DRAFT LETTER OF OFFER August 30, 2016 For the Eligible Equity Shareholders of the Company only IP RINGS LIMITED Our Company was incorporated as ‘IP Rings Limited’ on January 30, 1991, as a public limited company under the Companies Act, 1956, registered with the Registrar of Companies, Chennai, Tamil Nadu. Our Company received its certificate of commencement of business on July 5, 1991. CIN: L28920TN1991PLC020232. Registered Office: D 11/12, Industrial Estate Maraimalai Nagar – 603 209, Tamil Nadu, India Tel No: 044-27452853 / 044-27452929; Fax No.: 044-27452560 Contact Person: Mrs. S Priyamvatha, Company Secretary and Compliance Officer E-mail: [email protected], Website: www.iprings.com FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY DRAFT LETTER OF OFFER ISSUE OF [●] EQUITY SHARES OF FACE VALUE OF RS. 10 EACH (“RIGHTS EQUITY SHARES”) OF IP RINGS LIMITED (THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF RS. [●] PER RIGHTS EQUITY SHARE (INCLUDING A PREMIUM OF RS. [●] PER RIGHTS EQUITY SHARE) NOT EXCEEDING AN AMOUNT OF RS. 5,000 LAKHS BY THE COMPANY TO THE ELIGIBLE EQUITY SHAREHOLDERS IN THE RATIO OF [●] RIGHTS EQUITY SHARES FOR EVERY [●] EQUITY SHARES HELD ON THE RECORD DATE, I.E. [●] (THE “ISSUE”). THE ISSUE PRICE OF EACH RIGHTS EQUITY SHARE IS [●] TIMES THE FACE VALUE OF THE RIGHTS EQUITY SHARE. GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in relation to the Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including the risks involved. The securities being issued in the issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”) nor does the SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to the section titled “Risk Factors” from page 10 before making an investment in this Issue. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Draft Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The existing Equity Shares of our Company are listed on the BSE Limited (“BSE”). Our Company has received an ‘in-principle’ approval from the BSE for listing the Rights Equity Shares arising from this Issue pursuant to its letter dated [●]. For the purposes of the Issue, the Designated Stock Exchange is the BSE. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE Axis Capital Limited Link Intime India Private Limited 1st Floor, Axis House, C- 13, Pannalal Silk Mills Compound, C-2, Wadia International Centre, L.B.S. Marg, P.B. Marg, Worli, Bhandup (West), Mumbai 400 025 Mumbai – 400 078 Maharashtra, India Maharashtra, India Contact Person: Lohit Sharma Contact Person: Dinesh Yadav Tel: + 91 22 4325 2183 Tel: +91 22 6171 5400 Fax: +91 22 4325 3000 Fax: +91 22 2596 0329 Email: [email protected] Email: [email protected] Website: www.axiscapital.co.in Website: www.linkintime.co.in Investor Grievance E-mail: [email protected] Investor Grievance ID: [email protected] SEBI Registration Number: INM000012029 SEBI Registration No.: INR000004058 ISSUE SCHEDULE LAST DATE FOR REQUEST FOR ISSUE OPENS ON ISSUE CLOSES ON SPLIT APPLICATION FORMS [●] [●] [●] TABLE OF CONTENTS SECTION I – GENERAL ............................................................................................................................... 1 DEFINITIONS AND ABBREVIATIONS .............................................................................................. 1 NOTICE TO INVESTORS ...................................................................................................................... 6 CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND CURRENCY OF PRESENTATION .................................................................................................................................... 7 FORWARD LOOKING STATEMENTS ................................................................................................ 9 SECTION II – RISK FACTORS ................................................................................................................. 10 SECTION III- INTRODUCTION ............................................................................................................... 31 THE ISSUE ............................................................................................................................................ 31 SUMMARY FINANCIAL STATEMENTS .......................................................................................... 32 GENERAL INFORMATION ................................................................................................................ 36 CAPITAL STRUCTURE ....................................................................................................................... 40 OBJECTS OF THE ISSUE .................................................................................................................... 53 STATEMENT OF TAX BENEFITS ..................................................................................................... 58 SECTION IV – ABOUT THE COMPANY ................................................................................................ 60 HISTORY AND CORPORATE STRUCTURE .................................................................................... 60 OUR MANAGEMENT .......................................................................................................................... 61 SECTION V – FINANCIAL INFORMATION .......................................................................................... 65 FINANCIAL STATEMENTS ............................................................................................................... 65 ACCOUNTING RATIOS AND CAPITALISATION STATEMENT ................................................ 100 STOCK MARKET DATA FOR EQUITY SHARES .......................................................................... 101 MATERIAL DEVELOPMENTS ......................................................................................................... 103 WORKING RESULTS ........................................................................................................................ 104 SECTION VI – LEGAL AND OTHER INFORMATION ...................................................................... 105 OUTSTANDING LITIGATIONS AND OTHER DEFAULTS .......................................................... 105 GOVERNMENT AND OTHER STATUTORY APPROVALS ......................................................... 106 OTHER REGULATORY AND STATUTORY DISCLOSURES ....................................................... 107 SECTION VII – OFFERING INFORMATION ...................................................................................... 116 TERMS OF THE ISSUE ...................................................................................................................... 116 SECTION VIII – STATUTORY AND OTHER INFORMATION ........................................................ 147 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................ 147 DECLARATION ................................................................................................................................. 149 SECTION I – GENERAL DEFINITIONS AND ABBREVIATIONS In this Draft Letter of Offer, unless the context otherwise requires, the terms defined and abbreviations expanded below shall have the same meaning as stated in this section. References to statutes, rules, regulations, guidelines and policies will be deemed to include all amendments and modifications notified thereto. The following list of defined terms is intended for the convenience of the reader only and is not exhaustive. Company and Industry Related Terms Term Description “IPRL” or “the Company” or “our IP Rings Limited Company” or “we” or “us” or “our” or “Issuer” Articles / Articles of Association / Articles of Association of our Company, as amended AoA Statutory Auditor The statutory auditors of our Company, namely, R.G.N. Price & Co., Chartered Accountants Board / Board of Directors / Our The board of directors of our Company or any duly constituted Board committee thereof, as the context may require Director(s) Any or all director(s) of our Company, as the context may require Equity Share(s) The equity share(s) of our Company having a face value of Rs. 10 each, fully paid up Group Companies Such companies as covered under the applicable accounting standards and also other companies as considered material by the Board of the Issuer. In accordance with the policy adopted by the Board vide its resolution dated July 28, 2016, the companies listed herein below, excluding the companies with whom