Project Albatross - Legal DD Report - October 13

Privileged and Confidential
Draft for discussion purposes only September 21
LEGAL DUE DILIGENCE KEY ISSUES REPORT
SKAN MARINE SERVICES PRIVATE LIMITED
September 21October 137, 2022

Draft for discussion purposes only September 21October 137, 2022
CONTENTS
SCOPE OF REVIEW AND LIMITATIONS............................................................................................................................................................................ 1

LIST OF DEFINITIONS AND ABBREVIATIONS................................................................................................................................................................. 5
REPORT...................................................................................................................................................................................................................................... 6
(A) CORPORATE.................................................................................................................................................................................................... 6
(B) MATERIAL CONTRACTS............................................................................................................................................................................ 11
(C) FINANCING.................................................................................................................................................................................................... 13
(D) HUMAN RESOURCES................................................................................................................................................................................... 14
(E) REGULATORY............................................................................................................................................................................................... 17
(F) INTELLECTUAL PROPERTY..................................................................................................................................................................... 20
(G) LITIGATION................................................................................................................................................................................................... 21
(H) INSURANCE.................................................................................................................................................................................................... 22
(I) REAL ESTATE................................................................................................................................................................................................ 24
ANNEXURE I: LIST OF SHAREHOLDERS OF THE COMPANY...................................................................................................................................25
ANNEXURE II: SUMMARY OF PURCHASE ORDERS.....................................................................................................................................................26
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SCOPE OF REVIEW AND LIMITATIONS
1.1 This preliminary legal due diligence key issues report (the “Report”) has been prepared by Anagram Partners (“Anagram” or “us” or “we”) for
LEAP India Private Limited (“Client” or “Leap”) in connection with the proposed Acquisition by the Client of Skan Marine Services Private Limited
(“Company” or “Target”) (the “Proposed Transaction”).
1.2 This Report is meant to assist the Client in understanding and evaluating the Proposed Transaction. This Report is not intended to act in any way as a
recommendation to proceed (or not to proceed) with the Proposed Transaction, which is a commercial decision for the Client to make. This Report
therefore is not intended to be and should not be construed as an opinion as to matters of law except to the extent apparent from its content.
1.3 Please note the following in relation to our legal due diligence:
(i) We have reviewed the documents, made available to us on email and on the virtual documents room (“ VDR”) on Dropbox
(www.dropbox.com) till September 20October 1, 2022 (“Cut-off Date”) and responses received from Company representatives from time to
time (“Diligence Documents”), and have identified issues based on our understanding of the scope of work as per the terms of engagement
and discussions with the Client from time to time.
(ii) Our due diligence covers the 3 (three) immediately preceding financial years and the present financial year till the Cut-off Date.
(iii) This Report is based on our legal review of the Diligence Documents on the following subjects, (a) corporate; (b) material contracts; (c)
financial indebtedness; (d) human resources; (e) permits and consents; (f) intellectual property, (g) litigation, (h) insurance and (i) real estate.
(iv) We have only identified the material legal issues relating to the Target that may have an impact on the Proposed Transaction.
1.4 Please note the following in relation to the Report:
(i) We have not taken account of any documents, facts, matters, events or circumstances coming to our attention after the Cut-off Date.
(ii) We are not qualified to make, and have not made, any assessment of:
(a) any matters pertaining to direct or indirect taxes or levies that may be applicable to the Target or its operations or on the impact of
any tax related disputes or litigation;
(b) the extent of compliance by the Target of the conditions set out in technical and environmental licenses and approvals, as applicable;
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(c) the accounting and financial information and documents in relation to the Target or its business as applicable;
(d) the possible commercial or financial consequences of any particular Document or of its significance to the business or its
acceptability to the Client;
(e) any document that is provided to us in any other language other than English;
(f) anti-bribery, actuarial, commercial or operational matters;
(g) matters not pertaining to Indian law; and
(h) adequacy of the insurance cover.
(iii) We have not conducted any title diligence on the immovable properties owned or leased by the Company in connection with its business.
Further, we have not evaluated Company’s compliance with applicable building and construction laws, nor have we undertaken a technical
diligence relating to operations by the Company.
(iv) We have not carried out any independent verification, investigation or searches with public registries and authorities, except as may be
expressly set out herein.
(v) We have separately shared a list of requisitions on September 5, 2022 (“Requisition List”), which are outstanding as of the date of this
Report, and this Report may undergo change and / or be supplemented depending on the responses received to the Requisition List.
(vi) To the limited extent that Diligence Documents provided to us are in vernacular or illegible, we have not been able to comment on the
contents contained therein.
(vii) In respect of compliance with stamp duty laws, we have assumed, for the purposes of this legal due diligence, that the executed documents
have not been received in any other state in India other than the state in which they have been executed. In respect of documents executed
outside India with non-resident counterparties and governed under foreign laws, we have assumed that such agreements have not been
received in India as of the Cut-Off Date. We have not commented on the adequacy of stamp duty.
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(viii) The Diligence Documents may not comprise all the documents that ought to have been supplied to us for the purpose of our review and / or
may not contain all the information which would be considered to be material to the Proposed Transaction or which the Client would consider
relevant to their decision as to whether or not the Client should proceed with the Proposed Transaction.
(ix) We have not verified the completeness and / or accuracy of the Diligence Documents or the information provided in the VDR. Further, we
have assumed that the Diligence Documents provided in the VDR, and the information supplied to us in response to our requisitions are true,
accurate, complete and not misleading.
(x) We have assumed that each contracting party to a Document has the right, power and authority, and has taken all necessary corporate actions
to duly execute and deliver, and to exercise its rights and perform its obligations under, the relevant Document and that its obligations
thereunder are legally enforceable.
(xi) We have assumed that each of the Diligence Documents are in full force and effect and, save where expressly brought to our attention, has
not been breached, terminated, superseded or amended (whether or not in writing), as may be applicable, and that no breach has been
threatened and no step has been taken which would constitute a termination event under the terms of any of the Diligence Documents.
(xii) We have assumed that all the Diligence Documents in the form of copies conform to the originals, and we have assumed the genuineness of
all signatures.
(xiii) The reporting mechanism relating to various central and state laws is not entirely systematic and laws may be published in publications not
having wide circulation and not necessarily in a timely manner. Further, there are limited and unsatisfactory facilities for verification of such
laws. Our review of applicable Indian laws has included materials published and freely available and such other materials as we have deemed
appropriate under the circumstances. However, in light of the foregoing factors we may not have reviewed all existing local legislation.
(xiv) This Report should not be relied upon as a substitute for a full set of representations, warranties, covenants and undertakings which one
would secure in a transaction of like nature.
1.5 This Report is for the sole benefit of the Client and except with the prior written consent of Anagram Partners:
(i) this Report is not to be referred to or quoted in whole or in part, in any prospectus, registration statement, offering circular, public filing, loan
or other agreement or document; and
(ii) this Report is not to be, shared with or relied upon, in whole or in part, by any other person.
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1.6 The aggregate liability of Anagram Partners, its partners, agents and employees or any of them for losses or damages incurred by the Client shall be
limited to the extent of fees received by Anagram Partners in relation to undertaking this legal due diligence. In no event shall Anagram Partners be
liable for any losses or damages arising in any way from or in connection with any misstatement, concealment or other dishonest, deliberate,
negligent or reckless conduct on the part of any other person or otherwise or for any indirect or consequential losses or damages.
1.7 Any obligations that Anagram Partners incurs in connection with this Report shall be governed by the laws of India and the courts of India shall have
exclusive jurisdiction over any matter in relation to this Report.
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LIST OF DEFINITIONS AND ABBREVIATIONS
1956 Act Companies Act, 1956

Companies Act Companies Act, 2013, as amended from time to time
AGM Annual general meeting
AoA or Articles Articles of Association of the Company
Board Board of directors of the Company
Central Government Central Government of India
EGM Extra-ordinary General Meeting
EPF Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
ESI Employees’ State Insurance Act, 1948
FY Financial year
FEMA Foreign Exchange Management Act, 1999
GST Goods and Services Tax
Gratuity Act Payment of Gratuity Act, 1972, as amended from time to time
INR Indian National Rupees
IP Intellectual property
MCA Ministry of Corporate Affairs
MoA Memorandum of Association of the Company
MSME Ministry of Micro, Small & Medium Enterprises
POSH Act Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, as amended
from time to time.
RBI Reserve Bank of India
RoC Registrar of Companies
VDR The virtual data room available at www.dropbox.com
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REPORT
(A) CORPORATE
1. Overview
The Company is a private limited company engaged in the businesses of providing specialised equipment related services including providing lifting,
handling, loading / unloading equipment together with related services such as operation and repair of such equipment.
2. Corporate information
The key corporate details of the Company are as follows:
Name of the Company Skan Marine Services Private Limited

Corporate status Company limited by shares
Listing Unlisted
Registered office Unit No. 310 and 311 Plot No. 61, Sector 11 C B D Thane, Maharashtra 400614, India.
Date of incorporation October 6, 1983
Corporate Identity Number U61100MH1983PTC031031
Main Objects under the MOA 1. To carry on business as advisors, technicians, marine engineers, transport operators, traders and unloaders,
cargo dealers, crane and hoist operators in all matters relating to marine, maritime, shipping, conveyance
and transport.
2. To carry on business of vessel repairing, shipowning, ship breaking, vessel scrapping, making, assembling
and dealing in oil exploration and extraction equipment, machinery and tools, marine equipment, and also
supplying or leasing or letting on hire vessels, tankers, barges, and various types of vehicles and
conveyance including material handling equipment required for loading, unloading, oil exploration and
submarine survey.
Shareholding Pattern The shareholding pattern of the Company as on March 31, 2021 is set out in Annexure I.
Form of shares We understand that the Company has issued only equity shares. The shares of the Company are in physical
form.
Authorised share capital INR 5,00,000

Paid up share capital INR 1,00,000
Statutory Auditors (As per RSVA & Co.
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Latest ADT-1 Filed)
3. Management Structure
The management structure of the Company comprises of its board of directors. Their details are as follows:
Sr. Name of the Director/KMP DIN/PAN Current Designation Date of Appointment

No.
1. Anita Sood Mankar 05226215 Director April 4, 2012
2. Kavita Sood Wootton 05223337 Director April 4, 2012
3. Naryana Raghavendra Kolar Satyanarayana Rao 00126440 Director August 3, 2018
4. Suresh Kumar Sood 00396598 Additional Director December 12, 2021
5. Nergish Suresh Sood 00396717 Director October 6, 1983
4. Related Party Transactions:
We note from the Diligence Documents that the Company has entered into transactions for the sale of scrapped equipment with Skan Sales and
Services Private Limited, an entity owned by the promoters of the Company. Further, the Company has also undertaken loans from directors and
made inter-corporate deposits. The Company has not executed long form agreements with these related parties. We have not been provided with
copies of any corporate resolutions authorising such transactions during the Look Back Period. The Company has stated that they are in the process of
locating agreements for these transactions and shall share the same in due course.
Anagram Note: The Company has stated in the IRL that there exists a running account with the director’s salary account, and any expense related
to the director shall be directly deducted from the same. Further, there is no formal document for the running account between the group company
and the Company.
We recommend that the Company be required to enter into formal agreements with its related parties for such transactions. Further, as part of the
financial diligence, it should be ensured that these transactions are undertaken on an arms’ length basis.
5. Details of investments made by the Company
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Based on the Diligence Documents that have been provided by the Company; we understand that the Company does not have any investments .1, other
than 10 (ten) shares of Raheja Arcade Co-operative Premises Society Limited (a co-operative society) held by the Company. The Company has
informed us that these shares are held by it in connection with its ownership of its office premises at Raheja Arcade Co-operative Premises Society
Limited.
6. Employee stock options
We understand that the Company does not have any ESOPs, warrants or any other form of outstanding or convertible securities.
7. Shareholders’ Agreement
As per the Diligence Documents and responses from Company representatives, the Company has not entered into a shareholders’ agreement.
8. Filings with the RBI
We have been informed by the Company representatives that the Company has not made any filings with the RBI, since it does not have any foreign
investments and has not made any overseas direct investments.
However, we understand from the Company representatives that shares held by two of the Company’s current shareholders, Kavita Sood and Anita
Sood, were gifted to them by Sureshkumar Sood on March 6, 2014 and March 31, 2007, respectively, when they were non-resident Indians (“ NRIs”)
for the purposes of FEMA. We understand that these shareholders continue to be NRIs.
Under the foreign exchange control regulations in effect at the time of these transfers, gifting of shares of an Indian company by a person resident in
India to NRIs required prior approval of the RBI. We understand that no prior approval of the RBI may have been sought in the present case. Do note
that contravention of the provisions of FEMA may result in a penalty of up to thrice the sum involved (where such amount is quantifiable) or up to
INR 2,00,000 (where such amount is not quantifiable) and a further penalty of up to INR 5,000 for every day of the continuing contravention.
We have also been informed by Company representatives that these shares have always been held by the NRI shareholders on a non-repatriable basis,
and proceeds received from the shares till date (such as dividends) have been held in non-resident ordinary (NRO) accounts in India.
Anagram Note: To be discussed with the Client.
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We note that the Company appears to hold 10 (ten) shares of Raheja Arcade Co-operative Premises Society Limited, co-operative society. We have not been provided with
any further details regarding the shareholding held by the Company in Raheja Arcade Co-operative Premises Society Limited
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9. Key observations on minutes of meetings
We have been provided with minutes of the meetings of the Board for FY 2019-20, FY 2020-21 and FY 2021-22. We note that the minutes appear to
be in order. The Company informed us that no meeting of the Board of the Company has been conducted in the second quarter of FY 2019-20 due to
the CoVIDCOVID-19 pandemic. However, the outbreak of the pandemic had not yet occurred during the second quarter of FY 2019-20.
Anagram Note: Section 118 of the Companies Act read with Rule 25 of the Companies (Management and Administration) Rules, 2014 provides
that every company is required to maintain minutes containing a fair and correct summary of the proceedings of board meetings in the format
prescribed. Contravention of these provisions may make the company liable to a penalty of INR 25,000 and every officer of the company who is in
default, to a penalty of INR 5,000.
Further, Section 173 of the ICA provides that every company is required to hold a minimum of 4 board meetings every year with not more than
120 days intervening between 2 consecutive board meetings. Contravention of this provision may make the company and every officer in default
liable to a penalty of INR 10,000, and in case of continuing contravention, with a further penalty of INR 1,000 for each day after the first during
which the contravention continues, subject to a maximum of INR 2,00,000 in case of a company and INR 50,000 in case of an officer in default.
We recommend that the Company be required to rectify the non-compliance and regularize its minutes and records at the earliest. In addition,
representations and warranties should be obtained in the transaction documents confirming compliance with the provisions of the Companies Act,
including but not limited to maintenance of adequate records.
10. Stamp duty on share certificates
We were given to understand that the original share certificates of the Company’s shares had been misplaced, and the Company has issued duplicate
share certificates to its current shareholders in lieu of the original certificates. We have been provided with the duplicate share certificates and the
resolutions passed by the Company for issuance of such certificates. However, we have not been provided with any proof of stamp duty having been
paid on the original share certificates.
We note that the duplicate share certificates issued by the Company in lieu of the original share certificates have been stamped with a revenue stamp.
In terms of the Maharashtra Stamp Act, 1958, a stamp duty of INR 100 is payable on duplicate share certificates. Under Indian laws, an instrument
which is inadequately stamped is inadmissible as evidence and not enforceable in the event of a dispute in a court of law, unless the deficient portion
along with penalty, if any, is paid on such instrument.
Anagram Note: Under the Companies Act, (i) a certificate issued by an Indian company specifying the shares held by a person is prima facie
evidence of the title of such person to such shares, and (ii) a company cannot register transfer of its securities, unless a proper instrument of
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transfer, duly stamped, dated and executed by the transferor and the transferee has been delivered to such company.
If there is deficient stamp duty paid on the share certificates, we would recommend that the matter be compounded and the stamp duty issue be
resolved prior to the Client undertaking the transaction. In any event, the duplicate share certificates also need to be stamped at INR 100 each. the
duplicate share certificates. In addition, specific indemnities should be sought from the existing shareholders of the Company in respect of the lost
share certificates and deficiencies (if any) in payment of stamp duty on the original certificates.
We would also recommend that all the shares of the Company are dematerialised as a condition precedent and are acquired by the Client only in
dematerialised form.
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(B) MATERIAL CONTRACTS
1. Overview
1.1 The Company has informed us that the majority of its business is conducted in the form of purchase orders executed with its customers for periods
ranging from 1 (one) year, 3 (three) years to 5 (five) years, and that they do not have any long form contracts. We have been provided with copies of
the purchase/work orders and contracts entered into by the Company with its top 20 (twenty) customers in respect of equipment and services provided
by the Company. We have captured the key clauses in such purchase orders in Annexure II.
1.2 We understand that the Company does not have any long-term relationships with its vendors and does not enter into any long-form contracts with its
vendors or suppliers. We have been informed that the Company purchases batteries for its equipment from Exide regularly, and has a standard rate
card which has been agreed upon with Exide, however, there are no formal terms of contract setting out details of term, exclusivity, volume
commitments etc.
1.3 No long form contracts
We noted that the purchase orders executed by the Company with most of its customers do not contain robust contractual and commercial terms
which typically form part of business contracts. In Annexure II, we have analysed this against some of the key provisions in the standard template 2
used by the Client for its business contracts. The standard template is, however, much wider in its scope, and contains clauses on the terms and
conditions of use of equipment, limitation on the scope of services, provisions for reimbursement to the service provider of costs for transport,
loading/unloading and commissioning/de-commissioning of equipment, which are not reflected in the Purchase Orders entered into by the Company.
Additionally, the standard template provides for instances of liability of the customer in case of theft/loss of equipment or spare parts. However, the
Purchase Orders do not impose any such obligations on customers, and the customers are only liable for undisputed payments to be made to the
Company on a monthly basis.
Anagram Note: At the appropriate time as considered necessary by the Client, the business contracts of the Company should be revised to include
standard commercial provisions.
1.4 Onerous clauses in agreements with customers
(i) Under certain agreements, the customers have the right to terminate the agreement without cause by giving advance notice to the Company.
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MHE standard agreement shared via email dated August 30, 2022.
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(ii) Certain purchase orders impose restrictions on the Company’s right to assign its rights and obligations or subcontract its duties without prior
consent of the other party.
(iii) Some purchase orders impose a continuing indemnity on the Company without a time barred limitation.
(iv) The purchase orders dated July 13, 2022 and July 15, 2022 with JCB India Limited (“JCB”) includes a provision requiring the Company to
continue to supply the goods (as and when order is placed by JCB) for a period of 10 (ten) years from the sale of the last machine by JCB to
the end customer, irrespective of expiry or termination of the agreement between the Company and JCB.
Anagram Note: Client to note. We recommend that adequate representations and warranties should be obtained in the transaction
documents in relation to the Company’s compliance with all terms of the agreements it enters into for its business.
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(C) FINANCING
1. Overview
1.1 We understand that the Company routinely avails loans from banks and financial institutions for purchasing the various equipment used in the
services provided to its customers. The equipment is hypothecated with the respective banks and financial institutions as security for these loans. The
Company enters into standard form loan agreements for these loans with various banks, and we have been provided with the loan documents for Axis
Bank, Yes Bank and HDFC Bank on a sample basis. We note from these sample loan agreements that there are no material terms in such documents
affecting the Proposed Transaction, other than as highlighted in paragraph 2 below.
1.2 Based on the records available with the RoC, the details of the top 5 equipment loans (by amount) availed by the Company are set out below:
Sr. No Name of the Bank Date of creation of Charge Loan Amount (INR)
1. CITI Bank March 20, 2020 2,40,00,000
2. HDFC Bank August 29, 2016 3,70,00,000
3. HDFC Bank June 1, 2017 1,86,42,000
4. HDFC Bank August 28, 2021 1,73,44,000
5. Yes Bank October 8, 2018 1,61,04,800
1.3 The Company has provided us with receipts evidencing repayments of its loans, for the Look Back Period. We note that the Company has been
repaying the availed loans on a monthly basis, however, we will not be able to comment on the correctness of the instalment amounts.
1.4 The Company has also obtained an Udyam Registration Certificate as a "medium" enterprise. It has availed MSME loans from Yes Bank and Axis
Bank in furtherance of such classification.
2. Change in Ownership of Company
2.1 The Company has also provided us with a renewal sanction letter dated December 31, 2021 for a working capital loan of amount INR 4,20,00,000
obtained from HDFC Bank, wherein the Bank has the right to review the Company’s facilities in case of change in ownership of the Company. The
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Company is also required to inform the Bank regarding any changes in shareholding pattern. The tenor of this working capital loan was till July 15,
2022. We are waiting for ahave received confirmation from the Company on whether thisthat the loan has been repaid or is still subsisting. and is
being extended and that they are awaiting the revised sanction letter.
2.2 We have also been provided with a loan agreement executed on March 20, 2020 with Citibank N.A. for a loan of INR 2,40,00,000 obtained by the
Company for working capital purposes. The Company is not permitted to effect any material changes to its shareholding without the prior consent of
Citibank N.A., and any change in control of the Company without the prior consent will be considered an event of default under the loan
documentation.
Anagram Note: In the event this loan is subsisting, the Prior consent of HDFC Bank and Citibank should be intimated of the Proposed
Transaction and the Company’s resulting change in shareholdingobtained as a condition precedent to the Proposed Transaction.
3. Filings for closure of charges
We understand that the Company had previously availed certain loans from lenders including ICICI Bank, ABN Amro Bank and Citicorp Finance
Limited, for which charges had been created on the movable properties of the Company. The Company has stated that these loans have now been
repaid. Loans from the abovementioned lenders also do not form part of the subsisting charges in the Company’s register of charges shared with us.
However, we note that no filings have been made by the Company on the MCA website for satisfaction / closure of the charges in respect of loans
availed from the abovementioned lenders and the charges corresponding to these loans are still open as per MCA records.
Anagram Note: Section 82 of the Companies Act provides that every company is required to intimate the ROC within 30 days of the satisfaction of
a subsisting charge. Contravention of this provision may make the company liable to a penalty of INR 500,000 and every officer of the company
who is in default, to a penalty of INR 50,000.
It should be confirmed by the financial diligence team that loans from the abovementioned lenders do not form part of the subsisting loans in the
latest financial statements of the Company.
As a condition precedent to the Proposed Transaction, the Company should file appropriate forms with the ROC in respect of closure of all such
charges for which loan amounts have been repaid and loans are no longer subsisting. Further, a specific indemnity should be obtained by the
Client in respect of any fines or late filing fees that may be imposed by the ROC with regard to the late filing of such forms.
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(D) HUMAN RESOURCES
1. Overview
The Company has approximately 1,000 (one thousand) permanent employees on its rolls who provide the services of driving, operating and repair of
the Company’s equipment. These employees are spread across various client locations across the country. in India.
We have been informed by the Company that it does not engage any contract labour or temporary employees. <<We have we reviewed the
employment agreement? Lets mention if we havecontracts executed by the Company with its employees on a sample basis, and note that such
contracts contain provisions including salary and leave provisions, confidentiality obligations of the employees, termination clauses, etc…>.
Please note that the contracts may be terminated by the Company by giving a notice of 1 (one) month to the employee, or on payment of one month’s
salary in lieu of notice. The employee may terminate the contract by giving a notice of 1 (one) month to the Company, or by giving 1 (one) month
salary in lieu of such termination.
2. Compliance by the Company with key labour law legislations
2.1 Compliance under the EPF Act
The EPF Act applies to every establishment in which 20 (twenty) or more persons are employed. We have been provided with the letter of allotment
of code number dated August 1, 1988 issued to the Company by the provident fund authorities.
While we have not been provided with copies of challans in respect of monthly contributions made by the Company under the EPF Act, however, we
note from the EPFO website that the Company has been making monthly contributions under the EPF Act, with the last contribution made on August
14, 2022 for the month of July, 2022September 15, 2022 for the month of August, 2022. We further note that the Company is required to maintain
statutory registers and records under the EPF Act. While we have not been provided with these registers and records, we understand that these
registers have been reviewed by the financial due diligence team.
We note from the financial due diligence report dated September 18, 2022 prepared by Deloitte (“FDD Report”) and based on discussions with the
Deloitte team, that while the Company has been making deductions under the EPF Act, it has not deducted provident fund contributions from all
fixed salary components as required under the Supreme Court ruling dated February 28, 20193, and has instead included two special allowances to
make deductions. We understand based on our discussions that there may be some shortfall in the contribution as a result of this.
3
The Regional Provident Fund Commissioner (II), West Bengal and Ors. v. Vivekananda Vidyamandir and Ors., AIR 2019 SC 1240.
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Non-compliance with the EPF Act is punishable with imprisonment which may extend to 6 (six) months, but which shall not be less than 1 (one)
month and the company may also be liable to fine which may extend to INR 5,000.
Anagram Note: The Company has been making monthly contributions towards provident fund for its employees. However, it is recommended that
as part of the financial due diligence, it should be confirmed that the amounts of contributions being made by the Company are adequate.
Anagram Note: We recommend that adequate representations and warranties backed by indemnities should be obtained in the transaction
documents in relation to the Company’s compliance with the EPF Act and the adequacy of its contributions.
2.2 Compliance under the ESI Act
The ESI Act applies to every establishment in which 20 (twenty) or more persons are employed. We have been provided with the ESI Registration
Certificate dated September 14, 2001 obtained by the Company. Further, the Company is also required to maintain a register of employees as per
Form 6 of the ESI Act.
Anagram Note: We note that the address of the Company mentioned in the registration obtained under the ESI Act, 1948 is different from the
current address of the Company. We have requested for an updated copy of this registration and are awaiting the Company’s response.
Separately, as part of the financial due diligence, it should be confirmed that the Company is making appropriate contributions under the ESI Act
towards insurance for its employees., and the Company has informed us that it is in the process of updating the address. Adequate representations
and warranties should be obtained in the transaction documents in relation to the Company having obtained the requisite registrations and
authorisations under applicable laws.
We also note from the FDD Report that there may be a shortfall in contributions made by the Company under the ESI Act. Please note that non-
compliance in timely contribution under the ESI Act is punishable with imprisonment for a term which may extend to 3 (three) years, but—which
shall not be less than 1 (one) year, in case of failure by an employer to pay the employee's contribution which has been deducted by him from the
employee's wages and such employer shall also be liable to fine of INR 10,000, and in any other case, shall not be less than 6 (six) months with a fine
of INR 5,000.
Anagram Note: Adequate representations and warranties backed by specific indemnities should be obtained in the transaction documents in
relation to the Company’s compliance with the ESI Act.
2.3 Compliance under POSH Act
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Every employer employing 10 (ten) or more employees must constitute an internal complaints committee (“ICC”) under the POSH Act to deal with
sexual harassment at the workplace and also frame a policy in respect of prohibition and protection of women against sexual harassment at the
workplace. Every such ICC is required to submit an annual report to the employer and district officer consisting of the number of sexual harassment
complaints filed, disposed of and pending (for over 90 days), nature of actions taken by the employer and the number of workshops/ awareness
programs carried out against sexual harassment. The reporting is required even if no sexual harassment complaints are made during a year. The
employer is also required to disclose in the report of the organization, information relating to inter alia the number of sexual harassment reports filed
and disposed of in the relevant year.
We understand based on Company’s responses to our queries that the Company has not constituted an ICC or framed a separate policy under the
POSH Act to deal with sexual harassment at the workplace.
Anagram Note: Contravention of the POSH Act could be punishable by way of fine of up to INR 50,000 for a first-time offence, and up to double
that amount for a subsequent offence. In case of a subsequent offence, the employer may additionally be liable to have its licenses, registrations,
permits, etc. required for carrying on its business/ activities, cancelled by the concerned authority. Further, non-compliance with the provisions of
the POSH Act could also cause reputational harm to the Company.
We recommend that as a condition precedent to the Proposed Transaction, the Company should be required to implement a policy for prevention
of sexual harassment and constitute an ICC in accordance with the provisions of the POSH Act.
2.4 Compliance under the Payment of Wages Act, 1936
Based on the Due Diligence documents, we note that the Company has maintained registers and records as required under the Payment of Wages Act,
1936 and appears to be in compliance with the said act.
2.5 Compliance under the Minimum Wages Act, 1948 (“MW Act”)
Every employer is required to pay the minimum wage, extra wages for overtime, maintain registers and record particulars of employees such as the
work performed by them, wages paid to them, receipts given by them, and other particulars as prescribed under the MW Act. We note that the
Company has informed us that they do not maintain any registers under the MW Act. We further note from the FDD Report that in case of overtime
by its employees, the Company pays its employees at the same rate as regular wages and not at double the ordinary rate as required under the MW
Act for scheduled employment. This may result in a significant liability on the Company to pay the shortfall in overtime to relevant employees, if any
such issues are raised by the employees or labour authorities.
18
The MW Act allows for deductions from salary in case an employee has not worked for the requisite number of hours in any other day of the wage
period and also provides that any rest hours should not be calculated for the purpose of calculation of overtime hours, and therefore the overall
shortfall in overtime payments may be lesser than anticipated. However, we understand that the Deloitte team has not been provided with complete
information in respect of rest hours and deductions from salaries.
Anagram Note: We recommend that adequate representations and warranties should be obtained in the transaction documents in relation to the
Company’s compliance with the Minimum Wages Act, 1948. Further, a specific indemnity should be obtained in the transaction documents in
respect of any shortfall in overtime payments.
2.6 Compliance under Payment of Bonus Act, 1965 (“Bonus Act”)
We note that the Company has stated that it is paying bonus to its employees at the minimum rate of 8.33%. The FDD Report notes that the Company
has not carried out the calculation of the allocable surplus as per the Bonus Act and the actual bonuses payable may be higher than 8.33%. Further,
we have not been provided with registers in: (i) Form A showing the computation of allocable surplus, (ii) Form B showing the set-on and set-off of
allocable surplus, and (iii) Form C showing the details of the amount of bonus due to each of the employees, the deductions and the amount actually
disbursed, under the Bonus Act read with the Payment of Bonus Rules, 1975.
Please note that a non-compliance under the Bonus Act is punishable with imprisonment for a term which may extend to 6 (six) months, or with fine
which may extend to INR 1,000 or with both.
Company’s compliance with the Bonus Act. Further, a specific indemnity should be obtained in respect of any shortfalls in bonus payments and
fines that may be imposed under the Bonus Act.
2.7 Compliance under Gratuity Act
We note that the Company has not provided us with a notice of opening in Form A for the Belapur and Nashik premises under the Gratuity Act read
with the Payment of Gratuity (Central) Rules, 1972. Further, the FDD Report states that the Company has calculated gratuity expenses using an
incorrect method and therefore there may be certain increased gratuity liabilities as a result of this.
Please note that an employer who contravenes any of the provisions of the Gratuity Act or any rule or order made thereunder, shall be punishable with
imprisonment for a term which shall not be less than 3 (three) months, but which may extend to 1 (one) year, or with fine which shall not be less than
INR 10,000 but which may extend to INR 20,000, or with both.
19
Company’s compliance with the Payment of Gratuity Act, 1972. Further, a specific indemnity should be obtained by the Client in respect of any
shortfalls or added liabilities in gratuity payments as well as for fines that may be imposed under the Gratuity Act.
2.8 Other key labour legislations
We have not been provided with any document or information evidencing the Company’s compliance with legislations including the Rights of
Persons with Disabilities Act, 2016 (“Disabilities Act”), Equal Remuneration Act, 1976 (“ER Act”), Payment of Gratuity Act, 1972 (“Gratuity
Act”) and the Maternity Benefit Act, 1961 (“MB Act”). Please note the following:
(i) Disabilities Act: EveryDisabilities Act: We note the that the Company has stated that they do not have any employees with disabilities.
However, every employer is required to frame a policy in respect of providing equal employment opportunities to all persons. A non-
compliance under the Disabilities Act could attract a penalty involving a fine which may extend to INR 10,000 for the first offence, and from
INR 50,000 to INR 5,00,000 (for any subsequent offence).
(i) ER Act: The ER Act provides that an employer who fails to maintain any register under Form D or other document in relation to its
employees will be punishable with imprisonment for a term of up to 1 month or with fine of up to INR 10,000 or both. In addition, failure to
pay wages in accordance with the ER Act could trigger claims by employees.
(ii) Gratuity Act: The consequences of failure to comply withMB Act: While we understand that the provisions of the Gratuity Act could attract a
penalty which involves imprisonment ranging between 3 (three) months to 1 (one) yearCompany has not had to provide maternity leave or
fine of up to INR 20,000.
(iii) MB Act: Abenefit to any employee during the lookback period, please note that non-compliance with the provisions of the MB Act including
not maintaining registers and filing of annual returns, may attract imprisonment of up to 1 (one) year for the employer and/or fine of up to
INR 5,000. In addition, not providing maternity benefits to eligible women employees in accordance with the MB Act could trigger claims
from employees.
Company’s compliance with all applicable labor, employment, and social welfare related legislations, including the Disabilities Act, the ER Act,
the Gratuity Act and the MB Act. << FDD on number of leaves / accumulated leaves>>
Further, as a condition precedent, the Company should be required to implement an equal employment opportunity policy under the Disabilities
Act and ensure that adequate maternity leaves and benefits are included in its human resource policy.
20
2. Trade Unions
The Company has confirmed that its employees are not part of any trade unions, nor were there any disputes or settlement agreements with trade
unions in the past.
3. Human Resource Policies
We have been provided with the Company’s human resources policy.
3.1 Leave policy: We note that the Company provides a total of 30 (thirty) days of paid leave to all its employees every FY, and the same is not carried
forward to the next FY. The Company is registered under the Maharashtra Shops and Establishments (Regulation of Employment and Condition of
Service) Act, 2017 (“S&E Act”). Section 18 of the S&E Act provides that every worker shall be permitted 8 (eight) days casual leave with wages in
every calendar year and certain number of earned leaves depending on the number of days the worker has worked in the establishment, and the earned
leave can be carried forward and accumulated for a maximum period of 45 (forty-five) days.
We also note from the FDD Report that no provision was created by the Company in its books for leave encashment to its employees and only certain
supervisors are allowed to encash un-utilised leaves.
Anagram Note: We recommend that the Company aligns its paid leave as provided in the HR policy with the provisions of the S&E Act as a
Condition Precedent to the Proposed Transaction.
What about wages control legislations??
21
(E) REGULATORY
1. Overview
1.1 We understand that the Company is engaged in the business of specialized equipment related services including equipment such as forklifts, reach
trucks, tow trucks and battery-operated pallet trucks, to its customers. The Company also provides related services such as operation and repair of
such equipment.
1.2 The Company has informed us that it does not require any material operational permits connected to its business activities, given that it does not
undertake any manufacturing, packaging, storage of goods etc. The Company has confirmed that it does not require any licenses or registrations in
relation to pollution control, operation of diesel generators, boilers, e-waste disposal and license for operating lifts.
1.3 Apart from the Company’s registered office where it maintains its corporate office, the Company has two additional premises, namely a repair centre
at Nashik for repair and maintenance of its equipment and a commercial gala at KamboliKalamboli.
1.4 We have been provided with the following permits, consents and registrations obtained by the Company:
22
Sr. No. Name of the license/ registration/ Issuing Authority Issuance Date Key Terms and Observations
approval
1. Registration of Importers of New Lead Ministry of Environment and April 28, 2010 While this registration has
Acid Batteries
Draft for discussion purposes only
Forests expired, the Company has
September 21October 137, 2022
confirmed that they no longer
import acid batteries; hence,
renewal of this registration is not
required.
2. Registration certificate under Shop Inspector Office, Vashi July 6, 2021 This has been obtained for the
Maharashtra Shops and registered office premises.
Establishments (Regulation of However, we note that the
Employment and Conditions of Company has been using these
Service) S&E Act 2017 for 11 premises for several years prior to
employees. obtaining this registration. We
havehad sought clarification from
the Company on whether a fresh
registration certificate was
obtained for a change in
registered address of the
Company or whether the
Company was not required to
obtain registration under the
Shops and Establishments Act
earlier owing to not having the
required number of employees.
The Company has not provided
us with an adequate response to
this query.
Anagram Note: It is
recommended that adequate
representations and warranties
backed by indemnities are
obtained in respect of the
Company’s compliance with the
S&E Act.
3. Certificate of Registration as per Form Maharashtra State Tax on January 4, 2010 -

I-A Professions, Trades, Callings
and Employments Act, 1975
4. Certificate of Enrolment as per Form II- Maharashtra State Tax on April 1, 2018 For the years 2018-19 to 2021-22,
A Professions, Trades, Callings the Company is to pay tax for
and Employments Act, 1975 unenrolled period at Rs. 10,000
23 (Indian rupees ten thousand); Rs
2,500 (Indian rupees two
thousand five hundred) on or
1.5 We note that the Company has provided GST registration certificates for the states of Maharashtra, Assam, Chhattisgarh, Delhi, Haryana, Karnataka,
Madhya Pradesh, Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh and Uttarakhand.
1.6 Absence of certain permits andestablishment related registrations
We have not been provided with any establishment related registrations obtained for the Nashik and KamboliKalamboli premises. Further, we have
not been provided with other permits such as no-objection certificates fromHowever, the fire departmentCompany has informed us that may be
requiredit is in the process of applying for theseregistration for the Nashik premises. under the S&E Act, and as there is no activity in the Kalamboli
premises, no registration has been taken for the same.
Anagram Note: We note that while the Company has stated that it does not require any material operational permits, we recommend that The
registration under the S&E Act should be obtained by the Company be asked to acquire all permits which are necessary for it to conduct its
business in IndiaNashik premises as a condition precedent.
Further, suitable under the transaction documents. Suitable representations and warranties in respect of the Company having obtained all
relevant consents permits and permitsregistrations for Belapur, Nashik and Kalamboli premises, should also be obtained under the transaction
documents.
24
We note that the Company has not provided us with annual return in Form R required to be submitted within 2 months of the calendar year ending,
and the muster-roll cum wages register to be maintained under the S&E Act and the rules framed thereunder. A non-compliance under this act attracts
imprisonment which may extend to 6 (six) months, or with fine which shall not be less than INR 2,00,000 and which may be extended to INR
5,00,000, or with both.
Anagram Note: We recommend that suitable representations and warranties in respect of the Company having maintained the requisite registers,
should be obtained under the transaction documents. Further, as a condition precedent, the Company should be required to regularize its records
and necessary registers under the S&E Act.
1.7 Certification from the Fire Department
While the Company has shared with us a letter sent by the Company to the relevant fire department stating that their system in the Belapur premises
has been tested by a licensed agency under the Maharashtra Fire Prevention and Life Safety Measures Rules, 2009, they have not provided the
adjoining Form B.4 We have been unable to confirm the adequacy of the Company’s fire safety norms due to insufficient Diligence Documents. The
Company has also not provided us with no-objection certificates from the fire department that may be required for the Belapur, Nashik and Kalamboli
premises.
Failure of the occupier to provide and maintain the fire prevention and life safety equipment in good repair and efficient condition, attracts
punishment for a term not less than 6 (six) months but which may extend to 3 (three) years and with fine which shall not be less than INR 20,000 but
which may extend to INR 50,000. Where the offence is continuing in nature, the fine may extend to INR 3,000 for every day during which such
offence continues after the conviction for the first offence.
Anagram Note: We note that while the Company has stated that it does not require any material operational permits, we recommend that the
Company be asked to acquire all permits which are necessary for it to conduct its business in India as a condition precedent.
Further, suitable representations and warranties in respect of the Company having obtained all relevant consents and permits under the
Maharashtra Fire Prevention and Life Safety Measures Act, 2006 and adjoining rules should be obtained under the transaction documents.
4
Note: Upon submission of this letter, the relevant fire department is required to issue its fire safety compliance certificate in Form B to the premises.
25
(F) INTELLECTUAL PROPERTY
1. Overview
We understand based on the Diligence Documents and discussions with the Company’s representatives that the Company does not own or license any
intellectual property in relation to its business activities.
Anagram Note: We recommend that the Company should apply for a trademark registration for its name and logo under the Trademark Act, 1999
as a condition precedent to the Proposed Transaction. While the Company can continue using its name and marks even without registration,
however, it would not be able to avail any protection under the Trademark Act, 1999, and non-registration could result in a third party misusing
or infringing the name or logo of the Company, which may result in a loss of goodwill and brand recognition.
26
(G) LITIGATION
1. Overview
Based on the Diligence Documents, the Company does not appear to have any material pending or threatened litigations, arbitrations or governmental
proceedings outstanding against the Company, and no material sanctions have been imposed against the Company and / or its employees and officers.
We have been provided details of the following litigations by the Company:
Sr. No Matter Status Quantum

1. Outstanding dues payable to Company Awaiting response from M/s City INR 9,80,273
by M/s City Solutions Warehousing & Solutions Warehousing & Distribution
Distribution Private Limited Private Limited
2. Application filed by Bhoomendra Final disposal is pending. INR 1,00,000
Kumar Mangal Singh under the Motor
Vehicles Act, 1988 against the Company
and the insurer.
3. Unlawful termination of services under Pending before the relevant courts, next -
the Industrial Disputes Act, 1947. hearing is scheduled on September 17,
2022.
Anagram Note: We recommend that suitable representations and warranties in respect of litigation against the Company be obtained in the
transaction documents.
27
(H) INSURANCE
1. Overview
1.1 We have been provided with the following insurance policies with respect to the Company:
Sr. No Policy Validity Amount (INR) Policy Details

1. Group MediclaimMedshield insurance July 19, 2021 to - The policy covers 99
policy from Bajaj AllianzIFFCO – Tokio JulyAugust 18, 2022 (ninety-nine) employees.
General Insurance Company Limited. (Expired)to August 17,
2023
2. ContractorsContractor’s plant and September 15, 20212022 INR 39,79,82,064Fork Lift The policy covers 616
machinery insurance policy from ICICI to September 14, Trucks – 51,28,500 (six hundred and sixty-
Lombard5Go Digit General Insurance 20222023 Fork Lift Trucks – six) machines.
Limited. 7,19,50,417
Fork Lift Trucks –
54,54,98,177
Fork Lift Trucks –
3,39,90,428
3. Fire Insurance policyBusiness Suraksha July 31 2021 to July 30, INR 1,6020,00,000 The policy covers
Classik policy from HDFC Ergo General 2022 (Expired)to July 29, material damage (fire
Insurance Company Limited issued for the 2023 coverage), and burglary
Belapur premises. and housebreaking.
4. Burglary insurance policy Business July 31 2021 to July 30, INR 1,6020,00,000 The policy covers
Suraksha Classik policy from HDFC Ergo 2022 (Expired)to July 29, material damage (fire
General Insurance Company Limited 2023 coverage), and burglary
issued for the Nashik premises. and housebreaking.
5. Premises policy6Business guard – July 18, 2021 to July -2,00,00,000 -
commercial policy package (small 17September 14, 2022
business solutions) – retail from Tata AIG (Expired)to September 13,
General Insurance Company Limited. 2023
5
We note based on the Diligence Documents that there are 566 (five hundred and sixty-six) machines covered under the contractors plant and machinery insurance policy.
6
We note that this policy has been mentioned in the schedule provided by the Company, however, the document has not been shared in the VDR.
28
Sr. No Policy Validity Amount (INR) Policy Details

6. Working capitalWorkmen compensation -Stated policies are valid. -
policies entered into with different
insurersfor:
a) Benteler Auto Motive India
Private Limited
b) Huhtamaki India Limited
c) International Packaging Product
Private Limited
d) Piramal Glass Limited, Kosamba
e) Piramal Glass Limited, Jambusar
f) Pan India policy for 55 employees
of the Company
g) Pan India policy for 280
employees of the Company.
7. Motor vehicle insurance policies for two - -
wheelers and four wheelers entered into
with different insurers.
<< how many employees are covered here?>>
1.2 We note that as part of some of its customer contracts, the Company is obligated to indemnify its customers against damages and costs incurred by
customer in connection with performance of purchase orders including workman’s compensation and employer’s liability, comprehensive general
liability including contractual, products liability and motor third party liability insurance as required by law and in alignment with the Motor Vehicle
Act, 1988. The Company has not clarified whether it has obtained any specific insurance policies to cover any liability that may arise from
performance of such contracts. However, the Company has disclosed that no such claims have been made till date.
Anagram Note: It should be ensured that the insurance policies obtained by the Company adequately protect it against liabilities arising out of its
customer obligations. Further, the Company should provide suitable representations and warranties in the transaction documents in respect of
timely payment of premiums and there being adequate insurance to cover all possible business risks.
29
1.3 Further, some of the insurance policies provided to us appear to have expired. << which?>>
1.4 We further note that some of the insurance policies provided appear to have expired, including the Reliance Industries Patalganga workmen
compensation policy (expired on August 31, 2022) and the Saint Gobain Gyproc workmen compensation policy (expired on July 6, 2022).
Additionally, some of the motor vehicle insurance policies for two wheelers and four wheelers have expired. We understand that these motor vehicle
policies are routinely renewed in ordinary course.
Anagram Note: It should be confirmed with the Company that all recently expired policies have been renewed and all premiums are duly paid. If
not, such policies should be renewed as a condition precedent to the Proposed Transaction.
Further, suitable representations and warranties in respect of the Company having obtained all relevant policies should be obtained under the
transaction documents.
30
(I) REAL ESTATE
1. Overview
1.1 We understand from responses provided by the Company, that the Company owns/ has leased the following properties:
Sr. No Location Owned/Leased Purpose

1. 310-311, Raheja Arcade, Plot No.61, Sector 11, CBD Belapur Owned Registered Office/ Corporate Office
Navi Mumbai – 400614 (“Belapur Property”)
2. Shop No.15, Sector 4E/B, Kalamboli, Navi Mumbai - 400218 Owned Commercial
3. House No.1/13, sr. No.5/1-2-3/3, Pathardi road, near Decathlon Leased Warehouse
mall, Vill- Vilholi, Nashik – 422010
1.2 Mortgage on the Belapur Property
We understand that the Company owns the Belapur Property which it uses as its registered office. It appears that M/s Prayag Agencies Private
Limited (“Prayag”) has leased the land on which the registered office is constructed from City and Industrial Development Corporation of
Maharashtra Limited (CIDCO) on December 17, 1986 for a term of 60 years (“CIDCO Lease Deed”). Prayag sold the Office Property to M/s
Electrocon Consumer Electronics (I) Limited (“Electrocon”) on November 21, 2000. Vide an agreement of sale dated May 5, 2008, the Company
purchased the Office Property from Electrocon.
We note that Electrocon had mortgaged the Office Property with the Bank of Maharashtra in respect of a loan obtained by it, and this mortgage is
referenced in the agreement of sale executed between Electrocon and the Company. We have examined Electrocon’s charge filings available with the
ROC, and a mortgage on the Belapur property does not appear to be subsisting in respect of Electrocon. We have also been informed by the Company
representatives that the charge was closed and the Belapur Property is not mortgaged at present, however, we have not been provided with any
documents in this respect.
Anagram Note: We recommend that the Client may, depending on the materiality of the registered office to the business, consider undertaking an
independent title search on the Belapur Property. Further, the existing shareholders should be required to provide suitable representations and
warranties under the transaction documents in respect of title to the Belapur Property, as well as a specific indemnity in the event of any issues
relating to the title of the registered office.
1.3 There are no material issues impacting the Proposed Transaction based on our review of the documents in respect of the other premises used by the
Company.
31
ANNEXURE I: LIST OF SHAREHOLDERS OF THE COMPANY

AS ON MARCH 31, 2021
# Shareholder Residential Status No. of shares Share Capital

1. Suresh Kumar Sood Resident 800 80,000
2. Anita Sood Mankar NRI 100 10,000
3. Kavita Sood Wootton NRI 100 10,000
Total 1,000 1,00,000
32
ANNEXURE II: SUMMARY OF PURCHASE ORDERS
1. Purchase Order dated January 31, 2022 issued by Schaeffler India Limited (“Schaeffler”) to the Company
Name of the counter party Schaeffler India Limited

Nature of the contract Purchase Order
Term February 1, 2022 to February 31, 2022
Termination NA
Payment terms 15 (fifteen) days after every month end
Indemnity Company to indemnify Schaeffler (and its directors, officers, affiliates etc.) against any liabilities and expenses incurred
by Schaeffler as a result of any inaccuracy / breach of the warranties or covenants made by the Company.
Warranty NA
Insurance Company to take adequate insurance coverage of its employees in case of any accident, injury, death etc. Further, upon
request, the Company shall provide Schaeffler with copies of its insurance certificates.
Limitation of Liability NA
Assignment/ Subcontractor Company to not transfer, assign or sub-contract this contract or any rights / obligations to or for any third
party.
Non-compete/ Exclusivity NA
Terms of use of equipment, limitation The Company is an independent service provider.
on scope of services
Restriction on the Customer to use, NA
dispose of or deal with equipment or
make any claim upon the equipment
Provision for reimbursement of costs NA
incurred by the Company for
transporting, loading / unloading,
commissioning / de-commissioning
equipment
Restriction on deploying / utilizing NA
manpower provided by the Company
for unrelated purposes
Liability in case of loss / damage caused The Purchase Order specifies that the only liability / obligation of the Schaeffler is to make undisputed payments to the
to the equipment on account of the Company regularly on a monthly basis – no liability to customer in case of loss / damage of equipment.
Customer or in case of theft / loss of
33
equipment operated in the premises of

the Customer
2. Purchase Order dated May 7, 2022 issued by Schaeffler India Limited (“Schaeffler”) to the Company

Term May 1, 2022 to April 30, 2023
Termination NA
Payment terms 15 (fifteen) days after month end
Indemnity Company to indemnify Schaeffler (and its directors, officers, affiliates etc.) against any liabilities and expenses
incurred by Schaeffler as a result of any inaccuracy / breach of the warranties / covenants made by the
Company.
Warranty NA
Insurance Company to take adequate insurance coverage of its employees in case of any accident, injury, death etc.
Further, upon request, the Company shall provide the Schaeffler with copies of its insurance certificates.
party.
equipment
34
to the equipment on account of the Company regularly on a monthly basis – no liability to Schaeffler in case of loss / damage of equipment.
the Customer
3. Purchase Order dated July 29, 2022 issued by Saint-Gobain India Private Limited - GYPRoC (“Saint-Gobain”) to the Company
Name of the counter party Saint-Gobain India Private Limited - GYPRoC

Term Delivery date is August 11, 2022
Termination No language on the manner of termination of contract.
Company to provide any transition assistance that may be reasonably requested by Saint-Gobain.
Payment terms 30 (thirty) days from date of invoice subject to acceptance
Indemnity Company to indemnify Saint-Gobain against all losses and expenses arising directly / indirectly out of the
performance of the agreement from (i) injury to any employee / subcontractor of Company; (ii) loss or damage
to Company property, any subcontractor and any personnel, whether or not the negligence or breach by Saint-
Gobain has caused or contributed to such injury or loss and; (iii) any breach of its confidentiality obligations.
Warranty NA
Insurance Company to provide and maintain at its expense, the minimum insurance coverage required by law to protect the parties
from any liability which may arise out of or result from performing the obligations of this agreement.
Further, upon request, the Company shall provide the Saint-Gobain with copies of its insurance certificates.
Limitation of Liability Except for the Company's obligations under confidentiality, payment, taxes and delivery, neither party shall be
liable for any claims, expenses, or losses for an aggregate amount in excess of the fees paid by Saint-Gobain.
Assignment/ Subcontractor Neither party may assign this agreement without prior consent of the other party.
Company may subcontract any of its obligations under this agreement.
Terms of use of equipment, limitation NA
35

equipment
Liability in case of loss / damage caused NA
to the equipment on account of the
the Customer
4. Work Order dated March 31, 2022 issued by Alok Industries Limited (“Alok”) to the Company
Name of the counter party Alok Industries Limited
Nature of the contract Work Order
Term April 1, 2022 to March 31, 2023
Termination Alok can terminate the contract without cause by serving 3 (three) months written notice.
If performance of the contract is found to be in breach and /or unsatisfactory, the contract can be terminated by Alok
without giving notice or assigning any season thereof.
Payment terms Billing cycle to be from 1st of every month till 30th of the month
Indemnity NA
Warranty NA
Insurance NA
Assignment/ Subcontractor NA
36
equipment
the Customer
5. Work Order dated October 20, 2020 issued by Brainbees Solutions Private Limited (“Brainbees”) to the Company
Name of the counter party Brainbees Solutions Private Limited

Nature of the contract Work Order
Term 3 (three) years
Termination Brainbees to give 2 (two) months advance notice before termination of agreement with or without any reason.
If the Company fails to maintain up to 95% of working hours then Brainbees is entitled to terminate the agreement by
giving 30 (thirty) days’ notice during lock-in period of 3 (three) years. In case of a particular equipment, if service level
of 95% is not met in 2 (two) consecutive months, then Brainbees has option to return the equipment or terminate the
agreement.
Payment terms Invoice to be submitted by Company at the end of each month and payment to be made within 30 (thirty) days
from receipt of invoice.
Indemnity Company to indemnify the Brainbees and its directors, employees, successors etc. against all losses or liabilities, directly
or indirectly relating to (i) breach of any warranties or covenants; (ii) negligent or intentional acts / omissions or wilful
misconduct of Company; (iii) any failure of Company to comply with any applicable law; (iv) any injury, disease, or
death of any person, fine, penalty, or damage to or loss of any property, resulting from the purchase, use or operation of
any product; (v) any third party claim regarding Company’s performance; (vi) any third party claim regarding
Brainbees’s use of Company’s intellectual property.
Warranty NA
Insurance Company to carry adequate insurance including workman’s compensation and employer’s liability (and any other
coverage required by law); comprehensive general liability including contractual, and products liability and Motor Third
Party Liability Insurance as required by law and in alignment with the Motor Vehicle Act. Special insurance
requirements, if any, may be specified.
37
equipment
the Customer
6. Purchase Order dated July 15, 2022 issued by JCB India Limited (“JCB”) to the Company
Name of the counter party JCB India Limited

Term NA
Termination JCB may immediately terminate the agreement upon notice to the Company if:
(i) the Company doesn’t comply with any terms of the purchase order and fails to remedy such breach within 5 (five)
days after a notice from JCB;
(ii) the Company breaches any material obligation under the order which is not capable of remedy;
(iii) the Company becomes insolvent or makes an assignment for the benefit of its creditors;
(iv) the Company has a receiver, receiver and manager, administrator, investigator or liquidator appointed over
all or any of its assets or if an order is made or a resolution passed for the winding up of that party;
38
(v) the Company discontinues / ceases to do business so as not to be able to perform the agreement; or
(vi) the Company repeatedly fails to supply the goods and/or perform the services in conformity with the requirements of
the agreement or to JCB's satisfaction.
JCB may by giving 7 (seven) days' advance notice to the Company, terminate the agreement for any reason whatsoever.
Notwithstanding anything contained in the agreement and irrespective of expiry or termination of the agreement, the
Company shall continue to supply the Goods (as and when order is placed byJCB) for a period of 10 (ten) years from the
sale of the last machine (incorporating such Good) by JCB to the end customer.
Payment terms 15 (fifteen) days from date of invoice
Indemnity Company to indemnify JCB and its directors, employees, affiliates against all losses and expenses in connection with: (i)
any wilful, unlawful or negligent act or omission; (ii) a breach, failure or delay in performing the agreement; (iii) any
alleged or actual infringement of any third party's intellectual property rights or other rights arising out of the receipt, use
or supply of the goods and/or the deliverables of the services; (iv) any loss or injury to any person, defective goods
caused or deficiency of the services or contributed to by the acts or omissions of the Company or its representatives.
Warranty Warranty on goods shall be as per warranty agreement executed with Company.
In case of no warranty agreement executed, Company shall offer warranty on goods until the latter of:
(i) 24 (twenty-four) months from the date of invoice of the Company for supply of goods; or
(ii) 18 (eighteen) months from the date of installation of the Goods in the field;
Company shall provide where applicable or required byJCB, warranty documents to JCB including certificates issued by
manufacturer of the goods, at the time of delivery of goods under the purchase order.
Insurance Company to take out and maintain all insurance in accordance with the requirements of applicable laws.
Assignment/ Subcontractor Company cannot assign or subcontract its rights or obligations without JCB ’s prior written consent.
equipment
39

the Customer
7. Purchase Order dated July 13, 2022 issued by JCB India Limited (“JCB”) to the Company
Name of the counter party JCB India Limited

Term NA
Termination JCB may immediately terminate the agreement upon notice to the Company if:
(i) the Company doesn’t comply with any terms of the purchase order and fails to remedy such breach within 5 (five)
days after a notice from JCB;
(ii) the Company breaches any material obligation under the order which is not capable of remedy;
(iii) the Company becomes insolvent or makes an assignment for the benefit of its creditors;
(iv) the Company has a receiver, receiver and manager, administrator, investigator or liquidator appointed over
all or any of its assets or if an order is made or a resolution passed for the winding up of that party;
(v) the Company discontinues / ceases to do business so as not to be able to perform the agreement; or
(vi) the Company repeatedly fails to supply the goods and/or perform the services in conformity with the requirements of
the agreement or to JCB's satisfaction.
JCB may by giving 7 (seven) days' advance notice to the Company, terminate the agreement for any reason whatsoever.
Notwithstanding anything contained in the agreement and irrespective of expiry or termination of the agreement, the
Company shall continue to supply the Goods (as and when order is placed byJCB) for a period of 10 (ten) years from the
sale of the last machine (incorporating such Good) by JCB to the end customer.
Payment terms 15 (fifteen) days from date of invoice
Indemnity Company to indemnify JCB and its directors, employees, affiliates against all losses and expenses in connection with: (i)
any wilful, unlawful or negligent act or omission; (ii) a breach, failure or delay in performing the agreement; (iii) any
alleged or actual infringement of any third party's intellectual property rights or other rights arising out of the receipt, use
or supply of the goods and/or the deliverables of the services; (iv) any loss or injury to any person, defective goods
caused or deficiency of the services or contributed to by the acts or omissions of the Company or its representatives.
Warranty Warranty on goods shall be as per warranty agreement executed with Company.
In case of no warranty agreement executed, Company shall offer warranty on goods until the latter of:
(i) 24 (twenty-four) months from the date of invoice of the Company for supply of goods; or
40
(ii) 18 (eighteen) months from the date of installation of the Goods in the field;
Company shall provide where applicable or required byJCB, warranty documents to JCB including certificates issued by
manufacturer of the goods, at the time of delivery of goods under the purchase order.
Insurance Company to take out and maintain all insurance in accordance with the requirements of applicable laws.
Assignment/ Subcontractor Company cannot assign or subcontract its rights or obligations without JCB ’s prior written consent.
equipment
the Customer
8. Purchase Order dated January 1, 2022 issued by Honda Cars India Limited (“Honda”) to the Company
Name of the counter party Honda Cars India Limited

Term NA
Termination This agreement may be terminated at any time by either party by giving 30 (thirty) days written notice.
In the event of any breach of the obligations and undertakings on the part of the Company, Honda MAY terminate by
giving 15 (fifteen) days’ notice in writing.
41
Payment terms All payment shall be made as agreed in the work order against invoice.
Indemnity Company to indemnify Honda and its employees, officers and directors against all or any claim, expenses and liabilities,
arising out of default of the Company.
Warranty NA
Insurance The liability of Insurance till the completion of the job at site will be of the Company else otherwise agreed by Honda in
writing.
Assignment/ Subcontractor The Company cannot assign its rights or obligations without Honda ’s prior written consent.
equipment
the Customer
9. Professional Services Agreement dated January 11, 2022 issued by International Packaging Products Private Limited (“IPPL”) to the Company
Name of the counter party International Packaging Products Private Limited

Nature of the contract Agreement
Term December 1, 2021 to November 30, 2024
42
Termination If either party commits a material breach of this agreement which is not cured within 90 (ninety) days after written notice
is delivered to the breaching party, the non-breaching party may terminate the agreement. If either party (i) becomes
insolvent or shall cease to pay its debts when due, or (ii) is found bankrupt, whether voluntary or involuntary and such
insolvency is not corrected, or such bankruptcy declaration is not vacated within 90 (ninety) days, then the other party
shall have the right to immediately terminate this agreement by providing the bankrupt/insolvent party written notice of
such termination.
IPPL may terminate this agreement, whether in whole or in part, at any time and for any reason upon 90 (ninety) days
prior written notice to Company.
Payment terms Schedule of payment amounts to be invoiced to the IPPL.
Indemnity Company to indemnify IPPL against all claims or causes of action arising on account of injury, disease, or
death, or damages to property to the extent they result directly or indirectly from the performance by
Company, whether such liability is due to imperfections of any material furnished by IPPL, or by premises
themselves or any equipment. The Company shall have no liability for costs to the extent caused by the
negligence of IPPL.
Company to indemnify IPPL against any liability arising out of (i) Company’s libel, slander or defamation, (ii)
Company’s infringement of any intellectual property right arising out of systems provided or work performed,
(iii) Company’s piracy, plagiarism or unfair competition, (d) Company’s unlawful disclosure, use, or
misappropriation of another party's trade secret, or (e) Company’s negligence or wilful misconduct.
Warranty Company to warrant the performance of the contract and perform any work not in compliance with this warranty that is
brought to its attention within a reasonable time after that work is performed at no additional cost to IPPL.
Insurance The Company shall provide contractors plant and machinery insurance policy/ workman compensation policy
to take care of equipment and operators property while handling it.
Limitation of Liability The liability of IPPL to be limited to the actual direct out-of-pocket expenses that are reasonably incurred by Company
and shall not exceed the fees paid by IPPL under the work order. No limitation on Company liability.
Assignment/ Subcontractor The Company cannot assign or subcontract its rights or obligations without IPPL’s prior written consent.
43
equipment
the Customer
10. Purchase Order dated July 11, 2022 issued by Schaeffler India Limited (“Schaeffler”) to the Company

Term August 1, 2022 to December 31, 2022
Termination NA
Indemnity Company to indemnify Schaeffler (and its directors, officers, affiliates etc.) against any liabilities and expenses incurred
by Schaeffler as a result of any inaccuracy / breach of the warranties or covenants made by the Company.
Warranty NA
Insurance Company to take adequate insurance coverage of its employees in case of any accident, injury, death etc. Further, upon
request, the Company shall provide Schaeffler with copies of its insurance certificates.
party.
44

equipment
to the equipment on account of the Company regularly on a monthly basis – no liability to customer in case of loss / damage of equipment.
the Customer
11. Purchase Order dated February 3, 2022 issued by Nestle India Limited (“Nestle”) to the Company
Name of the counter party Nestle India Limited

Term April 1, 2022 to March 31, 2027
Termination Contract can be terminated by either party by giving 3 (three) months’ notice or 3 (three) months’ hiring
charges in lieu thereof.
Payment terms Within 60 (sixty) days of invoice date
Indemnity NA
Warranty NA
Insurance NA
45
equipment
the Customer
12. Purchase Order dated June 23, 2022 issued by PGP Glass Private Limited (“PGP”) to the Company
Name of the counter party PGP Glass Pvt. Ltd.

Term April 2022 to March 2023
Termination NA
Payment terms 15 (fifteen) days from the receipt of goods/approval of service
Indemnity Company will be liable to indemnify PGP in case of mismatch of credit in GST return.
Warranty NA
Insurance NA
equipment
46

the Customer
13. Purchase Order dated July 18, 2022 issued by PGP Glass Private Limited (“PGP”) to the Company

Term NA
Termination NA
Warranty NA
Insurance NA
equipment
47

the Customer
14. Purchase Order dated April 18, 2022 issued by PGP Glass Private Limited (“PGP”) and to the Company

Termination NA
Warranty NA
Insurance NA
equipment
48

the Customer
15. Purchase Order dated April 18, 2022 issued by PGP Glass Private Limited (“PGP”) and to the Company

Termination NA
Warranty NA
Insurance NA
equipment
49

the Customer
16. Contract Change Order dated January 13, 2021 issued by Reliance Industries Limited (“Reliance”) to the Company
Name of the counter party Reliance Industries Limited

Nature of the contract Order
Term January 1, 2020 to March 31, 2021
Termination NA
Payment terms As specified in the purchasing document.
Indemnity NA
Warranty NA
Insurance NA
equipment
50
the Customer
17. Contract Order dated October 27, 2021 issued by Reliance Industries Limited (“Reliance”) to the Company
Name of the counter party Reliance Industries Limited

Nature of the contract Contract Order
Term January 1, 2022 to December 31, 2022
Termination NA
Payment terms As specified in the purchasing document.
Indemnity NA
Warranty NA
Insurance NA
equipment
Liability in case of loss / damage NA
caused to the equipment on account of
the Customer or in case of theft / loss
of equipment operated in the premises
of the Customer
51
18. Purchase Order dated July 20, 2022 issued by Saint-Gobain India Private Limited - GYPRoC (“Saint-Gobain”) and to the Company
Name of the counter party Saint-Gobain India Pvt. Ltd. - GYPROC

Term Delivery date is September 30, 2022
Company to provide any transition assistance that may be reasonably requested by Saint-Gobain
Payment terms 30 (thirty) days from date of invoice
Warranty NA
equipment
52

of the Customer
19. Purchase Order dated July 8, 2022 issued by Saint-Gobain India Private Limited - GYPRoC (“Saint-Gobain”) and to the Company
Name of the counter party Saint-Gobain India Pvt. Ltd. - GYPROC

Term Delivery date is October 15, 2022
Company to provide any transition assistance that may be reasonably requested by Saint-Gobain.
Payment terms 30 (thirty) days from date of invoice subject to acceptance
Warranty NA
53

equipment
of the Customer
20. Purchase Order dated July 28, 2022 issued by Schaeffler India Limited (“Schaeffler”) to the Company

Term August 1, 2022 to January 31, 2023
Termination NA
Indemnity Company to indemnify Schaeffler (and its directors, officers, affiliates etc.) against any liabilities and expenses
incurred by Schaeffler as a result of any inaccuracy / breach of the warranties / covenants made by the
Company.
Warranty NA
Insurance Company to take adequate insurance coverage of its employees in case of any accident, injury, death etc.
Further, upon request, the Company shall provide the Schaeffler with copies of its insurance certificates.
Assignment/ Subcontractor Company to not transfer, assign or sub-contract this contract or any rights / obligations to or for any third party.
Terms of use of equipment, limitation The Purchase Order specifies that the Company is an independent service provider relationship.
54

equipment
Liability in case of loss / damage The Purchase Order specifies that the only liability / obligation of the Schaeffler is to make undisputed payments to the
caused to the equipment on account of Company regularly on a monthly basis – no liability to Schaeffler in case of loss / damage of equipment.
of the Customer
55

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Privileged and Confidential

Draft for discussion purposes only September 21

LEGAL DUE DILIGENCE KEY ISSUES REPORT

SKAN MARINE SERVICES PRIVATE LIMITED

September 21October 137, 2022

SCOPE OF REVIEW AND LIMITATIONS............................................................................................................................................................................ 1

SCOPE OF REVIEW AND LIMITATIONS

1.4 Please note the following in relation to the Report:

(f) anti-bribery, actuarial, commercial or operational matters;

(g) matters not pertaining to Indian law; and

(h) adequacy of the insurance cover.

LIST OF DEFINITIONS AND ABBREVIATIONS

1956 Act Companies Act, 1956

The key corporate details of the Company are as follows:

Name of the Company Skan Marine Services Private Limited

Authorised share capital INR 5,00,000

Latest ADT-1 Filed)

Sr. Name of the Director/KMP DIN/PAN Current Designation Date of Appointment

4. Related Party Transactions:

5. Details of investments made by the Company

6. Employee stock options

8. Filings with the RBI

Anagram Note: To be discussed with the Client.

9. Key observations on minutes of meetings

10. Stamp duty on share certificates

(B) MATERIAL CONTRACTS

1.3 No long form contracts

1.4 Onerous clauses in agreements with customers

2. Change in Ownership of Company

3. Filings for closure of charges

(D) HUMAN RESOURCES

2. Compliance by the Company with key labour law legislations

2.1 Compliance under the EPF Act

2.2 Compliance under the ESI Act

2.3 Compliance under POSH Act

2.4 Compliance under the Payment of Wages Act, 1936

2.6 Compliance under Payment of Bonus Act, 1965 (“Bonus Act”)

2.7 Compliance under Gratuity Act

2.8 Other key labour legislations

3. Human Resource Policies

We have been provided with the Company’s human resources policy.

What about wages control legislations??

3. Certificate of Registration as per Form Maharashtra State Tax on January 4, 2010 -

1.6 Absence of certain permits andestablishment related registrations

1.7 Certification from the Fire Department

(F) INTELLECTUAL PROPERTY

We have been provided details of the following litigations by the Company:

Sr. No Matter Status Quantum

Sr. No Policy Validity Amount (INR) Policy Details

Sr. No Policy Validity Amount (INR) Policy Details

<< how many employees are covered here?>>

(I) REAL ESTATE

Sr. No Location Owned/Leased Purpose

1.2 Mortgage on the Belapur Property

ANNEXURE I: LIST OF SHAREHOLDERS OF THE COMPANY

# Shareholder Residential Status No. of shares Share Capital

ANNEXURE II: SUMMARY OF PURCHASE ORDERS