitted that in compliance with the requirements of the ICDR Regulations and section 81(1)A of the Companies Act, 1956, the proposals would be placed by way of special resolutions in the Annual General Meeting ('AGM') of the Target Company to be held on September 26, 2012 for seeking approval of the shareholders. It is also submitted that the Target Company is also filing its request for 'in principle approval' to the NSE for the proposed issue of warrants in two tranches and also for listing of equity shares on conversion of warrants.

8. Pursuant to certain queries from SEBI with respect to the shareholders of the proposed acquirer, details of CDR proposals and its latest status, clarification as to how the infusion of ₹65 crore would be sufficient to meet the obligations under the scheme, etc., the Target Company provided further information/material vide its letter dated October 3, 2012. Vide a letter dated October 05, 2012, the Target Company informed that the proposals relating to the issue and allotment of 1,49,10,700 and 2,23,66,000 convertible warrants were considered and approved by the shareholders by special resolutions without any modification at the AGM of the Target Company held on September 26, 2012.

9. The Target Company vide its letter dated October 16, 2012, inter alia stated that the purpose of the proposed issue of convertible warrants is to part fund the payment obligations of the Target Company under the Scheme of Compromise with the Creditors under section 391 of the Companies Act, 1956 and that the balance would be met from operations and sale of investments of the Target Company. The total liability of the Target Company is ₹1366 crore and the three options (as mentioned above) are available for settling the creditors' dues. According to the Target Company, if all the creditors opt for Option 3 (payment of 18.15% of the dues payable within 45 days from the last date fixed for exercise of option), the immediate payment of ₹248 crore would be the highest pay-out (compared to the pay-outs if option 1 or 2 are exercised). The Target Company has already paid about ₹72 crore to its creditors. Therefore, the maximum amount payable immediately if option 3 was exercised by all creditors was ₹176 crores. The Target Company assumed that not all creditors would be exercising option 3 and that as per the scheme if any creditor fails to exercise any option, he would be deemed to have opted for option 1 (payment of 60% of dues over a period of 11 years). In that case, the pay-out to be made immediately would be lower.

10. The Target Company has also submitted that, besides the amount of ₹ 66 crores to be raised through the proposed issue of convertible warrants, it would divest some of its portfolio investments valued at ₹20 crores towards additional funding. Further, the Target Company expects to generate about ₹40 crores with its plants resuming operations. The Target Company also contemplates availing long term trade credit facilities from overseas suppliers for bulk import of fuel oil, which would provide additional cash reserves to meet the immediate obligations. Thus, the Target Company would have access to about ₹126 crores through issue of convertible warrants (₹66 crores), sale of investments (₹20 crores) and cash from operations (₹40 crores) in all, apart from additional resource through long term trade credit for fuel oil. The Target Company also expects that with the scheme coming into operation, it would be in a position to arrange loans from the market to meet shortfall, if any. The Target Company further submitted that it had a surplus of ₹43.37 crores from operations and made cash profit of ₹19.62 crores in 2011-12 and that post implementation of the scheme, the net worth of the Target Company would become positive and funds for working capital would be available, which would pave way for revival.

11. The Target Company vide its letter dated November 29, 2012, had further submitted that it had issued notices, as required under the scheme, to its creditors to exercise their respective options. On the option expiry date i.e., November 22, 2012, as per the options chosen by the creditors, the Target Company was required to pay ₹133 crores to the Creditors and that it proposed to meet its obligation through the following sources :

(a) Funds raised by issue of convertible warrants (10% of present voting rights - ₹26.09 crores) (b) Proposed issue of additional convertible warrants (15%) subject to receipt of SEBI approval - ₹39.14 crores. (c) Cash from operations and sale of certain non-core assets/investments of the Target Company. 12. Thereafter, vide letter dated December 18, 2012, the Target Company clarified and requested SEBI to consider its application for the grant of exemption to the proposed acquirer from complying with the provisions of Chapter II of the Takeover Regulations with respect to the conversion of 1,49,10,700 convertible warrants issued on October 11, 2012 and the issue and allotment of 2,23,66,000 convertible warrants and their conversion into equity shares. Vide another letter dated December 18, 2012, the Target Company stated that it is under 'CDR' and that the Hon'ble High Court of Judicature at Madras, vide an order dated August 16, 2012 has approved the scheme of arrangement for the settlement to the creditors. The Target Company made further submissions vide letters dated December 24, 2012 and January 2, 2013.

13. In view of the facts and circumstances involved in the case, as explained above, the application preferred by the proposed acquirer for the exemption was referred to a Panel of Experts, in terms of the proviso to Regulation 11(5) of the Takeover Regulations, for making recommendation on the application. The Panel considered that the proceeds are to be utilised for fulfilling part of the obligations of the Scheme sanctioned by the Hon'ble High Court and that the inflow would help the Target Company to reduce its debt, and vide its report dated January 7, 2013, recommended exemption from the open offer requirement with respect to the acquisition of 3,72,76,700 shares, as requested by the proposed acquirer.

14. I have considered the application filed on behalf of the proposed acquirer, submissions of the Target Company/proposed acquirer made through different letters, the documents/material produced in this proceeding, the Report of the Panel of Experts and other material available on record.

15. The Target Company has submitted that in order to restructure its secured debt with creditors, it had approached the CDR Cell, wherein a CDR scheme was approved during March

2003. The said proposal could not be implemented due to shortage of funds and revised proposals were submitted. As per the most recent proposal approved by the CDR Empowered Group in February 2010 as modified in July and September 2011, the Target Company was required to pay a total of ₹ 1425 crores to its secured creditors as against the original debt of ₹2042 crores. According to the Target Company, one of the conditions of the revised proposal was that the waiver of the balance amount would be subject to the timely payment of the agreed dues. As of November 24, 2011, the Target Company had repaid an amount of ₹ 1284 crores to its secured creditors under the CDR settlement. The Target Company has also submitted that as it was obligated to settle the dues of the secured lenders first, it could not meet its obligations towards the unsecured creditors and that few of the unsecured creditors had approached the Hon'ble High Court for winding up of the Target Company.

16. In order to resolve the financial crisis and to protect the interest of all stakeholders, a Scheme of Compromise and Arrangement (the Scheme) between the Target Company and its Creditors under section 391 of the Companies Act, 1956 was proposed. Under the scheme, the Target Company has offered three settlement options to its Creditors towards full and final settlement and discharge of liabilities due to them.

17. The Target Company has submitted that the aforesaid scheme of compromise and arrangement was approved by the Hon'ble High Court. In this regard, I have perused the Order dated August 16, 2012 of the Hon'ble High Court of Judicature at Madras. The Hon'ble High Court was of the considered opinion that the said Scheme is just, fair and reasonable and had sanctioned the same and declared that the same was binding on the Target Company and all Creditors. As per the scheme (Schedule I), the total liability, as on the appointed date, was ₹1366.90 crores (both secured and unsecured debts).

18. I note that the Scheme required the Target Company to settle a 'Trust' for the benefit of all Creditors covered by the Scheme and the said Trust was supposed to act as the security trustee on behalf of the Creditors who have not opted for option 3 (immediate payment of 18.15% liability/dues). The scheme also provided that with effect from option 3 settlement date, a first pari passu charge shall stand created on the Specified Assets (more particularly set out in schedule II of the Scheme) in favour of the Trust, on behalf of the Creditors (secured as well as unsecured creditors of the target company) who have opted for a settlement of their dues under option I or option II. I also note that the Trust shall, in the event of default by the Company, meet its payment obligations under the Scheme and pursuant to the provisions of the Trust Deed, enforce the security interest created in favour of the Creditors.

19. I also note that the options were exercised, and accordingly the Target Company is required to pay ₹133 crores to its Creditors. I also note that the Target Company has submitted that due to its poor financial health, it is not in a position to borrow funds from the banking sector or raise capital through public or rights issue. Therefore, in order to partly meet its obligations under the aforesaid sanctioned scheme, the Target Company has, in its wisdom, proposed to raise capital (₹66 crore) through the issue and allotment of 3,72,76,700 warrants to the proposed acquirer on preferential basis, in two tranches. The first tranche of 1,49,10,700 warrants were already issued on October 11, 2012. As per the Target Company, in the second tranche, 2,23,66,000 warrants would be issued and the same would be done pursuant to SEBI exempting the proposed acquirer from the open offer requirements and other approvals. The Target Company plans to bridge the short fall in meeting its obligation through cash from operations and sale of its certain non-core assets/investments.

20. The promoter group of the Target Company holds 41.13% of the voting capital, in terms of the application. The proposed acquirer does not hold any shares as on date. However, the proposed acquirer is identified as a company belonging to the promoters/promoter group of the Target Company, which proposes to invest in the warrants to be issued by the Target Company. As per the details submitted to SEBI, Mr. Ashwin C Muthiah (a shareholder in the Target Company under the category 'promoter and promoter group' of the Target Company) holds 96% of the capital and Mrs. Valli Ashwin Muthiah holds 4% of capital of the proposed acquirer. By virtue of the substantial shareholding of the promoter (Mr. Ashwin C. Muthiah) of the Target Company in the proposed acquirer, the proposed acquirer becomes a 'promoter group' entity of the Target Company.

21. On allotment of the warrants in Tranche II and post conversion of 3,72,76,700 warrants (issued under Tranches I and II) into equity shares, the shareholding/voting rights of the promoter and promoter group would increase from 41.13% to 51.91%. The individual holding of the proposed acquirer would increase from nil% to 18.31%. Consequent to the same, though the individual increase of the acquirer would not trigger the Takeover Regulations, the aggregate increase in the voting rights of the promoter/promoter group, as mentioned above, would trigger regulation 3(2) of the Takeover Regulations.

22. Considering the facts and circumstances of the case and the reasons put forth by the Target Company/proposed acquirer and on the basis of documents submitted in this proceeding including the Report of the Panel of Experts, I am of the considered view that the Target Company would benefit from the funds raised through the issue and allotment of warrants. The Scheme of Compromise and Arrangement between the Target Company and its Creditors has been approved by the Hon'ble High Court, as mentioned above. The funds raised through the issue and allotment of warrants would be utilised to partly meet the obligations of the Scheme. I also note here that the Target Company has submitted that due to its poor financial health, it is not in a position to borrow funds from banks/financial institutions due to its continuing default in repayment obligations to its secured lenders and also due to its negative net worth.

23. I also note that in case, the Target Company is not able to make payments as per the Scheme, the security interest created in favour of the Trust (the Creditors) would be enforced for the realisation of their dues. Such a situation could lead to the eventual winding up of the Target Company, which would not be in the interests of the Target Company, its shareholders and all other stakeholders. I also note from the records, that the shareholders have, in the Annual General Meeting convened on September 26, 2012, resolved and gave consent for the issuance and allotment of up to 1,49,10,700 warrants convertible into equity shares of ₹10/- each fully paid up on preferential basis to the proposed acquirer. The second tranche of allotment of 2,23,66,000 warrants to the proposed acquirer was also consented to by the shareholders in the aforesaid AGM. However, the said issuance of warrants in the second tranche would be subject to the receipt of exemption (from making an open offer) from SEBI, as mentioned in the notice to the shareholders.

24. I also note that the allotment of warrants and their conversion into equity shares would not result in any change in control in the Target Company. The consequential increase in the shareholding of the promoter/promoter group would also not disturb the minimum public shareholding levels in the Target Company. The Target Company has also undertaken that the funds raised through the issuance of warrants shall be used to part fund the obligations of itself under the scheme of compromise and arrangement between itself and its creditors.

25. In view of the foregoing, taking into consideration the interests of the Target Company and its shareholders, I am of the considered view that this is a fit case where exemption needs to be granted to the proposed acquirer from complying with the open offer requirements stipulated under regulation 3(2) of the Takeover Regulations with respect to the proposed increase in the shareholding of the promoter/promoter group (including the proposed acquirer) of the Target Company pursuant to the issue/allotment of 3,72,76,700 warrants and their conversion into equity shares carrying voting rights. I, therefore, agree with the recommendation made by the Panel of Experts in the matter.

26. For the above reasons, I, in exercise of the powers conferred upon me under section 19 of the Securities and Exchange Board of India Act, 1992 and regulation 11(5) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, hereby exempt the proposed acquirer, AMI Holdings Private Limited, from the obligation to make an open offer under regulation 3(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, with respect to the proposed acquisition of equity shares pursuant to the conversion of 1,49,10,700 warrants and 2,23,66,000 warrants (which are proposed to be issued and allotted to the proposed acquirer).

27. The exemption is granted subject to the following conditions : (i) The proposed acquisition shall be in accordance with the provisions of the Companies Act, 1956, the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, the Listing Agreement and other applicable laws; (ii) The Target Company/proposed acquirer shall ensure compliance with their statements, disclosures and undertakings made in the application and in their subsequent correspondences; and (iii) This exemption shall not be construed as exemption from the requirements of disclosures under Chapter V of the Takeover Regulations, 2011 and compliance with the SEBI (Prohibition of Insider Trading) Regulations, 1992, the Listing Agreement or other applicable Acts, Rules and Regulations.

28. The application dated August 31, 2012 of the Target Company/proposed acquirer is accordingly disposed off.

PRASHANT SARAN WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA Date : February 22, 2013 Place : Mumbai