ADVANTA LIMITED Regd.Office : Krishnama House, #8-2-418, 4th Floor, Road No. 7, Banjara Hills, Hyderabad 500 034, A.P., India Dear Member(s), POSTAL BALLOT NOTICE Notice is hereby given that pursuant to Section 192A(2) of the Companies Act, 1956 ( the Act ) and the Companies (passing of the Resolution by Postal Ballot) Rules, 2011, as amended (including any statutory modification or re-enactment thereof for the time being in force) ( the Rules ) made thereunder, the consent of the members of the Company is being sought by passing resolution through Postal Ballot process in respect of the Special Business appended below. The Explanatory Statement pertaining to the said Resolutions setting out the material facts and reasons thereof is annexed. The draft of the said Special Resolution and the Explanatory Statement is being sent to you along with a Postal Ballot Form for your consideration. The Company has appointed Mr. Y. Suryanarayana, Advocate, High Court of A.P. as Scrutinizer for conducting the Postal Ballot process in a fair and transparent manner. You are requested to carefully read the instructions printed on the Postal Ballot Form and return the same duly completed, in the enclosed postage pre-paid envelope so as to reach the Scrutinizer not later than the closing hours i.e. 18:00 hours on November 30, 2013. Upon completion of the scrutiny of the Postal Ballot Forms, the Scrutinizer will submit his report to the Chairman. The result of the Postal Ballot will be announced at the registered office of the Company and will be displayed at the Company s website on December 3, 2013 besides communication of results to Stock Exchanges (BSE and NSE). The result / outcome of the Postal Ballot process will also be published in the newspaper(s). The Company is also offering e-voting facility as an alternate, for all the Members to enable them to cast their vote electronically instead of dispatching Postal Ballot Forms. The detailed procedure is enumerated in the Instructions to the Postal Ballot Form. 1. Approval of Advanta Employee Stock Option Plan 2013 ( ESOP 2013 ) To consider and if thought fit, to pass the following resolution as Special Resolution:- RESOLVED THAT pursuant to the provisions of Section 81(lA) and other applicable provisions, if any, of the Companies Act, 1956, ( the Act ) Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ( SEBI Guidelines ) (including any statutory modifications or re-enactment of the Act or the SEBI Guidelines, for the time being in force) to the extent applicable and subject to the provisions contained in the Articles of Association of the Company and subject to other approvals, permissions and sanctions as may be necessary, and subject to such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors (hereinafter referred to as the Board which term shall be deemed to include any Committee including the Remuneration / Compensation Committee constituted by the Board to exercise its powers, including the powers conferred by this Resolution), consent and approval of the Company be and is hereby accorded to the Board to grant, issue, offer and allot at any time or from time to time, directly or through a trust, to the present and future permanent employee(s), Director(s) (other than Independent Directors and Directors holding directly or indirectly more than 10% of the outstanding equity shares of the Company) of the Company, whether working in India or out of India, in and as selected on the basis of criteria prescribed by the Board, hereinafter referred to as the Eligible Employees, except a promoter or a person who belongs to the promoter group under a scheme titled Advanta Employee Stock Option Plan - 2013 or such other similar name (hereinafter referred to as Plan), such number of options as the Board may decide, which could give rise to the issue of equity shares of Rs. 2 each, not exceeding 13,00,000 (Thirteen lacs Only) equivalent to 1.54% of the issued share capital of the Company as on the date of passing of this Resolution amounting to Rs 26,00,000 (Rupees Twenty Six Lacs only) divided into 13,00,000 (Thirteen lacs Only) equity shares of the face value of Rs. 2/- each, on such terms and conditions described below: 1
The offer shall be in accordance with the terms and conditions as regards price, payment, application, allotment, entitlement to dividend and other rights, transferability and all other matters as stipulated by the SEBI Guidelines to the extent applicable and in accordance with any other guidelines, rules, regulations and laws to the extent applicable and also subject to the Memorandum and Articles of Association of the Company provided that: The equity shares issued upon exercise of the options shall rank pari-passu in all respects with the existing equity shares. No option shall vest in the hands of the Option Grantee (as defined in the SEBI Guidelines) prior to 18 (Eighteen) months from the date of grant of the option or such longer period from the date of grant, as may be determined by the Board from time to time, subject to the condition that the Option Grantee continues to be an employee or director of the Company / its subsidiary or any other conditions as may be determined by the Board from time to time. However, the maximum vesting period shall be 4 years from the date of grant of the option or such other period as the Board may determine. The exercise period would commence from the date of vesting and will expire on completion of 60 months from the date of grant of options or until the cessation of employment, whichever is earlier. The options shall be exercised in accordance with the process as may be specified in the Plan. Each option granted to an Eligible Employee shall entitle him / her to one equity share of the nominal value of Rs. 2/- each at such price, being the Market price of the equity shares of the Company as defined in the Plan or such other price as may be determined by the Board. The consideration for the shares to be issued upon exercise of an option may, as determined by the Board at the time of exercising the options, be in one or more trenches, consisting of cash or cheque or any other mode or any combination of the foregoing methods of payment subject to any applicable laws or regulations, to the extent applicable. Before granting the options to the employees under the Plan, the Board / committee would, apart from examining and evaluating overall group corporate performance, inter alia, may take into consideration the duration of service, grade, performance, merit, key position, future potential contribution and conduct of the employee and such other factors as may be deemed appropriate by it. The maximum number of options that may be granted to each Employee, defined in the Plan shall not exceed the total number of options offered under the Plan. The Company shall conform to the accounting treatment to the extent applicable under SEBI Guidelines or any other relevant SEBI regulation or direction as is applicable to the accounting of such options. The Board shall have the power to make reasonable consequential adjustments to the number of options to be exercised and the exercise price in case of corporate actions, such as rights issues, bonus issues, merger, sale of division and others, provided that such adjustments or alterations do not adversely affect the rights and interests of the Option Grantees and is subject to the terms and conditions specified in the SEBI Guidelines to the extent applicable. Further, the Board shall also have the power to make consequential modifications or substitutions to the terms of the Plan, as it may deem fit from time to time, provided that such modifications or alterations do not adversely affect the rights and interests of the Option Grantees or the members of the Company and is subject to the terms and conditions specified in the SEBI Guidelines to the extent applicable. RESOLVED FURTHER THAT without prejudice to the generality of the above, but subject to the terms as approved by the members, the Board be and is hereby authorized to implement, administer and supervise the Plan. RESOLVED FURTHER THAT the Board be and is hereby authorized in whole or in part, to do all such acts, deeds, matters and things and execute all such deeds, documents, instruments and writings as it may in its absolute discretion deem necessary or desirable and pay fees and commission and incur expenses in relation to or for implementing the Plan. RESOLVED FURTHER THAT the said options may be granted / equity shares may be allotted in accordance with the Plan framed in that behalf, directly to such Eligible Employees or through a Trust, which may be set up in any permissible manner, or to the Trust to be held on behalf of such Eligible Employees. RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds, matters and things and execute all such deeds, documents, instruments and writings as it may in its absolute discretion deem necessary or desirable in connection with formation, funding, including any contributions to be made by the Company, administration, operation, etc. of a Trust, if the Board deems necessary or desirable, through which the options may be granted/equity shares may be allotted to the Eligible Employees of the Company. RESOLVED FURTHER THAT the Board may, at its discretion, or in order to comply with any applicable rules or guidelines, add, amend or put restrictions or any other conditions as it may deem fit. 2
Advanta Limited RESOLVED FURTHER THAT the Plan may also envisage providing any financial assistance to the employees or to the Trust to enable the Eligible Employees / Trust to acquire, purchase or subscribe to the said equity shares of the Company in accordance with the provisions of the Act. RESOLVED FURTHER THAT the Board be and is hereby authorized to settle all questions, difficulties or doubts that may arise in relation to the implementation of the Plan and to the shares issued herein without being required to seek any further consent or approval of the members or otherwise to the end and intent that the members shall be deemed to have given their approval thereto expressly by authority of this resolution. RESOLVED FURTHER THAT the Remuneration Committee of the Company be and is hereby authorized to identify the eligible employees and determine the number of options that may be offered to them pursuant to the Plan. RESOLVED FURTHER THAT the Company shall value the options granted under the Plan, at their Intrinsic value as defined under the SEBI Guidelines as may determined by the board. RESOLVED FURTHER THAT in case the Company calculates the employee compensation cost using the intrinsic value of the options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed in the Directors Report and also the impact of this difference on profits and on Earnings Per Share ( EPS ) of the Company shall also be disclosed in the Directors Report. 2. Approval for issue of Shares under Advanta Employee Stock Option Plan - 2013 to the employees of Subsidiary(ies). To consider and if thought fit, to pass the following resolution as Special Resolution:- RESOLVED THAT pursuant to the provisions of Section 81(lA) and other applicable provisions, if any, of the Companies Act, 1956, ( the Act ) Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ( SEBI Guidelines ) (including any statutory modifications or re-enactment of the Act or the SEBI Guidelines, for the time being in force) to the extent applicable and subject to the provisions contained in the Articles of Association of the Company and subject to other approvals, permissions and sanctions as may be necessary, and subject to such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors (hereinafter referred to as the Board which term shall be deemed to include any Committee including the Remuneration / Compensation Committee constituted by the Board to exercise its powers, including the powers conferred by this Resolution), consent and approval of the Company be and is hereby accorded to the Board to extend the benefits of Advanta Employee Stock Option Plan - 2013 or such other similar name (hereinafter referred to as Plan) proposed in the resolution set out under Item No.2 in this Notice to such persons who are in the permanent employment of the subsidiary companies / subsidiary (ies) (whether now or hereafter existing, whether incorporated in India or overseas as may be from time to time be allowed under the prevailing laws, rules and regulations and / or any amendments thereto from time to time), hereinafter referred to as Subsidiary Companies, whether working in India or out of India and to the directors of the Subsidiary Companies, whether whole-time or not and to such other persons as may from time to time be allowed, under prevailing laws, rules and regulations, and/or amendments thereto from time to time, on such terms and conditions as may be decided by the Board, whether working in India or out of India, in and as selected on the basis of criteria prescribed by the Board, if any, except a promoter or a person who belongs to the promoter group, hereinafter referred to as Subsidiary Companies Employees at such price or prices in one or more trenches and on such terms and conditions, as may be fixed or determined by the Board in accordance with the Advanta Employee Stock Option Plan 2013. RESOLVED FURTHER THAT for the purpose of giving effect to any creation, offer, issue, allotment or listing of Securities, the Board (including its committee) be and is hereby authorized on behalf of the Company to evolve, decide upon and bring in to effect the Scheme and make any modifications, changes, variations, alterations or revisions in the said Scheme from time to time or to suspend, withdraw or revive the Scheme from time to time as may be specified by any statutory authority and to do all such acts, deeds, matters and things as it may in its absolute discretion deem fit or necessary or desirable for such purpose and with power on behalf of the Company to settle any questions, difficulties, or doubts that may arise in this regard without requiring the Board to secure any further consent or approval of the members of the Company. By Order of the Board of Directors For Advanta Limited Place: Goa Date: 15.10.2013 V.R.Kaundinya Managing Director 3
Notes: 1. Explanatory Statement to the proposed items of Special Business, set out as Item No.1 and 2 in the Notice, pursuant to Section 102 of the Companies Act, 2013 and SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is given hereunder. 2. The Notice is being sent to all the Members whose names appear in the Register of Members as on 18th October 2013. 3. The Board of Directors has appointed Mr. Y. Suryanarayana, Advocate, High Court of A.P., Hyderabad as the scrutinizer ( the Scrutinizer ) for conducting the postal ballot process in a fair and transparent manner. 4. Members are requested to carefully read the instructions printed on the postal ballot form and may vote either electronically through www.evoting.nsdl.com, (detailed instructions in this regard are mentioned in the postal ballot form) or return the postal ballot form (no other form or photocopy is permitted) duly completed in the attached self-addressed, postage prepaid envelope so as to reach the scrutinizer by not later than 18:00 hours on 30th day of November 2013. Electronic vote or postal ballot forms received after this date / time will be strictly treated as if the reply from the concerned members has not been received. 5. The Scrutinizer will submit his report to the Managing Director of the Company after scrutiny of e-voting and postal ballot forms received. 6. The result of voting by postal ballot will be announced on 3rd December 2013 at the Registered Office of the Company and will be displayed at the Company s website www.advantaindia.com besides communication of result to the Stock Exchanges where the equity shares of the Company are listed. The result will also be published in Newspaper(s). 7. Postal Ballot Form and self-addressed postage pre-paid envelope are enclosed. Explanatory Statement Pursuant to Section 102 of the Companies Act, 2013 (In respect of Item No. 1 & 2 in the Notice) Stock option provides an opportunity to employees to participate in the growth of the company, besides creating long term wealth in their hands. Employee Stock Option Scheme represents a reward system for the employees. Such schemes help the companies to attract, retain and motivate the best available talent in the increasingly competitive environment. In view of the prospective requirements of the Company vis a vis the employee benefits, the management is of the opinion that the Company may formulate another Employee Stock Option Scheme in order to motivate the employees and create and offer additional shares for the benefit of Employees of the Company and that of its subsidiaries. With the above objectives in mind, it is proposed to introduce a new employee stock option plan to be known as Advanta Employee Stock Option Plan 2013 or ESOP 2013 for the benefit of eligible employees of the company and employees of its subsidiary companies and such other persons as may be permitted from time to time, under prevailing laws, rules and regulations and/or amendments thereto from time to time. Disclosures pursuant to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 : (a) Total Number of Options to be granted A total of 13,00,000 options would be available for being granted to employees of the company under Advanta Employee Stock Option Plan 2013. Each option when exercised would be converted into one equity share of Rs. 2/- each fully paid-up. 4
Vested options that lapse due to non-exercise or unvested options that get cancelled due to resignation of the employees or otherwise, would be available for re-grant at a future date. SEBI guidelines require that in case of any corporate action(s) such as rights issues, bonus issues, merger and sale of division, stock split/consolidation and others, a fair and reasonable adjustment needs to be made to the options granted. Accordingly, if any additional equity shares are issued by the company, the ceiling of 13,00,000 options / equity shares shall be deemed to be increased proportionately to the extent of such additional equity shares issued. (b) Identification of classes of employees entitled to participate in the ESOP 2013 Advanta Limited All employees of the company, including the employees of the subsidiaries but excluding the promoters of the company, Independent directors and Directors holding directly or indirectly more than 10% of the outstanding Equity Shares of the Company, as may be decided by the Board / Remuneration Committee, from time to time, would be entitled to be granted stock options under the Advanta Employee Stock Option Plan - 2013. (c) Requirements of vesting and period of vesting The options granted shall vest in the employee, subject to his/her continued employment with the company. Vesting of the granted options will commence after a period of 18 months from the date of grant, subject to fulfillment of terms and conditions, if any as may be decided by the Board / Remuneration Committee from time to time. (d) Maximum period within which the options shall be vested The options would vest not earlier than 18 (Eighteen) months and not later than 4 (Four) years from the date of grant of options. The exact proportion in which and the exact period over which the options would vest would be determined by the Board / Remuneration Committee, subject to the minimum vesting period of 18 (Eighteen) months and maximum period of 4 (Four) years from the date of grant of options. (e) Exercise price or pricing formula The options would be granted at an exercise price which shall be the Market Price, i.e., the latest available closing price, prior to the date of the Meeting of the Board / Remuneration Committee in which options are granted, on such Exchange where there is highest trading volume on the said date. (f) Exercise period and process of exercise The exercise period would commence from the date of vesting and will expire on completion of 60 months from the date of grant of options or until the cessation of employment, whichever is earlier. The options will be exercisable by the employees by a written application to the Company to exercise the options in such manner and on execution of such documents, as may be prescribed by the Board / Remuneration Committee from time to time. The options will lapse if not exercised within the specified exercise period. (g) The appraisal process for determining the eligibility of employees under the ESOP 2013 The process for determining the eligibility of the employee will be specified by the Board / Remuneration Committee and will be based on criteria such as duration of service, grade, performance, merit, key position, future potential contribution and conduct of the employee and such other factors as may be deemed appropriate by it in its sole discretion. (h) Maximum number of options to be issued per employee and in aggregate The maximum number of options that may be granted to each Employee and in aggregate, as defined in the Advanta Employee Stock Option Plan 2013, shall not exceed the total number of options offered under the Plan. 5
(i) Disclosure and accounting policies The company shall comply with the applicable disclosure and the accounting policies prescribed as per SEBI Guidelines and the guidance note issued by the Institute of Chartered Accountants of India. (j) Method of Option Valuation To calculate the employee compensation cost, the Company shall value the options granted under the Plan, at their Intrinsic value as defined under the SEBI Guidelines as may be determined by the Board. In case the Company calculates the employee compensation cost using the intrinsic value of the options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed in the Directors Report and also the impact of this difference on profits and on Earnings Per Share ( EPS ) of the Company shall also be disclosed in the Directors Report. Pursuant to the provisions of Section 81(1A) of the Companies Act, 1956 read with Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 any such proposal involving issue of options or any other instruments, resulting in issue of shares, need to be approved by the members by passing a Special Resolution. Hence the respective resolutions set out at Item No.1 and 2 in the Notice are recommended for your consideration and approval. A copy of Advanta Employee Stock Option Plan 2013 is available for Inspection at the Registered Office of the Company. The Directors, Key Managerial Personnel and their respective relatives may be deemed to be concerned or interested in the resolutions set out at Item No. 1 & 2 in the Notice, by virtue of and to the extent : as an employee of the Company or otherwise who may be eligible to be granted options as determined by the Remuneration Committee/Board. and /or of shares held in the paid up share capital of the Company as its shareholder. By Order of the Board of Directors For Advanta Limited Place: Goa Date:15.10.2013 V.R.Kaundinya Managing Director 6
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