RED HERRING PROSPECTUS Dated August 24 ... - Globus Spirits

Our Company, in consultation with the BRLMs reserves the right not to proceed with the Issue at
anytime, including after the Bid/Issue Closing Date but before the Board meeting for Allotment,
without assigning any reason. Notwithstanding the foregoing, the Issue is also subject to
obtaining the final listing and trading approvals of the Stock Exchanges, which the Company
shall apply for after Allotment. In terms of the SEBI Guidelines, QIB Bidders shall not be allowed
to withdraw their Bid after the Bid/ Issue Closing Date.
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
The Industrial Policy, 1991 and the FEMA regulated foreign investment in Indian Securities. The
Industrial Policy, 1991 stipulates the limits and the conditions subject to which foreign
investment can be made in different sectors of the Indian Economy. The FEMA further regulates
foreign investment by prescribing the precise manner in which such investment may be made.
Under the Industrial Policy, unless specifically restricted, foreign investment is freely permitted
in all sectors of Indian economy up to any extent and without any prior approvals, but the
foreign investor is required to follow certain prescribed procedures for making such investment.
As per current foreign investment policies, foreign investment in the real estate sector is
permitted under the automatic route in relation to investments by NRIs.
By way of Circular No.53 dated December 17, 2003, the RBI has permitted FIIs to subscribe to
shares of an Indian company in a public offer without the prior approval of the RBI, so long as
the price of the equity shares to be issued is not less than the price at which the equity shares
are issued to residents. Transfers of equity shares previously required the prior approval of the
FIPB. However, vide a RBI circular dated October 4,2004 issued by the RBI, the transfer of
shares between an Indian resident and a non-resident does not require the prior approval of the
FIPB or the RBI, provided that (i) the activities of the investee company are under the automatic
route under the foreign direct investment (FDI) Policy and transfer does not attract the
provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (ii)
the non-resident shareholding is within the sectoral limits under the FDI policy, and (iii) the
pricing is in accordance with the guidelines prescribed by the SEBI/RBI.
Subscription by NRIs/ FIIs
It is to be distinctly understood that there is no reservation for Non-Residents, NRIs, FIIs foreign
venture capital investors registered with SEBI and multilateral and bilateral development
financial institutions and such NRIs, FIIs, foreign venture capital investors registered with SEBI
and multilateral and bilateral development financial institutions will be treated on the same basis
as other categories for the purpose of allocation.
As per the RBI regulations, OCBs cannot participate in this Issue.
As per the current regulations, the following restrictions are applicable for
investments by FIIs:
No single FII can hold more than 10% of the post-Issue paid-up capital of the Company. In
respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on
behalf of each sub-account shall not exceed 10% of the total issued capital or 5% of the total
issued capital of the Company in case such sub-account is a foreign corporate or an individual.
With the approval of the board of directors and the shareholders by way of a special resolution,
the aggregate FII holding limit may be increased to 100%.
Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and
approvals in terms of Regulation 15(A)(1) of the Securities Exchange Board of India (Foreign
Institutional Investors) Regulations 1995, as amended, an FII or its sub-account may issue, deal
or hold, offshore derivative instruments such as participatory notes, equity-linked notes or any
other similar instruments against underlying securities listed or proposed to be listed in any
stock exchange in India only in favour of those entities which are regulated by any relevant
regulatory authorities in the countries of their incorporation or establishment subject to
compliance of “know your client” requirements. An FII or sub-account shall also ensure that no
further downstream issue or transfer of any instrument referred to hereinabove is made to any
person other than a regulated entity.
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