corporate governance articles of association articles of association

8/8/2019 Corporate Governance Articles of Association Articles of Association

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(THE COMPANIES ACT, 1956)

(Public Company Limited by Shares)

ARTICLES OF ASSOCIATION

OF

BHARTI AIRTEL LIMITED1. Unless the context or the definition herein contained otherwise requires, words or expressions

contained in these Articles shall bear the same meaning as in the Act or any statutory modificationthereof for the time being in force at the date at which these Articles become binding on theCompany.

DEFINITIONS; INTERPRETATIONS

1.1 Actshall mean the Companies Act, 1956, as amended and modified from time to time;

1.2 Affiliate, shall mean, with respect to any Person, any other Person that, directly or indirectly,

controls, is controlled by, or is under direct or indirect common control with, such Person, oris a director or officer of such Person or of any Person who would otherwise qualify as an

Affiliate of such Person pursuant to this definition; provided that an Affiliate shall include anyentity that, directly or indirectly (including through limited partner or general partner interests),owns more than 20% of voting equity or interest of such Person or is similarly owned by suchPerson. For purposes of this definition, the term control when used with respect to anyPerson means the possession, directly or indirectly, of the power to direct or cause thedirection of the management and policies of such Person, whether through the ownership ofvoting securities or by contract or otherwise.

1.3 Intentionally omitted.

1.4 Alternate Directorshall have the meaning ascribed to it in Article 127;

1.5 Annual Reportshall mean the annual report referred to in Article 100;

1.6 Approved Accounting Policy shall mean the Companys accounting policy as stated inthe audited accounts of the Company as at the period ending March 31, 2000.

1.7 Approved Business Plan shall mean the plan referred to in Article 138(b)(xii).

1.8 Approved Dividend Policy shall mean, with respect to the Company or any of itsSubsidiaries, the dividend policy of the Company or such Subsidiary, as at the date of these

Articles or any new dividend policy established in respect of the Company or any such Subsidiaryin accordance with these Articles, and, in each case, as the same may be amended ormodified, from time to time, in accordance with these Articles or any other agreement betweenthe Company Shareholders;.

1.9 Articlesshall mean the Articles of Association of the Company as amended, modified orsupplemented from time to time;

1.10 Auditorsmeans and includes those persons appointed as such for the time being by theCompany.

1.11 BEL shall mean Bharti Enterprises Private Limited, a company established and existingunder the laws of India.

1.12 BGL shall mean Bharti Global Limited, a company established and existing under the laws ofJersey, Channel Islands, with its registered office at PO Box 811, Queen House, Don Road,St. Hellier, Jersey, Channel Islands.


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1.13 Bharti or BTLshall mean Bharti Telecom Limited, a company duly incorporated and existingunder the provisions of the Act with its registered office at Plot No. 6, Sector - 34, EHTP,Gurgaon 122001, Haryana, India.

1.14 Bharti Entities shall mean, collectively, BEL, BGL, BTL, the Company and Bharti OverseasTrading Company.

1.15 Bharti Group shall mean, collectively, BEL and all of its indirect and direct Subsidiaries,and without limitation, shall include BTL, BGL, the Company, Bharti Aquanet Limited, BhartiHexacom Limited, Satcom Broadband Equipment Limited, Bharti Broadband Limited, BhartiComtel Limited, Bharti Overseas Trading Company and Indian Continent Investment Limited.

1.16 Bharti Shareholders shall mean, collectively, BEL, BGL and Bharti Overseas TradingCompany.

1.17 Boardshall mean the Board of Directors of the Company;

1.18 Intentionally omitted;

1.19 BTL Nominees shall mean the nominees of BTL.

1.20 BTL Shares shall mean any or all of the ordinary voting class of shares of BTL having parvalue of Rs. 10, and shall include all shares derived there from, or consolidation or subdivisionof BTLs share capital or otherwise, and a BTL Share shall mean any of them.

1.21 Business Day shall mean each Monday, Tuesday, Wednesday, Thursday and Friday whichis not a day on which banking institutions in the City of New Delhi, India, and Singapore areauthorised or obligated by law or executive order to close.

1.22 Capitalmeans the share capital for the time being raised or authorised to be raised forthe purpose of the Company.

1.23 Capital Expenditures shall mean, with respect to any Person, all expenditures by suchPerson which should be capitalised in accordance with Indian GAAP.

1.24 Chairmanshall have the meaning described in Article 104(1);

1.25 Change of Control shall mean (a) with respect to the STI Shareholder and in the eventand for so long as the STI Shareholder owns voting shares in the Company, any eventwhereby Singtel either ceases to (i) hold, directly or indirectly, more than 50% of the issuedand outstanding voting shares of the STI Shareholder or (ii) possess, directly or indirect ly,the power to direct or cause the direction of management of the STI Shareholder other thanthrough the exercise of veto rights by another Person; and (b) with respect to BTL, the firstto occur of any of the following events:

(i) any Person, or group of Persons (other than any Persons that are members of theBharti Group or the STI Group) acting in concert, who, directly or indirectly, (a) acquire(s)or obtain(s) any warrant, option or any other right which when exercised entitles suchPerson or Persons to hold, more than 50% of the then issued and outstanding BTL

Shares, and/or (b) acquire(s) or obtain(s) the right, whether through an agreement orotherwise, to direct or cause the direction of management of BTL other than throughthe exercise of veto rights; or

(ii) any business combination, merger, amalgamation or consolidation by BTL with anyPerson or group of Persons (other than any Persons that are members of the BhartiGroup or the STI Group) whereby such Person or Persons possess(es), directly orindirectly, the power to direct or cause the direction of management of BTL other thanthrough the exercise of veto rights.

1.26 Claims shall mean any and all administrative, regulatory, judicial or similar actions, suits,demands, demand letters, claims, liens, notices of non-compliance or violation, investigationsor proceedings.


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1.27 Companyshall mean Bharti Airtel Limited, a public Limited Company incorporated andexisting under the provisions of the Act.

1.28 Company Shareholdershall mean each of Brentwood, the STI Shareholder and Bhartiand any other person who is registered as a holder of Shares in the register of members ofthe Company and also is a party to a shareholders agreement between the CompanyShareholders.

1.29 Core Network Elements shall mean radio spectrum, transmission network and equipment,microwave equipment and telecommunications base stations, monopoles and towers.

1.30 Corporate Data Network Service shall mean internet protocol-virtual private networkservices, leased lines services, business dial-up plan services, business digital subscriberline services, business voice over internet protocol services, business facsimile over internetprotocol services, web-hosting services, collocation and facilities management (data centre)services, remote access and security services and any other related business services otherthan V-SAT Services.

1.31 Deadlock shall mean with respect to any action proposed to be taken by the Board of

Directors, the occurrence of the affirmative votes and the negative votes of the Directors, asthe case may be, being equal.

1.32 Debt shall mean, with respect to any Person or an Existing Project or New Project as atany time, in the case of such Person, all long term indebtedness of such Person as would bereflected on its balance sheet at such time (prepared in accordance with Indian GAAP asconsistently applied in the preparation of such Persons balance sheet), including any short-term component of such long-term indebtedness whether or not such short-term componentwould be included as long-term indebtedness under Indian GAAP, excluding (i) any contingentliabilities as determined in accordance with Indian GAAP, (ii) any such contingent liability thatis a financial or performance guarantee, and (iii) in the case of such project all moniesproposed to be invested in such project and funded from loans or other similar indebtedness.

1.33 Debt Equity Factor

shall mean, with respect to any Person at any time, the calculatedresult of: the Debt Equity Ratio of such Person or project, as the case may be, at such time,plus one (1), provided that in any case where the Debt Equity Ratio is less than two (2) theDebt Equity Factor shall be calculated as if the Debt Equity Ratio is equal to two (2). In thecase of a project and for the purposes of calculating the Debt Equity Factor, the Debt EquityRatio shall be calculated for the twelve-month period ending at the end of the third year ofthe operation of such project.

1.34 Debt Equity Ratio shall mean with respect to any Person or an Existing Project or NewProject, at any time, such Persons or projects, as the case may be, Debt divided by itsEquity, at such time.

1.35 Director shall mean a director on the Board.

1.36 Direct Shareholding shall mean with respect to any Company Shareholder or CompanyShareholders, at any time, the percentage of the issued, subscribed and paid up Shares helddirectly by such Company Shareholder or Company Shareholders at such time of all theissued, subscribed and paid up Shares.

1.37 DLDOshall mean domestic long distance telecommunications operations.

1.38 EBIT shall mean, as to any Person and for any period of time, the consolidated net incomeof such Person and its Subsidiaries (excluding any and all income, dividends or distributionsreceived from any Subsidiary or Affiliate of such Person) for such period of time, beforeinterest expense and provision for taxes and without giving effect to any extraordinary gainsor extraordinary losses and gains or losses from sales of assets (other than sales of inventoryin the ordinary course of business) for such period.


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1.39 EBITDA shall mean, as to any Person and for any period of time, the EBIT of such Personfor such period of time adjusted by (i) adding thereto the amount of all amortisation ofintangibles, depreciation and non-cash charges that were deducted in arriving at such EBITand (ii) subtracting there from the amount of all non-cash gains that were added in arrivingat such EBIT.

1.40 Intentionally omitted.

1.41 Intentionally omitted

1.42 Encumbranceshall mean any pledge, lien, charge, security agreement, lease, title retentionagreement, mortgage, encumbrance, option or adverse claim or right or interest of any kindwhatsoever in the Shares;

1.43 Equity shall mean with respect to any Person or an Existing Project or a New Project, atany time, in the case of such Person, the total shareholders funds, as disclosed in the latestaccounts, including the total issued and outstanding voting share capital, share premium andpositive retained earnings of such Person and in the case of such project the total moniesproposed to be invested in such project (other than monies funded from loans or similarindebtedness), at such time.

1.44 Existing Projectshall mean any existing project in India, SAARC Region or in any IndianOcean Rim Countries in the field of mobile telephony, fixed line telephony, long distancetelephony, V-SAT Services, ISP, portal services or Corporate Data Network Services, or anyother telecommunications services.

1.45 Existing Subsidiary shall mean any Subsidiary of the Company that is a Subsidiary on thedate that the STI Shareholder first acquires any Shares in the Company.

1.46 Fair Market Value shall mean such value as is acceptable to and agreed by each CompanyShareholder, or in the absence of any such acceptance or agreement, the value as isdetermined by an internationally recognised investment banking firm, accounting firm orother independent expert appointed, collectively, by the Company Shareholders.

1.47 Free Cash Flow shall mean, with respect to any Person for any period of time, the EBITDAof such Person for such period of time less the sum of (i) any change in the net workingcapital requirement, (ii) capital expenditure (i.e., all expenditures which should be capitalised,including all expenditures with respect to fixed assets and expenditures for maintenance andrepairs) and (iii) taxes computed on an unleveraged basis (i.e., without accounting for anyand all indebtedness), all as determined in accordance with Indian GAAP of such Person forsuch period of time.

1.48 Fiscal Yearshall have the meaning ascribed to it in Article 167;

1.49 General Meeting shall mean a meeting of the Shareholders of the Company entitled tovote at such meeting, whether or not they are parties to, or have agreed to be bound by theterms of these Articles, duly constituted in accordance with the Memorandum and Articles of

Association and the Act.1.50 General Reserved Matter shall have the meaning set forth in Article 138(b).

1.51 Government shall mean the Government of India, or any state or local government inIndia, or any political or statutory subdivision or authority thereof or therein or any othergovernment or subdivision, instrumentality, agency or authority thereof having jurisdictionover any activity required to be undertaken by the Company or any Shareholder to performits obligations under or in connection with these Articles.

1.52 Governmental Authorisation shall mean any permission, approval, consent, license,order, decree, authorisation, authentication of, or registration, qualification, designation,declaration or filing with or notification, exemption or ruling to or from the Governmentrequired under any statute or regulation, or pursuant to any Government policy or to or from


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any Regulatory Authority, in connection with any action to be taken by the Company or anyShareholder.

1.53 Granting Party shall have the meaning set forth in Article 83.

1.54 Indian Authoritiesshall mean any Indian federal/central, state or municipal government,

regulatory authority, governmental department, agency, instrumentality, commission, board,tribunal, or court or other law, rule or regulation making Person in India;

1.55 Indian GAAP shall mean, with respect to any Person, the generally accepted accountingprinciples used in India consistently applied with respect to such Person.

1.56 Indian Ocean Rim Countries shall mean countries in the Indian Ocean from the westerncoast of India to the eastern coast of Africa namely the Seychelles, Mauritius, Madagascar,Republic of Reunion, Comoros, Chagos Archipelago, Coetivy, Amirante, Providence, Tromelin,Roderigues and Aldabra1.

1.57 Investing Company shall mean the Company and/or any of its Subsidiaries that proposesto make or makes an investment in a New Project or an Existing Project.

1.58 Investment Criteria shall mean, in the case of any New Project or Existing Project, thebusiness case or investment assessment shall project the achievement of the following financialrequirements for such project:

(i) an internal rate of return over a 10-year period exceeding WACCor 15%, whichever ishigher;

(ii) positive EBITDA in respect of such New Project or Existing Project, as the case may be,for a fiscal year ending not later than the fourth fiscal year of such project after theinitial investment in such project; and

(iii) positive Free Cash Flow in respect of such New Project or Existing Project, as the casemay be, for a fiscal year ending not later than the fifth fiscal year of such project afterthe initial investment in such project.

1.59 In Writingand Written includes printing, lithography and other modes of representingor reproducing words in visible form.

1.60 IPO or Initial Public Offering shall mean the first offering of the Shares or the sharesof any of its Subsidiaries to the public or investors whether in or outside India and theconsequent listing of the Shares or the shares of such Subsidiary, as the case may be, on anystock or share exchange, whether Indian or international.

1.61 ISP shall mean internet service provider.

1.62 Laws shall mean all applicable laws, by-laws, rules, regulations, orders, ordinances,protocols, codes, guidelines, policies, notices, directions and judgments or other requirementsof any Indian Authority, as amended from time to time;

1.63 Liens shall mean any pledge, lien, charge, security agreement, lease, title retentionagreement, mortgage, encumbrance, option or adverse claim or right or interest of any kindwhatsoever in the Shares;

1.64 Material Adverse Effect shall mean, with respect to any Person, there has occurred oris likely to occur or there exists an event or circumstances, that has, or could reasonably beexpected to have, a material adverse effect on the condition (financial or otherwise), properties,assets, business, liabilities, results of operations or prospects of such Person or, if relevant,on the ability of such Person to perform its obligations under these Articles.

1.65 Membershall mean the registered holder for the time being of any shares in the Capital ofthe Company and without limitation shall include a Shareholder and a Company Shareholder.


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1.66 Memorandumshall mean the Memorandum of Association of the Company, as amended,modified or supplemented from time to time pursuant to applicable Law;

1.67 Mobile Business shall mean any business for the provision of mobile telephony services.

1.68 Mobile Carriage Services shall mean a service where a customer can send or receive

any sign, signal, writing, image, sound, intelligence or information of any nature transmittedover a transmission path while moving continuously between places using customer equipmentthat is not in physical contact with any part of the Mobile Telecommunications System bymeans of which the service is supplied;

1.69 Mobile Telecommunications System shall mean a system used or designed to be usedfor the supply of telecommunications to the public and that uses intercell hand-over functions;

1.70 Monthmeans calendar month;

1.71 New Projectshall mean a new project in India, SAARC Region or in any Indian Ocean RimCountries in the field of mobile telephony, fixed line telephony, long distance telephony, V-SAT Services, ISP, portal services or Corporate Data Network Services, or any othertelecommunications services.

1.72 New Subsidiary shall mean any entity that becomes a Subsidiary of the Company.

1.73 STL Nominee shall mean any subsidiary of STI.

1.74 Offeree shall have the meaning set forth in Article 83.

1.75 Offeree Parties shall mean the Bharti Entities or the STI Group, as the case may be.

1.76 Officemeans the registered office for the time being of the Company;

1.77 Pastel Limited shall mean Pastel Limited, a company established and existing under thelaws of Mauritius.

1.78 Permitted Transfereeand Permitted Transferees shall mean (a) in the case of any

member of the STI Group, any other member of the STI Group, (b) in the case of anymember of the Bharti Group, any other member of the Bharti Group.

1.79 Person shall mean any natural person, individual, corporation, limited partnership, co-operative, general partnership, joint stock company, joint venture, association, company,trust, bank, trust company, land trust, business trust, corporate body or other organisation,whether or not a legal entity, and government and agency and political subdivision thereof ortherein.

1.80 Proxyincludes Attorney duly constituted under a Power of Attorney to vote for a memberat a general meeting of the Company on a poll.

1.81 Qualified Stock Exchange shall mean any International, National or Regional Stock orSecurities exchange on which the Shares are listed or quoted for trading, including, withoutlimitation, the Stock Exchange, Mumbai, the National Stock Exchange of India Limited, Mumbai,the New York Stock Exchange and NASDAQ.

1.82 Initially omitted.

1.83 Regulatory Authority shall mean any such regulatory organisation having, jurisdictionover any activity required to be undertaken by the Company or any Shareholder to performits obligations under or in connection with these Articles.

1.84 Resale Business shall mean any business that provides Mobile Carriage Services usingCore Network Elements established, operated and maintained by another entity.

1.85 SAARC Region shall mean the countries comprising Bangladesh, Bhutan, India, Maldives,Nepal, Pakistan and Sri Lanka.


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1.86 Initially omitted.

1.87 Sealmeans the Common Seal for the time being of the Company.

1.88 SEBI shall mean the Securities and Exchange Board of India or any other agency thenadministering the SEBI regulations and the other national securities laws of India.

1.89 SEBI Price shall mean, at any time, the minimum price per Share at which the Shares canbe sold at such time as determined in accordance with then-applicable SEBI regulations.

1.90 Sharesshall mean the equity shares of the Company of a nominal value of Rs. 10/- eachor such other nominal value as approved pursuant to applicable Laws and the terms ofthese Articles.

1.91 Shareholding shall mean: with respect to any Person as a Company Shareholder, at anytime, that Persons total direct and indirect shareholding in the Shares; and with respect toa group of Persons, the aggregate of the total direct and indirect shareholding of each suchPerson in the Shares without any duplication or double counting of shareholdings amongsuch Persons; it being understood that the indirect shareholding of any such Person in theCompany shall mean the effective economic interest held indirectly by such Person in the

Company (e.g. if such Person holds 85% of the voting class of shares of A which in turn holds50% of the voting class of shares of B which in turn holds 30% of the voting class of sharesof the Company, then such Person holds an indirect shareholding of 12.00% (0.80x0.50x0.30)in the voting class of shares of the Company; and on a group (comprising such Person, A andB) basis, the holdings of A and B in the preceding example shall not be duplicated with theholdings of such Person for the purposes of determining the shareholding of the group in theCompany (and by way of another example, if such Person holds 80% of the voting class ofshares of C and C holds 50% of the voting class of shares of the Company, and A holds 20%of the voting class shares of B and B holds 30% of the voting class of shares of the Company,the group comprising such Person, C, A and B holds, on a group basis ((0.80x0.50) +(0.20x0.30)) 46% of the voting class shares of the Company). For the purpose of calculatingSTI Shareholders Shareholding at any time, such shareholding shall be deemed to include

the number of BTL Shares which the Convertible Debentures are capable of being convertedinto at such time. In the foregoing sentence, Convertible Debentures means the debenturesof principal amount US$75,000,000 which are to be convertible into 1,884,896 BTL Shares,or redeemable for 68,750,000 Shares, or a combination of those alternatives, which Pastelproposes to subscribe for pursuant to a debenture subscription agreement between BTL, BELand Pastel.

1.92 Shareholdershall mean any person holding a legal and beneficial interest in the Sharesand shall include, without limitation, a Member and a Company Shareholder.

1.93 Singtel shall mean Singapore Telecommunications Limited.

1.94 STI shall mean Singapore Telecom International Pte Ltd.

1.95 STI Group shall mean STI, the STI Shareholder, Singtel and any and all of Singtels director indirect Subsidiaries.

1.96 STI Shareholder shall mean whichever of STI or its Nominee;

1.97 Subsidiary shall mean, with respect to any Person, any entity of which more than 50% ofthe securities or ownership interest having ordinary voting power to elect a majority of theboard of directors or other persons performing similar functions are owned directly or indirectlyby such Person; and with respect to the Company, shall also mean to include the followingentities irrespective of whether such 50% of the securities or ownership interest of suchentity is owned by the Company, Bharti Aquanet Limited, Bharti Hexacom Limited, SatcomBroadband Equipment Limited, Bharti Broadband Limited, Bharti Comtel Limited, any Persondirectly or indirectly controlled by the Company (for these purposes control shall have themeaning set forth in the definition of Affiliate).


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1.98 Telcoshall mean any Person that is a Telecoms Operator in India, and shall include anyAffiliate or Subsidiary in India of such Person.

1.99 Telecoms Operator shall mean any Person (other than any member of the Bharti Groupor the STI Group) that is engaged, directly or indirectly through its Affiliates, in the businessof providing any of voice, data, DLDO, Corporate Data Network Services, V-SAT Servicesand/or other telecommunication services, whether through fixed, cable, multi media or mobilenetwork for local or international calls, as an operator or service provider, and shall includeany Affiliate or Subsidiary of such Person.

1.100 Telecom Shareholder shall mean any member of the Bharti Group and the STI Groupwho holds Shares.

1.101 Territory shall mean, at any time, any territory defined as a Circle under a valid andexisting licence for cellular mobile telephone service granted in respect thereof by theDepartment of Telecommunications, Government of India to the Company or any of itsSubsidiaries, at such time.

1.102 Total Equity Investmentshall mean, with respect to an Investing Company and an Existing

Project or a New Project, the sum of: (a) in the case of an Existing Project, such InvestingCompanys acquisition price of the investment in such Existing Project and, in the case of aNew Project, such Investing Companys initial equity investment in such New Project plus (b)such Investing Companys share of the projected additional equity investments, if any, insuch Existing Project or New Project, as the case may be, during the first three consecutiveyears after such acquisition or initial investment, as the case may be.

1.103 Transfer shall mean the sale, gift, pledge, assignment, transfer, transfer in trust, mortgage,alienation, hypothecation, Encumbrance or disposition of any Shares by any Shareholder inany manner whatsoever, voluntarily or involuntarily, including, without limitation, anyattachment, assignment for the benefit of creditors or transfer by operation of law or otherwiseand the term Transferred shall be construed accordingly.

1.104 V-SAT Services

shall mean data and voice transfer services provided through the use ofvery small aperture terminals and satellite transponders.

1.105 Virgin/Singtel JV shall have the meaning set forth in Article 87(f).

1.106 WACC shall mean the weighted average cost of capital.

TABLE A EXCLUDED

1A. Save as expressly reproduced in the Articles contained in these Articles of Association, the regulationscontained in Table A in the first schedule to the Companies Act, 1956, shall not apply to theCompany. The Articles of Association shall be subject to exercise of any statutory power of theCompany with reference to the alteration of, or addition thereto by special resolution, as prescribedby the Act.

1B. Words importing the singular number shall include where the context admits or requires the pluralnumber and vice versa and words importing the masculine gender shall include feminine;

CAPITAL & INCREASE AND REDUCTION OF CAPITAL

2. The Authorised Share Capital of the Company is INR 25,000,000,000 (Rupees Twenty Five Billion)divided into 2,500,000,000 (Two Billion Five Hundred Million) Equity Shares of INR 10 (Rupees Ten)each.

3. SHARES AT THE DISPOSAL OF THE DIRECTORS

Subject to the provisions of Section 81 of the Act and these Articles, the shares in the capital of thecompany for the time being shall be under the control of the Directors who may issue, allot orotherwise dispose of the same or any of them to such persons, in such proportion and on such


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terms and conditions and either at a premium or at par or (subject to the compliance with theprovision of Section 79 of the Act) at a discount and at such time as they may from time to timethink fit and with the sanction of the company in the General Meeting to give to any person orpersons the option or right to call for any shares either at par or premium during such time and forsuch consideration as the Directors think fit, and may issue and allot shares in the capital of the

company on payment in full or part of any property sold and transferred or for any services renderedto the company in the conduct of its business and any shares which may so be allotted may beissued as fully paid up shares and if so issued, shall be deemed to be fully paid shares. Providedthat option or right to call of shares shall not be given to any person or persons without thesanction of the company in the General Meeting.

3A. FURTHER ISSUE OF SHARES

1. Where at the time after the expiry of two years from the formation of the company or at anytime after the expiry of one year from the allotment of shares in the company made for thefirst time after its formation, whichever is earlier, it is proposed to increase the subscribedcapital of the company by allotment of further shares either out of the unissued capital or outof the increased share capital then:

a. Such further shares shall be offered to the persons who at the date of the offer, areholders of the equity shares of the company, in proportion, as near as circumstancesadmit, to the capital paid up on those shares at the date.

b. Such offer shall be made by a notice specifying the number of shares offered andlimiting a time not less than thirty days from the date of the offer and the offer if notaccepted, will be deemed to have been declined.

c. The offer aforesaid shall be deemed to include a right exercisable by the personconcerned to renounce the shares offered to them in favour of any other person andthe notice referred to in sub clause (b) hereof shall contain a statement of this right.PROVIDED THAT the Directors may decline, without assigning any reason to allot anyshares to any person in whose favour any member may renounce the shares offeredto him.

d. After expiry of the time specified in the aforesaid notice or on receipt of earlier intimationfrom the person to whom such notice is given that he declines to accept the sharesoffered, the Board of Directors may dispose off them in such manner and to suchperson(s) as they may think, in their sole discretion, fit.

2. Notwithstanding anything contained in sub-clause (1) thereof, the further aforesaid may beoffered to any persons (whether or not those persons include the persons referred to inclause (a) of sub-clause (1) hereof ) in any manner whatsoever.

a. If a special resolution to that effect is passed by the company in General Meeting, or

b. Where no such special resolution is passed, if the votes case (whether on a show ofhands or on a poll as the case may be) in favour of the proposal contained in the

resolution moved in the general meeting (including the casting vote, if any, of theChairman) by the members who, being entitled to do so, vote in person, or whereproxies are allowed, by proxy, exceed the votes, if any, cast against the proposal bymembers, so entitled and voting and the Central Government is satisfied, on anapplication made by the Board of Directors in this behalf that the proposal is mostbeneficial to the Company.

3. Nothing in sub-clause (c) of (1) hereof shall be deemed;

a. To extend the time within which the offer should be accepted; or

b. To authorise any person to exercise the right of renunciation for a second time on theground that the person in whose favour the renunciation was first made has declinedto take the shares comprised in the renunciation.


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4. Nothing in this Article shall apply to the increase of the subscribed capital of the companycauses by the exercise of an option attached to the debenture issued or loans by the company:

a. To convert such debentures or loans into shares in the company; or

b. To subscribe for shares in the company (whether such option is conferred in theseArticles or otherwise).

PROVIDED THAT the terms of issue of such debentures or the terms of such loansinclude a term providing for such option and such term :

a. Either has been approved by the Central Government before the issue of the debenturesor the raising of the loans or is in conformity with Rules, if any, made by theGovernment in this behalf; and

b. In the case of debentures or loans or other than debentures issued to or loans obtainedfrom Government or any institution specified by the Central Government in this behalf,has also been approved by a special resolution passed by the company in GeneralMeeting before the issue of the debentures or raising of the loans.

4. The Company may, subject to and in accordance with the provisions of Section 76 and other

applicable provisions (if any) of the Act, at any time, pay a commission to any persons inconsideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, forany shares in or debentures of the company or his procuring or agreeing to procure subscription,whether absolute or conditional for any share in, or debentures of the Company. The commissionmay be satisfied by the payment of the cash or the allotment of fully or partly paid shares ordebentures or partly in the one way and partly in the other subject to the applicable provisions, ifany, of the Act. The Company may also, on any issue of shares or debentures pay such brokerageas may be lawful, and usual or reasonable.

5. Subject always to Article 138, with the previous authority of the Company in General Meeting andupon otherwise complying with Section 79 and other applicable provisions, if any, of the Act, theBoard may issue at a discount any shares of a class already issued.

6. The money (if any) which the Board shall, on the allotment of any shares being made by them,require or direct to be paid by way of deposit, call, or otherwise, in respect thereof, shall immediatelyon the insertion of the name of the allottee in the Register of Members as the name of the holderof such shares become a debt due to and recoverable by the Company from the allottee thereofand shall be paid by him accordingly.

7. If by the conditions of allotment of any shares, the whole or part of the amount of issue pricethereof shall be payable by installments, every such installment shall, when due, be paid to theCompany by the person, who, for the time being, shall be the registered holder of the shares or byhis executors or administrator.

8. Save as herein otherwise provided and subject to Section 187(C) of the Act, the Company shall beentitled to treat the registered holder of any share as the absolute owner thereof and accordinglyshall not, except as ordered by a court of competent jurisdiction, or as required by statutes be

bound to recognise any equitable or other claim to or interest in such share on the part of anyother person.

9. a) The Company may from time to time, by ordinary resolution increase the authorised ShareCapital by such sum, to be divided into Shares of such amount as may be specified in theresolution.

b) Except so far as otherwise provided by the conditions of issue or by these presents, anyCapital raised by the creation of Issues of new shares shall be considered to be part of thethen existing capital, and shall be subject to the provisions herein contained.

10. If, owing to any inequality in the number of new shares to be issued, and the number of sharesheld by Members entitled to have the offer of such new shares, any difficulty shall arise in


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apportionment of such new shares or any of them amongst the Members, such difficulty shall, inthe absence of any direction in the resolution creating or issuing the shares or by the Company inGeneral Meeting, to be determined by the Board.

11. The Company may, subject to the provisions of Sections 100 to 105 (both inclusive) of that andother applicable provisions, if any, of the Act from time to time by special resolution, reduce its

capital and any capital redemption reserve account or premium account in any manner for the timebeing authorised by law and in particular capital may be paid off on the footing that it may be calledup again or otherwise, and the Company may, if and as far as is necessary, alter its Memorandumand Articles of Association by reducing the amount of its share Capital and of its shares accordingly.Provided that such special resolution shall not be necessary in case of application of share premiumaccount in the manner authorised by Section 78 of the Act.

12. In accordance with provisions of Section 94 of the Act, the Company in General Meeting may byordinary resolution from time to time subdivide or consolidate or cancel any of its shares, in suchmanner as it may think fit. The Company in General Meeting may also subject to the provisions ofthe Act, determine by ordinary resolution that as between the holders of the share resulting fromeach sub division one or more of such share shall have some preferential or special rights asregards dividends, payment of capital or otherwise.

13. Subject to the provisions of Sections 100 to 104 (both inclusive) of the Act, the Board may acceptfrom any Member the surrender on such terms and conditions as shall be agreed, of all or any ofhis shares.

13A. Notwithstanding anything contained in these Articles, subject to the provisions of Section 79A andany other applicable provisions of the Act or any law of the time being in force, the Board ofDirectors may from time to time issue Sweat Equity Shares.

VARIATION OF SHAREHOLDERS RIGHTS

14. a) If at any time the share Capital is divided into different classes of shares, rights attached toany class (unless otherwise provided by the terms of issue of the shares of that class) may,subject to the provisions of Sections 106 and 107 of the Act and whether or not the Company

is being wound up, be varied with the consent in writing of the holders of three fourths of theissued shares of that class, or with the sanction of a special resolution passed at a separateGeneral Meeting of the holders of the shares of that class. To every such separate GeneralMeeting, the provisions of these Articles relating to General Meeting shall, to the extentconsistent, apply.

b) The rights conferred upon the holders of the shares of any class with preferred or otherrights shall not, unless otherwise expressly provided by terms of the issue of the shares ofthat class, be deemed to be varied by the creation or issue of further shares ranking paripassu therewith.

15. LIMITATION OF TIME FOR ISSUE OF CERTIFICATES

Every member shall be entitled, without payment, to one or more certificates in marketable lots,

for all the shares of each class or denomination registered in his name, or if the Directors soapprove (upon paying such fee as the Directors may from time to time determine) to severalcertificates, each for one or more of such shares and the company shall complete and have readyfor delivery such certificates within three months from the date of allotment, unless the conditionsof issue thereof otherwise provide, or within one month of the receipt of application of registrationof transfer, transmission, sub-division, consolidation or renewal of any of its shares as the casemay be. Every certificate of shares shall be under the seal of the company and shall specify thenumber and distinctive numbers of shares in respect of which it is issued and amount paid-upthereon and shall be in such form as the directors may prescribe or approve, provided that inrespect of a share or shares held jointly by several persons, the company shall not be borne toissue more than one certificate and delivery of a certificate of shares to one of several joint holdersshall be sufficient delivery to all such holder.


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16. ISSUE OF NEW CERTIFICATE IN PLACE OF ONE DEFACED, LOST OR DESTROYED

If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the backfor endorsement of transfer, then upon production and surrender thereof to the Company, a newCertificate may be issued in lieu thereof, and if any certificate lost or destroyed then upon proofthereof to the satisfaction of the company and on execution of such indemnity as the company

deem adequate, being given, an a new Certificate in lieu thereof shall be given to the party entitledto such lost or destroyed Certificate. Every Certificates under the Article shall be issued withoutpayment of fees if the Directors so decide, or on payment of such fees (not exceeding Rs.2/- foreach certificate) as the Directors shall prescribe. Provided that no fee shall be charged for issue ofnew certificates in replacement of those which are old, defaced or worn out or where there is nofurther space on the back thereof for endorsement of transfer.

Provided that notwithstanding what is stated above the Directors shall comply with such Rules orRegulation or requirements of any Stock Exchange or the Rules made under the Act or the rulesmade under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules applicable in thisbehalf.

The provisions of this Article shall mutatis mutandis apply to debentures of the Company.

CALLS

17. The Board may from time to time, subject to the terms on which any shares may have been issued,and subject to the provisions of Section 91 of the Act, make such calls as the Board thinks fit uponthe Members in respect of all moneys unpaid on the shares held by them respectively and not bythe conditions of allotment thereof made payable at fixed time, and such Member shall subject tohis having been given at least thirty days notice specifying the time or times and place of payment,pay the amount of every call so made on him to the persons and at the times and places soappointed by the Board. A call may be made payable by installments and shall be deemed to havebeen made at the time when the resolution of the Board authorising such call was passed at ameeting of the Board.

18. If by the terms of issue of any share or otherwise any amount is made payable at any fixed time or

by installments at fixed times whether on account of the nominal amount of the share or by way ofpremium, every such amount or installment shall be payable as if it were a call duly made by theBoard and of which due notice has been given, and all the provisions herein contained in respect ofcalls, forfeiture or otherwise shall relate to such amount or installment accordingly.

19. If the sum payable in respect of any call or installment be not paid on or before the day appointedfor payment thereof, the holder for the time being of the shares in respect of which the call shallhave been made, or the installments shall be due shall pay interest for the same at the rate offifteen per-cent per annum or such lower rate of interest as the Board may determine from time totime from the day appointed for the payment thereof till the time of actual payment. The Boardshall be at liberty to waive payment of any such interest either wholly or in part.

20. On the trial or hearing of any action or suit brought by the Company against any Shareholder or his

legal representatives to recover any debt or money claimed to be due to the Company in respect ofhis shares, it shall be sufficient to prove that the name of defendant is or was, when the claimarose, on the Register of Members of the Company as a holder, or one of the holders of the numberof shares in respect of which such claim is made, that the resolution making the call is duly recordedin the Minute Book and that the amount claimed is not entered as paid in the books of the Companyand it shall not be necessary to prove the appointment of the Board who made any call, or that aquorum was present at the Board meeting at which any call was made nor that such meeting wasduly convened or constituted, nor any other matter whatsoever but the proof of the matters aforesaidshall be conclusive evidence of the debt.

21. Neither a judgment in favour of the Company for calls or other moneys due in respect of anyshares nor any part payment or satisfaction thereunder nor the receipt by the Company of aportion of any money which shall from time to time be due from any Member to the Company in


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respect of his shares either by way of principal or interest nor any indulgence granted by theCompany in respect of the payment of any such money, shall preclude the Company from proceedingto enforce forfeiture to such shares as hereinafter provided.

22. No member shall be entitled to exercise any voting rights either personally or by proxy at anymeeting of the Company in respect of any shares registered in his name on which any calls orother sums presently payable by him have not been paid or in regard to which the Company hasexercised any right of lien.

23. PAYMENT IN ANTICIPATION OF CALL MAY CARRY INTEREST

The Directors may, if they think fit, subject to the provisions of Section 92 of the Act, agree to andreceive from any member willing to advance the same whole or any part of the moneys due uponthe shares held by him beyond the sums actually called for, and upon the amount so paid orsatisfied in advance, or so much thereof as from time to time exceeds the amount of the calls thenmade upon the shares in respect of which such advance has been made, the company may payinterest at such rate, as the member paying such sum in advance and the Directors agree uponprovided that money paid in advance of calls shall not confer a right to participate in profits ordividend. The Directors may at any time repay the amount so advanced.

The members shall not be entitled to any voting rights in respect of the moneys so paid by him untilthe same would but for such payment, become presently payable.

The provisions of these Articles shall mutatis mutandis apply to the calls on debentures of theCompany.

FORFEITURE AND LIEN

24. If any member fails to pay any call or installment of a call on or before the day appointed for thepayment of the same, the Board may, at any time, thereafter during such time as the call orinstallment remains unpaid serve notice on such Members requiring him to pay the same, togetherwith interest that may have accrued and all expenses that may have been incurred by the Companyby reason of such non-payment.

25. The notice shall name a day (not being less than thirty days from the date of the notice) and aplace or places on and at which such call or installment and such interest and expenses as aforesaidare to be paid. The notice shall also state that in the event of non-payment at or before the timeand at the place appointed, the shares in respect of which such call was made or installment ispayable will be liable to be forfeited.

26. If the requirements of any such notice as aforesaid be not complied with, any share in respect ofwhich such notice has been given may, at any time thereafter before payment of all calls orinstallments, interests and expenses due in respect thereof, be forfeited by a resolution of theBoard to that effect. Such forfeiture shall include all dividends declared in respect of the forfeitedshares and not actually paid before the forfeiture.

27. When any share shall have been so forfeited, notice of the resolution shall be given to the Memberin whose name it stood immediately prior to the forfeiture and an entry of the forfeiture, with thedate thereof shall forthwith be made in the Register, but no forfeiture shall be in any mannerinvalidated by any omission or neglect to give such notice or to make such entry as aforesaid.

28. Any share so forfeited shall be deemed to be the property of the Company and the Board may sell,re-allot or otherwise dispose of the same in such manner as it thinks fit.

29. The Board may, at any time before any share so forfeited shall have been re-allocated or otherwisedisposed of, annul the forfeiture thereof upon such conditions as it thinks fit.

30. A person whose share has been forfeited shall cease to be a Member in respect of the share, butshall notwithstanding such forfeiture, remain liable to pay, and shall forthwith pay to the Companyall calls, or installments, interests and expenses owing upon or in respect of such share at the time


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of the forfeiture, together with interest thereon from the time of the forfeiture, until payment atfifteen per-cent per annum or at such lower rate as the Board may from time to time determineand the Board may enforce the payment thereof, or any part thereof, without any deduction orallowance for the value of the shares at the time of forfeiture, but shall not be under any obligationto do so.

31. A duly verified declaration in writing that the declarant is a Director, Manager or Secretary of theCompany and has been authorised by a Board Resolution to act as declarant and that certainshares in the Company have been duly forfeited on a date stated in the declaration shall be conclusiveevidence of the facts therein stated as against all persons claiming to be entitled to the shares andsuch declaration and the receipt of the Company for the consideration, if any, given for the shareson the sale or disposition thereof shall constitute a good title to such shares and the person towhom any such share is sold shall be registered as the holder of such share and shall not be boundto see the application of purchase money, nor shall his title to such share be affected by anyirregularity or invalidity in the proceedings in reference to such forfeiture, sale or disposition.

32. The forfeiture provisions of these Articles and Articles 36 to 38 hereof shall apply in the case ofnon-payment of any sum which by the terms of issue of a share becomes payable at a fixed time,

whether on account of the nominal value of the share or by way of premium, as if the same hadbeen payable by virtue of a call duly made and notified.

33. COMPANYS LIEN ON SHARE / DEBENTURES

The Company shall have a first and paramount lien upon all the shares / debentures (other thanfully paid-up shares / debentures) registered in the name of each member (whether solely or

jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently payableor not) called or payable at a fixed time in respect of such shares / debentures and no equitableinterest in any share shall be created except upon the footing and condition that this Article willhave full effect. And such lien shall extend to all dividends and bonuses from time to time declaredin respect of such shares / debentures. Unless otherwise agreed the registration of a transfer ofshares / debentures shall operate as a waiver of the Companys lien if any, on such shares /debentures. The Directors may at any time declare any shares / debentures wholly or in part to be

exempt from the provisions of this clause.

34. For the purpose of enforcing such lien, the Board may, sell the shares in such manner as it thinksfit, but no sale shall be made until the sum in respect of which such lien exists is presently payableand until a notice in writing of the intention to sell has been served on such Member, the executoror administrator or other legal representative as the case may be and default has been made byhim or them in the payment of the money called or payable at a fixed time in respect of such sharefor thirty days after the date of such notice.

Provided the Board may at any time declare any share to be wholly or in part exempt from theprovisions of this Article.

Provided further that unless otherwise agreed, the registration of a transfer of shares shall operateas a waiver of the Companys lien, if any on such shares.

35. Intentionally omitted.

36. The net proceeds of the sale shall be received by the Company and after payment of the costs ofsuch sale, applied in or towards payment of such part of the amount in respect of which the lienexists as is presently payable, and the residue, if any, shall (subject to a like lien for sums notpresently payable as existed upon the share before the sale) be paid to the persons entitled to theshare at the date of the sale.

37. Upon any sale after forfeiture or for enforcing lien in the purported exercise of the powershereinbefore given, the Board may appoint some persons to execute an instrument of transfer ofthe share sold and cause the purchasers name to be entered in the Register in respect of theshare sold, and the purchaser shall not be bound to see to the regularity of the proceedings or to


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the application of the purchase money and after his name has been entered in Register in respectof such shares, the validity of the sale shall not be impeached by any person and the remedy of anyperson aggrieved by the sale shall be damages only.

38. Where any share under the powers in that behalf herein contained is sold by the Board and thecertificate in respect thereof has not been delivered to the Company by the former holder of suchshare, the Board may issue a new certificate for such share distinguishing it in such manner as itmay think fit from the certificate not so delivered up. On the issue of such certificate the originalcertificate in respect of such share shall stand automatically cancelled and be void.

TRANSFER AND TRANSMISSION OF SHARES

39. Save as provided in Section 108 of the Act, transfer of a Share shall not be registered unless aproper instrument of transfer duly stamped and executed by or on behalf of the transferor and byor on behalf of the transferee has been delivered to the Company together with the certificate or,if no such certificate is in existence, with the Letter of Allotment of the share and such otherevidence as the Board may require to prove the title of transferor and transferor shall be deemedto remain the holder of such share until the name of the transferee is entered in the Register inrespect thereof. Each Signature to such transfer deed shall be duly attested by the signature of

one credible witness who shall add his name and address.

The provisions of Section 111 of the Companies Act, 1956, regarding powers to refuse Registrationof Transfer and appeal against such refusal should be adhered to. Provided that registration oftransfer shall not be refused on the ground of the transferor being either alone or jointly with anyother person or persons indebted to the Company on any account whatsoever except when thecompany has a lien on the shares. Transfer of shares / debentures in whatever lot shall not berefused.

DEMATERIALISATION OF SECURITIES

39A. 1. Definition(s) for the purpose of this Article :

(i) Beneficial Owner shall mean beneficial owner as defined in clause (a) of sub-section

(1) of Section 2 of the Depositories Act, 1996.

(ii) Depositories Act 1996 shall include any statutory modification or re-enactment thereof.

(iii) Depository shall mean a Depository as defined in clause (e) of sub-section (1) ofSection 2 of the Depository Act, 1996.

(iv) SEBI means the Securities and Exchange Board of India established under Section 3of the Securities and Exchange Board of India Act, 1992.

(v) Security means such security as may be specified by SEBI from time to time.

(vi) Member means members of the Company holding a share or shares of any class andincludes the beneficial owner in the records of the Depository.

(vii) The Register means the Register of Members to be kept in pursuant to the CompaniesAct and where shares are held in dematerialised form The Register includes theRegister of Beneficial owners maintained by a Depository.

2. Notwithstanding anything contained in these Articles, the Company shall be entitled todematerialise its existing shares, debenture and other securities, rematerialise its shares,debentures and other securities held in the Depositories and/ or offer its fresh shares,debentures and other securities, in a dematerialised form pursuant to the Depositories Act,1996 and the Securities and Exchange Board of India (Depositories and Participants)Regulations, 1996.

3. Every person subscribing to securities offered by the Company shall have the option toreceive security certificates or to hold the securities with a depository. Such a person who is


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the beneficial owner of the securities can at any time opt out of a Depository, if permitted bythe law, in respect of any security in the manner provided by the Depositories Act, and theCompany shall, in the manner and within the time prescribed, issue to the beneficial ownerthe required Certificate of Securities.

If a person opts to hold his security with a depository, the Company shall intimate suchdepository the details of allotment of the security, and on receipt of the information, thedepository shall enter in its record the name of the allottee as the beneficial owner of thesecurity.

4. All securities held by a depository shall be dematerialised and be in fungible form. Nothingcontained in Sections 153, 153A, 153B, 187B, 187C and 372A of the Companies Act, 1956,shall apply to a depository in respect of the securities held by it on behalf of the beneficialowners.

5. Notwithstanding anything to the contrary contained in the Act or these Articles, a depositoryshall be deemed to be the registered owner for the purposes of effecting transfer of ownershipof security on behalf of the beneficial owner.

Save as otherwise provided above, the depository as the registered owner of the securitiesshall not have any voting rights or any other rights in respect of the securities held by it.

The beneficial owner of securities shall be entitled to all the rights and benefits and besubject to all the liabilities in respect of his securities, which are held by a depository.

6. Notwithstanding anything in the Act or these Articles to the contrary, where securities areheld in a depository, the records of the beneficial ownership may be served by such depositoryon the Company by means of electronic mode or by delivery of floppies or discs.

7. Notwithstanding anything contained in these Articles, every holder of shares in or debenturesof the Company may at any time nominate in the manner prescribed under the Act, a personto whom his shares in or debentures of the Company shall vest in the event of his death.Such nomination and right of nominee to be registered as holder of shares/ debentures as

the case may be or for transfer of the shares/debentures as the case may be shall begoverned by the provisions of Section 109A and 109B and other applicable provisions of theCompanies Act, 1956.

8. Nothing contained in Section108 of the Act or these Articles shall apply to a transfer ofsecurities effected by transferor and transferee both of whom are entered as beneficialowners in the records of a depository.

9. Nothing contained in the Act or these Articles regarding the necessity of having distinctivenumbers for securities issued by the Company shall apply to securities held in the depositorymode.


41. INSTRUMENT OF TRANSFER

The instrument of transfer shall be in writing and all provisions of Section 108 of the CompaniesAct, 1956 and statutory modification thereof for the time being shall be duly compiled with inrespect of all transfer of shares and registration thereof.


43. No transfer shall be registered in favour of a person of unsound mind and no transfer of partly paidshares shall be registered in favour of a minor.

44. Every instrument of transfer shall be deposited at the office of the Company for registration,accompanied by the documents and evidence as required under these Articles.


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45. On giving not less than seven days previous notice by advertisement in some newspaper circulatingin the district in which the Registered Office of the Company is situated subject to the provisions ofSection 154 of the Act, registration of transfer may be closed or suspended during such time andfor such periods not exceeding in the aggregate forty five days in each year, but not exceedingthirty days at any one time as the Board may from time to time determine.

46. In case of the death of a Member, the survivor, where the deceased was a joint holder, and his legalrepresentative, executor or administrator where he was a sole holder, shall be the only personsrecognised by the Company as having any title to his interest in the shares; but nothing hereincontained shall release the estate of a deceased joint holder from any liability in respect of anyshare which had been jointly held by him with other persons. The Board may require any personsbecoming entitled to shares in consequence of the death of any Member to obtain a Grant ofProbate or Letter of Administration or other legal representation, as the case may be, from aCompetent Court. Provided it shall be lawful for the Board in its absolute discretions to dispensewith the production of Probate or Letter of Administration or such other legal representation uponsuch terms as to indemnify or otherwise as the Board may think fit, without in any case beingbound to do so. The powers and discretions of the Board under this Articles may be delegated andexercised by a Committee of Directors or an officer of the Company duly authorised in this regard.

No fee shall be charged for registration of transfer, transmission, Probate, Succession Certificateand Letters of administration, Certificate of Death or Marriage, Power of Attorney or similar otherdocument.

47. Any committee or guardian of a person of unsound mind or minor or any person becoming entitledto the transfer of a share in consequence of the death or bankruptcy or insolvency of any Memberor by any other lawful means, upon producing such evidence that he sustains the character inrespect of which he purposes to act under this Article or of his title as the Board thinks sufficient,may subject to the right of the Board to decline registration under Article 43 of these Articles, electeither:

i) To be registered himself as a holder of the share, or

ii) To make such transfer of shares as the deceased or the insolvent Member could have made.

48. The Board may, subject to the provisions of the Act, retain the dividends payable upon a share towhich any person becomes entitled under these Articles, until such person or his transferee shallbecome a Member in respect of such shares.

49. (1) If the person so becoming entitled under the Transmission Article shall elect to be registeredas holder of the share himself, he shall deliver or send to the Company a notice in writingsigned by him stating that he so elects.

(2) If the person aforesaid shall elect to transfer the share, he shall testify his election by executingan instrument of transfer of the share.

(3) All the limitations, restrictions and provisions of these Articles relating to the right of transfer

and the registration of instruments of transfer of shares shall be applicable to any suchnotice or transfer as aforesaid as if the death, lunacy, bankruptcy or insolvency of the Memberor transmission or devolution of his share by any other lawful means had not occurred andthe notice of transfer was a transfer signed by that Member.

50. Every transmission of a share shall be verified in such manner as the Board may require and theCompany may refuse to register any such transmission until the same be so verified or until orunless an indemnity be given to the Company with regard to such registration, which the Board atits discretion shall consider sufficient, provided nevertheless there shall not be any obligation onthe Company or the Board to accept any indemnity.

51. A person so becoming entitled under the Transmission Article to a share by reason of the death,lunacy, bankruptcy or insolvency of the holder thereof or by any other lawful means shall, subject


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to the provisions of these Articles be entitled to the same dividends and other advantages to whichhe would be entitled as if he were the registered holder of the share except that no such personshall, before being registered as a Member in respect of the share, being entitled to exercise inrespect thereof any right conferred by membership in relation to meetings of the Company. Providedthat the Board may at any time give notice requiring any such person to elect either to be registered

himself as a Member in respect of such share or elect to have some person nominated by himregistered as a Member in respect of such share subject to the right of the Board to declineregistration under Article 44 of these Articles and, if such notice is not complied with within ninetydays, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payablein respect of the share, until the requirements of the notice have been complied with.

52. Subject to the provisions of the Securities and Exchange Board of India Act, 1992 and regulationsframed or guidelines issued thereunder and the listing agreement with the Stock Exchanges onwhich the equity shares of the Company are listed, neither the Company nor any of its Directors orother Officers shall incur any liability or responsibility whatsoever in consequence of its registeringor giving effect to any transfer of a share made or purporting to be made by any apparent or legalowner thereof as shown or appearing in the Register of Members to the prejudice of personshaving or claiming any equitable right, title or interest to or in such share, notwithstanding that the

Company may have had notice of such equitable right, title or interest or notice prohibiting registrationof such transfer and may have entered any such notice or referred thereto in any book or record ofthe Company and the Company shall not be bound or required to regard to attend or give effect toany such notice nor be under any liability whatsoever for refusing or neglecting so to do though itmay have been entered or referred to in some book or record of the Company, but the Companyshall nevertheless be at liberty to regard and attend to any such notice and give effect thereto, ifthe Board shall so think fit..

53. The provisions of these Articles shall mutatis mutandis apply to the transfer or transmission byoperation of law of debentures or other securities of the Company.

54. Where two or more persons are registered as the holder of any share, they shall be deemed (sofar as the Company is concerned) to hold the same as joint tenants with benefits of survivorship,

but so that:(a) The Company shall be entitled to decline to register more than four persons as joiners of any

share, and

(b) The joint holders of any share shall be liable severally as well as jointly for and in respect ofall calls or installments and other payments which ought to be made in respect of suchshare.

55. Any one of the joint holders of a share may give effectual receipts for any dividends or othermoneys payable in respect of such share or bonus share.

56. (1) Only the person whose name stands first in the Register of Members as one of the jointholders of any share shall unless otherwise directed in writing by all joint holders and confirmed

in writing by the Company be entitled to delivery of the certificate relating to such share or toreceive notices (which expression shall be deemed to include all documents) from theCompany and any notice given to or served on such persons shall be deemed as a notice orservice to all the joint holders.

(2) Subject to the provisions of these Articles, the person first named in the Register as one ofthe joint holders shall be deemed as a sole holder thereof for all the matters connected withthe Company.

57. Any one of the joint holders of a share may vote at any meeting personally or by proxy as if he werea sole holder thereof provided that if more than one joint holder of the share is present personallyor by proxy then such of them whose name stands higher in the Register in respect of such shareshall alone be entitled to vote in respect thereof.


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57A. Intentionally omitted.



















75A. Intentionally omitted.

75B. Intentionally omitted.

76. The following Principles shall apply to the Transfer of Shares

(a) All Transfers shall be consummated pursuant to the relevant provisions of applicable Law(including, without limitation, Section 108 of the Act and, to the extent applicable, the relevantprovisions of the Foreign Exchange Management Act. 1999, the New Industrial Policy, 1991and the National Telecom Policy, each as amended (including, by way of example, approvalof the Indian Authorities in the event of any Share Transfer to or from resident Indianownership)).

(b) The provisions of these Articles shall remain binding and in full force and effect upon eachShareholder until such Shareholder owns any Shares or, in the case of Bharti until Bharti orany of its Affiliates own any Shares.

77. No Transfer by a transferee Shareholder of the Shares hereunder shall relieve such Shareholder ofany of its liabilities and obligations to the other Shareholders or any party which arise or accrueprior to the completion of such Transfer.

LISTING AND PUBLIC OFFER


79. (a) Subject to applicable law, in any public offering of Shares (including the IPO) the STIShareholder shall have the right to include all or part of the Shares held by it in such publicoffering.

(b) Intentionally Omitted


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(c) If the STI Shareholder, decides to exercise its rights contained in this Article, the Companyshall be responsible for:

(i) all fixed costs and expenses in connection with such public offering and any variablecosts as they relate to any Shares other than those held by any Shareholder beingoffered as part of such public offering;

(ii) preparing the offering document and marketing materials required in connection witha successful public offering of any Shares held by the STI Shareholder, as the casemay be. All such offering documents and marketing materials shall be prepared by theCompany in form and substance that is acceptable to the STI Shareholder, as the casemay be, and its counsel; and

(iii) providing such representations and warranties and indemnities that the Company couldreasonably be expected to provide solely on those aspects of the public offering whichthe Company alone is in a position to be able to represent and warrant, that may beexpected to successfully effect any public offering of any Shares held by the STIShareholder, as the case may be. For the purposes of clarity and avoidance of doubt,the STI Shareholder shall not in any event be required to provide any indemnity to any

Person in connection with any such public offering.80. In the event an IPO is undertaken by the Company, the Shareholders and the Company shall evaluate

and discuss in good faith possible amendments to the Articles in order to contribute to the successfulcompletion of the IPO.

CERTAIN COVENANTS

81. Shareholding thresholds.

Where any provision of these Articles refers to the ownership of a certain number or percentage ofShares, then, for the avoidance of doubt, in calculating whether such threshold has been met by aCompany Shareholder the Shareholding or Direct Shareholding, as the case may be, of any of suchCompany Shareholders Permitted Transferees shall be aggregated, without duplication, with suchCompany Shareholders Shareholding or Direct Shareholding, as the case may be.

82. Where any Article(s) confer any right upon any person and such right is subject to such personholding a minimum specified number of shares of the Company then, if any shares or other securitiesof the Company are issued by reason of a share dividend, issue of bonus shares, a share split orany other similar corporate action, such minimum specified number of shares of the Company willbe appropriately adjusted to take into account such shares dividend, issue of bonus shares, a sharesplit or other similar corporate action.

82A. Consents and Approvals for Share Transfers. If the Transfer of any Shares by any Shareholderrequires any consent, authorisation, approval and permit from, or the making of any filing or noticeto, any other Person or governmental, quasi-governmental and regulatory body, agency and authoritynecessary and appropriate to permit such Transfer under applicable law (including, without limitation,any approval required from SEBI, the Reserve Bank of India, the Foreign Investment Promotion

Board of India and the Department of Telecommunications), the Shareholders shall ensure that theCompany, prior to such Transfer, is provided with such consent, authorisation, approval or permitor proof of making such filing or notice.

82B. Distributions. Notwithstanding any provision of these Articles, the Company will use its bestefforts to ensure that distributions made with respect to the Shares are treated as dividendsconsistent with the operations of its business in the ordinary course and with the accounting methodand principles then in use.

82C. Limitation on Dividend/Indebtedness Restrictions.Notwithstanding any provisions of theseArticles, the Company will not, and will not permit any of its Subsidiaries, if any, to directly orindirectly, create or otherwise cause or suffer to exist or become effective any Encumbrance orrestriction on the ability of the Company or any such Subsidiary (i) to pay dividends or make any


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other distributions on its capital stock or any other interest or participation in its profits owned bythe Company or any Subsidiary of the Company, except for (x) Encumbrances or restrictions existingunder or by reason of applicable law and (y) Encumbrances or restrictions which are ordinary andcustomary with respect to the type of indebtedness being incurred by the Company or such Subsidiary(under the relevant circumstances) or (ii) to exchange any equity security of the Company for a

debt security of the Company.82D. Consents and Approvals for Payments.If the declaration or payment to any Shareholder of

any dividend, premium, liquidation value or equity redemption on or with respect to Shares requiresany consent, authorisation, approval or permit from, or the making of any filing or notice to, anyother Person or governmental, quasi-governmental or regulatory body, agency or authority necessaryor appropriate to permit such declaration or payment under applicable law (including, withoutlimitation, any approval required from the Reserve Bank of India in connection with the conversionof dividends payable to such Shareholder into foreign currencies and the payment of such foreigncurrency amounts to such Shareholder), the Company shall ensure that it is provided with suchconsent, authorisation, approval or permit or proof of making such filing or notice for or on behalfof such Shareholder.

82E.Amendments to Effect Initial Public Offering.

Each of the Company Shareholders agrees toreview at the time of the Initial Public Offering, any changes to these Articles (including withoutlimitation the rights of all Parties) that are recommended by the investment bankers lead-managingthe Initial Public Offering that may improve the marketability or valuation of the Initial Public Offering.

82F. Bharti Group and STI Group

(a) Each of BTL and the Company convenant that where any obligation in these Articles is anobligation of any Person of the Bharti Group, they will each, jointly and severally, procurethat each such Person and all other members of the Bharti Group act in accordance with theterms of this Articles.

(b) The STI Shareholder covenants that, where any obligation in these Articles is an obligationof the STI Group, it will procure that each other member of the STI Group acts in accordance

with the terms of these Articles.82G. Notwithstanding anything contained in these Articles but subject to the Provisions of Section 77A

and 77B and any other applicable provision of the Act or any other law for the time being in force,the Company may purchase its own shares or other specified securities.

83. Right of Refusal for Investment Opportunity.

Any opportunity, procured by or offered or granted to, or offered or granted by, a member of theSTI Group, on the one hand, or a member of the Bharti Group, on the other hand (such member,the Granting Party) relating to a proposed or potential investment in a business in India involvingmobile, fixed or international telecommunications (including international voice telephony businessactivities) or DLDO (including any Corporate Data Network Service and any investment in an existingtelecommunications business in which BTL or the Company has an investment or interest) shall

first be offered by such Granting Party to the Company for investment by the Company on the sameterms offered or granted by or to such Granting Party (either directly or indirectly through any of itsSubsidiaries in which it owns more than 50% of the voting shares of interest). In the event theCompany fails to provide written evidence of its intention to pursue such opportunity within 21 daysof being offered the same, such Granting Party shall then offer, in the case such Granting Party is amember of the Bharti Group, to the members of the STI Group, and in the case such Granting Partyis a member of the STI Group, to the members of the Bharti Group (each such member receivingsuch offer, an Offeree) an opportunity to participate along with such Granting Party in suchinvestment (upon mutually agreeable terms) and in the event such Offeree fails to provide writtenevidence of its intention to pursue such opportunity within 14 days of being offered the same, suchGranting Party may pursue such investment opportunity alone or with another third party. For thesake of clarity, if the opportunity is rejected by the Company as a result of a negative vote by Bharti


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and/or the STI Shareholder then irrespective of whether Brentwood approves or disapproves theoffer, none of the Bharti Group (other than the Company and its Subsidiaries) may pursue orparticipate in such investment.

84. Non-compete with the Companys DLDO Business.

In the event that the Company, either directly or indirectly through a Subsidiary as provided inArticle 83 above, makes an investment in a DLDO business in India, the STI Group and the membersof the Bharti Group other than the Company and such Subsidiary (if any) through which suchinvestment has been made shall not compete with the Company and such Subsidiary in the DLDObusiness in India so long as each of the following conditions has been satisfied:

(a) the Company has received and maintains all necessary Governmental Authorisations andlicenses, including all necessary approvals and licenses from the Department ofTelecommunications, Government of India, for conducting DLDO business in India;

(b) the Company directly controls more than 50% of the voting interest of and operates anyDLDO business in which it is involved;

(c) such DLDO business becomes operational within 2 years of the licence being granted or

making the investment, whichever is the earlier; and(d) such DLDO business is and remains operational.

85. Non-compete with the Companys Corporate Data Network Service Business.

In the event that the Company, either directly or indirectly through a Subsidiary as provided inArticle 83, makes an investment in a business in India that provides Corporate Data Network Services,the STI Group and the members of the Bharti Group, other than the Company and such Subsidiary(if any) through which such investment has been made, shall not compete with the Company andsuch Subsidiary in Corporate Data Network Services in India so long as each of the followingconditions has been satisfied:

(a) the Company has received and maintains all necessary Governmental Authorisations andlicenses for conducting such Corporate Data Network Services in India;

(b) the Company directly controls more than 50% of the voting interest of and operates anyCorporate Data Network Service Business in which it is involved;

(c) such Corporate Data Network Service business becomes operational within 1 year of thelicence being granted or making the investment, whichever is the earlier; and

(d) such Corporate Data Network Service business is and remains operational.

86. Non-compete with the Companys Mobile Business.

In the event that the Company, either directly or indirectly through a Subsidiary as provided inArticle 83 above, makes an investment or has already made an investment in a Mobile Business,the STI Group and the members of the Bharti Group, other than the Company and such Subsidiary

(if any) through which such investment has been made, shall not compete with the Company andsuch Subsidiary in such Mobile Business in the Territories so long as each of the following conditionshas been satisfied:

(a) the Company has received and maintains all necessary Governmental Authorisations andlicenses for conducting such Mobile Business in the Territories;

(b) the Company directly controls more than 50% of the voting interest of and operates anyMobile Business in which it is involved;

(c) such Mobile business becomes operational within 1 year of the licence being granted ormaking the investment, whichever is the earlier; and

(d) such Mobile Business is and remains operational.


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provided that such non-compete obligation shall not restrict STI Group from investing in anyMobile Business outside the Territories notwithstanding that fact that the area in which theSTI Group is involved may become a Territory by reason of regulatory change or otherwiseand such non-compete obligation shall not apply to the STI Groups operations in such Territory.

87. Non-compete Exceptions.

(a) The restriction contained in Article 84 shall not apply to any business arrangements of theSTI Group with any person or entity the principal purpose of which is not DLDO but mayinvolve DLDO.

(b) Subject to Article 83, if the Company has not entered into any investment referred to inArticle 85, the STI Group shall not be restricted from considering or entering into any businessarrangements with any person or entity for the purpose of providing internet-related servicesthat compete, or have the capacity or potential to compete, with DLDO services.

(c) Articles 84, 85 and 86 shall not apply in the event that the Company elects not to pursue aninvestment opportunity offered to it pursuant to Article 83 in respect of DLDO business,Corporate Data Network Services or Mobile Business (provided that the Company shall not

have previously pursued such an investment opportunity (in the case of Mobile Business, inthe same Territory) and made such an investment whether offered to it by a Granting Partyor otherwise) and either the Granting Party and/or the Offeree elects to pursue such investmentopportunity, in which case such Granting Party and/or Offeree, as the case may be shall notbe required under Articles 84, 85 and 86, as the case may be, to undertake not to competewith the Company in respect of any subsequent investment made by the Company pursuantto Article 83 (or otherwise) in any DLDO business, Corporate Data Network Services or withthe Company in respect of any subsequent investment by the Company in the same Territoryin any Mobile Business, as the case may be. For the avoidance of doubt, where the Grantingparty or Offeree, as the case may be, makes an investment in a Mobile Business, suchbusiness shall not be in competition with a Mobile Business operated by the Company in adifferent Territory simply because such business provides service to mutual customers orwhere competition arises as a result of regulatory change.

(d) The STI Group shall have no obligations under Articles 83, 84, 85 and 86, from the date thatis 182 days from the day on which the STI Shareholder ceases to be permitted to appoint anominee Director in accordance with Article 117(b)(i). The Bharti Group shall not have anyobligations under Articles 84, 85 or 86, from the date that is 182 days from the day on whichthe Bharti Groups Shareholding is less than 20%.

(e) Nothing in these Articles shall apply to any investment or proposed investment by any venturecapital fund of the STI Group or to any bonafide portfolio investment related purchases oflisted shares in the open market by the STI Group, in each case, which is not more thanUS$15 million or 2% in aggregate of the total issued and outstanding shares of the relevantinvestee, and pursuant to which the STI Group does not acquire any management participationrights or any management influence in respect of the investee.

(f) Notwithstanding anything to the contrary, these Articles shall not apply to any Resale Businessconducted by the joint venture between the STI Group a

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