Copy Of Final

Jaypee Commodities LTD.

Induction Session 2007

Jaypee Capital Services Ltd. Jaypee Capital Services Ltd. is a full service, world-class discount brokerage firm offering its client the most reliable, robust and best in class trading resources and platform in the financial industry. A broker dealer firm with global presence, Jaypee has proven experience and an inevitable track record in providing world-class brokering and trading services to individual, institutional, and high net worth clients in all major global exchanges. • •

Member of National Stock Exchange (NSE) Member of Bombay Stock Exchange (BSE)

• •

Member of National Commodity & Derivatives Exchange (NCDEX) Member of Multi Commodity Exchange (MCX)

• • •

Member of Chicago Board Of Trade (CBOT) Member National Association of Securities and Dealers Automated Quotation (NASDAQ) Member New York Mercantile Exchange (NYMEX)

•

Our Turnover in Financial Year 2005 – 06 129265 Crores

Initial Public Offering

Introduction An initial public offering (IPO) is the first sale of a corporation's common shares to investors on a public stock exchange. The main purpose of an IPO is to raise capital for the corporation. It also paves the way for listing and trading of the issuer’s securities. While IPOs are effective at raising capital, being listed on a stock exchange imposes heavy regulatory compliance and reporting requirements. The term only refers to the first public issuance of a company's shares. If a company later sells newly issued shares (again) to the market, it is called a 'Further Issue'. When a shareholder sells shares it is called a "secondary offering" and the shareholder, not the company who originally issued the shares, retains the proceeds of the offering.

Sale of Securities

Normal Issue

Book Building

Eligibility norms for making an IPO? SEBI has laid down eligibility norms for entities planning to enter the primary market through public issues. An unlisted company needs to satisfy following criteria to be eligible for making a public issue: 1.

a) Net tangible assets of at least Rs 3 Crore for three full years 2.

b) Distributable profits in at least three years 3.

c) Net worth of at least Rs 1 Crore in three years 4.

d) If change in name, at least 50 per cent of revenue for preceding one year should be from the new activity

5.

e) The issue size should not exceed five times the pre-issue net worth

Deciding the price of an Issue Indian primary market ushered in an era of free pricing in 1992. Following this, the guidelines have provided that the issuer in consultation with Merchant Banker shall decide the price. There is no price formula stipulated by SEBI. SEBI does not play any role in price fixation. The company and merchant banker are however required to give full disclosures of the parameters which they had considered while deciding the issue price. There are two types of issues, one where company and Lead Merchant Banker fix a price (called fixed price) and other, where the company and the Lead Manager (LM) stipulate a floor price or a price band and leave it to market forces to determine the final price (price discovery through book building process).

Price discovery through Book Building Process Book Building is basically a process used in IPOs for efficient price discovery. It is a mechanism where, during the period for which the IPO is open, bids are collected from investors at various prices, which are above or equal to the floor price. The offer price is determined after the bid closing date. The Book should remain open for a minimum of 3 days. A company planning an IPO appoints a merchant bank as a book runner. Then the company issues a prospectus that does not mention the a fixed price, but provides a price band and other details related to the issue size, the company's operating area and business, the promoters and future plans among other disclosures. A particular time frame is also fixed as the bidding period. Then the book runner builds an order book that collates bids from various investors. Potential investors are allowed to revise their bids at any time during the bidding period. At the end of bidding period the order book is closed and consequently the quantum of shares ordered and the respective prices offered are known. The calculation of final price is based on demand at various prices and also involves negotiations between those involved in the issue (through private placement etc.). The book runner and the company finalize the pricing and allocation to each syndicate member.

Difference between offer of shares through book building and offer of shares through normal public issue Price at which securities will be allotted is not known in case of offer of shares through Book Building while in case of offer of shares through normal public issue, price is known in advance to investor. Under Book Building, investors bid for shares at the floor price or above and after the closure of the book building process the price is determined for allotment of shares. In case of Book Building, the demand can be known everyday as the book is being built. But in case of the public issue the demand is known at the close of the issue.

Cut-Off Price In a Book building issue, the issuer is required to indicate either the price band or a floor price in the prospectus. The actual discovered issue price can be any price within the price band or any price above the floor price. This issue price is called “Cut-Off Price”. The issuer and lead manager decides this after considering the book and the investors’ appetite for the stock.

Price Band in a book built IPO The prospectus may contain either the floor price for the securities or a price band within which the investors can bid. The spread between the floor and the cap of the price band shall not be more than 20%. In other words, it means that the cap should not be more than 120% of the floor price. The price band can have a revision and such a revision in the price band shall be widely disseminated by informing the stock exchanges, by issuing a press release and also indicating the change on the relevant website and the terminals of the trading members participating in the book building process. In case the price band is revised, the bidding period shall be extended for a further period of three days, subject to the total bidding period not exceeding ten days.

How does one know if shares are allotted in an IPO/offer for sale? What is the time frame for getting refund if shares not allotted? As per SEBI guidelines, the Basis of Allotment should be completed with 15 days from the issue close date. As soon as the basis of allotment is completed, within 2 working days the details of credit to demat account / allotment advice and despatch of refund

order needs to be completed. So an investor should know in about 15 days time from the closure of issue, whether shares are allotted to him or not.

Basis of allotment In case of over-subscription in a fixed price issue, the allotment is done in marketable lots and on a proportionate basis. In case of a book building issue, allotment to Qualified Institutional Buyers (QIBs) and Non-Institutional Buyers (NIBs) are done on a discretionary basis. Allotment to retail investors is done on a proportionate basis. After the closure of the issue, the bids received are aggregated under different categories, such as firm allotment, Qualified Institutional Buyers (QIBs), Non-Institutional Buyers (NIBs) and Retail Individual Investors. The oversubscription ratios are calculated for each of the categories as against the shares reserved for each of the categories in the offer document. Within each of these categories, the bids are segregated into different segments based on the number of shares applied for. The oversubscription ratio is then applied to the number of shares applied for and the number of shares to be allotted for applicants in each of the buckets is determined. Then, the number of successful allottees is determined. This process is followed in case of proportionate allotment. In case of allotment for QIBs, it is subject to the discretion of the post issue lead manager.

Applying for an IPO An investor needs to first obtain an IPO application form through a share broker, an investment consultant or from the collecting banks. The investors are required to fill up the form and remit the amount, after calculating the number of shares applied for, inat the broker /sub-broker bank, which has been designated as a collecting centre for the particular IPO. An investor holding a Demat account can either apply for the shares directly through the account or can opt for physical delivery of share certificates. There are certain IPOs, which offer only Demat form of shares, while others offer both the Demat and regular shares. Application forms can be rejected due to incomplete details. . Every week SEBI issues press releases for information of the public, details of offer documents filed with SEBI and observations issued. The required details can be obtained from the 'Primary Market' section of the SEBI website. The draft offer document can also be purchased from the SEBI office. The draft offer document/letter of offer remains posted on SEBI website for a period of 21 days from the date of filing the same to SEBI and can also be downloaded from there.

Application forms can also be obtained from the lead manager and brokers to the issue. The application forms are also generally available at collecting bankers. Names and addresses of the lead managers are available in the prospectus/ letter of offer.

Requirements while applying for an IPO • IPO Application Form How to fill an IPO Form? Follow these steps moving downwards in the IPO form. Do only what is mentioned here. Leave all other fields/ blanks intact. 1. Write today’s date on top, in front of DATE. 2. Little below, where it is asked, tick the appropriate STATUS of the applicant, from amongst Individual, HUF, etc. 3. Then, against the NAME OF THE SOLE/ FIRST APPLICANT, write the name of the applicant/investor. (ALL NAMES IN BLOCK LETTERS) OR, Write the name of first applicant/ bidder (in case there are more than one people applying for the issue). Then continue with writing the names of second and (if there is), third applicant/ bidder also. On its right, tick the appropriate category. An individual applicant is a Non-institutional bidder if his bid amount is more than specified for Retail individual. 4. Below, give the details of the Demat account of the applicant, after asking the applicant. 5. Below in the field BID OPTION, in the first column, write the number of shares (in numerals) the applicant wants to apply for, in the row - OPTION 1. This number should be a multiple of 10 or as mentioned immediately above the column. In second column, write that number in Words. In third column, write the price (in numerals) at which the applicant wants to make a bid. Write the same price (in words) in the fourth column. Price should be in multiples of Re.1 and do not use decimal points. If the applicant does not mention a price, then write CUT-OFF PRICE in its place. (If only investment amount is known and not the number of shares, divide the same by the upper Price Band and write the number of shares as the lower round number.)

Ignore the II and III Option as they are for HNIs (High Net Worth Individuals) 6. On its right, write the RTGS number (IFSC code) of client’s bank (In most case this is avoided) 7. In the Payment methods, Method I is the payment of First Call money by the applicant (Rs.150 per share out of Rs.550 in this case). Most people will opt for this. Method II is payment of full amount (Rs.550) 8. In PAYMENT DETAILS, Total amount payable is total investment amount paid desired to be paid OR, the number of shares multiplied by bid given price given by the applicant. , or Rs.550cut-off price (in case of cut off)(In DLF IPO, the first Call Money amount asked is Rs.150. So, multiply the number of shares by Rs.150 as cut – off price for bidding is Rs.550). Write in numerals and words respectively. Write the cheque/ draft number on the form (in Orange circle), the date on which cheque/ draft was drawn and the name of Bank and the branch of bank mentioned on cheque.

9. Below, write the details of the Sole/ First Applicant only. 10. Next, write the PAN number of the first/all applicants and take a copy of the PAN Card/ PAN Allotment letter. (for bid amount greater than Rs.50000,

assuming full payment of all the applied shares) along with address proof. If the applicant/s do not have the PAN card, then get a Form 60 / 61 filled from them, or if they wish, they can get their PAN card made from office of Jaypee. Get the signatures (This is the only place on the fort where signatures are required.) 11. In the Acknowledgement Slip for Member of the Syndicate, fill in the appropriate details, in all columns other than Banker’s Signature & Stamp. 12. In the Acknowledgement Slip for Investor, in Bid Option fill in the same details as you filled in Step 5, along with other details. 13. In the ‘Member of the Syndicate’s Stamp Signature, Date & Time of Bid Form Submission’, sign yourself with the other details asked. 14. Tear off the first sheet of the form and give the rest to the applicant. 15. In case the applicant asks for some receipt or evidence, tear off the part of the form below the bottom-most perforated part line of the form and give to the applicant. 16. Make sure you get the following documents from the client: a. Copy of PAN card / PAN Allotment letter OR Form 60 / 61 b. Address proof, if Form 60/ 61 is filled. c. Cheque /draft for the bid amount. (Write the Bid cum Application Form number behind the cheque / draft) 17. After you get the form filled from the applicant, come back to the office and get the form punched (details entered). For the same contact, Ms. Anjana Mahoo on in office of Jaypee Capital, 5th floor, Naurang House.

Re Scan the form

• DEMAT Account How to fill the Demat form? Follow the following steps as you move downwards in the form. Only follow the instructions, leave all others fields intact.

Page 1 1. Leave the first isolated block of blank fields intact. 2. Then, in the Sole/ First Details, give the appropriate details. a. Write the names in Block Letters. b. Correspondence Address means the address where the applicant would like to have his letters/posts delivered. c. Leave the row field MAPIN Code empty. d. Fill in the details of Second Holder only if there are more than one holders of Demat Account. And similarly for third holder. 3. In Type of Account, tick the Individual, and in sub-status, tick Individual Resident. 4. Ensure that the applicant signs on the bottom of the Page-I

Page 2 1. In the Details for First holder, fill in the appropriate details for the first holder. 2. In the Account Statement Requirement, ask the applicant at what frequency does he wants the status statement of his Demat Account, and then tick the appropriate box. 3. In Bank Details, fill in the 9 digit Bank Code (MICR Code) as shown in figure in green circle. Fill in other details appropriately. In account number, fill in the number given on Cheque /Draft (shown in blue circle in figure). Account type in most cases shall be Saving.

4. After that, fill in the details of the Sole /First Holder, and others, if applicable. Get the applicant/s’ signatures and a passport size photo of each. Ask each of them to sign across their photo/s, preferably in black ink. 5. In the Details of introduction, if the applicant does not have any witness, leave the field. It will be done at the company’s office. 6. Get applicant’s signature on the bottom of the page.

Page 3 1. 2. 3. 4. 5.

Fill the name of the applicant/s yourself, and get their signatures of each. Get their additional details. Take details of guardian, only if one any of the applicants is a minor. Leave out the next column as well, as it is for NRIs. Fill the last three rows, and sign below, and give it to the applicant as receipt of Demat Account Opening Form. 6. Get applicant’s signature on the bottom of the page.

Page 4 1. Make sure that the applicant gives you all the documents asked in point number 10. Also, get a cheque from the applicant, which he has crossed with a pen/pencil. (See the sample) This is to see the correct Bank details. 2. Get the signature of the applicant on bottom of page.

Nomination Form 1. Get the Nomination Form filled by the applicant, wherein he/she gives information about the account and person he/ she is appointing as heir to the Demat Account in the event of the death of the Sole holder or all the joint holders. It also asks for information about the guardian in case the nominee is a minor. Place will be New Delhi. 2. Get the name and specimen signature of the applicant 3. If the applicant can give two witnesses, then get their addresses and signatures, otherwise, it can be at the company’s office.

Stamp Paper 1. Encourage the applicant to read the terms and conditions mentioned on the stamp paper. 2. Carefully get the date, month, Name of applicant and Address of applicant filled in the stamp paper, respectively. 3. Get his/her signature on the left margin and footer of the page.

Annexure – Page-2 to 3

1. Get the applicants’ signature on the bottom of the page. This is to ensure that applicant can not later claim that he/she has missed reading those specific terms and conditions. 2.

Annexure – Page- 4 1. Get the signature of applicant under SIGNED AND DELIVERED. 2. Get the signature of applicant on the bottom of the page.

•

PAN Card

DLF Limited History The DLF Group was founded in 1946. It developed some of the first residential colonies in Delhi such as Krishna Nagar in East Delhi, which was completed in 1949. Since then they have been responsible for the development of many of Delhi's other well known urban colonies, including South Extension, Greater Kailash, Kailash Colony and Hauz Khas. Following the passage of the Delhi Development Act in 1957, the state assumed control of real estate development activities in Delhi, which resulted in restrictions on private real estate colony development. They therefore commenced acquiring land at relatively low cost outside the area controlled by the Delhi Development Authority, particularly in the district of Gurgaon in the adjacent state of Haryana. This led to thieir first development, DLF Qutab Enclave, which has evolved into DLF City, our their landmark project. DLF City is spread over 3,000 acres in Gurgaon and is an integrated township, which includes residential, commercial and retail properties in a modern city infrastructure with schools, hospitals, hotels and shopping malls. It also boasts of the prestigious DLF Golf and Country Club with night golfing facilities.

Brand Name and Reputation DLF has a 60-year history of service excellence. Since it was founded in 1946, it has been responsible for the development of 22 urban colonies, as well as an entire integrated 3,000-acre township - DLF City. DLF’s reputation for providing prompt payment to landowners upon the acquisition of its land, developing and completing projects in a timely manner and conducting its business with transparency has created a relationship of trust with its customers and suppliers. DLF retains internationally and nationally renowned architectural, construction and consulting firms for its projects.

Extensive Land Reserves: The Company recognizes that extensive land reserves are the most important resource for a real estate developer. They have extensive Land Reserves in various regions across India, amounting to 10,255 acres. DlfLF Land Reserves comprise a developable area of approximately 574 million square feet, of which 46 million square feet is under construction.

Scale of Operations: The Company’s size allows it to benefit from economies of scale. DLF is able to purchase large plots of land from multiple sellers, thus enabling it to aggregate land at lower prices. The size of its balance sheet provides it with the ability to actively acquire land, adjust the scale of DLF’s projects and retain rather than sell its developments in the event of an economic downturn.

Strategic Locations: DLF’s projects are strategically located. The company believes that its ability to anticipate market trends and, in some cases, to influence the direction of these trends, provides it with the expertise to choose strategic locations.

A tradition of Innovation: DLF has a tradition of innovation in the Indian real estate market. It was one of the first developers to anticipate the need for townships on the outskirts of fast growing cities and is generally credited with the growth of Gurgaon. The company was one of the early developers to focus on developing theme-based projects such as The Magnolias in DLF City. DLF continually offers its customers new designs and concepts.

Experienced and Dedicated Management: The Company has an experienced, highly qualified and dedicated management team, many of whom have over 20 years of experience in their respective fields. DLF provides its staff with competitive compensation packages and a corporate environment that encourages responsibility, autonomy and innovation

Other Information DLF, originally registered as Delhi Land and Finance on 18 September 1946 had its name changed to DLF Universal Ltd. and had been functioning under this brand name for over two decades. Very recently, it has formally changed our its company logo with new base line, "BUILDING INDIA", which aptly depicts its plans in India.a operations.

The DLF Group is founded on the strengths of a strong foundation and lineage. This spans a period of well over six decades, involving the development of as many as 21 premium urban colonies in Delhi and its neighborhood. DLF has an impressive portfolio of projects which demonstrate its strong national leadership status as a pioneer and trendsetter in the Real Estate Sector. Commitment to excellence, a fetish for perfection and timelines, zealous pursuit of customer value have overtime built up for DLF a strong track record in terms of reputation, brand and organization that is synonymous with attributes of Trust, Credibility Quality and Innovation. To date, DLF has completed and under development projects of over, 207 million sq. ft. across its residential, commercial and retail businesses with a spread of 54 million sq. ft under Commercial, 19 million sq. ft. under retail and 134 million sq. ft under residential projects. With the economic policies of the country directed towards modern infrastructural development spanning- express highways, roadways, airports and mega projects, the focus is also increasingly expanding to the development of modern Special Economic Zones (SEZs). In line with this, DLF is aggressively pursuing the developments of SEZs across the country with over half a dozen projects secured/identified in northern India including Punjab and Haryana, and many more in the pipeline. Further, DLF Retail in association with DT Cinemas, an integral part of its multiplexes, is well on its way to enlarging its national leadership presence with firm outlays to develop over 100 malls across some 60 cities nationally in the medium term. This growth will be concurrent with the expanding presence of DT cinemas in all its malls, which will number over 500 during the same period. Aiming to provide leisure and entertainment of high standards, the DLF Golf and Country club, India's first night Golf course is today ranked as the best in the country as also amongst the leading courses in Asia. An exclusive 18 hole. par 72 Arnold Palmer Signature Golf Course, the unique and picturesque surroundings of this club offers golf enthusiasts a refreshing, entertaining and challenging sporting experience. The internationally acclaimed architect, Belt Collins has exquisitely landscaped the course. To ensure a near zero wastage factor, aspects of water conservation and waste recycling have also been successfully incorporated in the club.

DLF IPO The DLF IPO is all set to hit the Indian Capital Markets. DLF has finally obtained the clearance from SEBI for its mega IPO. DLF had filed its first IPO prospectus last year but failed to get clearance from SEBI after a dispute with its minority shareholders. After the dispute had been settled, DLF filed its second prospectus earlier this year. It is likely to be the largest IPO in India beating earlier records set by the ONGC IPO and Reliance Petroleum IPO. Post IPO, DLF Universal will list both on the NSE and the BSE and will be eligible for trading in the Futures and Options segment. The size of the total DLF IPO issue, at the price band of Rs.500 - 550, will be between Rs. 8750 crores and Rs. 9625 crores. Merrill Lynch & Co and Kotak Mahindra Capital are the global lead managers for the DLF IPO issue and Citigroup, ICICI Securities, UBS AG, Deutsche Equities India, SBI Capital Market are the other lead managers.

Subscription Opens - June 11, 2007

Subscription Closes - June 14, 2007 DLF IPO Price Band - Rs. 500 (fFloor Price) and Rs. 550 (Cap Price)

DLF IPO Payment Option for Retail Investors Retail investors [those investing less than Rs. 99000 in the stock market (primary market) for less than Rs. 1 lakh] can bid on the DLF IPO on payment of Rs 150 per share of which Re 1 will be credited to face value of DLF shares and Rs 149 towards premium on application. The balance amount will be payable on due date. QIB investors will have to pay 10 per cent of the bid amount and the balance before allotment. This means if an investor applies for less than Rs. 1 lakh99000 in the DLF IPO, then he needs to pay only Rs. 150 per share and not Rs. 550 per share. The balance amount needs to be paid after he gets the DLF shares alloted. Its likely that he won’t have to pay the balance amount since the DLF IPO issue is likely to be oversubscribed by atleast 4 times. The balance amount will be adjusted against the refund amount.

Purpose of the issue: To invest more into building infrastructure and acquiring Land for SEZs. The company’s VC Rajiv Singh says that land acquisition programme will cost Rs 6500 crore, while the completion of on going projects will cost about Rs 3100 crore. The company, at present, has loans worth Rs 4,000 crore.

Job at Hand

Jaypee Capital is one of the agents for the public issue of DLF Limited, and it has taken up the task of getting applications filled through its wide network. So, our first target is to get applications filled through the Jaypee-stamped forms from the retail investors. For that, you may use your contacts, approach the brokers asking them to use Jaypee forms, and through many others chains in distribution network of the IPO application forms. The IPO will be open between June 11, 2007 to June14, 2007 and till that time, the major target for all employees of the company is to market Jaypee-stamped IPO forms of DLF Company. Ltd.