LETTER OF OFFER › sebi_data › attachdocs › 1289384643543.pdfLETTER OF OFFER THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION This Letter of Offer is being sent

LETTER OF OFFER

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION This Letter of Offer is being sent to you as an equity shareholder(s) of Zensar Technologies Limited in accordance with Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998, as amended. If you require any clarification about the actions to be taken, you may consult your stockbroker or your investment consultant or the Manager/Registrar to the Buyback. In case you have sold all your equity shares in the Company, please hand over this Letter of Offer and the accompanying Form of Acceptance-cum-Acknowledgement and Transfer Deed to the member of the stock exchange through whom the sale was effected.

Zensar Technologies Limited Registered Office and Address for Correspondence: Zensar Knowledge Park, Plot # 4, MIDC, Kharadi, Off Nagar Road, Pune –

411014 Contact Person: Nilesh Limaye, Company Secretary, Phone: (020) 66057815, Fax: (022) 66057888

E-mail: [email protected] / [email protected]

MAKES A CASH OFFER AT Rs. 165/- PER SHARE TO BUY BACK UP TO

2,424,000 FULLY PAID-UP EQUITY SHARES OF RS. 10/- EACH

• Shares proposed to be bought back constitute 10.11% of the total number of issued, subscribed and paid up Shares of the Company as on September 30, 2009.

• The total amount to be used for the Buyback amounts to less than 25% of the networth of the Company excluding capital reserves, as at March 31, 2009.

• The Buyback is through a tender offer and the Specified Date is October 30, 2009. • The payment of consideration shall be made through ECS (subject to availability of all information for crediting the funds),

demand drafts / pay Order, or similar instruments payable at par at all the centers where the Company is accepting applications.

• The Offer is pursuant to SEBI (Buy-Back of Securities) Regulations, 1998 and subsequent amendments as well as in accordance with provisions of Sections 77A, 77AA and 77B and all other applicable provisions, if any, of the Companies Act, 1956 and the relevant provisions of the Memorandum of Association and Articles of Association of the Company and subject to such other approvals, permissions and sanctions as may be necessary.

• A copy of the public announcement issued on October 13, 2009 and this Letter of Offer (including the Form of Acceptance-cum-Acknowledgement, Withdrawal Form and ECS Mandate Form) is expected to be available at SEBI’s website (www.sebi.gov.in) during the period the Buyback is open.

• Form of Acceptance-cum-Acknowledgement, ECS Mandate Form and Withdrawal Form is enclosed together with this document.

• Shareholders are advised to refer to Section XVIII on Statutory Approvals and Section XXIII on Taxation before tendering their Shares in the Buyback.

BUYBACK OPENS ON: November 16, 2009 (Monday) BUYBACK CLOSES ON: November 30, 2009 (Monday)

LAST DATE OF RECEIPT OF COMPLETED ACCEPTANCE FORM: November 30, 2009 (Monday) MANAGER TO THE BUYBACK REGISTRAR TO THE BUYBACK Kotak Mahindra Capital Company Limited Bakhtawar, 3rd Floor, 229,Nariman Point, Mumbai – 400 021 Tel No: (022) 6634 1110 Fax No: (022) 2284 0492 Email: [email protected] SEBI Registration Number: INM000008704 Validity Period: 01/02/2008 – 31/01/2011 Contact Person: Chandrakant Bhole

Sharepro Services (India) Private Limited 13 A/B, Samhita Warehousing Complex, 2nd Floor Sakinaka Telephone Exchange Lane, Off. Andheri-Kurla Road, Sakinaka, Andheri (E), Mumbai - 400 072 Tel No : (022) 67720300 / 67720400 Fax No : (022) 28508927 Email : [email protected] SEBI Registration Number : INR000001476 Validity Period : 16/08/2007 to 15/08/2010 Contact Person : Ganesh Rane / Anand Moolya / Prakash Khare

The Offer is pursuant to SEBI (Buy-Back of Securities) Regulations, 1998 and subsequent amendments as well as in accordance with provisions of Sections 77A, 77AA and 77B and all other applicable provisions, if any, of the Companies Act, 1956

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INDEX

Section Particulars Page No. I SCHEDULE OF ACTIVITIES 3 II KEY DEFINITIONS 3 III DISCLAIMER CLAUSE 4 IV DETAILS OF RESOLUTIONS PASSED AT THE BOARD MEETINGS 5 V DETAILS OF PUBLIC ANNOUNCEMENT 6 VI DETAILS OF THE BUY BACK OFFER 6 VII AUTHORITY FOR THE BUY BACK 7 VIII NECESSITY FOR BUY BACK 8 IX MANAGEMENT DISCUSSION AND ANALYSIS ON LIKELY IMPACT OF THE BUY BACK ON THE

COMPANY 8 X BASIS OF CALCULATING BUYBACK PRICE 10 XI SOURCES OF FUNDS 10 XII DETAILS OF ESCROW ACCOUNT AND AMOUNT TO BE DEPOSITED THEREIN 10 XIII FIRM FINANCING ARRANGEMENTS 10 XIV CAPITAL STRUCTURE AND SHAREHOLDING PATTERN 11 XV BRIEF INFORMATION ABOUT THE COMPANY 13 XVI FINANCIAL INFORMATION 17 XVII STOCK MARKET DATA 18 XVIII STATUTORY APPROVALS 20 XIX REGISTRAR TO THE BUYBACK 20 XX COLLECTION CENTRES 21 XXI PROCESS AND METHODOLOGY FOR THE BUYBACK 22 XXII PROCEDURE FOR TENDERING SHARES AND SETTLEMENT 23 XXIII NOTE ON TAXATION 27 XXIV DECLARATION BY THE BOARD OF DIRECTORS 29 XXV AUDITOR’S CERTIFICATE 30 XXVI MATERIAL DOCUMENTS FOR INSPECTION 31 XXVII COMPLIANCE OFFICER 31 XXVIII REMEDIES AVAILABLE TO SHAREHOLDERS/ BENEFICIAL OWNERS 31 XXIX INVESTOR SERVICE CENTRE 32 XXX MANAGER TO THE BUYBACK 32 XXXI DIRECTORS’ RESPONSIBILITY STATEMENT 32

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I SCHEDULE OF ACTIVITIES

Activity Date Day Initial Board Meeting approving Buyback July 23, 2009 Thursday Special Resolution passed by shareholders by Postal Ballot approving Buyback September 29, 2009 Tuesday

Committee of the Board of Directors Meeting approving specifics of Buyback October 5, 2009 Monday

Public Announcement of Buyback October 13, 2009 Tuesday Specified Date October 30, 2009 Friday Buyback Opens on November 16, 2009 Monday Last Date of Withdrawal November 25, 2009 Wednesday Buyback Closes on November 30, 2009 Monday

Last Date of Verification December 11, 2009 Friday

Last Date of Intimation Regarding Acceptance/Non Acceptance and Dispatch of Consideration/Share Certificates/Demat Instruction

December 14, 2009 Monday

Last Date of Extinguishment of Shares December 17, 2009 Thursday II KEY DEFINITIONS

Act The Companies Act, 1956, as amended Articles

Articles of Association of the Company

Board Board of Directors of the Company or Committee constituted for the purpose of the Buyback

BSE Bombay Stock Exchange Limited Buyback Committee Buyback committee comprising of Mr. A. T. Vaswani, Mr. P. K. Choksey and Mr.

Arvind Agarwal Directors of the Company constituted on July 23, 2009 Buyback/Offer Offer to buyback 2,424,000 equity shares of Rs. 10/- each of Zensar

Technologies Limited at a price of Rs. 165/- per Share in accordance with the Regulations and relevant provisions of the Act via the tender offer route

Buyback Price Price at which shares will be bought back from the shareholders i.e. Rs. 165/- per Share

Buyback Size Number of Shares proposed to be bought back multiplied by the Buyback Price i.e. Rs. 399,960,000/-

CDSL Central Depository Services (India) Limited Company Zensar Technologies Limited (ZTL) DP Depository Participant Eligible Person(s) Person(s) eligible to participate in the Buyback and would mean all

shareholders (registered and unregistered)/beneficial owners of Shares Form Form of Acceptance-cum-Acknowledgement IT Act Income-tax Act, 1961, as amended LOF Letter of Offer Manager to the Buyback/Offer

Kotak Mahindra Capital Company Limited

NSDL National Securities Depository Limited

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NSE National Stock Exchange of India Limited PA/ Public Announcement

Public announcement regarding the Buyback dated October 13, 2009 issued in English language in Financial Express (English), Jansatta (Hindi) and Loksatta (Marathi)

RBI Reserve Bank Of India Registrar to the Buyback/Offer

Sharepro Services (India) Private Limited

Regulations The Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998, as amended

SEBI The Securities and Exchange Board of India Shares Fully paid-up equity shares of face value of Rs.10/- each of the Company Specified Date Date for the purpose of determining the names of the shareholders of the

Company to whom the Letter of Offer will be sent, as set out in the proposed timetable, being October 30, 2009

Takeover Regulations The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997

III DISCLAIMER CLAUSE

As required, a copy of this Letter of Offer has been submitted to the Securities and Exchange Board of India. It is to be distinctly understood that submission of the Letter of Offer to SEBI should not, in any way be deemed/construed that the same has been cleared or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of the Company to meet the Buyback commitments or for the correctness of the statements made or opinions expressed in the offer document. The Manager to the Buyback, Kotak Mahindra Capital Company Limited certifies that the disclosures made in the offer document are generally adequate and are in conformity with the provisions of the Companies Act, 1956 and the SEBI (Buy Back of Securities) Regulations, 1998, as amended. This requirement is to facilitate investors to take an informed decision for tendering their shares in the Buyback. It should also be clearly understood that while the Company is primarily responsible for the correctness, adequacy and disclosure of all relevant information in the offer document, the Manager to the Buyback is expected to exercise due diligence to ensure that the Company discharges its duty adequately in this behalf and towards this purpose, the Manager to the Buyback, Kotak Mahindra Capital Company Limited has furnished to SEBI a Due Diligence Certificate dated October 14, 2009 in accordance with SEBI (Buy-Back of Securities) Regulations, 1998, which reads as follows: “We have examined various documents and material papers relevant to the Buyback, as part of the due-diligence carried out by us in connection with the finalisation of the Public Announcement and Letter of Offer. On the basis of such examination and the discussions with the Company, we hereby state that:

• The Public Announcement and Letter of Offer are in conformity with the documents, materials and

papers relevant to the Buyback. • All legal requirements connected with the said offer including SEBI (Buy-Back of Securities)

Regulations, 1998, have been duly complied with. • The disclosures in the Public Announcement and Letter of Offer are, to the best of our knowledge,

true, fair and adequate in all material respects for the shareholders of the Company to make a well-informed decision in respect of the Buyback.

• Funds used for Buyback shall be as per the provisions of the Companies Act.”

The filing of offer document with SEBI, does not however, absolve the Company from any liabilities under the provisions of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearances as may be required for the purpose of the proposed Buyback.

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Promoters/ Directors of the Company declare and confirm that no information/material likely to have a bearing on the decision of investors has been suppressed/withheld and/or incorporated in the manner that would amount to mis-statement/misrepresentation and in the event of it transpiring at any point of time that any information/material has been suppressed/ withheld and/or amounts to a mis-statement/misrepresentation, the promoters/directors and the Company shall be liable for penalty in terms of the provisions of the Companies Act, 1956 and the SEBI (Buy Back of Securities) Regulations, 1998. Promoters/Directors also declare and confirm that funds borrowed from Banks and Financial Institutions will not be used for the Buyback.

IV DETAILS OF RESOLUTIONS PASSED AT THE BOARD MEETINGS

The Buyback through a tender offer has been duly authorised by resolutions passed by the Board of Directors of the Company at their meeting held on July 23, 2009, including constituting a committee for this purpose and resolutions passed by the Buyback Committee at its meeting held on October 1, 2009 and October 5, 2009. The details of the relevant resolutions passed are given below. Resolutions passed at the Board meeting held on July 23, 2009 RESOLVED that pursuant to the provisions of Sections 77A, 77AA, 77B of the Companies Act, 1956 (“Act”) and in compliance of the Securities and Exchange Board of India (Buyback of Securities) Regulations 1998, including any statutory modifications or reenactments thereof (“Buyback Regulations”), subject to approval of members of the Company and such other approvals, permissions and sanctions as may be necessary, consent of the Board be and is hereby accorded for Buyback of the Company’s fully paid-up equity shares of Rs. 10/- each for an aggregate amount not exceeding Rs. 40.00 crores and at a price not exceeding Rs. 165/- per share (“Buyback”); RESOLVED FURTHER that a Buyback Committee comprising of Mr. A. T. Vaswani, Mr. P. K. Choksey and Mr. Arvind Agarwal Directors of the Company be and is hereby constituted and the powers of the Board in respect of Buyback be delegated to the Committee (“Buyback Committee”); RESOLVED FURTHER that the Buyback Committee be and is hereby authorised to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient, usual or proper, including but not limited to, finalising the terms of the Buyback, the specific price(s) for the Buyback within maximum ceiling of Rs. 165 /-, the actual number of shares to be bought back, the mechanism for the Buyback, escrow arrangements, opening bank accounts for the purpose of payment and authorising persons to operate the said accounts, appointment of merchant bankers, brokers, bankers, escrow agents, registrars, solicitors, depository participants and other intermediaries/agencies for the implementation of the Buyback and carry out incidental documentation as also to prefer applications to the appropriate authorities for their requisite approvals as also to initiate all necessary actions for preparation and issue of various documents, including Public Announcement, Letter of Offer, Declaration of Solvency, extinguishment of share certificates and Certificates of extinguishment required to be filed in connection with the Buyback on behalf of the Board; RESOLVED FURTHER that the consent of the Board is hereby accorded to implement the Buyback in one or more tranches from time to time, terms of each tranche of the Buyback, including the price, the amount to be utilised, the number of equity shares to be bought back, the manner, source, mechanism and the time frame therefore, within the statutory limits prescribed by law, as the Buyback Committee may in its absolute discretion deem fit; RESOLVED FURTHER that the quorum for the meeting of the Buyback Committee shall be two Directors; RESOLVED FURTHER that the Buyback Committee be and is hereby authorized to use the Common Seal of the Company on relevant documents required to be executed for the Buyback of shares;

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RESOLVED FURTHER that the approval of the shareholders by postal ballot for Buyback be sought and the Buyback Committee be and is hereby authorized to finalization of the notice for the postal ballot, the accompanying explanatory statement, calendar of events and carrying out all incidental activities; RESOLVED FURTHER that the Board confirms that it has made a full enquiry into the affairs and prospects of the Company and has formed the opinion –

(i) That immediately following the date of Board Meeting held on July 23, 2009, there will be no grounds

on which the company can be found unable to pay its debts. (ii) That as regards the Company’s prospects for the year immediately following that date and having

regard to the Board’s intentions with respect to the management of the Company’s business during that year and to the amount and character of the financial resources, which will, in the Board’s view, be available to the Company during that year, the Company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of one year from that date.

(iii) In forming its opinion aforesaid, the Board has taken into account the liabilities as if the Company

were being wound up under the provisions of the Act (including prospective and contingent liabilities).

RESOLVED FURTHER that the Buyback Committee be and is hereby authorised to delegate all or any of the authorities conferred on it to any Officer(s) / Authorised Signatory(ies) of the Company; RESOLVED FURTHER that for the purpose of giving effect to this resolution, the Buyback Committee is hereby authorised to give such directions as may be necessary or desirable and to settle any questions or difficulties whatsoever that may arise in relation to the Buyback; RESOLVED FURTHER that nothing contained herein shall confer any right on any shareholder to offer and/or any obligation on the Company or the Board or the Buyback Committee to Buyback any shares, and/or impair any power of the Company or the Board or the Buyback Committee to terminate any process in relation to such Buyback, if so permissible by law.

V DETAILS OF PUBLIC ANNOUNCEMENT

1. The Public Announcement regarding the Buyback was issued in English language in Financial

Express (English), Jansatta (Hindi) and Loksatta (Marathi) on October 13, 2009, Tuesday.

VI DETAILS OF THE BUY BACK OFFER

2. Zensar Technologies Limited (“Company”) hereby announces the buy back (“Buyback”) of 2,424,000 fully paid-up equity shares of the face value Rs. 10/- each (“Shares”) from the existing owners of Shares of the Company through a tender offer, in accordance with Section 77A, 77AA, 77B of the Companies Act, 1956 (“Act”), the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, as amended (“Regulations”), the relevant provisions of the Memorandum of Association and Articles of Association of the Company and subject to such other approvals, permissions and sanctions as may be necessary, at a price of Rs. 165/- per Share (“Buyback Price”) payable in cash, for an aggregate amount of Rs. 399,960,000/- (Rupees Thirty Nine Crores Ninety Nine Lacs and Sixty Thousand only) (“Buyback Size”). The Buyback Size represents up to 16.01% of the aggregate of the Company’s total paid-up equity share capital and free reserves as on March 31, 2009. The aggregate number of Shares to be bought back by the Company under the Buyback is 2,424,000, which is not more than 25% of the Company’s total paid-up equity shares as on March 31, 2009, being the date of the last Audited Balance Sheet of the Company prior to the shareholder resolution dated September 29, 2009 approving the Buyback. The number of shares bought back would constitute 10.11 % of the total number of issued, subscribed and paid up Shares of the Company as on September 30, 2009.

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3. In terms of the Regulations, under tender offer route, the promoters have the option to participate in the Buyback. In this regard, promoter group companies have informed the Company vide their letter dated July 25, 2009 regarding their intention to participate in the Buyback. The extent of their participation has been detailed in clause 16 of this document.

4. The Buyback is through a tender offer and the Specified Date is October 30, 2009. 5. The Buyback is made to all Eligible Persons. The procedure for the buyback is described in Section

XXII. 6. The Shares proposed to be bought back will be bought back with all their benefits and must be free

from all liens, charges and encumbrances. 7. The aggregate shareholding of the promoters, directors of the promoter group companies and

directors of the Company is 13,110,011 Shares, comprising 54.68% of the paid up equity share capital of the Company as on September 30, 2009.

8. Assuming that the entire amount of Rs. 399,960,000 is utilized for the Buyback and the number of

Shares tendered by promoter group in the Buyback is 2,424,000, the promoter holding in the Company would be in the range of 47.82% and 57.02% and the public holding would be in the range of 42.98% and 52.18% depending on the extent of Shares tendered by public shareholders as more fully set out in clause 35 of this LOF. Thus, the public holding would be above the minimum level required as per listing conditions/agreement.

As mentioned in this clause, promoter holding in the Company post the Buyback could potentially increase to a maximum of 57.02%. In such a situation, the promoter group would be availing the benefit of consolidation permitted under Regulation 11-(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“Takeover Regulations”) to the extent of 2.02% with the option to further consolidate their shareholding by another 2.98% anytime after the Buyback as per the Takeover Regulations.

VII AUTHORITY FOR THE BUY BACK

9. Pursuant to Section 77A, 77AA and 77B and other applicable provisions of the Act, the Regulations

and in terms of Article 4 B of the Articles of Association of the Company, the Buyback through a tender offer has been duly authorised by:

• Resolutions passed by the Board of Directors of the Company at their meeting held on July 23, 2009, including constituting a committee of Board of Directors (“Buyback Committee”) for this purpose.

• A special resolution passed by the shareholders of the Company by Postal Ballot, the results of which were announced on September 29, 2009.

• Resolutions passed by the Buyback Committee on October 1, 2009 and October 5, 2009.

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VIII NECESSITY FOR BUY BACK

10. The Company has accumulated free reserves of Rs.22,588.33 Lacs as on March 31, 2009. The Buyback is proposed on account of the Company’s accumulated cash being more than what is needed for regular business operations.

11. The Buyback is expected to contribute to the overall enhancement of shareholder value and result in

an increase in the return on equity of the Company. 12. The Buyback is not expected to impact growth opportunities for the Company.

IX MANAGEMENT DISCUSSION AND ANALYSIS ON LIKELY IMPACT OF THE BUY BACK ON THE

COMPANY

13. The Buyback is not likely to cause any impact on the profitability of the Company, except the loss of other income, if any, on the amount of cash to be utilized for the Buyback.

14. The Buyback is not expected to impact growth opportunities for the Company. 15. The Buyback is expected to contribute to the overall enhancement of shareholder value and result in

an increase in the return on equity of the Company. 16. Following promoter group companies have informed the Company vide their letter dated July 25,

2009 regarding their intention to participate in the proposed Buyback. Details of date and price of acquisition of shares are given below:

Sr. No.

Name of the Promoter

Group Company

Total no. of Shares held in

the Company as on October 8,

2009

Maximum no. of

Shares intended to

be offered in the

Buyback* Date of

Acquisition

No. of Shares

AcquiredCost of

Acquisition (Rs.)

487,873

27.07.04

487,873 41,981,471.651

Jubilee Investments & Industries Limited

1,140,029

637,059 28.08.01 637,059 79,632,375.00

2 Hilltop Holdings India Limited 1,548,400 1,141,000 28.07.04 1,141,000 98,183,050.00

3 Kocilim Breweries Private Limited

3,054,124 634,068 21.02.00 634,068 21,257,530.44

4 Pedriano Investments Limited

4,764,691 2,900,000 03.07.07 2,900,000 565,575,025.30**

*Promoter and promoter group companies individually or collectively have undertaken not to tender equity shares in the proposed buyback exceeding maximum of 2,900,000 equity shares subject to the Buyback Regulations.

** Exchange rate used for conversion from USD to Rs. is the RBI Reference Rate as on July 3, 2007, i.e. 1 USD = Rs. 40.58 (Source: www.rbi.org.in)

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Subsequently, promoter group companies have undertaken and confirmed to the Company that they would be participating in the Buyback and shall collectively tender 2,424,000 Shares in the Buyback

17. The Buyback will not result in a change in control or otherwise affect the existing management

structure of the Company. 18. Consequent to the Buyback and based on the number of shares bought back within each category

of shareholders, the shareholding pattern of the Company would undergo a change. 19. The aggregate shareholding of the promoter group, directors of the promoter group companies and

directors of the Company is 13,110,011 Shares, comprising 54.68% of the equity share capital of the Company as on September 30, 2009. The promoter group has undertaken to collectively tender 2,424,000 Shares subject to Buyback Regulations as more fully set out in clause 16 above. In addition, directors of the promoter group companies and directors of the Company have informed that they do not intend to tender their Shares in the Buyback.

20. Assuming that the entire amount of Rs. 399,960,000 is utilized for the Buyback and the number of

Shares tendered by promoter group in the Buyback is 2,424,000, the promoter holding in the Company would be in the range of 47.82% and 57.02% and the public holding would be in the range of 42.98% and 52.18% depending on the extent of Shares tendered by public shareholders as more fully set out in clause 35 of this LOF. Thus, the public holding would be above the minimum level required as per listing conditions/agreement.

21. The shareholding of foreign investors consisting of OCBs, NRIs, GDRs, Non Residents and FIIs

prior to the Buyback is 22.41% as per the shareholding pattern of the Company as on September 30, 2009. The same would change depending on the extent to which they subscribe to the Buyback and their shares are accepted.

22. Post the Buyback, the debt-equity ratio of the Company shall be within the limit of 2:1 as prescribed

under section 77A of the Act. As per the certificate dated October 8, 2009 from the auditors of the Company, the Company did not have any debt and hence the debt-equity ratio of the Company was Nil, as on March 31, 2009.

23. Salient financial parameters consequent to the Buyback based on the latest audited results are as

under:

Pre Buyback* Post Buyback* Net Worth (Rs. Lacs) a 25,444.66 21,445.06 Average Return on Net Worth/ Return on Equity (%)b

26.32% 27.88%

Basic Earnings per Share - Basic (Rs) c 25.23 27.14 Book value per Share/ NAV per Share (Rs) d 106.17 99.55 P/E based on PAT as per the latest audited financial result (Rs.) e

3.09 3.09

Debt-Equity Ratio f N.A. N.A. *Pre and Post Buyback Data is as on March 31, 2009

a. Net Worth consists of Equity Share Capital and Reserves and Surplus as per the audited Balance Sheet as on March 31, 2009. The Post Buyback amount is computed assuming full acceptance of the offer.

b. Computed as PAT as per the audited Profit and Loss Account for the year ended March 31, 2009 divided by the average of the opening and closing Net Worth as defined in (a) above. The Post Buyback average return on Net Worth has been computed after adjusting PAT for loss of income on account of amount deployed for Buyback (assumed at 5% per annum post tax on Buyback Size) and for computing average Net Worth the closing Net Worth has been adjusted for Buyback Size.

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c. Pre Buyback Basic Earnings per share has been computed by dividing PAT as per the audited Profit and Loss Account for the year ended March 31, 2009 by the weighted average number of equity shares outstanding as at March 31, 2009. Post Buyback Earnings per Share has been computed by dividing adjusted PAT as in (b) above by the Post Buyback share capital.

d. Book value per Share/ NAV per Share has been computed as Net Worth as computed in (a) above divided by number of shares - pre and post Buyback

e. Pre Buyback P/E has been computed by dividing the market price as on March 31, 2009 with the Basic Earning per share as computed above.. The post Buyback P/E is considered to be the same. The actual P/E post Buyback would depend on the prevailing market price of the Company’s Shares post the Buyback

f. Debt-Equity Ratio is not applicable as there are no debt funds

X BASIS OF CALCULATING BUYBACK PRICE

24. The Buyback Price has been arrived at after considering various factors such as average market

value of Shares on BSE and NSE on the date of Board meeting approving the Buyback, net worth of the Company as well as future growth and outlook of the industry and possible impact of the Buyback on the earnings per share of the Company.

25. The Buyback Price is at a premium of 18.40% over the closing price of the Company’s equity shares

on BSE and 17.73% over the closing price of the Company’s equity shares on NSE respectively as at July 20, 2009, the day before the notice convening the first Board Meeting to consider the proposal of the Buyback was given to the BSE and NSE.

XI SOURCES OF FUNDS

26. Assuming full acceptance, the funds that would be deployed by the Company for the purposes of the

Buyback, would be Rs. 399,960,000/- (Rupees Thirty Nine Crores Ninety Nine Lacs and Sixty Thousand only).

27. The funds for Buyback will be available from cash balances available with the Company and /or

liquidation of financial instruments held by the Company that have been generated through internal accruals. The Company does not intend to raise additional debt for the explicit purposes of the Buyback. Thus, borrowed funds will not be used for the Buyback. The cost of financing the Buyback would be notional loss in other income, if any.

XII DETAILS OF ESCROW ACCOUNT AND AMOUNT TO BE DEPOSITED THEREIN

28. The Company has opened an escrow account in accordance with Regulation 10 of the Regulations in the form of cash deposit of a sum of Rs. 100,000,000 (Rupees Ten Crores only) (“Escrow Amount”), being in excess of 25% of the Buyback Size, with ICICI Bank Limited, Capital Market Division, Fort, Mumbai 400 001 (“Bank”), with directions to the Bank to act on the instructions of the Manager to the Buyback. This has been confirmed vide a confirmation letter dated October 8, 2009 issued by the Bank.

XIII FIRM FINANCING ARRANGEMENTS

The Company, duly authorized by its Buyback Committee, has set aside funds in term deposit accounts for the purpose of fulfillment of the obligations of the Company under the Buyback. Such term deposits, together with funds provided for escrow arrangements, are in excess of the Buyback Size. Based on the resolution of the Buyback Committee dated October 5, 2009 in this regard, and other facts/documents, Chetan Mayur & Co, A-2 Gruhlaxmi Apartments, 415/1, Somwar Peth, Near Rasta Peth MSEB Office, Pune – 411 011, Tel. No. +91 20 26052169 / 32301203, Partner – Chetan Shroff (Membership number 104273), Chartered Accountants, have certified, vide their letter dated October 8, 2009 that the Company has made firm financing arrangements for fulfilling the obligations under the Buyback. The Manager to the Buyback, having regard to the above, confirms that firm arrangements for fulfilling the obligations under the Buyback are in place.

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XIV CAPITAL STRUCTURE AND SHAREHOLDING PATTERN

29. The capital structure as on October 08, 2009 is as follows:

(Rs. Lacs) Pre Buyback Authorised Share Capital 2,75,00,000 Equity Shares of Rs. 10/- each 2,50,000 Preference Shares of Rs. 100/- each

2,750.00 250.00

3,000.00 Issued, Subscribed and Paid-Up Share Capital 23,980,265 fully paid-up Equity Shares of Rs. 10/- each 2,398.02

30. Assuming full acceptance in the Buyback the capital structure post Buyback would be as follows:

(Rs. Lacs)

Post Buyback Authorised Share Capital 2,75,00,000 Equity Shares of Rs. 10/- each 2,50,000 Preference Shares of Rs. 100/- each

2,750.00 250.00

3,000.00 Issued, Subscribed and Paid-Up Share Capital 21,556,265 fully paid-up Equity Shares of Rs. 10/- each

2,155.62

31. There are no partly paid-up Shares of the Company.

32. There are no outstanding instruments convertible into Shares other than 864,542 options

outstanding as on October 8, 2009 granted under equity stock option scheme.

33. In accordance with the resolution passed by the Buyback Committee on October 1, 2009, the Company shall not issue and allot any Shares including by way of bonus or convert any ESOPs into Shares, from the date of Public Announcement till the date of closure of this Buyback.

34. There have been no other buyback programmes of the Company over the last 3 years from the date

of the Letter of Offer

35. The shareholding pattern of the Company as on September 30, 2009 as well as post Buyback shareholding, are as shown below:

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Particulars Number of

Shares

% to existing share capital

No. of Shares

post Buyback*

% holding

post Buyback*

No. of Shares

post Buyback**

% holding post

Buyback**Promoter Group 12,729,582 53.10 12,287,422 57.02 10,305,582 47.82 Directors of the Promoter group companies

Nil Nil Nil Nil Nil Nil

Persons who are in control 380,429 1.59 380,429 1.77 380,429 1.77

Foreign Investors (GDRs/ OCBs/FIIs/NRIs/Non-residents)

5,373,844 22.41

Indian Financial Institutions/ Banks/Mutual Funds/Govt. Companies

453,066 1.89

Public including other Bodies Corporate

5,037,893 21.01

8,882,962 41.22 10,864,803 50.41

Total 23,974,814 100.00 21,550,814 100.00 21,550,814 100.00* Assuming (i) full acceptance of the Buyback (ii) all public shareholders (except for directors of the Company) tender their

Shares and (iii) promoter group tenders 2,424,000 Shares in the buyback

** Assuming (i) full acceptance of the Buyback (ii) none of the public shareholders tender their shares and (iii) promoter group tenders 2,424,000 shares in the buyback

36. During the period of last 12 months preceding the date of this LOF, the promoter group companies had purchased Shares of the Company as detailed below:

Name of the Promoters

No. of Shares

purchased

Maximum Purchase

Price

Minimum Purchase

Price

Average Purchase

Price Date of

Purchase Kocilim Breweries Pvt Ltd

500,000 87.50 79.55 86.52 06.03.09

Kocilim Breweries Pvt Ltd

50,000 87.50 87.50 87.50 09.03.09

Kocilim Breweries Pvt Ltd

100,000 87.00 87.00 87.00 31.03.09

During the period of last 12 months preceding the date of this LOF none of the directors of the Company or the directors of the promoter group companies have purchased or sold any Shares of the Company. In addition to above, during the period of last 12 months preceding the date of this LOF, promoter group companies have made an inter-se transfer of 4,00,000 shares between the promoter group companies, the details of which are as follows:

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Date of Transfer

Name of the Transferor

Name of the Transferee

No. of Shares

Transferred Price

Shares transferred / total Shares outstanding

as on the date of transfer

(%)

Compliance with

Takeover Regulations

20.08.09

Pedriano Investments Limited

Hilltop Holdings India Limited

3,00,000 189.6 1.25 Not Applicable

08.09.09

Pedriano Investments Limited

Hilltop Holdings India Limited

1,00,000 247.5 0.42 Not Applicable

Other than above, none of the promoters and directors of the promoter group companies and persons in control of the Company have purchased or sold any shares during the period of 12 months preceding the date of this LOF.

37. Assuming full acceptance of the Buyback, the issued, subscribed and paid up equity share capital of

the Company would be Rs. 2,155.08 Lacs comprising of 21,550,814 Shares of Rs. 10/- each as more fully set out in clause 35 of this LOF.

38. There is no pending scheme of amalgamation or compromise or arrangement pursuant to any

provisions of the Act. XV BRIEF INFORMATION ABOUT THE COMPANY

39. The Company was originally incorporated on March 29, 1963 under the Companies Act, 1956 as

International Computers and Tabulators Indian Manufacturing Company Limited. Its name was subsequently changed to International Computers Indian Manufacture Limited on July 8, 1968. The name was further changed to Fujitsu ICIM Limited on August 10, 1994 and to Zensar Technologies Limited on August 30, 2001. The registered office of the Company is located at Zensar Knowledge Park, Plot # 4, MIDC, Kharadi, Off Nagar Road, Pune – 411014.

40. The paid up equity share capital of the Company for the year ended March 31, 2009 was Rs 2,397

Lacs and the reserves and surplus for the year ended March 31, 2009 were Rs 23,048 Lacs.

41. The Company is a software and services organization providing end to end services from IT development to business process outsourcing on the one hand and consulting to implementation services on the other.

42. It is headquartered in Pune and has presence in 18 countries across 24 locations.

43. The services provided by the Company include process and technology consulting, business

process outsourcing services, IT-enabling services and IT support services.

44. The shares of the Company are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), in India.

45. Following is the share capital history of the Company from 1963-64 to 1993-94:

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Year Class of Shares

Authorised Capital

(No. of Shares)

Issued & Paid-Up Capital

(No. of Shares) 1963-64 Equity 100,000 50,000 1965-66 Equity 100,000 50,000 1978-79 Equity 2,500,000 750,000 1979-80 Equity 2,500,000 2,500,000 1986-87 Equity 5,000,000 4,137,646 1989-90 Equity 10,000,000 5,793,106 1990-91 Equity 10,000,000 8,607,388 1992-93 Equity 15,000,000 9,296,405

1993-94 Equity

Preference 22,500,000

750,000 13,975,941

200,000 Following is the share capital history of the Company from 1994-95 till the date of this LOF:

Year Class of Shares

Authorised Capital (No. of Shares)

Issued & Paid-Up Capital (No. of Shares) Corporate Action

Compliance with

Takeover Regulations

1994-95 Equity Preference 22,500,000

750,00017,442,760

200,000


250,00023,288,064

Nil

5,845,304 Shares issued upon merger of Fujitsu ICIM Limited and Zensar Technologies Limited

Not Applicable


250,00023,336,293

Nil

48,229 Shares issued upon exercise of ESOPs by the employees of the Company

Not Applicable


250,00023,435,884

Nil


Not Applicable


250,00023,920,412

Nil


Not Applicable


250,00023,964,935

Nil


Not Applicable


250,00023,965,670

Nil

735 Shares issued upon exercise of ESOPs by the employees of the Company

Not Applicable

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250,00023,980,265

Nil


Not Applicable

46. The Board of Directors of the Company comprises the following:

Name Designation Qualifications

Date of Appointment/

Reappointment Other Directorships

Harsh Vardhan Goenka

Chairman Graduation in Economics & MBA 04.09.2001

Bajaj Electricals Limited, CEAT Limited, KEC International Limited, RPG Enterprises Limited, Raychem RPG Limited, RPG Life Sciences Limited, Spencer International Hotels Limited, SICOM Limited, Zensar Technologies, Inc.

Ganesh Natarajan

Vice Chairman & Managing Director

BE (Mech), P.G. (Ind) Engg. Ph.D 04.09.2001

Zensar Transformation Services Limited., Zensar OBT Technologies Limited, Zensar Technologies (Singapore) Pte Limited, Zensar Technologies Inc., Zensar Technologies (UK) Limited, Zensar Technologies (Shenzhen) Limited, Zensar Advanced Technologies Limited, Zensar Technologies Gmbh i.L., Global Talent Track Private Limited

John Levack Director MBA

16.01.2003

Moser Baer India Limited, RT Packaging Limited, ElectraPartners Asia Pvt. Limited, Zensar Technologies Inc., Electra Partners Asia Limited, Electra Partners Mauritius Limited, EP Asia Limited, Aligned Capital Limited

Arvind Agrawal Director

MBA (IIM Ahmedabad) in

29.01.2001 Spencer International Hotels Limited

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Name Designation Qualifications

Date of Appointment/

Reappointment Other Directorships Marketing & HR

Pesi Kushru Choksey Director

Chartered Accountant 24.04.1980

Kesoram Industries Limited, Sericol India Private Limited

Pradipta Kumar Mohapatra

Director B.E (Chemical) and MBA 31.01.2001

Spencer International Hotels Limited, Brabourne Enterprises Limited, Morarjee Mills Limited, Zensar OBT Technologies Limited, Executive & Business Coaching Foundation India Limited, Chennai Business School Limited, Zensar Technologies, Inc., Zensar Technologies (UK) Limited, Zensar Technologies (Shenzhen) Limited, Zensar Advanced Technologies Limited, Hemas Holdings, plc, Sri Lanka, Saregama India Limited, Zensar Technologies GmbH, Germany, Totus Consulting Services Private Limited

Ajit Tekchand Vaswani Director

Chartered Accountant and Chartered Secretary

09.02.1996

Zensar Transformation Services Limited, Vulcan Engineers Limited, KEC International Limited, Emmellen Biotech Pharmaceuticals Limited, Zensar Technologies (Singapore) Pte Limited, P.J. Margo Private Limited, Margo Biocontrols Pvt. Limited, Sonoco India Pvt. Limited, Zensar Technologies, Inc.

Venkatesh Kasturirangan* Director

B.Tech in Chemical Engineering 28.01.2008

Galaxy Surfactants Limited

*Mr. Venkatesh Kasturirangan was appointed as Additional Director on the Board of Director on 28th January, 2008 and was re-appointed as Director of the Company at the Annual General Meeting of the Company held on 23rd July, 2008

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47. The details of change in Board of Directors during the last 3 years from the date of this LOF is as under:

Name Appointment/ Resignation Effective Date Reasons

Jack Noble Resignation 05.07.2007 Resigned consequent to sale of Shares by Fujitsu Services Limited, UK

Andrew MacNaughton

Resignation 05.07.2007 Resigned consequent to sale of Shares by Fujitsu Services Limited, UK

Petri Imberg Resignation 05.07.2007 Alternate Director to Jack Noble. Ceased to be Director consequent to resignation by Jack Noble

Anthony Pipe Resignation

05.07.2007 Alternate Director to Andrew MacNaughton. Ceased to be Director consequent to resignation by Andrew MacNaughton

Nirmalya Kumar Resignation 16.07.2007 Resigned from the Office of Board of Director

Venkatesh Kasturirangan

Appointment 28.01.2008 Appointed as Additional Director on the Board of Company. Regularised at Annual General Meeting held on 23.07.2008

None of the directors is concerned or interested either directly or indirectly in the Buyback save and except to the extent that in like manner as far all other remaining shareholders, their percentage holding in the post buy-back equity share capital will proportionately stand affected as a result of the Buyback.

48. Total Income of the Company has grown from Rs. 18,044 Lacs as on March 2005 to Rs. 43,062

Lacs as on March 2009 at a CAGR of 24.3%. During the same time period, the Profit after tax (PAT) has grown from Rs. 3,759 Lacs to Rs. 6,047 Lacs

XVI FINANCIAL INFORMATION

49. The brief audited financial information of the Company for the last three financial years and the unaudited financial results for the period ended June 30, 2009 is provided below. It must be noted that the financial results for the period ended June 30, 2009 although unaudited have been subjected to a limited review by the statutory auditors as is required under clause 41 of the listing agreement with the stock exchanges. The results have been adopted by the Board of Directors of the Company at its meeting on July 23, 2009 and the statutory auditors have issued their limited review report dated July 23, 2009 on the same.

(Rs. Lacs)

Period Ending Jun 30, 2009 Mar 31, 2009 Mar 31, 2008 Mar 31, 2007 Period 3 months 12 months 12 months 12 monthsIncome from operations 11,466 42,187 33,587 27,828

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Period Ending Jun 30, 2009 Mar 31, 2009 Mar 31, 2008 Mar 31, 2007 Other Income 60 875 1,027 718 Total Income 11,526 43,062 34,614 28,546 Total Expenses excluding Interest, Depreciation, Tax and Extraordinary Items

8,419 34,111 28,072 23,340

Earnings before Interest, Depreciation, Tax and Extraordinary Items

3,107 8,952 6,543 5,205

Interest 5 54 112 125 Depreciation 595 2,229 1,564 1,447 Profit before Tax 2,507 6,668 4,867 3,634 Provision for tax (including deferred tax, fringe benefit tax and prior years adjustments)

155 621 329 248

Profit after Tax 2,352 6,047 4,538 3,386 As on Mar 31, 2009 Mar 31, 2008 Mar 31, 2007 Equity Share Capital 2,397 2,396 2,392 Share Application Money Pending Allotment - 1 13

Reserves & Surplus * 23,048# 18,106 14,698 Net Worth * 25,445 20,503 17,103 Total Debt - - 1,452 Total Capital Employed 25,445 20,503 18,554 Key Ratios Mar 31, 2009 Mar 31, 2008 Mar 31, 2007 Earnings per Share (Rs)

9.81*** 25.23 18.94 14.16

Book value per Share (Rs) 106.17 85.56 71.50 Debt-Equity Ratio (Debt/Networth) - - 0.08

Average Return on Networth (%)** 26.32% 24.14% 21.64%

* Computation of Net Worth, Reserves & Surplus wherever applicable, has been arrived at after deducting miscellaneous expenditure not written off

** Computed as PAT divided by the average of the opening and closing networth for the year

*** Not annualized

# Reserves & Surplus includes Free Reserves of Rs. 22,588.33 Lacs as defined under section 372A of the Act

Notes:

1. Earnings per Share = Profit After Tax / No. of Shares at the year end

2. Book value per Share = Net Worth / No. of Shares at the year end The Company shall abide by the Takeover Regulations, if applicable. The Company has complied with sections 77A(2)(c), (d), 77B(1) and 77B(2) of the Companies Act, 1956 and will comply with clause 23 of the Regulations as and when applicable.

XVII STOCK MARKET DATA

50. The Shares of the Company are listed on BSE and NSE.

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51. The high and low market prices for the last three years (April to March periods) and the monthly high, low and average market prices for the six months preceding this LOF and the corresponding volumes on BSE are as follows:

Period High (Rs.)

Date of High and Number

of Shares traded on that

date

Low (Rs.)

Date of Low and Number of Shares traded on that date

Average Price* (Rs.)

Total volume

traded in period

2006-2007 303.00 24.04.2006

385,916 166.25 14.06.2006

20,170 226.27 7,399,592

2007-2008 379.90 30.05.2007

182,757 88.00 24.03.2008

24,907 218.84 7,865,328

2008-2009 163.50 30.04.2008

32,147 64.65 15.01.2009

1,045 108.24 2,113,422

Apr 2009 114.80 22.04.2009

41,839 77.50 01.04.2009

4,383 93.92 247,718

May 2009 133.95 26.05.2009

8,380 93.70 12.05.2009

6,858 106.85 190,303

Jun 2009 130.00 10.06.2009

42,058 108.10 24.06.2009

5,703 119.81 288,159

Jul 2009 177.70 31.07.2009

54,830 112.15 08.07.2009

10,815 136.02 647,037

Aug 2009 228.00 28.08.2009

100,336 160.00 10.08.2009

6,774 182.19 750,442

Sep 2009 259.90 09.09.2009

36,484 211.40

02.09.2009 63,543

230.67 722,016

Oct 2009 242.20 01.10.2009

26,244 190.05

16.10.2009 53,229

212.85 638,523

Source: www.bseindia.com

*Arithmetical average of closing prices

52. The high and low market prices for the last three years (April to March periods) and the monthly

high, low and average market prices for the six months preceding this LOF and the corresponding volumes on NSE are as follows:

Period High (Rs.)



date

Low (Rs.)



Total volume

traded in period

2006-2007 302.25 24.04.2006

567,805 164.10 14.06.2006

13,810 226.46 9,957,593

2007-2008 375.00 30.05.2007

273,055 77.00 24.03.2008

26,166 219.04 11,078,212

2008-2009 163.75 30.04.2008

62,410 66.00 25.02.2009

5,070 108.48 3,514,580

Apr 2009 113.00 22.04.2009

21,030 77.50 08.04.2009

8,707 93.77 302,549

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Period High (Rs.)



date

Low (Rs.)



Total volume

traded in period

May 2009 133.00 26.05.2009

17,571 92.20 12.05.2009

24,105 106.52 334,335

Jun 2009 129.50 11.06.2009

13,854 106.50 24.06.2009

8,814 119.38 393,323

Jul 2009 177.45 31.07.2009

96,063 111.60 08.07.2009

21,504 136.15 1,100,664

Aug 2009 228.65 28.08.2009

106,400 159.00 10.08.2009

19,027 182.11 1,088,694

Sep 2009 265.00 09.09.2009

54,271 207.00

01.09.2009 117,644

230.83 991,856

Oct 2009 243.75 01.10.2009

39,490 10,714

17.10.2009 10,714

212.93 1,020,220

Source: www.nseindia.com

*Arithmetical average of closing prices

53. Notice of the first Board Meeting convened to consider the proposal of the Buyback was given to the BSE and NSE on July 21, 2009. The closing price of the Company’s equity share on July 21, 2009 on BSE was Rs. 135.05 and on NSE was Rs. 135.45. The Board, at its meeting held on July 23, 2009, approved the proposal for the Buyback at a price not exceeding Rs. 165/- per share and the intimation was sent to BSE and NSE on the same day. The high and low market prices on BSE on July 23, 2009, were Rs. 155.90 and Rs. 146.00 respectively and on NSE were Rs. 156.00 and Rs. 145.00 respectively. The high and low market prices on BSE on July 22, 2009 (being the day previous to the day on which the Board Meeting was held to approve the Buyback) were Rs. 148.00 and Rs. 139.00 respectively and on NSE were Rs. 149.00 and Rs. 140.20 respectively. The Buyback Committee decided on the final Buyback Price of Rs 165/- at its meeting held on October 5, 2009 and on that date the high and low market prices on BSE were Rs. 232.00 and Rs. 220.15 respectively and on NSE were Rs. 232.50 and Rs. 220.50 respectively.

XVIII STATUTORY APPROVALS

54. The Buyback offer is subject to approvals, if any required, under the provisions of the Act, the Regulations and/or such other acts in force for the time being. The Buyback of Shares from non-residents (NR) and Non Resident Indian (NRI) shareholders will be subject to approvals, if any, of the appropriate authorities, including Reserve Bank of India (RBI), as applicable.

XIX REGISTRAR TO THE BUYBACK

The Company has appointed the following as the Registrar to the Buyback:

Name : Sharepro Services (India) Private Limited Address : 13 A/B, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone Exchange Lane Off. Andheri-Kurla Road, Sakinaka, Andheri (E), Mumbai - 400 072 Phone : 022 67720300 / 67720400 Fax : (022) 28508927 Email : [email protected] Contact Person : Ganesh Rane / Anand Moolya / Prakash Khare

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XX COLLECTION CENTRES

Eligible Persons are requested to submit their Form(s) and requisite documents either by registered post/courier to the Registrar to the Buyback, super scribing the envelope as “Zensar Buy Back”, or hand deliver the same at any of the Collection Centres mentioned below.

Place Address Telephone/Email Mode of Delivery

Mumbai Sharepro Services (India) Private Limited 13 AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Tel. Exchange Lane, Off Andheri Kurla Road, Sakinaka, Andheri (East), Mumbai – 400 072 Contact Person: Mr. Ganesh Rane

Tel: (022) 67720300 / 67720400 Email: [email protected]

Hand Delivery / Courier / Registered Post

Pune Sharepro Services (India) Private Limited 3 Chintamani Apartments, 824 D Bhandarkar Road, Off V G Kale Path, Pune - 411004 Contact Person: Mr. Milind Shroff / Mr. Uday

Tel: (020) 25662855 Email: [email protected]

Hand Delivery

Chennai Sharepro Services (India) Private Limited C/o Skypak Financial Sec. Pvt. Ltd. 3rd floor A Mount Chambers, 758 Anna Salai, Chennai – 600002 Contact Person: Mr. Devanandan


Hand Delivery

New Delhi Sharepro Services (India) Private Limited C/o Skypak Financial Sec. Pvt. Ltd. 3rd floor, Satyam Hotel Building, 10 Kutub Road, Ramnagar, Paharganj, Next to Hotel Nest, New Delhi – 110055 Contact Person: Mr. Anil Mehta

Tel: (011) 23538459 / 23553208/ 23621147 / 23512189 Email: [email protected]

Hand Delivery

Kolkata Sharepro Services (India) Private Limited C/o Skypak Financial Sec. Pvt. Ltd. 19, Kinderdine Lane, 3rd floor,


Hand Delivery

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Place Address Telephone/Email Mode of Delivery

Beside Yogayog Bhavan, Opp Indian Airlines, Kolkata – 700012 Contact Person: Mr. Somnath Banerjee

XXI PROCESS AND METHODOLOGY FOR THE BUYBACK

55. The Buyback is being made pursuant to SEBI (Buy-Back of Securities) Regulations, 1998 and subsequent amendments thereof as well as in accordance with the provisions of Sections 77A, 77AA, 77B and all other applicable provisions, if any, of the Act.

56. The maximum amount that would be deployed for the Buyback amounts to Rs 399,960,000/-. The

total amount to be used for the Buyback amounts to less than 25% of the paid up capital and eligible free reserves of the Company as at March 31, 2009. The aggregate paid up share capital and free reserves as at March 31 2009 was Rs. 24,984.90/- Lacs.

57. The maximum number of Shares to be bought back in the Buyback is 2,424,000 Shares.

58. The number of Shares bought back would constitute approximately 10.11% of the total number of

issued, subscribed and paid up Shares of the Company as on September 30, 2009.

59. The Shares shall be bought back at a price of Rs. 165/- per Share.

60. The Buyback is being implemented on a proportionate basis through the tender offer route.

61. Promoter group companies have informed the Company vide their letter dated July 25, 2009 regarding their intention to participate in the Buyback. Subsequently, promoter group companies have confirmed to the Company that they would be participating in the Buyback and shall collectively tender 2,424,000 Shares of the Company under the Buyback.

62. The aggregate shareholding of the promoters, directors of the promoter group companies and

directors of the Company is 13,110,011 Shares, comprising 54.68% of the paid up equity share capital of the Company as on September 30, 2009.

63. Assuming that (i) the entire amount of Rs. 399,960,000 is utilized for the Buyback (ii) the number of

Shares tendered by promoter group in the Buyback is 2,424,000 and (iii) all the non-promoter held shares (except the Shares held by directors of the Company) are tendered in the Buyback, the public holding in the Company post the Buyback would be in the range of 42.98% and 52.18% depending on the extent of Shares tendered by public shareholders, which is above the minimum level required as per listing conditions/agreement.

64. The payment of consideration for accepted applications shall be made by the Company to the

sole/first shareholder, the details of which are recorded with the Company/DP. Payment shall be made through ECS (subject to availability of all information for crediting the funds), Demand, drafts/Pay Order payable at par at all the centers where the Company is accepting applications and centers where the Company would have to open collection centers if it were carrying out a public issue of a size equal to the Buyback Size and the same shall be drawn in the name of the first named person in case of joint shareholders.

In order to avail Electronic Clearing Service (“ECS”), Eligible Persons holding shares in physical mode are requested to submit the enclosed ECS mandate form duly filled in and signed while submitting the Form if the same has not been submitted earlier to the Company/ Registrar & Share

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Transfer Agents. Eligible Persons holding shares in dematerialised mode are requested to instruct their respective depository participant regarding bank accounts in which they wish to receive the consideration before the close of the Offer. The Company/ Registrar & Share Transfer Agents will not act on any direct request received from Eligible Persons holding Shares in dematerialised form for change/deletion of such bank details.

XXII PROCEDURE FOR TENDERING SHARES AND SETTLEMENT

65. The Buyback is open to all Eligible Persons.

I. The Company shall comply with regulation 19(5) of the Regulations which states that the Company shall not buyback the locked-in shares or other specified securities and non-transferable shares or other specified securities till the pendency of the lock-in or till the shares or other specified securities become transferable.

II. The Company proposes to effect the Buyback through a tender offer, on a proportionate basis,

in accordance with the provisions of the Regulations.

66. This LOF, Form of Acceptance-cum-Acknowledgement (“Form”) and Withdrawal form, outlining the terms of the Buyback as well as the detailed disclosures as specified in the Regulations, are being mailed to shareholders of the Company whose names appear on the register of members of the Company or who are beneficial owners of Shares as per the records of NSDL/ CDSL, on the Specified Date i.e. October 30, 2009. The LOF is being sent to shareholders so as to reach them before the opening of the Buyback. The Buyback shall be open for the period as shown in the proposed timetable.

67. Eligible Persons must ensure that their Form(s), along with the requisite documents, reach the

collection centers before the close of business hours on the date of closure of the Buyback. Eligible Persons residing at a location where there is no collection center are requested to send the Form to the Registrar to the Offer by mail to their office in Mumbai (Contact details of Mumbai office of Registrar to the Offer, are provided in section XIX of this LOF).

68. The Company will consider all the shares tendered for the Buyback by Eligible Persons, for

acceptance under the Buyback, irrespective of whether such person is registered with the Company as on the Specified Date or has obtained delivery after the Specified Date or he holds the shares in street name. In case the tenderer is an unregistered shareholder, he should submit the transfer deed complete in all respects, along with the share certificate as specified elsewhere in this LOF. The Company has processed all transfer requests received on or before the Specified Date.

69. Eligible Persons may submit the Form duly signed (by all Eligible Persons in case the shares are in

joint names) at the specified Collection Centres along with the share certificate(s) / copy of DP instruction slip and other relevant documents as specified in the LOF. Each Eligible Person should submit only one Form irrespective of the number of folios he/she holds. Multiple applications tendered by any Eligible Person shall be liable to be rejected. Also, multiple tenders from the same depository account or same registered folio shall also be liable to be rejected.

70. Eligible Persons may offer for buyback their full holding or any part of their holding of Shares of the

Company, as they desire. As the Shares of the Company are tradable compulsorily in demat segment, in the event the aggregate number of Shares offered by Eligible Persons are more than the total number of Shares to be bought back by the Company, the acceptances per Eligible Person shall be made in accordance with the Regulations, i.e. valid acceptances per Eligible Person shall be equal to the valid acceptances tendered by the Eligible Person divided by the total valid acceptances received and multiplied by the total number of Shares to be bought back by the Company.

71. No single offeror can tender shares more than the shares proposed to be bought back and any Form

wherein the number of shares offered by an Eligible Person exceeds the total number of shares to be bought back will be rejected.

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72. The Company will not accept any Shares offered for buyback which are partly paid-up or under lock-

in or where there exists any restraint order of a Court for transfer / disposal or where loss of share certificates has been notified to the Company or where any other restraint subsists.

73. Where the Form is signed under Power of Attorney or by authorized signatory(ies) on behalf of a

company / body corporate, the Power of Attorney/signing authority along with the specimen signatures must have been previously registered with the Company. The registration serial number of such documents should be mentioned below the relevant signature. Where the relevant document is not so registered, a copy of the same duly certified by a Notary / Gazetted Officer should be enclosed with the Form.

74. In case one or more of the joint holders is deceased, the Form must be signed by all surviving

holder(s) and submitted along with a certified or attested true copy of the Death Certificate(s). If the sole Eligible Person is deceased, the Form must be signed by the legal representatives of the deceased and submitted along with the certified or attested true copy of Probate / Letters of Administration / Succession Certificate and all other relevant documentation while tendering their shares for the Buyback.

75. Where a joint shareholder is deceased, the Shares will be consolidated with the Shares, if any, held

and tendered by the surviving shareholder(s) for the purpose of reckoning the aggregate number of Shares to be bought back from the surviving shareholder(s).

76. In case of any lacunae and/or defect, incomplete information, late receipt or modifications in the

documents/Forms submitted, the Form(s) are liable to be rejected.

77. All Eligible Persons should provide all relevant documents, which are necessary to ensure transferability of the Shares in respect of which the Form is being sent. Such documents may include (but not be limited to): a. No objection certificate from any lender, if the Shares in respect of which the Form is sent,

were under any charge, lien or encumbrance. b. Duly attested Power of Attorney, if any person other than the Eligible Person has signed the

Form. c. In case of companies, the necessary certified corporate authorizations (including Board and/or

general meeting resolutions).

78. It is mandatory for Eligible Persons to indicate the bank account details at the appropriate place in the Form.

79. Non-receipt of this LOF by, or accidental omission to dispatch the LOF to any person who is eligible

to receive this Offer, shall not invalidate the Offer in any way.

80. In case of non-receipt of the LOF / Form:

(a) In case the Shares are in dematerialized form: A shareholder may send an application in writing on plain paper stating name, address, number of shares held, Client ID number, DP Name/ID, beneficiary account number, number of Shares tendered for the Buyback, bank account particulars for the payment of Buyback consideration etc. enclosing a photocopy of the delivery instruction in “Off-market” duly acknowledged by the DP, in favour of the depository account (details in Clause 86), and other necessary documents.

(b) In case the Shares are in physical form: A registered shareholder may send an application in writing on a plain paper signed by all shareholders stating name, address, folio number, number of equity shares held, certificate number, number of Shares tendered for the Buyback and the distinctive numbers thereof, bank account particulars for payment of consideration, etc. enclosing the original share certificate(s) with valid equity share transfer form(s) duly signed by the transferor and other necessary documents. In the event that the Eligible Person is unregistered, the application must additionally be accompanied by the original equity share

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certificate(s) accompanied by valid share transfer form(s) as received from the market, (wherein the name of the transferee has not been filled in), and the original broker contract note of a registered broker of a recognized stock exchange in relation to the purchase of the Shares tendered.

81. Eligible Persons desirous of withdrawing from their participation in the Buyback after having

submitted the Form can do so up to three working days prior to the date of closure of the Buyback i.e. up to November 25, 2009. The withdrawal option can only be exercised by submitting the Withdrawal Form (along with enclosures as applicable) so as to reach the Registrar to the Offer at its address Sharepro Services (India) Private Limited, 13 AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Tel. Exchange Lane, Off Andheri Kurla Road, Sakinaka, Andheri (E), Mumbai – 400 072 either by hand delivery, courier or registered post by 5 pm on November 25, 2009. Please note that the Withdrawal Forms will not be accepted at other collection centers. In case of withdrawal, shares tendered by such persons shall be returned only after the closure of the Buyback by the same date as date for dispatch of share consideration/share certificates/demat instruction.

82. The Company shall dispatch intimation of acceptance or non-acceptance of the shares latest by

December 14, 2009.

83. The Company will pay the consideration to the shareholders including NRIs/OCBs in respect of the shares bought back within 7 days of acceptance, in accordance with the Regulations, subject to receipt of approval from RBI as specified in clause 54. The payment of consideration for accepted applications shall be made by the Company by default to the sole/first shareholder. Payment shall be made through ECS (subject to availability of all information for crediting the funds), Demand drafts/Pay Orders or similar instruments payable at par at all the centers where the Company is accepting applications (and centers where the Company would have to open collection centers if it were carrying out a public issue of a size equal to the Buyback Size) and the same shall be drawn in the name of the first named person in case of joint shareholders. In the event that the amount payable to a tenderer exceeds Rs. 1,500/-, the instrument for such payment shall be sent by Registered Post.

In the event the Company wishes to fund the Special Account for payment of consideration to Eligible Persons from the Escrow Account, the Company shall transfer up to 90% of the amount in Escrow Account and the remaining 10% shall be released to the Company only on completion of all the formalities pertaining to the Buyback laid down in the Regulations.

84. The Shares lying to the credit of the aforesaid depository account will be extinguished within 7 days

from the date of dispatch of consideration in the manner specified in the Regulations. In respect of shares bought back in the physical form, the shares would be extinguished and share certificates physically destroyed within 7 days from the date of dispatch of consideration in the manner specified in the Regulations. The details of the shares extinguished would be notified to BSE and SEBI as per provisions of the Regulations.

85. All documents sent by Eligible Persons and all remittances to Eligible Persons will be at their own

risk. Eligible Persons are advised to adequately safeguard their interests in this regard.

For Shares held in dematerialised form

86. The Company has opened a depository account styled “Zensar Technologies Limited Buyback Offer” with Kotak Securities Limited (“Beneficiary Account”). The beneficial owners are required to execute an off-market trade by submitting the delivery instructions for debiting his/her beneficiary account with their concerned depository participant (“DP”). The date of execution entered in the delivery instruction should be on or after the date of opening of the Buyback and on or before the last date of submission of the Form to the collection centers or on or before mailing the Form to the Registrar to the Buyback as the case may be, but not later than the date of closure of the Buyback. A photocopy of the delivery instructions or counterfoil of the delivery instructions duly acknowledged by the DP shall be attached to the Form while submitting the same. The beneficial owner may note that the delivery instructions to be made to their DP should be in the “off-market trade” mode, and as

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per the details provided below. In the delivery instruction slip the section to be used is the section titled “For Off- Market Trades (Receiver Details)”.

Depository Name National Securities Depositories Limited DP Name Kotak Securities Limited DP ID Number IN300214 Beneficiary Account Name Zensar Technologies Limited Buyback Offer Beneficiary Account Number 14820261 ISIN INE520A01019 Market Off-Market Execution Date On or prior to November 30, 2009

Please note that the aforementioned account shall be closed at the end of business hours on the date of closure of the Buyback. Beneficial owners are requested to ensure the credit of their shares to the aforementioned account before the closure of the same. In the event, that any Shares have to be returned to Eligible Persons and if the returned shares are not credited to the shareholder’s beneficiary account for any reason whatsoever, the said Shares will be rematerialized and kept in physical form with the Company in trust for the shareholders until the Company receives specific directions from the shareholders with regard to these Shares.

87. In case all the shares tendered for the Buyback are accepted by the Company then the delivery

instruction given by the shareholders to their DPs will be acted upon and consideration will be paid directly to the concerned shareholder as specified earlier on.

88. Shares held in dematerialized form to the extent not accepted for the Buyback will be returned to the

beneficial owner to the credit of the beneficial owner’s depository account with their respective DP as per details furnished by the beneficial owner in the Form under intimation to the first named beneficial owner by registered post. The shares shall be transferred no later than December 14, 2009. In the event that there is a conflict between the details provided in the Form and those received electronically from the shareholder’s DP, the details received electronically shall prevail. However, the shares so received are liable to be rejected and returned to the account as per the details provided electronically by the shareholder’s DP.

For Shares held in physical form, by registered shareholders

89. Registered shareholders holding Shares in physical form are required to enclose the original share

certificate(s) and valid share transfer form(s) duly signed by the transferor (by all the equity shareholders in case the Shares are in joint names, with the names filled up in the same order in which they hold Shares in the Company) as per the specimen signatures lodged with the Company and duly witnessed at the appropriate place, while submitting the Form(s).

90. Shares held in physical form to the extent not accepted for the Buyback will be returned to the

beneficial owner after suitable sub-division, if any, in order to facilitate acceptance of share certificates tendered by them, through registered post or UPC, at the shareholders’ sole risk.

For Shares held in physical form, by persons not registered as shareholders, but are Eligible Persons

91. Unregistered shareholders who wish to tender their Shares in response to the Buyback Offer should

send the application in plain paper signed by all shareholders, stating folio number, name, address, number of Shares held, share certificate number, distinctive numbers, number of Shares tendered for the Buyback and bank account details.

92. Persons not registered as shareholders are required to enclose with the Form:

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(a) the original equity share certificate(s) accompanied by valid share transfer form(s) as received from the market, wherein the name of the transferee has not been filled in;

(b) the original broker contract note of a registered broker of a recognized stock exchange in relation to the purchase of the Shares tendered in this case;

(c) in case the share certificate(s) and the transfer deed(s) are lodged with the Company/its transfer agents for transfer, then the Form shall be accompanied by the acknowledgement of lodgment with, or receipt by, the company/its transfer agents, of the share certificate(s) and the transfer deed(s).

93. All transfer requests received by the Company on or before the closure of the Buyback shall be

processed by the Company and considered for finalization of the acceptance.

94. No indemnity would be required from unregistered shareholders as regards the title of the Shares.

For Shares held by Non-resident shareholders

95. Non-resident shareholders (excluding FII) should also enclose a copy of the permission received by them from the RBI to acquire the shares held by them in the Company.

96. In case the shares are held on repatriation basis, the non-resident shareholder should obtain and

enclose a letter from its authorized dealer/bank confirming that at the time of acquiring the said shares, payment for the same was made by the non-resident shareholder from the appropriate account as specified by RBI in its approval. In case the non-resident shareholder is not in a position to produce the said certificate, the shares would be deemed to have been acquired on non-repatriation basis and in that case the holder shall submit a consent letter addressed to the Company, allowing the Company to make the payment on a non-repatriation basis in respect of the valid shares accepted under the Buyback.

97. If any of the above stated documents, as applicable, are not enclosed along with Form, the shares

tendered under the Buyback are liable to be rejected. The Company shall be applying to RBI for permission to purchase Shares from Non-Residents, NRIs and OCBs and any such shareholders tendering the shares will need to provide such additional documents as may be required by RBI for the approval.

XXIII NOTE ON TAXATION

An opinion obtained from Deloitte Haskins & Sells, Chartered Accountants, dated September 17, 2009 is reproduced below: “Tax implications in the hands of the shareholders on the buy-back of shares: GENERAL

1. Gains on buy-back of shares is taxable as capital gains in the hands of the shareholders in terms of

section 46A of the Income-tax Act, 1961 in the year in which the shares are purchased by the Company. The manner of computation of capital gains is also provided in the said section which states that the difference between the value of consideration received by the shareholder and the cost of acquisition of the shares (after giving effect to the provisions of section 48 of the Income-tax Act, 1961) would be considered as capital gains on the buy-back of shares depending upon whether the shares in question were long term or short term be taxed as such.

In case the shares are held for twelve months or less from their date of acquisition the same would be considered as short term capital assets. In case the shares are held for more than twelve months then the same would be considered as long term capital assets. For the purpose of determining as to whether the capital gains are short-term in nature.

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• the date of credit of the shares to the shareholders demat account shall be taken as the date of acquisition.

• In case of any ambiguity, incomplete or conflicting information or the information not being available with the Company regarding the same, the capital gain shall be assumed to be short-term in nature.

FOR INDIAN RESIDENTS

2. The payments made by a company to any person resident in India on buy back of its shares in

terms of section 77A of the Companies Act, 1956 is not liable to deduction of tax at source, hence the Company will not deduct any tax on any payments made to persons resident in India pursuant to the said buy-back.

FOR NON RESIDENTS OF INDIA

3. Any person responsible for paying to a non-resident any sum chargeable to tax is required to deduct

tax at source (including surcharge and cess). Since the buyback consideration may be chargeable to capital gains under section 46A of the Income-tax Act, 1961, the Company will need to deduct tax at source (including surcharge if applicable and cess) at the rates specified in the Finance (No. 2) Act, 2009 in terms of section 195 of the Income-tax Act, 1961 or at the rates specified in the Double Taxation Avoidance Agreement entered into by the Central Government in terms of section 90 of the Income-tax Act, 1961 as applicable to the shareholder, whichever is lower. In case a shareholder claims that he is governed by a particular Double Taxation Avoidance Agreement, he should submit a certificate of tax residency from the appropriate tax authority of the relevant country to the Company.

Following are the rates specified in the Finance (no. 2) Act, 2009:

Non-resident Indians: In the case of shareholders who are "non resident Indians" - as defined in section 115C (e) of the Income-tax Act, 1961 and whose shares in the Company fall within the purview of "specified asset" as defined in section 115C (f) the Company will deduct tax at source in accordance with the provisions of section 115 E of the Income-tax Act, 1961 at the rate of 30% in the case of short-term capital gains (could be 20% if regarded as investment income) and at the rate of 10% in the case of long-term capital gains. Further, education cess at the rate of 2% and secondary and higher education cess at the rate of 1% on the aggregate of Income tax is also required to be deducted. In case a shareholder claims that he is governed by the provisions of section 115E of the Income-tax Act, 1961, he should submit the relevant documents in support thereof and to the satisfaction of the Company. These can either be documents ,proving that the shares were purchased by the shareholders either from foreign remittances or from funds lying in the non residents external (NRE) account or foreign currency non repatriable (FCNR) account and that these shares have been declared as such in the return of income filed by the shareholders. In case the documents are not submitted or the Company is not satisfied regarding the same then the rate of tax would be that as applicable to any other non-residents. Non-residents other than companies: The Company will deduct tax at source at the rate of 30% in the case of short-term capital gains and at the rate of 20% in the case of long-term capital gains. Further, education cess at the rate of 2% and secondary and higher education cess at the rate of 1 % on the aggregate of Income tax is also required to be deducted. In cases where Rule 26 of the Income- tax Rules, 1962 would become applicable, that is when the buy-back proceeds are to be remitted to the non-resident in foreign currency, for the purpose of deduction of tax at source on any income payable in foreign currency, the rate of exchange for the calculation of the value in rupees of such income payable to an assessee outside India shall be the telegraphic transfer buying rate of such currency as adopted by the State Bank of India as on the date on which the tax is required to be deducted at source.

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Foreign companies: The Company will deduct tax at source at the rate of 40% in the case of short-term capital gains, and at the rate of 20% in the case of long-term capital gains plus surcharge at 2.5% of tax deducted in case the income or aggregate of such income paid or likely to be paid and subject to the deduction exceeds Rs.1 Crore on the gross purchase price per share. Further education cess at the rate of 2% and secondary and higher education cess at the rate of 1% on the aggregate of Income tax and surcharge is also required to be deducted. Foreign Institutional Investors (FIls) enjoy exemption from tax deduction at source on the capital gains under section 196D(2) of the Income-tax Act, 1961 and hence no tax shall be deducted on amount payable to FIls subject to receipt of an undertaking from them stating their residential status and that it does not have a permanent establishment in India, the amount received by them as a part of the Buyback constitutes capital gains and does not constitute business income for them and that similar gains have been taxed as capital gains by the tax authorities in India in the past In the event the aforementioned categories of shareholders require the Company not to deduct tax or to deduct tax at a lower rate or on a lower amount, they would need to obtain an order from the Income Tax authorities under section 197 of the Income-tax Act, 1961 or such other documentary evidence to the sole satisfaction of the Company, and submit the same to the Company while submitting the Form. In case such order from the Income Tax authorities or other such documentary evidence to the satisfaction of the Company is not provided, tax will be deducted by the Company as aforesaid.

4. It is recommended that the shareholders consult their tax advisors for the treatment that should be

given in their respective circumstances and the stand that may be taken by their respective assessing officers in their case, and the appropriate course of action that they should take. The Company and the Manager to the Buyback does not accept any responsibility for the accuracy or otherwise of such advice. The aforesaid treatment of tax deduction at source may not necessarily be the treatment also for filing the return of Income.”

XXIV DECLARATION BY THE BOARD OF DIRECTORS

98. The Board of Directors confirm that there are no defaults subsisting in repayment of deposits, redemption of debentures or preference shares or repayment of term loans to any financial institutions or banks.

99. The Board of Directors confirm that based on a full enquiry conducted into the affairs and prospects

of the Company and taking into account all the liabilities including prospective and contingent liabilities payable as if the Company were being wound up under the Companies Act, 1956, the Buyback Committee of the Board of Directors have formed an opinion that;

i. Immediately following the date of the Letter of Offer, there are no grounds on which the

Company could be found unable to pay its debts ii. As regards its prospects for the year immediately following the date of the Letter of Offer that,

having regard to their intentions with respect to the management of the Company’s business during the said year and to the amount and character of the financial resources which will be available to the Company during the said year, the Company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of one year from that date.

This declaration is made and issued under the authority of the Committee of the Board of Directors in terms of the resolution passed at the meeting held on July 23, 2009. For and on behalf of the Board of Directors of the Company

Sd/- Sd/- Ganesh Natarajan P.K. Choksey Vice Chairman and Director Managing Director

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In addition, the Company has also confirmed that it is in compliance with section 159, 207 and 211 of the Act.

XXV AUDITOR’S CERTIFICATE

A text of the Report dated October 12, 2009 received from Price Waterhouse (Partner- Jeetendra Mirchandani, (Membership number F48125)), Chartered Accountants and the Statutory Auditors of the Company, addressed to the Board of Directors of the Company is reproduced below: “We have been informed that the Board of Directors of the Company and Buyback Committee Of Directors of the Company at their meetings held on July 23, 200

Documents

LETTER OF OFFER › sebi_data › attachdocs › 1289384643543.pdfLETTER OF OFFER THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION This Letter of Offer is being sent