1. BUSINESS RE-STRUCTURING… - CA HARESH SHAH

2. INTERNAL RE-STRUCTURING Means: Examine the present structure of the group businesses  Legal- Company, WoS, LLP  Financial:- leveraging, flexibility of financing, expansion, Promotor group shareholding and Family Succession  Tax optimization including transfer pricing regulations 2

3. INTERNAL RE-STRUCTURING  Future plan:- IPO, JV, alliance and exit  Commercial:- Synergies, focused management, risk and return profile, cost optimization and unlocking value  Return to shareholders:-Dividend and Buy Back 3

4. OPTIONS AVAILABLE… 4 Re- Structuring Merger Demerger Slump Sale Itemised Sale Apart from above, there are various other options available in restructuring.

5. 5 Case Study:- Godrej Group

6. ABOUT GODREJ GROUP… Recently, Godrej Group consolidated Godrej Industries Limited’s (GIL) interest in Godrej Vikhroli Properties LLP (GVP LLP) (a joint venture entity of Godrej Properties Limited and Godrej Industries Limited) with the Godrej Properties Limited (GPL). Godrej Vikhroli Properties LLP is incorporated in 2011, a limited liability partnership between GPL and GIL to develop an integrated township project known as ‘The Trees’ consisting of residential and commercial developments, planned over approximately 34 acres of land in Vikhroli to be build in 3 phases. GPL has 60% share in the LLP while GIL’s share is 40%. 6 GILGPL India's leading manufacturer of oleo chemicals and makes more than a hundred chemicals for use in over two dozen industries.  Real estate development arm of the Godrej Group.  It is a subsidiary of Godrej Industries Limited.

7. EXISTING STRUCTURE… Why Restructuring:- Godrej Industries Limited wants to exit from the project “The Trees” GIL GVP LLP GPL 40% 60% 56.41%

8. THE RE-STRUCTURING… GVREL* *:- New company incorporated.. 100% SPV SPV The restructuring steps as follows: Step 1:- GIL to formed a Special Purpose Vehicle (SPV) GIL Vikhroli Real Estate Limited (GVREL) as a wholly owned subsidiary of GIL. Step 2:- GVREL will enter as partner in GVP-LLP with 40% share and simultaneously GIL will retire itself from GVL-LLP. Step 3:- GVREL will get merged with GPL. GIL GPL 56.41% GVP LLP 40% 60% Step I Step II Step III

9. WHY SUCH STRUCTURE… GIL formed Special Purpose Vehicle (SPV) – GIL Vikhroli Real Estate Limited and then this to be merged in GPL. There can be 2 main reasons for doing so:- Transaction should be Tax Neutral for GIL:- If GIL would have sold its 40% stake in GVP LLP directly to GPL, it would resulted in tax implication on GIL’s part. Cash outflow from GPL Direct purchase of stake would have led to cash outflow of around 437.06 crore to GPL. Only GPL will receive cash and no other shareholders. 9 ParticularAmount (In Crore) Total Consideration437.06 Cost146.28 LTCG @ 20%~58.15 Net Cash received by GIL378.91

10. GAIN TO GODREJ GROUP…  Exit for GIL from non-core business.  Remaining two phases’ profit will be booked by GPL alone.  Promoters holding in GPL will increase to 76.86% from current level of 74.91%.  GIL/Promoters are likely to get about INR 110 crore from selling their 1.86% stake tax free. 10

11. 11 Case Study:- Adani Group

12. ABOUT ADANI GROUP… Diversified industrial conglomerate Adani Group restructured its business in which the public listed power generation and ports firm spliced out of the flagship company Adani Enterprises Ltd (AEL) while the privately held power transmission unit be listed as a separate firm. AEL decides to restructure four major businesses PORT BUSINESS: Operated through Adani Ports and Special Economic Zone Limited (APSEZL), in which AEL was holding 74.99% stake. POWER BUSINESS: Operated through Adani Power Limited (APL), in which AEL was holding 68.99% stake. TRANSMISSION BUSINESS: Adani Transmission Limited (ATL), WoS, through which the group is operating its Transmission business. COAL BUSINESS: Adani Mining Private Limited (AMPL), a wholly owned subsidiary of AEL to undertake activities relating to development and operation of domestic coal mine. 12

13. ADANI ENTERPRISES LIMITED Mining & Trading Adani Mining Private Limited Adani Global Limited Adani Global FZE, Dubai Adani Global Pte, Singapore Oil & Gas Adani Gas Limited Adani Welspun Exploration Agro Product Adani Agrifresh Limited Adani Wilmar Limited Port Adani Ports Special Economic Zone Limited Power Adani Power Limited Adani Power Maharashtra Limited Adani Transmission India Limited Adani Transmission Limited 100% 50% 74.99% 68.99% 100% 90.91% 65%100% 9.09% 100% PRE RE-STRUCTURING STRUCTURE OF ADANI GROUP… Before Re-Structuring, equity shares of AEL, APSEZL and APL were listed on BSE & NSE.

14. THE RE-STRUCTURING… Transaction I Demerger of the Port Undertaking of AEL comprising the undertaking, businesses, activities, operations, assets and liabilities pertaining to Belekeri Port and investment of AEL in APSEZL into APSEZL. Transaction II Demerger of the Power Undertaking of AEL comprising the undertaking, businesses, activities, operations, assets and liabilities pertaining to the 40MW Bitta Solar Project and investment of AEL in APL into APL. Transaction III Demerger of the Transmission Undertaking of AEL comprising the undertaking, businesses, activities, operations, assets and liabilities relating to the Mundra- Zedra transmission line and investment of AEL in ATL into ATL. ATL to be listed on BSE Limited and National Stock Exchange of India Limited pursuant to the scheme. Transaction IV Merger of AMPL into AEL. 14

15. POST RE-STRUCTURING STRUCTURE OF ADANI GROUP… Adani Ports and Special Economic Zone Limited (APSEZL) Adani Enterprises Limited (AEL) Mining Trading Adani Global Limited Adani Global FZE, Dubai Adani Global Pte, Singapore Agro Product Adani Agrifresh Limited Adani Wilmar Limited Gas and Oil Adani Gas Limited Adani Welspun Limited Adani Power Limited (APL) Adani Transmission Limited (ATL) 100% 50% 100% 65%  AEL, APSEZL, APL and ATL have their equity shares listed on BSE and NSE.  AEL now is engaged in Mining, Trading, Agro Product and Gas & Oil businesses. Adani Global Limited, Adani Agrifresh Limited and Adani Gas Limited are subsidiaries of AEL while Adani Global FZE & Adani Global pte are step down subsidiaries of AEL.  Adani Wilmar Limited & Adani Welspun Limited are the Joint Ventures of AEL.

16. WHY RE-STRUCTURING… Each of the varied businesses are distinct in terms of  potential for growth and profitability.  Nature of risk and competition,  different level of capital  Direct ownership of operational businesses  Increase the valuations  Shareholders will be having the flexibility to remain invested in one or more of the businesses 16

17. VALUE CREATION… Let us try to calculate gain to the shareholder 17 ParticularsAmount Share price of AEL before demerger announcement i.e on 28.01.2015 557 Today’s Price i.e. on 10.08.2015 AEL94 APSEZL (340* 1.4123)480 APL (28.50*1.8596)53 ATL38 Adjusted price of AEL665 Gain in prices108 (19.38%)

18. 18 Case Study:- Aditya Birla Nuvo

19. ABOUT ADITYA BIRLA GROUP… Aditya Birla group’s conglomerate Aditya Birla Nuvo Limited (ABNL) announced consolidation of its branded apparels businesses under its listed subsidiary - Pantaloons Fashion & Retail Limited (PFRL). Acquired in 2012 from Future group Presently, the apparels retail businesses of the Aditya Birla group are housed under three separate entities i.e. ABNL, Madura Garments Lifestyle Retail Company Limited (MGLRCL) and PFRL. ABNL has two division Madura Fashion & Lifestyle and Jaya shree textile. PFRL is among the top 3 large format fashion retailers and the largest branded womenswear retailer. MGLRCL, WoS of ABNL, is the largest premium branded apparel player in India. Its premium brands – Louis Philippe, Van Heusen, Allen Solly and its popular brand - Peter England, are leaders in their respective categories. 19

20. PRE RE-STRUCTURING STRUCTURE… ABNL Financial Services Life Insurance Asset Management NBFC Broking Telecom Fashion & Lifestyle MGLRCL PFRL Manufacturing Agri Rayon Insulators 20 Branded Apparels 100% 72.62% Aditya Birla Group Public 58.30%41.70%

21. THE TRANSACTION… 21 a ABNL Madura F&L Jaya Shree MGLRCL Madura Lifestyle Textile PFRL Demerger of two divisions 100% 72.62% Divisions

22. THE TRANSACTION… Transaction Steps:- Step I:- Demerger of Madura Fashion (division of ABNL) into PFRL. Step II:- Demerger of Madura Lifestyle (division of MGLRCL) into PFRL. As result of re-structuring, PFRL will issue shares to the shareholders of ABNL. The existing base of 92.8mn Shares of PFRL will expand to more than 770 mn. Post Re-structuring ABNL stake will come down to 9.06% from 72.62% resulting into losing of control over PFRL. 22 Aditya Birla Group ABNL Public Pantaloons/ABFRL = Madura F&L Pantaloons Madura Lifestyle 9.06%51.10%39.84%

23. WHY RE-STRUCTURING…  Consolidation of lifestyle business under one roof  Synergies of operation and cost savings in terms of size  Entire spectrum of fashion  Madura will get exposure to women wear 23

24. VALUE CREATION… Let us try to calculate gain to the shareholder 24 ParticularsAmount Share price of Aditya Birla Nuvo before demerger announcement i.e on 30.04.2015 1570 Share price of Pantaloons before demerger announcement i.e on 30.04.2015 114 Today’s Price i.e 17.08.2015 Aditya Birla Nuvo2298 Pantaloons232

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