SME Primer Privileged & Confidential

2 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Outline SME Listing - Background SME Listing - An Overview of Key Requirements & Eligibility Norms Core advantages of SME Listing SME Listing - Coming up in a BIG Way… Pantomath – Companion in Process Annexures

3 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SME Listing – Background

4 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SMEs – The backbone of Indian economy Contribution to GDP 8.7 % Share of Industrial output 45 % Share of Exports 40 % Total Employment 69 million Job creation every year 1.3 million Source : Ministry of Micro, Small and Medium Enterprises, GOI Nation’s 1.3 million SMEs account for 40% of India's total exports At 48 million, India is second to China in number of SMEs SMEs employ close to 40% of India's workforce & contributes 45% to India's manufacturing output SMEs are expected to drive the next-level growth of Indian economy provided they have enabling platform and avenues SMEs face major problem of capital inadequacy This problem can be tackled through Capital Market

5 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Valley of Death Pre seedExpansionEarly growthSeed/Start up Very risky Less risky Angel Investors Govt. Grants Bank Credits Personal Finances Angel Investors Govt. Grants Bank Credits Venture Cap PE IPO Debt PE Partnership Funding Options Lifecycle of SME

6 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SME Listing Background… BSE and NSE launched their respective platform for SMEs; MCX too is gearing up for SME Exchange The move aims at providing an opportunity to SME entrepreneu rs to raise growth capital and reap benefits of listed space Both BSE & NSE leverage their existing ‘equity platform’ for SME exchange platform As per estimate of SME Chamber of India, over 5000 SMEs have the potential for listing A facilitative framework for SME listing

7 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SME Listing – Evolution… SEBI lays down broad framework for SME listing platform 5-Nov-08 PM Task Force recomm- ends SME listing exchange Jan-10 SEBI circular on Guideline s for market making 26-Apr-10 SEBI Circular rolling out model listing agreement for SMEs 17-May-10 Amend- ments in SEBI Regulations (ICDR, Merchant Bankers etc. 18-May-10 SEBI Master Circular on SME exchange & Market Making 31-Dec-10 BSE Eligibility Norms for SME listing 19-Apr-12 BSE SME Exchange launch 13-Mar-12 SEBI circular standardizi ng lot size for SME exchange 21-Feb-12 SEBI approval to NSE SME Exchange 14-Oct-11 Amend- mends in Listing Agreeme nt 5-Oct-11 SEBI approval to BSE SME Exchange 27-Sep-11

8 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SME Listing - An Overview of Key Requirements & Eligibility Norms

9 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SME Listing - Key Requirements & Eligibility Norms Capital threshold for Listing SEBI BSE NSE SME Exchange SME/Main Board Main board 10 Crores 25 Crores Post Issue Face Value Capital ParticularsRequirement Minimum application amount / trading lot INR 1 Lac Underwriting 100% Mandatory (of which 15% to be done by MB in his own account) Market making (to be undertaken by MB) Through Exchange-registered market makers for min 3 years Public Shareholding Min. 25% Min. 50 investors No post-listing continuous requirement Provisions for migration to / from Main Board from / to SME Exchange Offer doc not subject to SEBI vetting Refer Annexure for key norms of SEBI ICDR

10 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Mandatory facilitation of trading in Demat securities Certificate that no winding petition or reference to BIFR Mandatory corporate website Promoters to attend to interview with Listing Advisory Committee No change in promoter in preceding 1 year Net Tangible Assets : INR 1 crore (as per latest audited results) Net Worth (excl. Rev. Reserve) : INR 1 crore or 3 crore, if no track record Track record of distributable profits for at least 2 years out of preceding 3 completed FYs Max : INR 25 crore Min : INR 1 crore Post Issue Capital (FV) Other Requirement Track Record SME Listing - Key Requirements & Eligibility Norms SEBI BSE NSE Refer Annexure for key norms of LA

11 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Same as BSE plus additional certification / disclosures on litigation etc. Track record of at least 3 years Positive cash accruals (EBDT) from operations and positive net worth for at least 2 FYs preceding the application In case the above conditions are not fulfilled, Exchange Authority (MD & Joint MD) to decide Same as BSE Post Issue Capital (FV) Other Requirement Track Record SME Listing - Key Requirements & Eligibility Norms SEBI BSE NSE

12 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity BSE SME vs. Main Board ParametersMain BoardSME Exchange Post – issue paid up capital Min INR 10 crore Min INR 1 crore; Max INR 25 crore Minimum Allotees in IPO IPO underwriting Non Mandatory (Under 50% compulsory subscription to QIB’s) Mandatory (100% underwritten with MB underwriting 15%) IPO GradingMandatoryNot mandatory Track recordStringent track record normsRelaxed track record norms Offer Document vettingBy SEBIBy Exchange IPO Application SizeINR – INR 15000Min. INR 1 lac IPO Time frame6 months2 – 3 Months Reporting RequirementsQuarterlyHalf yearly “SME Exchange has a winning edge over Main Board”

13 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Core Advantages of SME Listing

14 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Easy capital & fund availability Avoid diminution in value of business M&A Currency Better liquidity – entry & exit platform No tax on LTCG STCG Tax 15% - reduced rate No tax on equity infusion in the company No tax on ‘distress business’ purchase Enhancing worth ESOPs – Talent retention tool Visibility – Profile building Governance - Internal systems Core Advantages of Listing

15 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SME Listing – Coming up in a BIG way…

16 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity * Closing Price as on June 2, 2014 BSE SME Index Return of 229% in 2013 So far, 50 Companies have been listed on BSE SME Exchange and 4 on NSE Emerge Exchange SME LISTING - Coming up in a BIG Way… Sunstar Realty GCM Securities Looks Health Care Eco Friendly A. Market Cap INR Crores Pre Issue Net Worth Issue Size Market Capitalization* B. Price Pattern INR Per Share Issue Price CMP (Face Value INR 10)*

17 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Pantomath – Companion in Process End-to-end assistance and hand-holding by expert & dedicated Team – TEAM PANTOMATH End-to-end assistance and hand-holding by expert & dedicated Team – TEAM PANTOMATH Pre-IPO Capital Restructuring and Preparation 1. Preparation of Offer Document 2. Offer Management 3. Listing Assistance 4.

18 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Appointment of Merchant Banker Due Diligence & Pre-IPO preparation Preparation of Offer Document Marketing Strategy Appointment of other intermediaries Filing of Offer Document with BSE & Others Issue Pricing & Allocation Listing & Market Making Restructuring of capital 2 SME Listing – Way Forward…

19 Let’s Take It Forward…. CAPITAL ADVISORS PRIVATE LIMITED SEBI Registered Category I Merchant Bankers Progress with Values Disclaimer All data and information is provided for informational purposes only and is not intended for any factual use. It should not be considered as binding / statutory provisions. Neither Pantomath Capital Advisors nor any of its group company, directors, or employs shall be liable for any of the data or content provided for any actions taken in reliance thereon. Corporate Office 108, Madhava Premises Co-operative Society Limited, Bandra Kurla Complex, Bandra (East), Mumbai Landline:(022) , Fax:(022)

20 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Annexures Pantomath’s End-to-end Services

21 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Phase- I: Pre-IPO Capital Restructuring & Preparation Under the phase, we shall assist you in preparing for IPO and listing on SME Exchange. The services under this phase shall include the following :  Assistance in devising appropriate capital restructuring plan;  Assistance in statutory compliance management and setting up minimum corporate governance practices expected by a listed company from the perspective of the following rules / regulations :  Companies Act, 1956  Listing Agreement applicable for SMEs  BSE listing norms  SEBI ICDR Regulations;  Assistance in appointment of market intermediaries and other parties including the following;  Underwriters  Market Makers  Registrars to Issue  Bankers to Issue  PR Agency, Printer etc.;  Assistance in devising a complete IPO plan and strategy including the likely post-issue shareholding distribution pattern.

22 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Phase- II: Documentation Preparation We shall assist you in drafting of IPO Offer Document and other important agreements, documents and resolutions necessary for an SME IPO process. An indicative list of important documents is as under for easy understanding :  IPO Offer Document,  Tripartite Agreement with NSDL, CDSL and Registrar to Issue,  Underwriting Agreement,  Market Making Agreement,  Agreement with Bankers to Issue,  Agreement with Registrar to Issue,  Board / Shareholders’ Resolutions,  Certificates, Letters of Representations etc,  Draft of public advertisements, notices etc,  Forms / Applications to be filed with BSE, ROC and other regulatory office.

23 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Phase- III: Offer Management Once all pre-IPO preparations would be over including meeting the eligibility criteria, appointment of other market intermediaries, and drafting of offer document, we shall initiate the actual process of IPO. Our services under the phase shall include end-to-end IPO activities :  Filing of IPO Offer Document with BSE and other regulatory offices like SEBI and ROC;  Follow-up with BSE and ROC for their approvals;  Coordinating and assistance in interview with SE Listing Advisory Committee,  Assistance in execution of agreements with other market intermediaries;  Assistance in launch of IPO and coordinate with other parties including PR Agency, Printers for adequate public advertisement, distribution of application forms as required statutorily;  Monitoring the flow of applications and keeping a real-time discussion with the management of the Company;  Coordinating with bankers and registrars for deposit of application moneys and finalization of allotment list in consultation with the stock exchange.

24 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Phase- IV: Listing Assistance Finally, post IPO closure and finalization of allotment, we shall initiate the activities for listing of equity shares of the Company on SME Exchange. Our scope of services under this phase shall include the following:  Assistance in completing allotment of shares to the successful allotees,  Preparing listing application,  Filing of listing application with Stock Exchange(SE),  Follow-up with SE and obtain listing approval,  Assist in trading formalities and obtain SE’s trading approval,  Assist in making required public disclosures as required statutorily,  Coordinating for continuous market making for 3 years.

25 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity Annexures Some Key Norms of Listing Agreement & SEBI ICDR

26 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SEBI ICDR As Applicable to SMEs  SEBI ICDR applies to SME listing with specific relaxations  Offer document requirements and eligibility norms relaxed  Appointment of Merchant Banker, and other intermediaries required  Lead Merchant Banker to the issue,  Rights, obligations and responsibilities relating to disclosures, allotment, refund, and underwriting obligations  Book building or fixed priced issue permitted  Lock-in conditions apply  20% of post-issue capital to be locked in for 3 years; balance promoter shareholding to be locked in for 1 year  Non-promoter pre-IPO shareholding to be locked in for 1 year with exception to ESOP shares and shares held by VCF or FVCIs for more than 1 year pre IPO  Locked-in shares permitted to be transferred inter se promoters incl. new promoter(s)

27 Pantomath Capital Advisors Pvt. Ltd. (SEBI Registered Category I Merchant Bankers) – A Pantomath group entity SME Listing Agreement  All SMEs getting listed need to enter into Listing Agreement (LA) with the relevant stock exchange.  BSE and NSE has adopted model LA released by SEBI.  Key Requirements include the following :  Half-yearly results (Audit / limited review)  Half-yearly shareholding pattern  Advance notice of Board meetings with specified agenda (e.g. dividend, bonus, buy back etc.)  In-principle approval for any further issuance of shares  Disclosure of price sensitive information  Annual report containing inter alia full financials, consolidated financials, related party disclosures etc. to be uploaded on corporate website  Full annual report to be ed; Abridged annual report to shareholders not on ids  Compulsory migration to main board after the cut- off ceiling