The objects of the Offer are to achieve the benefits of listing the Equity Shares on the Stock Exchanges and to carry out the sale of Equity Shares offered for sale by the Promoter Selling Shareholders. Further, our Company expects that the listing of its Equity Shares will enhance our visibility and brand image, and will provide a public market for Equity Shares in India. Our Company will not receive any proceeds from the Offer and all the proceeds from the Offer will be received by the Promoter Selling Shareholders, in proportion to the Equity Shares offered by the respective Promoter Selling Shareholders as part of the Offer. For details of Equity Shares offered by each Promoter Selling Shareholder, please see “Other Regulatory and Statutory Disclosures” on page 375 of this Red Herring Prospectus. Offer Related ExpensesThe total Offer related expenses are estimated to be approximately [●] million. All expenses with respect to the Offer will be borne by the Promoter Selling Shareholders in the manner mutually agreed upon amongst them. Payments, if any, made by our Company in relation to the Offer, shall be on behalf of the Promoter Selling Shareholders and such payments will be reimbursed by the Promoter Selling Shareholders to our Company in the manner mutually agreed upon amongst them in the Inter-se Agreement. The following table sets forth details of the break-up for the Offer expenses: 5.Book Building Procedure The Offer is being made through the Book Building Process, in reliance on Regulation 26(1) of the ICDR Regulations, wherein not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to QIBs. Provided that our Company and the Promoter Selling Shareholders in consultation with the BRLMs, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis, in accordance with the ICDR Regulations, of which one-third shall be reserved for domestic Mutual Funds subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription in the Anchor Investor Portion, the remaining Equity Shares shall be added to the QIB Portion (other than Anchor Investor Portion). 5% of the QIB Portion (excluding the Anchor Investor Portion) will be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion (other than Anchor Investor Portion) will be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not less than 15% of the Net Offer will be available for allocation on a proportionate basis to Non-Institutional Investors and not less than 35% of the Net Offer will be available for allocation on a proportionate basis to Retail Individual Investors, in accordance with the ICDR Regulations, subject to valid Bids being received at or above the Offer Price. The unsubscribed portion, if any, in HDFC AMC Employee Reservation Portion, the HDFC Employee Reservation Portion and the HDFC Shareholders Reservation Portion shall first be adjusted amongst these categories and any unsubscribed portion thereafter in aggregate shall be added back to the Net Offer. Under-subscription, if any, in any category, including the HDFC AMC Employee Reservation Portion, the HDFC Employee Reservation Portion and the HDFC Shareholders Reservation Portion, except in the QIB Portion, would be allowed to be met with spill over from any other category or combination of categories, at the discretion of our Company and the Promoter Selling Shareholders in consultation with the BRLMs and the Designated Stock Exchange. The Equity Shares, on Allotment, shall be traded only in the dematerialised segment of the Stock Exchanges. Investors should note that the Equity Shares will be Allotted to all successful Bidders only in dematerialized form. The Bid cum Application Forms which do not have the details of the Bidders’ depository account, including DP ID, Client ID and PAN, will be treated as incomplete and will be rejected. Bidders will not have the option of being Allotted Equity Shares in physical form.
15. Board of Directors
Under our Articles of Association, our Company is required to have at least three and not more than 15 Directors. Our Company currently has 12 Directors, comprising six Independent Directors, one Managing Director and five Non-Executive Directors, which includes one woman Director. In terms of SEBI’s circulars dated November 30, 2017 and February 7, 2018, our existing Independent Directors can hold office for a maximum of 10 years, however, those Independent Directors who have held office for nine years or more, as on November 30, 2017, may continue to hold office for an additional period, not exceeding two years from November 30, 2017. Further, no independent director can hold office for more than two consecutive terms, however, such an independent director shall be eligible for re- appointment after a cooling-off period of three years. Brief profiles of our Directors Deepak Parekh is a Non-Executive Director and Chairman on our Board. He has been on our Board since July 4, 2000. He is also the non-executive director and chairman of one of our Promoters, HDFC. He is an associate of the Institute of Chartered Accountants (England and Wales). He is on the board of several leading companies across diverse sectors. He has won several awards, which includes Padma Bhushan conferred by Government of India in 2006, ‘Bundesverdienstkreuz’, which is Germany’s Cross of the Order of Merit, being one of the highest distinction by the Federal Republic of Germany, in 2014, “Knight in the Order of the Legion of Honour”, one of the highest distinction by the French Republic, in 2009 and he was also the first international recipient of the Outstanding Achievement Award by Institute of Chartered Accountants in England and Wales, in 2010. Keki Mistry is a Non-Executive Director on our Board. He has been a Director on our Board since December 24 2007. He is also the vice chairman and chief executive officer of one of our Promoters, HDFC. He is a fellow of the Institute of Chartered Accountants of India. He joined HDFC in 1981. He was appointed as an executive whole-time director of HDFC in 1993, as the deputy managing director in 1999 and as the managing director with effect from 2000. He was re-designated as the vice-chairman and managing director of HDFC in October 2007 and as the vice chairman and chief executive officer, with effect from January 1, 2010. Some of his recent recognitions include, being awarded “Best Independent Director Award 2014” by Asian Centre for Corporate Governance & Sustainability, the Best CEO Financial Services (Large Companies) 2014 by Business Today magazine, honoured with the ‘CA Business Achiever of the year’ award in the Financial Sector by the Institute of Chartered Accountants of India in 2011 and CNBC TV18's - CFO of the Year for 2008. He is the chairman of the CII National Council on Corporate Governance and a member of the Committee on Corporate Governance set up by SEBI. Renu Karnad is a Non-Executive Director on our Board. She has been on the board of our Company since July 4, 2000. She is also the managing director of one of our Promoters, HDFC. She holds a bachelor’s degree in Law from the University of Mumbai and a master’s degree in Economics from the University of Delhi. She is a Parvin Fellow – Woodrow Wilson School of International Affairs, Princeton University, USA. She joined HDFC in 1978 and was appointed as executive director in 2000. She was re-designated as the Joint Managing Director of HDFC in 2007 and was appointed as the managing director with effect from January 1, 2010. Some of her recent recognitions include, being awarded ‘Outstanding Woman Business Leader’ at the CNBC-TV18 Indian Business Leader Awards 2012, being part of the 25 Most Influential Women Professionals in India – India Today Magazine’s power list 2011, being featured amongst the list of ‘25 top non-banking women in finance’ by U.S. Banker magazine and Wall Street Journal Asia adjudged her among the ‘Top Ten Powerful Women to Watch Out for in Asia’. Norman Keith Skeoch is a Non-Executive Director on our Board and has been appointed as a nominee of Standard Life Investments. He has been on our Board since October 26, 2005. He holds a Bachelor of Arts degree in Economics from University of Sussex, United Kingdom and Master of Arts degree in Economics from University of Warwick. He has been on the board of Standard Life Aberdeen plc (formerly known as Standard Life plc) since 2006 and was appointed chief executive officer in 2015, having been the chief executive officer at Standard Life Investments Limited, one of our Company’s Promoters, since 2004. He is a non-executive director of the Financial Reporting Council in the United Kingdom. James Baird Aird is a Non-Executive Director on our Board and has been appointed as a nominee of Standard Life Investments. He has been on our Board since April 23, 2009. He holds a degree in Economics from Edinburgh University. He has been the Chief Executive of Ignis Investment Services Limited, since 2015, where he is responsible for the day to day management of the business. In addition, he is Head of Corporate Development for Standard Life Aberdeen plc (formerly Standard Life plc) where he focuses on developing new international business, joint ventures and mergers and acquisitions and has responsibility for corporate finance. He joined Standard Life Aberdeen plc in 1997 and has held a number of senior roles within Standard Life Aberdeen plc including as Chief Executive of Standard Life Investments mutual fund business and as a director of Standard Life Investments (Asia) in Hong Kong. Hoshang Billimoria is an Independent Director on the Board. He has been on our Board since July 4, 2000. He holds a bachelor’s degree in Commerce from University of Bombay and he is a fellow of the Institute of Chartered Accountants (England and Wales) and of the Institute of Chartered Accountants of India. He is presently the chief executive officer of Next Gen Publishing Private Limited. Prior to this, he was associated with Tata Infomedia Limited and at the time of his resignation, he was its vice-chairman and managing director. He was also the deputy chief executive officer with Tata Sons Limited. He was a partner with M/s S.B. Billimoria and Co. He was the president of the Council for Fair Business Practices. Humayun Dhanrajgir is an Independent Director on our Board. He has been a Director on our Board since July 4, 2000. He holds a bachelor’s degree in chemical engineering from Loughborough University, M.I. Chem E (U.K.), C.Eng (U.K.) and has completed the advanced management programme from Harvard Business School. He has held various senior management positions in the erstwhile Glaxo India Limited, became the managing director in 1990 and retired as executive vice-chairman. He was also the president of the Organisation of Pharmaceuticals Producers of India. He also served as a member of the Bombay Chamber of Commerce and Industry. Subsequent to that he was the managing director of Lupin Laboratories Limited. He was also the managing director of Kodak India Limited for a five-year term and retired in October 2000. He was also with Burmah Shell India from 1964 to 1969 having served in senior positions. He is a trustee of Breach Candy Hospital Trust. Currently, he is the Chairman of Emcure Pharmaceuticals Limited and Next Gen Publishing Private Limited and serves on the boards of certain companies including listed entities as an independent director. P. M. Thampi is an Independent Director on our Board. He has been on our Board since July 4, 2000. He holds a bachelor’s degree in Science from University of Madras, a post-graduate diploma in Chemical Engineering from Battersea Polytechnic London. He is a corporate member of Institution of Chemical Engineers and has been conferred with the title “F.I. Chem. E.”. As a corporate member of the Institution of Chemical Engineers on the date of the grant of a Royal Charter to The Council of Engineering Institutions, he is entitled to use the title “Chartered Engineer”. He was the chairman and managing director of BASF India Limited for over 13 years. Prior to this, he was with Imperial Chemical Industries India (Private) Limited. His last position held at Imperial Chemical Industries (India) Private Limited was as the chief executive of the explosives division. He is also a director on the board of various companies. Deepak Phatak is an Independent Director on our Board. He has been on our Board since July 4, 2000. He holds a bachelor’s degree in Electrical Engineering from University of Indore, a master’s degree in Technology from Indian Institute of Technology, Bombay (“IIT, Bombay”) and a Doctorate in Philosophy from IIT, Bombay. He has been associated with the IIT, Bombay and is presently a professor in the department of computer science & engineering. He is on the board of various other companies. Some of his recognitions include being awarded with a ‘Lifetime Achievement Award” in 2003 by Skoch, “Lifetime Achievement Award” conferred by Dataquest in 2008, “Excellence in Teaching” award by the IIT, Bombay in 2009, “Padma Shri” award conferred by the Government of India in 2013 for his contribution in science and technology, “Lifetime Achievement Award” conferred by the IIT, Bombay in 2014, “Lifetime Achievement Award” conferred by InterOp, Mumbai in 2014 and “Lifetime Achievement Award” conferred by Computer Society of India, in 2018. Rajeshwar Bajaaj is an Independent Director on our Board. He has been a director on our Board since October 26, 2005. He holds a bachelor’s degree in Science. He has been associated with Lerch Bates & Associates Inc. He was the chairman of the board of directors and managing director of Otis Elevator Co. (India) Limited. Thereafter, he had worked with Special Olympics Inc. as the managing director, Asia Pacific. He is also a director on the board of various companies. Vijay Merchant is an Independent Director on our Board. He has been a director on our Board since December 24, 2007. He holds a bachelor’s degree in Commerce from University of Bombay and has completed the post graduate diploma in Business Administration from Indian Institute of Management, Ahmedabad. He is a partner of Dynam Plastics. He has worked with Mafatlal Group of Companies in Administration. He was the president of Indian Plastics Institute and was the former president of the All India Plastic Manufacturing Association. He was the founder member of Indian Centre for Plastics in Environment. He was also associated with Indian Institute of Packaging (Ministry of Commerce), Indian Merchants Chamber, Enviroplast Plastindia Foundation, Indian Plastics Institute, The Plastic Export Promotion Council. He was the honorary editor of Industry Journal Plastics News. He has been conferred with the “Meritorious Service Award” by the Indian Plastics Institute in 2002, the “Best Presentation” award by Identiplast in 2007, an award for appreciation and gratitude by HDFC Bank and a golden jubilee year award by All India Plastics Manufacturers Association. Milind Barve is the Managing Director and an Executive Director of our Company since July 4, 2000. He has a bachelor’s degree in Commerce from University of Poona and he is also a fellow of the Institute of Chartered Accountants of India. He has been associated with HDFC in the capacity of general manager – treasury where he headed the treasury operations at HDFC for 14 years and was responsible for the management of HDFC’s treasury portfolio and for raising funds from financial institutions and capital markets. He was also the head of marketing for retail deposit products and responsible for investment advisory relationships for Commonwealth Equity Fund Mutual Fund and Invesco India Growth Fund. Borrowing powers of our Board In accordance with the provisions of the Articles of Association, the Board may, borrow or raise any monies required for the purpose of our Company upon such terms and in such manner with or without security as it may determine. In this regard, our Company, at its meeting of the Board dated April 16, 2018 and its meeting of the shareholders dated April 17, 2018 has resolved that subject to the provisions of the Companies Act, 2013 including without limitation Section 180(1)(c) of the Companies Act, 2013 and the rules and regulations issued thereunder, the Board is authorised to borrow money for the purpose of the business of our Company up to an amount of ₹ 20,000 million.
13. Litigation involving our Company
Outstanding civil litigation involving our Company As regards civil litigation, given the nature and extent of operations of our Company, our Board has, pursuant to its resolution dated June 22, 2018 considered outstanding civil litigation involving our Company wherein the aggregate amount involved exceeds the lower of 1% of the total revenue or 5% of the profit after tax of our Company as per the Restated Financial Information of our Company for the financial year ended March 31, 2018 to be material. Accordingly, we have only disclosed all outstanding civil litigations involving our Company wherein the aggregate amount involved exceeds ₹186.72 million individually. In case of pending civil litigation proceedings wherein the monetary amount involved is not quantifiable, such litigation has been considered ‘material’ only in the event that the outcome of such litigation is expected to have a material adverse bearing on the business, operations, financial position or reputation of our Company. There is no outstanding civil litigation involving our Company wherein the amount involved exceeds ₹ 186.72 million. Further, there is no outstanding litigation, whose outcome would have a material adverse bearing on the business, operations, financial position or reputation of our Company. Outstanding civil litigation involving HDFC Given the nature and extent of operations of HDFC, our Board has, pursuant to its resolution dated June 22, 2018 considered the outstanding civil litigation involving HDFC which exceeds 1% of the consolidated profit after tax of HDFC, as per the consolidated audited financial information of HDFC, for the financial year ended March 31, 2018, to be material. Accordingly, we have only disclosed all outstanding civil litigations involving HDFC wherein the aggregate amount involved exceeds `1.36 billion individually. In case of pending civil litigation proceedings wherein the monetary amount involved is not quantifiable, such litigation has been considered ‘material’ only in the event that the outcome of such litigation has a material adverse bearing on the business, operations, financial position or reputation of our Company. There is no outstanding civil litigation involving HDFC wherein the amount involved exceeds ₹1.36 billion. Further, there is no outstanding litigation, whose outcome would have a material adverse bearing on the business, operations, financial position or reputation of our Company.