Capital Reduction in OTIS

Document Summary

Otis Elevator Company (India) Limited has issued a postal ballot notice to its members, seeking approval for a special resolution regarding the reduction of equity share capital. The notice is in accordance with Section 110 of the Companies Act, 2013, read with relevant rules.

Key Dates and Procedures:

• Commencement of Voting: August 1, 2024, at 09:00 A.M (IST)
• End of Voting: August 30, 2024, at 05:00 P.M (IST)
• Announcement of Results: September 05, 2024
• Members can vote through postal ballot or remote e-voting. CDSL is the agency providing the remote e-voting facility.

Proposed Special Resolution: Reduction of Equity Share Capital

• The company proposes to reduce its issued, subscribed, and paid-up equity share capital from INR 11,80,82,220 to INR 11,59,98,190 by cancelling 2,08,403 equity shares.
• This reduction involves paying off the Non-Promoter Shareholders at a rate of INR 4,311.6 per equity share. GT Valuation Advisors Private Limited determined this fair value in a valuation report dated July 23, 2024.
• The reduction is selective, targeting only the equity shares held by Non-Promoter Shareholders which amounts to 1.76% of the total issued, subscribed, and paid-up equity share capital.
• Upon the Tribunal's sanction and confirmation of the capital reduction, Non-Promoter Shareholders will receive the consideration for their shares, net of applicable withholding taxes.
• After the capital reduction is sanctioned by the Tribunal, the Board will fix a record date to determine the names of the Non-Promoter Shareholders.
• The Board is authorized to agree to any modifications or conditions imposed by the Tribunal or any statutory authority. The company is also authorized to not add the words "And Reduced" to its name.

Rationale for the Reduction:

• The company's equity shares were delisted from the stock exchanges in 2003, leaving Non-Promoter Shareholders without a trading platform.
• Non-Promoter Shareholders requested to be bought out since they lack a mechanism to monetize their shareholding.
• The company believes the capital reduction will provide liquidity and an exit opportunity to these shareholders in a fair manner.
• The Capital Reduction will not adversely affect the company's operations.

Capital Structure (Pre- and Post-Reduction):

| Particulars | Pre-Reduction | Post-Reduction | | ------------------------ | ------------------------------ | ------------------------------ | | Number of Equity Shares | 1,18,08,222 | 1,15,99,819 | | Amount (INR) | 11,80,82,220 | 11,59,98,190 |

Shareholding Pattern (Pre- and Post-Reduction):

| Particulars | Pre-Reduction | % of holding | Post-Reduction | % of holding | | ------------------------ | --------------- | ------------ | -------------- | ------------ | | Promoter Group | 1,15,99,819 | 98.24% | 1,15,99,819 | 100% | | Non-Promoter Shareholder | 2,08,403 | 1.76% | Nil | Nil | | Total | 1,18,08,222 | 100% | 1,15,99,819 | 100% |

Additional Information:

• The company has obtained valuation reports from GT Valuation Advisors Private Limited and CA Harsh Chandrakant Ruparelia to determine the fair value of the equity shares.
• Non-Promoter Shareholders are responsible for their own tax obligations arising from the capital reduction. The Company will withhold applicable taxes before payment.
• The special bank account, opened for this Capital Reduction, is the final destination for the tribunal.

The Board of Directors recommends passing the special resolution. The Postal Ballot Form is provided in the notice, along with detailed instructions for both postal and electronic voting. Members can inspect relevant documents electronically or at the company's registered office.