Sabari Inn DRHP

DRAFT RED HERRING PROSPECTUS
Dated [●], 2010

Please read Section 60B of the Companies Act, 1956
100% Book Built Issue
SABARI INN LIMITED

[Incorporated as a Private Limited Company on April 01, 1999 under the Companies Act, 1956 as Sabari Inn Private Limited vide Certificate of Incorporation issued by the
Registrar of Companies, Chennai, Tamil Nadu. The name of the Company was changed to Sabari Inn Limited upon conversion into Public Limited Company and Company
received a fresh Certificate of Incorporation from Registrar of Companies, Chennai; Tamil Nadu on July 20, 2010]
Registered Office: No.29, Thirumalai Pillai Road, T.Nagar, Chennai – 600 017
Tel.: +91 - 044 - 28343030; Fax: +91 -044 - 28345868; E-mail: csco@sabarihotels.com; Website: www.sabarihotels.com
Contact Person: K.R.Ramakrishnan,Chief Law Officer and Company Secretary & Compliance Officer
[For details regarding change in registered office of the Company please refer to section titled “History & Corporate Structure of the Company” on page. 89 of this Draft Red Herring Prospectus]
PUBLIC ISSUE OF [●] EQUITY SHARES OF FACE VALUE ` 10/- EACH (“EQUITY SHARES”) OF SABARI INN LIMITED (THE “COMPANY” OR THE “ISSUER”)
FOR CASH AT A PRICE OF ` [●] PER EQUITY SHARE (INCLUDING SHARE PREMIUM OF ` [●] PER EQUITY SHARE), CONSISTING OF A FRESH ISSUE OF
[●] EQUITY SHARES AGGREGATING TO ` 12500.00 LACS AND AN OFFER FOR SALE OF [●] EQUITY SHARES AGGREGATING TO ` 4500.00 LACS BY “ICICI
PRUDENTIAL ASSET MANAGEMENT COMPANY LIMITED; PORTFOLIO MANAGERS ON BEHALF OF ITS CLIENTS MORE PARTICULARLY DESCRIBED AS
INDIA OPPORTUNITIES PORTFOLIO – ICICI PRUDENTIAL PMS INDIA REAL ESTATE SECURITIES SERIES-I” AND “INDIA OPPORTUNITY REAL ESTATE
FUND”, (“THE SELLING SHAREHOLDERS”), TOTAL AGGREGATING TO ` 17000.00 LACS (“THE ISSUE”). UPTO [●] EQUITY SHARES AGGREGATING TO
` 100.00 LACS WILL BE RESERVED IN THE ISSUE FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (“THE EMPLOYEE RESERVATION PORTION”). THE
ISSUE LESS THE EMPLOYEE RESERVATION PORTION IS REFERED TO AS THE “NET ISSUE”. THE ISSUE WOULD CONSTITUTE [●]% OF THE FULLY
DILUTED POST ISSUE PAID UP CAPITAL OF THE COMPANY. THE NET ISSUE TO PUBLIC WOULD CONSTITUTE [●]% OF THE FULLY DILUTED POST
ISSUE PAID UP CAPITAL OF THE COMPANY.
The Company is considering a Pre-IPO placement of up to 50,00,000 equity shares of ` 10/- each aggregating up to ` 2000.00 lacs with certain investors, prior to the completion of the issue. In
such a case the issue size offered to the public would be reduced to the extent of such Pre-IPO placement, subject to a minimum issue size of 25%of the post issue capital being offered to the public
PRICE BAND: ` [●] TO ` [●] PER EQUITY SHARE OF FACE VALUE ` 10/- EACH
THE ISSUE PRICE IS [●] TIMES OF THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND [●] TIMES OF THE FACE VALUE AT THE HIGHER
END OF THE PRICE BAND
THE PROMOTERS OF THE COMPANY: MR. K.R.V. RAMANI, MRS. ARUNA RAMANI AND RAMANI (HUF)
In case of revision in the Price Band, the Bidding/Issue Period will be extended for three (3) additional working days after revision of the Price Band subject to the Bidding/
Issue Period not exceeding ten (10) days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to
the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating the change
on the website of the Book Running Lead Manager and at the terminals of the Syndicate Member(s). The Issue is being made through the 100% Book Building Process
wherein upto 50% of the Net Issue shall be allocated on a proportionate basis to eligible Qualified Institutional Buyers, out of which 5% of the Portion shall be available
for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all eligible
Qualified Institutional Buyers, including Mutual Funds, subject to valid Bids being received at or above Issue Price. Further, not less than 15% of the Net Issue shall
be made available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue shall be made available for allocation on a
proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.
RISK IN RELATION TO FIRST ISSUE
This being the first issue of Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares
is ` 10/- per equity share and the Issue Price is [•] times of the face value. The Issue Price (as determined by the Company, in consultation with the Book Running Lead
Manager, on the basis of assessment of market demand for the Equity Shares offered by way of book building) should not be taken to be indicative of the market price
of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of the Company nor
regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS
Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk
of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision,
investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares issued in this Issue have not been recommended
or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Draft Red Herring Prospectus. Specific
attention of the investors is invited to the statements in the section titled “Risk Factors” beginning on page no. x of this Draft Red Herring Prospectus.
ISSUER’S ABSOLUTE RESPONSIBILITY
The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard
to the Company and this Issue, which is material in the context of this Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in
all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts,
the omission of which make this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading
in any material respect.
IPO GRADING
The issue has been graded by [●] and has been assigned the [●] indicating [●] vide their letter dated [●]. For further details and rationale of grading please refer page no. [●].
LISTING
The Equity Shares of the Company are proposed to be listed on Bombay Stock Exchange Limited ("BSE") and the National Stock Exchange of India Limited ("NSE").
The Company has received the in-principle approvals from these Stock Exchanges for the listing of the Equity Shares pursuant to their letters dated [•] and [•] respectively.
For the purpose of this Issue, BSE is the Designated Stock Exchange.
BOOK RUNNING LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE
KEYNOTE CORPORATE SERVICES LTD. INTEGRATED ENTERPRISES (INDIA) LIMITED

4th Floor, Balmer Lawrie Building, 5, J.N. Heredia Marg, 2nd Floor, Kences Towers, 1, Ramakrishna Street,
Ballard Estate, Mumbai – 400 001. North Usman Roar, T.Nagar, Chennai - 600 017
Tel: +91–22– 30266000-3; Fax: +91–22– 22694323
Tel No: +91–44–28140801 / 02 / 03; Fax: +91–44–28142479 /28143378
Website : www.keynoteindia.net; E-mail: mbd@keynoteindia.net
SEBI Registration No.: INM 000003606 Website: www.iepindia.com; E-mail: iposabari@iepindia.com
AMBI No.: AMBI/ 040 SEBI Registration No.: INR 000000544
Contact Person: Mr. Girish Sharma / Mr. Raunak Gokhale Contact Person: Mr. Sriram S / Mr. Suresh Babu K
ISSUE SCHEDULE
BID/ ISSUE OPENS ON* [•] BID/ ISSUE CLOSES ON** [•]
* Our Company may consider participation by Anchor Investors. The Anchor Investor Bid/Issue Period shall be one Working Day prior to the Bid/Issue Opening Date
** Our Company may consider closing the Bidding by QIB Bidders one Working Day prior to the Bid/Issue Closing Date subject to the Bid/Issue Period being for a minimum of
three Working Days.
SECTION TABLE OF CONTENTS PAGE
NO.
DEFINITIONS AND ABBREVIATIONS i
CERTAIN CONVENTIONS AND USE OF MARKET DATA viii
FORWARD LOOKING STATEMENTS ix
I RISK FACTORS x
PART I
II INTRODUCTION 1
SUMMARY OF THE INDUSTRY & BUSINESS OF THE COMPANY 1
THE ISSUE 15
GENERAL INFORMATION 16
CAPITAL STRUCTURE 25
OBJECTS OF THE ISSUE 36
BASIS OF ISSUE PRICE 44
STATEMENT OF TAX BENEFITS 46
III ABOUT THE ISSUER COMPANY 55
INDUSTRY OVERVIEW 55
BUSINESS OVERVIEW 67
KEY INDUSTRY REGULATIONS AND POLICIES 84
HISTORY AND CORPORATE STRUCTURE OF THE COMPANY 89
MANAGEMENT 102
COMPANY’S PROMOTERS AND PROMOTER GROUP 115
RELATED PARTY TRANSACTIONS 122
DIVIDEND POLICY 123
PART II
IV FINANCIAL STATEMENTS 124
REPORT OF THE STATUTORY AUDITORS, ESSVEEYAR, CHARTERED 124
ACCOUNTANTS
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL 145
CONDITIONS AND RESULTS OF OPERATIONS
V LEGAL AND REGULATORY INFORMATION 160
OUTSTANDING LITIGATIONS, MATERIAL DEVELOPMENTS AND OTHER 160
DISCLOSURES
GOVERNMENT/STATUTORY AND BUSINESS APPROVALS 165
OTHER REGULATORY AND STATUTORY DECLARATIONS 182
VI OFFERING INFORMATION 194
TERMS OF THE ISSUE 194
ISSUE STRUCTURE 197
ISSUE PROCEDURE 202
VII MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF THE 239
COMPANY
VIII OTHER INFORMATION 255
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTIONS 255
PART III
XI DECLARATIONS 257
SABARI INN LIMITED
DEFINITIONS AND ABBREVIATIONS
TERM DESCRIPTION
“SIL”, “ “the Unless the context otherwise requires, refers to Sabari Inn Limited, a Public
Company”, “We”, Limited Company incorporated under the Companies Act, 1956.
“us” and “our
Company”
COMPANY RELATED TERMS
TERM DESCRIPTION
Articles/ Articles of The Articles of Association of the Company.
Association
Auditors The Statutory Auditor of the Company, being Essveeyar, Chartered
Accountants.
Board/ Board of The Board of Directors of the Company or a Committee constituted thereof.
Directors
Director(s) Director(s) of Sabari Inn Limited, unless otherwise specified.
Memorandum of The Memorandum of Association of the Company.
Association
Promoters Mr. K.R.V. Ramani, Mrs. Aruna Ramani and Ramani (HUF)
Registered Office of No.29, Thirumalai Pillai Road, T.Nagar, Chennai - 600017
the Company
ISSUE RELATED TERMS AND ABBREVIATIONS
TERM DESCRIPTION
Allotment/ Allotment Unless the context otherwise requires, the issue and allotment of Equity Shares
of Equity Shares pursuant to this Issue, and the transfer of Equity Shares pursuant to the Offer for
Sale
Allottee A successful bidder to whom the Equity Shares are allotted.
Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor category,
with a minimum Bid of ` 1,000.00 lacs
Anchor Investor The date one day prior to the Bid/Issue Opening Date on which Bidding by
Bid/Issue Period Anchor Investors shall open and shall be completed
Anchor Investor Up to 30% of the QIB Portion, being up to [●] Equity Shares, which may be
Portion allocated by The Company in consultation with the Selling Shareholders and the
BRLMs to Anchor Investors on a discretionary basis. One-third of the Anchor
Investor Portion, being up to [●] Equity Shares, shall be reserved for domestic
mutual funds, subject to valid Bids being received from domestic mutual funds
at or above the price at which allocation is being done to Anchor Investors
Anchor Investor Issue The final price at which Equity Shares will be issued and Allotted to Anchor
Price Investors in terms of the Red Herring Prospectus and Prospectus, which price
will be equal to or higher than the Issue Price but not higher than the Cap Price.
The Anchor Investor Issue Price will be decided by The Company in consultation
with the Selling Shareholders and the BRLMs
ASBA/ Application An application for subscribing to an issue, containing an authorisation to block
Supported by Blocked the application money in a bank account.
Amount
i
SABARI INN LIMITED
TERM DESCRIPTION
ASBA Investor Prospective Investors in this Issue who intend to Bid/apply through ASBA
ASBA Form Bid cum Application form for Investors intending to subscribe through ASBA
Bid An indication to make an offer, made during the Bidding Period by a prospective
investor to subscribe to the Equity Shares at a price within the Price Band,
including all revisions and modifications thereto.
Bid Amount The highest value of the optional Bids indicated in the Bid-cum-Application
Form and payable by the Bidder on submission of the Bid for this Issue.
Bid cum Application The form in terms of which the Bidder shall make an indication to make an offer
Form to subscribe to the Equity Shares and which will be considered as the application
for the issue of the Equity Shares pursuant to the terms of this Draft Red Herring
Prospectus.
Bidder Any prospective investor who makes a Bid pursuant to the terms of this Draft
Red Herring Prospectus and the Bid-cum-Application Form.
Bid/ Issue Opening The date on which the members of the Syndicate shall start accepting Bids for
Date this Issue, which shall be the date notified in an English national newspaper, a
Hindi national newspaper and a Regional newspaper with wide circulation.
Bid/ Issue Closing The date after which the members of the Syndicate will not accept any Bids for
Date this Issue, which shall be notified in an English national newspaper, a Hindi
national newspaper and a Regional newspaper with wide circulation.
Book Building Book building mechanism as provided under Schedule XI of the SEBI
Process/ Method Regulations, in terms of which this Issue is made.
BRLM/ Book Book Running Lead Manager to this Issue, in this case being Keynote Corporate
Running Lead Services Limited.(‘Keynote’)
Manager
CAN/ Confirmation The note or advice or intimation of allocation of Equity Shares sent to the Bidders
of Allocation Note who have been allocated Equity Shares after discovery of Issue Price in the Book
Building Process.
Cap Price The higher end of the Price Band, above which the Issue Price will not be
finalized and above which no Bids will be accepted.
Cut-off Price The Issue Price finalized by the Company in consultation with the BRLM and it
shall be any price within the Price Band. A Bid submitted at the Cut-off Price by a
Retail Individual Bidder is a valid Bid at all price levels within the Price Band.
QIBs and Non Institutional Bidders are not entitled to Bid at the Cut-off Price. A
Bid submitted at Cut-off Price is a valid Bid at all price levels within the Price
Band
Depository A depository registered with SEBI under the SEBI (Depositories and Participant)
Regulations, 1996, as amended from time to time.
Depositories Act The Depositories Act, 1996, as amended from time to time.
Depository
A depository participant as defined under the Depositories Act.
Participant
Designated Date The date on which the Escrow Collection Banks transfer the funds from the
Escrow Account(s) to the Public Issue Account, which in no event shall be earlier
than the date on which the Offer Document is filed with the Registrar of
Companies, Gujarat, following which the Board of Directors shall allot Equity
Shares and the Selling Shareholders shall give delivery instructions for transfer of
Equity Shares constituting Offer for Sale to successful Bidders..
Designated Stock In this case being the Bombay Stock Exchange Limited.
Exchange
ii
SABARI INN LIMITED
TERM DESCRIPTION
DRHP/ Draft Red This Draft Red Herring Prospectus issued in accordance with Section 60B of the
Herring Prospectus Companies Act, which does not contain complete particulars on the price at
which the Equity Shares are issued and the size (in terms of value) of the Issue.
Equity Shares Equity Shares of the Company of face value of ` 10/- each unless otherwise
specified in the context thereof.
Escrow Account Account opened with Escrow Collection Bank(s) and in whose favor the Bidder
will issue cheques or drafts in respect of the Bid Amount when submitting a Bid.
Escrow Agreement Agreement to be entered into amongst the Company, the Registrar to this Issue,
the Escrow Collection Banks and the BRLM in relation to the collection of the Bid
Amounts and where applicable, refunds, if any, of the amounts collected, to the
Bidders on the terms and conditions thereof.
Escrow Collection The banks, which are clearing members and registered with SEBI as Banker (s) to
Bank(s) the Issue at which the Escrow Account for the Issue will be opened, in this case
being [•].
Employee Reservation The Portion of the Issue being [●] Equity Shares aggregating to ` 100.00 Lacs
Portion available for allocation to eligible employees.
First Bidder The Bidder whose name appears first in the Bid-cum-Application Form or
Revision Form.
Floor Price The lower end of the Price Band, below which the Issue Price will not be finalized
and below which no Bids will be accepted.
ICICI Prudential ICICI Prudential Asset Management Company Limited; Portfolio Managers on
Asset Management behalf of its clients more particularly described as ‘INDIA OPPORTUNITIES
Company Limited; PORTFOLIO – ICICI PRUDENTIAL PMS INDIA REAL ESTATE SECURITIES
Portfolio Managers on SERIES-I is a Selling Shareholder. The fund operates through its Investment
behalf of its clients Manager ICICI Prudential Asset Management Company Ltd having its
registered office at 12 th floor, Narain Manzil, 23, Barakhamba Road, New Delhi
110 001. Portfolio Manager is authorized to provide Portfolio Management
Services vide authorization no. INP000000373
India Opportunity
India Opportunity Real Estate Fund (Mauritius) is a Selling Shareholder. The
Real Estate Fund
Administrator for the Fund is Deutsche International Trust Corporation
(Mauritius) Limited having its registered office at suite 450, 4th floor, Barkly
Wharf, Le Caudan, Waterfront, Port Louis, Mauritius. The Administrator acts
through Investment Managers Prudential Asset Manager (Singapore) Limited
having its registered Office at 30 cecil Street, #20-01 Prudential Tower, Singapore
049712.
Indian National As used in the context of a citizen of India as defined under the Indian
Citizenship Act, 1955, as amended, who is not an NRI.
Issue Public issue of [●] equity shares of face value ` 10/- each (“equity shares”) of
Sabari Inn Limited (the “company” or the “issuer”) for cash at a price of ` [●] per
equity share (including share premium of ` [●] per equity share), consisting of a
fresh issue of [●] equity shares aggregating to ` 12500.00 lacs and an offer for sale
of [●] equity shares aggregating to ` 4500.00 lacs by ICICI Prudential Asset
Management Company Limited; Portfolio Managers on behalf of its clients more
particularly described as ‘INDIA OPPORTUNITIES PORTFOLIO – ICICI
PRUDENTIAL PMS INDIA REAL ESTATE SECURITIES SERIES-I and India
Opportunity Real Estate Fund, Mauritius (“the Selling Shareholders”),
aggregating to ` 17000.00 lacs (“the Issue”). : Collectively the Fresh Issue and the
Offer for Sale
iii
SABARI INN LIMITED
TERM DESCRIPTION
Issue/ Bidding Period The period between the Bid / Issue Opening Date and the Bid/Issue Closing
Date inclusive of both days and during which prospective Bidders can submit
their Bids.
Issue Price The final price at which Equity Shares will be issued and allotted in terms of the
Red Herring Prospectus or the Prospectus, as determined by the Company in
consultation with the BRLM, on the Pricing Date.
Net Issue The Issue less the Employee Reservation Portion.
Mutual Funds Means Mutual funds registered with SEBI pursuant to the SEBI (Mutual Funds)
Regulations, 1996, as amended from time to time.
Non Institutional All Bidders that are not Qualified Institutional Buyers or Retail Individual
Bidders Bidders who have Bid for Equity Shares for an amount more than ` 200,000/-
(but not including NRI’s other than Eligible NRI’s).
Non Institutional Consists of [●] Equity Shares of ` 10/- each aggregating to ` 2535.00 lacs, being
Portion not less than 15% of the Net Issue, available for allocation to Non Institutional
Bidder(s).
Non-Resident Indian A person resident outside India, as defined under the FEMA and the FEMA
or NRI (Transfer or Issue of Security by a person Resident Outside India) Regulations,
2000, as amended from time to time.
Offer Document Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus
Offer for Sale Public offer of [●] Equity Shares through an offer for sale aggregating to ` 4500.00
Lacs by the Selling Shareholder for cash at a price of Rs [●] per Equity Share,
consisting of the Net Issue and the Employee Reservation Portion.
Pay-in Date Bid/Issue Closing Date or the last date specified in the CAN sent to Bidders, as
applicable.
Pay-in-Period Means:
(i) with respect to Bidders whose Margin Amount is 100% of the Bid Amount,
the period commencing on the Bid/ Issue Opening Date and extending
until the Bid/Issue Closing Date; and
(ii) with respect to Bidders whose Margin Amount is less than 100% of the Bid
Amount, the period commencing on the Bid/Issue Opening Date and
extending until the closure of the Pay-in Date.
Price Band The price band of a minimum price (“Floor Price”) of ` [•]/- and the maximum
price (“Cap Price”) of ` [•]/- and includes revisions thereof.
Pricing Date The date on which the Company in consultation with the BRLM finalizes the
Issue Price.
Prospectus The Prospectus, to be filed with the Registrar of Companies, Tamil Nadu,
Chennai, containing, inter alia, the Issue Price that is determined at the end of the
Book Building Process, the size of this Issue and certain other information.
Public Issue Account Account opened with the Banker to this Issue to receive monies from the Escrow
Account for this Issue on the Designated Date.
Qualified Institutional A mutual fund, venture capital fund and foreign venture capital investor
Buyers or QIBs registered with the Board; a foreign institutional investor and sub-account (other
than a sub-account which is a foreign corporate or foreign individual), registered
with the Board; a public financial institution as defined in section 4A of the
Companies Act, 1956; a scheduled commercial bank; a multilateral and bilateral
development financial institution; a state industrial development corporation; an
insurance company registered with the Insurance Regulatory and Development
Authority; a provident fund with minimum corpus of twenty five crore rupees; a
iv
SABARI INN LIMITED
TERM DESCRIPTION
pension fund with minimum corpus of twenty five crore rupees; National
Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November
23, 2005 of the Government of India published in the Gazette of India.
QIB Portion Consists of [●] Equity Shares of ` 10/- each aggregating to ` 8450.00 lacs, being
upto 50% of the Net Issue, available for allocation to QIBs. 5% of the QIB Portion
shall be available for allocation on a proportionate basis to Mutual Funds only.
RHP/ Red Herring The Red Herring Prospectus issued in accordance with Section 60B of the
Prospectus Companies Act, which does not have complete particulars on the price at which
the Equity Shares are offered and size of this Issue. The Red Herring Prospectus
will be filed with the RoC at least three days before the Bid/ Issue Opening Date
and will become a Prospectus after filing with the RoC after determination of the
Issue Price.
Registrar/ Registrar Integrated Enterprises (India) Limited
to this Issue
Retail Individual Individual Bidders (including HUF’s) who have Bid for an amount less than or
Bidders equal to ` 200,000 in any of the bidding options in this Issue.
Retail Portion Consists of [●] Equity Shares of ` 10/- each aggregating to ` 5915.00 lacs, being
not less than 35% of the Net Issue, available for allocation to Retail Individual
Bidder(s).
Revision Form The form used by the Bidders to modify the quantity of Equity Shares or the Bid
price in any of their Bid-cum-Application Forms or any previous Revision
Form(s).
Selling Shareholder ICICI Prudential Asset Management Company Limited; Portfolio Managers on
behalf of its clients and India Opportunity Real Estate Fund, Mauritius
The Bombay Stock Exchange Limited and the National Stock Exchange of India
Stock Exchanges
Limited.
Syndicate The BRLM and the Syndicate Member.
Syndicate Agreement The agreement to be entered into between the Company and the members of the
Syndicate, in relation to the collection of Bids in this Issue.
Syndicate Member [●]
Transaction The slip or document issued by the Syndicate Member to the Bidders as proof of
Registration Slip/ registration of the Bid.
TRS
Underwriters The BRLM and the Syndicate Member.
Underwriting The Agreement amongst the Underwriters and the Company to be entered into
Agreement on or after the Pricing Date.
GENERAL / CONVENTIONAL TERMS:
TERM DESCRIPTION
Companies Act The Companies Act, 1956, as amended from time to time.
Financial Year/ The period of twelve months ended March 31 of that particular year.
Fiscal/ FY
Indian GAAP Generally Accepted Accounting Principles in India.
Insurance Act Insurance Act, 1938, as amended from time to time.
v
SABARI INN LIMITED
TERM DESCRIPTION
I. T. Act The Income Tax Act, 1961, as amended from time to time.
I. T. Rules The Income Tax Rules, 1962, as amended from time to time, except as stated
otherwise.
Non Resident A person who is not resident in India except NRI’s and FIIs.
RBI Reserve Bank of India constituted under the RBI Act.
RBI Act The Reserve Bank of India Act, 1934 as amended from time to time.
SCRA Securities Contract (Regulation) Act, 1956, as amended from time to time.
SCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to time.
SEBI Securities and Exchange Board of India constituted under the SEBI Act.
SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time.
SEBI Insider Trading The SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended from
Regulations time to time, including instructions and clarifications issued by SEBI from time to
time.
SEBI Regulation/ The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
SEBI (ICDR)
Regulations
ABBREVIATIONS
ABBREVIATION FULL FORM

AGM Annual General Meeting
AMBI Association of Merchant Bankers of India
ASBA Application Supported By Blocked Amount
AS Accounting Standards issued by the Institute of Chartered Accountants of India.
AY Assessment Year
BSE Bombay Stock Exchange Limited.
BG/LC Bank Guarantee/ Letter of Credit
CAGR Compounded Annual Growth Rate
CDSL Central Depository Services (India) Limited.
CRISIL Credit Rating and Information Services India limited
DP Depository Participant
ECS Electronic Clearing System
EGM Extra Ordinary General Meeting of the shareholders.
EPS Earnings per Equity Share.
FCNR Account Foreign Currency Non Resident Account.
Foreign Exchange Management Act, 1999, as amended from time to time and the
FEMA
regulations issued there under
Foreign Institutional Investor (as defined under SEBI (Foreign Institutional
FII Investors) Regulations, 1995, as amended from time to time) registered with SEBI
under applicable laws in India
FIs Financial Institutions
FIPB Foreign Investment Promotion Board, Department of Economic Affairs, Ministry
of Finance, Government of India
Foreign Venture Capital Investors registered with SEBI under the SEBI (Foreign
FVCI
Venture Capital Investor) Regulations, 2000
GDP Gross Domestic Product
GIR Number General Index Registry Number
GoI/ Government Government of India
vi
SABARI INN LIMITED
ABBREVIATION FULL FORM

HUF Hindu Undivided Family
INR / `/ Rupees Indian Rupees, the legal currency of the Republic of India
NAV Net Asset Value
NRE Account Non Resident External Account
NRI Non Resident Indian
NRO Account Non Resident Ordinary Account
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
P/E Ratio Price/Earnings Ratio
PAN Permanent Account Number
RoC/Registrar of The Registrar of Companies, Tamil Nadu, Chennai
Companies
RoNW Return on Net Worth.
NCR National Capital region
COMPANY & INDUSTRY RELATED TERMS
TERM DESCRIPTION
ARR Average Room Rental calculated by dividing the total room revenue by the number
of rooms occupied.
F&B Food and Beverage
FHRAI Federation of Hotel and Restaurant Associations of India
HRACC Hotel Restaurant Approval and Classification Committee
Occupancy Total number of room days occupied divided by the total number of room days
available
Project The proposed project of the Company
MIS Management Information System
T&T Travel and Tourism
WTTC World Travel & Tourism Corporation
Occupancy Rate Total number of rooms occupied divided by the total number of rooms available.
Occupancy Level The combined Saleable Area of the occupied units of a project as a percentage of the
total Saleable Area of the project available for lease
RevPAR Revenue per available Room
CAGR Compounded Annual growth Rate
Notwithstanding the foregoing:
a. In the section titled “Main Provisions of the Articles of Association of the Company” on page no. 239 of
this Offer Document, defined terms have the meaning given to such terms in the Articles of Association
of the Company.
vii
SABARI INN LIMITED
CERTAIN CONVENTIONS AND USE OF MARKET DATA
In this Offer Document, any discrepancies in any table between the total and the sums of the amounts
listed may be due to rounding-off.
Unless stated otherwise, the financial data in this Offer Document is derived from the financial
statements of the Issuer prepared and restated in accordance with Indian GAAP, included in this Offer
Document. Issuer’s financial year commences on April 1 and ends on March 31 of the next calendar year.
Accordingly, all references to a particular financial year are to the twelve-month period ended on March
31 of that year, unless otherwise specified.
Further, there are significant differences between Indian GAAP and US GAAP. Issuer has not attempted
to explain those differences or quantify their impact on the financial data included herein, and the Issuer
urges you to consult your own advisors regarding such differences and their impact on Sabari Inn Ltd.
financial data. Accordingly, the degree to which the Indian GAAP financial statements included in this
Offer Document will provide meaningful information is entirely dependent on the reader’s level of
familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting
practices on the financial disclosures presented in this Offer Document should accordingly be limited.
In this Offer Document, unless the context otherwise requires, all references to the word "lacs" means
"one hundred thousand" and the word "million" means "ten lacs" and the word "Crore" means "ten
million". Throughout this Offer Document, all figures have been expressed in Rupees lacs, unless
otherwise stated.
For additional definitions, please refer to the section titled ‘Definitions and Abbreviations’ starting from
page no. i of this Offer Document. In the section titled ‘Main Provisions of the Articles of Association of
SIL beginning on page no. 239 of this Offer Document, defined terms have the meaning given to such
terms in the Articles of Association of SIL.
The Industry data used in the document is as per the CRISIL Research Hotels Annual Review October
2010.CRISIL limited has used due care and caution in preparing this report. Information has been
obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the
accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions
or for the results obtained from the use of such information. No part of this report may be
published/reproduced in any form without CRISIL’s prior written approval. CRISIL is not liable for
investment decisions which may be based on the views expressed in this report. CRISIL Research
operates independently of, and does not have access to information obtained by CRISIL’s Rating
Division, which may, in its regular operations, obtain information of a confidential nature that is not
available to CRISIL Research.
CURRENCY OF PRESENTATION
In this Offer Document, references to “Rupees” or “`” or “Rs.” are to Indian Rupees, the official currency
of the Republic of India. All references to “US$”, “USD” or “US Dollars” are to United States Dollars, the
official currency of the United States of America.
viii
SABARI INN LIMITED
FORWARD-LOOKING STATEMENTS
This Offer Document contains certain “forward looking statements”. These forward looking statements
generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”,
“estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or
other words or phrases of similar import. Similarly, statements that describe the strategies, objectives,
plans or goals of Issuer are also forward-looking statements. These statements discuss future expectations;
contain projections of result of operations or of financial conditions or state other “forward looking
information”. When considering such forward statements, the investor should keep in mind the risk
factors and other cautionary statements in the Offer Document.
All forward looking statements are subject to risks, uncertainties and assumptions about the Issuer that
could cause actual results to differ materially from those contemplated by the relevant forward-looking
statement.
Actual results may differ materially from those suggested by the forward looking statements due to risks
or uncertainties associated with Issuer’s expectations with respect to, but not limited to, regulatory
changes pertaining to the Issuer’s industry and Issuer’s ability to respond to them, Issuer’s ability to
successfully implement its strategy, its growth and expansion, technological changes, its exposure to
market risks, general economic and political conditions in India and which have an impact on the Issuer’s
business activities or investments, the monetary and fiscal policies of India, inflation, deflation,
unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices,
the performance of the financial markets in India and globally, changes in domestic laws, regulations and
taxes and changes in competition in SIL industry. Important factors that could cause actual results to
differ materially from Issuer’s expectations include, but are not limited to, the following:
· General economic and business conditions in the markets in which the Issuer operates and in the
local, regional, national and international economies;
· Changes in laws and regulations relating to the industry in which the Issuer operates;
· Increased competition in the respective industry;
· The nature of Issuer’s contracts with its customers which contain inherent risks and contain
certain provisions which, if exercised, could result in lower future income and negatively affect
its profitability;
· Unanticipated variations in the duration, size and scope of the projects;
· Changes in political and social conditions in India or in other countries that the Company may
enter, the monetary and interest rate policies of India and other countries, inflation, deflation,
unanticipated turbulence in interest rates, equity prices or other rates or prices;
For further discussion of factors that could cause SIL actual results to differ from Issuer’s expectations,
see the sections titled “Risk Factors” beginning on page x, of this Draft Red Herring Prospectus. Neither
the Issuer nor any of the Underwriters nor any of their respective affiliates has any obligation to update
or otherwise revise any statements reflecting circumstances arising after the date hereof. In accordance
with SEBI requirements, the Issuer and the Book Running Lead Manager will ensure that investors in
India are informed of material developments until the time of the grant of listing and trading permission
by the Stock Exchanges.
ix
SABARI INN LIMITED
PART I
SECTION I - RISK FACTORS
Any investment in the Issuer may not be suitable for all recipients of this Offer Document. Any potential
investors are accordingly advised, before any investment, to consult independent financial advisers who
specialize in advising on making investments in Indian securities and are conversant with rules and
regulations governing investments in India.
Investors should carefully consider the risks described below and the other information in this Offer
Document before investing. The Issuer’s business and/or the Share Price could be adversely affected by any
of these risks. In particular, any potential investor in, or purchaser of, Shares should pay particular attention
to the fact that the Issuer is governed in India by a legal or regulatory environment which, in some respects,
may differ from that which prevails in other countries. The trading price of the Shares could decrease due to
any of these risks which may lead to losing all or part of the investment.
The risk factors noted in this section and other factors noted throughout the Offer Document, including
certain risks and uncertainties, could cause actual results to differ materially from those contained in any
forward looking statement.
The following risk factors do not purport to be an exhaustive list or explanation of all the risk factors
involved in investing in the Company and they are not set out in any order of priority. In particular, the
Company's performance might be affected by changes in market and/or economic conditions and in legal,
regulatory and tax requirements.
Additionally, there may be further risks of which the Board of Directors is not aware or believe them to be
immaterial at present, which may, in the future, adversely affect the Company's business and the market
price of the Ordinary Shares.
The risk factors have been determined on the basis of their materiality. The following factors have been
considered for determining the materiality:
· Some events may not be material individually, but may be found material collectively.
· Some events may have material impact qualitatively instead of quantitatively.
· Some events may not be material at present but may have material impact in the future.
An investment in Equity Shares involves a high degree of risk. You should carefully consider all of the
information in this Draft Red Herring Prospectus, including the risks and uncertainties described below,
before making an investment in the Company’s Equity Shares. If any of the following risks occur, the
business of the Company, financial condition and results of operations could suffer, the trading price of the
Equity Shares could decline, and you may lose all or part of your investment.
The risk factors are as envisaged by the management.
Unless specified or otherwise stated in the relevant risk factors set forth below, the Issuer is not in a
position to quantify the financial or other implications of any risks mentioned in this section.
x
SABARI INN LIMITED
I. Internal Risks
The Company is involved in certain legal proceedings, incidental to its business and operations, which if
determined against the Company, could have an adverse impact on the results of the operations and
financial condition. The summary of such legal proceedings is as follows:
1. Litigations filed/ disputes/ cases pending/ Notices issued against the Company/ Promoters/
Directors/ Promoters Group/ Group Entities
Financial implications where quantifiable

Particulars No. of cases (` in lacs)
Against our Company
Notice relating to 1 Not Ascertainable
Unapproved Civil Construction
Against our Director
Mr. R. Thiagarajan
Criminal matters 2 31.03
Mr. P. Vaidyanathan
Criminal matters 1 5.06
2. Contingent liabilities not provided for, which if materializes may have an adverse effect on the
financial condition and future financial performance of the Company.
The contingent liabilities not provided for as on 30/06/2010 are as follows:
Particulars Amount
(` in lacs)
Bank Guarantee in respect of export obligations for capital
goods imported under Export Promotion Capital Goods
(EPCG) Scheme 207.13
Total 207.13
3. The Company has for its T Nagar hotel made an application to Chennai Metropolitan
Development Authority (CMDA) for regularization of construction of three additional floors. In
the event of the said unapproved development being not approved by the appropriate authorities
the Company may face the risk of punitive action.
The Company had permission for construction of a hotel at T. Nagar, Chennai with basement plus
ground floor plus three floors vide permission no. 000582 dated 8/5/2001 from Chennai
Metropolitan Development Authority (CMDA). The Company had vide application dated
29/11/2001 applied for construction of three additional floors for regularization and also paid the
requisite fee for the same. Subsequently, the Company received a notice from CMDA dated
20/12/2001 calling for approved plan. The Company replied vide letter dated 20/12/2001
explaining that the Company has already made an application for construction of additional three
floors for regularization. The Government of Tamil Nadu vide ordinance dated 27/7/2007 issued an
ordinance suspending all punitive action for a period of one year in respect of any notice issued by
xi
SABARI INN LIMITED
any local authority or any other authority empowered under relevant law with regard to any
unapproved development completed prior to the date of the ordinance. This ordinance was
followed thereafter by subsequent ordinances/act, which is enforceable as on date. In the event of
any such unapproved developments being not approved by the appropriate authorities then the
Company may face the risk of punitive action.
4. The company proposes to utilize net issue proceeds to the extent of ` 7251.00 lacs towards capital
expenditure to be incurred for new hotel being constructed at Bangalore. The hotel may not
generate the desired revenues and expected benefits in the estimated time frame.
The company has proposed to utilize an amount of ` 7251.00 Lacs constituting around 58.00% of the
net issue proceeds towards the deployment of capital expenditure for building the hotel at
Bangalore, near Airport. Presently, the Company has purchased the land for Bangalore hotel and
commenced the construction activity after taking requisite approvals from the statutory authorities.
An amount of ` 2283.28 lacs already been incurred towards the project. The capital expenditure
plans are subject to the number of factors like timely execution of project, receipt of statutory
approvals, natural calamities, economic stability, political developments, management perception
and other factors that directly affect the long term functioning of the business. In the event of these
occurrences, the company may run into cost overruns, delayed commencement of the proposed
project and may not be able to achieve the desired revenues and benefits as foreseen by the
Company.
5. The Company intends to utilize an amount of ` 4700.00 Lacs constituting around 37.60 % of the net
issue proceeds for long term lease for unidentified hotels. In the event the Company is unable to
identify and utilise the proceeds for appropriate purposes, the business, results of operations and
profitability could be adversely affected.
The Company proposes to spread the Hotel network in Tier II business cities by entering into the
long term lease agreement with the owners of the hotel properties. We believe that the Tier II cities
are potential places for the business travelers and executives that will help the Company to increase
the operating income and profitability apart from giving a visibility to the Company. The Company
proposes to deploy ` 4700.00 Lacs from the net issue proceeds towards security deposit, advance
rental payment, renovation and refurbishment expenses, working capital, etc.
The Company is subject to different risks associated with leased or licensed properties as compared
to properties that it owns. For example, since the lease or license arrangements are subject to renewal
from time to time on mutually agreeable terms, there may be an increase in license fees and lease
rentals when they are renewed. The Company may not be able to renew such arrangements on terms
that are favorable to them. Further, the lessor or licensor may decide to use the property for other
purposes or otherwise terminate or not renew the arrangement. For details on leasehold properties
please refer the section “Properties” beginning on page no. 79 of this DRHP.
6. The existing revenue is dependent to an extent on the brand name “Quality Inn “and “Quality
Hotel” for which the Company has entered into Franchisee Agreements with Choice Hospitality
(India) Private Ltd. For its upcoming Hotel at Coimbatore, the Company has entered into a
management agreement with Carlson Hotel Asia Pacific Pty Limited (Carlson). These
franchise/management agreements are subject to risk of disputes, obligations, non renewal,
termination etc.
xii
SABARI INN LIMITED
The Company with a view to grow and to capitalise on the Brand Value of Choice Hotels
International, Inc has entered into franchisee agreements with Choice Hospitality (India) Private Ltd
(the master franchisee of Choice Hotels International Inc) for its hotels at T-Nagar, Chennai and OMR
Road, Chennai and Kodaikanal. These arrangements have helped the company to increase the footfall
of guests at the ventured locations and have also helped in strengthening the brand visibility.
Under the franchise agreements, the Company has a continuing obligation to ensure that the hotels
comply with the “Quality Inn” and “Quality Hotel” brand standards and must promptly provide any
necessary funds for capital expenditures and upgrading to ensure that such broad standards are
maintained. This may require the Company to make capital expenditures from time to time. Further,
should there be a dispute regarding the compliance with the brand standards, or should these
licenses are terminated or not renewed, the Company will not be able to continue operating under
the “Quality Inn” and “Quality Hotel” brand. For its Hotel at Coimbatore, the Company has entered
into a management agreement with Carlson.
In the event these contracts are not be renewed or terminated prior to expiration it would have an
adverse impact on the brand image and financials of the Company.
7. The utilization of the net issue proceeds shall be entirely at the discretion of the Company and no
independent monitoring agency has been appointed.
The fund requirement is based on Company’s estimates. There is no guarantee that these will prove
to be accurate and any significant deviation in the estimates could have an adverse impact on the
operations of the Company. The deployment of issue proceeds towards the objects as mentioned on
page no. 43 is entirely at the sole discretion of the Company and no independent agency has been
appointed for monitoring the deployment.
8. The Company has entered into share subscription agreement with two investors that require the
Company to obtain prior permission from them for certain acts which may limit Company’s
discretion in these matters.
The Company entered into a share subscription agreement with ICICI Prudential Asset Management
Company Limited; Portfolio Managers on behalf of its clients and India Opportunity Real Estate
Fund, Mauritius in the year 2007 to primarily benefit from the investment and also to widen the
scope of operations of the Company. There are restrictive covenants in the agreement that limit the
discretion of the Company. For further details on this agreement please refer “share subscription
agreement” on page no. 90
9. If the Company is unable to obtain required approvals and licenses in a timely manner, the
business and operations may be adversely affected.
The business model of the Company is largely dependent on the licenses and approvals of statutory
and other regulatory authorities. The Company may from time to time, require certain approvals,
licenses, registrations and permissions for undertaking the business. If the Company fails to obtain
any of the approvals or licenses or renewals thereof, in a timely manner, or at all, the business could
be adversely affected. For further details please see section titled “Government/ Statutory and
Business Approvals” beginning on page no. 165 of this Draft Red Herring Prospectus. Licenses &
Approvals which have been applied for but for which approval has not yet been received are as
follows:
xiii
SABARI INN LIMITED
Sr. Name of the Expired on Granting Status

No. License/Approval/Certificate
Authority
Quality Inn Sabari T-Nagar Chennai
30.11.2010 Licensing Dept., The Applied for
1. Renewal of license for the public
Indian Performing renewal and
performance of musical works
Right Society renewal fees
under section 30 of the Copyright
Limited paid
Act, 1957
License to operate the lift bearing sr 9.11.2010 Electrical Inspector Electrical
2.
no. 8361 of Johnson Make under Chennai Division, Inspection
Rule 4 (2) and 5 (2) of Tamil Nadu Guindy, Chennai done.
Lift Rules 1997 Certificate
awaited
3.
no. 8362 of Johnson Make under Chennai Division Inspection
awaited
4.
awaited
Public Performance License for all 31.01.2011 Phonographic Applied for
5.
Sound Recordings controlled by Performance Ltd. renewal
Phonographic Performance Ltd.
Certificate of Registration for a 31.12.2010 Assistant Inspector Applied for
6.
Catering Establishment for of Labour, 19th renewal
employing not more than 150 Circle, Chennai
persons
Quality Sabari Classic OMR
1. License to operate lift bearing Sr. 09.08.2010 Electric Inspector Electrical
No. 52903-0-A of Mistubishi Make Kanchipuram Inspection
under Rule 4(2) and 5(2) of Tamil South Division done.
Nadu Lift Rules 1997 Chennai Certificate
awaited
2. License to operate Sr. No. 52904-0-A 09.08.2010 Electric Inspector Electrical
of Mistubishi Make under Rule 4(2) Kanchipuram Inspection
and 5(2) of Tamil Nadu Lift Rules South Division done.
1997 Chennai Certificate
awaited
awaited
xiv
SABARI INN LIMITED

awaited
5. Consent under section 21 of Air 31.03.2010 District Inspection
(Prevention and Control of environmental completed.
Pollution) Act, 1974, subject to Engineer Tamin Certificate
general and conditions specified in Nadu Pollution awaited
the Consent Order Control Board
Kancheepuram
District
6. Consent under section 21 of Water 31.03.2010 District Inspection
Kancheepuram
District
7. License under section 30 of the 31.10.2010 The Indian Renewal fees

Copyright Act, 1957 authorising to Performing Right paid.
perform all musical & literary works Society Ltd. Certificate
controlled by The Indian Performing awaited
Right Society Ltd.
8. Consent under section 21 of Air 31.3.2010* District Inspection
(Prevention and Control of Environmental completed.
Pollution) Act, 1981, subject to Engineer Certificate
general and conditions specified in Tamil Nadu awaited
the Consent Order. Pollution Control
Board
Kancheepuram
District
Maraimalai Nagar
9. Certificate of verification of weights, 26.10.2010 Asst. Applied for
measures etc. under the standards of controller/Inspector and waiting
weights and Measures of Legal Metrology for inspection
(Enforcement) Act, 1985 – for Peg
measures
Quality Inn Sabari Resorts Kodaikanal

1. Renewal of registration under 13.05.2010 Commercial Tax Renewal Fees
section IX A of Tamil Nadu Tax on Officer (FAC) paid
Luxury Hotel and Lodging Houses Kodaikanal
act, 1981
2. Sanitary Certificate Certificate Municipal Health Application
dated Officer made for
20.07.2009 Kodaikanal renewal
Municipality
3. Registration Certificate issued under NA Commercial Tax Application
Section 101 of Tamil Nadu Public Officer, Kodaikanal made for
Health Act, 1939 renewal
xv
SABARI INN LIMITED
5. FL.3 License under Tamil Nadu NA Commissioner P&E, Inspection

Liquor License and permit Rules, Chennai done.
1981 Certificate
awaited
Sabari Nest Coimbatore
1. Consent Order under section 21 of 31.03.2010 District Inspection
the Air (Prevention and Control of Environmental done.
Pollution) Act, 1981 for operation of Engineer Certificate
Industrial plant in the Air Pollution TNPC Board awaited
area and to make new discharge of Chennai
emission from the stacks 600 106
the Water (Prevention and Control Environmental done.
of Pollution) Act, 1974 for discharge Engineer TNPC Certificate
of sewage and trade effluent Board Coimbatore awaited
3. Registration under Section 9A of the 01.02.2010 Assistant Applied for
Tamil Nadu Tax on luxuries in the Commissioner(CT) renewal
Hotel and Lodging Houses, act 1981
5. Registration Certificate issued under Assistant Health Application
Section 101 of Tamil Nadu Public Officer, Zone VI, for renewal
Health Act, 1939. Corporation of made
Chennai
10. The company is dependent on Key Managerial Personnel (KMP) for its success and the absence of
continued association of any of KMP could impair the ability to continue to manage and expand
business efficiently.
The success of the Company largely depends on the continued services and performance of the KMPs
who have been associated with the Company for past several years. These KMPs have been the
driving force behind the success of the business and brand till date. Their acumen, efforts and
dedication have contributed mainly to the growth of Company. The Company believes that the
absence of continued association of any of KMP could impair the ability to continue to manage and
expand business efficiently
11. Unsecured loans taken by the Company can be recalled by the lenders at any time, which may
affect the business and financial condition.
As on June 30, 2010 the Company has outstanding unsecured loans to the extent of ` 508.71 lacs
which has been taken in a normal course of business. Such unsecured loans may be recalled by the
lenders at any time which may have an impact on the business of the Company.
12. One of the group companies has made loss in past three financial years. Any prolonged losses by
Group Company could result in reduction of reputation of the Company.
One of the Group Company which has made loss in for the financial period ended 30 September,
2009 (The First Financial Year) is tabulated below:
Sr. No Name of the Company For the period ended on

30/09/2009 (` in lacs)
1. Sabari Nest Inn Private Limited (250.34)
xvi
SABARI INN LIMITED
13. The inability to manage the growth strategy could disrupt the business and reduce the
profitability.
The Company has experienced substantial growth in recent years and expects the business to
continue to grow significantly. Although the Company plans to continue to expand the scale of
operations through organic growth it may not grow at a rate comparable to the growth rate in the
past, either in terms of income or profit. The Company expects the future growth to place significant
demands on the management and operations, and require us to continuously evolve and improve the
financial, operation and other internal controls across the organization. In particular, continued
expansion increases the risks discussed in this section as well as other risks. However, new business
initiatives may not be successful. This could hamper the growth prospects.
14. Increased competition in the hotel sector may adversely affect the operation of the hotels.
The Company competes for guests with other hotels in a highly competitive industry. The success of
Company largely depends on the ability to compete in areas such as room rates, quality of
accommodation, service levels, and brand recognition among others. The Company faces competition
from existing hotel players and will also have to compete with any new hotel properties coming up in
the city. There can be no assurance that new or existing competitors will not significantly lower rates
or offer greater convenience, services or amenities or significantly expand or improve facilities in the
market in which the Company operates. Such developments would affect the ability to compete with
them and have a negative impact on the profitability of the Company.
15. The results of operations of the Company could be adversely affected by strikes, work stoppages
or increased wage demands by the employees or any other kind of disputes with the employees.
The Company may experience disruptions to the operations due to disputes or other problems with
the work force, which may adversely affect the business and results of operations of the Company.
The Company may not be able to negotiate acceptable collective bargaining agreements with those
who have chosen to be represented by unions, which could lead to union-initiated work stoppages,
including strikes, which could adversely affect the business and results of operations. They may enter
into contracts with independent contractors to complete specified assignments and these contractors
are required to source the labour necessary to complete such assignments. Although the Company
does not proposes to engage those labourers directly, it is possible under Indian law that the
Company may be held responsible for wage payments to labourers engaged by contractors should
the contractors default on wage payments. Any requirement to fund such payments may adversely
affect the business, financial condition and results of operations.
16. The Company has experienced negative cash flows from its operating activities.
The company has reported negative cash flows from its operating activities for the financial year FY
2007-08 to the tune of ` 668.71 Lacs. Any negative cash flows in future could affect the result of
operations and financial conditions.
17. There are restrictive covenants in the agreements with Banks / Institutions from whom we have
borrowed, which among other things require the company to obtain prior permission from them
for certain acts which may limit company’s discretion in these matters.
xvii
SABARI INN LIMITED
There are restrictive convents in the agreements with banks / institutions from whom we have
borrowed, which among other things require company to obtain prior permission from them for
change in Management, declaring dividend and undertaking new project etc. which may limit
company’s discretion in these matters. Brief details of the restrictive convents are as follows:
(a) Borrower not to induct any person who is a Director on the Board of a Company which
is/has been identified as a willful defaulter and in case is found to be on the Board of the
Borrower, Borrower to take expeditious and effective steps for removal of such persons from
the Board.
(b) Company not to create, without the consent of the Bank any charge on its assets and
revenues of the Company, including credit card receipts during the currency of the loan.
(c) Company not to effect any major changes in the management of the Company without prior
permission of the Bank.
(d) During the substance of the liability of the Borrower to the Bank in respect of the credit
facility, Borrower shall not, without the Bank’s prior approval in writing:
(i) effect any change in its capital structure

(ii) formulate any scheme of amalgamation or reconstruction
(iii) undertake any new project, implement a new scheme of expansion or acquire fixed assets
except those indicated in the funds flow statement submitted to the Bank from time to
time and approved by the Bank.
(iv) invest by way of share capital in or lend or advance funds to or place deposits with any
other concern (including group companies), normal trade credit or security deposits in
the normal course of business or advances to employees being excepted.
(v) enter into borrowing arrangement either secured or unsecured with any other Bank,
financial institution, company or otherwise or accept deposits apart from the
arrangements indicated in the funds flow statements submitted to the Bank from time to
time and approved by the Bank.
(vi) undertake any guarantee obligation on behalf of any other company (including group
companies)
(vii) declare dividends for any year except out of profits relating to that year after making
necessary provisions PROVIDED that no default has occurred in any term loan
repayment obligations.
(viii) create any charge, lien or encumbrance over its undertaking or any part thereof in favour
of any financial institution, bank, company, firm or persons.
(ix) sell, assign, mortgage or otherwise dispose off any of the fixed assets charged to the
bank.
(x) enter into any contractual obligation of any long term nature or affecting the company
financially to a significant extent.
(xi) change the practice with regard to remuneration of directors or commission, scale of
sitting fee etc.
(xii) Permit any transfer of controlling interest or make any drastic change in the management
set up.
(xiii) Repay monies brought in by the promoters/directors/principal shareholders and their
friends and relatives by way of deposits/loans/advances. Rate of interest payable on
such deposits/loans/advances to be lower than the rate of interest charged by the bank,
xviii
SABARI INN LIMITED
II. External Risks
1. The hotel industry is cyclical and sensitive to changes in the economy and this could have a
significant impact on the operations and financial results.
The hotel sector may be unfavorably affected by such factors as changes in the global and domestic
economies, changes in local market conditions, excess hotel supply or reduced demand for hotel
rooms and associated services, competition in the industry, changes in interest rates, the availability
of finance and other similar factors. Since demand for hotels is affected by economic growth in India
as well as globally, a global or domestic recession could lead to a down-turn in the hotel industry.
Such adverse developments in the hotel industry in India or in the cities where the hotels are located
could have a negative impact on the profitability. Any slowdown in the Indian economy or future
volatility in global commodity prices could adversely affect the business.
2. Disruptions or lack of basic infrastructure such as electricity, water supply and transport could
affect the operations
The industry in which the Company operates is a service industry. Any disruption in basic
infrastructure such as supply of electricity, water and transportation could affect the operations, the
services to the guests and increase the operating costs, and as a result, could have an effect on the
business and results of operations of the Company.
3. The hotel industry is subject to significant regulations.
The Company subject to numerous laws and regulations in all of the jurisdictions in which it operates
including those relating to the preparation and sale of food and beverages, safety norms, health,
excise and entertainment licensing laws. The properties are also subject to laws and regulations
governing relationships with employees in such areas as minimum wage and maximum working
hours, overtime, working conditions, hiring and terminating of employees and work permits. Any
case of non-compliance with applicable laws can result into loss of operation and thus affecting the
profitability.
4. Changes in the policies of Government of India and the political situation in India may affect the
Operations of the company.
A significant change in India’s economic liberalization and deregulation policies could affect business
and economic conditions in India. Taxes and levies affect the cost and prices of the company’s
business. Any change in the policies, regulations and other levies regulated or imposed by either
Central or State Government of India may have an adverse impact on the company’s business.
5. Acts of violence or war, in India or other neighboring countries, could adversely affect Indian and
Worldwide economic markets, result in a loss of business confidence, and adversely affect the
business and profitability.
Acts of violence or war, including an increase in the terrorist activities in India or other neighboring
countries, may affect Indian and worldwide economic markets. These acts may also result in a loss of
business confidence and have other consequences that could adversely affect the business and
profitability through reduction in business activity and business travel. Increased volatility in
economic markets can have an adverse impact on the economies of India and other countries. The
threat of additional terrorist attacks and other acts of violence or war also have a direct impact on
xix
SABARI INN LIMITED
international travel and may have an adverse impact on the ability of Company to attract
international guests.
6. The operations of the Company could be affected by natural calamities at or in the vicinity of the
properties.
The operations of the Company are dependent on the ability to protect the properties from any
natural calamity such as fire, earthquakes, and floods, natural and similar events. The occurrence of a
natural disaster or other unanticipated problems at the hotels can cause interruptions in the
operations of the Company. Any damage or failure that causes interruptions in the operations could
have a negative impact on the profitability and financial condition. The results of the operations of
the Company have been and will continue to be significantly affected by other factors outside the
Company’s control, such as political unrest etc, all of which may affect the level of travel and
business activity.
7. The Company’s business is exposed to the effects of exchange rate fluctuations.
The Company’s assets, earnings and cash flows are influenced by fluctuations in exchange rates of
other currencies against the rupee, and more particularly by movements in the US dollar. Any such
fluctuations in exchange rates may affect company’s operations and financial conditions.
8. Any downgrading of India’s debt rating by a domestic or international rating agency could
negatively impact the business of the Company.
Any adverse revisions to India’s credit ratings for domestic and international debt by domestic or
international rating agencies may adversely impact the Company’s ability to raise additional
financing, and the interest rates and other commercial terms at which such additional financing is
available. This could have an adverse effect on the Company’s financial results and business
prospects, ability to obtain financing for capital expenditures and the price of the Equity Shares.
9. After this Issue, the price of the Company’s Equity Shares may be highly volatile, or an active
trading market for the Equity Shares may not develop.
The prices of the Company’s Equity Shares on the Indian stock exchanges may fluctuate after this
Issue as a result of several factors, including:
· Volatility in the Indian and global securities market or in the Rupee’s value relative to the U.S.
dollar, the Euro and other foreign currencies;
· The Company’s profitability and performance;
· Perceptions about the future performance or the performance of Indian hospitality companies in
general;
· Performance of the competitors in the Indian hotel industry and the perception in the market
about investments in the hotel industry;
· Adverse media reports on the Company or the Indian hotel industry;
· Significant developments in India’s economic liberalization and deregulation policies; and
· Significant developments in India’s fiscal and environmental regulations.
There can be no assurance that an active trading market for the Company’s Equity Shares will
develop or be sustained after this Issue, or that the prices at which the Equity Shares of the Company
xx
SABARI INN LIMITED
are initially traded will correspond to the prices at which the Equity Shares will trade in the market
subsequent to this Issue.
Prominent Notes
1. Investors may contact the BRLM for any complaints/ information/ clarification pertaining to this
Issue. For contact details of the BRLM, please refer to the cover page of this Offer Document.
2. Public Issue of [● ] Equity Shares of ` 10/- each , comprising of fresh issue of [● ] equity shares
aggregating to ` 12500.00 lacs and an offer for sale of [● ] equity shares by the selling shareholder for
cash at a price of ` [● ] per equity share aggregating to ` 4500.00Lacs
3. The Net worth as per re-stated audited financials of the Company as on 30/06/2010 is ` 10706.70
lacs.
4. The Book Value per equity share of the Company as per its restated audited financial statement as at
30/06/2010 is ` 15.80/-
5. The average cost of acquisition of the equity Shares of the Company by each of the promoter is ` 10/-
each.
6. Details of group companies having business interest or other interests in the company:
Name of the Group Registered Office Nature of Interest

Company
Sabari Nest Inn Private # 29, Thirumalai Pillai Road, T. SNPL owns the three hotel properties
Limited (SNPL) Nagar, Chennai- 600 017, Tamil at Coimbatore, Chennai and
Nadu, India Bangalore that have been leased out
to the company on long term basis.
Sabari Supermarket # 29, Thirumalai Pillai Road, T. · SSPL is a lessor of convention
Private Limited (SSPL) Nagar, Chennai- 600 017, Tamil centre used by Sabari Inn Limited
Nadu, India (SIL)
· SSPL acts as a vendor to SIL for
purchase of provisions & groceries
for the hotels operated by SIL.
7. Details on Related Party Transactions, are as follows:

` (In Lakhs)
LIST OF RELATED PARTY DISCLOSURES
Opening Closing
Name of the Related Nature of Nature of Balance During the Balance
Party Relationship Transactions (As at Period (As at
01.04.2010) 30.06.2010)
Sabari Foundations (P) Associate
Loan-Liability Nil Nil Nil
Ltd Company
xxi
SABARI INN LIMITED
` (In Lakhs)
Opening Closing
Name of the Related Nature of Nature of Balance During the Balance
Party Relationship Transactions (As at Period (As at
01.04.2010) 30.06.2010)
Purchase of
Sabari Supermarket (P) 0.79 0.79
Goods & Nil
Ltd (Credit) (Credit)
Services
Purchase of
48.69 68.58
Sabari Nest Inn ( P) Ltd Goods & 19.89
(Debit) (Debit)
Services
K.R.V. Ramani Remuneration 9.18
Key
K.R.V. Ramani Management Rent Payments 1.20
Personnel
511.96 3.25 508.71
K.R.V. Ramani Unsecured Loan
(Credit) (Debit) (Credit)
Relative of
K.R.Ramakrishnan Key Mgt Remuneration 3.89
Personnel
8. The Company has not changed its name any time during the last three years immediately preceding
the date of filing DRHP except for the deletion of the words “Private” consequent to conversion into a
Public Limited Company.
9. There are no financing arrangements whereby the promoter group, the directors of the Company
which is a promoter of the issuer, the directors of the issuers and their relatives have financed the
purchase by any other person of securities of the issuer other than in the normal course of business of
the financing entity during the period of six months immediately preceding the date of filing draft
offer document with the Board..
10. In addition to the BRLM, the Company shall be obliged to update the Offer Document and keep the
public informed about any material changes till listing and till trading commences in respect of the
shares issued through this issue.
11. The Company has not issued any equity shares in the last twelve months from the date of filing of
this DRHP.
xxii
SABARI INN LIMITED
SECTION II INTRODUCTION
SUMMARY OF INDUSTRY AND BUSINESS OF THE COMPANY
2010. CRISIL limited has used due care and caution in preparing this report. Information has been
INDUSTRY OVERVIEW
As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is
ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world's
attractive destinations. It is ranked the 14th best tourist destination for its natural resources and 24th for
its cultural resources. The India travel and tourism industry ranked 5th in the long-term (10-year) growth
and is expected to be the second largest employer in the world by 2019. The liberalization of Indian
economy in 1991 and the integration of India into the global economy have given impetus to business
travelers and tourist travelers.
India’s hospitality industry has enjoyed robust growth over the past few years buoyed by a benign
economic and political environment. Increase in domestic business and leisure travel has benefited hotels
in India. Rising incomes, higher weekend trips and increased access to travel-related information over the
internet have all propelled growth in hospitality. Premium segment hotels are more prominent in major
business destinations in India, and are also dominant in popular tourist destinations like Goa, which
attracts a lot of foreign clientele. However, in the second half of 2008-09, ARRs decreased due to fall in
room demand on account of the global economic slowdown.
MARKET SIZE
The hotels industry witnessed robust growth during the period 2002-03 to 2007-08, with revenues
registering a CAGR of 24 per cent. During the same period, the premium segment (comprising of 5 star 5
star deluxe hotels) registered a CAGR of 29 per cent. This rapid growth was driven by a benign political
environment and rapid economic growth.
Business destinations such as Bengaluru, Mumbai and NCR witnessed high occupancy rates (ORs) and
were able to leverage upon low availability premium hotel rooms to charge high average room rates
(ARRs). On the other hand, leisure destinations were benefitted by rapid growth in foreign tourist
arrivals (FTAs), which registered a CAGR of 14 per cent during the period 2002-03 to 2007-08.
As a result, the overall size of the hotels market in terms of revenue has more than doubled in the
aforementioned period, from Rs 64.8 billion in 2003-04 to Rs 186.7 billion in 2007-08. During the same
period, the premium hotels segment grew almost four times from Rs 31.6 billion in 2003-04 to Rs 112.4
billion in 2007-08. The rapid growth in revenues spurred investments in new properties, especially in the
premium segment. Large supply additions were commissioned during the period 2006-07 to 2008-09.
1
SABARI INN LIMITED
However, industry revenues witnessed a sharp decline as a result of the global economic crisis in the
latter half of 2008-09. The resulting fall in room demand across destinations was exacerbated by large
supply additions, which forced players to reduce ARRs. Consequently, hotel revenues have decline
sharply over the last two years; revenues for the total market have decline at a CAGR of 24 per cent from
Rs. 186.7 billion in 2007-08 to 106.7 billion in 2009-10, during the same period revenues for the premium
segment have declined at a CAGR of 22 per cent from Rs 112.4 billion in 2007-08 to Rs 68.1 billion in 2009-
10.
Hotels Industry: Market Size
200,000 50
150,000 30
10
100,000
-10
50,000 -30
0 -50
2009-10E
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Premium market size (Rs. Million)
Total market size (Rs. Million)
Premium growth (per cent)
Total growth (per cent)
Source:CRISIL Research
Number of hotel rooms by category

Category 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10E
Premium segment 20,343 22,082 24,183 25,141 26,021 28,010 29,090 30,329 33,217
Mid-market segment 29,001 28,506 28,788 33,094 32,209 34,971 35,885 37,321 40,306
Budget hotels 10,974 10,423 10,119 9,746 8,107 7,783 7,783 7,861 7,939
Heritage hotels 2,492 2,258 2,297 2,567 2,611 2,689 2,703 2,730 2,757
Others (unregistered etc) 30,440 29,816 30,854 31,712 37,368 40,357 45,200 49,720 53,201
Total rooms 93,250 93,085 96,241 102,260 106,316 113,810 120,661 127,960 137,421
Growth (y-o-y) 0% 3% 6% 4% 7% 6% 6% 7%
E: Estimate
Source: CRISIL Research, FHRAI
INDUSTRY CHARACTERISTICS
Business and Leisure Destinations
From the point of view of the hospitality sector, destinations may be classified as business or leisure
destinations. It must be noted that the two are not mutually exclusive as some business destinations also
have their fair share of leisure travelers and vice versa. The demand dynamics of the two segments are
quite different, and can be discussed under the following headers:
2
SABARI INN LIMITED
Cyclicality
The hospitality sector is cyclical in nature. During positive cycles, the industry witnesses periods of
sustained growth in average room rates (ARRs) and occupancy rates (ORs). This trend continues until the
economy undergoes a downturn or there is excess supply in the sector. Usually occupancy rates begin to
decline at the onset of an economic deceleration, and this is followed by a reduction in ARRs. In the
recovery phase, occupancy rates start to move up, and subsequently, ARRs also start increasing.
Business destinations are more sensitive to macro-economic factors; i.e. RevPAR growth in business
destinations is more sensitive to macro-economic indicators such as nominal GDP growth. This is
reflected by the fact that during the global economic crisis, RevPARs in business destinations declined at
a CAGR of 22 per cent, compared to 11 per cent for leisure destinations.
Leisure destinations on the other hand, show a greater sensitivity to non-economic factors such as terror
attacks and health related travel warnings. This sensitivity is highlighted by sharper reduction in
RevPAR growth in leisure destinations during 2001-02 (as a result of the World Trade Centre attacks on
September 11), and in 2003-04 (as a result of SARS related travel advisories). It must be noted that the
decline in RevPAR growth in 2008-09 and 2009-10 was largely because of the Mumbai terror attacks on
26th November 2008 and swine flu related travel advisories; this negative effect was compounded by the
global slowdown.
Cyclicality of ORs and ARRs

50.0 20.0
- 10.0
(50.0) -
Business Destinations RevPAR growth

Leisure Destinations RevPAR growth
Nominal GDP growth
Source: CRISIL Research
Seasonality
The nature of demand in the hotels industry is seasonal. However, the pattern of ORs shows significant
variation in business and leisure destinations. Though the peak season for both business and leisure
destinations coincides (January-March), for the remainder of the year they exhibit markedly different
behavior. While business destinations maintain relatively constant ORs (albeit 5-10 per cent lower than
the January-March period) throughout the year, ORs exhibit a sharp correction during the month of
December, as this period coincides with the international holiday period. Leisure destinations on the
other hand witness extremely low ORs (around 50 per cent) during the May-October period. On the other
hand leisure destinations witness very high ORs (above 80 per cent) during the December holiday period.
3
SABARI INN LIMITED
Seasonal Nature of the Hotels Industry (ORs)
100
90
80
70
60
50
40
30
Business Destinations Leisure Destinations

Average Length of Stay (ALOS) and Occupancy Patterns
The demand for hotel rooms in business destinations is generally concentrated around weekdays; as a
result, ORs are generally lower on weekends. The ALOS in business hotels is usually in the range of 1 to 2
nights with low levels of double occupancy (i.e. fewer occasions where more than one person shares a
hotel room). Conversely, hotels in leisure destinations enjoy higher ORs on weekends, and generally have
a higher ALOS of around 3-5 nights. The incidence of double occupancy is also higher in leisure
destinations.
Value Chain
Value chain for a Hotel Industry has a Multi tier model. The Owner, Manager and The Franchisee are the
three categories under which Players operate in the hotel Industry. All the three verticals are aided by the
strong distribution channels which play a significant role.
4
SABARI INN LIMITED
Industry Trends
Review: 2009-10 over 2008-09
ORs show a recovery, but Average Room Rates (ARRs) decline
With the increase in Foreign Tourist Arrivals (FTAs), room demand posted a strong year-on-year (y-o-y)
growth of around 30 per cent in the fourth quarter of 2009-10. As a result, ORs increased to reach 70 per
cent levels in the last quarter of 2009-10 as against 65 per cent in the fourth quarter of 2008-09. However,
supply additions continued to hamper ARR growth. As a result, ARRs for the key business and leisure
destinations remained flat during the fourth quarter of 2009-10.
Figure 1: India – Foreign tourist arrivals (number) Figure 2: India – Forex earnings (million USD)
700,000 1 ,6 00
600,000 1 ,4 00
1 ,2 00
500,000
1 ,0 00
400,000
8 00
300,000
6 00
200,000 4 00
100,000 2 00
- -
Jan Feb Mar Apr M ay Jun Jul Aug Sep Oct Nov Dec Ja n Feb M ar Apr M ay Jun Jul A ug S ep Oct N ov D ec
20 08 200 9 201 0
2008 2009 2010
Source: CRISIL Research Source: CRISIL Research
On an annual basis, despite the recovery in room demand in the latter half of the year, 2009-10 remained
a year of stress for the premium hotel industry. Although, room demand increased by 4 per cent (y-o-y);
ORs declined marginally over 2008-09 levels to 61 per cent. In addition, supply growth of 9 per cent
during the same period forced players to reduce ARRs by 19 per cent, as a consequence of which
RevPARs declined by 23 per cent y-o-y to Rs 4,900.
Figure 3: India- Room demand and RevPAR Figure 4: India- ARR and OR
Room demand (rooms per day) RevPAR (Rs per day) OR (per cent) ARR (Rs per day)
90 16,000
20,000 14,000
80 14,000
18,000
12,000 70
16,000 12,000
14,000 10,000 60
10,000
12,000 50
8,000 8,000
10,000 40
8,000 6,000 6,000
30
6,000 4,000 4,000
20
4,000
2,000 10 2,000
2,000
- - - -
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Room demand: Aug 07 - Jul 08 Room demand: Aug 08 - Jul 09 OR: Aug 07 - Jul 08 OR: Aug 08 - Jul 09
Room demand: Aug 09 - Jul 10 RevPAR: Aug 07 - Jul 08 OR: Aug 09 - Jul 10 ARR: Aug 07 - Jul 08
ARR: Aug 08 - Jul 09 ARR: Aug 09 - Jul 10
RevPAR: Aug 08 - Jul 09 RevPAR: Aug 09 - Jul 10
5
SABARI INN LIMITED
The business destinations such as Mumbai, NCR and Bengaluru have shown the strongest recovery in
terms of room demand, which saw a 35-40 per cent y-o-y in room demand during the fourth quarter of
2009-10. Other significant business destinations such as Hyderabad, Chennai, Kolkata and Pune also
witnessed an increase in demand, but of a relatively lower scale (around 20 per cent). Buoyed by the
increase in FTAs during the fourth quarter, leisure destinations (Goa, Agra and Jaipur) witnessed a 15-20
per cent increase during the same period.
Table 1: India Review and Outlook Summary

India Supply Demand ARR RevPAR
growth growth growth growth
2003-04 to 2008-09 4.4% 3.7% 14.4% 17.7%
2009-10 9.1% 4.2% -19.2% -22.9%
2009-10 to 2014-15 8.4% 10.5% 2.4% 4.4%
Outlook: 2009-10 to 2014-15
Increasing ORs to drive hotel revenue growth
Driven by increasing FTAs and a recovery in business related travel expenditure over the coming years,
room demand at a pan-India level is projected to grow at a compounded rate of 11 per cent over the next
5 years. Supply additions during the same period will take place at a rate of 8 per cent.
Largely driven by an improvement in ORs; at a pan-India level, RevPARs are expected to grow at a
CAGR of 4 per cent to Rs 6,100 by 2014-15.
Figure 5: India- Room availability, demand and OR Figure 6: India- ARR, OR and RevPAR
Nos. Per cent Rs./day Per cent

50,000 100 12,000 100
10,000
40,000 80 80
8,000
30,000 60 60
6,000
20,000 40 40
4,000
10,000 20 20
2,000
0 0 0 0
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11P
2011-12P
2012-13 P
2013-14 P
2014-15 P
2012-13 P
2013-14 P
2014-15 P
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11P
2011-12P
Room availability (nos) Room demand (nos) ARR (Rs per day) RevPAR (Rs per day)
Occupancy rate (%) Occupancy rate (%)
Over the next 5 years, amongst the business destinations, RevPAR growth of hotels located in Mumbai,
NCR and Bengaluru will be in the range of 4-6 per cent driven by an improvement in occupancy rates.
RevPARs of hotels located in Hyderabad and Ahmedabad are likely to remain flat as a result of large
supply additions.
6
SABARI INN LIMITED
With increasing foreign tourist arrivals and relatively lower supply additions, hotels located in leisure
destinations like Goa, Agra and Jaipur will see a RevPAR growth of 4-8 per cent over the next 5 years.
Profitability of hotels players to improve in 2010-11
In 2010-11, hotel revenues are expected to grow at 15-20 per cent after two years of decline. This increase
will largely be driven by an expected improvement in ORs. Employee costs are expected to rise
marginally to 23-25 per cent of sales, as the demand for hotel graduates, fuelled by large supply additions
across destinations, is likely to exceed the existing supply. As a result of this shortage, hoteliers are
expected increase employee compensation in order to retain existing staff and improve recruitment.
CRISIL Research estimates that due to improving sales and higher ORs, operating margins will to
improve y-o-y to 30-35 per cent of sales.
7
SABARI INN LIMITED
BUSINESS OVERVIEW
The Company is a part of Sabari Group which has interest in Hospitality, Retail and Real Estate
Development. The Company believesbelieve in the tradition of providing corporate hospitality, quality
accommodation and business related services at affordable prices. The Company operates and manages
hotels in the state of Tamilnadu and Karnataka. Sabari Nest Inn Pvt. Ltd. owns three budget hotel
properties in Chennai, Coimbatore and Bangalore which are operated by the Company under long term
lease arrangement. Its associate Company, Sabari Supermarkets Pvt. Ltd. runs the supermarket business
under the brand name of “Nilgiris” on franchise business model at three locations in Chennai. Sabari
Realtors Pvt. Ltd., another associate company in which ICICI Prudential Asset Management Company
Limited; Portfolio Managers on behalf of its clients and India Opportunity Real Estate Fund has
substantial equity investment, is implementing under a joint development arrangement a residential cum
commercial complex of about 10,00,000 sq.ft near OMR Road, Chennai. Sabari Foundations Pvt. Ltd., also
an associate company is implementing ing a commercial complex of about 2,00,000 sq. ft at centre of the city
of Chennai under joint development arrangement. The broad structure of the group can be summarized
as under:
Hospitality
Sabari
Group
Real Estate
Retail
Development
Real Estate Retail

Hospitality Development
Sabari Sabari
Sabari Inn Realtors Pvt. Supermarket
Ltd. Ltd. Pvt. Ltd.
Sabari
Sabari Nest Foundations
Inn Pvt. Ltd. Pvt. Ltd.
8
SABARI INN LIMITED
The Company operates and manages chain of hotels in Chennai, Bangalore, Coimbatore and Kodaikanal
in the state of Tamil Nadu and Karnataka. The Company believes that they are one of the “Value for
Money” hotels which laid its foundation in Chennai and has expanded its footprints to Kodaikanaal,
Coimbatore and Bangalore. The core strength of the Company lies in offering quality care and comfort to
the guests at competitive prices.
Presently, the Company owns and manages a total of about 377 rooms. The Company has one 4 STAR
hotel, one 3 STAR hotel in Chennai and one 3 STAR resort in Kodaikanal under the brands “Quality Inn”
and “Quality Hotel”. The company has made the soft launch for its 3 STAR hotel at Coimbatore during
November 2010. The commercial operation is expected by December 15, 2010. The Company also
manages three budget hotels at Bangalore, Chennai and Coimbatore taken on lease from its associate
company, Sabari Nest Inn Private Limited. The Company has recently entered into a long term lease
agreement for operating “Mark Boulevard” hotel in Bangalore. The hotels operated by the Company are
targeted to cater to different customer segments. The Company also operates a convention centre having
two banquet hall facilities, adjacent to the 4 STAR hotel at T. Nagar, Chennai. This convention centre has
been taken on lease from Sabari Supermarkets Pvt. Ltd.
The Company is expanding its presence in Karnataka by constructing a new hotel at Bangalore. The
revenue break up from the main operations of the Company during last 3 years is as under:
Revenue Composition of main operations
F.Y. 2007-08 F.Y.2008-09 F.Y.2009-10

Particulars
Amount Percentage Amount Percentage Amount Percentage
(` in lacs) (` in lacs) (` in lacs)
Room
781.69 42.76 1266.25 44.30 2079.87 50.16
Food &
beverages 863.57 47.24 1276.63 44.67 1897.37 45.75
Other
Services 129.39 7.08 36.13 1.26 59.32 1.43
Other
Income 53.41 2.92 279.22 9.77 110.17 2.66
Total 1828.05 100.00 2579.01 100.00 4146.83 100.00
Revenue earned from owned Hotels & Resort in F.Y.2009-10 (` in lacs)

Name of Hotel Room Food & Other Other Total
Beverages Services Income
Quality Inn Sabari, Chennai 819.08 957.73 43.08 93.94 1913.83
Quality Hotel Sabari Classic, 751.63 685.21 14.17 4.29 1455.30
Chennai
Quality Inn Sabari Resorts, 84.96 27.47 0.62 0.92 113.97
Kodaikanal
Total 1655.67 1670.41 57.87 99.15 3483.10
9
SABARI INN LIMITED
Revenue earned from Leased Hotels in F.Y.2009-10 (` in lacs)

Name of Hotel Room Food & Other Other Total
Sabari’s Nest, Bangalore 53.23 - 0.10 0.50 53.83
Sabari’s Nest, Coimbatore 168.87 219.59 - 6.48 394.94
Sabari’s Nest, Chennai 202.12 7.38 1.34 4.14 214.98
Total 424.22 226.97 1.44 11.12 663.75
COMPETITIVE STRENGTH
Strong Value Proposition: The Company believes that they are one of the “Value for Money” hotel
chains which laid its foundation in Chennai and has expanded its footprints to Kodaikanaal, Coimbatore
and Bangalore. The core strength of the Company lies in offering quality care and comfort to the guests at
competitive prices.
Strong Management Team: The Company has a complete professional management set up with
professionals having rich experience in their respective field of operations like marketing, finance, human
resource etc. The promoter, Mr. K.R.V. Ramani has substantial experience in the hotel industry. The
Company’s management has been able to visualize the dynamic changes affecting the industry and strike
a balance between the cost and the objective of delivering quality service.
Locational Advantage: The existing hotels of the Company are located at prime locations and provide
easy accessibility to airport, railways and commercial/business centres. A few of the hotels are located in
the heart of cities providing easy access to shopping hub and other recreational facilities in the city.
Presence in different Price Segment: The Company believes that the global meltdown of economy in
2008 has made business travelers and guest more price sensitive and selective. The Company is present
across different price categories of hotels - premium to economy segment. This enables us to have access
to different categories of customers and provide a complete suite of offerings targeted at top, middle and
junior executives of corporate clients. The following indicates the different star classification for the
Hotels owned and managed by the Company.
Name of Hotel HRACC

Classification
Quality Inn Sabari, Chennai 4 STAR
Quality Hotel Sabari Classic, Chennai 3 STAR
Quality Inn Sabari Resorts, Kodaikanal 3 STAR
Sabari’s Nest, Bangalore N.A.
Sabari’s Nest, Coimbatore N.A.
Sabari’s Nest, Chennai N.A.
Mark Boulevard, Bangalore N.A.
Affiliation with Global Brand: The Company has franchisee and marketing affiliation with Choice
Group & Carlson Group. These groups are well known around the globe in hospitality industry and own
multi brands in the hospitality segment. The brand of the Company “Sabari” is suffixed with the “Quality
Inn/Quality Hotel” brand at different hotels wherein the tie ups are with the Choice Group. This
provides higher brand visibility and easy acceptability amongst the potential guests and business
travelers. It also strengthens the commitment towards providing quality service.
10
SABARI INN LIMITED
BUSINESS STRATEGY
Expanding Presence:
The Company intends to increase the presence at major business cities and promising mid market
segment cities depending on the market analysis comprising of demography, lifestyle, footfall of
domestic and international travelers and other related factors. In line with this, the Company has
presently identified Pune and Hyderabad wherein the Company proposes to enter into long term lease.
The long term objective is to have Pan India presence mid market segment. The Company’s experience in
operating business hotels further motivates to expand in this segment. However, the company shall also
evaluate the opportunities present in other categories of hotels like heritage, leisure, etc.
Collaboration with Corporate:
The globalization and shrinkage of world has increased the travelling of business executives domestically
and internationally. The Company shall focus on collaborations and tie ups with corporate to ensure
higher occupancy levels and steady business volume.
Franchisee Tie Ups: Presently, the Company has arrangement with Choice Hotels International using
their brand name of “Quality” for few of its hotels. The Company feels that tie up with global brand has
increased the brand image and acceptability. The Company has also entered into a Service Agreement
with Carlson Hotel Asia Pacific Pty. Ltd. (“Carlson”) by which Carlson has agreed to provide certain
services to the Company in respect of the Coimbatore hotel. Carlson would provide technical and pre-
opening services for the “PARK PLAZA” branded Hotel. The Company will explore opportunities of tie
up with other global hospitality brands for the upcoming projects for sustained superior brand image.
Combination of ownership and leased properties: Out of the hotels operated and run by us, the
Company owns 3 hotels and 4 hotels are taken on long term lease basis. In line with asset light strategy,
the Company would look at entering into lease agreement with property owners which would reduce the
initial expenditure towards acquisition and development of properties. The acquisition of properties on
lease basis would enable the Company to establish a quick foothold with minimal lead time.
11
SABARI INN LIMITED
SUMMARY OF FINANCIAL INFORMATION
ANNEXURE I – RESTATED STATEMENT OF ASSETS AND LIABILITIES
` In lacs
As At The Period Ended

Particulars 30.06.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006
(3 Months) (12 Months)
A. Fixed Assets
Gross block 9250.92 9,236.71 7,515.20 7,235.52 2,982.61 2,958.55
Less Depreciation 1207.09 1,118.66 778.56 478.90 341.94 256.11
Net Block 8043.83 8,118.05 6,736.64 6,756.61 2,640.67 2,702.44
Capital Work in Progress 10422.08 9,071.62 7,007.09 2,459.54 3,135.66 754.05
Net Block after adjustment for
18465.91 17,189.67 13,743.73 9,216.16 5,776.33 3,456.49
Revaluation Reserve
B. Investments - - - - - -
C. Current Assets, Loans and Advances

Inventories 145.34 139.07 171.86 167.25 92.75 87.39
Sundry Debtors 666.65 706.99 191.79 146.99 81.89 67.39
Cash and Bank Balances 296.03 150.64 1,781.45 3,147.87 814.47 51.80
Loans and Advances 1145.16 1,189.28 745.46 1,890.31 163.01 111.60
2253.17 2,185.98 2,890.56 5,352.42 1,152.11 318.18
D. Liabilities and Provisions:
Secured Loans 8035.42 7,013.35 5,319.50 3,437.28 2,953.96 1,798.41
Unsecured Loans 508.71 511.96 - - 99.20 211.76
Current Liabilities and Provisions 884.11 746.50 921.68 920.35 220.28 128.34
Deferred Tax Liability 584.14 550.87 316.96 234.11 121.37 172.69
10012.38 8,822.68 6,558.13 4,591.74 3,394.81 2,311.20

E. Net Worth 10706.70 10,552.98 10,076.16 9,976.83 3,533.63 1,463.47
F. Represented by
Share Capital 6784.31 6,784.31 6,784.31 6,784.31 3,360.00 1,525.00
Reserves 3922.39 3,768.66 3,291.84 3,192.52 173.63 (61.47)
Total 10706.70 10,552.98 10,076.16 9,976.83 3,533.63 1,463.53
Misc. Expenditure to the extent not
G. - - - - - 0.06
written off or adjusted
H. Net Worth (F-G) 10706.70 10,552.98 10,076.16 9,976.83 3,533.63 1,463.47
12
SABARI INN LIMITED
ANNEXURE II - RESTATED STATEMENT OF PROFIT AND LOSS ACCOUNT
Rs. In Lacs
For The Period Ended
Particulars
30.06.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006
(3
(12 Months)
Months)
Income
Sales:
Rooms 614.96 2,079.87 1,266.25 781.69 378.79 268.91
Food and Beverages 445.83 1,897.37 1,276.63 863.57 603.02 420.94
Other Income 94.00 169.58 315.35 182.79 274.30 182.51
1154.80 4,146.83 2,858.23 1,828.05 1,256.11 872.36
Expenditure
Raw Materials Consumed 154.60 572.38 382.24 233.38 195.58 116.36
Staff Costs 194.92 777.68 557.48 337.52 170.61 136.79
Administration Expenses 151.51 519.12 419.70 313.88 207.62 106.56
Upkeep and Service Expenses 227.82 829.97 573.95 395.93 270.40 179.35
728.85 2,699.15 1,933.36 1,280.70 844.20 539.07
Earning Before Depreciation Interest & Tax 425.95 1,447.68 924.87 547.35 411.91 333.29
Depreciation 88.44 345.63 302.11 142.22 90.37 85.28
Interest 140.20 405.38 429.39 233.40 131.96 136.56
Net Profit before tax and Extraordinary items 197.32 696.67 193.37 171.73 189.57 111.45
Taxation
Minimum Alternate Tax Credit 100.00 120.79 20.64 17.67 21.17 9.28
Current tax (100.00) (120.79) (34.28) (25.29) (26.16) (13.08)
Deferred tax (35.01) (233.91) (82.85) (112.74) 51.32 (46.26)
Net Profit before Extraordinary Items 162.30 462.76 96.88 51.37 235.90 61.38
Extraordinary items - (1.05) - (8.27) (0.88) (1.52)
Net Profit after Extraordinary Items 162.30 461.71 96.88 43.09 235.03 59.86
Adjustments on account of Prior period
- 5.11 2.45 0.09 0.08 0.40
Expenses
Adjusted Profit 162.30 466.82 99.33 43.19 235.10 60.26
13
SABARI INN LIMITED
ANNEXURE III – RESTATED STATEMENT OF CASH FLOW

Rs. In Lacs
Particulars
30.06.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006
(3
(12 Months)
Months)
Cash Flows from Operating Activities
Net Profit before Taxation 187.31 710.73 195.82 163.55 188.77 110.32
Adjustments for:
Depreciation 88.44 345.63 302.11 142.22 90.37 85.28
Loss on sales of Assets - 1.05 - 8.27 0.88 1.52
Interest/ Dividend Income (1.74) (79.73) (263.15) (41.61) (13.74) (3.31)
Preliminary expenses Written off - - - - 0.06 0.06
Interest Paid 140.20 405.38 429.39 233.40 131.96 136.56
Operating Profit before Working Capital
414.20 1,383.06 664.17 505.84 398.30 330.43
Changes
Change in Trade and Other Receivables 40.35 (515.21) (44.80) (65.10) (14.50) (15.95)
Change in Inventories (6.27) 32.79 (4.62) (74.50) (5.36) (17.49)
Change in Other Current Assets 146.45 (316.01) 1,244.68 (1,679.34) (10.41) (46.63)
Change in Current Liabilities 38.04 (260.01) (32.96) 674.78 69.58 (1.03)
Income-taxes paid (3.07) (42.99) (79.19) (30.29) (23.63) 1.00
Prior Period Expenditure - (5.11) (2.45) (0.09) (0.08) -
Net Cash Flow from Operating Activities 629.71 276.54 1,744.84 (668.71) 413.91 250.34
Cash Flow from Investing Activities
Purchase of Fixed Assets (14.21) (1,725.01) (279.69) (4,271.94) (30.70) (236.31)
Capital Work in progress (1,350.46) (2,064.53) (4,547.54) 676.11 (2,381.61) (754.05)
Sale of Fixed Assets - 2.02 - 5.60 1.30 1.96
Interest Received 1.74 79.73 263.15 41.61 13.74 3.31
Net Cash Flow used in Investing Activities (1,362.94) (3,707.78) (4,564.08) (3,548.62) (2,397.27) (985.10)
Cash Flows from Financing Activities
Changes in Borrowings 17,639.49 8,962.53 3,905.14 1,795.01 2,040.52 2,221.13
Proceeds from Issuance of Capital - - - 6,300.01 1,835.00 -
Increase in Reserves - - - 100.00 - -
Repayments (16,620.67) (6,756.72) (2,022.93) (1,410.89) (997.52) (1,542.00)
Share Application Money Received - - - - - 200.00
Interest Paid (140.20) (405.38) (429.39) (233.40) (131.96) (132.03)
Net Cash Flow from Financing Activities 878.62 1,800.43 1,452.82 6,550.73 2,746.03 747.09
Net increase in cash and cash equivalents 145.39 (1,630.81) (1,366.42) 2,333.40 762.67 12.33
Cash and Cash Equivalents (Opening
150.64 1,781.45 3,147.87 814.47 51.80 41.47
Balance)
Cash and Cash Equivalents (Closing Balance) 296.03 150.64 1,781.45 3,147.87 814.47 51.80
14
SABARI INN LIMITED
THE ISSUE
Equity shares offered
Issue [●] Equity Shares aggregating to ` 17000.00 lacs
Which comprises of:
Fresh Issue [●] Equity Shares aggregating to ` 12500.00 lacs
Offer for Sale [●] Equity Shares aggregating to ` 4500.00 lacs

Of which:
Employee Reservation Portion [●] Equity Shares aggregating to ` 100.00 lacs
Net Issue to the Public [●] Equity Shares aggregating to ` 16900.00 lacs
Of Which
QIB Portion * Upto [●] Equity Shares constituting 50% of the

(allocation on proportionate basis) net issue
aggregating to ` 8450.00 lacs out of which 5% of the
QIB Portion consisting of [●] Equity Shares shall be
available for allocation on a proportionate basis to
Mutual Funds only (Mutual Funds Portion), and the
balance Equity Shares shall be available for allocation
to all QIBs, including Mutual Funds.
Non-Institutional Portion* Not less than [●] Equity Shares of ` 10/- each,
constituting 15% of the Net Issue aggregating to
2535.00 lacs (allocation on proportionate basis).
Retail Portion* Not less than [●] Equity Shares of ` 10/- each,
constituting 35% of the Net Issue aggregating to `
5915.00 lacs (allocation on proportionate basis).
Equity Shares outstanding prior to the Issue 6,78,43,137 Equity Shares
Equity Shares outstanding post the Issue [●] Equity Shares
* Under subscription, if any, in any of the above category would be met with spill over from any other
category, at the sole discretion of the Company in consultation with the BRLM.
Use of Issue Proceeds See the section titled “Objects of the Issue” on page no.
36 of this Offer document.
ISSUE PROGRAM
ISSUE OPENS ON ISSUE CLOSES ON

[●], 2011 [●], 2011
15
SABARI INN LIMITED
GENERAL INFORMATION
Name of the Company Sabari Inn Limited
Registered Office No. 29, Thirumalai Pillai Road, T. Nagar, Chennai – 600017,
Tamilnadu, India
Corporate Office No. 23/11, 2nd Main Road, Raja Annamalai Puram,
Chennai – 600 028, Tamilnadu, India
Registration Number 042205
CIN U55101TN1999PLC042205
Permanent Account Number (PAN) AADCS2249H
Registrar of Companies Block No. 6, B Wing, 2nd Floor, Shastri Bhawan No.26,
Haddows Road, Chennai-600 034, Tamil Nadu, India
PRESENT BOARD OF DIRECTORS
The Board of Directors of the company are:
Name Designation Status

Mr. K.R.V Ramani Chairman & Managing Director Chairman and Managing Director
Mr. K.R.Narayanan Director Non-Executive and Non-Independent
Mr. V.Janakiraman Director Non - Executive and Independent
Mr. T.R.Sridharan Director Non - Executive and Independent
Mr. P.Vaidyanathan Director Non - Executive and Independent
Mr. R.Thiagarajan Director Non - Executive and Independent
BRIEF DETAILS OF THE CHAIRMAN AND THE MANAGING DIRECTOR
Mr. K.R.V. Ramani (45 Years) is the Chairman and Managing Director of the Company. He holds
Bachelor’s Degree in field of Commerce. He is a first generation entrepreneur and founder of Sabari
group. Mr. Ramani started his business venture as a builder/developer/promoter in the business of
construction of residential and commercial properties in 1993 by promoting Sabari Foundations Pvt. Ltd.
As a lateral expansion, the group ventured into the supermarket business under the brand name
“Nilgiris” with franchisee arrangement, which presently runs three super markets in Chennai. He then
ventured into hospitality services with the incorporation of Sabari Inn Pvt. Ltd. in 1999. He established
the First Hotel - “Quality Inn Sabari” at T. Nagar, Chennai in the year 2002 with 72 Room Keys and
thereafter expanded the business by setting up hotels at OMR, Chennai and Kodaikanal. Currently, Mr.
K.R.V. Ramani owns and manages the gamut of businesses from realty to hospitality with significant
stake in all the Group Companies.
For more details regarding the Directors please refer to section titled “Management” on page 102 of this
Offer Document.
COMPANY SECRETARY AND COMPLIANCE OFFICER
Name: Mr. K.R. Ramakrishnan,

Designation: Chief Law Officer and Company Secretary & Compliance Officer
No. 29, Thirumalai Pillai Road,
T. Nagar, Chennai – 600017
Tamil Nadu, India
16
SABARI INN LIMITED
Tel no: 044-28343030

Fax no: 044-28345868
Email: csco@sabarihotels.com
csco@sabarigroup.org
Website of the company: www.sabarihotels.com
Investors can contact the Compliance Officer in case of any pre-Issue and post-Issue related problems
such as non receipt of letters of allotment, credit of allotted shares in the respective beneficiary account,
refund orders etc. on working days (except Saturday, Sunday, and Public Holidays).
BOOK RUNNING LEAD MANAGER TO THE ISSUE
KEYNOTE CORPORATE SERVICES LIMITED

4th Floor, Balmer Lawrie Building,
5, J. N. Heredia Marg Ballard Estate,
Mumbai – 400 001
Tel.: (022) 3026 6000; Fax: (022) 2269 4323
E-mail: mbd@keynoteindia.net
Website: www.keynoteindia.net
Contact person: Mr. Girish Sharma / Mr. Raunak Gokhale
REGISTRAR TO THE ISSUE
INTEGRATED ENTERPRISES (INDIA) LIMITED

2nd Floor, Kences Towers, 1, Ramakrishna Street,
North Usman Road, T.Nagar, Chennai - 600 017
Tel No: (044) 28140801/02/03
Fax: (044) 28142479 /3378
E-mail: iposabari@iepindia.com
Website: http://www.iepindia.com
Contact Person: Mr. Sriram S./Mr. Suresh Babu K
STATUTORY AUDITOR TO THE COMPANY
ESSVEEYAR, CHARTERED ACCOUNTANTS

# 40/2A, Musiri Subramaniam Salai (Oliver Road),
Mylapore, Chennai – 600 004,
Tamil Nadu, India
Tel No: (044) 24950568
Fax: (044) 24950487
E-mail: essveeyar@gmail.com Contact Person : Mr. Vijayraghavan
FRN No: 00808S
Peer Review No: 004954
17
SABARI INN LIMITED
LEGAL ADVISOR TO THE ISSUE
CORPORATE LAW CHAMBERS INDIA

Advocates
44/A, Nariman Bhavan
Near Atlanta Building,
Nariman Point, Mumbai - 400021
Tel: 91 – 2266321528/ 589
Fax: 91-22-6632 1531
E-mail: ajai@corplawchambers.com
Contact Person: Mr. A.Y.Srinivasan
BANKERS TO THE COMPANY
STATE BANK OF BIKANER & JAIPUR STATE BANK OF INDIA

UTI House, No. 29, Rajaji Salai, #No. 232, NSC Bose Road,
Chennai 600 001 Chennai 600 001
Tamil Nadu, India Tamil Nadu, India
Tel no: 044-25230282 Tel no: 044- 25341316
Fax no: 044-25222326 Fax no: 044- 25342476
E-mail: sbbj10286@sbbj.co.in E-mail: sbi.07347@sbi.co.in
Website: www.sbbjbank.com Website: www.sbi.com
Contact Person: Mr. Gopikrishnan Contact Person: Mrs. Jayanthi
STATE BANK OF MYSORE STATE BANK OF TRAVANCORE
Industrial Finance Branch, No. 162, Anna Salai,
No. 576, Anna Salai, MOH Building, Teynampet, Chennai - 600 002
Chennai - 600 006 Tel No: 044-28521005
Tel No: 044-24320173 Fax No: 044-28523310
Fax No: 044-24320175 Email: mountroad@sbt.co.in
Email: ifbchennai@sbm.co.in Website: www.statebankoftravancore.com
Website: www.statebankofmysore.co.in Contact Person: Mr. Ramachandran
Contact Person: Mr. G.D. Mathur
BANKERS TO THE ISSUE AND ESCROW COLLECTION BANKS
[·]
SELF CERTIFIED SYNDICATE BANKS

As on date following banks are registered with SEBI for collection of ASBA forms:
1. Axis Bank Ltd 20. Bank of India
2. State Bank of Hyderabad 21. CITI Bank
3. Corporation Bank 22. IndusInd Bank
4. State Bank of Travencore 23. Allahabad Bank
5. IDBI Bank Ltd. 24. Karur Vysya Bank Ltd.
6. State Bank of Bikaner and Jaipur 25. The Federal Bank
7. YES Bank Ltd. 26. Indian Bank
8. Punjab National Bank 27. Central Bank of India
18
SABARI INN LIMITED
9. Deutsche Bank 28. Oriental Bank of Commerce

10. Union Bank of India 29. Standard Chartered Bank
11. HDFC Bank Ltd. 30. J P Morgan Chase Bank, N.A.
12. Bank of Baroda 31. Nutan Nagarik Sahakari Bank Ltd.
13. ICICI Bank Ltd 32. UCO Bank
14. Vijaya Bank 33. Canara Bank
15. Bank of Maharashtra 34. United Bank ofIndia
16. State Bank of India 35. Syndicate Bank
17. Andhra Bank 36. South Indian Bank
18. HSBC Ltd. 37. Indian Overseas Bank
19. Kotak Mahindra Bank Ltd.
For the details of list of controlling banks along with its branches for ASBA please visit the website of
SEBI, BSE and NSE at www.sebi.gov.in, www.bseindia.com, www.nseindia.com respectively.
MONITORING AGENCY
As per regulation 16(1) of the SEBI (ICDR) Regulations, 2009, monitoring agency is required to be
appointed in case the public issue size exceeds ` 50,000 Lacs. Since the proposed issue size is less than `
50,000 Lacs, the Company does not propose to appoint a Monitoring Agency. However, as per the Clause
49 of the Listing Agreement to be entered into with the stock exchanges upon listing of the equity shares
in accordance with the Corporate Governance requirements, the Audit Committee of the Company
would be monitoring the utilization of the proceeds of the Issue.
CREDIT RATING
As this is an Issue of Equity Shares, there is no requirement of credit rating for this Issue.
IPO GRADING AGENCY

[●]
IPO GRADING
This Issue has been graded by [●] as [●] indicating [●] fundamentals, pursuant to Regulation 26(7) of the
ICDR Regulations. The IPO grade is assigned on a five point scale from 1 to 5, with IPO grade 5/5
indicating strong fundamentals and IPO grade 1/5 indicating poor fundamentals.
The rationale/description by the IPO Grading Agency will be updated at the time of filing the Red Herring
Prospectus with the Designated Stock Exchange.
TRUSTEES
As this is an Issue of Equity Shares, the appointment of Trustees is not required.
PROJECT APPRAISAL
The Bangalore Hotel Project is appraised by State Bank of India and financed under consortium
arrangement with State Bank of India, State Bank of Mysore and State Bank of Travancore.
19
SABARI INN LIMITED
INTER-SE ALLOCATION OF RESPONSIBILITIES
Keynote Corporate Services Ltd. Is acting as sole Book Running Lead Manager/BRLM to this Issue. The
following table sets forth the responsibility and co-ordination for various activities of Keynote Corporate
Services Limited.
Activity Responsibility &
Coordinator
A. Capital Structuring with relative components and formalities such as the
Keynote
composition of equity instrument, Structuring of the issue instrument
B. Draft and design of the offer document and of advertisement/publicity
material including newspaper advertisement and brochure/memorandum Keynote
containing salient features of the offer document
C. Due Diligence certificate in compliance with SEBI (ICDR) Regulations, 2009
and other stipulated requirements and completion of prescribed formalities Keynote
with Stock Exchanges, Registrar of Companies and SEBI
D. Marketing of the Issue, which will cover, interalia formulating of marketing
strategies, preparation of publicity budget, arrangement for selection of Ad
Media, Centres for holding conferences of Stock Brokers, Investors etc, Keynote
Bankers to the Issue.
E. Selection of various agencies connected with the issue such as Registrars to
Keynote
the Issue, Printers, Advertising Agency and Brokers.
F. Selection of Bankers to the Issue, collection centres Keynote
G. Follow up with Bankers to the issue on collections and advising the issuer
Keynote
about closure of the issue based on correct figures
Post issue activities will involve submission of statutory reports, essential
follow up steps including finalization of basis of allotment, listing of
H. instrument and dispatch of certificates and refunds, coordination with
various agencies connected with the work such as registrars to the issue,
bankers to the issue, Self Certified Syndicate Banks and the bank handling the Keynote
refund business. Even if many of these activities will be handled by other
intermediaries, the Lead Manager shall be responsible for ensuring that these
agencies fulfill their functions and enable to discharge this responsibility
through suitable agreement with the issue company.
BOOK BUILDING PROCESS
The Book Building Process, with reference to the Issue, refers to the process of collection of Bids on the
basis of the Red Herring Prospectus within the Price Band. The Issue Price is finalized after the Bid/Issue
Closing Date. The principal parties involved in the Book Building Process are:
1. The Company;
2. The Book Running Lead Managers,
3. Syndicate Members who are intermediaries registered with SEBI or registered as brokers with
BSE/NSE and eligible to act as Underwriters. The Syndicate Members are appointed by the Book
Running Lead Manager;
4. Registrar to the Issue;
5. Escrow Collection Banks; and
6. Self Certified Syndicate Banks
20
SABARI INN LIMITED
The Issue is being made through the 100% Book Building Process where upto 50% of the Net Issue to the
public shall be allocated on a proportionate basis to eligible Qualified Institutional Buyers (“QIBs”). 5% of
the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only and the
remainder of the QIB Portion shall be available for allocation on a proportionate basis to all other eligible
QIBs, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further,
not less than 15% of the Issue to the public shall be available for allocation on a proportionate basis to
Non-Institutional Bidders and not less than 35% of the Net Issue to the public shall be available for
allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or
above the Issue Price.
In accordance with the SEBI Regulations, QIBs are not allowed to withdraw their Bid(s) after the
Bid/Issue Closing Date. QIBs are required to pay full Bid Amount upon submission of the Bid cum
Application Form during the Bid/Issue Period and allocation to QIBs will be on a proportionate basis.
For further details, see section “Terms of the Issue” on page no. 194 of this Draft Red Herring Prospectus.
The Company shall comply with the SEBI Regulations and any other directions issued by SEBI for this
Issue. In this regard, the Company has appointed Keynote Corporate Services Limited as the Book
Running Lead Manager to manage the Issue.
The process of Book Building under the SEBI Regulations is subject to change(s) from time to time
and the investors are advised to make their own judgment about investment through this process prior
to making a Bid or application in the Issue.
Illustration of Book Building and Price Discovery Process (Investors should note that this example is solely
for illustrative purposes and is not specific to the Issue)
Bidders (including ASBA bidders) can bid at any price within the Price Band. For instance, assume a price
band of ` 20 to ` 24 per equity share, issue size of 3,000 equity shares and receipt of five (5) bids from
bidders, details of which are shown in the table below. A graphical representation of the consolidated
demand and price would be made available at the bidding centers during the bidding period. The
illustrative book below shows the demand for the equity shares of the issuer company at various prices
and is collated from bids received from various investors.
Bid Quantity Bid Price (`) Cumulative Quantity Subscription

500 24 500 16.67%
1,000 23 1,500 50.00%
1,500 22 3,000 100.00%
2,000 21 5,000 166.67%
2,500 20 7,000 250.00%
The price discovery is a function of demand at various prices. The highest price at which the issuer is able
to issue the desired number of shares is the price at which the book cuts off, i.e., ` 22 in the above
example. The issuer, in consultation with the BRLMs will finalize the issue price at or below such cut-off
price, i.e., at or below ` 22. All bids at or above this issue price are valid bids and are considered for
allocation in the respective categories.
Steps to be taken by the Bidders for Bidding
a) Check eligibility for bidding (please refer to the section entitled “Issue Procedure - Who Can Bid”
on page no. 203 of this Draft Red Herring Prospectus.
21
SABARI INN LIMITED
b) Ensure that you have an active demat account and the demat account details are correctly
mentioned in the Bid cum Application Form and ASBA Bid cum application Form, as the case
may be.
c) Ensure that you have mentioned your PAN and attached copies of your PAN card to the Bid
Cum Application Form and ASBA Bid cum application Form, as the case may be.. In accordance
with the SEBI Regulations, the PAN would be the sole identification number for participants
transacting in the securities market, irrespective of the amount of transaction (see section entitled
“Issue Procedure” on page no. 202 of this Draft Red Herring Prospectus.
d) Ensure that the Bid cum Application Form and ASBA Bid cum application Form is duly
completed as per instructions given in this Draft Red Herring Prospectus and in the Bid Cum
Application Form.
e) Bids by QIBs will only have to be submitted to the BRLMs; and
f) Bids by ASBA bidders will have to be submitted to the designated Branches of the SCSBs. ASBA
bidders should ensure that their bank account have adequate credit balance at the time of
submission to the SCSBs to ensure that the ASBA Bid cum Application form is not rejected.
Withdrawal of the Issue
The Company and The Selling Shareholders, in consultation with the BRLMS, reserve the right not to
proceed with the Issue anytime after the Bid/Issue Opening Date but before the Allotment of Equity
Shares. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and
trading approvals of the Stock Exchanges, which the Company shall apply for after Allotment; and (ii)
the final RoC approval of the Prospectus after it is filed with the RoC. In terms of the SEBI Regulations,
QIB Bidders shall not be allowed to withdraw their Bid after the Bid/Issue Closing Date.
In such an event the Company would issue a public notice in the newspapers, in which the pre-Issue
advertisements were published, within two days of the Bid/ Issue Closing Date, providing reasons for
not proceeding with the Issue. The Company shall also inform the same to Stock Exchanges on which the
Equity Shares are proposed to be listed.
In the event of withdrawal of the Issue anytime after the Bid/Issue Opening Date, the Company will
forthwith repay, without interest, all monies received from the applicants in pursuance of the Red
Herring Prospectus. If such money is not repaid within 8 days after the Company becomes liable to repay
it i.e. from the date of withdrawal, then the Company, and every Director of the Company who is an
officer in default shall, on and from such expiry of 8 days, be liable to repay the money, with at the rate of
15% per annum on application money.
Bid/Issue Programme
BID/ISSUE OPENS ON [·], 2011

BID/ISSUE CLOSES ON [·], 2011
The Company is considering participation by Anchor Investors in terms of ICDR Regulations. For details
see “Issue Procedure-Bids by Anchor Investor” on page no. 207
22
SABARI INN LIMITED
Bids and any revision in Bids shall be accepted only between 10 a.m. and 5 p.m. (Indian Standard Time)
during the Bidding/ Issue Period as mentioned above at the bidding centres mentioned on the Bid cum
Application Form. On the Bid / Issue Closing Date, the Bids (excluding the ASBA Bidders) shall be
accepted only between 10 a.m. and 3.00 p.m. (Indian Standard Time) and shall be uploaded until (i) 4.00
p.m. in case of Bids by QIB Bidders and Non-Institutional Bidders where the Bid Amount is in excess of `
200,000 and (ii) until 5.00 p.m. or such extended time as permitted by the NSE and the BSE, in case of Bids
by Retail Individual Bidders where the Bid Amount is up to ` 2,00,000. It is clarified that the Bids not
uploaded in the book would be rejected. Bids by the ASBA Bidders shall be uploaded by the SCSB in the
electronic system to be provided by the NSE and the BSE.
In case of discrepancy in the data entered in the electronic book vis-à-vis the data contained in the
physical Bid form, for a particular Bidder, the details as per the physical form of the Bidder maybe taken
as the final data for the purpose of allotment. In case of discrepancy in the data entered in the electronic
book vis-à-vis the data contained in the physical or electronic Bid cum Application Form, for a particular
ASBA Bidder, the Registrar to the Issue shall ask for rectified data from the SCSB.
Due to limitation of time available for uploading the Bids on the Bid/ Issue Closing Date, the Bidders are
advised to submit their Bids one day prior to the Bid/ Issue Closing Date and, in any case, not later than
the times mentioned above on the Bid/ Issue Closing Date. All times mentioned in the Draft Red Herring
Prospectus is Indian Standard Time. Bidders are cautioned that in the event a large number of Bids are
received on the Bid/ Issue Closing Date, as is typically experienced in public offerings, some Bids may
not get uploaded due to lack of sufficient time. Such Bids that cannot be uploaded will not be considered
for allocation under the Issue. Bids will be accepted only on Business Days, i.e., Monday to Friday
(excluding any public holiday).
On the Bid/ Issue Closing Date, extension of time will be granted by the Stock Exchanges only for
uploading the Bids received by Retail Individual Bidders after taking into account the total number of
Bids received up to the closure of time period for acceptance of Bid cum Application Forms as stated
herein and reported by the BRLMs to the Stock Exchange within half an hour of such closure.
Investors please note that as per letter no. List/smd/sm/2006 dated July 3, 2006 and letter no.
NSE/IPO/25101- 6 dated July 6, 2006 issued by BSE and NSE respectively, bids and any revision in Bids
shall not be accepted on Saturdays and Holidays as declared by the Exchanges.
The Price Band will be decided by us in consultation with the BRLMs. The announcement of the Price
Band shall also be made available in the websites of the BRLMs and at the terminals of the Syndicate.
The Company and Selling Shareholders, in consultation with the BRLMs reserves the right to revise the
Price Band during the Bidding/ Issue Period, provided that the Cap Price shall be less than or equal to
20% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The
revision in Price Band shall not exceed 20% on the either side i.e. the floor price can move up or down to
the extent of 20% of the floor price disclosed at least two (2) days prior to the Bid/ Issue Opening Date
and the Cap Price will be revised accordingly.
In case of revision in the Price Band, the Issue Period will be extended for three additional working days
after revision of the Price Band, subject to the Bidding Period/Issue Period not exceeding 10 working
days. Any revision in the Price Band and the revised Bidding Period/Issue Period, if applicable, will be
widely disseminated by notification to the BSE and the NSE, by issuing a press release, and also by
indicating the change on the website of the BRLM and at the terminals of the Syndicate.
23
SABARI INN LIMITED
Underwriting Agreement
After the determination of the Issue Price and allocation of Equity Shares of the company, but prior to the
filing of the Prospectus with the RoC, The Company will enter into an Underwriting Agreement with the
Underwriters for the Equity Shares proposed to be offered through the Issue. It is proposed that pursuant
to the terms of the Underwriting Agreement, the Book Runners shall be responsible for bringing in the
amount devolved in the event that the Syndicate Members do not fulfill their underwriting obligations.
The Underwriting Agreement is dated [·]. Pursuant to the terms of the Underwriting Agreement, the
obligations of the Underwriters are several and are subject to certain conditions specified therein.
The Underwriters have indicated their intention to underwrite the following number of Equity Shares:
[This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC].
Name, address, telephone Indicated Number of Equity Amount Underwritten

number, fax number and e-mail Shares to be Underwritten (` Lacs)
of the Underwriters
[·] [·] [·]
[·] [·] [·]
Total [·] [·]
The above-mentioned amount is an indicative underwriting and would be finalized after pricing and
actual allocation. The above underwriting agreement is dated [·]. In the opinion of the Board of Directors
of the Company (based on a certificate given by the Underwriters), the resources of all the above
mentioned Underwriters are sufficient to enable them to discharge their respective underwriting
obligations in full, as per schedule VIII, Part A, (VI)(B)(15) of SEBI ICDR Regulations, 2009 have been
complied with. All the above-mentioned Underwriters are registered with SEBI under Section 12(1) of the
SEBI Act.
Allocation among Underwriters may not necessarily be in proportion to their underwriting

commitments. Notwithstanding the above table, the BRLMs and the Syndicate Members shall be
responsible for ensuring payment with respect to Equity Shares allocated to investors procured by them.
In the event of any default in payment, the respective Underwriter in addition to other obligations to be
defined in the Underwriting Agreement, will also be required to procure/subscribe to the extent of the
defaulted amount. Allocation to QIB Bidders is proportionate as per the terms of this DRHP.
The underwriting agreements mentioned above shall not apply to the subscriptions by the ASBA bidders
in this offer.
24
SABARI INN LIMITED
CAPITAL STRUCTURE
The share capital of the Company as on the date of filing of this Draft Red Herring Prospectus with SEBI is as
set forth below:
Aggregate
Aggregate Value
Share Capital Value at Issue
at Nominal Price
Price
(Amount in `)
(Amount in `)
A. Authorized Capital:
100,00,00,000 100,00,00,000
10,00,00,000 Equity Shares of Rs 10. Each
B. Subscribed and Paid Up Capital before this Issue:

6,78,43,137 Equity Shares of the Face Value of ` 10 /- each 67,84,31,370 67,84,31,370
C. Present Issue to the Public in terms of this Offer Document

[·] Equity Shares of ` 10/- each
Which comprises of:
a) Fresh Issue:
[·] Equity shares of ` 10/- each aggregating to ` 1,2500 Lacs [·] 125,00,00,000
b) Offer for sale #:
[·] Equity shares of ` 10/- each aggregating to ` 4500 Lacs [·] 45,00,00,000
Of Which Employee Reservation portion includes [·] Equity shares of `
[·] 1,00,00,000
10/- each
D. Net Issue to the Public
[·] 169,00,00,000
[·] Equity shares of ` 10/-
Of which
i) QIB portion of upto [·] Equity Shares (1) [·] 84,50,00,000

ii) Non Institutional Portion not less than [·] Equity Shares (1) [·] 25,35,00,000
iii) Retail Portion of not less than [·] Equity Shares (1) [·] 59,15,00,000
E. Issued, Subscribed and Paid-Up Capital after this Issue

[·] [·]
[·] Equity Shares of the Face Value of ` 10/- each
Securities Premium Account

Before this Issue ` 2875.70 lacs
After this Issue [·]
(1)
Under subscription, if any, in the above category would be met with spill over from any other category, at the sole discretion of the
Company in consultation with the BRLM.
# The Offer for Sale has been authorized by (1) India Opportunity Real Estate Fund (Mauritius) and (2) India Opportunities Portfolio – ICICI
Prudential Asset Management Company Limited; Portfolio Managers on behalf of its clients pursuant to their consent dated December 08, 2010
respectively and December 09, 2010 respectively.
Note: The Company is considering a Pre-IPO placement of up to 50,00,000 equity shares aggregating up to` 2000.00 lacs with certain
investors, prior to the completion of the issue. In such a case the issue size offered to the public would be reduced to the extent of such Pre-
IPO placement, subject to a minimum issue size of 25%of the post issue capital being offered to the public.
25
SABARI INN LIMITED
Changes in the authorized capital since inception are as follows:
Date Authorized Capital Increased Authorized Capital Increased to

From
Incorporation i.e. - 5,00,000 equity shares of ` 10/- each
April 01, 1999 aggregating to ` 50.00 Lacs
October 28, 1999 5,00,000 equity shares of ` 10/- each 35,00,000 equity shares of ` 10/- each
aggregating to ` 50.00 Lacs aggregating to ` 350.00 Lacs
December 23, 2000 35,00,000 equity shares of ` 10/- 60,00,000 equity shares of ` 10/- each
each aggregating to ` 200.00 Lacs aggregating to ` 600.00 Lacs
April 10, 2002 60,00,000 equity shares of ` 10/- 80,01,000 equity shares of ` 10/- each
December 01, 2003 80,01,000 equity shares of ` 10/- 1,10,00,000 equity shares of ` 10/- each
December 20, 2006 1,10,00,000 equity shares of ` 10/- 2,10,00,000 equity shares of ` 10/- each
each aggregating to ` 1100.00 Lacs aggregating to ` 2100.00 lacs and
15,00,000 redeemable convertible
cumulative preference shares of `
100/- each aggregating to ` 1500.00
Lacs.
December 28, 2007 2,10,00,000 equity shares of ` 10/- The authorized share capital
each aggregating to ` 2100.00 lacs aggregating to ` 3600.00 lacs
and 15,00,000 redeemable consisting of equity shares and
convertible cumulative preference redeemable convertible cumulative
shares of ` 100/- each aggregating preference shares were reclassified and
to ` 1500.00 Lacs increased to 6,80,00,000 equity shares
of ` 10/- each aggregating to ` 6800.00
Lacs
July 13, 2010 6,80,00,000 equity shares of ` 10/- 10,00,00,000 equity shares of ` 10/-
each aggregating to ` 6800.00 Lacs each aggregating to ` 10,000.00 Lacs
Offer for Sale by Selling Shareholders
The Public Issue comprises of an offer for sale of [●] equity shares by ICICI Prudential Asset
Management Company Limited; Portfolio Managers on behalf of its clients and India Opportunity
Real Estate Fund (the “selling shareholders”)
Name of Selling Shareholder Date of No. of Equity Amount

acquisition Shares
(` in lacs)
ICICI Prudential Asset Management 28/12/2007 [●] 2300.00
Company Limited; Portfolio
Managers on behalf of its clients
India Opportunity Real Estate Fund 08/01/2008 [●] 2200.00
TOTAL [●] 4500.00
26
SABARI INN LIMITED
The Equity Shares constituting the Offer for Sale have been held by the respective Selling Shareholders
for a period of more than one year till the date of the filing of the Draft Red Herring Prospectus with
SEBI.
Notes to the Capital Structure:
1. History of Paid-up Equity Share Capital of the Company is as follows
Date of Face Issue No. of Cum. Nature of allotment Nature of

Allotment Value Price Shares No. of Consideration
(`) (`) shares
Incorporation 10 10.00 2,000 2,000 Subscription to Cash

April 15, 1999 Memorandum
September 04, 10 10.00 200 2,200 Non-Promoters Cash
1999
October 04, 10 10.00 100 2,300 Non Promoter Cash
1999
March 25, 2000 10 10.00 29,97,700 30,00,000 Promoters, Cash
Promoter Group
and Non-Promoters
March 25, 2001 10 10.00 6,55,000 36,55,000 Promoter, Promoter Cash
Group and Non-
Promoters
December 03, 10 10.00 12,45,000 49,00,000 Promoter and Cash
2001 Promoter Group
March 25, 2002 10 10.00 11,00,000 60,00,000 Promoter, Promoter Cash
Group and Non-
Promoters
May 07, 2002 10 10.00 10,30,000 70,30,000 Promoters and Cash
Promoter Group
December 10, 10 10.00 9,70,000 80,00,000 Promoters and Cash
2002 Promoter Group
December 01, 10 10.00 25,00,000 1,05,00,000 Cash
Promoters
2003
January 27, 10 10.00 81,00,000 1,86,00,000 Cash
Promoters
2007
December 27, 10 10.00 1,50,00,000 3,36,00,000 Conversion of
2007 15,00,000
redeemable
cumulative
convertible
preference
Promoter
shares (CCPS)
of ` 100/- each
allotted on
January 27,
2007 into
1,50,00,000
27
SABARI INN LIMITED
Date of Face Issue No. of Cum. Nature of allotment Nature of

Allotment Value Price Shares No. of Consideration
(`) (`) shares
equity shares
of ` 10/- each
December 27, 10 10.00 10,00,000 3,46,00,000 Conversion of

Promoter
2007 unsecured loan
December 28, 10 18.65 1,69,60,784 5,15,60,784 Allotment to ICICI Cash
2007 Prudential Asset
Management
Company Limited;
Portfolio Managers
on behalf of its
clients
January 08, 2008 10 18.65 1,62,82,353 6,78,43,137 Allotment to India Cash
Opportunity Real
Estate Fund,
Mauritius
2. History of share capital of the promoters:
Name of Date of allotment/ No of shares Consideration Face Issue % to post

Promoter transfer allotted/ Value Price issue
transferred (`) (`) capital
Mr. K.R.V. April 15, 1999 1,000 Cash 10 10.00 [●]
Ramani March 25, 2000 14,98,900 Cash 10 10.00 [●]
March 25, 2000 100 Cash 10 10.00 [●]
December 12, 2001 7,50,000 Cash 10 10.00 [●]
March 25, 2002 6,00,000 Cash 10 10.00 [●]
May 7, 2002 5,00,000 Cash 10 10.00 [●]
December 10, 2002 6,50,000 Cash 10 10.00 [●]
December 01, 2003 15,00,000 Cash 10 10.00 [●]
January 27, 2007 2,50,000 Cash 10 10.00 [●]
January 27, 2007 75,00,000 Cash 10 10.00 [●]
December 27, 2007 1,50,00,000 Cash 10 10.00
(Conversion of
redeemable
CCPS) [●]
December 27, 2007 10,00,000 Cash 10 10.00
(Conversion of
Unsecured
Loans) [●]
December 30, 2009 (6) Transfer 10 10.00 [●]
Sub Total (A) 2,93,49,994
28
SABARI INN LIMITED
Name of Date of allotment/ No of shares Consideration Face Issue % to post

Promoter transfer allotted/ Value Price issue
Mrs. Aruna April 15, 1999 1,000 Cash 10 10.00 [●]

Ramani March 25, 2000 4,99,000 Cash [●]
10 10.00
March 25, 2001 80,000 Cash 10 10.00 [●]
December 12, 2001 4,20,000 Cash 10 10.00 [●]
May 7, 2002 5,00,000 Cash 10 10.00 [●]
December 10, 2002 2,50,000 Cash 10 10.00 [●]
December 01, 2003 10,00,000 Cash 10 10.00 [●]
January 27, 2007 6,00,000 Cash 10 10.00 [●]
Sub Total (B) 33,50,000
(HUF) December 03, 2001 75,000 Cash 10 10.00 [●]
March 25, 2001 75,000 Cash 10 10.00 [●]
March 25, 2002 3,00,000 Cash 10 10.00 [●]
May 07, 2002 30,000 Cash 10 10.00 [●]
December 10, 2002 70,000 Cash 10 10.00 [●]
January 27, 2007 8,50,000 Transfer 10 10.00 [●]
Sub Total (C) 19,00,000
Grand Total (A+B) 3,45,99,994
3. Promoters Contribution and Lock-In:
The equity shares eligible for Lock-in as per Chapter IV of ICDR Regulations, 2009 for a period of 3 years
is as under:
Name of Date of allotment/ No of shares Consideratio Face Issue % to post

Promoter transfer allotted/ n Value Price issue
Mr. K.R.V. April 15, 1999 1,000 Cash 10 10.00 [●]
March 25, 2000 100 Cash 10 10.00 [●]
December 12, 2001 7,50,000 Cash 10 10.00 [●]
March 25, 2002 6,00,000 Cash 10 10.00 [●]
May 7, 2002 5,00,000 Cash 10 10.00 [●]
December 10, 2002 6,50,000 Cash 10 10.00 [●]
December 01, 2003 15,00,000 Cash 10 10.00 [●]
January 27, 2007 2,50,000 Cash 10 10.00 [●]
January 27, 2007 75,00,000 Cash 10 10.00 [●]
December 27, 2007 1,50,00,000 Cash 10 10.00
(Conversion of
redeemable
CCPS) [●]
29
SABARI INN LIMITED
Name of Date of allotment/ No of shares Consideratio Face Issue % to post

Promoter transfer allotted/ n Value Price issue
December 27, 2007 10,00,000 Cash 10 10.00
(Conversion of
Unsecured
Loans) [●]
December 30, 2009 (6) Transfer 10 10.00 [●]
Sub Total (A) 2,93,49,994
Mrs. Aruna April 15, 1999 1,000 Cash 10 10.00 [●]

March 25, 2001 80,000 Cash 10 10.00 [●]
December 12, 2001 4,20,000 Cash 10 10.00 [●]
May 7, 2002 5,00,000 Cash 10 10.00 [●]
December 10, 2002 2,50,000 Cash 10 10.00 [●]
December 01, 2003 10,00,000 Cash 10 10.00 [●]
January 27, 2007 6,00,000 Cash 10 10.00 [●]
Sub Total (B) 33,50,000
(HUF) December 03, 2001 75,000 Cash 10 10.00 [●]
March 25, 2001 75,000 Cash 10 10.00 [●]
March 25, 2002 3,00,000 Cash 10 10.00 [●]
May 07, 2002 30,000 Cash 10 10.00 [●]
December 10, 2002 70,000 Cash 10 10.00 [●]
January 27, 2007 8,50,000 Transfer 10 10.00 [●]
Sub Total (C) 19,00,000
Grand Total (A+B) 3,45,99,988
All the Equity Shares, which are being locked-in are eligible for computation of promoter’s contribution
and lock-in under Chapter IV of ICDR Regulations, 2009.
Pursuant to the SEBI Regulations, an aggregate of 20% of the post issue capital of the Company i.e. [●]
equity shares of `10/- each held by the Promoter shall be locked-in for a period of three years from the
date of Allotment in the Issue.
Specific written consent has been obtained from the Promoters for inclusion of the Equity Shares for
ensuring lock-in of three years to the extent of minimum 20% of post -Issue paid-up equity share capital
from the date of allotment in the proposed public issue. Promoters’ contribution does not consist of any
private placement made by solicitation of subscription from unrelated persons either directly or through
any intermediary.
Shares held by the person other than the Promoters, prior to this Issue, which are subject to lock in as per
Regulation 37 of SEBI (ICDR) Regulations 2009, may be transferred to any other person holding shares
which are locked in, subject to continuation of lock -in in the hands of transferees for the remaining
period and compliance of Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997 as applicable.
30
SABARI INN LIMITED
Shares held by Promoter(s) which are locked in as per the relevant provisions of Regulation 36 of the SEBI
(ICDR) Regulations, may be transferred to and amongst Promoter/Promoter group or to a new promoter
or persons in control of the Company, subject to continuation of lock -in in the hands of transferees for
the remaining period and compliance of Securities and Exchange Board of India (Substantial Acquisition
of shares and Takeovers) Regulations, 1997, as applicable. As per Regulation 39 of SEBI (ICDR)
Regulations, 2009, the locked-in Equity Shares held by the Promoter(s) can be pledged only with banks or
financial institutions as collateral security for loans granted by such banks or financial institutions,
provided the pledge of shares is one of the terms of sanction of such loan. Provided that if securities are
locked in as minimum promoters’ contribution under Regulation 36 of the SEBI Regulations, the same
may be pledged, only if, in addition to fulfilling the requirements of this clause, the loan has been granted
by such banks or financial institutions for the purpose of financing one or more of the objects of the issue.
Other than those shares that are locked in as promoter’s contribution for three years, the entire pre-issue
share capital will be locked in for a period of one year from the date of allotment in this public issue.
Any Equity Shares allotted to Anchor Investors in the Anchor Investor Portion shall be locked-in for a
period of 30 days from the date of Allotment of Equity Shares in the Issue.
4. Pre & Post Shareholding pattern of the Company
The table below presents the Equity Shareholding pattern of the Company before the proposed Issue and
as adjusted for the Issue.
Shareholder Category Pre-Issue Post-Issue No. of Shares

No. of Pledged
Share No. of Equity % No. of % No. of %
holders Shares Equity Equity
Shares Shares
Shareholding of Promoter and Promoter Group
Individuals/ Hindu 3
Undivided Family
Mr. K.R.V. Ramani

2,93,49,994 43.26 2,93,49,994
Mrs. Aruna Ramani 33,50,000 4.94 33,50,000

Ramani (HUF) 19,00,000 2.80 19,00,000 [●] Nil Nil
Central Government/ - - -
State Government
Bodies Corporate
Financial Institutions/ - - -
Banks
Any Others (Specify) - - -
Sub Total (A)(1) 3,45,99,994 51.00 3,45,99,994 [●] Nil Nil
Foreign
Individuals (Non-
Resident Individuals/
Foreign Individuals)
Bodies Corporate - [●] Nil Nil
- -
Institutions
Any Other (Specify)
31
SABARI INN LIMITED

No. of Pledged
Shares Shares
Sub Total (A)(2) - - - [●] Nil Nil
Total Shareholding of
Promoter and Promoter
3 3,45,99,994 51.00 3,45,99,994 [●] Nil Nil
Group (A)
=(A)(1)+(A)(2)
Public Shareholding Nil Nil
Institutions
Mutual Funds/ UTI
Financial Institutions/
Banks
Central Government/
State Government
Venture Capital Funds
Insurance Companies
Foreign Institutional
Investors Nil Nil
Foreign Venture Capital

Investors
Any Others (IOREF
(Mauritius) and ICICI
Prudential Asset
Management Company 2 3,32,43,137 49.00
Limited; Portfolio
Managers on behalf of
its clients ) [●] [●]
Sub Total (B)(1) 3,32,43,137 49.00 Nil Nil
Non-Institutions
Body Corporate - -
Individuals
Individuals - i. 6 6 0.00
Individual shareholders
holding nominal share
capital up to ` 1 Lac Nil Nil
Any Other (Specify)
Non-Resident Indians
(OCBs)
Hindu Undivided -
Family -
Demat – Clearing
Member
Sub-Total (B)(2) 8 Nil Nil Nil Nil
Total Public
8 3,32,43,143 49.00 Nil Nil
Shareholding
32
SABARI INN LIMITED

No. of Pledged
Shares Shares
(B)=(B)(1)+(B)(2)
TOTAL (A)+(B) 11 6,78,43,137 100.00 Nil Nil
Shares held by
Custodians and against
which Depository - - - Nil Nil
Receipts have been
issued
GRAND TOTAL
11 6,78,43,137 100.00 [●] 100.00 Nil Nil
(A)+(B)+(C)
5. There are no transactions in the Company’s Equity Shares by the Promoter & their relatives or the
directors of the Company during a period of six months preceding the date of filing of this Draft Red
Herring Prospectus with SEBI.
6. Shareholders of the company and the number of equity shares held by them
6a. Top ten shareholders as on the date prior to filing this Draft Red Herring Prospectus with SEBI:
Sr. Name of the Shareholder Number of % of issued

No. Shares Capital
1. Mr. K.R.V. Ramani 2,93,49,994 43.26
2. ICICI Prudential Asset Management Company
1,69,60,784 25.00
Limited; Portfolio Managers on behalf of its clients
3. India Opportunity Real Estate Fund 1,62,82,353 24.00
4. Mrs. Aruna Ramani 33,50,000 4.94
5. Ramani (HUF) 19,00,000 2.80
6. Mr. K.R. Ramakrishnan 1 0.00
7. Mr. T. Prasanna 1 0.00
8. Mr. S.Ramabadran 1 0.00
9. Mr. Ramesh Shiva 1 0.00
10. Mr. D. Babu 1 0.00
11. Mr. A.Kumaravel 1 0.00
Total 6,78,43,137 100.00
6b. Top ten shareholders two years prior to filing this Draft Red Herring Prospectus with SEBI:

No. Shares Capital
1. Mr. K.R.V. Ramani 2,93,50,000 43.26
2. ICICI Prudential Asset Management Company
1,69,60,784 25.00
5. Ramani (HUF) 19,00,000 2.80
Total 6,78,43,137 100.00
33
SABARI INN LIMITED
6c. Top ten shareholders ten days prior to filing this Draft Red Herring Prospectus with SEBI:

No. Shares Capital
1. Mr. K.R.V. Ramani 2,93,49,994 43.26
2. ICICI Prudential Asset Management Company 1,69,60,784 25.00
5. Ramani (HUF) 19,00,000 2.80
6. Mr. K.R. Ramakrishnan 1 0.00
7. Mr. T. Prasanna 1 0.00
8. Mr. S.Ramabadran 1 0.00
9. Mr. Ramesh Shiva 1 0.00
10. Mr. D. Babu 1 0.00
11. Mr. A.Kumaravel 1 0.00
Total 6,78,43,137 100.00
7. Till date Company has not introduced any Employees Stock Option Schemes/ Employees Stock Purchase
Schemes.
8. There is no “buyback” or “standby” arrangement for purchase of Equity shares by the company,
promoters, directors, BRLM for the equity shares offered through this Draft Red Herring Prospectus.
9. The company has not raised any bridge loan against the proceeds of the issue
10. The company has eleven Shareholders as on the date of filing this Draft Red Herring Prospectus with
SEBI.
11. An over-subscription to the extent of 10% of the net offer to public can be retained for purpose of
rounding off to the nearest multiple of minimum allotment lot.
12. There would be no further issue of capital whether by way of issue of bonus shares, preferential
allotment, and rights issue or in any other manner during the period commencing from submission of
this Draft Red Herring Prospectus with SEBI until the Equity Shares to be issued pursuant to the Issue
have been listed. The Company is considering a Pre-IPO placement of up to 50,00,000 equity shares
aggregating up to ` 2000.00 lacs with certain investors, prior to the completion of the issue. In such a case
the issue size offered to the public would be reduced to the extent of such Pre-IPO placement, subject to a
minimum issue size of 25%of the post issue capital being offered to the public.
13. The company has not made any issue of specified securities during the preceding one year.
14. The Company presently does not intend or propose to alter its capital structure for a period of six months
from the Bid/Issue Opening Date, by way of split or consolidation of the denomination of Equity Shares
or further issue of Equity Shares (including issue of securities convertible into or exchangeable, directly
or indirectly for Equity Shares) whether preferential or otherwise.
15. The company has not revalued its assets since its incorporation.
16. The company has not made any public issue since its incorporation.
17. As on date all the equity shares of the company are fully paid-up.
34
SABARI INN LIMITED
18. The Company undertakes that at any given time, there shall be only one denomination for the Equity
Shares of the Company and that it shall comply with such disclosure and accounting norms as specified
by SEBI from time to time.
19. As on the date of this Draft Red Herring Prospectus, there are no outstanding warrants, options or rights
to convert debentures, loans or other financial instruments into the Equity Shares. The shares locked in
by the Promoter are not pledged to any party.
20. No payment, direct or indirect, in the nature of discount, commission allowance or otherwise shall be
made either by the issuer company or the promoters in any public issue to the persons who receive firm
allotment in the public issue.
21. As on date of filing this DRHP there are no equity shares held by BRLM.
35
SABARI INN LIMITED
OBJECTS OF THE ISSUE

The Issue comprises the Fresh Issue and the Offer for Sale. The object of the Offer for Sale is to carry out
the sale of [●] Equity Shares aggregating to ` 4500 Lacs by the Selling Shareholders. The Company will
not receive any proceeds from the Offer for Sale by the Selling Shareholders. The Issue consists of a fresh
issue for ` 12,500 lacs. The net proceeds are proposed to be utilized by the company for the following
objects:
Objects of Fresh Issue of Shares
1. Financing of expansion / acquisition / setting up / lease of new hotels.
2. Repayment of the existing debts.
3. General corporate purpose
4. To meet the issue related expenses.
The company believes that listing will enhance the company’s brand name and create a public market for
its equity shares in India.
The main objects clause of the Memorandum of Association and objects incidental to the main objects
enable the company to undertake its existing activities and the activities for which funds are being raised
by the company through the fresh issue.
Expenses related to the issue, including underwriting and management fees, selling commissions and
other expenses will be borne entirely by the company. The Selling shareholder(s) will not bear any part of
Issue related expenses.
The details of the Net Proceeds are summarized in the table below:
Particulars Amount (` in lacs)

Gross Proceeds of the Issue 17,000.00
Less: Proceeds of the Offer for Sale 4,500.00
Net Proceeds 12,500.00
Requirement of Funds
Sr. Particulars Amount Total Amount

No (` in lacs) (` in lacs)
1. Financing of Expansion/Setting up/ Lease of new Hotels
1.1 Setting up of Hotel at Bangalore 7251.00 11951.00
1.2 Operating hotels on Long term lease at various locations 4700.00
2. Repayment of Existing Debts 4,000.00
3. General Corporate Purposes 500.00
4. To meet the issue related expenses 1,000.00
Total Requirement of Funds 17451.00
Means of Finance

IPO 12,500.00
Term Loan from Banks* 3900.00
Internal Accruals 1051.00
36
SABARI INN LIMITED
*The Company has been sanctioned a total loan of ` 3900.00 lacs for Bangalore Hotel by State Bank of
India for an amount of `2700.00
2700.00 lacs, State Bank of Mysore for an amount of ` 550.00 lacs and State Bank
of Travancore for an amount of ` 650.00 lacs vide their sanction letter
letters dated 04/07/2008, 10/05/2010
and 12/08/2010 respectively. The brief details of the terms of loans are as follows:
Particulars State Bank of India State Bank of Mysore State Bank of Travancore
Sanctioned ` 2700.00 Lacs ` 550.00 Lacs ` 650.00 Lacs
Amount
Primary 1st charge on all movable and immovable assets (including mortgage over im immovable properties),
Security present and future, of the project in Bangalore. Equitable mortgage of land with an extent of 50094 sq. ft
bearing Khatta nos 303/115
303/115-117
117 at Bangalore Bellary Road and the building to be constructed thereon
Collateral - Extension of Charge on the assets Extension of Charge on the
of the Pune Hotel Project assets of the Pune Hotel
Project
Guarantee Personal Guarantee of Mr. K K.R.V Ramani and Mrs. Aruna Ramani
Repayment 90 monthly installment 90 monthly installment 90 monthly installment
Interest rate 1.00% above SBAR (SBAR at At 0.50% above SBMPLR, At 0.50% above SBTPLR,
present: 12.75 %p.a.) presently 12.75% p.a. presently 12.75%
1 p.a.
1. Financing of Expansion/Setting up/ Lease of new Hotels
The company intends to utilize a part of the Net Proceeds for financing the expansion of the company’s
hotels and setting up of new hotels as detailed below:
Sr. Location of th
the project Total Estimated Project Cost
No (` in lacs)
1.1 Setting up of Hotel at Bangalore 7251.00
1.2 Operating hotel on Long term lease at various locations 4700.00
Total 11951.00
1.1 Setting up Hotel at Bangalore
The Company is setting up a four our star hotel at Devanahalli, Bangalore with a total capacity of 120
rooms. The hotel is proposed to have two basement floors, one lobby, one banquet floor and three guest
room floors with around 40 guest rooms on each floor. The Company has already acquired
cquired the land for
the proposed hotel vide sale agreement dated 02/01/2008 for a total consideration of arou
around ` 1160.49
lacs including stamp duty and registration charges. The Company has commenced the constructio
construction of
hotel at the said location. An amount of ` 2283.28 lacs has already been incurred towards purchase of
land and other expenses relating
ting to construction of Building
Building.
Brief Details of the upcoming Hotel project at Bangalore for which part of the funds are raised is
as follows:
The Company is constructing a 4 star deluxe
hotel at Bangalore with total capacity of 120
rooms with banquet and conference facility
facility. The
hotel is located near to international airport at
Devanahalli, Bangalore. The nearness to airport
would benefit the business class executives.
Perspective view of the proposed hotel

Rooms
37
SABARI INN LIMITED
The proposed hotel will have 120 Rooms classified as:
Sr. No Type of Rooms No. of Rooms

1. Standard Room 102
2 Deluxe Rooms 14
3. Suites 4
Total Rooms 120
Facilities:
The hotel will have 3 banquet halls, 2 restaurants and a bar.
The total estimated cost to be incurred for setting up the hotel is stated below:
Amount (` In Total (Amount
Sr. No Particulars
lacs) ` In lacs)
1. Land 1160.49 1160.49
2. Civil and 1740.17
Structural work
3. Electricals 426.24
4. Furnishing and 1261.41
Interior
5. Mechanical 533.81
Services
6. Plant & Equip 506.03 4662.00
7. Other Assets 194.34
8. Consultancy 128.00
Charges
9. Preliminary and 1300.51 1428.51
Pre Operative
Expenses
Total 7251.00
The detailed break up of the estimated cost is as under:
Sr. No Particulars Name of the Supplier Date of Amount

Quotation (` in lacs)
Civil and Structural
1. Civil and KNK Nexgen Construction 30/11/2009 947.72
Structural Work Co
2. Civil and Rasi Constructions 05/01/2010 747.97
Structural Work
3. Structural Glazing Care India Fabrication 12/05/2010 21.51
work
4. Swimming pool GYM Pool Consultants 19/05/2010 15.97
5. Landscaping & Ripple Engineering 27/05/2010 7.00
Gardening
SUB TOTAL 1740.17
Electricals
6. Electrical Work Jayaram Electricals Ltd 07/4/2010 375.26
38
SABARI INN LIMITED

7. Genset GMMCO LTD 18/06/2010 50.98
SUB TOTAL 426.24
Furnishing and Interior
8. Furniture INSCALE 19/03/2010 781.71
Furnishing &
Interior Work
9. Lobby Area, Viswakarma Decore 09/03/2010 214.86
Banquet Hall, Pre
Function Area
Interior Work
10. Interior Work- Bar A.P. interior 15/04/2010 104.84
and Rooms
11. Interior Work- J.K.Interior 30/04/2010 160.00
Coffee Shop
SUB TOTAL 1261.41
Mechanical Services
12. Air Conditioning Unitech Air Systems 25/06/2010 272.43
13. Plumbing & Rameesh Associates P Ltd 12/03/2010 201.12
Sanitation
14. Fire Fighting Aswin Engineers 26/03/2010 60.26
Systems
SUB TOTAL 533.81
Plant and Equipments
15. Hydro Pneumatic BI Marketing & Equipments 17/05/2010 10.09
System
16. Sewage treatment Statco Magnitudes P Ltd 10/05/2010 20.48
plant
17. Hot Water Boiler Enmax Global Technologies 26/05/2010 42.14
18. Water treatment Water Treatment 10/05/2010 15.00
plant Technologies
19. Kitchen & Toilet Aircontrol Equipment & 07/06/2010 35.27
Exhaust System Systems
20. Kitchen Aircontrol Equipment & 16/06/2010 30.34
Equipments Systems
21. EPABX Systems Enkay Technologies 18/06/2010 21.51
22. Telephones Online Instruments India 15/09/2010 7.02
PLtd
23. TV Sets Online Instruments India 15/09/2010 45.60
PLtd
24. Signages Inscale 12/09/2010 6.00
25. Miscellaneous Alsha Hotel Supplies 01/09/2010 38.22
Equipments
26. Laundry Ramsons Garments & 25/05/2010 30.11
Equipments Equip.
27. Cold storage & Aswa Cool Solutions Pvt Ltd 31/05/2010 22.16
Deep Freezer
Room
39
SABARI INN LIMITED

28. Safe & Lock Onity India Ltd 07/05/2010 7.66
System
29. Computer Precision Informatic Systems 23/06/2010 15.00
30. Software IDS Software P Ltd 21/06/2010 30.00
31. Networking Chennai Datacom P Ltd 18/06/2010 10.08
System
32. Lifts - 4Nos Johnson Lifts 28/04/2010 119.35
SUB TOTAL 506.03
Other Assets
33. Crockery & EAGM Hotel Supplies 13/09/2010 60.48
Cutlery, Glassware
34. Room, F & B Linen Welco International 25/09/2010 25.39
35. Uniform JJ Fashions 15.36
36. Housekeeping Anugraha Multitech Co 07/09/2010 20.64
Equipments
37. F & B and Baskar Enterprises 04/09/2010 30.91
Housekeeping
Pantry Area
38. Kitchen utensils S.Selladurai Nadar and Co 06/09/2010 15.35
39. Operating Supplies Alsha Hotel Supplies 01/09/2010 26.21
Kit
SUB TOTAL 194.34
GRAND TOTAL 4662.00
Consultancy Charges
An amount of Rs. 128.00 lacs is proposed to be incurred towards payment of consultancy charges for
various services rendered such as architectural and interior consultancy, project management fees,
HVAC consultancy etc.
Preliminary and Pre Operative Expenses
An amount of Rs. 1300.51 lacs is estimated to be incurred towards preliminary and pre operative
expenses which includes interest during construction period and other preliminary expenses.
1.2 Operating Hotels on a Long Term lease at various locations

The Company proposes to spread the Hotel network in Tier II business cities by entering into the
long term lease agreement with the owners of the hotel properties. We believe that the Tier II cities
are potential places for the business travelers and executives that will help the Company to increase
the operating income and profitability apart from giving a visibility to the Company. We are in the
process of identifying the hotels at the said locations and propose to invest a sum of ` 4700.00 lacs
towards the same. In this direction the following steps have been taken:
A. The Company has entered into a “Sub Lease Deed” with M/s. Prism Properties (Sub Lessor) and
Courtyard Hotels and Resorts Pvt. Ltd. on 22/08/2010 for a period of 10 years for lease the hotel
“THE MARK Boulevard” at Whitefield, Bangalore, which is the IT hub of the city. The total land
area of the hotel is 37,424 sq. ft approx and the built up area is 48,972 sq. ft approx. The hotel has 76
rooms, 1 banquet hall, 1 restaurant and a lounge bar. The hotel is in close proximity to the large
40
SABARI INN LIMITED
corporate houses located at Whitefield. The Company has already made a payment of ` 300.00 lacs
towards the interest free refundable security deposit. The Company has commenced the operations
of the hotel w.e.f. 01/09/2010. The Company proposes to incur additional expenditure of ` 300.00
lacs towards refurbishment of the present facilities including making certain improvements in
room furnishing, coffee shop and banquet hall, housekeeping equipments and other miscellaneous
expenses. including expenses relating to transfer of license in the name of the Company.
B. The Company has identified hotels at Pune and Hyderabad after conducting internal feasibility
study and have initiated the due diligence process. On satisfactory due diligence, these hotels will
be taken on long term lease.
C. The Company is also exploring similar opportunities in other Tier II cities that will help the
Company to increase the room keys inventory and achieve the long term objective of Pan India
presence in mid market segment.
On these long term lease properties, the Company proposes to deploy an amount of ` 4700.00 lacs
which will be utilized towards security deposit, advance rental payment, renovation and
refurbishment expenses, working capital, etc.
2. Repayment of Loans availed by the company

The Company has availed debt facilities from certain banks. As on 30th June 2010 the Principal loan
Outstanding against the company is ` 7665.73 lacs. The Company intends to utilize an amount of `
4000.00 lacs out of the total net proceeds of the issue to repay a part of the outstanding loan amount as
detailed below:
(` in lacs)
Sr.No Name of the Bank Date of Loan Rate of Total Principal Amount
sanction Interest amount amount proposed to be
(%) p.a. outstanding as repaid
on 30 June 2010
1 State Bank of Bikaner & 12/04/2010 12.00 5400.00 4302.00 2400.00
Jaipur, Chennai
2 State Bank of Mysore, 07/06/2010 12.00 3600.00 2825.01 1600.00
Chennai
For the financial year ended 31/03/2010, the total interest and finance charges of the Company was `
405.38 lacs. The part repayment of the above mentioned loan would result in reduction of the financing
cost of the Company thereby leading to increase in profitability.
3. General Corporate Purpose
The Company proposes to utilize a sum of ` 500.00 lacs for general corporate purposes that include
strategic initiatives, brand building exercises, strengthening of the marketing capabilities, meeting
exigencies which the company in ordinary course of business may face, or any other purpose as approved
by the board.
4. Issue related expenses

The expenses of this issue include, among others, underwriting and management fees, printing and
distribution expenses, legal fees, advertisement expenses and listing fees. The estimated issue expenses
are as follows:
41
SABARI INN LIMITED
Activity Estimated % of the Issue % of the

Expenses Expenses Issue Size
(` in lacs)
Lead Management, underwriting & selling commissions 600.00 60.00 3.53
Advertising and marketing expenses 175.00 17.50 1.03
Printing & Stationery expenses 100.00 10.00 0.59
Others (registrar fees, IPO Grading, legal, listing fees, etc.,) 125.00 12.50 0.73
Total estimated issue expenses 1000.00 100.00 5.88
The Selling shareholder(s) will not bear any part of Issue related expenses.
Working Capital
For the construction of the Bangalore hotel, the Company does not propose to utilize any amount of the
net issue proceeds towards the working capital requirements. The present working capital requirement as
of 30/06/2010 is ` 1369.06 lacs is being met by way of cash credit facilities to the extent of ` 500.00 lacs
availed from State Bank of Bikaner and Jaipur and balance through internal accruals. The Company shall
approach the banks for enhanced credit limits as and when required.
Schedule of implementation
The proposed schedule of implementation for the setting up of Hotel at Bangalore is detailed below:
Sr. No. Particulars Commencement Completion

1. Land & Site Development Already Acquired
2. Building Already Commenced October 2011
3. Plant and Equipments January 2011 December 2011
4. Commercial Launch January 2012
Year wise break-up of the expenditure proposed to be incurred on the project

(` In lacs)
Particulars Amount to be spent Amount to be spent Total
during the year 2010- 11 during the year 2011-12
Setting up of Hotel at Bangalore 3500.00 3751.00 7251.00
Operating hotel on Long term 1000.00 3700.00 4700.00
lease at various locations
Repayment of Existing Debts - 4000.00 4000.00
General Corporate Purposes - 500.00 500.00
Issue related expenses 200.00 800.00 1000.00
Total 4700.00 12751.00 17451.00
Sources and Deployment of Funds

The Company has spent an amount of ` 2602.80 lacs towards the implementation of project till
31.10.2010. The Company has received the Sources and Deployment of Funds Certificate dated
December 08, 2010, from Essveeyar, Chartered Accountants, the Statutory Auditors of the Company.
Details of the sources and deployment of the funds as per the certificate are as follows:
Deployment of Funds
Setting Up of Hotel at Bangalore 2283.28
42
SABARI INN LIMITED

Operating of Hotel on Long term lease (lease advance towards Bangalore 300.00
Hotel)
Issue Expenses 19.52
Total 2602.80
Sources of Funds
Term Loan from Bank 981.28
Internal Accruals 1621.52
Total 2602.80
Interim Use of Proceeds

The management, in accordance with the policies set up by the Board, will have flexibility in
deploying the proceeds received through the Issue. Pending utilization for the purposes described
above, the Company intends to temporarily invest the funds in high quality interest or dividend
bearing liquid instruments including deposits with banks for the necessary duration. Such
investments would be in accordance with any investment criteria approved by the Board of Directors
from time to time.
Monitoring of Utilization of Funds
The Company will disclose the utilization of the proceeds of the Issue under a separate head in the
financial statements clearly specifying the purposes for which such proceeds have been utilized. The
Company will also in the financial statements provide details if any, in relation to all such proceeds of
the Issue that have not been utilized thereby also indicating investments, if any, of such unutilized
proceeds of the Issue. No part of the proceeds of this Issue will be paid by the company as
consideration to the Promoters, Directors, Key Management Employees or Companies promoted by
the Promoters, save and except in the course of normal business.
Basic Terms of the Issue

The Equity shares being offered are subject to the provision of the Companies Act, 1956, the
Memorandum and Articles of Association of the Company, the terms of this DRHP and other terms
and conditions as may be incorporated in the Allotment advice and other documents /certificates
that may be executed in respect of the issue. The Equity shares shall also be subjected to laws as
applicable, guidelines, notifications and regulations relating to the issue of capital and listing and
trading of securities issued from time to time by SEBI, Government of India, RBI, ROC and /or other
authorities as in force on the date of issue and to the extent applicable.
43
SABARI INN LIMITED
BASIS OF ISSUE PRICE
The Issue Price will be determined by the Company and Selling Shareholders in consultation with the
BRLM on the basis of the demand from investors for the Equity Shares through the Book-Building
Process. The face value of the Equity Shares is ` 10/- and the Issue Price is [•] times the face value at the
lower end of the Price Band and [•] times the face value at the higher end of the Price Band.
Qualitative Factors:
· Existing profit making company in the hospitality sector having presence in Chennai,
Coimbatore, Kodaikanal and Bangalore with capacity of 377 rooms
· Focus on business travelers which makes us less susceptible to the seasonality factor
· Strong Value Proposition
· Strong Management Team
· Locational Advantage
· Presence across different price categories
· Affiliation with global brand
Information presented in this section is derived from the restated audited financial statements of the
Company for years ended March 31 2010, 2009, 2008, 2007 and 2006 and for the quarter ended 30th June,
2010
1. Basic and Diluted Earnings per Share (EPS)
Year ended Basic EPS (`) Weight

March 31, 2008
0.24 1
March 31, 2009 0.15 2
March 31, 2010 0.70 3
Weighted Average 0.44
Annualised EPS for the Quarter ended 30th June, 2010 ` 0.96
2. Price Earnings Ratio (P/E) in relation to the Issue Price of `[●] per Equity Share of `10/- each
Sr. No. Particulars

a. P/E ratio based on Weighted average EPS for the three years ended [●] times
March 31, 2008, 2009 and 2010 at the Floor Price
b. P/E ratio based on Weighted average EPS for the three years ended [●] times
March 31, 2008, 2009 and 2010 at the Cap Price
3. Return on Net worth (RoNW)
Year ended RoNW (%) Weight

March 31, 2008 0.43 1
March 31, 2009 0.99 2
March 31, 2010 4.52 3
Weighted Average 2.66
RoNW for the Quarter ended 30th June, 2010 1.51%
44
SABARI INN LIMITED
4. Minimum Return on Increased Net Worth required to maintain pre-issue EPS: [·]
5. Net Asset Value (NAV) per share, post-Issue and comparison with the Issue Price
NAV (Rs.)
NAV as at March 31, 2010 15.55
NAV after the Issue* [●]
Issue Price [●]
NAV as at 30th June, 2010 is 15.80
6. Industry Average P/E
Particulars Name of the Company P/E Multiple based on Price as

on 07/12/2010
Highest EIH Ltd. 76.96
Lowest CHL 9.22
Industry Composite 39.50
Source for industry composite: Dalal Street Investment Journal, Hotels 05 December, 2010
7. Comparison with other listed companies
The comparable ratios of the companies which are in similar business are given as follows:
31/03/2010
Company Face Equity Sales Net Book EPS Market P/E Price/BV
Value (` in (` in Cr.) Profit Value (`) Price as on
(`) Cr.) (` in (`) 07/12/2010
Cr.) (`)
Bhagwati
Banquets & Hotels
Ltd. 10 29.30 86.00 10.20 47.00 3.50 140.00 40.00 2.98
CHL 10 11.00 70.00 12.50 76.00 11.40 105.10 9.22 1.38
EIH Ltd. 2 78.60 774.00 57.20 36.00 1.50 115.45 76.96 3.21
Royal Orchid 8.30 0.96
Hotel 10 27.20 78.00 73.00 3.00 69.80 23.26
(Source: Dalal Street Investment Journal, Hotels Sep 13 – Sep 26, 2010
Sabari Inn Limited
10 67.84 41.46 4.71 15.50 0.24 NA NA NA
8. The face value of Equity Shares of Sabari Inn Limited is Rs.10 and the Issue Price is [·] time of the Face
Value.
The Issue Price of `[•] has been determined by the Company and Selling Shareholders in consultation
with the BRLM, on the basis of assessment of market demand from investors through the Book- Building
Process and is justified based on the above factors. The face value of the Equity Shares is ` 10 each. The
Issue Price is [•] times the face value at the lower end of the price band and [•] times the face value at the
higher end of the Price Band.
On the basis of the above parameters the Issue Price of ` [·] per share is justified.
45
SABARI INN LIMITED
STATEMENT OF TAX BENEFITS
STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS

SHAREHOLDERS. AS PER THE CERTIFICATE ISSUED BY STATUTORY AUDITORS OF THE
COMPANY
To
The Board of Directors
Sabari Inn Limited,
T.Nagar, Chennai – 600 017.
We M/s Essveeyar, Chartered Accountants are the Statutory Auditors of Sabari Inn Limited having its
registered office at No. 29, Thirumalai Pillai Road, T.Nagar, Chennai – 600 017. We hereby certify that
under the current tax laws, the following tax benefits inter-alia, will be available to the Company and the
members of the Company. However a member is advised to consider in his/her/its own case the tax
implications of an investment in the Equity Shares, particularly in view of the fact that certain recently
enacted legislation may not have direct legal precedent or may have a different interpretation on the
benefits, which an investor can avail.
As per the existing provisions of the Income Tax Act 1961 and other laws as applicable for the time being in
force, the following tax benefits and deductions are and will, inter-alia be available to Sabari Inn Limited
and its shareholders.
Special Tax Benefits
We believe that there are no special tax benefits available to the Company and its shareholders.
General tax benefits available:
A. Benefits to the company under Act
1. Dividends exempt under section 10(34) and 10(35) of the IT Act.
Dividend (whether interim or final) received by the company from its investment in shares of another
domestic company would be exempted in the hands of the company as per the provisions of section
10(34) read with section 115-O of the IT Act. In terms of section 10(35) of the IT Act, any income
received from units of a Mutual Fund specified under section 10(23D) of the IT Act is exempt from tax,
subject to such income not arising from the transfer of units in such Mutual Fund.
2. Computation of capital gains
Capital assets are to be categorised into short-term capital assets and long-term capital assets based on
the period of holding. All capital assets except shares held in a company or any other security listed in a
recognised stock exchange in India or units of Unit Trust of India (‘UTI’) or Mutual Fund units
specified under section 10(23D) of the IT Act or zero coupon bonds are considered to be long-term
capital assets, if they are held for a period exceeding thirty-six months. Shares held in a company or any
other security listed in a recognised stock exchange in India or UTI or Mutual Fund units specified
under section 10(23D) of the IT Act or zero coupon bonds are considered as long-term capital assets, if
these are held for a period exceeding twelve months.
46
SABARI INN LIMITED
As per the provisions of section 10(38) of the IT Act, long term capital gain arising to the company from
transfer of a long term capital asset being an equity share in a company listed on a recognized stock
exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and
the transaction is chargeable to Securities Transaction Tax (‘STT’).
As per the provisions of section 112 of the IT Act, long-term capital gains other than those covered
under section 10(38) of the IT Act are subject to tax at a rate of 20% (plus applicable surcharge and
cess). However, proviso to section 112(1) specifies that if the long-term capital gains other than those
covered under section 10(38) of the IT Act arising on transfer of listed securities or units or zero coupon
bond, calculated at the rate of 20% with indexation benefit exceeds the capital gains computed at the
rate of 10% without indexation benefit, then such capital gains are chargeable to tax at the rate of 10%
without indexation benefit (plus applicable surcharge and education cess).
However, from Assessment Year 2007-2008, such long-term capital gains will be included while
computing book profits for the purpose of payment of Minimum Alternate Tax (“MAT”) under the
provisions of section 115JB of the IT Act.
As per provisions of section 111A of the IT Ac t, short term capital gains arising from transfer of short
term capital asset, being an equity share in a company or a unit of an equity oriented mutual fund shall
be taxable at the rate of 15% (plus applicable surcharge and education cess), if such sale is entered into
on or after October 1, 2004 and the transaction is chargeable to STT.
3. Securities Transaction Tax
In terms of STT, transactions for purchase and sale of the securities in the recognized stock exchange by
the shareholder will be chargeable to STT. As per the said provisions, any delivery based purchase and
sale of equity share in a company through the recognized stock exchange is liable to securities
transaction tax @ 0.125% of the value payable by both buyer and seller individually.The non-delivery
based sale transactions are liable to tax @ 0.025% of the value payable by the seller.
4. Exemption of capital gains arising from income tax
As per the provisions of section 54EC of the IT Act and subject to the conditions specified therein
capital gains arising to a company on transfer of a long-term capital asset other than those covered
under section 10(38) of the IT Act shall not be chargeable to tax to the extent such capital gains are
invested in National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC)
notified bonds within six months from the date of transfer. If only part of such capital gain is invested,
the exemption shall be proportionately reduced. The IT Act has restricted the maximum investment in
such bonds up to Rs 5 million per assessee during any financial year.
5. Where the long-term specified asset is transferred or converted into money at any time within a period
of three years from the date of its acquisition, the amount of capital gains exempted earlier would
become chargeable to tax as long term capital gains in the year in which the long-term specified asset is
transferred or converted into money.
6. In accordance with and subject to the provisions of section 32 of the Income tax Act, the Company will
be allowed to claim depreciation on specified tangible and intangible assets as per the rates specified.
Besides normal depreciation, the Company, in terms of section 32(1)(iia), shall be entitled to claim
Additional depreciation @ 20% of actual cost on new plant and machinery for the period of one year
after acquired on or after 31st March, 2005.
47
SABARI INN LIMITED
7. In accordance with and subject to the provisions of section 35D of the Income tax Act, the Company
will be entitled to amortise, over a period of five years, all expenditure in connection with the proposed
public issue subject to the overall limit specified in the said section.
8. Under Section 115 JAA (1A) of the Act, tax credit shall be allowed of any tax paid (MAT) under Section
115 JB of the Act. Credit eligible for carry forward is the difference between MAT paid and the tax
computed as per the normal provisions of the Act. Such MAT credit shall not be available for set-off
beyond 7 years succeeding the year in which the MAT becomes allowable.
9. Unabsorbed depreciation if any, for an Assessment Year (AY) can be carried forward and set off against
any source of income in subsequent AYs, as per section 32 of the Act, subject to the (2) of section 72 and
sub-section (3) of section 73 of the Act.
Carry forward and Set off of Business Loss
10. Business losses if any, for any AY can be carried forward and set off against business profits for eight
subsequent AYs.
11. Section 48 of the Act, which prescribes the mode of computation of capital gains, provides for deduction
of cost of acquisition/improvement and expenses incurred in connection with the transfer of a capital
asset, from the sale consideration to arrive at the amount of capital gains. However, in respect of long
term capital gains, it offers a benefit by permitting substitution of cost of acquisition / improvement
with the indexed cost of acquisition/improvement, which adjusts the cost of acquisition /
improvement by a cost inflation index as prescribed from time to time.
12. As per section 71 read with section 74, Short-term capital loss arising during a year is allowed to be set-
off against short-term as well as long-term capital gains of the said year. Balance loss, if any, should be
carried forward and set-off against short-term as well as long-term capital gains for subsequent 8 years.
13. As per section 71 read with section 74, Long-term capital loss arising during a year is allowed to be set-
off only against long-term capital gains. Balance loss, if any, should be carried forward and set-off
against subsequent year’s long-term capital gains for subsequent 8 years.
B. Benefits to the Resident shareholders of the company under the IT Act
1. Dividends exempt under section 10(34) of the IT Act
Dividend (whether interim or final) received by a resident shareholder from its investment in shares of
a domestic company would be exempt in the hands of the resident shareholder as per the provisions of
section 10(34) read with section 115-O of the IT Act.
2. Any income of minor children (Maximum two children) clubbed with the total income of the parent
under section 64(1A) of the Income Tax Act 1961, will be exempt from tax to the extent of ` 1500 per
minor child under section 10(32) of the Income Tax Act 1961.
the period of holding. All capital assets [except shares held in a company or any other security listed in
a recognised stock exchange in India or units of UTI or Mutual Fund units specified under section
10(23D) of the IT Act and zero coupon bonds] are considered to be long-term capital assets, if they are
held for a period exceeding thirty-six months. Shares held in a company or any other security listed in a
48
SABARI INN LIMITED
recognised stock exchange in India or units of UTI or Mutual Fund units specified under section
10(23D) of the IT Act and zero coupon bonds are considered as long-term capital assets, if these are held
for a period exceeding twelve months.
As per the provisions of section 48 of the IT Act, the amount of capital gain shall be computed by
deducting from the sale consideration, the cost of acquisition and expenses incurred in connection with
the transfer of a capital asset. However, in respect of long-term capital gains arising to a resident
shareholder, a benefit is permitted to substitute the cost of acquisition/ improvement with the indexed
cost of acquisition/ improvement. The indexed cost of acquisition/ improvement, adjusts the cost of
acquisition/ improvement by a cost inflation index, as prescribed from time to time.
As per the provisions of section 10(38) of the IT Act, long term capital gain arising to a resident
shareholder from transfer of a long term capital asset being an equity share in a company listed on a
recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after
October 1, 2004, and the transaction is chargeable to STT.
As per the provisions of section 112 of the IT Act, long-term capital gains [other than those covered
under section 10(38) of the IT Act] are subject to tax at a rate of 20% (plus applicable surcharge and cess).
However, proviso to section 112(1) specifies that if the long-term capital gains [other than those covered
under section 10(38) of the IT Act] arising on transfer of listed securities or units or zero coupon bond,
calculated at the rate of 20% with indexation benefit exceeds the capital gains computed at the rate of
10% without indexation benefit, then such capital gains are chargeable to tax at the rate of 10% without
indexation benefit (plus applicable surcharge and education cess).
be taxable @ 15% (plus applicable surcharge and education cess), if such sale is entered into on or after
October 1, 2004 and the transaction is chargeable to STT.
As per the provisions of Section 10(23D) of the Act, all mutual funds set up by public sector banks, public
financial institutions or mutual funds registered under the Securities and Exchange Board of India (SEBI)
or authorized by the Reserve Bank of India are eligible for exemption from income tax, subject to the
conditions specified therein, on their entire income including income from investment in the shares of the
company.
4. Exemption of capital gains arising from income tax
As per the provisions of section 54EC of the IT Act and subject to the conditions specified therein capital
gains arising to a resident shareholder on transfer of a long-term capital asset other than those covered
under section 10(38) of the IT Act shall not be chargeable to tax to the extent such capital gains are
invested in certain notified bonds within six months from the date of transfer. If only part of such
capital gain is invested, the exemption shall be proportionately reduced.
However, if the resident shareholder transfers or converts the notified bonds into money (as stipulated
therein) within a period of three years from the date of their acquisition, the amount of capital gains
exempted earlier would become chargeable in such year. The bonds specified for this section are bonds
issued on or after April 1, 2006 by NHAI and REC. The IT Act has restricted the maximum investment
in such bonds up to Rs 5 million per assessee during any financial year.
Further, as per the provisions of section 54F of the IT Act and subject to conditions specified therein,
long-term capital gains other than a capital gains arising on sale of resident house and those covered
under section 10(38) of the IT Act arising to an individual or Hindu Undivided Family (‘HUF’) on
transfer of shares of the company will be exempted from capital gains tax, if the net consideration from
49
SABARI INN LIMITED
such shares are used for either purchase of residential house property within a period of one year before
or two years after the date on which the transfer took place, or for construction of residential house
property within a period of three years after the date of transfer.
However, if the resident shareholder transfers the residential house property within a period of three
years from the date of their acquisition, the amount of capital gains exempted earlier would become
chargeable in such year.
C. Benefits to the Non-resident shareholders of the company other than Foreign Institutional Investors
and Foreign Venture Capital Investors
1. Dividends exempt under section 10(34) of the IT Act
Dividend (whether interim or final) received by a non-resident shareholder from its investment in
shares of a domestic company would be exempt in the hands of the non-resident shareholder as per the
provisions of section 10(34) read with section 115-O of the IT Act.
2. Any income of minor children (Maximum two children) clubbed with the total income of the parent
under Section 64(1A) of the Income Tax Act 1961 will be exempt from tax to the extent of ` 1,500 per
minor child per year in accordance with the provisions of section 10(32) of the Income Tax Act 1961.
the period of holding. All capital assets [except shares held in a company or any other security listed in
10(23D) of the IT Act and zero coupon bonds] are considered to be long-term capital assets, if they are
held for a period exceeding thirty-six months. Shares held in a company or any other security listed in
10(23D) of the IT Act and zero coupon bonds are considered as long-term capital assets, if these are
held for a period exceeding twelve months.
As per the provisions of section 48 of the IT Act, the amount of capital gain shall be computed by
deducting from the sale the consideration, the cost of acquisition and expenses incurred in connection
with the transfer of a capital asset. Under first proviso to section 48 of the IT Act, the taxable capital
gains arising on the transfer of capital assets being shares or debentures of an Indian company need to
be computed by converting the cost of acquisition, expenditure in connection with such transfer and full
value of the consideration received or accruing as a result of the transfer into the same foreign currency
in which the shares were originally purchased. The resultant gains thereafter need to be reconverted
into Indian currency. The conversion needs to be done at the prescribed rates prevailing on dates
stipulated. Hence, in computing such gains, the benefit of indexation is not available to non-resident
shareholders.
As per the provisions of section 10(38) of the IT Act, long term capital gain arising to a non-resident
shareholder from transfer of a long term capital asset being an equity share in a company listed on a
recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after
October 1, 2004, and the transaction is chargeable to STT.
As per the provisions of section 112 of the IT Act, long-term capital gains (other than those covered
under section 10(38) of the IT Act) are subject to tax at a rate of 20% (plus applicable surcharge and cess).
However, proviso to section 112(1) specifies that if the long-term capital gains [other than those covered
second proviso to section 48 and under section 10(38) of the IT Act] arising on transfer of listed
50
SABARI INN LIMITED
securities or units or zero coupon bond, calculated at the rate of 20% with indexation benefit exceeds
the capital gains computed at the rate of 10% without indexation benefit, then such capital gains are
chargeable to tax at the rate of 10% without indexation benefit (plus applicable surcharge and
education cess).
be taxable @ 15% (plus applicable surcharge and education cess), if such sale is entered into on or after
October 1, 2004 and the transaction is chargeable to STT.
4. Exemption of capital gain from income-tax
As per the provisions of section 54EC of the IT Act and subject to the conditions specified therein capital
gains arising to a non-resident shareholder on transfer of a long-term capital asset (other than those
covered under section 10(38) of the IT Act) shall not be chargeable to tax to the extent such capital gains
are invested in certain notified bonds within six months from the date of transfer. If only part of such
capital gain is invested, the exemption shall be proportionately reduced.
However, if the non-resident shareholder transfers or converts the notified bonds into money (as
stipulated therein) within a period of three years from the date of their acquisition, the amount of
capital gains exempted earlier would become chargeable in such year. The bonds specified for this
section are bonds issued on or after April 1, 2006 by NHAI and REC. The IT Act has restricted the
maximum investment in such bonds up to Rs 5 million per assessee during any financial year.
Further, as per the provisions of section 54F of the IT Act and subject to conditions specified therein,
long-term capital gains (other than a capital gains arising on sale of resident house and those covered
under section 10(38) of the IT Act) arising to an individual or HUF on transfer of shares of the company
will be exempted from capital gains tax, if the net consideration from such shares are used for either
purchase of residential house property (subject to prior approval from Reserve Bank of India) within a
period of one year before or two years after the date on which the transfer took place, or for
construction of residential house property within a period of three years after the date of transfer.
5. Non resident taxation
Under section 115-I of the IT Act, the non-resident Indian shareholder has an option to be governed by
the provisions of Chapter XIIA of the IT Act viz. “Special Provisions Relating to Certain Incomes of
Non-Residents” which are as follows:
Under section 115E of the IT Act, where shares in the company are acquired or subscribed to in
convertible foreign exchange by a non-resident Indian, capital gains arising to the non-resident on
transfer of shares held for a period exceeding 12 months, will [in cases not covered under section 10(38)
of the IT Act], be concessionally taxed at the flat rate of 10% (plus applicable surcharge and cess)
(without indexation benefit but with protection against foreign exchange fluctuation)
Under provisions of section 115F of the IT Act, long-term capital gains [in cases not covered under
section 10(38) of the IT Act] arising to a non-resident Indian from the transfer of shares of the company
subscribed to in convertible foreign exchange will be exempt from income tax, if the net consideration is
reinvested in specified assets within six months of the date of transfer. If only part of the net
consideration is so reinvested, the exemption will be proportionately reduced. However the amount so
exempted will be chargeable to tax subsequently, if the specified assets are transferred or converted into
money within three years from the date of their acquisition.
51
SABARI INN LIMITED
6. In accordance with the provisions of Section 115G of the Income Tax Act 1961, Non Resident Indians
are not obliged to file a return of income under Section 139(1) of the Income Tax Act 1961 if
their only source of income is income from investments or long term capital gains earned on transfer of
such investments or both, provided tax has been deducted at source from such income as per the
provisions of Chapter XVII-B of the Income Tax Act 1961.
7. In accordance with the provisions of Section 115H of the Income Tax Act 1961, when a Non Resident
Indian become assessable as a resident in India, he may furnish a declaration in writing to the
Assessing Officer along with his return of income for that year under Section 139 of the Income Tax Act
1961 to the effect that the provisions of Chapter XII-A shall continue to apply to him in relation to such
investment income derived from the specified assets for that year and subsequent assessment years
until such assets are converted into money.
8. As per the provisions of section 115 I of the I.T. Act, a Non-Resident Indian may elect not to be
governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of
income for that year under Section 139 of the Income Tax Act 1961, declaring therein that the provisions
of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for
that assessment year will be computed in accordance with the other provisions of the Income Tax Act
1961.
9. Tax Treaty Benefits
As per the provisions of Section 90(2) of the Income Tax Act 1961, the provisions of the Income Tax Act
1961 would prevail over the provisions of the tax treaty to the extent they are more beneficial to the
Non-Resident.
D. Benefits to Foreign Institutional Investors (‘FII’)
1. Dividends exempt under section 10(34) of the Act
Dividend (whether interim or final) received by a FII from its investment in shares of a domestic
company would be exempt in the hands of the FII as per the provisions of section 10(34) read with
section 115-O of the Act.
2. Long term capital gains exempt under section 10(38) of the Act.
As per the provisions of section 10(38) of the Act, long term capital gain arising to the FII from transfer
of a long term capital asset being an equity share in a company listed on a recognized stock exchange
in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the
transaction is chargeable to STT.
3. Capital gains
As per the provisions of section 115AD of the Act, FIIs are taxed on the capital gains income at the
following rates:
Rate of tax
Nature of Income (%)*

Long-term capital gains 10
Short-term capital gains 30
* Plus applicable surcharge and cess
52
SABARI INN LIMITED
The benefits of foreign currency fluctuation protection and indexation as provided by section 48 of the
Act are not available to a FII.
As per the provisions of section 10(38) of the Act, long term capital gain arising to FII from transfer of a
long term capital asset being an equity share in a company listed on a recognized stock exchange in
India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the
transaction is chargeable to STT.
As per provisions of section 111A of the Act, short term capital gains arising from transfer of short
be taxable at the rate of 15% (plus applicable surcharge and education cess), if such sale is entered into
on or after October 1, 2004and is chargeable to STT.
Under section 196D (2) of the Income-tax Act, 1961, no deduction of tax at source will be made in
respect of income by way of capital gain arising from the transfer of securities referred to in section
115AD.
4. Tax Treaty Benefits
As per section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax
treaty to the extent they are more beneficial to the FII. Thus, an FII can opt to be governed by provisions
of the Act or the applicable tax treaty whichever is more beneficial.
E. Benefits to the Mutual Funds
Dividend (whether interim or final) received by a Mutual Fund from its investment in shares of a
domestic company would be exempt in the hands of the Mutual Fund as per the provisions of section
10(34) read with section 115-O of the Act.
2. As per the provisions of section 10(23D) of the Act
Any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992
(‘SEBI’) or regulations made there under, Mutual Funds set up by public sector banks or public
financial institutions or Mutual Funds authorised by the Reserve Bank of India, would be exempt from
income tax, subject to the prescribed conditions.
F. Benefits to the Venture Capital Companies / Funds
Dividend (whether interim or final) received by a Venture Capital Company (‘VCC’)/ Venture Capital
Funds (‘VCF’) from its investment in shares of another domestic company would be exempt in the
hands of the VCC/VCF as per the provisions of section 10(34) read with section 115-O of the Act.
2. In case of a shareholder being a Venture Capital Company/ Fund, as per the provisions of Section
10(23FB) of the Income Tax Act 1961, any income of Venture Capital Companies/ Funds registered with
the SEBI, would be exempt from Income Tax, subject to the conditions specified in the said subsection.
G. Benefits under the Wealth Tax Act, 1957
53
SABARI INN LIMITED
Asset as defined under section 2(ea) of the Wealth-tax Act, 1957 does not include shares in companies
and hence, shares are not liable to wealth tax.
H. Benefits under the Gift Tax Act

As no Gift tax is leviable in respect of gifts made on or after October 1, 1998, but before April 1, 2006.As
per amended section 56 (2) (vi) any gift received in money, the aggregate value of which exceeds `
50,000/- is received without consideration, the whole of the aggregate value of such sum will be
chargeable to tax. As per newly inserted section 56 (2) (vii) value of sum of money / immovable
property/ movable property received without consideration or for inadequate consideration is in
exceed of ` 50,000/- than the whole of the aggregate value of such sum will be chargeable to tax with
effect from Dt: 01.10.2009.
Notes
1. All the above benefits are as per the current tax laws as amended by the Finance Act, 2009 &
Finance Bill, 2010 and will be available only to the sole/ first named holder in case the shares are
held by joint holders.
2. Some of the above benefits may under go changes, if the Direct Tax Code, comes into effect, as
envisaged by the Government of India with effect from 1st April 2012.
3. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be
further subject to any benefits available under the double taxation avoidance agreements, if any,
between India and the country in which the non-resident has fiscal domicile.
4. In view of the individual nature of tax consequences, each investor is advised to consult his/ her
own tax advisor with respect to specific tax consequences of his/ her participation in the scheme.
5. Tax implications of an investment in the Equity Shares, particularly in view of the fact that certain
recently enacted legislations may not have direct legal precedent or may have a different
interpretation on the benefits which an investor can avail.
6. The views expressed herein are based on the facts and assumptions indicated above. No assurance
is given that the revenue authorities/courts will concur with the views expressed herein. The views
are based on the existing provisions of law and its interpretation, which are subject to change from
time to time. We do not assume responsibility to update the views consequent to such changes.
Place: CHENNAI For Essveeyar,

Date: 08/12/2010 Chartered Accountants
Sd/-
R VIAJAYARAGHAVAN
Partner
Membership No.: 022442
F.R.No.000808S
54
SABARI INN LIMITED
SECTION III- ABOUT THE ISSUER COMPANY
INDUSTRY OVERVIEW
2010.CRISIL limited has used due care and caution in preparing this report. Information has been
INDUSTRY OVERVIEW
As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is
ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world's
attractive destinations. It is ranked the 14th best tourist destination for its natural resources and 24th for
its cultural resources. The India travel and tourism industry ranked 5th in the long-term (10-year) growth
and is expected to be the second largest employer in the world by 2019.
The liberalization of Indian economy in 1991 and the integration of India into the global economy have
given impetus to business travellers and tourist travellers. This has intensified and elevated room rates
and occupancy levels in India. The growing economy and increased business opportunities in India have
acted as a boon for Indian Hotel industry. The “Incredible India” destination campaign and the recently
launched “Atithi Devo Bhavah” campaign have also helped in the growth of domestic and international
tourism and consequently the hotel industry.
India’s hospitality industry has enjoyed robust growth over the past few years buoyed by a benign
economic and political environment. Increase in domestic business and leisure travel has benefited hotels
in India. Rising incomes, higher weekend trips and increased access to travel-related information over the
internet have all propelled growth in hospitality. Premium segment hotels are more prominent in major
business destinations in India, and are also dominant in popular tourist destinations like Goa, which
attracts a lot of foreign clientele. However, in the second half of 2008-09, ARRs decreased due to fall in
room demand on account of the global economic slowdown.
MARKET SIZE
The hotels industry witnessed robust growth during the period 2002-03 to 2007-08, with revenues
registering a CAGR of 24 per cent. During the same period, the premium segment (comprising of 5 star 5
star deluxe hotels) registered a CAGR of 29 per cent. This rapid growth was driven by a benign political
environment and rapid economic growth.
Business destinations such as Bengaluru, Mumbai and NCR witnessed high occupancy rates (ORs) and
were able to leverage upon low availability premium hotel rooms to charge high average room rates
(ARRs). On the other hand, leisure destinations were benefitted by rapid growth in foreign tourist
arrivals (FTAs), which registered a CAGR of 14 per cent during the period 2002-03 to 2007-08.
55
SABARI INN LIMITED
As a result, the overall size of the hotels market in terms of revenue has more than doubled in the
aforementioned period, from Rs 64.8 billion in 2003-04 to Rs 186.7 billion in 2007-08. During the same
period, the premium hotels segment grew almost four times from Rs 31.6 billion in 2003-04 to Rs 112.4
billion in 2007-08. The rapid growth in revenues spurred investments in new properties, especially in the
premium segment. Large supply additions were commissioned during the period 2006-07 to 2008-09.
However, industry revenues witnessed a sharp decline as a result of the global economic crisis in the
latter half of 2008-09. The resulting fall in room demand across destinations was exacerbated by large
supply additions, which forced players to reduce ARRs. Consequently, hotel revenues have decline
sharply over the last two years; revenues for the total market have decline at a CAGR of 24 per cent from
Rs. 186.7 billion in 2007-08 to 106.7 billion in 2009-10, during the same period revenues for the premium
segment have declined at a CAGR of 22 per cent from Rs 112.4 billion in 2007-08 to Rs 68.1 billion in 2009-
10.
Hotels Industry: Market Size

200,000 50
150,000 30
10
100,000
-10
50,000 -30
0 -50
2009-10E
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Premium market size (Rs. Million)

Total market size (Rs. Million)
Premium growth (per cent)
Total growth (per cent)
Source:CRISIL Research
Number of hotel rooms by category

Category 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10E
Premium segment 20,343 22,082 24,183 25,141 26,021 28,010 29,090 30,329 33,217
Mid-market segment 29,001 28,506 28,788 33,094 32,209 34,971 35,885 37,321 40,306
Budget hotels 10,974 10,423 10,119 9,746 8,107 7,783 7,783 7,861 7,939
Heritage hotels 2,492 2,258 2,297 2,567 2,611 2,689 2,703 2,730 2,757
Others (unregistered etc) 30,440 29,816 30,854 31,712 37,368 40,357 45,200 49,720 53,201
Total rooms 93,250 93,085 96,241 102,260 106,316 113,810 120,661 127,960 137,421
Growth (y-o-y) 0% 3% 6% 4% 7% 6% 6% 7%
E: Estimate
Source: CRISIL Research, FHRAI
56
SABARI INN LIMITED
INDUSTRY CHARACTERISTICS
Business and Leisure Destinations
From the point of view of the hospitality sector, destinations may be classified as business or leisure
destinations. It must be noted that the two are not mutually exclusive as some business destinations also
have their fair share of leisure travelers and vice versa. The demand dynamics of the two segments are
quite different, and can be discussed under the following headers:
Cyclicality
The hospitality sector is cyclical in nature. During positive cycles, the industry witnesses periods of
sustained growth in average room rates (ARRs) and occupancy rates (ORs). This trend continues until the
economy undergoes a downturn or there is excess supply in the sector. Usually occupancy rates begin to
decline at the onset of an economic deceleration, and this is followed by a reduction in ARRs. In the
recovery phase, occupancy rates start to move up, and subsequently, ARRs also start increasing.
Business destinations are more sensitive to macro-economic factors; i.e. RevPAR growth in business
destinations is more sensitive to macro-economic indicators such as nominal GDP growth. This is
reflected by the fact that during the global economic crisis, RevPARs in business destinations declined at
a CAGR of 22 per cent, compared to 11 per cent for leisure destinations.
Leisure destinations on the other hand, show a greater sensitivity to non-economic factors such as terror
attacks and health related travel warnings. This sensitivity is highlighted by sharper reduction in
RevPAR growth in leisure destinations during 2001-02 (as a result of the World Trade Centre attacks on
September 11), and in 2003-04 (as a result of SARS related travel advisories). It must be noted that the
decline in RevPAR growth in 2008-09 and 2009-10 was largely because of the Mumbai terror attacks on
26th November 2008 and swine flu related travel advisories; this negative effect was compounded by the
global slowdown.
Cyclicality of ORs and ARRs

50.0 20.0
- 10.0
(50.0) -
Business Destinations RevPAR growth

Leisure Destinations RevPAR growth
Nominal GDP growth
Seasonality
The nature of demand in the hotels industry is seasonal. However, the pattern of ORs shows significant
variation in business and leisure destinations. Though the peak season for both business and leisure
destinations coincides (January-March), for the remainder of the year they exhibit markedly different
behavior. While business destinations maintain relatively constant ORs (albeit 5-10 per cent lower than
57
SABARI INN LIMITED
the January-March period) throughout the year, ORs exhibit a sharp correction during the month of
December, as this period coincides with the international holiday period. Leisure destinations on the
other hand witness extremely low ORs (around 50 per cent) during the May-October period. On the other
hand leisure destinations witness very high ORs (above 80 per cent) during the December holiday period.
Seasonal Nature of the Hotels Industry (ORs)
100
90
80
70
60
50
40
30
Business Destinations Leisure Destinations
Average Length of Stay (ALOS) and Occupancy Patterns
The demand for hotel rooms in business destinations is generally concentrated around weekdays; as a
result, ORs are generally lower on weekends. The ALOS in business hotels is usually in the range of 1 to 2
nights with low levels of double occupancy (i.e. fewer occasions where more than one person shares a
hotel room). Conversely, hotels in leisure destinations enjoy higher ORs on weekends, and generally have
a higher ALOS of around 3-5 nights. The incidence of double occupancy is also higher in leisure
destinations.
Value Chain
58
SABARI INN LIMITED
Value chain for a Hotel Industry has a Multi tier model. The Owner, Manager and The Franchisee are the
three categories under which Players operate in the hotel Industry. All the three verticals are aided by the
strong distribution channels which play a significant role.
Room revenue
Room revenue contribution volatile, varies across segments
Room revenues are higher for premium hotels vis a vis the mid market segment owing to the higher rates
prevalent in the former category. Also, the contribution of room revenue decreases during negative
cycles, as the food and beverage business is relatively less impacted at such times. Thus, a hotel having a
successful food and beverage business is likely to better withstand an industry downturn.
Ownership Model
Hotels follow a combination of ownership, manager, franchise and lease methods. The options for
operating hotels are enumerated below:
• Owner cum manager cum franchiser: The hotel owner owns, manages and franchises its properties
•Owner cum manager, and franchiser: The owner owns and manages the property. However, the
property is branded or co-branded with a franchiser.
•Owner, and manager cum franchiser: Owner owns the property that is managed and branded/co-
branded with a franchiser.
• Owner and lessee: The owner grants a lease to the operator for a specified duration. The lessee incurs
the capital expenditure for renovating the hotel. The lessee has an interest in the asset as there is
lock-in period and penalty is chargeable if the lease agreement is not adhered to
59
SABARI INN LIMITED
• Owner and licensee: Owner enters into a license agreement with operator. The licensor receives a
license fee. The licensee earns gross revenue and all expenses are borne by him. All employees and
recruited and paid for by the licensee.
Distribution and Sales Channels
The major distribution and sales channels for Hotel Reservations are:
• Global Distribution Systems (GDS): A Global Distribution System (GDS) is a network of

electronic reservation systems used by buyers (travel agents and public) and sellers (hotels, airlines,
car rental companies, etc) to exchange travel-related services. Globally GDS systems account for
majority of hotel reservations but their usage is relatively lower in India.
• Centralized Reservation Systems (CRS): This system is primarily used by hotel chains with
properties in different locations, whereby the a common central system is used for reservations in all
the properties
• Travel Agent: Travel agents are the intermediaries between the traveler and the Hotel.
60
SABARI INN LIMITED
• Marketing Alliances: Major hotels are often associated with marketing alliances. These alliances
provide the hotel direct access to reservation network, promotion, and Internet coverage. Major
marketing alliances include Leading Hotels of the World, Leading Small Hotels of the World and
airline tie-ups.
• Internet: Internet has become an effective medium for hotel reservations in India due to its ease
and cost effectiveness.
(Source FHRAI)
Segment-wise Contribution Margin
Room contribution
Room contribution primarily depends on average room rates, since costs such as manpower and energy,
which are associated with rooms, are not significant. A rise in the ARR causes a direct increase in room
contribution. Room contribution is at its highest in the premium segment, accounting for around 65-70
per cent of the hotel’s total revenues. However, during a downturn, when ARRs and occupancy rates are
on the decline, the contribution from room revenue declines to around 50 per cent.
F&B contribution
F&B revenues include income from room service, restaurant and banqueting activity. Banqueting
accounts for a significant portion of total F&B revenue. Revenues from room service are directly
dependent on room occupancy. F&B margins (excluding banqueting facilities) are generally at 45-50 per
cent, which are very low as compared to room margins, thereby leading to lower overall margins in case
of hotels focusing on F&B. The contribution from F&B usually ranges between 30-35 per cent of the total
revenues. During a downturn, a strong F&B business helps soften the impact of lower room revenue.
Classification of Hotels
1. Star classification
Starred hotels: These include hotels classified by the ministry of tourism into heritage hotels, 5-D, 5-star, 4-
star, 3-star, 2-star and 1-star. Heritage hotels comprise old palaces and havelis, which have been
converted into hotels. The ministry of tourism reclassifies hotels every 3 years, and is responsible for the
61
SABARI INN LIMITED
classification of 5-D, 5-star and 4-star hotels. The responsibility for the classification of 1-star, 2-star and 3-
star hotels rests with state governments. Heritage and Heritage Classic include residences, havelis,
hunting lodges, forts, palaces built prior to 1950 and 1935, respectively.
Approved (Awaiting classification) hotels: These include hotels that have acquired approval from the
ministry of tourism but have not been classified into any star category.
Licensed units: These comprise hotels that have acquired a license from local municipal authorities to offer
boarding and lodging facilities.
Classification on basis of Segment
Hotel Concepts
Ecotel
An ecotel is a group of inns, hotels, or resorts that define the concept of environmental responsibility
within the hospitality industry. All certified hotels have to pass a detailed inspection and satisfy stringent
criteria designed by Hospitality Valuation Services (HVS) International, the international ecotel-
accreditation agency. The ECOTEL® inspection is based on five separate inspections, each with a three-
tiered Numerical Scoring System. The five inspections correspond with the five globe awards namely
environmental commitment, solid waste management, energy efficiency, water conservation, employee
education and community involvement. Since its establishment in 1994, over 1,100 hotels in over 30
countries have applied for the ecotel certification. However, to date, less than 5 per cent have been
certified.
Resorts
Resorts cater to the leisure needs of a tourist. Usually located at hill stations or seashores, these are places
for relaxation or recreation. Resorts can be further classified into hill resorts, health resorts, beach resorts,
summer resorts and winter resorts.
62
SABARI INN LIMITED
Most resorts located at hill stations have well-defined off and peak season periods. Hence, their revenue
inflows keep fluctuating. Among business destinations, resorts are usually characterised by higher
occupancy rates during weekends as compared with weekdays.
Motels
The word motel (portmanteau of "motor and hotel" or "motorists' hotel") referred initially to a single
building of connected rooms whose doors face a parking lot and/or common area or a series of small
cabins with common parking. In general, motels are located along highways connecting important cities.
The main features distinguishing a motel from a hotel are:
• Adequate parking facilities

• Cottage style accommodation (provided by most motels)
• Short duration of stay.
Floatels
A floatel is a floating hotel or a boat or ship operating as a hotel.
Boutique hotels
Boutique hotels differentiate themselves from larger chain/branded hotels and motels by providing
personalized level accommodation and services / facilities. Boutique hotels are typically unique
properties operated by individuals or companies with a small collection. The typical boutique hotel has
less than 100 guest rooms, limited service, one or no boardroom, and food and beverage is generally
outsourced. Boutique hotels are usually furnished in accordance with a theme, and are characterised by a
high percentage of repeat clientele. Reportedly, there are around 500 boutique hotels worldwide
Service apartments
This concept is slowly gaining ground in the industry. Service apartments mainly target emigrants and
long duration visitors, both business and leisure. These apartments offer all the luxuries of a five-star
hotel, but at far more competitive rates, and in addition, give the “at home” feel. The customer can enjoy
all the comforts of a hotel while simultaneously feeling the personal touch.
With more and more quality-conscious expatriates coming to India and stay for longer durations, 5-star
service apartments have increasingly become the perfect option in terms of price, lifestyle and
convenience. Service apartments are ideal for people who do not have to stay long enough to set up a
home, but also stay long enough to want to live a more normal lifestyle while experiencing the creature
comforts that a 5-star hotel offers.
This is an ideal accommodation even for foreigners who prefer the “home away from home” experience
rather than “cramped” hotel rooms.
Industry Trends
Review: 2009-10 over 2008-09
ORs show a recovery, but Average Room Rates (ARRs) decline

With the increase in Foreign Tourist Arrivals (FTAs), room demand posted a strong year-on-year (y-o-y)
growth of around 30 per cent in the fourth quarter of 2009-10. As a result, ORs increased to reach 70 per
cent levels in the last quarter of 2009-10 as against 65 per cent in the fourth quarter of 2008-09. However,
63
SABARI INN LIMITED
supply additions continued to hamper ARR growth. As a result, ARRs for the key business and leisure
destinations remained flat during the fourth quarter of 2009-10.
Figure 1: India – Foreign tourist arrivals (number) Figure 2: India – Forex earnings (million USD)
700,000 1,600
600,000 1,400
1,200
500,000
1,000
400,000
800
300,000
600
200,000
400
100,000 200
- -
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2008 2009 2010 2008 2009 2010
On an annual basis, despite the recovery in room demand in the latter half of the year, 2009-10 remained
a year of stress for the premium hotel industry. Although, room demand increased by 4 per cent (y-o-y);
ORs declined marginally over 2008-09 levels to 61 per cent. In addition, supply growth of 9 per cent
during the same period forced players to reduce ARRs by 19 per cent, as a consequence of which
RevPARs declined by 23 per cent y-o-y to Rs 4,900.
Figure 3: India- Room demand and RevPAR Figure 4: India- ARR and OR
Room demand (rooms per day) RevPAR (Rs per day) OR (per cent) ARR (Rs per day)
90 16,000
20,000 14,000
80 14,000
18,000
12,000
16,000 70
12,000
14,000 10,000 60
10,000
12,000 8,000 50
10,000 8,000
40
8,000 6,000
6,000
30
6,000 4,000 4,000
20
4,000
2,000 2,000
2,000 10
- - - -
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Room demand: Aug 07 - Jul 08 Room demand: Aug 08 - Jul 09 OR: Aug 07 - Jul 08 OR: Aug 08 - Jul 09
Room demand: Aug 09 - Jul 10 RevPAR: Aug 07 - Jul 08 OR: Aug 09 - Jul 10 ARR: Aug 07 - Jul 08
RevPAR: Aug 08 - Jul 09 RevPAR: Aug 09 - Jul 10 ARR: Aug 08 - Jul 09 ARR: Aug 09 - Jul 10
The business destinations such as Mumbai, NCR and Bengaluru have shown the strongest recovery in
terms of room demand, which saw a 35-40 per cent y-o-y in room demand during the fourth quarter of
2009-10. Other significant business destinations such as Hyderabad, Chennai, Kolkata and Pune also
witnessed an increase in demand, but of a relatively lower scale (around 20 per cent). Buoyed by the
64
SABARI INN LIMITED
increase in FTAs during the fourth quarter, leisure destinations (Goa, Agra and Jaipur) witnessed a 15-20
per cent increase during the same period.
Table 1: India Review and Outlook Summary

India SupplyDemand ARR RevPAR
growth growth growth growth
2003-04 to 2008-09 4.4% 3.7% 14.4% 17.7%
2009-10 9.1% 4.2% -19.2% -22.9%
2009-10 to 2014-15 8.4% 10.5% 2.4% 4.4%
Outlook: 2009-10 to 2014-15
Increasing ORs to drive hotel revenue growth
Driven by increasing FTAs and a recovery in business related travel expenditure over the coming years,
room demand at a pan-India level is projected to grow at a compounded rate of 11 per cent over the next
5 years. Supply additions during the same period will take place at a rate of 8 per cent.
Largely driven by an improvement in ORs; at a pan-India level, RevPARs are expected to grow at a
CAGR of 4 per cent to Rs 6,100 by 2014-15.
Figure 5: India- Room availability, demand and OR Figure 6: India- ARR, OR and RevPAR
Nos. Per cent Rs./day Per cent

50,000 100 12,000 100
10,000
40,000 80 80
8,000
30,000 60 60
6,000
20,000 40 40
4,000
10,000 20 20
2,000
0 0 0 0
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11P
2011-12P
2012-13 P
2013-14 P
2014-15 P
2012-13 P
2013-14 P
2014-15 P
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11P
2011-12P
Room availability (nos) Room demand (nos) ARR (Rs per day) RevPAR (Rs per day)
Occupancy rate (%) Occupancy rate (%)
Over the next 5 years, amongst the business destinations, RevPAR growth of hotels located in Mumbai,
NCR and Bengaluru will be in the range of 4-6 per cent driven by an improvement in occupancy rates.
RevPARs of hotels located in Hyderabad and Ahmedabad are likely to remain flat as a result of large
supply additions.
With increasing foreign tourist arrivals and relatively lower supply additions, hotels located in leisure
destinations like Goa, Agra and Jaipur will see a RevPAR growth of 4-8 per cent over the next 5 years.
65
SABARI INN LIMITED
Profitability of hotels players to improve in 2010-11
In 2010-11, hotel revenues are expected to grow at 15-20 per cent after two years of decline. This increase
will largely be driven by an expected improvement in ORs. Employee costs are expected to rise
marginally to 23-25 per cent of sales, as the demand for hotel graduates, fuelled by large supply additions
across destinations, is likely to exceed the existing supply. As a result of this shortage, hoteliers are
expected increase employee compensation in order to retain existing staff and improve recruitment.
CRISIL Research estimates that due to improving sales and higher ORs, operating margins will to
improve y-o-y to 30-35 per cent of sales.
66
SABARI INN LIMITED
BUSINESS OVERVIEW
The Company is a part of Sabari Group which has interest in Hospitality, Retail and Real Estate
Development. The Company believesbelieve in the tradition of providing corporate hospitality, quality
accommodation and business related services at affordable prices. The Company operates and manages
hotels in the states of Tamil Nadu
adu and Karnataka. Sabari Nest Inn Pvt. Ltd., owns three budget hotel
properties in Chennai, Coimbatore and Bangalore which are operated by the Company under long term
lease arrangement. Its associate Company, Sabari Supermarkets Pvt. Ltd. runs the supermarket business
under the brand name of “Nilgiris” on franchise business model at three locations in Chennai
Chennai. Sabari
Realtors Pvt. Ltd., another
her associate company in which ICICI Prudential Asset Management Company
Limited; Portfolio Managers on behalf of its clients and India Opportunity Real Estate Fund has
substantial equity investment, is implementing
implementing under a joint development arrangement a residential cum
commercial complex of about 10,00,000 sq.ft near OMR Road, Chennai. Sabari Foundations Pvt. Ltd.
Ltd., also
an associate company is implementing a commercial complex of about 2,00,000 sq. ft at centre o
of the city
of Chennai under joint development arrangement. The broad structure of the group can be summarized
as under:
Hospitality
Sabari
Group
Real Estate
Retail
Development
Real Estate Retail

Hospitality Development
Sabari Sabari
Sabari Inn Realtors Pvt. Supermarket
Ltd. Ltd. Pvt. Ltd.
Sabari
Sabari Nest Foundations
Inn Pvt. Ltd. Pvt. Ltd.
67
SABARI INN LIMITED
The Company operates and manages chain of hotels in Chennai, Bangalore, Coimbatore and Kodaikanal
in the states of Tamil Nadu and Karnataka. The Company believes that they are one of the “Value for
Money” hotels which laid its foundation in Chennai and has expanded its footprints to Kodaikanaal,
Coimbatore and Bangalore. The core strength of the Company lies in offering quality care and comfort to
the guests at competitive prices.
Presently, the Company owns and manages a total of about 377 rooms. The Company has one 4 STAR
hotel, one 3 STAR hotel in Chennai and one 3 STAR resort in Kodaikanal under the brands “Quality Inn”
and “Quality Hotel”. The company has made the soft launch for its 3 STAR hotel at Coimbatore during
November 2010. The commercial operation is expected by December 15, 2010. The Company also
manages three budget hotels at Bangalore, Chennai and Coimbatore taken on lease from its associate
company, Sabari Nest Inn Private Limited. The Company has recently entered into a long term lease
agreement for operating “Mark Boulevard” hotel in Bangalore. The hotels operated by the Company are
targeted to cater to different customer segments. The Company also operates a convention centre having
two banquet hall facilities, adjacent to the 4 STAR hotel at T. Nagar, Chennai. This convention centre has
been taken on lease from Sabari Supermarkets Pvt. Ltd.
The Company is expanding its presence in Karnataka by constructing a new hotel at Bangalore. The
revenue break up from the main operations of the Company during last 3 years are as under:
Revenue Composition of main operations
F.Y. 2007-08 F.Y.2008-09 F.Y.2009-10

Particulars
Amount Percentage Amount Percentage Amount Percentage
(` in lacs) (%) (` in lacs) (%) (` in lacs) (%)
Room
781.69 42.76 1266.25 44.30 2079.87 50.16
Food &
beverages 863.57 47.24 1276.63 44.67 1897.37 45.75
Other
Services 129.39 7.08 36.13 1.26 59.32 1.43
Other
Income 53.41 2.92 279.22 9.77 110.17 2.66
Total 1828.05 100.00 2579.01 100.00 4146.83 100.00
Revenue earned from owned Hotels & Resort in F.Y.2009-10 (Rs in lacs)
Name of Hotel Room Revenue Food & Other Other Total
Quality Inn Sabari, Chennai 819.08 957.73 43.08 93.94 1913.83
Quality Hotel Sabari Classic, 751.63 685.21 14.17 4.29 1455.30
Chennai
Quality Inn Sabari Resorts, 84.96 27.47 0.62 0.92 113.97
Kodaikanal
Total 1655.67 1670.41 57.87 99.15 3483.10
68
SABARI INN LIMITED
Revenue earned from Leased Hotels in F.Y.2009

F.Y.2009-10 (Rs in lacs)
Name of Hotel Room Revenue Food & Other Other Total
Sabari’s Nest, Bangalore 53.23 - 0.10 0.50 53.83
Sabari’s Nest, Coimbatore 168.87 219.59 - 6.48 394.94
Sabari’s Nest, Chennai 202.12 7.38 1.34 4.14 214.98
Total 424.22 226.97 1.44 11.12 663.75
OPERATIONAL DETAILS OF HOTELS AND RESORTS
Details of hotels owned by the company
1. Quality Inn Sabari
Quality Inn Sabari located at #29, Thirumalai

Pillai Road, T. Nagar, Chennai.. This is the flagship
hotel of the Company that commenced its
operation
tion on October 15, 2002. The company has
positioned this hotel as a premium business stay
hotel. Quality Inn Sabari is presently accorded
with 4 Star Deluxe Hotel by HRACC.
Rooms
This hotel has 72 rooms comprising of Executive Rooms, Deluxe Rooms and Suite Rooms with single
and twin sharing basis.
Sr. Type of Rooms No. of Rooms

No
1 Executive Rooms 54
2 Deluxe Rooms 17
3 Suite Rooms 1
Total 72
Food and Beverages
Rendezvous and Cascade are the two in house restaurants serving gastronomic deli
delights
ghts and gourmet
cuisine to the guests of Hotel. It also has ZEROo - The Bar.
Other Facilities
The hotel including the convention centre adjacent to the hotel, has five conference and banqueting
facilities with total
tal area of around 7000 sq. ft approx. The conference
ence and banquet facilities cater the
needs of corporate houses,, functions, conferences, meeting, social parties and other events.
Centralized A/c in all Rooms, Business Center, 24 hrs Room Service, On call doctor, In
In-house Travels,
LCD TV’s in all rooms, Wi-Fi Fi Internet, In-house
In house Laundry, ISD Enabled are the other facilities offered
to the guest.
69
SABARI INN LIMITED
Location Advantages
o Located in the heart of Chennai’s shopping Paradise at T Nagar and close to major business hub
o 10 minutes drive to US Consulate / Spe
Spencer Plaza
o 12 kms from Chennai International and Domestic Airports
o 6 kms from Chennai Central / Egmore Railway station
2. Quality Hotel Sabari Classic
Quality Hotel Sabari Classic located at #33,

Rajiv Gandhi Salai (OMR), Navalur, Chennai
Chennai.
This hotel commencedenced its operation on
September 15, 2007. This hotel was started
with the objective to provide visibility of
Sabari brand amongst the large corporates
and also tap the IT corridor of OMR. Quality
Hotel Sabari Classic is presently accorded
with 3 Star Deluxe
xe Hotel by HRACC.
Rooms
This hotel has 84 Executive and Deluxe Rooms classified as:

No
1 Executive Rooms 73
2 Deluxe Rooms 11
Total Rooms 84
Food and Beverages
The in-house Restaurant - “The Bytes” serves tra

traditional
ditional and international cuisine to the guests. It also
has ZEROo - The Bar.
Other Facilities
The hotel has 3 conference and banqueting facilities with total area of 3050 sq.ft approx to cater the
needs of corporate houses in the vicinity. Centralized A/c in all Rooms, Business Centre, 24 hrs
Room Service, On call doctor, In--house Travels, LCD TV’s in all rooms, Wi-Fi Fi Internet, In-house
In
Laundry, ISD Enabled in all rooms
rooms. The swimming pool and SPA is under construction and is
expected to get ready by November 2011.
2011..
Location Advantages
o Located at heart of the IT corridor of Chennai – the Old Mahabalipuram Road, Chennai.
o Major
ajor IT companies and Corporate companies with
within 6 kms proximity
o 40 minutes drive from Chennai International and Domestic Airport
70
SABARI INN LIMITED
3. Quality Inn Sabari Resorts
Quality Inn Sabari Resorts is the first

international brand resort in Kodaikanal,
which is one of the most popular hill
resorts in South India. It is a hill station that
stands amidst sylvan beauty on the
southern crest of the upper Palani Hills
near Madurai in Tamilnadu. The resort
commenced its operation on 15th February,
2009. This resort caters to international
travellers, dignitaries, business and leisure
travellers.
Rooms
This resort has 40 Standard and Deluxe Rooms classified as:
Sr. No Type of Rooms No. of Rooms

1 Standard Room 36
2 Deluxe Room 4
Total Rooms 40
Food and Beverages
“Rendezvous” the all day dining restaurant specializes in Indian, continental and Pan Asian delights
with elaborate menu and lavish buffet.
Other Facilities
The resort has 2 banquet rooms with total area of 1400 sq ft. approx and a convention centre of 1680
sq. ft. for organizing conferences, business meets and events.
Location Advantages
o Kodaikanal is major tourist attraction for domestic as well as international tourist.
o 2 kms from Kodaikanal Bus Stand.
o 2 hours drive from Madurai Airport
4. Park Plaza – Coimbatore
The Company has built a 3 star hotel (in

principle approval received for 3 star
classification and final accreditation awaited)
at Coimbatore with total capacity of 110
rooms. The soft launch of the hotel was
made on November 20, 2010 and the hotel is
slated to commence commercial operations
by December 15, 2010. The hotel is
surrounded by Corporate Offices of all major
Textile Industries. The Company has
71
SABARI INN LIMITED
positioned this hotel as a premium business

class hotel. The hotel will be branded as
“Park Plaza”, a brand owned by Carlson
Group.
The Company has entered into a Service Agreement with Carslon Hotel Asia Pacific Pty. Ltd.
(“Carslon”) by which Carslon has agreed to provide certain services to the Company in respect of the
management of the hotel. Carlson would provide technical and pre-opening services for the “PARK
PLAZA” branded Hotel. For further details relating to the agreement please refer paragraph title
“History and Corporate Structure of the company” on page no. 89
Rooms
This hotel has 110 rooms classified as under:

No
1 Standard Rooms 92
2 Deluxe Rooms 14
3 Suites 4
Total Rooms 110
Food and Beverages
The hotel will have a restaurant that serves traditional and international cuisine to the guests. It will
also have a Bar.
Other Facilities
The hotel will have 4 conference and banqueting facilities with total area of 5800 sq.ft approx. The
hotel has centralized A/c rooms, Business Centre, 24 hrs Room Service, On call doctor, In-house
Travels, LCD TV’s in all rooms, Wi-Fi Internet, In-house Laundry and ISD Enabled in all rooms. The
hotel will also have swimming pool and a pool garden.
Location Advantages
o Located at National Highway of South India’s Cotton city of Coimbatore.

o Surrounded by the all major Corporate Houses of Coimbatore and the Textile Industries.
o Located on a major arterial road, it is at 2kms from Coimbatore Airport, at 10kms from
Coimbatore Bus stand and Railway Station
o Located at 1hr drive from Tirupur, the Garment Hub of South India.
72
SABARI INN LIMITED
Details of hotels taken on long term lease basis
1. The Mark Boulevard - Bangalore
The Mark Boulevard hotel operated by us is located

at # 23, EPIP Zone, Whitefield, Bangalore and has
been positioned as a business boutique hotel for the
business travellers. The Company has taken on lease
the hotel for a period of 10 years. The Company has
commenced the operations of the hotel w.e.f.
01/09/2010. For further details relating to the lease
agreement please refer paragraph title “Properties”
on page no. 79
Rooms
The Mark Boulevard Hotel comprises of 76 exquisitely designed and furnished rooms including 15
extra-large luxury club rooms
Food and Beverages
“Fusion Express,” the multi cuisine restaurants offers exotic fine dining experience to guests whereas
“Checkered Bar” serves an array of cocktails and beverages.
Other Facilities
This Hotel has a Board Room and Banquet Halls that can accommodate from 6 to 125 guests. Other
facilities include a fully equipped Business Centre with a secretarial service and 24-hour internet
connectivity, state-of-the-art gym.
Location Advantages
The Hotel is 4 kms from the International Tech Park, the IT Hub of Bangalore and 12 kms from the
central business district of the city, MG Road. From the Whitefield area, the new Bangalore
International Airport in Devanahalli is 55 kms away, approximately a 2-3 hour drive.
2. Sabari’s Nest
The Company operates three budget hotels located at Bangalore, Chennai and Coimbatore that have
been taken on long term lease from the associate company “Sabari Nest Inn Pvt. Ltd.” for a period of
30 years from the date of the respective agreement. These hotels are located at buzzing areas of
respective location that provide accommodation facility at affordable rates. For further details
relating to the lease agreement please refer paragraph title “Properties” on page no. 79
73
SABARI INN LIMITED
Rooms
The total rooms at different location are as below:
Sr. No Sabari’s Nest Hotels No. of Rooms

1 Bangalore 23
2 Chennai 44
3 Coimbatore 38
Food and Beverages
The in-house restaurants of these budget hotels offer quality food and beverages.
Other Facilities
These hotels have centralized A/c in all Rooms, 24 hrs Room Service, On call doctor, In-house Travels,
TV’s in all rooms, Wi-Fi Internet, In-house Laundry, ISD Enabled in all rooms
COMPETITIVE STRENGTH
Strong Value Proposition: The Company believes that they are one of the “Value for Money” hotel chain
which laid its foundation in Chennai and has expanded its footprints to Kodaikanaal, Coimbatore and
Bangalore. The core strength of the Company lies in offering quality care and comfort to the guests at
competitive prices.
Strong Management Team: The Company has a complete professional management set up with
professionals having rich experience in their respective field of operations like marketing, finance, human
resource etc. The promoter, Mr. K.R.V. Ramani has substantial experience in the hotel industry. The
Company’s management has been able to visualize the dynamic changes affecting the industry and strike
a balance between the cost and the objective of delivering quality service.
Locational Advantage: The existing hotels of the Company are located at prime locations and provide
easy accessibility to airport, railways and commercial/business centres. A few of the hotels are located in
the heart of cities providing easy access to shopping hub and other recreational facilities in the city.
Presence in different Price Segment: The Company believes that the global meltdown of economy in
2008 has made business travellers and guest more price sensitive and selective. The Company is present
across different price categories of hotels - premium to economy segment. This enables us to have access
to different categories of customers and provide a complete suite of offerings targeted at top, middle and
junior executives of corporate clients. The following indicates the different star classification for the
Company’s hotels:
Name of Hotel HRACC Classification
Quality Inn Sabari, Chennai 4 STAR
Quality Hotel Sabari Classic, Chennai 3 STAR
Quality Inn Sabari Resorts, Kodaikanal 3 STAR
Sabari’s Nest, Bangalore N.A.
Sabari’s Nest, Coimbatore N.A.
Sabari’s Nest, Chennai N.A.
Mark Boulevard, Bangalore N.A.
74
SABARI INN LIMITED
Affiliation with Global Brand: The Company has franchisee and marketing affiliation with Choice
Group & Carlson Group. These groups are well known around the globe in hospitality industry and own
multi brands in the hospitality segment. The brand of the Company “Sabari” is suffixed with the “Quality
Inn/Quality Hotel” brand at different hotels wherein the tie ups are with the Choice Group. This
provides higher brand visibility and easy acceptability amongst the potential guests and business
travelers. It also strengthens the commitment towards providing quality service.
FINANCIAL PERFORMANCE
Financial Performance of the Company in the last five years reflected in terms of the growth in the
turnover of the Company and the Profit After Tax.
Turnover
Turnover (Rs. In Lacs)

4500
4000
3500
3000
2500
2000
1500
1000
500
0
2005-06 2006-07 2007-08 2008-09 2009-10
Profit After Tax
PAT (Rs. In Lacs)

500
400
300
200
100
0
2005-06 2006-07 2007-08 2008-09 2009-10
75
SABARI INN LIMITED
BUSINESS STRATEGY
Expanding Presence:
The Company intends to increase the presence at major business cities and promising mid market
segment cities depending on the market analysis comprising of demography, lifestyle, footfall of
domestic and international travellers and other related factors. In line with this, the Company has
presently identified Pune and Hyderabad wherein the Company proposes to enter into long term lease.
The long term objective is to have Pan India presence mid market segment. The Company’s experience in
operating business hotels further motivates to expand in this segment. However, the company shall also
evaluate the opportunities present in other categories of hotels like heritage, leisure, etc.
Collaboration with Corporates:
The globalization and shrinkage of world has increased the travelling of business executives domestically
and internationally. The Company shall focus on collaborations and tie ups with corporates to ensure
higher occupancy levels and steady business volume.
Franchisee Tie Ups: Presently, the Company has arrangement with Choice Hotels International using
their brand name of “Quality” for few of its hotels. The Company feels that tie up with global brand has
increased the brand image and acceptability. The Company has also entered into a Service Agreement
with Carslon Hotel Asia Pacific Pty. Ltd. (“Carslon”) by which Carslon has agreed to provide certain
services to the Company in respect of the Coimbatore hotel. Carlson would provide technical and pre-
opening services for the “PARK PLAZA” branded Hotel. The Company will explore opportunities of tie
up with other global hospitality brands for the upcoming projects for sustained superior brand image.
Combination of ownership and leased properties: Out of the hotels operated and run by us, the
Company owns 3 hotels and 4 hotels are taken on long term lease basis. In line with asset light strategy,
the Company would look at entering into lease agreement with property owners which would reduce the
initial expenditure towards acquisition and development of properties. The acquisition of properties on
lease basis would enable the Company to establish a quick foothold with minimal lead time.
OCCUPANCY LEVEL OF THE HOTELS AND RESORT
Name of Hotel 2007-08(%) 2008-09 (%) 2009-10

Quality Inn Sabari, Chennai 80.00% 81.00% 77.00%
Quality Hotel Sabari Classic, Chennai 44.00% 51.00% 84.00%
Quality Inn Sabari Resorts, Kodaikanal N.A. N.A. 29.00%
Sabari Nest – Bangalore N.A. N.A. 42.00%
Sabari’s Nest, Coimbatore N.A. 46.00% 66.00%
Sabari’s Nest, Chennai N.A. 63.00% 69.00%
Estimated & Projected occupancy levels

2010-11(%) 2011-12(%) 2012-13(%)
Name of Hotel
Estimated Projected Projected
Quality Inn Sabari, Chennai
85.00% 90.00% 90.00%
85.00% 85.00% 90.00%
Quality Hotel Sabari Classic,
Chennai
76
SABARI INN LIMITED
2010-11(%) 2011-12(%) 2012-13(%)

Name of Hotel
Estimated Projected Projected
Quality Inn Sabari Resorts, Kodaikanal 55.00% 60.00% 65.00%
Park Plaza - Coimbatore 50.00% 70.00% 85.00%
Bangalore Hotel N.A. 50.00% 65.00%
Sabari Nest – Bangalore 50.00% 55.00% 60.00%
Sabari’s Nest, Coimbatore 75.00% 80.00% 85.00%
Sabari’s Nest, Chennai 75.00% 80.00% 85.00%
The Mark Boulevard, Bangalore 50.00% 75.00% 80.00%
EQUIPMENTS
Presently the Company has Kitchen equipments, Restaurant & Bar equipments, Laundry equipments, air-
conditioning plant, elevators, hot water boilers and steam boiler system, hydro pneumatic plant, water
treatment plant, sewerage treatment plant, fire fighting equipments, electrical equipments and power
back-up systems and other movable materials. For details of equipments to be purchased for new hotels,
please refer objects of issue on page no.”36”
INFRASTRUCTURE FACILITIES AND UTILITIES
Registered Office:
The registered office of the Company is located at 29, Thirumalai Pillai Road, T.Nagar, Chennai – 600 017.
The property wherein the registered office of the Company is situated is owned by the Company.
Corporate Office:
The corporate office of the Company is located at 23/11, second main road, Raja Annamalaipuram,
Chennai – 600 028. The premises of the corporate office has been taken on lease from Mr. M.V. Chandran
for a period of 7 years from 01.01.2008.
Utilities
· Power: The power requirement for hotels and resorts is catered through respective state electricity
boards. The company has also made provision for the power back by installing DG Sets for
continuous and smooth supply of power.
· Water: The Company has requisite water connections from local municipal bodies at the hotels to
cater the water requirements. The Company believes in saving the water resources and have
displayed small placard in each room to prevent the wastage of resources.
Services
The Company is exclusively into services of hospitality, food and beverages and also undertakes large
outdoor catering services.
CLIENTELE
The efforts, perseverance and hospitality of the management have helped the Company to earn and
retain large corporates as a part of clientele list. This includes Indian Oil Corporation, Bharat Heavy
Electricals Ltd., Tata Iron & Steel Co. Ltd., Maruti Suzuki, SBI Life Insurance Co. Ltd., Sun
Pharmaceuticals Industries Ltd., Renault Nissan Automotive Industries, Polaris, Hexaware, FL Smith &
Co., Infosys, Cognizant, Sree Sakthi Paper Mills Limited, General Motors, etc.
77
SABARI INN LIMITED
COLLABORATIONS
The details of the collaborations entered by the company are as follows:
Name of the Services Date of Nature/Purpose of Agreement

Company Offered/Type of MOU/Agreement
Business
Choice Hospitality Hospitality Sector 5th July, 2007
Franchisee agreement for use
India Limited
of Brand Name “Quality Inn”
(Master Franchisee
owned by Choice group.
of Choice Hotels
International Inc)
Marketing Agreement
Carlson Hotels Hospitality Sector 07th July, 2010 & 24th Hotel Development Services
Asia Pacific Pty August, 2010 Agreement & Hotel
Ltd. Management Services
Agreement
For details of these agreements, please refer to page no. 92
PERSONNEL
The company has a total employee strength of 493 employees as on September 30, 2010. The break up of
the employees as per the functional areas is categorized below:
Sr. Department No. of employees
No
1. Front Office
47
2. Food & Beverage Production & Services
85
3. Food & beverage Service 81
4. Kitchen Stewarding 35
5. House Keeping 89
6. Engineering 43
7. Travel Assistance 19
8. Sales and Marketing 14
9. Human Resource 7
10. Finance and Accounts 32
11. Purchase 7
12. Security 21
13. Laundry 8
14. EDP/Systems 5
15. Total 493
The above strength includes 47 employees recruited for the Park Plaza Coimabtore Hotel. Further, about
115 more employees are expected to be recruited for the the Park Plaza Coimabatore. For the Bangalore
Hotel Company proposes to recruit about 160 employees at appropriate time.
78
SABARI INN LIMITED
PROPERTY TAKEN ON LEASE

Sr Location Address Area Lessor Amount Tenure
No.
1. Chennai No. 103, Dr. 24,579 sq. ft Sabari Rs 9.00 lacs per month with 30 years
Radhakrishnan Nest Inn escalation of 15% of the last commencin
Salai, Myalapore, Private rent paid at the completion g from
Chennai – 600 004. Limited of every three years of lease 15/12/2008
Refundable Security
deposit of Rs.1.80 crore
2. Coimbator 739- A, Avinashi 36,158 sq. ft. Sabari Rs.10.00 lacs per month 30 years
e Road, Coimbatore Nest Inn with escalation of 15% of from
– 641 108 Private the last rent paid at the 15/12/2008
Limited completion of every three
years of lease
Refundable Security
deposit of Rs.200.00 lacs
3. Bangalore No. 171, Brigade 20,950 sq. ft Sabari Rs.6.00 lacs per month with 30 years
Road, Bangalore Nest Inn escalation of 15% of the last from
Private rent paid at the completion 02/01/2009
Limited of every three years of lease
Refundable Security
deposit of Rs.120.00 lacs
4. Chennai Old No.15, New 6127 sq. ft Sabari Rs.1.50 lacs per month with 12 years
No.29, Chinniah Super escalation of 15% of the last from
Street, T Nagar, market rent paid at the completion 01/12/2007
Chennai 600 017 Pvt. Ltd. of every three years of lease
Security deposit of Rs.22.50

lacs
5. Chennai Office premises at 3000 sq. ft Mr. Rs.0.80 lacs per month 7 years
First Floor at Door M.V.Chan from
No.11, New Door dran 1.1.2008 to 31.12.2009 1.1.2008
No.23, II Main
Road, R A Puram, 12.5% increase for the
Chennai 600 028 second term of 3 years from
1.1.2010 to 31.12.2012.
12.5% increase for the third
term of 2 years from
1.1.2013 to 31.12.2014
Security deposit of Rs.10.00

lacs
6. Bangalore Kundalahalli Land: Prism (i)From 22nd August 2010 10 years

village, K.R.Puram Admeasuring 16 Properties till 31st August 2010 - from
Holi, Bangalore 22/08/2010
79
SABARI INN LIMITED
East guntas (i.e. 409, Rs.1,64,094/-

17,424 sq.ft) Christhur being the land rent for the
ayan plot.
Building: Building,
Built up area - Mount (ii)From 1st September 2010,
48,972 sq.ft. Road Land Rent to be escalated at
including of Coonoor the rate of 5% and
basement, 643 010. thereafter @5% upon the
ground, four (Sub- expiry of every 12 months
upper floors and Lessor)
terrace floor & (iii)Hotel rent -
Rs.6,75,000/- per month
Courtyard during the first five years of
Hotels the term and Rs. 7,42,000/-
Kitchen block and per month during the last
and the access Resorts five years of the term.
path - 5,208 sq. Private
ft. Ltd. If the leases of the building
854, 10th is renewed for a further 5
Main years, monthly rent payable
in respect of the hotel shall
Road
be Rs.8,16,000/-
4th Cross
HAL 2nd
Stage
Indiranag
ar
Bangalore
(“Courtya
rd”)
80
SABARI INN LIMITED
FREEHOLD PROPERTY
Sr. Location Address Area Purpose

No
1. No.29, Thirumalai Pillai Road, T Nagar 4.64 grounds

Chennai – 17 (11,136 Sq. ft)
2. D No. 18, Thirumalai Pillai Road, T.Nagar, 4085 sq. ft
Chennai 600 017,
Chennai
3. D No. 18, Thirumalai Pillai Road, T. Nagar, 688 Sq.ft. Quality Inn Hotel
Chennai – 600 017
4. No. 63/3, situated at 33, Rajiv Gandhi 85 Cents
Salai, Navalur Village- 603 103,
Kanchipuram District,
5. Kodaikanal Ward C, Block 17, Door No. (164 A3) – 4/9 76 cents Hotel under the
and (164-A4)- 4/8, Sivanadi Road, name of Quality
Kodaikanal Village, Kodaikanal Taluk, Inn Sabari Resorts
Dindigul District
6. Coimbatore Survey no. 114/2C Part, 116/1B (Part), 1 acre Being developed
116/2A2 (Part) situate at Mylampatti,
Chinniampalayam, Palladam Taluka, into a
Coimbatore District.
hotel project
7. Munnar Land comprised in Survey No. 224, Survey 10 acres & 77 cents Presently Vacant
No. 34 situated in Revenue No.1, (4.3581 hectares) Land
Chinnakanal Village
8. Bangalore Khata No. 303/115 to 117 in Survey No. 1 acre & 6 guntas Being developed
115, 116 and 117 (earlier bearing Survey (50,094 sq.ft) into a
No. 73) situated at, Kannamangala Village, hotel project
Devanahalli Taluk, Bangalore Rural
District.
9. Survey No.49, Hissa No.3, situate, lying 25.75 ares out of 29
and being at Village, Taluka Mulshi, ares
District Pune, now situated within the
administrative limits of Pimpri Chinchwad
Presently Vacant
Municipal Corporation
Pune Land
10. Survey No. 49, Hissa No.3, situate, lying 3.25 ares, out of
and being at Village, Taluka Mulshi, 29 ares
District Pune, now situated within the
administrative limits of PImpri Chinchwad
Municipal Corporation
81
SABARI INN LIMITED
Sr. Location Address Area Purpose

No
11. Survey No. 48, Hissa No. 4 of Village 17.25 ares out of
Wakad, Taluka Mulshi, District Pune, now land admeasuring
situated within the administrative limits of 46 ares
Pimpri Chinchwad Municipal Corporation
12. Portion of land on the eastern side out of 10.20 ares out of
land bearing survey no. 42, Hissa No. 1, land admeasuring
situate, lying and being at Village Wakad, 46 ares.
Taluka Mulshi, District Pune, now situated
within the administrative limits of Pimpri
Chinchwad Municipal Corporation
INTELLECTUAL PROPERTY RIGHTS
The logo used by the company is owned by the promoter – Mr. K.R.V. Ramani, who has applied
for the registration of logo with trademark authority at Chennai. The said application has been accepted
and the logo has been advertised in the trademarks journal and the matter is pending for issue of
registration certificate. Presently no consideration / fee in any manner is being paid by the company for
the use of the logo.
EXPORT OBLIGATIONS
The Company has imported some of its kitchen equipments, furniture and fixtures, decorative items etc
under EPCG scheme. As per the EPCG scheme, the obligation has to be discharged within a period of 8
years from the date of issue of licence. The outstanding export obligation as on 31/03/2010 of the
company is ` 2297.96 lacs. The export obligation of the company is discharged by way of foreign
exchange earnings from international travellers.
COMPETITION
The company primarily competes with the other hotels operating at the locations wherein it has a
presence. The company also may face competition from the other existing players in the locations
wherein it proposes to set up hotels / acquire hotels on lease basis. The company believes that the
positioning, marketing and sales strategy, quality of services offered, brand image etc will insulate to a
large extent from the competition.
MARKETING AND SALES STRATEGY
The company opines that marketing and sales strategy plays pivotal role in attracting fist time clients.
The marketing team of the company identifies the target market and accordingly designs strategies to
attract the customers. The company has sales force in each of its hotels and also a centralized marketing
team to co-ordinate the efforts of the teams at different hotels. The focus of the marketing team is to
improve the occupancy levels at the hotels at an optimized Average Room Rent (ARR). The team also
82
SABARI INN LIMITED
focuses on banquet orders and large outdoor catering contracts, which is also a major revenue earner to
the Company. The Company also provides online reservation facilities at its owned hotels.
The company also stresses on the Customer Relationship Management process and venture into
marketing campaigns such as direct mailers, telemarketing, web marketing advertisement in media, etc.
to promote the hotels of the Company and to get repeat customers.
To make the brand of the Company visible amongst the feeders and the customers, the company
organizes road shows for the travel agents, conducts food festivals, theme lunches and dinners. The
company also participates in seminars and meets, does tie up with travel portals such as Make My Trip,
Yatra, expedia.com, travelguru.com etc.
The company has also participated in travel tourism fair organized by Government of Tamilnadu held in
the year 2009.
83
SABARI INN LIMITED
KEY INDUSTRY REGULATIONS AND POLICIES
The following description is a summary of the relevant regulations and policies as prescribed by the central / state
governments that are applicable to the Company in India. The information detailed in this chapter has been obtained
from publications available in the public domain. The regulations set out below are not exhaustive, and are only
intended to provide general information to the investors and are neither designed nor intended to be a substitute for
professional legal advice.
Legislations related to Hotel Industry
Tourism Policy of the Government of India
In order to develop tourism in India in a systematic manner, position it as a major engine of economic
growth and harness its direct and multiplier effects for employment and poverty eradication in an
environmentally sustainable manner, the National Tourism Policy was formulated in the year 2002 (the
“Tourism Policy”). Broadly, the Tourism Policy attempts to:-
• Position tourism as a major engine of economic growth;

• Harness the direct and multiplier effects of tourism for employment generation, economic development
and providing impetus to rural tourism;
• Focus on domestic tourism as a major driver of tourism growth.
• Position India as a global brand to take advantage of the burgeoning global travel trade and the vast
untapped potential of India as a destination;
• Acknowledge the critical role of the private sector with the government working as a pro-active
facilitator and catalyst;
• Create and develop integrated tourism circuits based on India’s unique civilization, heritage, and
culture in partnership with the state governments, private sector and other agencies; and
• Ensure that the tourist to India gets physically invigorated, mentally rejuvenated, culturally enriched,
spiritually elevated and “feels India from within”.
Classification of Hotels
Under the Tourism Policy of the Government of India, hotels may, at their option, obtain classification in
a star category by applying to the Ministry of Tourism, Government of India in the following categories:
Five Star Deluxe, Five Star, Four Star, and Three Star. The Hotel and Restaurant Approval and
Classification Committee inspect and assesses the hotels based on various criteria including the quality of
facilities and services provided at the hotel. Upon the hotel obtaining the qualifying mark prescribed for a
particular status of star classification, and based on a recommendation of the Hotel and Restaurant
Approval and Classification Committee, the hotel is given the relevant star classification by the Ministry
of Tourism, Government of India. Various approved projects are eligible for various concessions and
facilities that are announced by the Government from time to time besides, getting worldwide publicity
through the India Tourism offices located in India and abroad.
Registration of Tourist Trade Act
Every state in India has in general a Registration of Tourist Trade Act (the “Tourist Trade Act”). The
Tourist Trade Act requires all hotels, travel agents, tour operators, tourist guides, tourist taxi operators
and dealers of notified articles and other persons engaged in tourist activities in each particular state to
register themselves under the Tourist Trade Act. Under the Tourist Trade Act of each state, some officers
84
SABARI INN LIMITED
of the Tourism Department have been vested with magisterial powers, including the power of
compounding in case of cheating, overcharging, harassment, pestering, touting, etc. faced by tourists.
The Prevention of Food Adulteration Act, 1954
The Prevention of Food Adulteration Act is a Central legislation and provides provisions for the
prevention of adulteration of food. The Gujarat State Government has adopted the Central Act which
requires any person/ entity manufacturing / storing / selling food articles to be registered under the
provisions of the Act.
The Companies Act, 1956
The Act deals with laws relating to companies and certain other associations. It was enacted by the
parliament in 1956. The Companies Act primarily regulates the formation, financing, functioning and
winding up of companies. The Act prescribes regulatory mechanism regarding all relevant aspects
including organizational, financial and managerial aspects of companies. Regulation of the financial and
management aspects constitutes the main focus of the Act. In the functioning of the corporate sector,
although freedom of companies is important, protection of the investors and shareholders, on whose
funds they flourish, is equally important. The Companies Act plays the balancing role between these two
competing factors, namely, management autonomy and investor protection.
Regulation of Foreign Investment in India
Foreign investment in India is primarily governed by the provisions of the Foreign Exchange
Management Act, 1999 (“FEMA”) and the rules and regulations promulgated there under. The RBI, in
exercise of its powers under FEMA, has notified the Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India) Regulations, 2000 (“FEMA Regulations”) which prohibit,
restrict and regulate, transfer or issue of securities, to a person resident outside India. Pursuant to the
FEMA Regulations, no prior consent or approval is required from the RBI for foreign direct investment
under the “automatic route” within the specified sectoral caps prescribed for various industrial sectors. In
respect of all industries not specified under the automatic route, and in respect of investments in excess of
the specified sectoral limits under the automatic route, approval for such investment may be required
from the FIPB and/or the RBI. Further, FIIs may purchase shares and convertible debentures of an Indian
company under the portfolio investment scheme through registered brokers on recognized stock
exchanges in India. Regulation 1 (4) of Schedule II of the FEMA Regulations provides that the total
holding by each FII or SEBI approved sub-account of an FII shall not exceed 10% of the total paid-up
equity capital of an Indian company or 10% of the paid-up value of each series of convertible debentures
issued by an Indian company and the total holdings of all FIIs and sub accounts of FIIs added together
shall not exceed 24% of the paid-up equity capital or paid-up value of each series of convertible
debentures. However, this limit of 24% may be increased up to the statutory ceiling as applicable, by the
Indian company concerned passing a resolution by its board of directors followed by the passing of a
special resolution to the same effect by its shareholders.
Environment (Protection) Act, 1986
The Environment (Protection) Act, 1986 was enacted as a general legislation to safeguard the
environment from all sources of pollution by enabling coordination of the activities of the various
regulatory agencies concerned, to enable creation of an authority with powers for environmental
protection, regulation of discharge of environmental pollutants etc. The purpose of the Act is to act as an
"umbrella" legislation designed to provide a frame work for Central government co-ordination of the
activities of various central and state authorities established under previous laws, such as Water Act &
85
SABARI INN LIMITED
Air Act. It includes water, air and land and the inter-relationships which exist among water, air and land,
and human beings and other living creatures, plants, micro-organisms and property.
Income-tax Act, 1961
The Income Tax Act, 1961 deals with the taxation of individuals, corporate, partnership firms and others.
As per the provisions of this Act the rates at which they are required to pay tax is calculated on the
income declared by them or assessed by the authorities, after availing the deductions and concessions
accorded under the Act. The maintenance of Books of Accounts and relevant supporting documents and
registers are mandatory under the Act. Filing of returns of Income is compulsory for all assesses.
Service Tax
Chapter V of the Finance Act 1994 (as amended), and Chapter V-A of the Finance Act 2003 requires that
where provision of certain listed services, whole taxable services exceeds ` 400,000, a service tax with
respect to the same must be paid. Every person who is liable to pay service tax must register himself for
the same
Central Sales Tax Act (CST)
The main object of this act is to formulate principles for determining (a) when a sale or purchase takes
place in the course of trade or commerce (b) When a sale or purchase takes place outside a State (c) When
a sale or purchase takes place in the course of imports into or export from India, to provide for levy,
collection and distribution of taxes on sales of goods in the course of trade or commerce, to declare certain
goods to be of special importance trade or commerce and specify the restrictions and conditions to which
State laws imposing taxes on sale or purchase of such goods of special importance (called as declared
goods) shall be subject. CST Act imposes the tax on interstate sales and states the principles and
restrictions as per the powers conferred by Constitution.
Standards of Weights and Measures Act, 1976
This legislation and the rules made there under apply to any packaged commodity that is sold or
distributed. It provides for standardization of packages in specified quantities or numbers in which the
manufacturer, packer or distributor shall sell, distribute or deliver some specified commodity to avoid
undue proliferation of weights, measures or number in which such commodities may be packed. Any
person intending to pre-pack or import any commodity for sale, distribution or delivery has to make an
application to the Director of Legal Metrology for registration.
Standards of Weights and Measures Enforcement Act, 1985
The Standards of Weights and Measures Enforcement Act, 1985 regulates the classes of weights and
measures manufactured, sold, distributed, marketed, transferred, repaired or used and the classes of
users of weights and measures. The Act was passed with a view to regulating and modernizing the
standards used in India based on the metric system. The units of weight which are sought to be used in
day to day trade are required to be periodically inspected and certified by the designated authorities
under this act for their accuracy
Value Added Tax (“VAT”)

VAT is a system of multi-point levy on each of the purchases in the supply chain with the facility of set-
off input tax on sales whereby tax is paid at the stage of purchase of goods by a trader and on purchase of
raw materials by a manufacturer. VAT is based on the value addition of goods, and the related VAT
86
SABARI INN LIMITED
liability of the dealer is calculated by deducting input tax credit for tax collected on the sales during a
particular period. VAT is a consumption tax applicable to all commercial activities involving the
production and distribution of goods and the provisions of services, and each state that has introduced
VAT has its own VAT Act, under which, persons liable to pay VAT must register and obtain a
registration number from Sales Tax Officer of the respective State.
The Minimum Wages Act, 1948 ("Minimum Wages Act")
Minimum Wages Act was enacted to provide for minimum wages in certain employments. Under this
Act, the Central and the State Governments are the authorities to stipulate the scheduled employment
and to fix minimum wages. The Act contains list of Agricultural and Non Agricultural employment
where the prescribed minimum rate of wages is to be paid to the workers. The minimum wages are
calculated and fixed based on the basic requirement of food, clothing, housing required by an average
Indian adult.
Employees (Provident Fund and Miscellaneous Provisions) Act, 1952
The Act is applicable to factories employing more than 20 employees and may also apply to such
establishments and industrial undertakings as notified by the Government from time to time. All the
establishments under the Act are required to be registered with the Provident Fund Commissioners of the
State. Also, in accordance with the provisions of the Act the employers are required to contribute to the
Employees' Provident Fund the prescribed percentage of the basic wages, dearness allowances and
remaining allowance (if any) payable to the employees. The employee shall also be required to make the
equal contribution to the fund. As per the provision of the Act, employers are to contribute 12% of the
basic wages, dearness allowances and remaining allowances (if any) payable for the time being to the
employees. A monthly return in Form 12 A is required to be submitted to the commissioner in addition to
the maintenance of registers by the employers.
Payment of Gratuity Act, 1972
A terminal lump sum benefit paid to a worker when he or she leaves employment after having worked
for the employer for a prescribed minimum number of years is referred to as "gratuity". The provisions of
the Act are applicable to all the factories. The Act provides that within 30 days of opening of the
establishment, it has to notify the controlling authority in Form A and thereafter whenever there is any
change in the name, address or change in the nature of the business of the establishment a notice in Form
B has to be filed with the authority. The Employer is also required to display an abstract of the Act and
the rules made there-under in Form U to be affixed at the or near the main entrance. Further, every
employer has to obtain insurance for his liability towards gratuity payment to be made under Payment of
Gratuity Act 1972, with Life Insurance Corporation or any other approved insurance fund.
Payment of Bonus Act, 1965
The Payment of Bonus Act, 1965 is applicable to every establishment employing 20 or more employees.
The said Act provides for payment of the minimum bonus to the employees specified under the Act. It
further requires the maintenance of certain books and registers such as the register showing computation
of the allocable surplus; the register showing the set on & set off of the allocable surplus and register
showing the details of the amount of Bonus due to the employees. Further it also require for the
submission of Annual Return in the prescribed form (FORM D) to be submitted by the employer within
30 days of payment of the bonus to the Inspector appointed under the Act.
87
SABARI INN LIMITED
Contract Labour (Regulation and Abolition) Act, 1970
The purpose of Contract Labour (Regulation and Abolition) Act 1970, is to regulate the employment and
protect the interests of the workers who are hired on the basis of individual contracts in certain
establishments. In the event that any activity is outsourced, and is carried out by labourers hired on
contractual basis, then compliance with the Contract Labour (Regulation and Abolition) Act, including
registration will be necessary and the principal employer will be held liable in the event of default by the
contractor to make requisite payments towards provident fund etc.
Employment (Standing Orders) Act, 1950
The Industrial Employment (standing orders) Act requires employers in industrial establishments to
formally define conditions of employment under them. It applies to every industrial establishment
wherein 100 (reduced to 50 by the Central Government in respect of the establishments for which it is the
Appropriate Government) or more workmen are employed. The Act calls for the submission of such
conditions of work to the relevant authorities for their approval.
The Equal Remuneration Act, 1976 ("Equal Remuneration Act") and Equal Remuneration Rules, 1976
The Constitution of India provides for equal pay for equal work for both men and women. To give effect
to this provision, the Equal Remuneration Act, 1976 was implemented. The Act provides that no
discrimination shall be shown on the basis of sex for performing similar works and that equal
remuneration shall be paid to both men and women when the same work is being done.
Employees State Insurance Act, 1948
All the establishments to which the Employees State Insurance (ESI) Act applies are required to be
registered under the Act with the Employees State Insurance Corporation. The Act applies to those
establishments where 20 or more persons are employed. The Act requires all the employees of the
factories and establishments to which the Act applies to be insured in the manner provided under the
Act. Further, employer and employees both are required to make contribution to the fund. The return of
the contribution made is required to be filed with the ESI department.
The Maternity Benefit Act, 1961 ("Maternity Act")
The purpose of Maternity Act 1961 is to regulate the employment of pregnant women and to ensure that
they get paid leave for a specified period during and after their pregnancy. It provides, inter-alia for
payment of maternity benefits, medical bonus and enacts prohibition on dismissal, reduction of wages
paid to pregnant women etc.
Registrations under the applicable Shops & Commercial Establishments Acts of the respective States
in which The Company has an established place of business/ office ("Shops Act")
The Shops Act provides for the regulation of conditions of work in shops, commercial establishments,
restaurants, theatres and other establishments. The Act is enforced by the Chief Inspector of Shops (CIS)
and various inspectors under the supervision and control of Deputy/Assistant Labour Commissioners of
the concerned District, who in turn functions under the supervision of Labour Commissioner.
88
SABARI INN LIMITED
HISTORY AND CORPORATE STRUCTURE OF THE COMPANY
Brief History
The Company was originally incorporated as Sabari Inn Private Limited in the State of Tamil Nadu on
April 01, 1999 under the Companies Act, 1956 vide certificate of incorporation issued by The Registrar of
Companies, Tamil Nadu, Chennai. Subsequently the company was converted into Public Limited vide a
fresh certificate of incorporation dated July 20, 2010 from The Registrar of Companies, Tamil Nadu,
Chennai.
Name of the Company Sabari Inn Limited

Date of Incorporation 01/04/1999
Corporate Identity Number U55101TN1999PLC042205
Registered Office No.29, Thirumalai Pillai Road, T.Nagar, Chennai – 600 017
Major Events
Year Events
2002 Launch of 3 Star Hotel Quality Inn Sabari, T Nagar, Chennai with marketing arrangement
and franchise agreement with Choice Hospitality (India) Limited
2005 Upgradation of Quality Inn Sabari at T. Nagar to 4 Star status
2007 Launch of 3 Star Hotel - Quality Hotel Sabari Classic at OMR, Chennai
- Investment of ` 6199.84 lacs made by ICICI Prudential Asset Management
Company Limited; Portfolio Managers on behalf of its clients and India
Opportunity Real Estate Fund, Mauritius by entering into share subscription
agreement
2008 - Acquired land for construction of Hotel property at Bangalore and Coimbatore
- Entered into lease agreement with Group Company for operating the budget
hotels “Sabari’s Nest” at Bangalore, Chennai and Coimbatore
2009 - Launch of 3 Star Resort - Quality Inn Sabari Resorts at Kodaikanal
- Awarded the Finalist award for “International Quality Hotel 2009” for the
Quality Hotel Sabari Classic at OMR, Chennai
2010 - Awarded the “Employer - Employee Relationship Award 2010” for the Sabari
Group of Hotels by Rotary Club of Madras Southwest, Chennai
- Entered into Hotel Development Services Agreement with Carlson Hotels Asia
Pacific Pty Ltd. for “Park Plaza” at Coimbatore
- Entered into Management Services Agreement with RHW Hotel Management
Services Limited for “Park Plaza” at Coimbatore .
- Entered into long term lease for operating the Hotel “The Mark Boulevard” at
Whitefield, Bangalore
- Soft launch of Coimbatore Hotel
CHANGE IN THE REGISTERED OFFICE
The registered office of the Company was shifted to its own premises at No.29, Thirumalai Pillai Road,
T.Nagar, Chennai – 600 017 from Door No 24, Dr. Nair Road , T. Nagar, Chennai – 600 017 to ,vide Board
resolution dated January 17, 2005 .
89
SABARI INN LIMITED
Main Objects
The main objects of the company to be pursued by the Company on its incorporation are:
1. To carry on the business as hoteliers, hotel proprietors, hotel managers and operators, refreshment
contractors and caterers, restaurant keepers, refreshment room proprietors, ice-cream merchants,
sweetmeat merchants, milk manufacturers and merchants, bakers, confectioners, professional
merchants, licensed victuallers, wine and spirit merchants, blendors and bottlers.
2. To carry on the business as manufacturers, producers, processors, makers, inventors, convertors,

importers, exporters, traders, buyers, sellers, retailers, wholesalers, suppliers, indentors, packers,
movers, preservers, stockists, agents, sub-agents, merchants, distributors, consignors, jobbers,
brokers, concessionaries or otherwise deal in all types of food and food product, meat, fish, groceries,
fruit, confectionery, wine, spirits, beer and other beverages whether alcoholic or not, tobacco,
chemists and druggists suppliers, linen, furniture, furnishings, and other articles required by visitors
to the company’s premises and others.
Changes in Memorandum of Association
The Company has made the following changes in Memorandum of Association apart from the changes
made on account of increase in authorized capital.
Date of Shareholder’s Nature of Changes in the Memorandum of Association

Approval
13/07/2010 Change of name on conversion to public limited company
Shareholders’ Agreement:
The Company entered into share subscription cum shareholders’ agreement with the following parties
vide agreement dated 28/12/2007.
- Mr. K.R.V. Ramani, Ms. Aruna Ramani, K.R.V Ramani (HUF) termed as “Promoters” and
- India Opportunity Real Estate Fund, Mauritius as “ Foreign Investor” and
- ICICI Prudential Asset Management Company Limited; Portfolio Managers on behalf of its
clients “ Indian Investor”
The foreign and Indian investors are collectively referred as “investors”.
Purpose of the Agreement
To lay down the understanding between the parties on the terms and conditions subject to which the
investors will acquire stake in the Company and to confirm and record their mutual understanding on
various issues.
Important terms of the Agreement
(i) The obligation of the Investors to subscribe to the shares of the Company is subject to and
conditional upon fulfillment of conditions precedent specified in the Agreement.
(ii) Subject to the fulfillment of the conditions precedent specified in the Agreement, the
Company has agreed to issue to the Investors and the Promoters shall cause the Company to
issue to:
90
SABARI INN LIMITED
(a) Indian Investor 1,69,60,784 fully paid up equity shares of the company
(b) Foreign Investor 1,62,82,353 fully paid equity shares of the Company
(iii) The shares are to be issued at a price of Rs.18.65/- per share (includes premium).
(iv) Subsequent to the subscription and allotment of shares to the Indian Investor and the Foreign
Investor, the shareholding in the Company is to be as follows:
Promoters: 51%
Indian Investor 25%
Foreign Investor 24%
(v) Company to use the entire proceeds from subscription by the Indian Investor and the Foreign
Investor strictly in accordance with the Business Plan and Annual Budget.
(vi) As long as the Investors are invested in the Company, Promoters not to transfer their
shareholding in the Company except with the prior written approval of each of the Investor,
in the manner specified in the Agreement.
(vii) Company not to allow the current agreement for branding of the Hotels under the Quality
Inn brand to terminate, except in the event Choice Hotels – Quality Inn in breach of the
Agreement, only after obtaining the prior written consent of the Investors.
(viii) Company not to repay or convert unsecured loans of the Promoters until each investor has
received an IRR at the rate specified in the Agreement on post tax basis of its investment.
(ix) In the event of short fall in the funds required for any project, the promoters shall infuse
required funds.
(x) In the event of the number of rooms in Hotel Quality Inn Sabari which may be reduced on
account of any potential legal action, the Promoters shall convey in favour of the Company,
the additional land adjacent to the hotel at a minimal price, such that existing number of
rooms and car parking slots of the hotel is not reduced.
(xi) Company to take and maintain insurance against risks as specified in the Agreement.
(xii) Promoters to vote, in respect of their shareholding in the Company to ensure that the
provisions of the Agreement to the extent they are incorporated in the Memorandum and
Articles of Association of the Company and its obligations are duly and validly performed.
(xiii) Business of the Company to be conducted in accordance with the Business Plan and Annual
Budget to be updated or amended, prior to the beginning of each financial year. Means of
finance developing the projects to be specified in the Business Plan.
(xiv) The Investors are entitled to maintain their stake in the Company. Further issue of shares by
the Company will in compliance with the provisions specified in the said Agreement.
(xv) Decision in respect of certain matters mentioned in the Agreement to be taken by the Board
only with the affirmative vote of each Investor Director present at the meeting, unless written
consent is given by the Investor prior to the meeting at which such decision is taken or such
consent has been specifically waived in writing by the Investor.
(xvi) Promoters, Investor and other shareholders of the Company not to act in any matter that is
prejudicial to the rights of other parties under the Agreement. Each party to co-operate and
support each other in the best interest of the Company.
(xvii) Notwithstanding anything to the contrary in the agreement, in the event Promoters’
percentage interest falling below 51%, for any reason other than with the prior written
approval of each Investor, the number of Directors to be reduced to three of which each
Investor shall nominate one Director, the quorum requirement shall be as per the Companies
Act and all decisions of the Board to be taken by the majority.
(xviii) Transfer of shares by any party to the Agreement to be in conformity with the provisions of
the Agreement, transfer of shares by each Investor inter-se, to an affiliate or to any third party
excepted.
(xix) Shareholding of the Promoters to remain locked-in until such time each Investor is invested
in the Company, unless prior consent of each Investor is obtained.
91
SABARI INN LIMITED
(xx) In the event of default as specified in the Agreement, each Investor is entitled to PUT its
shares and cause the Promoters to purchase any or all of the shares held by such Investor in
the Company at the price arrived at as per the formula provided in the Agreement. Failure by
the Promoters to honour the PUT option within 30 business days, would entitle the Investors
to sell their shares to any third party at any price/terms and in such an event, the Investors
shall be entitled to drag the Promoters to sell their shares (either part or in full) at the same
terms/price. Additionally, on the Investor invoking their rights, the Board shall stand
reconstituted with the Investor Directors comprising majority of the Board.
(xxi) The promoters will take steps to list the shares of the Company by way of an Initial Public
Offering (IPO) by June 2012. The investors will be entitled to offer for sale 100% of their
shares in the company during or before such an IPO. The Promoters agree and undertake
that they shall, without any recourse to Investors whatsoever, obtain all the relevant
approvals, statutory or otherwise as may be necessary to provide exit to investors by way of
an IPO. The Investors shall not be named as Promoters in the offer document. The price at
which shares will be issued/ offered to the Public shall be acceptable to the Promoters &
Investors. . If a category I Merchant Banker acceptable to both Promoters and Investors
certifies that in event the Company lists its shares in an IPO in June 2012 and such IPO would
allow each Investor to exit at an IRR of 25% then, no investor shall be entitled to object to the
Company proceeding with such IPO.
(xxii) If the IPO does not take place by June 30, 2012, then the Promoters shall have an option to
purchase all shares (but not less than all shares) held by both Investors at a price that shall
provide each Investor with an IRR of 38% (“Promoters Option”). The Promoters Option shall
be exercised on or before October 1, 2012, failing which the option shall automatically lapse.
All costs associated with the purchase of shares as a result of exercise of Promoters Option
shall be borne by the Promoters.
(xxiii) In the event the Promoters choose not to exercise the Promoters Option or have failed to do
so on or before October 1, 2012, each Investor shall be entitled to transfer all or part of its
shares to any third party at any price such Investor deems fit.
(xxiv) In the event the Investors collectively inform the Company that they are unable to find a
third party to purchase their shares, then by December 2012, the Company shall mandatorily
sell each of its hotels one by one at a valuation which provides the Exit Valuation (IRR of 25%
or a price equivalent to enterprise value / immediate past 12 months EBIDTA multiple of 8.5
times less outstanding net debt whichever is higher) to each Investor and the Company shall
thereafter distribute in terms of applicable law, the proceeds of such sell off to each Investor.
Upon sale of the last of the hotels, the Company shall be wound up
(xxv) The Board of the Company shall consist of 6 (Six) Directors, 3 each to be nominated by the
Promoters and the Investors collectively will nominate the rest three.
(xxvi) The promoters undertake not to veto or otherwise obstruct the appointment of the Investor
Directors in accordance with this Clause. The Investor undertakes not to veto or otherwise
obstruct the appointment of the Promoter Directors in accordance with this clause. The
Investor Directors shall not be subject to retirement by rotation.
(xxvii) The Investor shall have the right to appoint additional Directors to the Board in proportion of
their combined shareholding in the company. The removal/ reappointment of any additional
director / independent director shall be subject to prior written consent of the Investors.
(xxviii) Agreement to remain valid as long as the Investors hold any share in the Company. The
Agreement is subject to mutual termination and automatic termination as provided in the
Agreement.
(xxix) Except as permitted by the Agreement or otherwise agreed in writing by the Board with the
Investors’ prior written consent, the Promoters shall not, either personally or through an
agent or Company or otherwise, directly or indirectly be concerned in any business directly
92
SABARI INN LIMITED
or indirectly manufacturing, operating, selling or distributing products or services which

compete with any business then carried by the Company.
(xxx) Agreement is subject to confidentiality clause as provided in the Agreement. Exceptions to
the Confidentiality clause also have been provided.
(xxxi) Disputes under the Agreement subject to arbitration. Such arbitration to be subject to the
provisions of Arbitration and Conciliation Act, 1996.
(xxxii) No party, except any Investor shall assign or transfer its rights and liabilities under the
Agreement to any person without the prior written consent of all other parties. Subject to the
provisions of the Agreement, the Investor shall be entitled to assign its rights and obligations
under the Agreement to any third party without the consent of other parties. However the
Investor shall intimate the other parties of such assignment.
(xxxiii) Agreement to be governed by laws of India. Courts in Mumbai shall have exclusive
jurisdiction.
Other Agreements
Quality Inn Sabari, T-Nagar, Chennai
1. International & Domestic Franchise & Marketing Agreement with Choice group
The agreement dated 9th March, 2001 was entered between Choice Hospitality (India) Limited an
Indian company under the India Companies Act, whose registered office is at 4/11, Shanti
Niketan, new Delhi- 110 021 and whose registration no is 28887 (hereafter known as Master
Franchisee) and Sabari Inn Private Limited, an Indian Company under the Indian Companies
Act whose registered office is at 29, Thirumalai Pillai Road, T. Nagar, Chennai 60 017 and whose
registration number is 42205 (hereafter known as Franchisee)
Master Franchisee and Choice Hotels International, Inc (“Choice”) have executed an agreement
dated 5th November, 1999(“Master Franchisee Agreement in which Master Franchisee has been
licensed to grant franchisees in territory and to act as “Master Franchisee” under Choice
franchisee agreement. The agreement has been renewed for a further period of five years with
effect from 1st January, 2008 on a revised fee. Other Franchisee obligations remains the same as
per the earlier agreement dated 9th March, 2001.
Important terms of the agreement
1) Franchisee shall strictly act in accordance with Franchisee Operations Manual and Rules and
Regulation and all future amendments thereto as may be provided to Franchisee time to time by
Master Franchisee and shall operate the Franchised Hotel under system and in accordance with
terms and condition of agreement.
2) Franchisee shall pay all Travel commissions on monthly basis. The franchisee shall participate
in Choice’s Centralized Travel Agent Commission Payment Program.
3) Franchisee shall prominently display at the Franchised Hotel the Franchised Marks in exterior
and interior signage and in all advertising and promotion of Franchised Hotel.
4) Franchisee shall be solely responsible for conducting local advertising and promotion of the
Franchised Hotel and the expense thereof. Franchisee shall participate fully and without
exception in all marketing programmes, sales promotions and services of Choice and Master
Franchisee as the Choice or Master Franchisee may determine to be necessary and desirable for
system from time to time.
93
SABARI INN LIMITED
5) Franchisee agrees that the existence of any claims it any have against master Franchisee,
whether or not arising from this Agreement, shall not constitute a defense to the enforcement by
Master Franchisee of the covenants mentioned in the terms of the agreement. Franchisee agrees to
pay all costs and expenses incurred by Master Franchisee in connection with the enforcement of
the agreement terms.
Fees and Payments
1) Initial Franchisee fee: In consideration of the franchisee rights granted as per the agreement,
Franchisee shall pay to Master Franchisee a onetime, non refundable initial franchisee fee of Rs
5.00,000 (Rupees Five Lacs)
As and when additional rooms are made operative in the Hotel, the initial membership fee will
be payable at the rate of US $ 200 per hotel room, on a per-room basis as per foreign exchange
prevailing rate at that time.
Revised on 1st January, 2008
2) Franchisee & Marketing Services Fee: Franchisee shall pay Master Franchisee monthly an
ongoing franchisee and marketing services fee (the franchisee & Marketing service Fee in the
following manner:
The Franchisee shall pay to master Franchisee a monthly fixed fee of ` 1.75 Lacs towards
Franchisee Fee and ` 1.75 Lacs towards Marketing Services. The total Franchisee and Marketing
services Fee will amount to Rs 3.50 Lacs per month and is inclusive of taxes. The fixed Fee would
increase by 10% after every year over the fee for the immediate preceding year.
3) Reservation Fee: Franchisee shall pay to Master Franchisee monthly during the term, a
reservation fee of
US $ 4.50 only for reservation services relating to each reservation made by Choice hotels
International system
OR
US $ 4 only for each booking made through Global Distribution system to which Choice’s
reservation system is connected or such other amount as may be charged from time to time by
the relevant global distribution system.
4) if any amounts payable to Master Franchisee are not paid by the Payment due date, Franchisee
shall pay Master Franchisee interest on any outstanding amount from the Payment Date at a rate
of one and half percent per month.
Term
The agreement stays valid for a period of five (5) years with effect from 1st January, 2008. The
agreement and terms thereof shall be reviewed from renewal or termination on or before 31st
December, 2012.
Quality Hotel Sabari Classic, OMR, Chennai
1. Franchise Agreement with Choice Group

The agreement dated 5th July, 2007 was entered between Choice Hospitality (India) Limited an
Indian company under the India Companies Act, whose registered office is at 4/11, Shanti
Niketan, new Delhi- 110 021 and whose registration no is 28887 (hereafter known as Master
94
SABARI INN LIMITED
Franchisee) and Sabari Inn Private Limited, an Indian Company under the Indian Companies
Act whose registered office is at 29, Thirumalai Pillai Road, T. Nagar, Chennai 60 017 and whose
registration number is 42205 (hereafter known as Franchisee)
Master Franchisee and Choice Hotels International, Inc (“Choice”) have executed an agreement
dated 5th November, 1999(“Master Franchisee Agreement”) amended on 1st April, 2005 in which
Master Franchisee has been licensed to grant franchisees in territory and to act as “Master
Franchisee” under Choice franchisee agreement.
Important terms of the agreement

1) Franchisee shall strictly act in accordance with Franchisee Operations Manual and Rules and
Regulation and all future amendments thereto as may be provided to Franchisee time to time by
Master Franchisee and shall operate the Franchised Hotel under system and in accordance with
terms and condition of agreement.
2) Franchisee shall pay all Travel commissions on monthly basis. The franchisee shall participate
in Choice’s Centralized Travel Agent Commission Payment Program.
3) Franchisee shall prominently display at the Franchised Hotel the Franchised Marks in exterior
and interior signage and in all advertising and promotion of Franchised Hotel.
4) Franchisee shall be solely responsible for conducting local advertising and promotion of the
Franchised Hotel and the expense thereof. Franchisee shall participate fully and without
exception in all marketing programmes, sales promotions and services of Choice and Master
Franchisee as the Choice or Master Franchisee may determine to be necessary and desirable for
system from time to time.
5) Franchisee agrees that the existence of any claims it any have against master Franchisee,
whether or not arising from this Agreement, shall not constitute a defense to the enforcement by
Master Franchisee of the covenants mentioned in the terms of the agreement. Franchisee agrees to
pay all costs and expenses incurred by Master Franchisee in connection with the enforcement of
the agreement terms.
Fees and Payments
1) Initial Franchisee Fee: In consideration of franchisee rights granted as per the agreement,
Franchisee shall pay to Master Franchisee a non-refundable initial franchisee fee at the rate US $
20 per hotel room payable in Rupees in India.
As and when additional rooms are made operative in the Hotel, the initial membership fee will
be payable on a per-room basis at the fee terms and foreign exchange prevailing rate at that time.
2) Franchisee & Marketing Services Fee: A monthly fixed franchisee fee equivalent to `
1,50,000/- per month plus Marketing Fee of ` 1,50,000/- per month, total of ` 3,00,000 per month
exclusive of taxes for the first year of operations payable on the 7th day of succeeding month.
These fees shall increase @ 10% year on year from the second year onwards over the fee paid for
the immediate preceding year.
Addendum 1
Addendum dated 15th day of April 2009 between Choice Hospitality (India) limited (Master
Franchisee) and Sabari Inn Private Limited (Franchisee).
95
SABARI INN LIMITED
For the period starting from 1st April, 2009 to 31st March 2010, the Franchisee & Marketing Fee
payable is revised to ` One Lac (Rs 1, 00,000) per month i.e. ` 50,000 per month as Franchisee Fee
and ` 50,000 per month as Marketing services Fee payable on 7th day of every month without any
adjustment whatsoever.
Addendum 2
Addendum dated 22nd day of June 2010 between Choice Hospitality (India) limited (Master
Franchisee) and Sabari Inn Private Limited (Franchisee).
For the period starting from 1st April, 2010 to 31st March 2011, the Franchisee & Marketing Fee
payable is revised to ` One Lac (` 1, 82,000) per month i.e. ` 91,000 per month as Franchisee Fee
and ` 91,000 per month as Marketing services Fee payable on 7th day of every month without any
adjustment whatsoever.
With effect from 1st April, 2011 the original terms of Franchisee agreement dated 5th July, 2007
would be applicable unless otherwise mutually agreed between the parties.
3) Reservation Fee: Franchisee shall pay to Master Franchisee, monthly, during the term a
reservation fee of US $ 4.50/- only for Reservation Transactions relating to reservations made
through Choice’s reservation Services. This fee may be increased from time to time.
4) GDS Fee: Franchisee shall pay to Master Franchisee a fee equal to US $ 4.50 only for each
booking made through a global distribution system(GDS) to which Choice’s reservation system is
connected, or such other amount as may be charged from time to time by the relevant global
distribution system. This shall be paid directly to the Master Franchisee on a monthly basis.
5) The Franchisee shall also pay software license fee to Choice Hotels India for message centre to
be installed at the Hotel, so that the hotel may receive reservations from Choice Hotels India,
presently the fees is US $ 1,500 per hotel.
Term
The agreement is effective from 5th July, 2007 and shall terminate on the tenth anniversary of the
operating date, or at any time thereafter; provided, however, that prior to any such termination
one party shall give the other party no less than six months prior written notice of such
termination. The parties may agree to extend or renew the term for a further period of ten years
upon written agreement of both parties and signed by an authorized representative of each party
at least ninety days prior to expiration of the term.
HOTEL DEVELOPMENT SERVICES AGREEMENT
The Company had entered into a Services Agreement with Carslon Hotel Asia Pacific Pty. Ltd.
(“Carslon”) by which Carslon has agreed to provide certain services to the Company in respect of its
Hotel project being developed at Mylampatti Village, Chinnampalayam, Coimbatore.
Following are some of the material details of the Agreement.
Date of the Agreement: 7th July, 2010
Duration of the Agreement 7th July 2010 to the date that the Hotel is fully open and
managed by Carslon.
96
SABARI INN LIMITED
Nature of transaction covered Carlson to provide technical and pre-opening services

(both detailed in the agreement) for the “PARK PLAZA”
branded Hotel located at Avinashi Road, Mylampatti
Village, Chinnampalayam, Coimbatore.
Gist of some of the material terms
(i) Carlson to use good faith efforts to perform the services in accordance with the pre-opening
budget.
(ii) Company’s responsibilities include:
· Designing and constructing the Hotel to comply with the brand standards and requirements and
in accordance with the approved plans and specifications. In addition Hotel to be constructed,
furnished, fitted and fully equipped so that the class, quality, function and aesthetic standard of
all internal and external finishings and fittings, together with the guest rooms, public and “back
of house” areas and the exterior, shall be no less than those of the Park Plaza Noida (“Reference
Hotel”) as at the opening date of the Reference Hotel.
· Providing Carlson with all necessary information that Carlson needs.
· Assembling a Project Team that is experienced in the design and construction of hotels of a class
and type similar to the Hotel.
· Establishing and maintaining a Project schedule that will consist of a timeline that details the
timeframes for design, bidding and procurement, construction, installation.
· Establishing and maintaining a Project budget which shall include allocations for FF & E
(furniture, furnishing, fixtures and equipments) and OS & E (Operating supplies and
equipments) and all operating systems.
· At Carlson’s request, construct one model room for a standard room and one model room for a
selected suite room, with a section of adjoining guest room corridor and external walls for
Carlson’s approval, prior to the commencement of any interior fit out.
(iii) Company to pay to Carlson fee for the services rendered at the rate specified in the agreement.
Such payment is to made every month from the date of the signing of the agreement upto and including
the Actual Opening Date.
(iv) Right of termination given to either party under certain circumstances.
(v) Carlson can assign its rights, benefits and obligations under the Agreement to any third party,
without the consent of the Company. Company not to assign or otherwise transfer all its rights, benefits
and obligations under the agreement to anyone without Carlson’s consent.
(vi) Company to purchase and maintain, subject to Carlson’s approval builder’s “all risk” and public
liability insurance with minimum limits and other terms in accordance with Carlson’s requirements.
Company to require the general contractor of the project and other project team members to maintain
insurance policies with minimum limits and other terms in accordance with the requirements of Carlson.
(vii) Disputes subject to arbitration in accordance with the International Arbitration Rules of
Singapore International Arbitration Centre. Venue of arbitration is in Singapore.
(viii) Agreement and the relationship between the parties is subject to and governed by the laws of
India.
HOTEL MANAGEMENT AGREEMENT
The Company had entered into a Management Agreement with RHW Hotel Management Services
Limited for operating the Hotel being constructed by the Company at Coimbatore.
Following are the Gist of some of the terms of the Agreement.
97
SABARI INN LIMITED
Date of the Agreement 24th August 2010
Parties to the Agreement The Company (therein and hereinafter referred to as

“the Owner”) and
RHW Hotel Management Services Ltd.

Ground Floor, Commercial Plaza
Radisson Hotel Delhi
National Highway 8
New Delhi 110 037.
(therein and hereinafter referred to as “the Manager”)
Scope of the Agreement Manager will operate the Hotel being constructed by the
Company at Avinashi Road, Mylampatti Village,
Chinnampalayam, Coimbatore and in respect of such
operation provide certain services as mentioned in the
Agreement.
Period of the Agreement Commences on the Soft Opening Date

(as defined in the Agreement) and expires on 31st
December of the year in which the fifteenth annual
anniversary of the Opening Date occurs.
Parties may negotiate two renewals of the Operating

Term for further period of five years each on the same or
different terms but only by written agreement signed by
both of them.
Fee payable by the Owner For services being provided by the Manager, the Owner
shall pay to the Manager base management fee, royalty
fee, incentive fee, reservation charges and marketing
contribution at the rates specified in the Agreement.
Gist of some of the other material terms
(i) Owner to complete construction and to ensure that Opening Date occurs not later than31st May 2011.
Owner responsible for construction of the hotel in compliance with approved plans.
(ii) Construction to conform to the Operating Standards and the Hotel Development Services Agreement.
Owner shall design, complete, equip and furnish the Non-Hotel facilities in accordance with
Operating Standards or when there is no Operating Standard that applies, then to a quality level
comparable to the operating standards in general.
(iii) Manager to operate the hotel as “Park Plaza Coimbatore” . Owner not to change the name of the
hotel without Manager’s approval.
(iv) (iv) Manager to provide Reservation services though the Reservation System, marketing activities in
the Asia Pacific region and other parts of the work for the benefit of the hotel and other hotels under
the “Park Plaza” brand name, purchasing FF&E, OS&E and other goods and services from the
98
SABARI INN LIMITED
Manager and Technology System. These services could be provided either by the Manager directly
or through Affliates from outside India.
(v) Manager to establish certain policies mentioned in the Agreement for the hotel employees. Manger
and Owner to review the policies from time to time.
(vi) Manager will determine the charges for the rooms, commercial space, entertainment, food and
beverages taking into account the competitive environment and the financial objectives established
in the Annual Plan in consultation with the owner.
(vii) Manager will provide the hotel employees with the necessary system information needed to establish
and will assisthem iln establishing all employment policies for the hotel employees in consultation
with the Owner, including salaries, wages, fringe benefits etc. All hotel employees will be the
employees and agents of the Owner.
(viii) Manager will review and approve all Annual Plans before they are submitted to the Owner. Annual
Plans to include financial statements, analysis of the market and a marketing plan, general
description of the Capital Improvement Projects and Reserve Fund work, cash flow projections and
any other item of expenditure as may be reasonably required by the Owner. Owner to notify the
Manager of those portions of the Annual Plan that the Owner approves and disapproves, including
reasons for Owner’s objections. Owner and Manager to use their good faith efforts to agree on the
disapproval portion.
(ix) Provision has been made for maintaining proper books of accounts, records and statements in
respect of operation of the hotel and for furnishing of financial statements at periodic statements.
(x) Subject to Manager’s approval, Owner to appoint an independent auditor of national or international
repute having hotel experience with internationally branded hotels.
(xi) Prior to the Opening Date, Manager will arrange, at Owner’s cost the purchase of all necessary
components of the Technology System from the Manager’s approved suppliers and shall install and
maintain the Technology System at the Hotel. Manager may periodically modify or upgrade the
Reservation System, its internet web site and the Technology System.
(xii)Manager will arrange for the purchase of all interior and exterior signs for the hotel as provided for in
the Annual Plan at Owner’s cost and expenses.
(xiii) Manager to use prudent business judgment in operating the hotel in compliance with Legal
Requirements and the requirements of any insurance companies covering any of the risks against
which the hotel is insured.
(xiv) Owner to maintain insurance sufficient to provide Owner and Manager with reasonable and
adequate protection in the operation of the hotel.
(xv) Provision of indemnity by the Owner to the Manager and its affliates and their respective partners,
shareholders, directors, officers, agents, employees etc.against claims by third parties relating to or
arising out of the Agreement or the construction or operation of the hotel or any acts or omissions of
the Owner or anyone associated with the Owner.
(xvi) Owner to use the marks and systems (both as defined in the Agreement). Owner not to assert any
ownership of the marks and system and will not take any action to contest Manager’s rights to them.
(xvii) Owner undertakes that it shall not and shall ensure that the Non- Hotel Facilities shall not use the
marks (including “Park Plaza” name and logo) and the system in any manner other than solely for
the hotel.
(xviii) Owner not to use any Confidential and Proprietary System Information for any purpose other than
with respect to the construction and operation of the hotel pursuant to this Agreement. Manager
99
SABARI INN LIMITED
may modify the Confidential and Proprietary System Information at any time. Owner has no right
with respect to such information other than those that are granted in this Agreement.
(xix) Provision has been made for termination of the Agreement and consequences of such termination.
The Agreement to terminate upon the termination (not expiration) of the Hotel Development Services
Agreement.
(xx) Manager may assign this Agreement in whole or in part without the Owner’s consent to (i) an
Affiliate (ii) any successor or assignee of Manager result from any merger, consolidation or
reorganization or (iii) another person that acquires all or substantially all of Manager’s business and
assets. The transferee/assignee to assume all of Manager’s obligations under this Agreement and to
operate the hotel as a “Park Plaza” hotel. Owner may assign this Agreement and the Hotel to an
Affiliate provided that Owner remains primarily liable under this Agreement to the Manager. Owner
not to effect an ownership transfer to any third party without the Manager’s written consent and the
Hotel and this Agreement must be transferred to the same person. Manager not to withhold consent
provided the ownership transfer fulfills the conditions specified in the Agreement.
(xxi) Right of first refusal given to the Manager in the event the Owner desires to sell the Hotel.
(xxii) Owner may place a mortgage on the hotel with and collaterally assign its interest in this Agreement
to an institutional lender as mortgagee without Manager’s approval as long as the conditions
specified in the Agreement are complied with.
(xxiii) Agreement is subject to laws of India.
(xxiv) Disputes under the Agreement to be resolved by arbitration in accordance with the rules of the
Singapore International Arbitration Centre in force. Any award rendered by the arbitration tribunal
is final and binding upon each party. Venue of arbitration shall be Singapore
(xxv) Agreement is subject to force majure clause.
(xxvi) The Agreement contains a clause for confidentiality by either party.
(xxvii) Owner to obtain at its costs and expenses, all approvals as are necessary for entering into this
Agreement and the Hotel Development Services Agreement. Owner unconditionally and irrevocably
consents to Carlson Hotels Worldwide Inc. and/or its holding companies, subsidiaries, affiliates or
sister concerns to
· Set up subsidiaries for developing, constructing, owning, managing, operating, leasing and/or
promoting one or more hotels, resorts and/or serviced apartments and/or acquire or invest in
one or more companies for developing, constructing, owning, managing, operating, leasing
and/or promoting one or more hotels, resorts and/or serviced apartments through joint venture
with an Indian entity and/or through a subsidiary.
· Enter into arrangement in India with any person for management, technical
assistance/collaboration, franchising, group services, marketing services and trade mark
licensing in the hotel, resorts and/or serviced apartments.
· Authorize or permit any other persons or entity to develop, construct, manage, operate, lease or
promote one or more hotels, resorts and/or serviced apartments.
FINANCIAL PARTNERS
There are no financial partnership agreements entered into by the Company.
100
SABARI INN LIMITED
STRATEGIC PARTNERS
There are no strategic partnership agreements entered into by the Company.
SUBSIDIARY OF THE COMPANY
The Company does not have any subsidiary.
COMMON PURSUITS
Presently none of the other group companies are in the same line of business of operating hotels except
for the fact that the company is apart from operating the hotels owned by the company itself, is also
operating the hotels owned by the group company – Sabari Nest Inn Private Ltd. and the convention
centre owned by Sabari Supermarket Pvt. Ltd. The company shall adopt necessary procedures and
practices as permitted by law to address any conflict situations, as and when they may arise. For further
details on the related party transactions, to the extent of which the Company is involved, see “Related
Party Transactions” on page 122.
101
SABARI INN LIMITED
MANAGEMENT
Board of Directors
The following table sets forth details regarding the present Directors:
Name, Designation Date of Qualification Remuneration Other Directorships

Residential Address, Appointment / per annum held
Age, Re-appointment (` in lacs)
Occupation
DIN No.
Mr. K.R.V. Ramani · Sabari Nest Inn

S/o Late K.R. Ramachandran Private Limited
· Sabari Realtors
Designation: Chairman & private Limited
Managing Director · Sabari Foundations
private Limited
Add:#9/5, Seethamani · Sabari Supermarket
Colony Extension, First private Limited
Cross Street, Teynampet, · Sabari Stocks private
Chennai – 600 018 01/04/1999 B.Com 72.00 Limited
· Sabari Cuisines
DOB: 20/01/1965 private Limited
· Vishranthi Sabari –
Occupation: Industrialist
Partnership Firm
Status: Executive & Non-
Independent
DIN: 00208160
Mr. K.R. Narayanan

S/o K.R. Ramachandran · Jupiter Netboss
Private Limited
Designation: Director
Add:#9/5, H-S, Hiranya,

67/69, Greenways Road,
R.A. Puram, Chennai – 600
028
B.Com, FCA,
30/11/1999 Sitting Fees
Grad CWA
DOB: 21/06/1959
Occupation: Professional
Status: Non-Executive &

Non-Independent
DIN: 00225135
102
SABARI INN LIMITED

Occupation
DIN No.
Mr. Venkatraman
Janakiraman · Arjun
S/o Kumbakonam Technologies
Ramaswami Venkataraman Limited
· Arjun Health &
Designation: Director Hygiene
Limited
Add:# 1C, Alamar Court, · IL&FS Securities
New No 242, Old No 271, Services Limited
Avvai Shanmugham Road, M.Sc
· IL&FS Waste
Royapettah, Chennai, Tamil (Geology),
Management
Nadu, 600014 FIIBF, Fellow
26/02/2010 Sitting Fees and Urban
of
Services Limited
DOB: 15/02/1940 Mineralogical
· Road
Society of India
Infrastructure
Occupation: Professional Development
Company of
Status: Non-Executive & Rajasthan
Independent Limited
· Edelweiss Asset
DIN: 00051804
Reconstruction
Company
Limited
Mr. T.R.Sridharan
S/o T.R.Srinivasachari · Sundaram
Clayton Limited
Designation: Director · Optimus Global
Services Limited
Add:# Old -7, State Bank
Colony, New No 2,
Vannanthurai Road Adyar
Chennai, Tamil Nadu
India 600020
B.Com (Hons.)
DOB: 15/05/1939 CAIIB

Independent
DIN: 00004546
103
SABARI INN LIMITED

Occupation
DIN No.
Mr. P. Vaidyanathan
S/o N Panchapagesan · City Union
Bank Limited
Designation: Director · Hatsun Agro
Product Limited
Add:#7AB, Block III, · Economist
Kences Enclave, No. 1 Chari Communications
St. ,T Nagar, Chennai 600 Limited
017 · Suja Shoe
FCA, ACS,
03/09/2010 Sitting Fees Industries Pvt.
AICWA
DOB: 15/05/1939 Limited
· Embassy Property
Occupation: Professional Developments
Limited
Independent
DIN: 00029503
Mr.R.Thiagarajan
S/o K. Ramamirthnam · Delta Global
Financial
Designation: Non- Services Limited
Executive and Director · IJR Investments
Private Limited
Add:# 6, Second Floor, · IKR
Bishop Wallers Avenue, Investments
South Mylapore, Private Limited
Chennai 600 004 B.Com, FCA,
FCS
DOB: 24/07/1961

Independent
DIN: 00010650
NOTE: There has been no arrangement or understanding with any of the major shareholders, customers,
suppliers pursuant to which the directors were selected as a director or member of Senior Management.
104
SABARI INN LIMITED
Details of Current and Past Directorship in listed companies that have been suspended from Stock
Exchanges
None of the directors of the company have been directors in any other listed company(ies) which have
been suspended from the stock exchanges.
Details of Current and Past Directorship in listed companies that have been delisted from Stock
Exchanges
Name of the Name of Listed on Year of Compulsory/ Reason for Relisted Term of
Director the Stock Delisting Voluntary Delisting Yes / No Directorship
Company Exchange Delisting Held
Mr. India Madras 2009-10 Voluntary Merger No 5 Years
Thiagarajan Meters Stock Delisting under section
Limited Exchange 391 to 394 of
the
Companies
act under the
orders of
Honourable
High Court
of Madras
with a
Unlisted
Company
BRIEF BIOGRAPHY OF THE DIRECTORS
Mr. K.R.V. Ramani (45 Years) is the Chairman and Managing Director of the Company. He holds
Bachelor’s Degree in field of Commerce. He is a first generation entrepreneur and founder of Sabari
group. Mr. Ramani started his business venture as a builder/developer/promoter in the business of
construction of residential and commercial properties in 1993 by promoting Sabari Foundations Pvt. Ltd.
As a lateral expansion, the group ventured into the supermarket business under the brand name
“Nilgiris” with franchisee arrangement, which presently runs three super markets in Chennai. He then
ventured into hospitality services with the incorporation of Sabari Inn Pvt. Ltd. in 1999. He established
the First Hotel - “Quality Inn Sabari” at T. Nagar, Chennai in the year 2002 with 72 Room Keys and
thereafter expanded the business by setting up hotels at OMR, Chennai and Kodaikanal. Currently, Mr.
K.R.V. Ramani owns and manages the gamut of businesses from realty to hospitality with significant
stake in all the Group Companies.
Mr. K.V. Narayanan (51 years) is a Non-Executive and Non-Independent Director of the Company and
brother of Mr. K.R.V. Ramani. He is a practicing Chartered Accountant with rich experience of more than
25 years in the field of Finance. He has been associated with the Company since inception and has played
important role in providing critical inputs relating to financial matters of the Company
Mr. Venkatraman Janakiraman (70 years) is a Non-Executive and Independent Director of the Company.
He holds Masters of Science Degree in Geology and is a Fellow of Indian Institute of Banking and Finance
and Fellow of Minerological Society of India. He has held key positions viz., the Managing Director of
105
SABARI INN LIMITED
State Bank of India, Chairman & Managing Director of Centurion Bank. He was extensively involved in
the rehabilitation of the Centurion Bank.
Mr. T.R.Sridharan (aged 71 years) is a Non-Executive and Independent Director of the Company. He has
about forty years of experience in international banking, capital markets, administrative and operational
portfolios in domestic banking. He has held position of Chairman & Managing Director of Canara Bank
for two years (April 1997 to May 1999). He has five years experience as member of BIFR ( June 1999 to
May 2004). He was actively involved in the evaluation of “Country Financial Accountability Assessment
(CFAA) of various countries, as a consultant for the World Bank (May 1996 to October 1996).
Mr. P. Vaidyanathan (aged 63 years) is the Non-Executive and Independent Director of the Company.
He is a Chartered account, Cost account and Company Secretary by qualification. He is a pioneer in
Financial services Industry with over 35 years of experience. Presently he is the Non Executive Chairman
of City Union Bank Limited wherein his family has substantial stake. He is a member of “Disciplinary
Action Committee” of National Securities Depository Limited (NSDL). He is also a member of the SEBI
advisory committee on “Misselling Vs. Right Selling of Mutual Fund”. Mr Vaidyanathan is also member of
“Investors Education and Protection Fund Committee” managed by Ministry of Corporate Affairs, Ministry of
Finance.
Mr.R.Thiagarajan (aged 49 years) is the Non Executive and Independent Director of Company. He is a
Bachelor of Commerce, Chartered Accountant and a Company Secretary by qualification. He has
professional experience of over 10 years, a leading pharmaceutical company based at Hyderabad. His last
position held at the company was Chief of Finance and Company Secretary. He started his private
practice since 1995 at Chennai.
Apart from the above board of directors, the Company is ably advised on various matters by Mr.
T.S.Krishnamurthy – Chairman Emeritus. Mr. T.S. Krishnamurthy is a post graduate in Economics and
has done his M.Sc. (Fiscal Studies) form the University of Bath (U.K). Mr. T.S. Krishnamurthy is a Retd.
I.R.S officer who has held important positions in the Government of India including Secretary,
Department of Corporate Affairs, Chief Election Commissioner of India. He has also held important
positions in Ministry of Finance and was the first Chairman of the Investors Education and Protection
Fund.
Relationships between Directors
Mr. K.R. Narayanan is brother of Mr. K.R.V Ramani. Except the stated relationship there is no
relationship between any of the directors of the Company.
Service Contract entered into by Directors with the Company
The service contract dated 27/09/2010 entered into by the Company with the Chairman and Managing
Director does not provide any benefits upon termination of employment.
COMPENSATION OF MANAGING DIRECTOR/ WHOLE TIME DIRECTORS
Mr. K.R.V. Ramani, Chairman & Managing Director
Mr. K.R.V Ramani is re-appointed as Chairman and Managing Director vide Annual general Meeting
dated 27/09/2010 for a period of 5 years with effect from 01/10/2010. The terms of remuneration as
recommended by Remuneration committee on 03/09/2010 are:
106
SABARI INN LIMITED
Salary
The salary payable to Mr. K.R.V. Ramani effective from 01/10/2010 is Rs.6,00,000 per month that
includes Rs.1,00,000/- as salary and Rs.5,00,000/- as other allowances.
Perquisites
- Contribution to Provident Fund, Superannuation fund or annuity fund to the extent these either
singly or put together are not taxable under the income tax act, 1961.
- Gratuity payable at a rate not exceeding half a month’s salary for each completed year of service
- Encashment of leave at end of tenure
- Entitled to one month’s leave with pay per completed year of service
- Medical benefits as per rules of the Company
- Entitle to rent free accommodation.
- Chauffer driven car
- Telephone at residence
Minimum Remuneration
In the event of inadequacy of profits in any financial year of the Company, Mr. K.R.V.Ramani shall be
entitled to the minimum remuneration as applicable under Schedule XIII to the Act
The above remuneration has been fixed for a period of three years from 01/10/2010 by remuneration
committee and it shall be revised thereafter.
Compensation Paid to the Managing Directors during previous years
Particulars 2009-10 (` in Lacs)

Salary 39.72
Perquisites Nil
Shareholding of Directors in the Company
Sr. No Name of the Directors No. of shares held % of shareholding in the

company
1. Mr. K.R.V. Ramani 2,93,49,994 43.26
2. Mr. K.R. Narayanan Nil Nil
3. Mr. T.R.Sridharan Nil Nil
4. Mr. V.Janakiraman Nil Nil
5. Mr. P.Vaidyanathan, Nil Nil
6. Mr. R. Thiagarajan Nil Nil
Total 2,93,49,994 43.26
Borrowing Powers of Directors

The Company has passed an resolution at its EGM held on July 13, 2010 in terms of the provisions of
section 293(1)(d) of the Act, whereby it has authorized the Board of Directors to borrow money up to `
400.00 Crores (Rupees Four Hundred Crores) from time to time.
107
SABARI INN LIMITED
Qualification Shares required to be held by the Directors
The directors are not required to hold any qualification shares.
Interest of Directors
Except as stated in the “Statement of Related Party Transaction” beginning on page no. 122 of this Draft
Red Herring Prospectus, all the Directors may be deemed to be interested to the extent of fees, if any,
payable to them for attending meetings of the Board and Committees as well as to the extent of
remuneration and/or reimbursement of expenses payable to them in accordance with the provisions of
the Companies Act and in terms of the Articles of Association. The Director may also be regarded as
interested in the Equity Shares, if any, held by them or their relatives in the Company or that may be
subscribed by and allotted/transferred to the companies, firms and trusts and other entities in which they
are interested as Directors, members, partners, trustees or otherwise.
Compliance with Corporate Governance requirements

The provisions of the Listing Agreement to be entered into with the Stock Exchange(s) will be applicable
to the Company immediately upon the listing of the Equity Shares with the Stock Exchanges. The
Company has complied with the corporate governance code in accordance with Clause 49 to the extent
possible. The Company undertakes to take all necessary steps to continue to comply with all the
requirements of Clause 49 of the Listing Agreement to be entered into with the Stock Exchanges.
In terms of the Clause 49 of the Listing Agreement, The Company has already constituted the following
committees.
Audit Committee
The Audit Committee was constituted at the Board meeting held on September 3, 2010. The Audit
Committee comprises of the following members
Name of Director Status in Committee Nature of Directorship
Mr. P. Vaidyanathan Chairman Independent Director

Mr. R. Thiagarajan Member Independent Director
Mr. V Janakiraman Member Independent Director
Mr. K R V Ramani Member Non - Independent Director
The role of the Committee has been defined to include the following activities:
(a) Overseeing the Company’s financial reporting process and the disclosure of its financial information to
ensure that the financial statements are correct, sufficient and credible.
(b) Recommending to the Board, the appointment, re-appointment and if required, the replacement or
removal of the statutory auditor and fixation of audit fee.
(c) Approval of payment to statutory auditors for any other services rendered by the statutory auditors.
(d) Reviewing with the management the annual financial statements before submission to the Board for
approval, with particular reference to:
- Matters required to be included in the Director’s Responsibility Statement to be included in the
Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956.
- Changes, if any, in accounting policies and practices and reasons for the same.
- Major accounting entries involving estimates based on the exercise of judgment by management.
108
SABARI INN LIMITED
- Significant adjustments made in the financial statements arising out of audit findings.
- Compliance with listing and other legal requirements relating to financial statements.
- Disclosure of any related party transactions.
- Qualifications in the draft audit report.
(e) Reviewing with the management, the quarterly financial statements before submission to the board for
approval
(f) Reviewing, with the management, the statement of uses/ application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than
those stated in the offer document/ prospectus/ notice and the report submitted by the monitoring
agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate
recommendations to the Board to take up steps in this matter.
(g) Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the
internal control systems.
(h) Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage
and frequency of internal audit.
(i) Discussion with internal auditors any significant findings and follow up there on.
(j) Reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting
the matter to the board.
(k) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as
well as post-audit discussion to ascertain any area of concern.
(l) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non payment of declared dividends) and creditors.
(m) To review the functioning of the Whistle Blower mechanism, in case the same is existing.
(n) Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Remuneration Committee
The Remuneration Committee was constituted on September 03, 2010 and comprises the following
directors of the Board.

Mr. V Janakiraman Chairman Independent Director
Mr. P. Vaidyanathan Member Independent Director
Mr. R. Thiagarajan Member Independent Director
Mr. T.R.Sridharan Member Independent Director
The terms of reference of the Remuneration Committee are as follows:
(a) The Remuneration Committee recommends to the board the compensation terms of the executive
directors.
(b) Framing and implementing on behalf of the Board and on behalf of the shareholders, a credible and
transparent policy on remuneration of executive directors including ESOP, Pension Rights and any
compensation payment.
(c) Considering approving and recommending to the Board the changes in designation and increase in
salary of the executive directors.
(d) Ensuring the remuneration policy is good enough to attract, retain and motivate directors.
109
SABARI INN LIMITED
(e) Bringing about objectivity in deeming the remuneration package while striking a balance between the
interest of The Company and the shareholders.
Shareholders’/ Investor Grievances Committee
The Company has constituted the Shareholders and Investors Grievances Committee on September 03,
2010. The Committee consists of the following Directors.

Mr. T.R.Sridharan Chairman Independent Director
Mr. P.Vaidyanathan Member Independent Director
Mr. K.R.V.Ramani Member Non – Independent Director
Mr. K.R.Narayanan Member Non – Independent Director
The scope and function of this committee is to consider and review shareholders’/ investors’ grievances
and complaints and ensure that all shareholders’/ investors’ grievances and correspondence are attended
to expeditiously and satisfactorily unless constrained by incomplete documentation and/ or legal
impediments.
Changes in The Board of Directors
The changes in the Board of Directors during the last three years are as follows:
Name Date of Change Reason for Change

Mr. Naresh Pathak 28/12/2007 Resignation
Mr. T.R.Sridharan 30/12/2009 Appointment
Mr. V. Janakiraman 26/02/2010 Appointment
Mr. P. Vaidyanathan 03/09/2010 Appointment
Mr. R.Thiagarajan 03/09/2010 Appointment
Mrs. Aruna Ramani 03/09/2010 Resignation
110
SABARI INN LIMITED
MANAGEMENT ORGANIZATION STRUCTURE
Chairman & Managing Director
Chief Executive Officer - VP - Technical Executive Company Secretary

Operation Director and Law officer
Chief Financial Chief Financial

Officer Officer
111
SABARI INN LIMITED
KEY MANAGERIAL PERSONNEL
Sr. Name Designation Functional Qualification Date of Total Previous Remuner

No Area Joining Experie Employer ation
nce (in paid in
years) 09-10
(` in
lacs)
1 Mr. Sunil Mathur Executive Operation, B.A. 15/07/2010 30 Years Wyndham N.A.
52 Years Director Sales & (Economics), Hotel
Marketing PGDHM Group
and Human
Resource
2. Mr. K.R. Chief Law Legal and B.Sc, LLB, 01/02/2008 40 Years Kirloskar 15.00
Ramakrishnan Officer and Secretarial FCS & Constructi
63 Years Company AICWA ons and
Secretary & Engineers
Compliance Ltd.
Officer
3. Mr. Ramesh Siva Chief Operations of B.A., 17/07/2003 15 years Savera 20.40
39 Years Executive Hotels and DHMCT & Hotel
Officer Resorts AN
4. Mr. D. Babu Chief Finance and B.A, M.Com, 21/01/2005 15 Years Self 20.40
39 Years Financial Accounts FCA & ISA, Employed
Officer B.L
5. Mr. D.Gideon Vice Project B.E. and M.I 05/06/2007 45 Years Choice 15.00
65 Years President Execution MARE Hotels
(Technical) India
6. Mr. A.Kumaravel Vice Operation B.Com, FCA 08/02/2008 25 Years Aban 15.00
48 Years President and Project Constrcuti
(Finance) Finance ons Pvt.
Ltd.
8. Mr. Pradeep General Operations- DHMCT & 27/03/2004 23 Years Ambika 9.60
Krishna Manager T.Nagar AN , MTM Empire
46 years Hotel , Hotel
Chennai
9. Mr. Samir Kumar General Operations- B.Com 10/05/2007 22 Years The 8.40
Sharma Manager OMR Hotel , Residency
44 Years Chennai Hotel
10. Mr. Akash Gupta General Operations- B.A. , 02/08/2010 19 Years RainTree 18.00
42 Years Manager Park Plaza DHMCT & Hotel
Hotel , AN
Coimbatore
11. Mr. Lionel Arthur General Corporate B.A. , SSL , 02/06/2009 23 Years The 7.20
Leo Manager Affairs & HR PGDPM & Residency
45 Years IR, DHRM Group of
Hotels
112
SABARI INN LIMITED
Note: As on date, all the employees named above are on the roll of the Company as permanent
employees except Mr. Sunil Mathur, who has been appointed as a consultant. Further there is no
arrangement or understanding with major shareholders, customers, suppliers or others pursuant to
which key managerial personnel were selected as a director or member of senior management.
Changes in Key Managerial Personnel
Name Date of Change Reason for Change

Mr. K.R. Ramakrishnan 01/02/2008 Appointment
Mr. A. Kumaravel 08/02/2008 Appointment
Mr. Lionel Arthur Leo 02/06/2009 Appointment
Mr. Sunil Mathur 15/07/2010 Appointment
Mr. Akash Gupta 02/08/2010 Appointment
Shareholding of the Key Managerial Personnel
Name Number of shares held Percentage of Shares held
Mr. Ramesh Siva 1 0.00

Mr. D.Babu 1 0.00
Mr. K.R. Ramakrishnan 1 0.00
Mr.A. Kumaravel 1 0.00
Total 4 0.00
Relationship with Directors / Promoters of the company
Except for Mr. K.R. Ramakrishnan who is brother of Mr. K.R.V Ramani, the promoter, none of the Key
Managerial Personnel are related to the promoters, directors of SIL and other Key Managerial Personnel.
Bonus or Profit Sharing Plan for Key Managerial Personnel
There are no profit sharing plans or schemes for key managerial personnel. Company may in future
implement Employee Stock Option Plans as may be approved by the members of the Company.
Loans to Key Managerial Personnel
There are no loans outstanding from Key Managerial Personnel
Interest of Key Managerial Personnel
None of the Key Managerial Personnel have any interest in the Company except to the extent of
shareholding, remuneration and reimbursement of expenses.
Employee Stock Option Schemes

Till date, the Company has not introduced any Employees Stock Option Scheme/Employee Stock
Purchase Scheme.
113
SABARI INN LIMITED
Payment or benefit to Officers (non-salary related)

No other benefits or payments have been made to any officer of SIL. At present, the Company does not
intend to give any benefit or any payment to any of SIL employees. Incentive Plans if any as may be
required to be implemented shall be approved by the shareholders at that point of time.
114
SABARI INN LIMITED
PROMOTERS AND PROMOTER GROUP
The Promoters
· Mr. K.R.V. Ramani

· Mrs. Aruna Ramani
Details of Promoter being an individual
1. Mr. K.R.V. Ramani
Mr. K.R.V. Ramani (45 Years) is the Chairman and Managing Director of the
Company. He holds Bachelor’s Degree in field of Commerce. He is a first
generation entrepreneur and founder of Sabari group. Mr. Ramani started his
business venture as a builder/developer/promoter in the business of
construction of residential and commercial properties in 1993 by promoting
Sabari Foundations Pvt. Ltd. As a lateral expansion, the group ventured into the
supermarket business under the brand name “Nilgiris” with franchisee
arrangement, which presently runs three super markets in Chennai. He then
ventured into hospitality services with the incorporation of Sabari Inn Pvt. Ltd.
in 1999. He established the First Hotel - “Quality Inn Sabari” at T. Nagar,
Chennai in the year 2002 with 72 Room Keys and thereafter expanded the
business by setting up hotels at OMR, Chennai and Kodaikanal. Currently, Mr.
K.R.V. Ramani owns and manages the gamut of businesses from realty to
hospitality with significant stake in all the Group Companies.
Identification Details
Passport No. Z1763545
Driving License TN09 20080004384
Number
2. Mrs. Aruna Ramani
Mrs. Aruna Ramani (43 Years), wife of Mr. K.R.V. Ramani, holds Bachelor of
Science Degree. She is the one of the promoter of the Company and has been
actively involved in the management of the group companies.
Identification Details
Passport Number A9462407
PAN AICPR9284P
115
SABARI INN LIMITED
3. Ramani (HUF)
The HUF with Mr. K.R.V Ramani as Karta is engaged in the business of Civil Construction. The HUF was
formed on 01/04/2000 and has its office at 9/5, Seethammal colony Extension, 1st Cross Street,
Teynampet, Chennai 600 018.
The coparceners of HUF are as follows:
Mrs. Aruna Ramani

Ms. Apoorva Ramani
Financials
(` In lacs)
Particulars 2008-09 2007-08 2006-07
Capital 17.77 41.15 33.54

Sales /Income 13.50 10.30 9.84
The financials of HUF for F.Y.2009-10 are not available.
The Company confirms that the Permanent Account Number, Bank Account Numbers, Passport Number
of the promoters have been submitted to the Stock Exchanges at the time of filing of the Draft Red
Herring Prospectus. Further, the Promoters have not been detained as a willful defaulter by the Reserve
Bank of India or any other Government authority and there are no violations of securities laws committed
by the Promoters in the past or any such proceedings are pending against the Promoters except as
discussed in section titled “Legal and Regulatory Information” on page no. 160 of this Draft Red Herring
Prospectus.
INTEREST OF PROMOTERS
All the Promoters who are on the Board of Company may be deemed to be interested to the extent of the
sitting fees and other remuneration for the services rendered and the reimbursement of expenses, if any,
payable to them under the articles. The Promoters may also be deemed to be interested to the extent of
the shares, if any, held by them or by the relatives or by firms or companies of which any of them is a
partner and a director/member respectively.
Except as mentioned above the promoters do not have any interest in the business of the company.
The Group Companies/Entities
The following are the Group Companies/Entities
Sr. No. Name of the Group Companies/Partnership Firm

1. Sabari Supermarket Private Limited
2. Sabari Nest Inn Private Limited
3. Sabari Realtors Private Limited
4. Sabari Foundations Private Limited
5. Sabari Cuisines Private Limited
6. Sabari Stocks Private Limited
7. Vishranthi Sabari ( Partnership Firm)
8. Vishranthi Sabari Constructions (Partnership Firm)
116
SABARI INN LIMITED
The details of the Group Companies are as follows:
1. SABARI SUPERMARKET PRIVATE LIMITED (SSPL)
SSPL was incorporated on 23/03/1999 with Registrar of Companies, Tamil Nadu. The CIN of the
Company is U52190TN1999PTC042129. The registered office is situated at “Nilgiris”, 29, Thirumallai
Pillai road, T. Nagar, Chennai, Tamil Nadu-600017. The company is presently engaged in the business of
Super Market and Departmental Stores.
Present Board of Directors 1) Mr. K.R.V. Ramani

2) Mrs. Aruna Ramani
Present Share Holding Pattern of the Company:
Sr. Category No. of shares held % of total share

No. of ` 10/- each capital
1 Mr. K.R.V. Ramani 5,49,000 99.82
2 Mrs. Aruna Ramani 1,000 0.18
Grand Total 5,50,000 100.00
Brief Audited Financials:

(` In Lacs)
Particulars Financial Year Ended 31st March
2007-08 2008-09 2009-10
Equity Share Capital at face value of ` 10/- each 55.00 55.00 55.00
Share Application Money 250.00 250.00 250.00
Reserves & Surplus 85.88 115.88 167.94
Total Income 1433.80 1662.94 3204.32
Profit After Tax 19.32 29.99 52.06
Earnings Per Share (`) (Face Value ` 10/-) 3.51 5.45 9.47
Net Asset Value (NAV) (`) 25.61 31.07 40.53
SSPL has not made any capital issue during last three years. SSPL is not a Sick Industrial Company
within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.
The Company has not made any loss in the immediately preceding financial year.
2. SABARI NEST INN PRIVATE LIMITED (SNIPL)
SNIPL was incorporated as “Sabari Nest Inn Private Limited.” on 19/08/2008 with Registrar of
Companies, Tamil Nadu. The Registration Number of the company is 068917 of 2008 and the CIN
Number isU55101TN2008PTC068917. The registered office is situated at No. 29, Thirumallai Pillai road, T.
Nagar, Chennai, Tamil Nadu-600017.
The main object of the company is to carry out the business of hotels, lodging rooms or apartment
housekeepers, licensed victuallers, cafeteria, resorts with facilities such as bars, swimming pools,
importers and manufacturers of aerated mineral & artificial waters and other drinks. The company was
incorporated also to carry on all the business of purveyors, restaurants, caterers for public, tourist car
117
SABARI INN LIMITED
operators, importers and brokers of food, amusement, recreation and entertainments of all kinds that may
be required by the guests or visitors to the company’s premises.


1 Mr. K.R.V. Ramani 2,00,05,000 99.98
Grand Total 2,00,10,000 100.00

(` In Lacs)
Particulars For the Financial
Period ended 30th
September, 2009
Equity Share Capital of face value ` 10/- each 2001.00
Redeemable Cumulative Preference Share Capital (Face 160.00
Value ` 100/-)
Reserves & Surplus Nil
Total Income 591.01
Profit After Tax (250.34)
Earnings Per Share (`) (Face Value ` 10/-) (1.25)
Net Asset Value (NAV) (`) 8.75
SNIPL has not made any capital issue during last three years. SNIPL is not a Sick Industrial Company
3. SABARI REALTORS PRIVATE LIMITED (SRPL)
SRPL was incorporated on 28/05/2007 with Registrar of Companies, Tamil Nadu. The CIN of the
company is U70101TN2007PTC063682. The registered office is situated at #29, Thirumallai Pillai Road, T.
Nagar, Chennai, Tamil Nadu-600017.
The main object of the company is to carry on the business of engineering contractors, undertaking and
executing contract works of construction of building, roads, bridges and other super structures on behalf
of various organizations, individuals, governments. The company also focuses to develop, purchase and
or sells lands or construct buildings thereon and other related activities.

118
SABARI INN LIMITED

1 Mr. K.R.V. Ramani 40,05,000 14.00
2 Mrs. Aruna Ramani 40,05,000 14.00
3 ICICI Prudential Asset Management Company
Limited; Portfolio Managers on behalf of its clients 1,00,000 0.35
4 India Opportunity Real Estate Fund 2,05,00,000 71.65
Grand Total 2,86,10,000 100.00

(` In Lacs)
2007-08 2008-09 2009-10
Equity Share Capital at face value of Rs.10/- 1.00 2861.00 2861.00
each
Reserves & Surplus Nil 940.00 980.18
Total Income Nil Nil 1864.73
Profit After Tax Nil Nil 40.18
Earnings Per Share (Rs.) (Face Value Rs. 10/-) NA N.A. 0.14
Net Asset Value (NAV) (Rs.) 10.00 13.28 13.43
SRPL has not made any capital issue during last three years. SRPL is not a Sick Industrial Company
4. SABARI FOUNDATIONS PRIVATE LIMITED (SFPL)
SFPL was incorporated on 28/06/1993 with Registrar of Companies, Tamil Nadu. The CIN of the
Company is U70101TN1993PTC025339. The registered office is situated at No. 29, Thirumallai Pillai road,
T. Nagar, Chennai, Tamil Nadu-600017, India.
The company is engaged in the business of property development, buy and or sell of land and other
related real estate activity.
Present Board of Directors 1.) Mr. K.R.V. Ramani

2.) Mrs. Aruna Ramani
3.) Mr. T.Prasanna

1 Mr. K.R.V. Ramani 3,82,500 92.17
Grand Total 4,15,000 100.00
119
SABARI INN LIMITED
Brief Audited Financials: (` In Lacs)

2007-08 2008-09 2009-10
Equity Share Capital at face value of ` 100/- each 25.00 415.00 415.00
Share Application Money 1350.00 1000.00 1000.00
Reserves & Surplus 43.45 9.98 35.74
Total Income 91.70 90.22 140.00
Profit After Tax 27.10 6.53 25.76
Earnings Per Share (`) (Face Value Rs. 100/-) 108.40 4.95 6.21
Net Asset Value (NAV) (`) 273.80 102.40 108.61
SFPL has not made any capital issue during last three years. SFPL is not a Sick Industrial Company
The Company has not made any loss in the immediately preceding financial year.
5. SABARI CUISINES PRIVATE LIMITED (SCPL)
SCPL was incorporated on 31/07/2009 with the Registrar of Companies Tamil Nadu, Chennai. The CIN
of the Company is U55101TN2009PTC072442. The registered office is situated at #29, Thirumallai Pillai
Road, T. Nagar, Chennai, Tamil Nadu-600017.
The main object of the company is to carry on the business of high end food court multi cuisine
restaurants under franchise agreement or otherwise and to have chain of food restaurants, cafes and
related activities. The Company has not commenced its operation.
Board of Directors:

1 Mr. K.R.V. Ramani 5,000 50
2 Mrs. Aruna Ramani 5,000 50
Grand Total 10,000 100.00
Financials:
SCPL has not commenced any activity since incorporation and hence there are no financials available for
relevant period.
SCPL has not made any capital issue during last three years. SCPL is not a Sick Industrial Company
120
SABARI INN LIMITED
6. SABARI STOCKS PRIVATE LIMITED (SSPL)
SSPL was incorporated on 02/01/2009 with Registrar of Companies, Tamil Nadu. The CIN of the
company is U65993TN2009PTC070361. The registered office is situated at #29, Thirumallai Pillai Road, T.
Nagar, Chennai, Tamil Nadu-600017
The main object of the company is to acquire and hold shares, to invest the funds of Company in shares,
stocks, debentures, debenture stocks, bonds, obligations and securities and to accumulate funds and lend.
The Company has not commenced any operations since incorporation.


1 Mr. K.R.V. Ramani 5,000 50
2 Mrs. Aruna Ramani 5,000 50
Grand Total 10,00,000 100.00
Financials
SSPL has not commenced any activity since incorporation and hence there are no financials available for
relevant period.
SSPL has not made any capital issue during last three years. SSPL is not a Sick Industrial Company
7. Vishranthi Sabari (Partnership Firm)
Vishranthi Saabri is a partnership firm engaged in the business of Civil Construction, Real estate,
Property Development and Interior Decorators. The partners of the firm are Mr. K.R.V. Ramani (50%) and
Mr. M.R. Rajkumar Reddy (50%). Their registration No of Vishranthi Sabari is 267 of 2006. The registered
office is situated at No. 29, Thirumalai Pillai Road, T. Nagar, Chennai 600 017.
8. Vishranthi Sabari Constructions (partnership Firm)
Vishranthi Saabri is a partnership firm engaged in the business of Civil Construction, Real estate,
Property Development and Interior Decorators. The partners of the firm are Mrs. Aruna Ramani (50%)
and Mrs. M.R. Varija (50%). The registration No for Vishranthi Sabari Constructions is 606 of 2006. The
registered office is situated at No. 29, Thirumalai Pillai Road, T. Nagar, Chennai 600 017.
121
SABARI INN LIMITED
Common Pursuits
Presently none of the other group companies are in the same line of business of operating hotels except
for the fact that the company is, apart from operating the hotels owned by the company itself, also
operating the hotels owned by the group company – Sabari Nest Inn Private Ltd. and the convention
centre owned by Sabari Supermarket Pvt. Ltd. The company shall adopt necessary procedures and
practices as permitted by law to address any conflict situations, as and when they may arise.
Payment or Benefit to the Promoter
Other than salary and remuneration of the Promoter Directors, Dividends if any, declared by the
company on shares held by them, there are no payment or benefits to promoters of the company.
Related party transactions
For details of the related party transactions, please see the sections titled “Auditor’s Report” Annexure
XV: Statement of Related Party Transaction on page 143
Defunct Promoter Group Companies
The Company does not have any defunct group company.
Disassociation from companies
The promoters have not disassociated themselves from any of the companies / firms during the three
proceeding years from the date of filing of this DRHP.
122
SABARI INN LIMITED
DIVIDEND POLICY
The Company has not paid any dividend so far. The declaration and payment of any dividends in the
future will be recommended by the Board of Directors, at its discretion, and will depend on a number of
factors, including the Company’s earnings, positive cash flows from operations, capital requirements and
overall financial condition. In addition, the Company’s ability to declare and pay dividends may be
restricted by the terms of its financing agreements executed if any with the lenders. Issuer is committed
to building and developing the business of the Company. Accordingly, it may propose to reinvest any
profits generated and not pay dividends, following this issue. The Issuer cannot assure that any future
dividends will be declared or paid or that the amount thereof will not be decreased from the previously
declared dividends, if any.
123
SABARI INN LIMITED
PART II
SECTION – IV FINANCIAL INFORMATION
AUDITORS’ REPORT
To,
The Board of Directors,
Sabari Inn Limited,
No.29, Thirumalai Pillai Road,
T.Nagar, Chennai – 600 017
Dear Sirs,
1. We have examined the Financial Information of SABARI INN LIMITED (the Company)
annexed to this report for the purpose of inclusion in the Draft Red Herring Prospectus
(DRHP)/ Red Herring Prospectus (RHP)/ Prospectus. The said Financial Information has been
prepared by the Company in accordance with the requirements of paragraph B (1) of Part-II of
Schedule II to the Companies Act, 1956 (‘the Act’), and the Securities and Exchange Board of
India (“SEBI”)-(Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended
from time to time, issued by the Securities and Exchange Board of India in pursuance of Section
11 of the Securities and Exchange Board of India Act, 1992 and related clarification and in
accordance with the terms of our engagement letter dated 23rd August 2010 issued in
connection with its Proposed Initial Public Offering (IPO) of equity shares. (The Financial
Information has been prepared by the Company and approved by the Board of Directors.)
2. Financial Information as per Audited Financial Statement:
We have examined the attached ‘Summary Statement of Assets and Liabilities’ as restated of
the Company as at 30th June 2010, 31st March 2010, 31st March 2009, 31st March 2008,
31st March, 2007 and 31st March, 2006 (Annexure I) and the attached ‘Statement of Profit and
Loss’ as restated (Annexure II) and the attached ‘Statement of Cash Flows’ as restated
(Annexure III) for the quarter ended 30th June 2010 and financial years ended on
31st March 2010, 2009, 2008, 2007 and 2006 together referred to as ‘Restated Summary
Statement’. These Summary Statements have been extracted from the financial statements for
the quarter ended 30th June 2010 and year ended 31st March 2010 audited by us and for the
years 2009, 2008, 2007 and 2006 audited by Mr.V.Karthikeyan B.sc, F.C.A, Chartered
Accountant and have been adopted by the Board of Directors/ Members and examined by us.
Based on our examination of these summary statements, we state that:
i) The ‘Restated Summary Statements’ have to be read in conjunction with the notes given
in Annexure IV.
ii) The ‘Restated Summary Statements’ of the Company have been restated with
retrospective effect to reflect the significant accounting policies being adopted by the
Company as on 30th June 2010.
iii) The restated profits have been arrived at after charging all expenses including
depreciation and after making such adjustment and regroupings as in our opinion are
appropriate in the year/period to which they are related.
iv) There are no extra ordinary items that need to be disclosed separately in the Restated
Summary Statements.
124
SABARI INN LIMITED
v) There are no qualifications in the auditors’ report on the financial statements that require
adjustments to the Restated Summary Statements.
3. Other Financial Information
We have examined the following information relating to the quarter ended 30th June 2010,
financial years ended March 31, 2010, 2009, 2008, 2007 and 2006 of the Company, proposed to
be included in the DRHP/ RHP/ Prospectus, as approved by the Board of Directors and
annexed to this report:
i. Significant Accounting Policies and Notes on Restated Summary Statements

(Annexure IV)
ii. Schedule of Secured Loans for the period ended on 30th June 2010 (Annexure V)
iii. Schedule of Unsecured Loans for the quarter ended 30th June 2010 and years ended 31st
March 2010, 2009, 2008, 2007 and 2006 (Annexure VI)
iv. Age-wise Schedule of Sundry Debtors for the quarter ended 30th June 2010 and years
ended 31st March 2010, 2009, 2008, 2007 and 2006 (Annexure VII)
v. Schedule of Loans and Advances for the quarter ending 30th June 2010 and years ended
31st March 2010, 2009, 2008, 2007 and 2006 (Annexure VIII)
vi. Schedule of Investments for the quarter ended 30th June 2010 and years ended 31st March
2010, 2009, 2008, 2007 and 2006 (Annexure IX)
vii. Schedule of Other Income for the quarter ended 30th June 2010, and years ended
31st March 2010, 2009, 2008, 2007 and 2006 (Annexure X)
viii. Details of Dividends Paid for the quarter ended 30th June 2010 and years ended
31st March 2010, 2009, 2008, 2007 and 2006 (Annexure XI)
ix. Statement of Tax Shelter (Annexure XII)
x. Summary of Accounting Ratios based on adjusted profits related to earnings per share,
net asset value and return on net worth (Annexure XIII)
xi. Statement of Capitalization as at 30th June 2010 (Annexure XIV)
xii. Related Party Disclosure for the quarter ended 30th June 2010 and years ended
31st March 2010, 2009, 2008, 2007 and 2006 (Annexure XV)
4. Schedule of Contingent Liabilities for the years ended 30th June 2010 (Annexure XVI)
5. In our opinion, the ‘Financial Information as per Audited Financial Statements’ and ‘Other
Financial Information’ mentioned above for the quarter ended 30th June 2010, and the years
ended 31st March 2010, 2009, 2008, 2007 and 2006 have been prepared in accordance with
Part IIB of schedule II of the Act and the Regulations, 2009.
125
SABARI INN LIMITED
6. This report should not in any way be construed as a re-drafting of any of the previous audit
report given by Mr.V.Karthikeyan B.sc, F.C.A, Chartered Accountant or us nor should this be
construed as a new opinion on any of the financial statements referred to herein.
7. This report is intended solely for your information and for inclusion in the DRHP/ RHP/
Prospectus in connection with the proposed IPO of the Company and not to be used, referred
to or distributed for any other purpose without our prior written consent.
Yours Faithfully
Sd/-
R.Vijayaraghavan
Partner
Membership No. : 022442
Firm Registration No: 000808S
Place : Chennai
Date : 08/12/2010
126
SABARI INN LIMITED
ANNEXURE I – RESTATED STATEMENT OF ASSETS AND LIABILITIES
` In lacs

Particulars 30.06.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006
3 Months 12 Month period
A. Fixed Assets
Gross block 9250.92 9,236.71 7,515.20 7,235.52 2,982.61 2,958.55
Less Depreciation 1207.09 1,118.66 778.56 478.90 341.94 256.11
Net Block 8043.83 8,118.05 6,736.64 6,756.61 2,640.67 2,702.44
Capital Work in Progress 10422.08 9,071.62 7,007.09 2,459.54 3,135.66 754.05
Net Block after adjustment for
18465.91 17,189.67 13,743.73 9,216.16 5,776.33 3,456.49
Revaluation Reserve
B. Investments - - - - - -
C. Current Assets, Loans and Advances

Inventories 145.34 139.07 171.86 167.25 92.75 87.39
Sundry Debtors 666.65 706.99 191.79 146.99 81.89 67.39
Cash and Bank Balances 296.03 150.64 1,781.45 3,147.87 814.47 51.80
Loans and Advances 1145.16 1,189.28 745.46 1,890.31 163.01 111.60
2253.17 2,185.98 2,890.56 5,352.42 1,152.11 318.18
D. Liabilities and Provisions:
Secured Loans 8035.42 7,013.35 5,319.50 3,437.28 2,953.96 1,798.41
Unsecured Loans 508.71 511.96 - - 99.20 211.76
Current Liabilities and Provisions 884.11 746.50 921.68 920.35 220.28 128.34
Deferred Tax Liability 584.14 550.87 316.96 234.11 121.37 172.69
10012.38 8,822.68 6,558.13 4,591.74 3,394.81 2,311.20

E. Net Worth 10706.70 10,552.98 10,076.16 9,976.83 3,533.63 1,463.47
F. Represented by
Share Capital 6784.31 6,784.31 6,784.31 6,784.31 3,360.00 1,525.00
Reserves 3922.39 3,768.66 3,291.84 3,192.52 173.63 (61.47)
Total 10706.70 10,552.98 10,076.16 9,976.83 3,533.63 1,463.53
Misc. Expenditure to the extent not
G. - - - - - 0.06
written off or adjusted
H. Net Worth (F-G) 10706.70 10,552.98 10,076.16 9,976.83 3,533.63 1,463.47
127
SABARI INN LIMITED
ANNEXURE II - RESTATED STATEMENT OF PROFIT AND LOSS ACCOUNT
` In lacs
Particulars
30.06.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006
3 Months 12 Months
Income
Sales:
Rooms 614.96 2,079.87 1,266.25 781.69 378.79 268.91
Food and Beverages 445.83 1,897.37 1,276.63 863.57 603.02 420.94
Other Income 94.00 169.58 315.35 182.79 274.30 182.51
1154.80 4,146.83 2,858.23 1,828.05 1,256.11 872.36
Expenditure
Raw Materials Consumed 154.60 572.38 382.24 233.38 195.58 116.36
Staff Costs 194.92 777.68 557.48 337.52 170.61 136.79
Administration Expenses 151.51 519.12 419.70 313.88 207.62 106.56
Upkeep and Service Expenses 227.82 829.97 573.95 395.93 270.40 179.35
728.85 2,699.15 1,933.36 1,280.70 844.20 539.07
Earning Before Depreciation Interest & Tax 425.95 1,447.68 924.87 547.35 411.91 333.29
Depreciation 88.44 345.63 302.11 142.22 90.37 85.28
Interest 140.20 405.38 429.39 233.40 131.96 136.56
Net Profit before tax and Extraordinary items 197.32 696.67 193.37 171.73 189.57 111.45
Taxation
Minimum Alternate Tax Credit 100.00 120.79 20.64 17.67 21.17 9.28
Current tax (100.00) (120.79) (34.28) (25.29) (26.16) (13.08)
Deferred tax (35.01) (233.91) (82.85) (112.74) 51.32 (46.26)
Net Profit before Extraordinary Items 162.30 462.76 96.88 51.37 235.90 61.38
Extraordinary items - (1.05) - (8.27) (0.88) (1.52)
Net Profit after Extraordinary Items 162.30 461.71 96.88 43.09 235.03 59.86
Adjustments on account of Prior period
- 5.11 2.45 0.09 0.08 0.40
Expenses
Adjusted Profit 162.30 466.82 99.33 43.19 235.10 60.26
128
SABARI INN LIMITED
ANNEXURE III - RESTATED STATEMENT OF CASH FLOW
` In lacs
Particulars
30.06.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006
3 Months 12 Months
Cash Flows from Operating Activities
Net Profit before Taxation 187.31 710.73 195.82 163.55 188.77 110.32
Adjustments for:
Depreciation 88.44 345.63 302.11 142.22 90.37 85.28
Loss on sales of Assets - 1.05 - 8.27 0.88 1.52
Interest/ Dividend Income (1.74) (79.73) (263.15) (41.61) (13.74) (3.31)
Preliminary expenses Written off - - - - 0.06 0.06
Interest Paid 140.20 405.38 429.39 233.40 131.96 136.56
Operating Profit before Working Capital
414.20 1,383.06 664.17 505.84 398.30 330.43
Changes
Change in Trade and Other Receivables 40.35 (515.21) (44.80) (65.10) (14.50) (15.95)
Change in Inventories (6.27) 32.79 (4.62) (74.50) (5.36) (17.49)
Change in Other Current Assets 146.45 (316.01) 1,244.68 (1,679.34) (10.41) (46.63)
Change in Current Liabilities 38.04 (260.01) (32.96) 674.78 69.58 (1.03)
Income-taxes paid (3.07) (42.99) (79.19) (30.29) (23.63) 1.00
Prior Period Expenditure - (5.11) (2.45) (0.09) (0.08) -
Net Cash Flow from Operating Activities 629.71 276.54 1,744.84 (668.71) 413.91 250.34
Cash Flow from Investing Activities
Purchase of Fixed Assets (14.21) (1,725.01) (279.69) (4,271.94) (30.70) (236.31)
Capital Work in progress (1,350.46) (2,064.53) (4,547.54) 676.11 (2,381.61) (754.05)
Sale of Fixed Assets - 2.02 - 5.60 1.30 1.96
Interest Received 1.74 79.73 263.15 41.61 13.74 3.31
Net Cash Flow used in Investing Activities (1,362.94) (3,707.78) (4,564.08) (3,548.62) (2,397.27) (985.10)
Cash Flows from Financing Activities
Changes in Borrowings 17,639.49 8,962.53 3,905.14 1,795.01 2,040.52 2,221.13
Proceeds from Issuance of Capital - - - 6,300.01 1,835.00 -
Increase in Reserves - - - 100.00 - -
Repayments (16,620.67) (6,756.72) (2,022.93) (1,410.89) (997.52) (1,542.00)
Share Application Money Received - - - - - 200.00
Interest Paid (140.20) (405.38) (429.39) (233.40) (131.96) (132.03)
Net Cash Flow from Financing Activities 878.62 1,800.43 1,452.82 6,550.73 2,746.03 747.09
Net increase in cash and cash equivalents 145.39 (1,630.81) (1,366.42) 2,333.40 762.67 12.33
Cash and Cash Equivalents (Opening
150.64 1,781.45 3,147.87 814.47 51.80 41.47
Balance)
Cash and Cash Equivalents (Closing Balance) 296.03 150.64 1,781.45 3,147.87 814.47 51.80
129
SABARI INN LIMITED
ANNEXURE IV
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
(A) SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Preparation of Financial Statements:
The Financial Statements are prepared under historical cost convention on accrual basis and
comply with the Accounting Standards (AS) notified by the Companies (Accounting Standards)
Rules 2006. The Significant accounting policies adopted in the presentation of the accounts are as
under:
Use of Estimates
In preparing the Financial Statements in conformity with the accounting principles generally
accepted in India, we are required to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date
of Financial Statements and the amounts of revenue and expenses during the reported period.
Actual results could differ from those estimates. Any revision to such estimates is recognized in
the period in which the same is determined.
2. Government Grants:
The Department of Tourism, Government of India has granted during the financial year 2007-08 a
sum of Rs.1 Crore for setting up a Three Star Hotel at the Old Mahabalipuram Road. This has
been received with a condition that the status of Three Star has to be maintained for a period of 5
years. This amount has been transferred to Capital Subsidy Reserve.
3. Fixed Assets
· Fixed Assets are stated at cost less depreciation. Cost includes expenses incidental to the
installation of assets and borrowing costs attributable thereto.
· Capital Work-In-Progress comprise of outstanding advances made to acquire fixed assets and the
cost of fixed assets that are not yet ready for their intended use at the reporting date.
· Other incidental expenditure directly attributable to the project is accumulated as Capital Work-
In-Progress and is allocated to the relevant fixed assets on a pro-rata basis on the prime cost of
the assets.
4. Borrowing Costs:
· Interest and other borrowing costs, attributable to qualifying assets are capitalized.
· Interest not attributable to qualifying assets is charged to the profit and loss account in the period
in which it is incurred.
· Other borrowing costs are charged to revenue account over the tenure of the borrowing.
5. Valuation of Inventories:
Stock of Food, Beverages, Stores and Operating Supplies are carried at Cost or Net Realizable
Value whichever is lower.
130
SABARI INN LIMITED
6. Transactions in Foreign Exchange:
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the
transactions. Monetary items of Assets and Liabilities denominated in foreign currency and
outstanding at the Balance sheet date are translated at the exchange rate ruling at the period end.
Exchange differences arising on foreign currency transactions are recognized as income or
expense in the period in which they arise.
7. Revenue Recognition:
(A) Rooms, Restaurants, Banquets & Other Services:
Rooms, Restaurants, Banquets & Other Services comprise of sale of rooms, food and
beverages, allied services relating to hotel operations, including net income from
telecommunication services. Revenue is recognized upon rendering of the service.
(B) Other Income:
Other income comprise of interest on fixed deposits, rental receipts, commission income
and miscellaneous income like sale of scraps. These incomes are recognized as and when
they accrue.
8. Depreciation
Depreciation on fixed assets is provided on straight-line method at the rates and in the manner
specified in Schedule XIV of the Companies Act, 1956 read with the relevant circulars issued by
the Department of Company Affairs. Depreciation is provided on a pro-rata basis from the date
on which assets have been put to use.
9. Employee Benefits
(A) Provident Fund & Employee State Insurance :
The Company’s contribution to the Provident Fund and Employees state insurance
Scheme, paid or payable during the period has been debited to the Profit & Loss
Account.
(B) Gratuity Fund And Leave Encashment
The Company makes annual contributions to funds administered by trustees for

amounts notified. The company accounted the net present value of its obligations for the
gratuity benefits, based on the external actuarial valuation, determined on the basis of
projected unit credit method, carried out as at balance sheet date.
(C) Other Benefits:

In respect of other employee benefits, provisions for such benefits are provided in terms
of Accounting Standard 15(Revised) – “Employee Benefits”.
10. Cash Flow Statement:
131
SABARI INN LIMITED
Aggregate amount of Cash flows that represents increase or decrease in Operating, Financing &
Investment Activities are separately disclosed in Cash Flow Statement, prepared as per
Accounting Standards 3.
11. Segment Reporting
The Company is exclusively engaged in the business of Hoteliering. This, in context of

Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountants
of India, is considered to constitute one single primary segment and accordingly no segment
information as required under Accounting Standard 17 is furnished.
12. Leases:
(A) Operating Leases :

· Operating Lease payments are recognized as expenditure in the Profit & Loss
Account on a Straight line basis.
· Security deposits made for these Leasehold properties are shown as Current Assets.
(B) Finance Leases :

· Assets under Finance Lease are disclosed separately from the assets owned.
· During the period of lease, finance charges and depreciation towards these assets are
charged to Profit & Loss account.
13. Deferred Tax Liability:
· Income tax is computed in accordance with Accounting Standard 22, notified by the
Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted in the same
period to which the revenue and expenses relate.
· Deferred Tax resulting from the timing difference between the book profits and taxable
profits are accounted for to the extent deferred tax liabilities are expected to crystallize with
reasonable certainty. Deferred tax is recognized on adjustments to revenue reserves to the
extent the adjustments are allowable as deductions in determination of taxable income and
they would reverse out in future periods.
14. Impairment of Assets:
Impairment is ascertained at each Balance sheet date in respect of company’s Fixed Assets. An
impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable
amount. As on the Balance Sheet date, the carrying amount of the assets net of accumulated
depreciation has not exceeded the recoverable amount. Hence there is no impairment loss on the
assets of the company.
15. Contingent Liabilities:
Provision for contingent liabilities in respect of bank guarantees have not been made but
disclosed in Notes to Accounts.
132
SABARI INN LIMITED
(B) NOTES TO ACCOUNTS AS ON 30/06/2010

1.
(i) The Company has obtained the approval from the Ministry of Corporate Affairs,
Government of India under section 211 (4) of the Companies Act 1956, for
exempting the company from the disclosure of quantitative data in Part – II
Schedule VI to the Companies Act, 1956 under paras 3(i)(a) and 3(i)(d) upto the
financial year ending March 31, 2011 vide Order No. 46/197/2010-CL-III.
(ii) The following expenses / provisions have been made for the period based on the
past trend or the estimated liability for the period considering the operations for
the whole year:
(a) Bonus
(b) Leave Encashment
(c) Gratuity (Based on Actuarial Valuation as on 31.03.2010)
(d) Income Tax
(iii) Service charges collected amounting to `65.18 lacs during the previous years is
no longer payable. Hence the same is included under Other Services under
“Other Income” (Schedule 13).
(iv) Capital Work-In-Progress includes `665.91 lacs (as on 31.03.10
` 525.45 lacs) being the interest on Term Loans availed from Banks.
2. SECURED LOANS:
(i) TERM LOANS
Term Loan from State Bank of Bikaner & Jaipur and State Bank of Mysore
The term loan is secured by a First pari-passu charge over the assets of the company viz.,
by an equitable mortgage of the Hotel properties of the company at T.Nagar (Chennai),
OMR (Chennai), Kodaikanal and Coimbatore.
Term Loan from State Bank of India, State Bank of Mysore & State Bank of
Travancore
The term loans are secured by a First charge on all movable and immovable assets
(including mortgage over immovable properties), present and future, of the project in
Bangalore ranking pari-passu with other term lenders. Equitable Mortgage of land at
Bangalore Bellary Road (Devanahalli) and the building to be constructed thereon.
(ii) TERM LOAN - OTHERS
Term Loans are secured by respective assets purchased out of the loans sanctioned.
(iii) WORKING CAPITAL FACILITIES
The working capital facilities sanctioned by State Bank of Bikaner & Jaipur are secured
as:
a) Primary:
133
SABARI INN LIMITED
First exclusive charge on all current assets including receivables of the company.
a) Collateral:
First exclusive charge by way of equitable mortgage of the company’s land property
at Munnar situated at Chinnakanal Village, Udumpanchola Taluk, Idukki Dist.,
Kerala.
(iv) All the above loans are personally guaranteed by the Promoter Directors.
3. Unsecured Loan represents interest free loan received from the Managing Director.
4. The company has paid ` 49.64 Lakhs towards upfront fee for the loans availed during the
period including loans transferred from Axis Bank to State Bank of Bikaner & Jaipur and
State Bank of Mysore. One-fourth of the said amount is being charged off during the current
period (for the 1st Quarter) and the balance amount would be charged off during the
remaining period of the financial year.
5. Contingencies & Events Occurring After the Balance Sheet Date:
(i) The Company is converted in to a Public Limited Company with effect from 20th
July 2010.
(ii) All the Term loans and Cash Credit facilities availed from Axis Bank Ltd and
Oriental bank of Commerce has been taken over by State Bank of Bikaner and
Jaipur during the current financial year.
(iii) The Company has taken a hotel property “The Mark Boulevard” on lease at
Whitefield Bangalore and commenced its operations on 1st September 2010.
6. Related Party Transactions:
The following are the related party transactions effected during the period:
` In lacs
Opening Closing
Name of the Nature of Nature of Balance During the Balance
Related Party Relationship Transactions (As at Period (As at
01.04.2010) 30.06.2010)
Sabari Foundations
Loan-Liability Nil Nil Nil
(P) Ltd
0.79
Sabari Supermarket Associate Purchase of 0.79
Nil
(P) Ltd Company Goods & Services Credit Credit
48.69 68.58
Sabari Nest Inn ( P) Purchase of
19.89
Ltd Goods & Services Debit Debit
Key
K.R.V. Ramani Remuneration 9.18
Management
134
SABARI INN LIMITED
Personnel
K.R.V. Ramani Rent Payments 1.20
511.96 3.25 508.71

K.R.V. Ramani Unsecured Loan
Credit Debit Credit
Relative of
K.R.Ramakrishnan Key Mgt Remuneration 3.89
Personnel
7. Earnings Per Share:
The Company’s Earnings Per Share are stated as per Accounting Standard 20 is as follows:
Basic EPS = 88 Paise (Annualised)

Diluted EPS = 88 Paise (Annualised)
Weighted Average Number of shares = 67,843,137
Particulars Amount in `
Profit as per profit And loss account 15,229,930

Less : Extraordinary items of Profit Nil
Profit attributable to equity shareholders 15,229,930
8. Deferred Taxation:
Amount in `
Calculation of Deferred Tax Liability
As at As at
Particulars
30.06.2010 31.03.2010
Deferred Tax Liability :
Related to Fixed Assets (A) 58,091,112 5,21,78,736
Deferred Tax Asset :
Disallowances Under Income Tax
(323,360) (27,34,528)
Act 1961 (B)
Net Timing Difference (Cr.) (A)-(B) 58,414,472 5,49,13,264
9. MSMED Act 2006 :
In the opinion of the management, there are no Micro, Small and Medium Enterprises to
whom the Company owes dues, which are outstanding for more than 45 days at the balance
sheet date. The information regarding Micro, Small and Medium Enterprises has been
determined to the extent such parties have been identified on the basis of the data available
with the Company.
135
SABARI INN LIMITED
10. CONTINGENT LIABILITIES NOT PROVIDED FOR:
` In lacs)
As At As At
Particulars
30.06.2010 31.03.2010
Outstanding bank Guarantees 207.13 207.13
Claims against the company not acknowledged as
NIL NIL
debts
Estimated amount of contracts remaining to be
918.08 1676.77
executed on capital account and not provided for
11. CIF VALUE OF IMPORTS
` In lacs
For the Period Ended

Particulars FY 2009-10
30.06.2010
Capital Goods 49.74 43.94
Stores & Spares NIL NIL
12. EARNINGS AND EXPENDITURE IN FOREIGN CURRENCY:
` In lacs
30.06.2010
(Represents money received through
international credit Card and 26.96 109.64
travelers’ cheques)
(Represents money paid through
Authorized foreign exchange 9.76 28.97
dealers)
13. MANAGERIAL REMUNERATION:
REMUNERATION TO MANAGING DIRECTOR:
` In lacs

30.06.2010
Salary & Allowances 9.18 39.72

Perquisites NIL NIL
136
SABARI INN LIMITED
14. AUDITORS REMUNERATION:
` In lacs

30.06.2010
Statutory Audit Fees 2.50 10.00
Tax Audit 0.50 2.00
Service Tax 0.31 1.24
15. The Previous Year’s figures have been re-grouped, wherever necessary.
16. Certain Creditor/Debtor, the individual balances of which are not material, is in the process
of reconciliation/confirmation.
Significant notes on restated Profit & Loss and Assets and Liabilities
1. The Disclosure as required by the Accounting Standard - 18 (Related Party Disclosure) are given
in the Annexure XV of the Restated Financial Statement.
2. The calculation of Earnings per Share (EPS) has been made in accordance with Accounting
Standard (AS) 20 issued by the ICAI. A statement on calculation of Basic and Diluted EPS is
given in Annexure XIII of the Restated Financial Statement.
3. Details of Deferred Tax assets and liabilities:

In view of the Accounting Standard 22 issued by Institute of Chartered Accountants of India, the
significant component and classification of deferred tax liability/asset on account of timing
difference comprises of the following:
` In lacs
Particulars 30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
On account of difference in book
580.91 523.52 316.13 244.21 158.55 166.81
and Tax depreciation
Deferred Tax Assets (3.23) (27.35) (0.83) 10.10 37.19 (5.88)
Net Deferred Tax Liabilities (as
584.14 550.87 316.96 234.11 121.37 172.69
at period ended)
4. Material Adjustments:
(i) Depreciation:
· Prior period Depreciation of ` 5.21 lakhs related to FY 2004-05 had been written back (credited) in
FY2005-06. While preparing the restated accounts it has been adjusted to the financial year it
relates i.e. FY 2004-05.
FY 2009-10. While preparing the restated accounts it has been adjusted to the financial year it
137
SABARI INN LIMITED
· Prior period Gratuity & Leave Encashment provision of ` 10.00 lakhs related to FY 2009-10 had
been provided in the June 2010 Balance Sheet. While preparing the restated accounts it has been
adjusted to the financial year it relates i.e. FY 2009-10.
(ii) Income Tax Provisions:
· Prior period Fringe Benefit Tax of ` 0.39 lakhs related to FY 2005-06 had been reversed in
FY 2006-07. While preparing the restated accounts the same has been adjusted to the financial
year it relates i.e. FY 2005-06.
Impact on profits/(losses) due to restatement and other material adjustments made to the audited
financial statement:
(i) Comparison of Audited profits/(losses) after Tax and Restated Profits/(Losses) after Tax:
` in lacs
Particulars 30.06.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Reported profit / (loss)
after tax as per audited 152.30 479.46 98.54 43.12 245.89 54.32
P&L A/c
Depreciation Nil (2.62) 2.45 0.09 0.08
(5.21)
Deferred Tax Nil 0.01 22.03 17.69 31.34
(1.75)
Income Tax Provision Nil 0.00 (20.36) (17.66) (20.48)
(9.40)
Extraordinary items 10.00 (10.00)
Total Impact of
Nil (12.60) 4.12 0.12 10.94
Adjustments (16.36)
Restated Profit 162.30 466.82 99.33 43.19 235.10 60.26
138
SABARI INN LIMITED
ANNEXURE V
SCHEDULE OF SECURED LOANS
` In Lacs
Principal
Sr. Outstanding as on Rate of Repayment Details of Security (if
Name of the Lender
No Broken Period (Rs.) Interest Schedule applicable)
30.06.10
Term Loans from Banks
State Bank of Bikaner & Paripassu First Charge on the
01 4302.00 12% 31.67
Jaipur assets of the company at
T.Nagar, OMR Chennai,
02 State Bank of Mysore 2825.01 12% 21.11
Kodaikanal and Coimbatore
Paripassu First Charge on the
03 State Bank of India 518.70 13.75% - assets of the company at
Bangalore
Hypothecation charge over
machineries and other fixed
04 State Bank of Mysore 20.02 14.00% 0.90
assets to be created out of
Bank finance
Total 7665.73 53.68
Cash Credit Facilities:

Primary: First Exclusive
charge on all current assets
including receivables of the
State Bank of Bikaner & company
01 322.79 12% -
Jaipur
Collateral: Ist Exclusive EM
Charge on property at
Munnar
Total 322.79
Hire Purchase Loans
Hypothecation of the vehicle
01 ICICI Bank Ltd 10.19 16.50% 1.77
financed
02 HDFC bank Ltd 20.20 16.00% 0.83
financed
03 State Bank of India 13.46 11.25% 0.45
financed
04 Indian Overseas bank 3.05 11.50% 0.27
financed
Total 46.90 3.32
Grand Total 8035.42 57.00
139
SABARI INN LIMITED
ANNEXURE VI
SCHEDULE OF UNSECURED LOANS
` In Lacs
Quarter
Particulars Year Ended
Ended
30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
From Directors 508.71 511.96 NIL NIL 99.20 206.53

From Others NIL NIL NIL NIL NIL 5.23
Total 508.71 511.96 NIL NIL 99.20 211.76
Note: The unsecured loans are availed from the Managing Director and the same is payable on
demand. Interest is not charged by the Managing Director for the loans given to the company.
ANNEXURE VII
SCHEDULE OF SUNDRY DEBTORS
` In Lacs
Particulars Quarter Ended Year Ended
30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
(Unsecured, considered good)
- Outstanding for a period less
594.08 628.83 143.39 116.59 56.58 67.39
than six months
- Outstanding for a period
80.63 78.15 48.40 30.40 25.31 Nil
exceeding six months
674.71 706.99 191.79 146.99 81.89 67.39
The amount receivable from promoters, promoters group, group companies, associate companies and
directors of the company (included in Sundry Debtors) is as under:
` In Lacs
Quarter
Nature of Year Ended
Particulars Ended
Relationship
30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
Sabari Nest Inn Private Associate
68.58 48.69 - - - -
Limited Company
Sabari Realtors Private Associate
- 9.58 - - - -
Limited Company
Total 68.58 58.27 - - - -
ANNEXURE VIII
SCHEDULE OF LOANS AND ADVANCES
` In Lacs
Quarter Ended Year Ended
Particulars
30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
Loan & Advances 1,145.16 1,189.28 745.46 1,890.31 163.01 111.60
140
SABARI INN LIMITED
The loans and advances given to the promoters/promoter group/ Directors of the Company are as
follows:
S Particulars 30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
No.
1 Sabari Nest Inn Private - - -
Limited 500.00 500.00 400.00
2 Sabari Supermarket Private
Limited 22.25 22.25 22.25 22.25 22.25 22.25
3 K R V Ramani - - - - -
1,671.07
Total 522.25 522.25 422.25 1,693.32 22.25 22.25
ANNEXURE IX
SCHEDULE OF INVESTMENTS
` In Lacs
Quarter
Year Ended
Particulars Ended
30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
EQUITY SHARES NIL NIL NIL NIL NIL NIL
QUOTED
UNQUOTED
TOTAL NIL NIL NIL NIL NIL NIL
Note: The Company has not made any investments.
ANNEXURE X
SCHEDULE OF OTHER INCOME
` In Lacs
Quarter
Year Ended
Particulars Ended
30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
Other Income 94.00 169.58 315.35 182.79 274.30 182.51
Net Profit before tax as restated 197.32 696.67 193.37 171.73 189.57 111.45
Percentage 210% 411% 61% 94% 69% 61%
ANNEXURE XI
SCHEDULE OF DIVIDEND PAID
` In Lacs
Quarter Ended Year Ended
Particulars
30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
Class of Shares NIL NIL NIL NIL NIL NIL
Equity:
- Interim NIL NIL NIL NIL NIL NIL
- Final NIL NIL NIL NIL NIL NIL
141
SABARI INN LIMITED
Note: The Company has not paid any dividend to the share holders.
ANNEXURE XII - STATEMENT OF TAX SHELTER
` In Lacs
For the Period/Year ended 30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
Net Profit/(Loss) before Tax (as
197.32 696.67 193.37 171.73 189.57 111.45
restated)
Tax rate – Normal 33.99% 33.99% 33.99% 33.66% 33.66% 33.66%
Tax at Normal Tax Rates (A) 67.07 236.80 65.73 57.80 63.81 37.51
Adjustments:
Permanent Difference (B) - - - - - -
Temporary Difference ( C ) 63.95 370.24 301.50 255.61 97.78 119.97
Depreciation as per Books 88.44 345.63 302.11 142.22 90.37 85.28
Depreciation as per Income Tax 152.38 715.88 603.61 397.83 188.15 205.26
Total Timing Difference
Net Adjustments (B+C) 63.95 370.24 301.50 255.61 97.78 119.97
Tax Saving thereon 21.74 125.85 102.48 86.04 32.91 40.38
Minimum Alternate Tax u/s 115JB 100.00 120.79 20.64 17.67 21.17 9.28
Tax on Restated Income 45.33 110.95 Nil Nil 30.90 Nil
Note: Minimum Alternate Tax (MAT) paid by the company under section 115JB of Income Tax Act 1961
is available for setoff against tax payable on the total income of the company, for the next 10 financial
year’s w.e.f FY 2006-07 and for a period of 7 years relating to MAT paid by the company for the financial
year 2005-06.
ANNEXURE XIII - ACCOUNTING RATIOS
30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06

Earnings per share (Basic) (`) 0.96 0.70 0.15 0.24 1.88 0.57
Earnings per share (Diluted) (`) 0.96 0.70 0.15 0.24 2.28 0.57
Net Asset value per share (`) 15.80 15.55 14.85 56.48 28.21 13.94
Return on Net Worth (%) 1.51% 4.52% 0.99% 0.43% 6.65% 4.12%
Weighted average number of

equity shares in the period 67843137 67,843,137 67,843,137 17,663,950 12,525,000 10,500,000
(Basic) (in Nos.)
Weighted average number of
equity shares in the period 67843137 67,843,137 67,843,137 17,663,950 10,320,000 10,500,000
(Diluted) (in Nos.)
142
SABARI INN LIMITED
Formula:
1. Earnings per share (Basic) (`) = Net profit attributable to equity shareholders
Weighted average number of equity shares outstanding during the
period (Basic)
2. Earnings per share (Diluted) (`) = Net profit attributable to equity shareholders
period (Diluted)
Net Worth excluding revaluation reserve at the end of the

3. Net Asset Value per share (`) =
period/year
period (Basic)
4. Return on Net Worth (%) = Net profit attributable to equity shareholders

Net Worth excluding revaluation reserve at the end of the
period/year
ANNEXURE XIV
STATEMENT OF CAPITALISATION
(`) in lacs
Particulars Pre-Issue as at Post Issue*
Broken Period (30.06.2010)
Borrowings :
Short-term Debt** 389.71
Long-term Debt 7645.71
Total Debt 8035.42
Shareholders' funds:
Share Capital 6784.31 *
Reserves 3922.39
Total Shareholders' Funds 10706.70
Total Capitalization 18742.12

Long-term Debt/Equity ratio 0.71
Total Debt/Equity ratio 0.75
* Share Capital and reserves and total shareholders' Funds would be calculated on conclusion of the Book
Building process
** Short-term Debts are debts maturing within the next one year from the date of above statement.
ANNEXURE XV
STATEMENT OF RELATED PARTY TRANSACTION
A. Related Parties and their relationship
Promoters/ directors and their relatives

1. Mr.K.R.V.Ramani - Promoter, Managing Director
2. Mr. K R Narayanan – Director – Relative of the Managing Director
143
SABARI INN LIMITED
Group Companies
1. Sabari Foundations (P) Ltd - Associate Company
2. Sabari Nest Inn (P) Ltd - Associate Company
3. Sabari Super Market (P) Ltd - Associate Company
4. Sabari Realtors (P) Ltd - Associate Company
Key Managerial Personnel and their relatives
1. Mr.K.R.V.Ramani - Promoter, Managing Director

2. Mr.K.R.Ramakrishnan – Company Secretary/Chief Law Officer - Relative of Managing
Director(Key Management Personnel)
B. Details of Related Party Transactions
(`) in lacs
Nature of Nature of Opening During Closing

Name of the Related Party
Relationship Transactions Balance the year Balance
Sabari Foundations (P) Ltd Loan-Liability Nil Nil Nil
Purchase of 0.79 0.79

Sabari Supermarket (P) Ltd Associate Nil
Goods & Services Credit Credit
Company
Purchase of 48.69 68.58
Sabari Nest Inn ( P) Ltd 19.89
Goods & Services Debit Debit
K.R.V.Ramani Remuneration 9.18
Key
K.R.V.Ramani Management Rent Payments 1.20
Personnel
511.96 3.25 508.71
K.R.V.Ramani Unsecured Loan
Credit Debit Credit
Relative of Key
K.R.Ramakrishnan Remuneration 3.89
Mgt Personnel
ANNEXURE XVI SCHEDULE OF CONTINGENT LIABILITIES
(`) in lacs
Particulars 30.06.10 31.03.10 31.03.09 31.03.08 31.03.07 31.03.06
Bank Guarantee 207.13 207.13 208.30 185.84 106.03 63.51
Total 207.13 207.13 208.30 185.84 106.03 63.51
144
SABARI INN LIMITED
MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND THE

RESULTS OF OPERATIONS
You should read the following discussion and analysis of the financial condition and the results of
operations together with the financial statements on page 124 included in this Draft Red Herring
Prospectus. You should also read the section titled “Risk Factors” beginning on page x, which discusses a
number of factors and contingencies that could impact the financial condition, results of operations and
cash flows.
The following discussion of the results of operations should be read in conjunction with the Restated
Financial Statements as of and for the financial year ended 31.03.2010, 31.03.2009, 31.03.2008, 31.03.2007
and 31.03.2006 as restated in accordance with SEBI Regulations, including the notes thereto, which appear
elsewhere in this Draft Red Herring Prospectus. The financial year ends on March 31 each year, so all
references to a particular year are for a twelve month period ending on March 31 of each year. The
restated financial information was prepared in accordance with Indian GAAP, which differ in certain
material respects from generally accepted accounting principles in other jurisdictions, including US
GAAP and IFRS.
Overview
We operate and manage a chain of hotels under the brand names “Quality Inn Sabari”(QIS) in Chennai,
“Quality Hotel Sabari Classic”(QHSC) in Old Mahabalipuram Road, Chennai, “Quality Inn Sabari
Resorts” (QISR) in Kodaikanal Tamilnadu and “Sabari’s Nest” in Chennai, Coimbatore and Bangalore in
India. We also operate a hotel on a long term lease under the brand name “The Mark Boulevard” in
Whitefield, Bangalore.
Altogether, we operate offering 377 rooms across 3 cities in South India through owned and leased hotel
properties. Most of the existing hotels cater to the business class travelers, while some of the hotels also
cater to leisure travelers. The company has made the soft launch for its 3 STAR hotel at Coimbatore
during November 2010. The commercial operations is expected by December 15, 2010. The hotel will be
under the brand name “The Park Plaza” managed by Carlson Group of Hotels. We are also constructing a
hotel in Devanahalli, Bangalore near the International Airport - a hotel with about 110 rooms. This hotel
also will have an International tie-up of a renowned brand at an appropriate time.
The table below illustrates the income from various activities included in the restated financial
statements.
` in Lacs
% of % of % of
Nature of Income FY 2009-10 Total FY 2008-09 Total FY 2007-08 Total
Income Income Income
Room Revenues 2,079.87 50.16% 1,266.25 44.30% 781.69 42.76%
Food & Beverage
(including banquet 1,897.37 45.75% 1,276.63 44.67% 863.57 47.24%
income)
Other Service charges 59.32 1.43% 36.13 1.26% 129.39 7.08%
Total operating
4,036.56 97.34% 2,579.01 90.23% 1,774.65 97.08%
Revenue
Other Income 110.27 2.66% 279.23 9.77% 53.41 2.92%
145
SABARI INN LIMITED
Total Income 4,146.83 100.00% 2,858.23 100.00% 1,828.05 100.00%
The following table illustrates the capacity expansion made by the Company over the years :
Quarter
FY FY FY FY FY
No. of rooms for ended
2005-06 2006-07 2007-08 2008-09 2009-10
2010-11
QIS, TNAGAR 72 72 72 72 72 72
QHSC, OMR - - 84 84 84 84
QISR, KODAIKANAL - - - - 40 40
SABARI'S NEST,
- - - 38 38 38
COIMBATORE
SABARI'S NEST,
- - - 44 44 44
CHENNAI
SABARI'S NEST,
- - - - 23 23
BANGALORE
The Mark Boulevard,
- - - - - 76
Whitefiled, Bangalore
Total 72 72 156 238 301 377
The following table gives the break-up of the revenues earned in the financial year 2009-10 :
` in Lacs
Food &
Beverage
Other Total
Room Revenue Other Total
Hotel Service Operating
Revenue (including Income Income
Charges Revenue
banquet
income)
QIS, TNAGAR 819.08 957.73 43.08 1,819.88 93.94 1,913.82
QHSC, OMR 751.63 685.21 14.17 1,451.01 4.29 1,455.29
QISR,
84.96 27.47 0.62 113.04 0.92 113.96
KODAIKANAL
SABARI'S NEST,
168.87 219.59 - 388.46 6.48 394.94
COIMBATORE
SABARI'S NEST,
202.12 7.38 1.34 210.84 4.14 214.98
CHENNAI
SABARI'S NEST,
53.23 - 0.10 53.33 0.50 53.83
BANGALORE
Total 2,079.87 1,897.37 59.32 4,036.56 110.27 4,146.83
Key factors influencing the results of operations
Several factors influence the results of operations, financial condition and cash flow significantly. The key
factors affecting the operations include :
146
SABARI INN LIMITED
Demand and Supply
Demand and supply of hotel accommodation at the locations where the existing and proposed hotel
properties are or are planned to be located affect the results of operations. In particular, the occupancy
rates, average room rates and revenues are subject to demand and supply fluctuations. Demand for hotel
accommodation is influenced by factors such as availability and location of hotel rooms, prices, available
services and at times seasonality.
Operating expenses including lease payments, food and beverage costs, employee compensation and
power and fuel costs
The financial results are affected by occupancy and room rates achieved by the hotels, the ability to
control the cost of developing and operating additional rooms and the success of the food and beverage
operations. The results of operations are also affected by changes in the cost of electricity, insurance and
environmental compliance. Further, the hotels have to be renovated periodically to keep up with
changing trends and consumer demands, and such renovation may involve significant development and
maintenance costs.
The hotel industry is cyclical and sensitive to changes in the economy. Any slowdown in the economy
could have a significant impact on the operations and financial results.
The hotel business is cyclical and sensitive to changes in the economy in general. The financial results are
affected by factors such as changes in global and domestic economies, changes in local market conditions,
changes in interest rates, the availability of finance and other similar factors. Since demand for hotels is
affected by economic growth in India as well as globally, a global or domestic recession could lead to a
downturn in the hotel industry. Such developments in the hotel industry in India or in the cities where
the hotels are located would have a negative impact on the profitability and financial condition. We
expect the growth in the Indian economy to continue to be the driver for growth in the hospitality sector.
We believe, increase in disposable incomes, as well as in business opportunities are expected to stimulate
both leisure and business travel, thereby leading to increased demand for hotels.
Increased competition in the hotel sector may affect the operations of the hotels.
Hotel industry is highly competitive and the hotels owned, managed or operated by us compete for
guests with other hotels in the same city. The success would be dependant on the ability to compete in
areas such as room rates, quality of accommodation, service levels, and brand recognition among others.
Most of the current operations are in locations like Chennai, Coimbatore and Bangalore where we face
competition from existing hotel players and will also have to compete with any new hotel properties
coming up in the city. We expect to face similar competition in the cities where we are expanding or have
intentions of expanding to. There can be no assurance that new or existing competitors will not
significantly lower rates or offer greater convenience, services or amenities or significantly expand or
improve facilities in the market in which we operate. Such developments would affect the ability to
compete with them and have a negative impact on the profitability and financial condition.
Effectiveness of marketing strategies
We devote significant attention to the brand-building efforts. We use various innovative forms of
advertising and marketing with a view to constantly create more awareness of the brand in the market
and to reach out to more and more customers. The marketing department also looks after corporate
147
SABARI INN LIMITED
branding and advertising. The services are advertised widely through hoardings at prominent places,
regular advertisements in in-flight journals and business magazines, travel and hospitality magazines
and by organizing local and international food festivals at the various hotels periodically. We also partner
with car rental companies and others to reach to various sectors of customers. We have also tied up with
certain banks, wherein their customers can avail certain discounts on the Food & Beverage across the
hotels. We believe such initiative contributes significantly in increasing the sales. We plan on continuing
to build the brand and retail sales by satisfying customers with the service and by continuing to invest
significant amounts in the advertising and marketing of the Sabari brand. For more information on these
and other factors/developments which have or may affect us, see “Risk Factors” on page x of this Draft
Red Herring Prospectus and “Business overview” on page 67 of this Draft Red Herring Prospectus.
Financial Operations Overview
Income from Operations:
The income from operations can be broadly divided into income from room revenue, from sale of Food
and Beverage and income realized from other services. Income from room revenue is the rental income
received from the rooms occupied at the hotels. Food & Beverage income comprises of income received
from sale of food and beverages across the restaurants in the hotels, room service, in-room mini bars and
Banquet income. Banquet income consists of all income associated with banquet services, including the
rental fees for the banquet hall, food and beverages served at the event, decorations etc. Other services
consist of revenues from telephone services, laundry, internet services and travel services.
The composition of income from operations since FY 2007 to FY 2010 is as under:
` in Lacs
Particulars FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10
Room Revenue 378.79 781.69 1,266.25 2,079.87
Food & Beverage revenues
603.02 863.57 1,276.63 1,897.37
(including banquet income)
Other service charges 249.19 129.39 36.13 59.32
Income from Operations 1,231.00 1,774.65 2,579.01 4,036.56
Key indicators
Room Revenue
Particulars
FY 2006-2007 FY 2007-2008 FY 2008-2009 FY 2009-2010
Occupancy (%) Occupancy (%) Occupancy (%) Occupancy (%)
QIS, TNAGAR 60.23% 80.18% 81.30% 76.99%
QHSC, OMR - 43.65% 51.28% 83.80%
QISR,
- - - 29.33%
KODAIKANAL
SABARI'S NEST,
- - 46.48% 65.72%
COIMBATORE
SABARI'S NEST,
- - 63.10% 68.63%
CHENNAI
SABARI'S NEST,
- - - 41.75%
BANGALORE
148
SABARI INN LIMITED
Note: Occupancy % is computed with reference to the number of guest rooms available for sale, exclusive
of number of rooms temporarily unavailable due to repair and maintenance and other operational
reasons. The Company has witnessed a substantial jump in the occupancy level in OMR in the financial
year 2009-10. This is principally because of substantial improvement in activity in OMR in the last 1 year.
Expenditure:
The Food and Beverage expenses consist of consumption of various food and beverage items (including
alcoholic and non-alcoholic beverages, banquet costs, room service and restaurants), groceries and food
staples.
Employee costs include salaries, wages, bonuses, gratuities, leave encashment, staff welfare expenses,
staff perks, medical benefits and contributions to the provident fund. Other operating expenses primarily
comprise of power & fuel, repairs & maintenance, licenses & rent. General and administrative expenses
comprise of the agent commissions and discounts, sales tax and other statutory taxes and advertisement
expenses.
Detailed break up of the expenditure from FY 2006-07 to FY 2009-10 are as below :
` In Lacs
Particulars FY 2007 FY 2008 FY 2009 FY 2010
Food & Beverage 195.58 233.38 382.24 572.38
Employee Costs 170.61 337.52 557.48 767.67
Other operating expenses 270.40 395.93 573.95 829.97
General & Administrative expenses 207.62 313.88 419.70 519.12
Total 844.20 1,280.70 1,933.36 2,689.14
Comparison of the significant items of income and expenditure for FY 2010, 2009, 2008 & 2007
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH
FY 2009-10 FY 2008-09 FY 2007-08 FY 2006-07
% of % of % of % of
% of Increase Increase Increase Increase
% of % of
Tota / / / % of /
Particular Total Total ` in
` in lacs l (Decreas ` in lacs (Decreas ` in lacs (Decreas Total (Decreas
s Incom Incom lacs
Inco e) over e) over e) over Income e) over
e e
me Previou Previou Previou Previou
s Year s Year s Year s Year
INCOME
Room
2,079.87
Income
50.16 64.25 1,266.25 44.30 61.99 781.69 42.76 106.37 378.79 30.16 40.86
Food &
Beverage 1,897.37 45.75 48.62 1,276.63 44.67 47.83 863.57 47.24 43.21 603.02 48.01 43.26
Income
149
SABARI INN LIMITED
FY 2009-10 FY 2008-09 FY 2007-08 FY 2006-07
% of % of % of % of
% of % of
Tota / / / % of /
s Incom Incom lacs
e e
Other
59.32 1.43 64.20 36.13 1.26 -72.08 129.39 7.08 -48.08 249.19 19.84 48.78
Services
Income
from 1,231.0
4,036.56 97.34 56.52 2,579.01 90.23 45.33 1,774.65 97.08 44.16 98.00 43.58
Operation 0
s
Other
110.27 2.66 -60.51 279.23 9.77 422.81 53.41 2.92 112.68 25.11 2.00 67.20
Income
TOTAL 100.0 1,256.1
4,146.83 45.08 2,858.23 100.00 56.35 1,828.05 100.00 45.53 100.00 43.99
INCOME 0 1
EXPENDI
TURE
Food &
Beverages 572.38 13.80 49.74 382.24 13.37 63.79 233.38 12.77 19.33 195.58 15.57 68.07
consumed
Employee
767.67 18.51 37.70 557.48 19.50 65.17 337.52 18.46 97.84 170.61 13.58 24.72
s Cost
Other
operating 829.97 20.01 44.61 573.95 20.08 44.96 395.93 21.66 46.42 270.40 21.53 50.77
Expenses.
General &
Administr
519.12 12.52 23.69 419.70 14.68 33.71 313.88 17.17 51.18 207.62 16.53 94.83
ative
Expenses
TOTAL
EXPENDI 2,689.14 64.85 39.09 1,933.36 67.64 50.96 1,280.70 70.06 51.71 844.20 67.21 56.60
TURE
Profit
before
Interest,
1,457.69 35.15 57.61 924.87 32.36 68.97 547.35 29.94 32.88 411.91 32.79 23.59
Depreciati
on & Tax
(PBIDTA)
Depreciati
345.63 8.33 14.41 302.11 10.57 112.42 142.22 7.78 57.38 90.37 7.19 5.97
on
Interest 405.38 9.78 -5.59 429.39 15.02 83.97 233.40 12.77 76.87 131.96 10.51 -3.36
Profit
Before 706.67 17.04 265.46 193.37 6.77 12.60 171.73 9.39 -9.41 189.57 15.09 70.10
Tax (PBT)
-
Less: TAX (233.91) 5.64 142.41% (96.49) -3.38% -19.83% (120.36) -6.58% -359.78% 46.33 3.69% -192.54%
%
Profit
472.76 11.40 388.01 96.88 3.39 88.59 51.37 2.81 -78.23 235.90 18.78 284.31
after Tax
150
SABARI INN LIMITED
FY 2009-10 FY 2008-09 FY 2007-08 FY 2006-07
% of % of % of % of
% of % of
Tota / / / % of /
s Incom Incom lacs
e e
(PAT)
before
Extraordi
nary
items
Extraordin
(1.05) -0.03 0.00 - 0.00 -100.00 (8.27) -0.45 842.30 (0.88) -0.07 -42.30
ary items
Net Profit
after
Extraordi 471.72 11.38 386.93 96.88 3.39 124.80 43.09 2.36 -81.66 235.03 18.71 292.62
nary
Items
Adjustme
nts on
account of
5.11 0.12 108.39 2.45 0.09 2545.05 0.09 0.01 21.05 0.08 0.01 -80.67
Prior
period
Expenses
Adjusted
476.82 11.50 380.06 99.33 3.48 129.99 43.19 2.36 -81.63 235.10 18.72 290.16
Profit
Results of operations for the financial year 2009-10 as compared to financial year 2008-09 are as under :
Income from operations
The income from operations increased from ` 2579.01 Lacs in FY 2009 to ` 4036.56 Lacs in FY 2010. The
operating income as compared to total income increased to 97.34% for the FY 2010 vis-à-vis 90.23% for the
FY 2009. This increase can be attributed partially to the full year operations of Chennai & Coimbatore
Nest hotels. Also the increase can be attributed to the Kodaikanal Resort and Bangalore Nest hotel that
commenced the operations with effect from May 2009 and June 2009 respectively.
Room revenue
The room revenues increased from ` 1266.25 Lacs in FY 2009 to ` 2079.87 Lacs in FY 2010. The Room
Revenue comprised 50.16% of the total income in FY 2010 as compared to 44.30% of the total income in
FY 2009. The occupancy levels for the FY 2010 are given below :
Property Occupancy (%)

QIS, TNAGAR 76.99%
QHSC, OMR 83.80%
QISR, KODAIKANAL 29.33%
SABARI'S NEST, COIMBATORE 65.72%
151
SABARI INN LIMITED
SABARI'S NEST, CHENNAI 68.63%

SABARI'S NEST, BANGALORE 41.75%
Food and Beverage Revenue

The food and beverage revenue increased from ` 1276.63 Lacs in FY 2009 to ` 1897.37 Lacs in FY 2010,
registering a growth rate of 48.62 % on y-o-y basis. Further as compared to total income, it increased from
44.67% in FY 2009 to 45.75% in FY 2010. The main reason for increase in Food and Beverage revenue is
due to more hotels being operational and increase in occupancy levels.
Other Service Charges

The revenue from other service charges increased from ` 36.13 Lacs in FY 2009 to ` 59.32 Lacs in FY 2010,
registering a growth rate of 64.20% on y-o-y basis. Once again the reason for increase is that more hotels
were operated and the occupancy levels are also increased.
Other Income
The other income comprises of exchange gain, interest earned, shops and rental, credits written back and
miscellaneous income. The other income declined by 60.51% on y-o-y basis to ` 110.27 Lacs in FY 2010 as
compared to ` 279.23 Lacs in FY 2009. This decline was mainly on account of reduction in interest income
from Term Deposit, as the funds were utilized for the construction of the hotel projects.
Expenditure
The total expenditure for the FY 2010 was ` 2689.14 Lacs as against ` 1933.36 Lacs for the FY 2009.
Expenditure as a percentage of total income was 64.85% for the FY 2010 as against 67.64% for the FY 2009.
Food & Beverage Costs

The Food & Beverage cost for the FY 2010 was ` 572.38 Lacs as against ` 382.24 Lacs in FY 2009, an
increase of 49.74 % on y-o-y basis. However as compared to the total income, it increased marginally to
13.80% for the FY 2010 vis-à-vis 13.37% for the FY 2009. Food & Beverage cost mainly increased because
of increase in procurement cost and fluctuation in prices of input materials during the year.
Employee Costs
Employee costs increased from ` 557.48 Lacs in FY 2009 to ` 767.67 Lacs in FY 2010, an increase of 37.70%
on y-o-y basis. However as compared to the total income it decreased to 18.51% for the FY 2010 vis-à-vis
19.50% for the FY 2009.
Other Operating Expenses

The other operating expenses for the FY 2010 was ` 829.97 Lacs as compared to
` 573.95 Lacs for the FY 2009. However, the other operating expenses as compared to the total income
decreased marginally to 20.01% for the FY 2010 as against 20.08% for the FY 2009.
General and Administrative Expenses

The general and administrative expenses for the FY 2010 was ` 519.12 Lacs as compared to ` 419.70 Lacs
for the FY 2009. Once again, the General and administrative expenses as a percentage of total income
decreased from 14.68% in FY 2009 to 12.52% in the
FY 2010.
152
SABARI INN LIMITED
Profit before Interest, Depreciation, Amortization and Tax (PBIDTA)
The PBIDTA for the FY 2010 was ` 1457.69 Lacs as compared to ` 924.87 Lacs. The PBIDTA margin for the
FY 2010 was 35.15% as compared to 32.36% for the FY 2009. The main reason for increase in PBIDTA is
due to substantial increase in the total income, which happened mainly due to improved ARR and
substantial increase in occupancy levels.
Depreciation and Interest Cost
The depreciation for the FY 2010 was ` 345.63 Lacs as against ` 302.11 Lacs in FY 2009. Depreciation as
compared to total income for the FY 2010, decreased to 8.33% as compared to 10.57% for the FY 2009. The
increase in absolute terms was on account of depreciation cost on the Kodaikanal hotel and also
depreciation on the capital expenditure incurred for renovation of the existing hotel at T.Nagar. The
interest and other finance expenses for the FY 2010 was ` 405.38 Lacs as against ` 429.39 Lacs in FY 2009.
The interest declined by 5.59% on y-o-y basis and also as compared to total income it decreased to 9.78%
for the FY 2010 vis-à-vis 15.02% for the FY 2009.
Profit before Tax
The profit before tax for the FY 2010 was ` 706.67 Lacs as compared to ` 193.37 Lacs for the FY 2009. The
profit before tax as a percentage of total revenue has increased to 17.04% in this period from 6.77% in FY
2009. Once again substantial increase in revenue, which happened due to increased ARR and occupancy
level are the main reasons for increase in PBT.
Taxation
The total tax provision made by the Company including the deferred tax for FY 2010 was ` 233.91 Lacs as
compared to ` 96.49 Lacs for FY 2009. The effective tax rate for the FY 2010 was 5.64% as compared to
3.38% in the FY 2009. The reason for increase in Taxation is mainly due to substantial increase in PBT.
Profit after Tax

The profit after tax for FY 2010 was ` 472.76 Lacs. The net profit margin for FY 2010 was 11.40% as
compared to 3.39 % in FY 2009. The reason for increase in Taxation is mainly due to substantial increase
in PBT.
Secured Loans
The Secured Loans has increased from ` 5319.50 Lacs for the FY 2009 to ` 7013.35 Lacs in FY 2010. The
increase was mainly due to availment of term loans for the Coimbatore and Bangalore hotel projects.
Unsecured Loans
The Company has taken Unsecured Loans from the Promoters amounting to ` 511.96 Lacs during the FY
2010 to meet the project cost funding needs.
Fixed Assets
The net fixed assets (Including capital work in progress) increased to ` 17189.67 Lacs in FY 2010 from `
13741.11 Lacs in FY 2009. This increase was due to capitalization of the Kodaikanal hotel that commenced
153
SABARI INN LIMITED
operations from May 2009 and also due to the cost of construction incurred on Coimbatore and Bangalore
hotel projects.
Loans and Advances
The Loans and Advances has increased from ` 744.27 Lacs for the FY 2009 to ` 1188.53 Lacs for the FY
2010. The main reason for increase in Loans and Advances is due to advance to suppliers for capital
goods for the Coimbatore and Bangalore projects and increase in TDS and MAT tax payments.
Results of operations for FY 2009 as compared to FY 2008 are as under :
Income from Operations
The income from operations increased to ` 2579.01 Lacs in FY 2009 from ` 1774.65 Lacs in FY 2008,
registering a increase of 45.33% on y-o-y basis. The increase is due to increase in ARR and occupancy
levels in the existing hotels and startup of Sabari Nest, Coimbatore and Sabari Nest, Chennai hotels.
Room Revenue
The room revenues increased to ` 1266.25 Lacs in FY 2009 from ` 781.69 Lacs in FY 2008, registering an
increase of 61.99% on y-o-y basis. The Room Revenue comprised of 44.30% of the total income in FY 2009
as compared to 42.76% of the total income in FY 2008.
The occupancy rates at individual hotel properties for the FY 2009 are given below:

QIS, TNAGAR 81.30%
QHSC, OMR 51.28%
SABARI'S NEST, COIMBATORE 46.48%
SABARI'S NEST, CHENNAI 63.10%

The food and beverage revenue increased to ` 1276.63 Lacs in FY 2009 from ` 863.57 Lacs in FY 2008,
registering a growth rate of 47.83% on y-o-y basis. This growth was attributable due to addition of new
hotels, revision of rates of the menu card etc.,.

The revenue from other service charges decreased to ` 36.13 Lacs in FY 2009 from ` 129.39 Lacs in FY
2008, a decline of 72.08% on y-o-y basis. This was due to decrease in the revenue contributions from Car
Rentals, Guest Laundry Sales, Wifi Internet charges and Long distance calls. The other services for the FY
2009 comprised 1.26% of the total income as against 7.08% for the FY 2008.
Other Income
miscellaneous income. The other income increased by 422.81% on y-o-y basis to ` 279.23 Lacs in the FY
2009 as compared to ` 53.41 Lacs in the FY 2008. This substantial increase was mainly due to increase in
the interest from Term Deposits.
Expenditure
The total expenditure for the FY 2009 was Rs. 1933.36 Lacs as against Rs. 1280.70 Lacs for the FY 2008, an
increase of 50.96% on y-o-y basis. However, the total expenditure as a percentage of total income has
come down from 70.06% for the FY 2008 to 67.64% for the FY 2009.
154
SABARI INN LIMITED

The food & beverage costs for the FY 2009 were ` 382.24 Lacs as against ` 233.38 Lacs in the FY 2008. The
food & beverage costs witnessed an increase of 63.79 % on y-o-y basis as compared to previous year. The
food & beverage cost was 29.94% compared to the food & beverage revenue in the FY 2009 as against
27.02% in the FY 2008. The reason for increase in Food and Beverage cost is due to increase in various
input cost.
Employee Costs
Employee costs increased to ` 557.48 Lacs in the FY 2009 from ` 337.52 Lacs in the FY 2008, an increase of
65.17% on y-o-y basis. However, as compared to total income, it marginally increased to 19.50% for the
FY 2009 vis-à-vis 18.46% for the FY 2008. This was on account of increase in the headcount in anticipation
of the planned expansion of the business.

` 395.93 Lacs for the FY 2008. The other operating expenses was 21.66% of the total income for the FY
2008 has come down marginally to 20.08% for the FY 2009.

The general and administrative expenses for the FY 2009 was ` 419.70 Lacs as compared to ` 313.88 Lacs
for the FY 2008. General and administrative expenses as a percentage of total income decreased from
17.17 % in the FY 2008 to 14.68 % in the FY 2009.

The PBIDTA for the FY 2009 was ` 924.87 Lacs as compared to ` 547.35 Lacs in FY 2008. The PBIDTA as
compared to total income increased to 32.36% for the FY 2009 vis-à-vis 29.94% for the FY 2008. The main
reason for increase in PBIDTA is due to increase in ARR, occupancy levels and new hotels being made
operational.

The depreciation for the FY 2009 was ` 302.11 Lacs as against ` 142.22 Lacs for the FY 2008. There was an
increase in depreciation by 112.42% on y-o-y basis. The interest and other finance expenses for the FY
2009 were ` 429.39Lacs as against ` 233.40 Lacs in FY 2008. Interest as compared to total income increased
to 15.02% for the FY 2009 vis-à-vis 12.77% for the FY 2008. The increase in interest cost is due to the full
year operation of the OMR hotel, Chennai.
Profit before Tax

profit before tax as a percentage of total income has decreased to 6.77% in this period from 9.39% in FY
2008. This decline was mainly because of increase in food & beverage cost, other operating expenses,
employee cost, interest cost and depreciation amortization.
Taxation
The total tax paid by the Company including the deferred tax for FY 2009 was ` 96.49 Lacs as compared
to ` 120.36 Lacs for FY 2008. The effective tax rate in FY 2009 was 3.38% as compared to 6.58% in FY 2008.
Profit after Tax

The profit after tax for FY 2009 was ` 96.88 Lacs. The net profit margin for FY 2009 was 3.39% as
compared to 2.81% in FY 2008.
155
SABARI INN LIMITED
Secured Loans
The Secured Loans outstanding for the FY 2009 was ` 5319.50 Lacs as against ` 3473.28 Lacs for the FY
2008. The reason for increase in secured loan is due to the implementation of the Kodaikanal hotel and
commencement of construction of Coimbatore hotel.
Fixed Assets
The net fixed assets (including capital work in progress) increased to ` 13741.11 Lacs during the FY 2009
from ` 9215.99 Lacs in the FY 2008. This growth of 49.10% in the FY 2009 as against the FY 2008 was
mainly due to the cost incurred on Kodaikanal and Coimbatore projects.
Results of operations for the FY 2008 as compared to the FY 2007.
Income from Operations

The income from operations increased from ` 1231.00 Lacs in the FY 2007 to ` 1774.65 Lacs in the FY 2008,
registering a growth of 44.16% on y-o-y basis. This was due to the overall growth in ARR and occupancy
rates across the hotels in line with the growth in the economy.
Room Revenue
The room revenues increased to ` 781.69 Lacs for the FY 2008 from ` 378.79 Lacs for the FY 2007,
registering a growth of 106.37% on y-o-y basis. This was due to the rise in ARR and the occupancy rates
owing to overall growth of tourism industry in the country. The Room Revenue comprised of 42.76% of
the total income in FY 2008 as compared to 30.16% in FY 2007.
The occupancy rates at individual hotel properties for the FY 2008 are given below:

QIS, TNAGAR 80.18%
QHSC, OMR 43.65%
The food and beverage revenue increased to ` 863.57 Lacs in the FY 2008 from ` 603.02 Lacs in the FY
2007, registering a growth of 43.21% on y-o-y basis.
The revenue from other service charges decreased to ` 129.39 Lacs in FY 2008 from ` 249.192 Lacs in FY
2007, a decline of 48.08% on y-o-y basis.
Other Income
miscellaneous income. The other income increased by 112.68% on y-o-y basis to ` 53.41 Lacs for the FY
2008 as compared to ` 25.11 Lacs for the FY 2007. This increase has been mainly due to interest on Term
Deposits.
Expenditure
The total expenditure for the FY 2008 was ` 1280.70 Lacs as against ` 844.20 Lacs for the FY 2007, an
increase of 51.71% on y-o-y basis. This growth was in line with the increase in turnover. The total
156
SABARI INN LIMITED
expenses for the FY 2008 comprised 70.06% of the total income as against 67.21% for the FY 2007, only a
marginal increase.
The Food & Beverage costs for the FY 2008 was ` 233.38 Lacs as against ` 195.58 Lacs for the FY 2007. The
Food & Beverage costs witnessed an increase of 19.33% on y-o-y as compared to previous year mainly
due to rise in the occupancy level owing to overall growth of tourism industry in the country. However,
the Food & beverage cost was 27.02% compared to the food & beverage revenue in the FY 2008 as against
32.43% in FY 2007.
Employee Costs
Employee costs increased to ` 337.52 Lacs in FY 2008 from ` 170.61 Lacs in FY 2007, registering an
increase of 97.84% on y-o-y basis. This growth was mainly on account of bonus, incentives and pay
revision to the employees.
` 270.40 Lacs for the FY 2007, an increase of 46.42% on y-o-y basis. However, the operating expenses as a
percentage of total revenue gone up only marginally from 21.53% for the FY 2007 to 21.66% for the FY
2008.

The general and administrative expenses for the FY 2008 were ` 313.88 Lacs as compared to ` 207.62 Lacs
for the FY 2007. General and administrative expenses increased by 51.18% on y-o-y basis. However the
general and administrative expenses has gone up marginally from 17.17% for the FY 2008 vis-à-vis
16.53% for the FY 2007.

The PBIDTA for the FY 2008 was ` 547.35 Lacs witnessing a growth of 32.88% on y-o-y basis as compared
to ` 411.91 Lacs for the FY 2007. This increase was mainly due to increased ARR and occupancy levels.
The depreciation for the FY 2008 was ` 142.22 Lacs as against ` 90.37 Lacs for the FY 2007. The increase
was due to capitalization of the OMR hotel which commenced operations from September 2007. The
interest and other finance cost for the FY 2008 was ` 233.40 Lacs as against ` 131.96 Lacs for the FY 2007.
There was an increase of 76.87% on y-o-y basis due to utilization of cash credit facility for working capital
requirements & term loans for capital expenditure and renovations of the existing hotels.
Profit before Tax
profit before tax decreased to 9.39% of the total income in the FY 2008 vis-à-vis 15.09% in the FY 2007.
This was mainly due to the increase in the interest costs.
Taxation
157
SABARI INN LIMITED
The total tax paid by the Company including the deferred tax for FY 2008 was ` 120.36 Lacs as compared
to ` 46.33 Lacs for FY 2007. The effective tax rate in FY 2008 was 6.58%.
Profit after Tax
The profit after tax for FY 2008 was ` 51.37 Lacs as compared to ` 235.90 Lacs for FY 2007. The main
reason for reduction in Profit after Tax is due to higher interest and depreciation cost.
Fixed Assets
The net fixed assets (including capital work in progress) increased to ` 9215.99 Lacs at end of the FY 2008
from ` 5776.25 Lacs for the FY 2007. The addition to fixed assets in 2007 was mainly due the OMR Hotel,
which was capitalized on September 15, 2007.
Information regarding:
Unusual or infrequent events or transactions
Except as described elsewhere in this Draft Red Herring Prospectus, there have been no events or
transactions to the knowledge which may be described as “unusual” or “infrequent”.
Significant economic changes that materially affected or are likely to affect income from continuing
operations
Volatility in foreign exchange rates may have an effect on the revenues from foreign travellers. We
believe that barring this factor, there are no significant economic changes that materially affect or likely to
affect income from continuing Operations.
Known trends or uncertainties
The ARR and occupancy is dependent on the demand and supply of hotel rooms at the respective centers
where the hotels are located. Several new hotel properties are coming up or are expected to become
operational in the near future at these locations and will thus influence the supply of hotel rooms and
consequently the ARR and occupancy.
Future relationship between costs and revenue
We are continuously working to create efficient processes and systems in the hotel operations aimed at
cost control and reduction. We expect to continue this effort of improving the processes and
methodologies for setting up new hotel properties and operating the hotels. Other than as described in
this section in this Draft Red Herring Prospectus, to the best of the knowledge, there are no known
factors, which will affect the future relationship between the costs and revenue.
Extent to which material increase in net sales or revenue are due to increased sales volume, introduction
of new products or services or increased sales prices
As mentioned in the Management Discussion and Analysis we have increased the capacities in terms of
the rooms available as well as the food and beverage outlets. The ARRs have also been increasing over a
period of time at the T.Nagar and OMR Hotels. These factors have contributed to increase in the
revenues.
158
SABARI INN LIMITED
Total turnover of each major industry segment in which the issuer company operated
The Company is engaged only in the hotel business which is the only industry segment in which the
Company operates
Status of any publicly announced new products or business segment
We have not announced any new products or business segments
Extent to which the business is seasonal
Since, we primarily cater to business class travelers, we do not experience seasonality in the business
except for Kodaikanal resort which is seasonal sector.
Over dependence on Single supplier/ Customer
We cater to a wide customer base including international and domestic business and leisure travelers.
The threat from excessive dependence on a single customer is not significant as the customer base is well
diversified. We source the raw materials from diverse suppliers.
Competitive conditions
Please refer to the “Business Overview” section on Page 67 for details of competition.
Details of material developments after the date of last financial statement i.e. after June, 30, 2010 –
The Company is converted as a Public Limited Company with effect from 20thJuly2010. All Term loans
and Cash Credit facilities availed from Axis Bank Ltd and Oriental bank of Commerce has been taken
over by State Bank of Bikaner and Jaipur and State Bank of Mysore during the current financial year.
Other than mentioned there are no circumstances since the date of last financial statements as disclosed in
the offer document and which materially and adversely affect or is likely to affect the trading or
profitability of the issuer, or the value of its assets, or its ability to pay its liabilities within the next twelve
months.
CHANGES IN ACCOUNTING POLICIES
There has been no change in the accounting policies of the company for the past three financial years
viz.,for the financial years ended 31st March 2010, 31st March 2009 and 31st March 2008 and for financial
quarter ended 30th June 2010.
159
SABARI INN LIMITED
SECTION V - LEGAL AND REGULATORY INFORMATION
OUTSTANDING LITIGATIONS, MATERIAL DEVELOPMENTS AND OTHER DISCLOSURES
I. CONTINGENT LIABILITIES NOT PROVIDED FOR:
The contingent liabilities not provided for as on 30/06/2010 are as follows:
Particulars Amount
(` in lacs)
Bank Guarantee in respect of export obligations for capital
goods imported under Export Promotion Capital Goods
(EPCG) Scheme 207.13
Total 207.13
II. OUTSTANDING LITIGATIONS INVOLVING SABARI INN LIMITED:
The Issuer Company has certified that except as stated herein there are no:
· Pending litigations against the company.

· Outstanding litigations, defaults etc pertaining to matter likely to affect operations and finances
of the company including prosecution under the Companies Act 1956 (1 of 1956).
· Cases of pending litigations, defaults etc in respect of Companies/firms/ventures with which the
promoters were associated in the past but are no longer associated, and their names continue to
be associated with particular litigation.
· Disciplinary action/ investigation taken by Securities and Exchange Board of India(SEBI)/ Stock
Exchanges against the Company, its directors , promoters and their other business ventures.
· Cases against the Company or its Promoters of economic offences in which penalties were
imposed on promoters.
· Pending litigation, disputes, defaults, non-payment of statutory dues, proceedings initiated for
offences (including past cases and irrespective of whether specified in paragraph (i) of part 1 of
Schedule XIII of the Companies Act, 1956) against the promoters and their business ventures.
Pending litigations, defaults, non-payment of Statutory dues, proceedings initiated for economic
offences/civil offences, any disciplinary action taken by Securities and Exchange Board of India against
the Company/Promoters and their business ventures/Directors
CASES FILED AGAINST THE COMPANY

A. Civil Cases - NIL
B. Criminal Cases - NIL
C. Others
The Company has permission for construction of hotel at Thirumalai Pillai Road, T Nagar,
Chennai 600 017 for basement plus ground plus three floors vide permission no. 000582 dated 8th
May 2001. The Company vide application dated 29th November 2001 applied for regularization
160
SABARI INN LIMITED
of three additional floor and had paid the requisite fee for such regularization. Subsequently the
Company received a notice dated 20th December 2001 calling for the approved plan, to which the
Company replied explaining that the Company has already made an application for
regularization for additional floors. The Government of Tamil Nadu vide ordinance dated 27th
July 2007 suspended all punitive actions for a period of one year from the date of ordinance in
respect of any notice issued by any local authority or any other authority empowered under
relevant law with regard to any unapproved development completed prior to the date of the
ordinance. This ordinance was followed thereafter by subsequent ordinances for a period of one
year each. As on the date of this Report, the Tamil Nadu Ordinance No. 1 of 2010 has been
promulgated which will be in force for a period of one year from 27th July, 2010.
CASES FILED AGAINST THE COMPANY UNDER LABOUR LAWS: NIL
PENDING LITIGATION UNDER CENTRAL EXCISE ACT AND SERVICE TAX ACT: NIL
PENDING DISPUTES UNDER INCOME TAX ACT: NIL
III. OUTSTANDING LITIGATIONS INVOLVING DIRECTORS OF COMPANY
(a) Proceedings of civil nature

(i) By the Directors - NIL
(ii) Against the Directors - NIL
(b) Proceedings of criminal nature
(i) By the Directors - NIL

(ii) Against the Directors -
Following two cases have been filed against the Directors of the Company.
Sr. Reference to Case Opposite Party Brief facts of the case

No. No.
CB CID, Ernakulam registered crime No.
1. Criminal M C No. State of Kerala
17/CR/S-II/08 against Delta Innovative
846 of 2009, Represented by Enterprises Ltd. (“Delta”) and others for
Detective offences punishable under section 420 read
In the court of the Inspector with 34 of Indian Penal Code. The
Sessions Judge, CB (C I D ) , prosecution case is that during 2000 – 2001,
the accused persons, in furtherance of
Ernakulam. Ernakulam common intention to cheat the defacto
Vs. complainant Smt. Omana Jacob and six
others, collected an amount of Rs.5,05,720/- by
Delta Innovative offering to open franchisees to a satellite
Enterprises Ltd. communication services of Delta in certain
161
SABARI INN LIMITED
and others areas of Kerala (Idukki, Ernakulam and

Kottayam) which was proposed to provide
easy, fast and costless communication facility.
The de facto complainant and others executed
an agreement with Delta and deposited the
amount as demanded by Delta. Subsequently,
contrary to the agreement the accused persons
violated the terms and conditions of the
agreement and absconded and thereby
committed the offence punishable under
section 420 read with section 34 of Indian
Penal Code. Further, it is the case of the
prosecution that Mr. R. Thiagarajan, Director
of the Company was a Director of Delta and
has been arrayed as the 5th accused.
Mr. P Vaidyanathan, another Director of the

Company has been arrayed as the 4th accused.
The complaint is pending.
2. C C No. 5482 of 2003 HCL Coronet HCL Coronet Systems and Services Ltd.
In the court of the Systems and (“HCL Coronet”) is the complainant. It has
Services Ltd., alleged in the complaint as follows:
XIV Metropolitan
4th Floor, Wing The complainant is engaged in the business of
Magistrate, II, providing various kinds of telecom and
Egmore Nelson Towers software services to their customers
117, Nelson throughout the country.
Chennai
Manickam Road
Chennai 600 029. In the course of business , Delta Innovative
Enterprises Ltd. (“Delta”), the 1st accused
Vs placed purchase orders dated 24.6.1999 and
3.1.2000 to avail V sat services from the
Delta Innovative complainant to the tune of ` 74,97,945/- .
Enterprises Ltd.,
Sankar Towers Since the amount payable got accumulated,
119, Dr. the 1st accused signed a revenue sharing
Radhakrishnan agreement dated 1.2.2002, in terms of which
Salai the 1st accused promised to settle a sum of `
Chennai 12 lakhs on or before 1.5.2002, ` 12 lakhs on or
600 004 and three before 1.8.2002 ` 25 lakhs on or before
others. 11.11.2002 and the balance of ` 25,97,942/- on
162
SABARI INN LIMITED
or before 1.2.2003.
In pursuance of the agreement, the 1st accused

handed over to the complainant 4 post dated
cheques in favour of the complainant in
discharge of its liability. The cheques were
signed by the 2nd accused on behalf of the 1st
accused.
When the cheque dated 1.2.2003 for `

25,97,945/- was presented for payment, the
same was returned with endorsement
“insufficient funds”. The complainant has
filed the complaint under section 138 of the
Negotiable Instruments Act against Delta, its
Managing Director, Executive Director and
Mr. R Thiagarajan, who was a Director of
Delta.
The complaint is pending.
The last date of hearing was on 24/4/2010 and

the next date of hearing is on 22/12/2010.
IV. OUTSTANDING LITIGATIONS INVOLVING PROMOTER AND GROUP COMPANIES
(a) Proceedings of civil nature

(i) By the promoters/group entities : NIL
(ii) Against the promoters/group entities: NIL
(b) Proceedings of a criminal nature

(i) By the promoters/ group entities: NIL
(ii) Against the promoters/ group entities: NIL
(c) Cases under Income tax Act against the Group Entities:
BY THE PROMOTER/GROUP ENTITIES: NIL
163
SABARI INN LIMITED
MATERIAL DEVELOPMENTS
Significant development since the last audited financial statement as on June 30, 2010 till the date of Draft Red
Herring Prospectus
No circumstances have arisen since the date of last financial statement until the date of filing of this Draft Red
Herring Prospectus with SEBI, which materially and adversely affect or is likely to affect the operations or
profitability of the Company, or value of its assets, or its ability to pay its liability within next twelve months.
There is no subsequent development after the date of the Auditor's Report, which will have a material impact
on the reserves, profits, earnings per share and book value of the Equity Shares of the Company.
164
SABARI INN LIMITED
GOVERNMENT/ STATUTORY AND BUSINESS APPROVALS
On the basis of the indicative list of approvals below, the Company is permitted to carry on business
activities and no further approvals from any Government authorities/RBI are required by the Company
to undertake the business of the Company. It must be distinctly understood that, in granting these
licenses, the Government of India and/or RBI does not take any responsibility for Company’s financial
soundness or for the correctness of any of the statements made or opinions expressed in this behalf.
The Company has obtained necessary approvals and registrations from various authorities in relation to
its business activities; which include:
Approvals for the IPO
1. The Board of Directors have been authorized by a special resolution passed at the extra ordinary
general meeting of the members of the company held on July 13th, under section 81(1A) of the
Companies Act for the proposed IPO.
2. ICICI Prudential Asset Management Company Limited; Portfolio Managers on behalf of its clients,
India Opportunity Real Estate Fund (Mauritius) have consented to the transfer of shares pursuant to
the Offer for Sale in terms of their consent letter dated December 09, 2010 & December 08, 2010
respectively.
Tax Registrations
1. Permanent Account Number “AADCS2249H” issued by Income Tax Department under the Income Tax
Act 1961 on 01.04.1999.
2. The Tax Deduction Account Number No. “CHES05798C” issued by Office of Deputy Commissioner,
Income Tax, (TDS).
Certificate of Registraion No.3331561390 dated 19.01.2007 under Tamil Nadu Value Added Tax, 2006
issued by the Commercial Tax Officer, T Nagar (East) Assessment Circle, Chennai.
Company Approvals
1. Certificate of Registration No.3331561390 dated 19.01.2007 under Tamil Nadu Value Added Tax, 2006
issued by the Commercial Tax Officer, T Nagar (East) Assessment Circle, Chennai.
2. Certificate of Importer and Exporter Code No. IEC: 0401018440 dated 21.11.2001 issued by the Assistant
Director General of Foreign Trade, Ministry of Commerce and Industry, Government of India..
3. The Corporate Identity Number of the Company issued by the Registrar of Companies, Tamil Nadu is
U55101TN1999PLC042205.
4. Certificate of Incorporation No. 18-42205 dated 01.04.1999 issued by the Registrar of Companies, Tamil
Nadu in the name of SABARI INN PRIVATE LIMITED.
165
SABARI INN LIMITED
5. The Company has changed its name from SABARI INN PRIVATE LIMITED to SABARI INN LIMITED
on 13.07.2010 and has been notified by the Registrar of Companies, Tamil Nadu w.e.f 20.07.2010
Hotel Approvals
HOTEL “QUALITY INN SABARI” T- Nagar, Chennai

Sr. Name of the License/ Granting Valid
No. License/Approval/ Certificate Registration Authority Up to
No.
1. 24 HRACC 07/10 Deputy Director 12/11/2015
Classification of the Hotel as
General
Four Star
(H&R)
Department of
Tourism,
Government of
India
New Delhi
2. 5365980 Asst. -
Certificate of registration of
controller/Inspecto
users of weights and measures
r of Legal
under the standards of weights
Metrology
and Measures (Enforcement)
Act, 1985 for combined liquor
measurement.
3. Registration Certificate issued Z O VIII- Assistant Health Valid for the
under Section 101 of Tamil AHO VIII- Officer, Zone VIII, year 2010 –
Nadu Public Health Act, 1939. C No./372/10 Corporation of 2011
Chennai
(License has been issued in the
name of Mr. K.R.V. Ramani, as
the keeper of the “lodging
house” for not more than 72
persons in 32 rooms)
4. Renewal License under section 0119050305 Revenue Officer Official year
279 of the CCMC Act dated Corporation of ending
10.03.2010 Chennai 31.03.2011
(License for running a
Restaurant in the Hotel. This
License has been issued in the
name of Mr. K.R.V. Ramani)
5. Fire and Rescue Services 65/2010 DGP/Director 19.03.2011
License for Basement+ Ground (Renewal) dated Fire & Rescue
floor+6 floors 19.03.2010 Services, Tamil
Nadu
6. Certificate of verification of Certificate No. Inspector of Legal 19.08.2011
weights, measures etc. under 5365980 dated Metrology
the standards of weights and 20.08.2010 Circle 7,
166
SABARI INN LIMITED

No.
Measures (Enforcement) Act, Chennai600 015.
1985 – for the weighing
machines
7. Certificate of Registration CST No.773390/ Commercial Tax Valid until

under Central Sales Tax Dated Officer, T Nagar cancelled
(Registration and Turnover) 6.6.2000 (East), Assessment
Rules, 1957 Circle
For food and drinks, icecream,

swees and savouries for (for
resale)
Rice, wheat, provisions and

equipments and instruments
for use in manufacture or
processing of goods for sale
and general goods
Generators for use in the

generation and distribution of
electricity or any form of
power.
Poly Bags, Cartons and Paper

for use in packing goods for
sale/resale.
8. Renewal of FL. 3 License dated Commissioner of Valid for the
(bearing no. 32/02-03) under 07.07.2010 Prohibition and year 2010 –
the Tamil Nadu Liquor Excise 2011
(License and Permit) Rules, Chennai
1981 to possess and sell 600 005
draught beer
9. Consent Order under section Consent Order District 31.03.2012
25 of Water (Prevention and R.I.R No. Environmental
Control of Pollution) Act, 1974 DEE/TNPCB/O Engineer
for discharge of sewage and M 76/W & TNPC Board
trade effluent. A/AI/2008-1 Chennai
dated 600 106
The consent is subject to 13.05.2008
operating the sewage treatment
plant and other the conditions
mentioned therein.
10. Consent Order under section Consent Order District 31.03.2012
21 of the Air (Prevention and R.I.R No. Environmental
Control of Pollution) Act, 1981 DEE/TNPCB/O Engineer
for operation of industrial M 76/W & TNPC Board
167
SABARI INN LIMITED

No.
plant in the Air Pollution area A/AI/2008-1 Chennai
and to make new discharge of dated 600 106.
emission from the stacks. 13.05.2008
The consent is subject to the

adherence of the
AAQ/Emission standards
prescribed by the Board.
11. Structural Stability Certificate Certificate dated Mr. S Nagesh, 25.03.2012
for Basement + Ground Floor + 26.03.2010 Chartered
6 Upper Floors Engineer,
Flat B-1,
26, II Main Road
Kasturba Nagar
Chennai 600 020
12. Registration under Employees` Registration No. Assistant Provident Valid till
Provident Funds and TN/50274 dated Fund cancelled
Miscellaneous Provisions Act, 03.04.2003 Commissioner
1952 Employees
Provident Fund
Organization
Regional Office,
Tamil Nadu
Region, Chennai
13. Registration under Code No. 51- Deputy Director of Valid until
Employees’ State Insurance 77415-112 Inspection cancelled
Act, 1948 Dated 03.02.2003 Regional Office
(Tamil Nadu)
Employees’
State Insurance
Corporation,
Chennai
14. Renewal of registration under LTH 01898/2002- Assistant N.A
section IXA of Tamil Nadu Tax 03 Commissioner (CT)
on Luxury Hotel and Lodging T Nagar (E)
Houses Act, 1981 Assessment Circle
15. AADCS2249HST0 Superintendent of Valid until

Service Tax Registration for the
01 dated Service Tax (Tech), cancelled
services of Mandap Keeper and
29.08.2007 Service Tax
Outdoor Catering
Commissionerate,
Chennai
168
SABARI INN LIMITED
Hotel “QUALITY Hotel SABARI CLASSIC”, OMR, Chennai

No. License/Approval/ Registration Authority Upto
Certificate No.
1. Classification of the Hotel as INDTOUR/ Regional Director Valid for a
Three Star Chennai & Convener period of 5
HRACC/ General HRACC years i.e. until
2007 (TN) (South) 21.11.2012
771 dated Department of
21.11.2007 Tourism,
Government of
India Southern
Regional Office
Chennai
2. Fire and Rescue Services License No. DGP/Director 27.08.2011
License for Basement+ 230/2010 of Fire & Rescue
Ground floor+3 floors+ Duct (Renewal) dated Services, Tamil
Floor 20.08.2010 Nadu
3. Renewal of FL.3 License K.Dis. P&E Commissioner of Valid for the
bearing No. 31/07-08 under 2(4)/3176/ 2010 Prohibition and year 2010 –
the Tamil Nadu Liquor dated Excise, Chennai 2011
(License and Permit) Rules, 04.08.2010
1981.
4. Structural Stability dated 19.12.2009 Mr. Alex Jacob, N.A
Certificate Consulting
Engineer
48, MGR Road,
Kalakshetra
Colony,
Chennai-600 090
5. Public Performance License License No. Phonographic 14.08.2012
for all Sound Recordings 13/M/40182 Performance Ltd.
controlled by Phonographic
Performance Ltd.
6. Registration under Registration No. Assistant Provident Valid till
Employees’ Provident Funds CHN/RO/TN/53 Fund cancelled
and Miscellaneous 191/CC-I Commissioner
Provisions Act, 1952 [13]/2007 (C & R)
dated 10.01.2008 Employees
Provident Fund
Organisation
Chennai and
Puducherry Region
37, Royapettah
High Road Chennai
600 014
7. Registration under Code No. 51- Deputy Director of Valid until
Employees’ State Insurance 88036-111 Inspection cancelled
Act, 1948 dated 20.12.2007 Regional Office
169
SABARI INN LIMITED

Certificate No.
(Tamil Nadu)
Employees’
State Insurance
Corporation
143, Sterling Road
Chennai 600 034.
8. Licence under section 30 of Licence No. The Indian 31.10.2010
the Copyright Act, 1957 GL:CHN:00485 Performing Right
authorising to perform all Society Ltd.
musical & literary works
controlled by The Indian
Performing Right Society
Ltd.
9. Licence for Industries and Licence No.607 Commissioner, 31.03.2011
Factories for running a Hotel. dated 17.06.2010 Panchayat Union
Thiporur
10. Certificate of Registration for Registration No. Assistant Inspector 31.12.2010
a Catering Establishment 348 dated of Labour,
for employing not more than 19.11.2007 Chingleput
250 persons
11. Certificate of Registration License Inspector of 31.12.2010
under section 12(1) of the No.1370/09 dated Labour,
Contract Labour (Regulation 12.08.2009 Kancheepuram
and Abolition) Act, 1970 to
employ a maximum of 82
contract labourers from the
contractor FL Smidth Pvt.
Ltd. for catering service
12. Land use letter for the Hotel. Roc. Director of Town -
No.26299/2005- and Country
MP1 dated Planning
16.11.2005
13. Service Tax Registration for AADCS2249HST0 Superintendent of Valid until
the services of Mandap 02 dated Central Excise & cancelled
Keeper and Outdoor 31.10.2007 Service Tax,
Catering Tambaram
Division
Doc.No. 9/2006 Member Secretary, NA
14. Planning Permit for
dated 19.07.2006 Planing Authority,
construction of hotel
Mamallapuram
15. Registration Certificate 1475/S2/06 dated Block Health Valid for the
issued under Section 101 of 27.04.2006 Suprevisor, year 2010 –
Tamil Nadu Public Health Thiruporur Block, 2011
Act, 1939. Kelambakkam
16. Registration under section 9- Renewal Receipt Commercial Tax Valid
170
SABARI INN LIMITED

Certificate No.
a of the Tamil Nadu Tax on No.0627159 Officer (FAC)
Luxuries in Hotel and
Lodging Houses Act, 1981
Hotel “QUALITY INN SABARI RESORTS”, Kodaikanal

No. License/Approval/ Certificate Registration Authority Upto
No.
1. Classification of the Hotel as INDTOUR/ Regional Director Valid for a
Three Star Chennai & Convenor. period of 5
HRACC/ HRACC (South) years i.e. until
2009 (TN) Indiatourism 19.10.2014
1079 dated (Chennai)
26.10.2009 Southern Regional
Office
154, Anna Salai
Chennai
600 002
2. NOC for running a Hotel dated Not Available Inspector of Police Valid until
August 18, 2009 Kodaikanal Cancelled
Dindigul
District
3. Structural Stability Certificate Certificate dated Sri Balaji 06.08.2012
07.08.2009 Constructions
65, Subramania
puram Road
Opp. Swamy
Theatre, Palani
624 601
4. Licence under section 13 of Licence No. Circle Officer 02.03.2011
Tamil Nadu Fire Services Act, 23/2010 dated Fire Rescue
1985 03.03.2010 Services
Department
Dindigul Circle
Dindigul
5. Public Performance Licence for Licence No. Phonographic 14.08.2012
all Sound Recordings 13/M/40178 Performance Ltd.
controlled by Phonographic
Performance Ltd.
6. Licence under section 30 of the Licence No. The Indian 30.6.2011
Copyright Act, 1957 to publicly GL:KODAI- Performing Right
perform any Musical Works 00011 Society Ltd.
and any words or any action
intended to be sung, spoken or
performed with the music
171
SABARI INN LIMITED

No. License/Approval/ Certificate Registration Authority Upto
No.
7. Registration under Employees’ Registration No. Assistant Provident Valid till
Provident Funds and TN/MD/58478 Fund cancelled
Miscellaneous Provisions Act, w.e.f 01.05.2009 Commissioner
1952 (C&R) Madurai
8. Licence for Industries and Licence No. 766 Commissioner, 31.03.2011
Factories for boarding and Municipality of
lodging Kodaikanal
9. Licence under Madras Public Licence No. Tahsildar 06.08.2012
Building (Licence) Act, 1965 to 8/2009 Taluk Office
accommodate 100 persons for Registration Kodaikanal
Boarding and Lodging No.
8/2009 dated
20.07.2009
10. Registration certificate in Registration No. Asst Inspector, 31.12.2010
respect to catering 289 dated 6.7.2009 Labour, Kodaikanal
establishment
11. Service Tax Registration AADCS2249HSD Commissioner, Valid

005 Service Tax
HOTEL PROJECT, Coimbatore
Sr. Name of the License/Approval/ License/ Granting Valid

No. Certificate Registration Authority Upto
No.
1. Approval for project construction of Letter No. Regional Director If the Hotel
3 star Hotel. The classification to be INDTOUR/CHENNA (South), India project is not
awarded after the Hotel is fully I/HTL/ Tourism, Chennai, completed
functional. APL/2009(TN)/10 Southern Regional within 5
dated 10.7.2009 Office, 154, Anna years, the
Salai, Chennai approval is
600 002. deemed to
have been
withdrawn
2. No Objection Certificate for No.AAI/SR/NOC/R Senior Manager Valid for a
construction at Sy No. 114/2C2, HQ in Case No. Airports Authority period of 5
116/1B2, 116/2A2, Mylampatati, 585/08 dated 4.12.2008 of India years i.e.
Avinashi Road, Coimbatore 641 014. Southern Region until
The Certificate is for the purpose of Chennai Airport 03.12.2013
clearance from the angles of safety Chennai
and for height clearance only. 600 027.
3. No Objection Certificate for Letter No. Director Until

construction of hotel having two 15888/E1/2010 dated Fire and Rescue cancelled
basements + Ground Floor + 6 03.08.2010 Operations Deptt.
172
SABARI INN LIMITED

No.
Floors and a height not exceeding Chennai
29.6 mtrs. The original certificate
was dated 17.11.2008. The fresh
NOC was provided when there was
an amendment in the height of the
building from 28 mtrs to 29.6 mtrs.
4. Approval for new sub-division of RTR/545/2007-E2 Tasildhar -

various survey numbers in Dated nil Palladam
Mylampatti Village.
5. No Objection Certificate for 4938/2008 dated Circle Engineer, -

construction of a hotel on Salem – 7.9.2009 Highways,
Cochin Road. Coimbatore.
NOC is subject to the conditions

specified therein.
6. No Objection Certificate for Lr No. G2/56288/2008 Superintendent of -
construction of the Hotel. dated 29.1.2009 Police, Coimbatore
District
Based on notarsied copy
7. Proceedings to declare the land in ROC No. Commissioner of -
the survey nos 114/2C2, 114/2C3, 25689/2008/Special Town and Country
116/1B2, 1B3, 2A2 and 116/2A3 of Cell dated 8.10.2009 Planning, Chennai
Mayilampatty Village, Avinashi 600 002.
Road, Coimbatore as Multi-storied
building area subject to conditions
mentioned therein.
8. Planning Permit for construction of Order No.17735/2010 Director, Town & -
Hotel on the land in S No. 114/2C2, Dated 05.09.2010 Country Planning,
116/1B2 and 116/2A2 in Government of
Mylampatti Village, Palladam (Subject to conditions Tamil Nadu
Circle, Coimbatore District. mentioned therein.
Actual permission to
be issued by the local
authority at
Coimbatore.)
9. Certificate of Registration under RC. No. Deputy Chief December
section 7(3) of the Building and 0072010DCIFICBE Inspector of 2010
other construction workers dated 19.07.2010 Factories, 1 Division,
(Regulation of Employment and Coimbatore
Conditions of Service) Act, 1996 for
a maximum of 300 workers being
employed on any particular day for
the Hotel project
10. Structural Stability Certificate for 2 Certificate dated Mr. N.N. Nagendra -
173
SABARI INN LIMITED

No.
Basement+ Ground Floor+ Eight 13.01.2009 Kumar, Structural
Floors+ Swimming Pool and Health Engineer,
Club at Terrace 1307, Brigade
Towers, 135, Brigade
Road, Bangalore 560
025
Hotel “SABARI’S NEST”, Chennai

No. License/Approval/Certificate Registration No. Authority Upto
1. Consent Order under section 25 of 3rd renewal of Consent District 31.3.2011
Water (Prevention and Control of Order No. 767 Environmental
Pollution) Act, 1974 for discharge of Engineer
sewage and trade effluent subject to TNPC Board
the conditions mentioned in the Chennai
Consent Order. 600 106

Company setting up a package
treatment plant for treatment of
sewage and garbage is to be
disposed in the manner specified.
2. Consent Order under section 21 of 3rd renewal of Consent District 31.3.2011
the Air (Prevention and Control of Order No. 772 Environmental
Pollution) Act, 1981 for operation of Engineer
industrial plant in the Air Pollution TNPC Board
emission from the stacks. 600 106.

adherence of the AAQ/Emission
standards prescribed by the Board.
3. Fire and Rescue Services License for 248/2010 (Renewal) DGP/Director 09.02.2011
Ground floor Mezzanine + 5 floors dated 08.09.2010 Fire & Rescue
subject to the conditions mentioned Services, Tamil
therein. Nadu
4. Registration under Employees’ Registration No. Assistant Valid till

Provident Funds and Miscellaneous TN/54261 dated Provident Fund cancelled
Provisions Act, 1952 08.07.2009 Commissioner
Employees
Provident Fund
Organisation
Regional Office,
174
SABARI INN LIMITED

Tamil Nadu
Region
37, Royapettah
High Road
Chennai 600 014
5. Registration under the Employees Code No. 51-88036-111 Asst. Director, Valid until
State Insurance Act, 1948 dated 01.10.2009 Regional Office, cancelled
ESIC, 143,
Sterling Road,
Chennai
TNTL/05332/2008-09 - Application
6. Registration under section 9-a of the
for renewal
Tamil Nadu Tax on Luxuries in
made
Hotel and Lodging Houses Act, 1981
7. Registration Certificate issued under Vj/AHO-VI/C.No: Assistant Health Valid for the
section 101 of the Tamilnadu Public 1303/10 dated Officer, Zone VI, year 2010 –
Health Act, 1939 authorising to 14.08.2010 Corporation of 2011
receive upto 70 lodgers in 35 rooms. Chennai
8. Application dated 2.3.2010 has been - - -

made by the Company for license for
food handlers – for the year 2010-11.
The Application is pending before

the competent authority
9. Certificate of Registration for a License No. 257/2009 Assistant 31.12.2010

Catering Establishment for dated 12.5.2009 Inspector of
employing not more than 50 persons Labour, 15th
Circle, Chennai
600 035
10. Public Performance License for all License No. Phonographic 14.08.2012
Sound Recordings controlled by 13/M/40180 Performance
Phonographic Performance Limited Limited
11. - Commercial Tax Valid

Registration under section 9-a of
Officer
the Tamil Nadu Tax on Luxuries
in Hotel and Lodging Houses Act,
1981
Hotel “SABARI’S NEST”, Bangalore

1. Registration under Employees’ Registration No. Assistant Provident Valid till
175
SABARI INN LIMITED

Provident Funds and Miscellaneous KN/44072 dated Fund cancelled
Provisions Act, 1952 31.03.2010 Commissioner
EPFO,
Regional Office
(Compliance
Wing),
Bangalore,
Karnataka
2. Registration Certificate of 76/KN - 5611/2009 Office of the 31.12.2013

Establishment under the Karnataka Inspector,
Shops & Commercial Establishments Bangalore,
Act, 1961 Karnataka
3. Registration for Luxury Taxes L04312019 dated Asst. Valid until
01.06.2009 Commissioner of cancelled
Commercial Taxes
(Luxury Tax) – 43,
Bangalore 20
4. The Company has vide its letter - - -
dated February 9, 2010 made an
application for registration under
ESIC.
The Company is awaiting the

allotment of the sub code under
ESIC.
Hotel “SABARI’S NEST, Coimbatore

1. Classification of the Hotel as Two INDTOUR/ Regional Director Valid for a
Star Chennai (I/C) & Convener, period of 5
HRACC/ HRACC (South) years i.e. until
2009(TN)/1092 dated Department of 23.10.2014
30.11.2009 Tourism,
Government of
India Southern
Regional Office
Chennai
2. Public Performance License for all License No. Phonographic 14.08.2012

Sound Recordings controlled by 13/M/40177 Performance Ltd.
176
SABARI INN LIMITED

3. Registration under Code No. 56-109040- Asst. Director (IPN) Valid until
Employees’ State Insurance Act, 112 Employees’ cancelled
1948 dated 29.5.2009 State Insurance
Corporation
1897, Trichy Road,
Panchdeep
Complex,
Ramanathapuram,
Coimbatore
4. Registration under Employees’ Registration No. Assistant Provident Valid until
Provident Funds and Miscellaneous TN/CBE/77660 Fund cancelled
Provisions Act, 1952 Commissioner
Employees
Provident Fund
Organisation
Regional Office,
Coimbatore
5. Fire and Rescue Services License for 292/2009 (Renewal) Director 05.08.2010
Ground floor + 4 floors dated 20.11.2009 Fire & Rescue
Services, Tamil
(The Company vide its letter dated Nadu
August 9, 2010 had applied for
renewal)
6. No Objection Certificate for Dated 29.01.2009 Inspector of Police, -
construction of the Hotel. B-4, Race Course,
Coimbatore City
7. AADCS2249HST003 Superintendent of Valid until
Service Tax Registration for the
dated 04.02.2009 Service Tax & cancelled
services of Mandap Keeper and
Central Excise, III
Outdoor Catering
Division,
Coimbatore
8. Agreement dated 14.9.2009 for - Superintending Valid until
supply of electrical energy for a Engineer, TNEB, cancelled
maximum demand of 240KVA Coimbatore
9. Structural Stability Certificate for Certificate dated Mr. K Chandran,
Basement + Ground Floor + Three 06.04.2009 Chartered Engineer,
Floors 75.3/92, 1st Floor, NS
Road, Saibab
Colony, Coimbatore
10. Certificate of Registration under License No.343 dated Inspector of Labour, 31.12.2010
section 12(1) of the Contract Labour 05.01.2010 Coimbatore
(Regulation and Abolition) Act, 1970
to employ a maximum of 100
contract labourers from the
contractor FL Smidth Pvt. Ltd. for
catering service
11. License to operate the lift bearing sr. License No. Lift Inspector cum 24.01.2011
177
SABARI INN LIMITED

no. 11251 of Kone make under sub- 12/November/2009 Electrical Inspector
section 3 of section 5 of the Coimbatore
Tamilnadu Lifts Act, 1997 (Central)
12. License to operate the lift bearing sr. License No. Lift Inspector cum 02.03.2011
no. A2106 of Johnson make under 11/November/2009 Electrical Inspector
sub-section 3 of section 5 of the Coimbatore
Tamilnadu Lifts Act, 1997 (Central)
13. Renewal of FL.3 License bearing No. K.Did.P&E Commissioner of Valid for the
31/07-08 under the Tamil Nadu 2(1)/3744/2010 dated Prohibition and year 2010 –
Liquor (License and Permit) Rules, 28.08.2010 Excise, Chennai 2011
1981.
14. Fire and Rescue Services License for - Director Valid

Ground floor + 4 floors Fire & Rescue
Services, Tamil
(The Company vide its letter dated Nadu
August 9, 2010 had applied for
renewal)
Approvals pending as on the date of filing of DRHP are as follows:
Sr. Name of the Expired on Granting Status

No. License/Approval/Certificate
Authority
Quality Inn Sabari T-Nagar Chennai
30.11.2010 Licensing Dept., The Applied for
2. Renewal of license for the public
Indian Performing renewal and
performance of musical works
Right Society renewal fees
under section 30 of the Copyright
Limited paid
Act, 1957
2.
no. 8361 of Johnson Make under Chennai Division, Inspection
awaited
3.
awaited
4.
awaited
Public Performance License for all 31.01.2011 Phonographic Applied for
5.
Sound Recordings controlled by Performance Ltd. renewal
178
SABARI INN LIMITED
Certificate of Registration for a 31.12.2010 Assistant Inspector Applied for

6.
Catering Establishment for of Labour, 19th renewal
employing not more than 150 Circle, Chennai
persons
Quality Sabari Classic OMR

1. License to operate lift bearing Sr. 09.08.2010 Electric Inspector Electrical
No. 52903-0-A of Mistubishi Make Kanchipuram Inspection
under Rule 4(2) and 5(2) of Tamil South Division done.
Nadu Lift Rules 1997 Chennai Certificate
awaited
awaited
awaited
awaited
5. Consent under section 21 of Air 31.03.2010 District Inspection
Kancheepuram
District
6. Consent under section 21 of Water 31.03.2010 District Inspection
Kancheepuram
District
7. License under section 30 of the 31.10.2010 The Indian Renewal fees

Copyright Act, 1957 authorising to Performing Right paid.
perform all musical & literary works Society Ltd. Certificate
controlled by The Indian Performing awaited
Right Society Ltd.
8. Consent under section 21 of Air 31.3.2010* District Inspection
179
SABARI INN LIMITED
(Prevention and Control of Environmental completed.

Pollution) Act, 1981, subject to Engineer Certificate
general and conditions specified in Tamil Nadu awaited
the Consent Order. Pollution Control
Board
Kancheepuram
District
Maraimalai Nagar
9. Certificate of verification of weights, 26.10.2010 Asst. Applied for
measures etc. under the standards of controller/Inspector and waiting
weights and Measures of Legal Metrology for inspection
(Enforcement) Act, 1985 – for Peg
measures
Quality Inn Sabari Resorts Kodaikanal

1. Renewal of registration under 13.05.2010 Commercial Tax Renewal Fees
section IX A of Tamil Nadu Tax on Officer (FAC) paid
Luxury Hotel and Lodging Houses Kodaikanal
act, 1981
2. Sanitary Certificate Certificate Municipal Health Application

dated Officer made for
20.07.2009 Kodaikanal renewal
Municipality
3. Registration Certificate issued under NA Commercial Tax Application
Section 101 of Tamil Nadu Public Officer, Kodaikanal made for
Health Act, 1939 renewal
5. FL.3 License under Tamil Nadu NA Commissioner P&E, Inspection

Liquor License and permit Rules, Chennai done.
1981 Certificate
awaited
Sabari Nest Coimbatore
the Air (Prevention and Control of Environmental done.
Pollution) Act, 1981 for operation of Engineer Certificate
Industrial plant in the Air Pollution TNPC Board awaited
emission from the stacks 600 106

the Water (Prevention and Control Environmental done.
of Pollution) Act, 1974 for discharge Engineer TNPC Certificate
of sewage and trade effluent Board Coimbatore awaited
3. Registration under Section 9A of the 01.02.2010 Assistant Applied for

Tamil Nadu Tax on luxuries in the Commissioner(CT) renewal
Hotel and Lodging Houses, act 1981
5. Registration Certificate issued under Assistant Health Application
180
SABARI INN LIMITED
Section 101 of Tamil Nadu Public Officer, Zone VI, for renewal
Health Act, 1939. Corporation of made
Chennai
Note:
· Licenses to operate the lifts are in the name of Sabari Nest Inn Private Ltd.
· For Mark Boulevard, Whitefield, Bangalore
At present the licenses and approvals are in the name of the Lessor. The company is in
the process of applying for transfer of such of those licenses which are in the name of
Licensor and which can be transferred in the name of the Company and in other cases, it
is in the process of applying for licenses in its favour.
181
SABARI INN LIMITED
OTHER REGULATORY AND STATUTORY DISCLOSURES
A) AUTHORITY FOR THE PRESENT ISSUE
The shareholders of Sabari Inn Limited have authorized the Issue by a resolution adopted pursuant to
Section 81 (1A) of the Companies Act, passed at the Extra Ordinary General Meeting held on July 13, 2010
ICICI Prudential Asset Management Company Limited; Portfolio Managers on behalf of its clients and
India Opportunity Real Estate Fund, Mauritius have approved the transfer of shares pursuant to the
Offer for Sale in terms of their consent dated December 09, 2010 & December 08, 2010 respectively.
The details of the number of Equity Shares proposed to be sold by each of the Selling Shareholders in the
Offer for Sale are as follows:
Sr. Name of Selling Date of Percentage of No. of Amount (`

No. Shareholder Allotment / Pre-issue Equity In Lacs)
Transfer Shareholding Shares
(%) offered for
Sale
1. ICICI Prudential Asset 28/12/2007 25.00 [●] 2300.00

Management Company
Limited; Portfolio
Managers on behalf of its
clients
India Opportunity Real 08/01/2008 24.00 [●] 2200.00
2.
Estate Fund, Mauritius
Total [●] 4500.00
ICICI Prudential Asset Management Company Limited; Portfolio Managers on behalf of its clients and
India Opportunity Real Estate Fund, Mauritius was allotted Equity Shares by the Company
For details, please see the section titled “History and Corporate Structure of Company” on page 89.
All the Equity Shares being offered for sale by the Selling Shareholders have been held by them for a
period of at least one year. None of the Selling Shareholders are offering any shares acquired pursuant to
a bonus issue of the Equity Shares in the Offer for Sale.
B) PROHIBITION BY SEBI
The Company, its Promoters, its Directors, The Selling Shareholders or any of the Company’s associates
or group companies and companies with which the Directors of the Company are associated as Directors
or Promoters, or Directors or Promoters in control of, of the promoting Company, are currently not
prohibited from accessing or operating in the capital market under any order or direction passed by SEBI.
The Promoters, their relatives (as per Act), the Company, group companies, associate companies are not
detained as willful defaulters by RBI / Government authorities.
182
SABARI INN LIMITED
C) Eligibility for the Issue
The Company is eligible for the Issue as per regulation 26(1) of the (Issue of Capital and Disclosure
Requirements).
• SIL has a net tangible assets of at least ` 3 crores in each of the preceding three full years (of 12 months
each), of which not more than 50% is held in monetary assets;
• SIL has a pre-Issue net worth of at least ` 1 crore in each of the three preceding full years (of 12 months
each);
• SIL has a track record of distributable profits as per Section 205 of Companies Act , 1956, for at least
three out of the immediately preceding five years;
• The proposed Issue size would not exceed five times the pre-Issue net worth as per the audited
accounts for the year ended March 31, 2010;
• SIL has not changed its name during the last one year.
The distributable profits as per Section 205 of the Companies Act and net worth for the last five years as
per the restated financial statements are as under:
(In ` lacs)
For The
Quarter For the Financial Year Ended
Particulars
Ended
30.06.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006
Distributable Profits (1) 162.30 466.82 99.33 43.19 235.10 60.26
Net Worth (2) 10716.70 10542.97 10076.16 9976.83 3533.63 1463.47
Net Tangible Assets (3) 20719.08 19375.65 16634.29 14568.57 6928.44 3774.67
Monetary Assets (4) 296.03 150.64 1,781.45 3,147.87 814.47 51.80
Monetary Assets as a % of
1.43% 0.78% 10.71% 21.61% 11.76% 1.37%
Net Tangible Assets
Note:
(1) Distributable profits have been defined in terms of section 205 of the Companies Act.
(2) Net worth has been defined as the aggregate of equity share capital and reserves, excluding miscellaneous
expenditures, if any.
(3) Net tangible assets means the sum of all net assets of the Company excluding intangible assets as defined in
Accounting Standard 26 issued by Institute of Chartered Accountants of India.
(4) Monetary assets comprise of cash and bank balances, public deposit account with the Government.
The Company satisfies all the eligibility criteria’s, laid down in regulation 26(1) of the SEBI (Issue of
Capital and Disclosure Requirements) Regulation. However, the Company is doing a “voluntary book-
building issue” wherein the Company proposes to allot upto 50% of the Issue to QIBs and under-
subscription, if any, in the QIB portion will be added back to the Issue to public.
The promoters, the company, directors of SIL are not detained as willful defaulters by the RBI/ GOI
authorities and there are no violations of securities laws committed by them in the past or pending
against them other than those disclosed in this Offer Document.
No penalty has been imposed by SEBI and other regulatory bodies against the company, its directors, its
promoters and companies promoted their directors.
183
SABARI INN LIMITED
SIL undertakes that the number of allottee in the Issue shall be at least 1,000. Otherwise, the entire
application money shall be refunded forthwith. In case of delay, if any, in refund, the Company shall pay
interest on the application money at the rate of 15% per annum for the period of delay.
D) DISCLAIMER CLAUSE (SEBI)
"IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF OFFER DOCUMENT TO THE

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) SHOULD NOT IN ANY WAY BE
DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI.
SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF
ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR
THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE OFFER
DOCUMENT. THE LEAD MERCHANT BANKER, KEYNOTE CORPORATE SERVICES LIMITED
HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE OFFER DOCUMENT ARE
GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SEBI (ISSUE OF CAPITAL
AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE TIME BEING.
THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION
FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY AND
THE SELLING SHAREHOLDERS ARE PRIMARILY RESPONSIBLE FOR THE CORRECTNESS,
ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE OFFER
DOCUMENT, THE LEAD MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE
TO ENSURE THAT THE ISSUER DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS
BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MERCHANT BANKER KEYNOTE
CORPORATE SERVICES LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE
DATED 09/12/2010 WHICH READS AS FOLLOWS:
(1) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO

LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
COLLABORATORS, ETC. AND OTHER MATERIAL IN CONNECTION WITH THE
FINALISATION OF THE DRAFT RED HERRING PROSPECTUS PERTAINING TO THE SAID
ISSUE;
(2) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, ITS
DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT
VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE
JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS
FURNISHED BY THE ISSUER, WE CONFIRM THAT:
(A) THE DRAFT RED HERRING PROSPECTUS FILED WITH THE BOARD IS IN
CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO
THE ISSUE;
(B) ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE
REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ISSUED BY THE
BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY
IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND
(C) THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE,
FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED
DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH
DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE
184
SABARI INN LIMITED
COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE
OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER
APPLICABLE LEGAL REQUIREMENTS.
(3) WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE
DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH THE BOARD AND THAT
TILL DATE SUCH REGISTRATION IS VALID.
(4) WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO

FULFIL THEIR UNDERWRITING COMMITMENTS.
(5) WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR
INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS’
CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO
FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE
DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS DURING THE PERIOD
STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS WITH
THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN
THE DRAFT RED HERRING PROSPECTUS.
(6) WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF

INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF
PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE
DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN
THE DRAFT RED HERRING PROSPECTUS.
(7) WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND
(D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE
BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS
HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE
RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE
THAT AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE
BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE
THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A
SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER ALONG
WITH THE PROCEEDS OF THE PUBLIC ISSUE. – NOT APPLICABLE
(8) WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS
ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED
IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER
CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED
OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM
OF ASSOCIATION.
(9) WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT
THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK
ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF THE
COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID
BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES
185
SABARI INN LIMITED
MENTIONED IN THE PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT

ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY
CONTAINS THIS CONDITION.
(10) WE CERTIFY THAT SINCE THE PROPOSED ISSUE SIZE IS MORE THAN RS.10 CRORES, THE
PROVISION RELATING TO OPTION TO THE INVESTORS TO GET THE SHARES IN
PHYSICAL MODE IS NOT APPLICABLE IN TERMS OF SECTION 68B OF THE COMPANIES
ACT, 1956.
(11) WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES
AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO
DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE
INVESTOR TO MAKE A WELL INFORMED DECISION.
(12) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT
RED HERRING PROSPECTUS/ DRAFT PROSPECTUS/ DRAFT LETTER OF OFFER:
(A) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE
ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE ISSUER AND
(B) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH
DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO
TIME.
(13) WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO

ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE
MAKING THE ISSUE.
(14) WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN
EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR
THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK
FACTORS, PROMOTERS EXPERIENCE ,ETC.
(15) WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE

APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF
COMPLIANCE, PAGE NUMBER OF THE DRAFT RED HERRING PROSPECTUS WHERE THE
REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.
THE FILING OF THE OFFER DOCUMENT DOES NOT, HOWEVER, ABSOLVE THE ISSUER FROM
ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 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 ISSUE. SEBI FURTHER RESERVES
THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MERCHANT BANKER
ANY IRREGULARITIES OR LAPSES IN OFFER DOCUMENT."
The promoters/directors of Sabari Inn Limited, Mr. K.R.V. Ramani, Mrs. Aruna Ramani and Ramani
HUF, Mr. K.R. Narayanan, Mr. T.R. Sridharan, Mr. V. Janakiraman, Mr. P. Vaidyanathan, Mr.
186
SABARI INN LIMITED
R.Thiagarajan confirms that no information/material likely to have a bearing on the decision of investors
in respect of the shares offered in terms of this Draft Red Herring Prospectus has been suppressed
withheld and / or incorporated in the manner that would amount to mis-statement/misrepresentation
and in the event of its transpiring at any point in time till allotment/refund, as the case may be, that any
information/material has been suppressed/withheld and/ or amounts to a mis-statement/
misrepresentation, the promoters/directors undertake to refund the entire application monies to all
subscribers within 7 days thereafter without prejudice to the provisions of section 63 of the companies
act.
E) DISCLAIMER STATEMENT FROM THE COMPANY, THE SELLING SHAREHOLDERS AND THE
BRLM
The Company, the Directors, Selling Shareholders and the BRLM accept no responsibility for statements
made otherwise than in this DRHP or in the advertisements or any other material issued by or at instance
of the above mentioned entities and anyone depending on any other source of information,
including the website, www.sabarihotels.com, would be doing so at his or her own risk.
The BRLM accept no responsibility, save to the limited extent as provided in the Memorandum
of Understanding entered into among the BRLM and us dated No 13/11/2010 and the Underwriting
Agreement to be entered into among the Underwriters and us.
All information shall be made available by us and BRLM to the public and investors at large and no
selective or additional information would be available for a section of the investors in any manner
whatsoever including at road show presentations, in research or sales reports or at bidding centres etc.
Neither the Comapny, the Selling Shareholders nor the Syndicate is liable to the Bidders for any failure in
downloading the Bids due to faults in any software/hardware system or otherwise.
F) DISCLAIMER WITH RESPECT TO JURISDICTION
This Issue is being made in India to persons resident in India {including Indian nationals resident in India
who are majors, HUFs, companies, corporate bodies and societies registered under the applicable laws in
India and authorised to invest in shares, Indian Mutual Funds registered with SEBI, Indian financial
institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or
trusts under the applicable trust law and who are authorised under their constitution to hold and invest
in shares, permitted insurance companies and pension funds and insurance funds setup and managed by
the army and navy and to FII’s and eligible NRI’s}. This Prospectus does not, however, constitute an
invitation to subscribe to Equity Shares offered hereby in any other jurisdiction to any person to whom it
is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this
Prospectus comes is required to inform him or herself about and to observe, any such restrictions. Any
dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Chennai,
Tamil Nadu only.
No action has been or will be taken to permit a public offering in any jurisdiction where action would be
required for that purpose, except that this Prospectus has been filed with SEBI for observations.
Accordingly, the Equity Shares, represented thereby may not be offered or sold, directly or indirectly,
and this Red Herring Prospectus may not be distributed, in any jurisdiction, except in accordance with
the legal requirements applicable in such jurisdiction. Neither the delivery of this Red Herring Prospectus
nor any sale hereunder shall, under any circumstances, create any implication that there has been no
187
SABARI INN LIMITED
change in our affairs from the date hereof or that the information contained herein is correct as of any
time subsequent to this date.
G) DISCLAIMER CLAUSE OF THE STOCK EXCHANGES
Disclaimer Clause of Bombay Stock Exchange Limited (BSE):
“Bombay Stock Exchange Limited (“the Exchange”) has given vide its letter no. [●] dated [●] permission
to the Company to use the Exchange’s name in this Red Herring Prospectus as one of the stock exchanges
on which this Company’s securities are proposed to be listed. The Exchange has scrutinized this
Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission
to this Company. The Exchange does not in any manner:
i. Warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus;
or
ii. Warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or
iii. Take any responsibility for the financial or other soundness of this Company, its promoters, its
management or any scheme or project of this Company;
and it should not for any reason be deemed or construed that this Prospectus has been cleared or
approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of
this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have
any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person
consequent to or in connection with such subscription/acquisition whether by reason of anything stated
or omitted to be stated herein or for any other reason whatsoever”.
Disclaimer Clause of the NSE
As required, a copy of this Draft Red Herring Prospectus has been submitted to National Stock Exchange
of India Limited. NSE has given vide its letter Ref. No. [●] dated [●] permission to the Issuer to use
the Exchange’s name in this Red Herring Prospectus as one of the stock exchanges on which this Issuer’s
securities are proposed to be listed subject to the Issuer fulfilling the various criteria for listing including
the one related to paid up capital and market capitalisation (i.e. the paid up capital shall not be less than
Rs. 10 crores and market capitalisation shall not be less than ` 25 crores at the time of listing). The
Exchange has scrutinized this Red Herring Prospectus for its limited internal purpose of deciding
on the matter of granting the aforesaid permission to this Issuer. It is to be distinctly understood that the
aforesaid permission given by NSE should not in any way be deemed or construed that the Red Herring
Prospectus has been cleared or approved by NSE; nor does it in any manner warrant, certify or
endorse the correctness or completeness of any of the contents of this Red Herring Prospectus, nor does
it warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does
it take any responsibility for the financial or other soundness of this Issuer, its promoters, its management
or any scheme or project of this Issuer.
Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so
pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
Exchange whatsoever by reason of any loss which may be suffered by such person consequent to
or in connection with such subscription/acquisition whether by reason of anything stated or omitted to
be stated herein or any other reason whatsoever.
188
SABARI INN LIMITED
Disclaimer Clause of IPO Grading Agency
[●]
H) FILING
A copy of this DRHP has been filed with SEBI at Securities and Exchange Board of India, SEBI
Bhavan, G Block, 3rd Floor, Bandra Kurla Complex, Bandra East, Mumbai - 400 051, BSE at Bombay Stock
Exchange Limited, P. J. Towers, Dalal Street, Mumbai – 400 001 and NSE at The National Stock Exchange
of India Ltd, Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051.
A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 60B
of the Companies Act, will be delivered for registration to the ROC and a copy of the Prospectus required
to be filed under Section 60 of the Companies Act would be delivered for registration with the ROC,
Chennai, Tamil Nadu.
I) LISTING
Applications will be made to BSE and NSE for permission to deal in and for an official quotation of the
Equity Shares of the Company. BSE shall be the Designated Stock Exchange with which the basis of
allocation will be finalised.
If the permission to deal in and for an official quotation of the Equity Shares is not granted by any of the
Stock Exchanges mentioned above, the Company and the selling shareholders shall forthwith repay,
without interest, all monies received from the applicants in pursuance of this DRHP. If such money is not
repaid within eight days after the Company and the Selling Shareholders become liable to repay it ie.
from the date of refusal or within 7 days from the date of Bid/Issue Closing Date, whichever is earlier,
then the Company, the Selling Shareholders and every Director of the Company who is an officer in
default shall, on and from expiry of eight days, be liable to repay the money, with interest at the rate of
15% per annum on application money, as prescribed under Section 73 of the Companies Act.
The Company shall ensure that all steps for the completion of the necessary formalities for listing
and commencement of trading at both the Stock Exchanges mentioned above are taken within seven
working days of finalisation of the basis of Allotment for the Issue.
J) Impersonation
Attention of the Applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the
Companies Act, which is reproduced below:
"Any person who:
a) makes in a fictitious name, an application to a company for acquiring or subscribing for,

any shares therein, Or
b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or
any other person in a fictitious name, shall be punishable with imprisonment for a term
which may extend to five years."
189
SABARI INN LIMITED
K) CONSENTS
Consents in writing of the Directors, the Company Secretary and Compliance Officer, the Auditors, the
Legal Advisor, Bankers to the Company, BRLM and the Registrar to the Issue to act in their respective
capacities, have been obtained and will be filed along with a copy of the RHP with the ROC as required
under Sections 60 and 60B of the Companies Act and such consents have not been withdrawn up to the
time of delivery of the Prospectus for registration with the ROC.
Essveeyar, Chartered Accountants, Auditors of the Company have also given their consent to the
inclusion of their report as appearing hereinafter in the form and context in which it appears in this
DRHP and also of the tax benefits accruing to the Company and to the members of the Company and
such consent and report have not been withdrawn up to the time of signing this DRHP.
L) EXPERT OPINION OBTAINED, IF ANY
Except as stated below, our Company has not obtained any expert opinions:
The Company has received consent from their Statutory Auditors namely, Essveeyar., Chartered
Accountants, to include their names as an expert in this Red Herring Prospectus in relation to the
statement of tax benefits accruing to our Company and its members in the form and context in which it
appears in this Red Herring Prospectus.
CRISIL, the agency engaged by us for the purpose of preparing The Industry Overview in respect of this
Issue, will give its written consent to the inclusion of its report in the form and context in which it will
appear in the Red Herring Prospectus and such consent and report will not be withdrawn up to the time
of delivery of the Red Herring Prospectus and the Prospectus with the RoC and the Designated Stock
Exchange.
M) EXPENSES OF THE ISSUE
The Management estimates an expense or Rs. [●] Lacs towards issue expense. The expenses of this Issue
include, among others, underwriting and management fees, selling commission, printing and distribution
expenses, legal fees, statutory advertisement expenses and listing fees. All expenses with respect to the
Issue will be borne by The Company. The Selling Shareholders who have offered their shares for sale on a
prorate basis, will not share any expenses incurred with respect to the Issue.
The estimated Issue expenses are as follows:

(` in Lacs)
Sr. Nature of Expenses Amount* % to the % to
No. Total the
Expenses Issue
1. Lead Management Fee, Underwriting 600.00 60.00 3.53
Commissions and Selling Commissions
2. Advertising and Marketing Expenses 175.00 17.50 1.03
3. Printing and Stationery 100.00 10.00 0.59
4. Others (Registrar’s Fee, IPO Grading Fees, Legal 125.00 12.50 0.73
Fee, Listing Fees, etc.)
Total 1000.00 100.00 5.88
N) DETAILS OF FEE PAYABLE
190
SABARI INN LIMITED
Book Running Lead Manager to the Issue
The total fees payable to the Book Running Lead Manager will be as per the Memorandum of
Understanding signed with the Lead Manager, a copy of which is available for inspection at the
Registered Office of the Company. The Book Running Lead Manager will be reimbursed for all relevant
out-of-pocket expenses such as cost of travel, stationery, postage and communication expenses.
Fees Payable to the Registrar to the Issue
The fees payable by the Company to the Registrar to the Issue for processing of application, data entry,
printing of CAN/ refund order, preparation of refund data on magnetic tape, printing of bulk mailing
register will be as per the Memorandum of Understanding signed with the Company dated September
29, 2010.
The Registrar to the Issue will be reimbursed for all out-of-pocket expenses including cost of stationery,
postage, stamp duty and communication expenses. Adequate funds will be provided by the Company to
the Registrar to the Issue to enable them to send refund orders or Allotment advice by registered post/
speed post/ under certificate of posting.
O) UNDERWRITING COMMISSION, BROKERAGE AND SELLING COMMISSION
The underwriting commission and the selling commission for the Issue are as set out in the Syndicate
Agreement amongst the Company, the BRLM and the Syndicate Member. The underwriting commission
shall be paid as set out in the Syndicate Agreement based on the Issue price and the amount underwritten
in the manner mentioned on page no. 24 of this DRHP.
P) PREVIOUS PUBLIC OR RIGHTS ISSUE
The Company has not made any public or rights issue of shares either in India or abroad in the ten years
preceding the date of this DRHP.
Q) PREVIOUS ISSUE OF SHARES OTHERWISE THAN FOR CASH
The Company has not issued equity shares as bonus by capitalizing free reserves. We have not issued
any equity shares for consideration otherwise than for cash.
R) COMMISSION AND BROKERAGE ON PREVIOUS ISSUES
Since this is the initial public offer of the Company, no sum has been paid or has been payable as
commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of
the Equity Shares since inception of the Company.
S) CAPITAL ISSUE DURING THE LAST THREE YEARS
Sabari Inn Limited and its group companies have not made any capital issue during the last three years.
T) PROMISE VIS-A-VIS PERFORMANCE
191
SABARI INN LIMITED
This is a first issue of the Company and none of its group companies are listed on any stock exchanges in
India.
U) OUTSTANDING DEBENTURES OR BONDS AND REDEEMABLE PREFERENCE SHARES AND

OTHER INSTRUMENTS
There are no outstanding debentures or bonds or redeemable preference shares and other instruments
issued by the company as on the date of this DRHP.
V) STOCK MARKET DATA
This being an initial public offering of the Company, the Equity Shares are not listed on any stock
exchange.
W) INVESTOR GRIEVANCES AND REDRESSAL SYSTEM
The company has appointed the registrar to the issue, to handle the investor grievances in co-ordination
with the Compliance Officer of the Company. All grievances relating to the present issue may be
addressed to the Registrar with a copy to the Compliance Officer, giving full details such as name,
address of the applicant, number of equity shares applied for, amount paid on application and bank and
branch. The Company would monitor the work of the registrar to ensure that the investor grievances are
settled expeditiously and satisfactorily.
The Registrar to the issue, namely, Integrated Enterprises (India) Limited, will handle investor’s
grievances pertaining to the issue. A fortnightly status report of the complaints received and redressed by
them would be forwarded to the company. The Company would also be coordinating with the registrar
to the issue in attending to the grievances to the investor. The Company assures that the Board of
Directors in respect of the complaints, if any, to be received shall adhere to the following schedules:
Sr. Nature of complaint Time Table

No.
1. Non-receipt of refund Within 7 days of receipt of complaint
subject to production of satisfactory
evidence
2. Non Receipt of Share Certificate/Demat Within 7 days of receipt of complaint
Credit subject to production of satisfactory
evidence
3. Any other complaint in relation to Public Issue Within 7 days of receipt of complaint with
all relevant details
Redressal of investors’ grievance are given top priority by the Company. The Committee oversees
redressal of complaints of shareholders/investors and other important investor related matters. The
Company has adequate arrangements for redressal of investor complaints as follows:
Share transfer/ dematerialisation/ rematerialisation are handled by well equipped professionally

managed Registrar and Transfer Agent, appointed by the Company in terms of SEBI’s direction for
appointment of Common Agency for physical as well as demat shares. The Registrars are constantly
monitored and supported by qualified and experienced personnel of the Company. The Company has
appointed Mr. K.R. Ramakrishnan , Chief Law Officer and Company Secretary as the Compliance Officer
192
SABARI INN LIMITED
and he may be contacted in case of any pre-issue or post-issue problems. He can be contacted at the
following address:
Mr. K.R. Ramakrishnan

Designation: Chief law Officer and Company Secretary & Compliance Officer
Sabari Inn Limited

T. Nagar, Chennai – 600017
Tamil Nadu, India
Tel.: +91 44 28343030; Fax: +91 044 28345868
Email: sabariinn@vsnl.net
Website of the company: www.sabarihotels.com
X) CHANGES IN AUDITORS
Sr. No Auditor Date of Change Reason

1 V. Karthikeyan 24/01/2010 Resignation
2 Price Waterhouse Coopers 25/01/2010 Appointment
3 Price Waterhouse Coopers 19/07/2010 Resignation
4 Essveeyar 23/08/2010 Appointment
Y) CAPITALIZATION OF RESERVES OR PROFITS DURING LAST 5 YEARS
The Company has not issued any bonus Equity Shares by capitalizing reserves or profits.
Z) REVALUATION OF ASSETS DURING THE LAST 5 YEARS
The company has not revalued its assets during the last 5 years.
SECTION VI - OFFERING INFORMATION
193
SABARI INN LIMITED
A) TERMS OF THE ISSUE
The Equity Shares being offered are subject to the provisions of the Companies Act, The
Memorandum and Articles of Association of the Company, the terms of this Draft Red Herring
Prospectus, Red Herring Prospectus, the Prospectus, the Bid-cum-Application Form, the Revision
Form, the CAN and other terms and conditions as may be incorporated in the Allotment advices
and other documents/certificates that may be executed in respect of the Issue. The Equity Shares shall
also be subject to laws as applicable, guidelines, notifications and regulations relating to the issue of
capital and listing and trading of securities issued from time to time by SEBI, Government of
India, the Stock Exchanges, the Reserve Bank of India, ROC and/ or other authorities, as in force on the
date of the Issue and to the extent applicable.
RANKING OF EQUITY SHARES
The Equity Shares being offered shall be subject to the provisions of the Companies Act, The
Memorandum and Articles of Association and shall rank pari passu in all respects with the existing
Equity Shares including rights in respect of dividend. The Allottees will be entitled to dividend or any
other corporate benefits, if any, declared by the Company after the date of allotment.
MODE OF PAYMENT OF DIVIDEND
The Company shall pay dividends to the shareholders in accordance with the provisions of the
Companies Act, the Articles and the provision of the Listing Agreements. The dividends in respect of the
Equity Shares forming part of the Offer for Sale by the Selling Shareholders for the entire year shall be
payable to the transferees of such Equity Shares.
FACE VALUE AND ISSUE PRICE
The face value of the Equity Shares is ` 10/- each and the Floor Price is ` [●] and the Cap Price is ` [●]
per Equity Share. At any given point of time there shall be only one denomination for the Equity Shares
subject to the applicable laws.
RIGHTS OF THE EQUITY SHAREHOLDERS
Subject to applicable laws, the equity shareholders shall have the following rights:
Ø Right to receive dividend, if declared;

Ø Right to attend general meetings and exercise voting powers, unless prohibited by law;
Ø Right to vote on a poll either in person or by proxy;
Ø Right to receive annual reports and notices to members;
Ø Right to receive offers for rights shares and be allotted bonus shares, if announced;
Ø Right to receive surplus on liquidation;
Ø Right of free transferability; and
Ø Such other rights, as may be available to a shareholder of a listed public company under the
Companies Act, 1956 and the Memorandum and Articles of Association of the Company.
MARKET LOT
194
SABARI INN LIMITED
In terms of Section 68B of the Companies Act, 1956, the Equity Shares of the Company shall be
allotted only in dematerialized form. In terms of existing SEBI Regulations, the trading in the Equity
Shares of the Company shall only be in dematerialized form for all investors. Since trading of
Equity Shares will be in dematerialized mode, the tradable lot is one equity share. Allotment of Equity
Shares through this Issue will be done only in electronic form in multiples of one Equity Share subject to a
minimum Allotment of [●] Equity Shares.
NOMINATION FACILITY TO INVESTOR
In accordance with Section 109A of the Companies Act, the sole or first Bidder, along with other
joint Bidder(s), may nominate any one person in whom, in the event of death of the sole Bidder or in case
of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares Allotted, if any, shall vest.
A person, being a nominee, entitled to the Equity Shares by reason of the death of the original
holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same
advantages to which he or she would be entitled if he or she were the registered holder of the Equity
Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the
prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death
during the minority. A nomination shall stand rescinded upon a sale/transfer/alienation of Equity
Share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner
prescribed. A fresh nomination can be made only on the prescribed form available on request at the
registered office of the Company or at the registrar and transfer agent of the Company.
In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of
the provisions of Section 109A of the Companies Act, shall upon the production of such evidence
as may be required by the Board, elect either:
Ø To register himself or herself as the holder of the Equity Shares; or

Ø To make such transfer of the Equity Shares, as the deceased holder could have made.
Further, The Board may at any time give notice requiring any nominee to choose either to be registered
himself or herself or to transfer the Equity Shares, and if the notice is not complied with, within a period
of 90 days, The Board may thereafter withhold payment of all dividends, bonuses or other monies
payable in respect of the Equity Shares, until the requirements of the notice have been complied with.
Since the allotment of Equity Shares in the Issue will be made only in dematerialized form, there is no
need to make a separate nomination with us. Nominations registered with the respective depository
participant of the applicant would prevail. If the investors require changing the nomination, they are
requested to inform their respective depository participant.
MINIMUM SUBSCRIPTION
If the company does not receive the minimum subscription of 90% of the fresh issue including
devolvement of Underwriters within 60 days from the closure of the issue, the company shall forthwith
refund the entire subscription amount received. If there is a delay beyond 8 days after the company
becomes liable to pay the amount, the company shall pay interest as per Section 73 of the Companies Act.
The issue comprises of fresh issue of [●] equity shares of ` 10/- each aggregating to ` 12500.00 lacs and
an offer for sale by the selling share holders to the extent of [●] equity shares of ` 10/- each aggregating
to ` 4500.00 lacs. In regard to the shares under the offer for sale, the requirement of minimum
subscription shall not be applicable.
195
SABARI INN LIMITED
The company will proceed for allotment on receipt of subscription to the extent of [●] equity shares of `
10/- each, representing 90% of the fresh issue including devolvement of Underwriters whereby public
holding in the company will be more than 25% of the post issue paid up equity capital of the company.
In case of under-subscription in the issue, equity shares in the fresh issue will be issued prior to the sale
of equity shares in the offer for sale.
ARRANGEMENTS FOR DISPOSAL OF ODD LOTS
The Company has not made any arrangements for the disposal of odd lots.
RESTRICTIONS ON TRANSFER OF SHARES
There are no restrictions on transfers and transmission of shares/ debentures and on their consolidation/
splitting
196
SABARI INN LIMITED
B. ISSUE STRUCTURE
Public Issue of [●] Equity Shares of face value ` 10/- each for cash at a price of ` [●] per Equity Share,
consisting of Fresh issue of Equity Shares aggregating ` 12500.00 Lacs and an Offer for Sale of [●] Equity
Shares by Selling Shareholders aggregating to ` 4500.00 Lacs (hereinafter referred to as the “Issue”). Up
to [●] Equity Shares aggregating to ` 100.00 Lacs will be reserved in this Issue for subscription by Eligible
Employees (The Employee Reservation Portion). The Issue less the Employee Reservation Portion is
referred to as The Net Issue. The Issue would constitute [●] % of the post Issue paid-up capital of the
Company and the Net Issue will constitute [●] % of the post Issue paid up capital of the Company. The
Issue is being made through the 100% Book Building Process:
Employees
Non-Institutional Retail Individual
Particulars Reservation QIBs
Bidders Bidders
Portion
Number of Upto [●] Upto [●] Equity Shares Not less than [●] Not less than [●]
Equity Shares* equity shares will be allotted to QIBs. Equity Shares shall Equity Shares shall
be available for be available for
allocation. allocation.
Percentage of Upto [●] % of Upto 50% of the Net Not less than 15% Not less than 35% of
Issue Size the Issue size. Issue (of which 5% shall of the Net Issue or the Net Issue or Net
available for be reserved for Mutual Net Issue less Issue less allocation
allocation Funds) Mutual Funds allocation to QIBs to QIBs and Non-
participating in the 5% and Retail Portion* Institutional
reservation in the QIB Portion.*
Portion will also be
eligible for allocation in
the remaining QIB
Portion. The
unsubscribed portion, if
any, in the Mutual Fund
reservation will be
available to QIBs.
Basis of Proportionate Proportionate Proportionate Proportionate
allocation if
(a) [●] Equity Shares
respective
shall be available for
category is
allocation on a
oversubscribed
proportionate basis to
Mutual Funds; and
(b) [●] Equity Shares
shall be allotted on a
proportionate basis to all
QIBs, including Mutual
Funds receiving
allocation as per (a)
above.
197
SABARI INN LIMITED
Employees
Bidders Bidders
Portion
Minimum Bid [●] Equity Such number of Equity Such number of [●] Equity Shares
Shares and in Shares that the Bid Equity Shares that and in multiples of
multiples of Amount exceeds ` the Bid Amount [●] Equity Share
[●] Equity 200,000 and in multiples exceeds ` 200,000 thereafter.
Share of [●] Equity Shares and in multiples of
thereafter. thereafter. [●] Equity Shares
thereafter.
Maximum Bid Such number Not exceeding the size Not exceeding the Such number of
of Equity of the Issue subject to size of the Issue Equity Shares per
shares so as to regulations as applicable subject to Retail Individual
ensure that the to the Bidder regulations as Bidder so as to
bid size does applicable to the ensure that the Bid
not exceed [●] Bidder Amount does not
Equity Shares exceed ` 200,000.
Mode of Compulsorily Compulsorily in Compulsorily in Compulsorily in
Allotment in dematerialized form. dematerialized dematerialized
dematerialized form. form.
form.
Trading Lot One Equity One Equity Share One Equity Share One Equity Share
Share
Who can Eligible Public financial Resident Indian Individuals
Apply ** Employees of institutions, as specified individuals, (including HUFs
the Company in Section 4A of the Elligible NRI’s, in the name of
Companies Act: HUFs (in the karta) applying for
scheduled commercial name of karta), Equity Shares such
banks, mutual funds, Companies, that the Bid
foreign institutional Corporate bodies, Amount per Retail
investors registered with Societies and Individual Bidder
SEBI, multilateral and Trusts. does not exceed `
bilateral development 200,000 in value.
financial institutions,
foreign venture capital
funds registered with
SEBI, State Industrial
Development
Corporations, permitted
insurance companies
registered with the
Insurance Regulatory
and Development
Authority, provident
funds with minimum
corpus of ` 2500 Lacs
and pension funds with
minimum corpus of `
2500 Lacs in accordance
198
SABARI INN LIMITED
Employees
Bidders Bidders
Portion
with applicable law.
Terms of Margin Margin Amount Margin Amount Margin Amount
Payment Amount applicable to QIB applicable to Non- applicable to Retail
applicable Bidders at the time of institutional Bidder Individual Bidder at
shall be submission of Bid-cum- at the time of the time of
payable at the Application Form to the submission of Bid- submission of Bid -
time of Member of Syndicate. cum-Application cum - Application
submission of Form to the Form to the
Bid-cum- Member of Member of
Application Syndicate. Syndicate.
Form to the
members of
the Syndicate.
Margin Full Bid Full Bid Amount on Full Bid Amount on Full Bid Amount on
Amount Amount on Bidding. Bidding. Bidding.
Bidding.
* Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in any
of the above categories would be allowed to be met with spillover inter-se from any of the other
categories, at the sole discretion of the Company, the BRLM and subject to applicable provisions of
the SEBI Regulations.
** In case the Bid-cum-Application Form is submitted in joint names, the investors should ensure that
the demat account is also held in the same joint names and in the same sequence in which they
appear in the Bid-cum-Application Form.
Note: 1) If the aggregate demand in this category is less than or equal to [●] Equity Shares at or above the
Issue Price, full allocation shall be made to the Eligible Employees to the extent of their demand.
Provided that the value of allotment to any employee in pursuance of this reservation, shall not exceed `
2, 00,000/-.
2) If the aggregate demand by Mutual Funds is less than [●] Equity Shares, the balance Equity Shares
available for allocation in the Mutual Fund reservation will first be added to the QIB Portion and be
allocated proportionately to the QIB Bidders in proportion to their Bids.
Withdrawal of this Issue
The Company, the Selling Shareholders, in consultation with the BRLM, reserves the right not to proceed
with the issue after the bidding and if so, the reason thereof shall be given as a public notice within two
days of the closure of the issue. The public notice shall be issued in the same newspapers where the pre-
issue advertisement had appeared. The stock exchanges where the specified securities were proposed to
be listed shall also be informed promptly. If the Company withdraws the Issue after the Bid/Issue
Closing Date and thereafter determines that it will proceed with an initial public offering of its Equity
Shares, it shall file a fresh draft red herring prospectus with the SEBI.
Letters of Allotment or Refund Orders
199
SABARI INN LIMITED
The Company and the Selling Shareholders shall credit each beneficiary account with its depository
participant within two working days from the date of the finalization of the basis of allocation.
Applicants that are residents of the 68 cities notified by SEBI through its notification (Ref. No.
SEBI/CFD/DIL/ICDR/11/2009/03/09) dated September 3, 2009 will receive refunds through NECS
only (subject to availability of all information for crediting the refund through NECS) except where the
applicant is eligible to receive refunds through Direct Credit, NEFT or RTGS. In the case of other
applicants, the Company shall ensure the dispatch of refund orders, if any, of value up to ` 1,500 by
“Under Certificate of Posting”, and shall dispatch refund orders above ` 1,500, if any, by registered post
or speed post at the sole or first Bidder’s sole risk within 15 days of the Bid/Issue Closing Date.
Bidding/Issue Programme
BID/ISSUE OPENS ON [●], 2011

BID/ISSUE CLOSES ON [●], 2011
Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard
Time) during the Bidding Period as mentioned above at the bidding centres mentioned on the Bid cum
Application Form. On the Bid/Issue Closing Date, Bids (excluding the ASBA Bidders) shall be uploaded
until (i) 4.00 p.m. in case of Bids by QIB Bidders, Non- Institutional Bidders and Eligible Employees
bidding under the Employee Reservation Portion where the Bid Amount is in excess of ` 200,000 and (ii)
until 5.00 p.m. or such extended time as permitted by the NSE and the BSE, in case of Bids by Retail
Individual Bidders and Eligible Employees bidding under the Employee Reservation Portion where the
Bid Amount is up to ` 200,000. It is clarified that Bids not uploaded in the book, would be rejected. Bids
by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the NSE and
the BSE.
In case of discrepancy in the data entered in the electronic book vis-à-vis the data contained in the
physical Bid form, for a particular bidder, the details as per physical application form of that Bidder may
be taken as the final data for the purpose of allotment. In case of discrepancy in the data entered in the
electronic book vis-à-vis the data contained in the physical or electronic Bid cum Application Form
submitted through the ASBA process, for a particular ASBA Bidder, the Registrar to the Issue shall ask
for rectified data from the SCSB.
Due to limitation of time available for uploading the Bids on the Bid/Issue Closing date, the bidders are
advised to submit their Bids one day prior to the Bid/Issue Closing Date and, in any case, no later than
the times mentioned above on the Bid/Issue Closing Date. All times are Indian Standard Time. Bidders
are cautioned that in the event a large number of Bids are received on the Bid/Issue Closing Date, as is
typically experienced in public offerings, some Bids may not get uploaded due to lack of sufficient time.
Such Bids that cannot be uploaded will not be considered for allocation under the Issue. If such Bids are
not uploaded, the Issuer, BRLMs and Syndicate members will not be responsible. Bids will be accepted
only on Business Days, i.e., Monday to Friday (excluding any public holidays).
The Company reserves the right to revise the Price Band during the Bid/Issue Period in accordance with
the SEBI Guidelines provided that the Cap Price is less than or equal to 20% of the Floor Price. The Floor
Price can be revised up or down to a maximum of 20% of the Floor Price advertised at least one day
before the Bid /Issue Opening Date.
In case of revision in the Price Band, the Issue Period will be extended for three additional working
days after revision of Price Band subject to the Bidding Period/Issue Period not exceeding 10 working
200
SABARI INN LIMITED
days. Any revision in the Price Band and the revised Bidding Period/Issue Period, if applicable, will
be widely disseminated by notification to the BSE and the NSE, by issuing a press release, and also by
indicating the change on the web sites of the Book Runners at the terminals of the Syndicate.
201
SABARI INN LIMITED
C) ISSUE PROCEDURE
This section applies to all Bidders. Please note that all Bidders other than Anchor Investors can participate in
the Issue through the ASBA process. ASBA Bidders should note that the ASBA process involves application
procedures that are different from the procedure applicable to Bidders other than the ASBA Bidders. Bidders
applying through the ASBA process should carefully read the provisions applicable to such applications
before making their application through the ASBA process. Please note that all the Bidders are required to
make payment of the full Bid Amount along with the Bid cum Application Form.
BOOK BUILDING PROCEDURE
The Issue is being made through the 100% Book Building Process wherein upto 50% of the Net Issue will
be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”), out of which 5%
(excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to
Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to all QIBs,
including Mutual Funds, subject to valid Bids being received from them at or above the Issue Price.
Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-
Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate
basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Further
up to [●] Equity Shares shall be available for allocation on a proportionate basis to Employees, subject to
valid Bids being received at or above the Issue Price. Allocation to Anchor Investors shall be on a
discretionary basis and not on a proportionate basis.
Bidders are required to submit their Bids through the members of the Syndicate. ASBA investors
intending to subscribe to the issue shall submit a complete ASBA form to the designated branch of the
SCSB. The Company, in consultation with the selling shareholders BRLMs reserve the right to reject any
QIB Bid procured by any or all members of the Syndicate provided the rejection is at the time of receipt of
such Bids and the reason for rejection of the Bid is communicated to the Bidder at the time of rejection of
the Bid. In the cases of Non-Institutional Bidders, Retail Individual Bidders and Bidders in the Employee
Reservation Portion, the Company will have a right to reject the Bids only on technical grounds.
Investors should note that Allotment of Equity Shares to all successful Bidders will be only in the
dematerialised form. The Bid cum Application Forms which do not have the details of the Bidders’
depository accounts shall be treated as incomplete and rejected. Bidders will not have the option of
being Allotted Equity Shares in physical form. The Equity Shares on Allotment shall be traded only
on the dematerialised segment of the Stock Exchanges.
BID CUM APPLICATION FORM
Bidders shall only use the specified Bid cum Application Form, bearing the stamp of a member of the
Syndicate for the purpose of making a Bid in terms of the Red Herring Prospectus. The Bidders shall have
the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not
be considered as multiple Bids. Upon the allotment of Equity Shares, dispatch of the CAN, and filing of
the Prospectus with the ROC, the Bid cum Application Form shall be considered as the Application Form.
Upon completing and submitting the Bid cum Application Form to a member of the Syndicate, the Bidder
is deemed to have authorized the Company to make the necessary changes in the Red Herring Prospectus
and the Bid cum Application Form as would be required for filing the Prospectus with the ROC and as
would be required by the ROC after such filing, without prior or subsequent notice of such changes to the
Bidder.
202
SABARI INN LIMITED
The prescribed colour of the Bid cum Application Form for various categories is as follows:
Category Colour of Bid cum Application

Form
Resident Indians, Eligible NRIs applying on a non-repatriation basis [●]
Eligible NRIs and FIIs applying on a repatriation basis [●]
Eligible employees applying in the Employee Reservation Portion [●]
ASBA Form [●]
Anchor Investors [●]
*Bid cum Application Forms for Anchor Investors have been made available at the offices of the BRLMs.
Bidders (other than ASBA Bidders) are required to submit their Bids through the Syndicate. Such Bidders
shall only use the specified Bid cum Application Form bearing the stamp of a member of the Syndicate for
the purpose of making a Bid in terms of the Red Herring Prospectus. The Bidder shall have the option to
make a maximum of three Bids in the Bid cum Application Form and such options shall not be considered as
multiple Bids.
ASBA Bidders shall submit an ASBA Bid cum Application Form to the SCSB authorising blocking of
funds that are available in the bank account specified in the ASBA Bid cum Application Form only. Only
QIBs can participate in the Anchor Investor Portion and Anchor Investors cannot submit their Bids
through the ASBA process.
Upon the filing of the Prospectus with the RoC, the Bid cum Application Form shall be considered as the
Application Form. Upon completion and submission of the Bid cum Application Form to a Syndicate or the
SCSB, the Bidder or the ASBA Bidder is deemed to have authorised the Company to make the necessary
changes in the Red Herring Prospectus as would be required for filing the Prospectus with the RoC and as
would be required by RoC after such filing, without prior or subsequent notice of such changes to the Bidder
or the ASBA Bidder.
Who can Bid?
· Persons eligible to invest under all applicable laws, rules, regulations and guidelines;
· Indian nationals resident in India who are not minors in single or joint names (not more than three);
· Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder should specify
that the Bid is being made in the name of the HUF in the Bid cum Application Form as
follows: “Name of Sole or First bidder: XYZ Hindu Undivided Family applying through XYZ, where
XYZ is the name of the Karta”. Bids by HUFs would be considered at par with those from
individuals;
· Companies, corporate bodies and societies registered under the applicable laws in India and
authorized to invest in the equity shares;
· Mutual Funds registered with SEBI;
· Eligible NRIs on a repatriation basis or on a non-repatriation basis, subject to applicable laws. NRIs
other than Eligible NRIs are not eligible to participate in this issue;
· Indian Financial Institutions, commercial banks, regional rural banks, co-operative banks (subject to
RBI and the SEBI Regulations and regulations, as applicable);
203
SABARI INN LIMITED
· FIIs and sub-accounts registered with SEBI, other than a sub-account which is a foreign corporate or a
foreign individual;
· FIIs registered with SEBI;
· Venture Capital Funds registered with SEBI;
· Foreign Venture Capital Investors registered with SEBI,
· Multilateral and Bilateral development financial institutions
· State Industrial Development Corporations;
· Trusts/ societies registered under the Societies Registration Act, 1860, as amended, or under any
other law relating to trusts/ societies and who are authorized under their constitution to hold and
invest in equity shares;
· Scientific and/or industrial research organizations authorized to invest in equity shares;
· Insurance Companies registered with Insurance Regulatory and Development Authority, India;
· Provident Funds with minimum corpus of ` 250 million and who are authorized under their
constitution to hold and invest in equity shares;
· Pension Funds with a minimum corpus of ` 250 million and who are authorized under their
constitution to hold and invest in equity shares; and
· National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of
Government of India published in the Gazette of India; and
· Eligible Employees (as defined in the section “Definitions and Abbreviations” beginning on page i of
the Red Herring Prospectus.)
As per the existing regulations, OCBs cannot participate in this Issue.
Participation by associates of BRLM and Syndicate Members
The BRLM and Syndicate Members shall not be allowed to subscribe to this Issue in any manner except
towards fulfilling their underwriting obligations. However, associates and affiliates of the BRLM and
Syndicate Members may subscribe for Equity Shares in the Issue, either in the QIB Portion and Non-
Institutional Portion where the allotment is on a proportionate basis.
The BRLMs and any persons related to the BRLMs, the Promoters and the Promoter Group cannot apply
in the Issue under the Anchor Investor Portion.
Bids by Eligible Employees
Reservation to Eligible employees has been provided in this issue, as per Regulation 42 of the SEBI
(ICDR) Regulations, 2009. Eligible Employee shall mean a permanent and full-time employee or a
Director of the Company as on the date of the Red Herring Prospectus, who is a person resident in India
(as defined under the FEMA) and who continues to be in the employment of the Company until
submission of the Bid-cum-Application Form. They do not include employees of the Promoters and the
Promoter Group. Bids under Employee Reservation Portion by Eligible Employees shall be:
204
SABARI INN LIMITED
· Made only in the prescribed Bid-cum-Application Form or Revision Form (i.e., [●]color form).
· Eligible Employees, as defined above, should mention their Employee Number at the relevant place in
the Bid-cum-Application Form.
· The sole/First Bidder should be Eligible Employees as defined above. In case the Bid-cum- Application
Form is submitted in joint names, it should be ensured that the Depository Account is also held in the
same joint names and in the same sequence in which they appear in the Bid-cum- Application Form.
· Only Eligible Employees would be eligible to apply in this Issue under the Employee Reservation
Portion.
· Eligible Employees will have to bid like any other Bidder. Only those bids, which are received at or
above the Issue Price, would be considered for allocation under this category.
· Eligible Employees who apply or bid for securities of or for a value of not more than ` 200,000 in any of
the bidding options can apply at the Cut-Off Price. This facility is not available to other Eligible
Employees whose minimum Bid Amount exceeds ` 200,000.
· Bid/Application by Eligible Employees can also be made in the Net Issue portion and such Bids shall
not be treated as multiple bids.
· If the aggregate demand in this category is less than or equal to [●] Equity Shares at or above the Issue
Price, full allocation shall be made to the Eligible Employees to the extent of their demand.
· Any under-subscription in the Equity Shares under the Employee Reservation Portion will be added
back to the Net Issue.
· If the aggregate demand in this category is greater than [●] Equity Shares at or above the Issue Price,
the allocation shall be made on a proportionate basis.
Bids by Mutual Funds
An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual
Funds Portion. In the event that the demand is greater than [●] Equity Shares, allocation shall be made to
Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining demand by
Mutual Funds shall, as part of the aggregate demand by QIBs, be available for allocation proportionately
out of the remainder of the QIB Portion, after excluding the allocation in the Mutual Funds Portion.
One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid
Bids being received from domestic Mutual Funds at or above the price at which allocation is being done
to other Anchor Investors.
In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund
registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be
treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid
has been made.
As per the current regulations, the following restrictions are applicable for investments by mutual funds:
205
SABARI INN LIMITED
No mutual fund scheme shall invest more than 10% of its net asset value in the equity shares or equity
related instruments of any company provided that the limit of 10% shall not be applicable for
investments in index funds or sector or industry specific funds. No mutual fund under all its schemes
should own more than 10% of any company’s paid-up capital carrying voting rights.
The above information is given for the benefit of the Bidders. The Company, The Selling
Shareholders and the BRLM are not liable for any amendments or modification or changes in
applicable laws or regulations, which may happen after the date of this Red Herring Prospectus.
Bidders are advised to make their independent investigations and ensure that the number of Equity
Shares bid for do not exceed the applicable limits under laws or regulations.
Bids by Eligible NRIs
Bid cum Application Forms have been made available for Eligible NRIs at the registered office of the
Company and with members of the Syndicate and the Registrar to the Issue.
Eligible NRI applicants should note that only such Bids as are accompanied by payment in free foreign
exchange shall be considered for Allotment. The Eligible NRIs who intend to make payment through
Non-Resident Ordinary (NRO) accounts shall use the Bid cum Application Form meant for Resident
Indians.
Bids by FIIs
As per the current regulations, the following restrictions are applicable for investments by FIIs:
The issue of Equity Shares to a single FII should not exceed 10% of the post-Issue paid- up capital. In
respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of
each sub-account shall not exceed 10% of the total issued capital of the Company or 5% of the total
issued capital, in case such sub-account is a foreign corporate or an individual.
Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in
terms of Regulation 15A(1) of the Securities Exchange Board of India (Foreign Institutional Investors)
Regulations 1995, as amended, an FII or its sub-account may issue, deal or hold, offshore
derivative instruments such as Participatory Notes, equity-linked notes or any other similar instruments
against underlying securities listed or proposed to be listed in any stock exchange in India only in favour
of those entities which are regulated by any relevant regulatory authorities in the countries of their
incorporation or establishment subject to compliance of “know your client” requirements. An FII or sub-
account shall also ensure that no further downstream issue or transfer of any instrument referred to
hereinabove is made to any person other than a regulated entity.
Bids by Sebi Registered Venture Capital Funds And Foreign Venture Capital Investors
As per the current regulations, the following restrictions are applicable for Sebi registered venture capital
funds and foreign venture capital investors:
The SEBI (Venture Capital) Regulations, 1996 and the SEBI (Foreign Venture Capital Investor)
Regulations, 2000 prescribe investment restrictions on venture capital funds and foreign venture capital
investors registered with SEBI.
Accordingly, the holding by any individual venture capital fund registered with SEBI in one company
should not exceed 25% of the corpus of the venture capital fund; a Foreign Venture Capital Investor can
206
SABARI INN LIMITED
invest its entire funds committed for investments into India in one company. Further, Venture Capital
Funds and Foreign Venture Capital Investors can invest only up to 33.33% of the funds available for
investment by way of subscription to an initial public offer.
The above information is given for the benefit of the Bidders. The Company, The Selling
Shareholders and the Book Runners are not liable for any amendments or modification or changes in
applicable laws or regulations, which may occur after the date of this Red Herring Prospectus. Bidders
are advised to make their independent investigations and ensure that the number of Equity Shares Bid
for do not exceed the applicable limits under laws or regulations.
Maximum and Minimum Bid Size
a) For Retail Individual Bidders: The Bid must be for a minimum of [●] Equity Shares and in multiples
of [●] Equity Shares thereafter, so as to ensure that the Bid Price payable by the Bidder does not
exceed ` 200,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid
Price does not exceed ` 200,000. In case the Bid Price is over ` 200,000 due to revision of the Bid or
revision of the Price Band or on exercise of Cut-off option, the Bid would be considered for allocation
under the Non-Institutional Bidders portion. The Cut-off option is an option given only to the Retail
Individual Bidders indicating their agreement to Bid and purchase at the final Issue Price as
determined at the end of the Book Building Process.
b) For Other Bidders (Non-Institutional Bidders and QIBs, excluding Anchor Investors): The Bid
must be for a minimum of such number of Equity Shares such that the Bid Amount exceeds ` 200,000
and in multiples of [●] Equity Shares thereafter. A Bid cannot be submitted for more than the Net
Issue. However, the maximum Bid by a QIB investor should not exceed the investment limits
prescribed for them by applicable laws. Under the existing SEBI Regulations, a QIB Bidder cannot
withdraw its Bid after the Bid/Issue Closing Date and is required to pay QIB Margin Amount
upon submission of the Bid.
In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the
Bid Amount is greater than ` 200,000 for being considered for allocation in the Non-Institutional
Portion. In case the Bid Amount reduces to ` 200,000 or less due to a revision in Bids or revision of
the Price Band, Bids by Non-Institutional Bidders who are eligible for allocation in the Retail Portion
would be considered for allotment under the Retail Portion. Non-Institutional Bidders and QIBs are
not allowed to Bid at ‘Cut-Off’.
c) For Bidders in the Employee Reservation Portion: The Bid must be for a minimum of [●] Equity
Shares and in multiples of [●] Equity Shares thereafter. Allocation shall be made on a proportionate
basis. Eligible Employees, whose Bid Amount does not exceed `200,000, including due to any
revision in the Price Band, may Bid at the Cut-off Price. Eligible Employees whose Bid Amount
exceeds `200,000 may not Bid at Cut-off Price. However, the maximum Bid in this portion cannot
exceed [●] shares.
d) For Bidders in the Anchor Investor Portion: The Bid must be for a minimum of such number of
Equity Shares in multiples of [●] such that the Bid Amount exceeds ` 1,000 lacs. Bids by Anchor
Investors under the Anchor Investor Portion and the QIB Portion shall not be considered as multiple
Bids. A Bid cannot be submitted for more than 30% of the QIB Portion. Anchor Investors cannot
withdraw their Bids after the Anchor Investor Bid/ Issue Period and are required to pay the Bid
Amount at the time of submission of the Bid. In case the Anchor Investor Issue Price is lower than
207
SABARI INN LIMITED
the Issue Price, the balance amount shall be payable as per the pay-in date mentioned in the
revised Anchor Investor Allocation Notice.
In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the Bid
Amount is greater than ` 200,000 for being considered for allocation in the Non-Institutional Portion. In
case the Bid Amount reduces to ` 200,000 or less due to a revision in Bids or revision of the Price Band,
Bids by Non-Institutional Bidders who are eligible for allocation in the Retail Portion would be
considered for allotment under the Retail Portion. Non-Institutional Bidders and QIBs are not allowed to
Bid at ‘Cut-Off’.
Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or
maximum number of Equity Shares that can be held by them under applicable law or regulation or as
specified in this Red Herring Prospectus.
Information for the Bidders:
(a) The Company and Selling Shareholder in consultation with the BRLM shall declare the Bid/Issue
Opening Date and Bid/Issue Closing Date in the Red Herring Prospectus to be registered with the
RoC and also publish the same in two (2) national newspaper one(1) each in English and Hindi
newspaper and one regional newspaper with wide circulation
(b) Bidding by QIBs will close one Working Day prior to the Bid Closing Date, provided that Bidding
shall be kept open for a minimum of three Working Days for all categories of Bidders.
(c) The Company will file the Red Herring Prospectus with the RoC at least three (3) days before the
Bid/Issue Opening Date.
(d) The members of the Syndicate will circulate copies of the Bid-cum-Application Form to potential
investors, and at the request of the potential investor’s, copies of the Red Herring Prospectus.
(e) Any Bidders (who is eligible to invest in the Equity Shares) who would like to obtain the Red
Herring Prospectus and/ or the Bid cum Application Form can obtain the same from the Registered
Office or from any member of the Syndicate or the SCSBs.
(f) Eligible investors who are interested in subscribing for the Equity Shares should approach the
BRLM or Syndicate Member or their authorized agent(s) to register their Bids. Bidders (other than
Anchor Investors) who wish to use the ASBA process should approach the Designated Branches of
the SCSBs to register their Bids.
(g) ASBA Bidders shall correctly mention the bank account number in the ASBA Bid cum Application
Form and ensure that funds equal to the Bid Amount are available in the bank account maintained
with the SCSB before submitting the ASBA Bid cum Application Form to the respective Designated
Branch.
(h) If the ASBA Account holder is different from the ASBA Bidder, the ASBA Bid cum Application
Form should be signed by the account holder as provided in the ASBA Bid cum Application Form.
(i) The Bids should be submitted on the prescribed Bid-cum-Application Form only. Bid-cum-
Application Forms (other than the ASBA Bid cum Application Forms) should bear the stamp of the
member of the Syndicate. Bid-cum-Application Forms which do not bear the stamp of a member of
the Syndicate will be rejected. Bids by ASBA Bidders shall be accepted by the Designated Branches
of the SCSBs in accordance with the SEBI (ICDR) Regulations and any circulars issued by SEBI in
this regard. Bidders (other than Anchor Investors) applying through the ASBA process also have an
option to submit the ASBA Bid cum Application Form in electronic form.
208
SABARI INN LIMITED
(j) The Syndicate and the Designated Branches of the SCSBs shall accept Bids from the Bidders during
the Bid/Issue Period in accordance with the terms of the Syndicate Agreement, provided that the
BRLM shall accept the Bids from Anchor Investors only during the Anchor Investor Bid/Issue
Period.
The applicants may note that in case the DP ID and Client ID and PAN mentioned in the Bid cum
Application Form and entered into the electronic bidding system of the Stock Exchanges by the
Syndicate do not match with the DP ID and Client ID and PAN available in the Settlement
Depository database, the application is liable to be rejected.
Method and Process of Bidding
(a) The Company and Selling Shareholders in consultation with the BRLM will decide the Price Band
and the minimum Bid lot size for the Issue. The Syndicate and the SCSBs shall accept Bids from the
Bidders during the Bid/Issue Period.
(b) The Bid/Issue Period shall be for a minimum of three Working Days and shall not exceed 10
Working Days. The Bid/ Issue Period may be extended, if required, by an additional three Working
Days, subject to the total Bid/Issue Period not exceeding 10 Working Days. Any revision in the
Price Band and the revised Bid/ Issue Period, if applicable, will be published in two national
newspapers (one each in English and Hindi) and one regional newspaper with wide circulation and
also by indicating the change on the websites of the BRLM and at the terminals of the Syndicate.
(c) During the Bid/Issue Period, Bidders, other than QIBs, who are interested in subscribing for the
Equity Shares should approach the Syndicate or their authorised agents to register their Bids. The
Syndicate shall accept Bids from all Bidders and have the right to vet the Bids during the Bid/ Issue
Period in accordance with the terms of the Red Herring Prospectus. Bidders (other than Anchor
Investors) who wish to use the ASBA process should approach the Designated Branches of the
SCSBs to register their Bids.
(d) Each Bid cum Application Form will give the Bidder the choice to Bid for up to three optional
prices (for details refer to the paragraph entitled ― “Bids at Different Price Levels” below) within
the Price Band and specify the demand (i.e., the number of Equity Shares Bid for) in each option.
The price and demand options submitted by the Bidder in the Bid cum Application Form will be
treated as optional demands from the Bidder and will not be cumulated. After determination of the
Issue Price, the maximum number of Equity Shares Bid for by a Bidder at or above the Issue Price
will be considered for allocation/Allotment and the rest of the Bid(s), irrespective of the Bid
Amount, will become automatically invalid.
(e) The Bidder cannot Bid on another Bid cum Application Form after Bids on one Bid cum
Application Form have been submitted to any member of the Syndicate or the SCSBs. Submission
of a second Bid cum Application Form to either the same or to another member of the Syndicate or
SCBS will be treated as multiple Bids and is liable to be rejected either before entering the Bid into
the electronic bidding system, or at any point of time prior to the allocation or Allotment of Equity
Shares in this Issue. However, the Bidder can revise the Bid through the Revision Form, the
procedure for which is detailed under the paragraph entitled ― “Build up of the Book and Revision
of Bids”.
(f) The Syndicate/the SCSBs will enter each Bid option into the electronic bidding system as a separate
Bid and generate a Transaction Registration Slip, (‘TRS’), for each price and demand option and
give the same to the Bidder. Therefore, a Bidder can receive up to three TRSs for each Bid cum
Application Form.
209
SABARI INN LIMITED
(g) The BRLM shall accept the Bids from the Anchor Investors during the Anchor Investor Bid/ Issue
Period i.e. one Working Day prior to the Bid/ Issue Opening Date. Bids by QIBs under the Anchor
Investor Portion and the QIB Portion shall not be considered as multiple Bids.
(h) Along with the Bid cum Application Form, all Bidders (other than ASBA Bidders) will make
payment in the manner described in ― “Payment into Escrow account for bidders other than ASBA
Bidders” on page 221.
(i) Upon receipt of the ASBA Bid cum Application Form, submitted whether in physical or electronic
mode, the Designated Branch of the SCSB shall verify if sufficient funds equal to the Bid Amount
are available in the ASBA Account, as mentioned in the ASBA Bid cum Application Form, prior to
uploading such Bids with the Stock Exchanges.
(j) If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB shall
reject such Bids and shall not upload such Bids with the Stock Exchanges.
(k) If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to
the Bid Amount mentioned in the ASBA Bid cum Application Form and will enter each Bid option
into the electronic bidding system as a separate Bid and generate a TRS for each price and demand
option. The TRS shall be furnished to the ASBA Bidder on request.
(l) The Bid Amount shall remain blocked in the aforesaid ASBA Account until finalisation of the Basis
of Allotment and consequent transfer of the Bid Amount against the Allotted Equity Shares to the
Public Issue Account, or until withdrawal/failure of the Issue or until withdrawal/rejection of the
ASBA Bid cum Application Form, as the case may be. Once the Basis of Allotment is finalized, the
Registrar to the Issue shall send an appropriate request to the Controlling Branch of the SCSB for
unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful
Bidders to the Public Issue Account. In case of withdrawal/failure of the Issue, the blocked amount
shall be unblocked on receipt of such information from the Registrar to the Issue.
Bids at Different Price Levels and Revision of Bids
1. The Bidder can bid at any price within the Price Band. The Bidder has to bid for the desired number
of Equity Shares at a specific price. Retail Individual Bidders applying for a maximum Bid in any of
the bidding options not exceeding ` 200,000 and Bidders in the Employee Reservation Portion may
bid at Cut-Off Price. However, bidding at Cut-Off Price is prohibited for QIB, Non-Institutional
Bidders or Bidders in the Employee Reservation Portion bidding in excess of ` 200,000 and such
bids shall be rejected.
2. Retail Individual Bidders and Bidders in Employee Reservation Portion who bid at the Cut-Off
Price agree that they shall purchase the Equity Shares at any price within the Price Band. Retail
Individual Bidders and Bidders in Employee Reservation Portion bidding at Cut-Off Price shall
deposit the Bid Price based on the higher end of the Price Band in the Escrow Account. In the event
the Bid Price is higher than the subscription amount payable by the Retail Individual Bidders and
Bidders in Employee Reservation Portion who Bid at Cut off Price (i.e., the total number of Equity
Shares allocated in the Issue multiplied by the Issue Price), the Retail Individual Bidders and
Bidders in Employee Reservation portion who Bid at Cut off Price, shall receive the refund of the
excess amounts from the Escrow Account.
3. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders and
Bidders in the Employee Reservation portion who had Bid at Cut-off Price could either (i) revise
their Bid or (ii) make additional payment based on the higher end of the Revised Price Band (such
that the total amount i.e., original Bid Price plus additional payment does not exceed ` 200,000 for
Retail Individual Bidders, if the Bidder wants to continue to Bid at Cut-off Price), with the
210
SABARI INN LIMITED
members of the Syndicate to whom the original Bid was submitted. In case the total amount (i.e.,
original Bid Price plus additional payment) exceeds ` 200,000 for Retail Individual Bidders the Bid
will be considered for allocation under the Non- Institutional Portion in terms of this Red Herring
Prospectus. If, however, the Bidder does not either revise the Bid or make additional payment and
the Issue Price is higher than the higher end of the Price Band prior to revision, the number of
Equity Shares Bid for shall be adjusted downwards for the purpose of Allotment, such that no
additional payment would be required from the Bidder and such Bidder is deemed to have
approved such revised Bid at Cut-off Price.
4. In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders
and Bidders in the Employee Reservation portion who have Bid at Cut-off Price could either revise
their Bid or the excess amount paid at the time of bidding would be refunded from the Escrow
Account.
5. The Company, in consultation with the Selling Shareholders and the BRLMs, can finalise the
Anchor Investor Issue Price within the Price Band in accordance with this clause, without the prior
approval of, or intimation, to the Anchor Investors.
6. In the event of any revision in the Price Band, whether upwards or downwards, the minimum
application size shall remain [●] Equity Shares irrespective of whether the Bid Price payable
on such minimum application is not in the range of ` . 5,000 to ` 7,000.
7. Revision option is not available to ASBA investor. For details, please refer section “ASBA Process”
in this Red Herring Prospectus.
8. During the Bidding/ Issue Period, any bidder who has registered his or her interest in the Equity
Shares at a particular price level is free to revise his or her Bid within the Price Band using the
printed Revision Form, which is a part of the Bid cum Application Form.
9. Revisions can be made in both the desired number of Equity Shares and the Bid price by using the
Revision Form. The Bidder must also mention the details of all the options in his or her Bid cum
Application Form or earlier Revision Form. For example, if a Bidder has Bid for three options in the
Bid cum Application Form and he is changing only one of the options in the Revision Form, he
must complete all the details of the other two options that are not being revised, in the Revision
Form. The members of the Syndicate will not accept incomplete or inaccurate Revision Forms.
10. The Bidder can make this revision any number of times during the Bidding/ Issue Period.
However, for any revision(s) in the Bid, the Bidders will have to use the services of the same
member of the Syndicate through whom he or she had place the original Bid.
11. Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be made
only in such Revision Form or copies thereof.
12. Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft
for the incremental amount, if any, to be paid on account of the upward revision of the Bid. The
excess amount, if any, resulting from downward revision of the Bid would be returned to the
Bidder at the time of refund in accordance with the terms of this Red Herring Prospectus. In case of
the QIB Bidders, the members of the Syndicate shall collect the payment in the form of cheque or
demand draft or electronic transfer of funds through RTGS for the incremental amount in the QIB
Margin Amount, if any, to be paid on account of the upward revision of the Bid at the time of one
or more revisions by the QIB Bidders.
13. When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and get a revised
TRS from the members of the Syndicate. It is the responsibility of the Bidder to request for and
obtain the revised TRS, which will act as proof of revision of the original bid.
211
SABARI INN LIMITED
Electronic Registration of Bids
(a) The Syndicate and the SCSBs will register the Bids using the on-line facilities of the Stock
Exchanges.
(b) The Syndicate and the SCSBs will undertake modification of selected fields in the Bid details
already uploaded within one Working Day from the Bid/Issue Closing Date.
(c) There will be at least one on-line connectivity facility in each city, where a stock exchange is located
in India and where Bids are being accepted. The BRLM, The Company and the Registrar are not
responsible for any acts, mistakes or errors or omission and commissions in relation to, (i) the Bids
accepted by the Syndicate Members and the SCSBs, (ii) the Bids uploaded by the Syndicate
Members and the SCSBs, (iii) the Bids accepted but not uploaded by the Syndicate Members and
the SCSBs or (iv) with respect to ASBA Bids, Bids accepted and uploaded without blocking funds in
the ASBA Accounts. However, the Syndicate and/or the SCSBs shall be responsible for any error in
the Bid details uploaded by them. It shall be presumed that for Bids uploaded by the SCSBs, the Bid
Amount has been blocked in the relevant ASBA Account.
(d) The Stock Exchanges will offer an electronic facility for registering Bids for the Issue. This facility
will be available with the Syndicate and their authorised agents and the SCSBs during the Bid/
Issue Period. The Syndicate Members and the Designated Branches of the SCSBs can also set up
facilities for off-line electronic registration of Bids subject to the condition that they will
subsequently upload the off-line data file into the on-line facilities for Book Building on a regular
basis. On the Bid/ Issue Closing Date, the Syndicate and the Designated Branches of the SCSBs
shall upload the Bids till such time as may be permitted by the Stock Exchanges. This information
will be available with the BRLM on a regular basis.
(e) Based on the aggregate demand and price for Bids registered on the electronic facilities of the Stock
Exchanges, a graphical representation of consolidated demand and price as available on the
websites of the Stock Exchanges would be made available at the Bidding centres during the
Bid/Issue Period.
(f) At the time of registering each Bid other than ASBA Bids, the Syndicate shall enter the following
details of the Bidders in the on-line system:
· Name of the Bidder: Bidders should ensure that the name given in the Bid cum Application
Form is exactly the same as the name in which the Depositary Account is held. In case the Bid
cum Application Form is submitted in joint names, Bidders should ensure that the
Depository Account is also held in the same joint names and are in the same sequence in
which they appear in the Bid cum Application Form.
· Investor Category – Individual, Corporate, QIBs, Eligible NRI, FVCI, FII & sub-account
registered with SEBI (other than a sub-account which is a foreign corporate or foreign individual) or
Mutual Fund, etc.
· Numbers of Equity Shares Bid for.
· Bid Amount.
· Bid cum Application Form number.
· DP ID and client identification number of the beneficiary account of the Bidder.
· PAN.
212
SABARI INN LIMITED
With respect to ASBA Bids, at the time of registering each Bid, the Designated Branches of the
SCSBs shall enter the following information pertaining to the Bidder into the online system:
· Name of the Bidder(s);
· Application Number;
· PAN (of First Bidder, in case of more than one Bidder);
· Investor Category and Sub-Category:
Retail Non- Institutional QIB
(No sub category) · Individual · Mutual Funds
· corporate · Financial Institutions
· other · Insurance companies
· Foreign Institutional
· Investors other than
· corporate and individual
· sub-accounts
· Employee/shareholder (if reservation);

· DP ID and client identification number;
· Beneficiary account number of Equity Shares Bid for;
· Quantity;
· Bid Amount and
· Bank account number;
(g) A system generated TRS will be given to the Bidder as a proof of the registration of each of the
bidding options. It is the Bidder‘s responsibility to obtain the TRS from the Syndicate or the
Designated Branches of the SCSBs. The registration of the Bid by the member of the Syndicate or
the Designated Branches of the SCSBs does not guarantee that the Equity Shares shall be
allocated/Allotted either by the Syndicate or The Company.
(h) Such TRS will be non-negotiable and by itself will not create any obligation of any kind.
(i) In case of QIB Bidders, only the BRLM and their Affiliate Syndicate Members have the right to
accept the Bid or reject it. However, such rejection shall be made at the time of receiving the Bid
and only after assigning a reason for such rejection in writing. In case of Non-Institutional Bidders,
Retail Individual Bidders and Eligible Employees and Eligible Employees, Bids will be rejected on
technical grounds listed on page 225. The Members of the Syndicate may also reject Bids if all the
information required is not provided and the Bid cum Application Form is incomplete in any
respect. The SCSBs shall have no right to reject Bids, except on technical grounds.
(j) The permission given by the Stock Exchanges to use their network and software of the online IPO
system should not in any way be deemed or construed to mean that the compliance with various
statutory and other requirements by The Company and/or the BRLM are cleared or approved by
the Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or
completeness of any of the compliance with the statutory and other requirements nor does it take
any responsibility for the financial or other soundness of the Company, the Promoter, the
management or any scheme or project of the Company; nor does it in any manner warrant, certify
or endorse the correctness or completeness of any of the contents of this Draft Red Herring
213
SABARI INN LIMITED
Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on
the Stock Exchanges.
(k) Only Bids that are uploaded on the online IPO system of the Stock Exchanges shall be considered
for allocation/ Allotment. Members of the Syndicate will be given up to one day after the Bid/Issue
Closing Date to verify the information uploaded in the online IPO system during the Bid/Issue
Period after which the date will be sent to the Registrar for reconciliation and Allotment of Equity
Shares. In case of any discrepancy of data between the BSE or the NSE and the Members of the
Syndicate or the Designated Branches of the SCSBs, the decision of the Company, in consultation
with the BRLM and the Registrar, based on the physical records of Bid Cum Application Forms
shall be final and binding on all concerned. If the Syndicate Members finds any discrepancy in the
DP name, DP Id and the Client Id, the Syndicate Members will correct the same and send the data
to the Registrar for reconciliation and Allotment of Equity Shares.
(l) Details of Bids in the Anchor Investor Portion will not be registered on the on-line facilities of the
electronic facilities of the Stock Exchanges.
Build up of the book and revision of Bids:
(a) Bids received from various Bidders through the Syndicate and the SCSBs shall be electronically
uploaded to the Stock Exchanges‘ mainframe on a regular basis.
(b) The Book gets built up at various price levels. This information will be available with the BRLM on
a regular basis at the end of the Bid/Issue Period.
(c) During the Bid/Issue Period, any Bidder who has registered his or her interest in the Equity Shares
at a particular price level is free to revise his or her Bid within the Price Band using the printed
Revision Form, which is a part of the Bid cum Application Form.
(d) Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using
the Revision Form. Apart from mentioning the revised options in the Revision Form, the Bidder
must also mention the details of all the options in his or her Bid cum Application Form or earlier
Revision Form. For example, if a Bidder has Bid for three options in the Bid cum Application Form
and such Bidder is changing only one of the options in the Revision Form, he must still fill the
details of the other two options that are not being revised, in the Revision Form. The Syndicate and
the Designated Branches of the SCSBs will not accept incomplete or inaccurate Revision Forms.
(e) The Bidder can make this revision any number of times during the Bid/Issue Period. However, for
any revision(s) in the Bid, the Bidders will have to use the services of the same member of the
Syndicate or the SCSB through whom such Bidder had placed the original Bid. Bidders are advised
to retain copies of the blank Revision Form and the revised Bid must be made only in such Revision
Form or copies thereof.
(f) In case of an upward revision in the Price Band announced as above, Retail Individual Bidders and
Eligible Employees who had Bid at Cut-off Price could either (i) revise their Bid or (ii) shall make
additional payment based on the cap of the revised Price Band (such that the total amount i.e.,
original Bid Amount plus additional payment does not exceed ` 200,000 if the Bidder wants to
continue to Bid at Cut-off Price), with the Syndicate to whom the original Bid was submitted. In
case the total amount (i.e., original Bid Amount plus additional payment) exceeds ` 200,000, the Bid
will be considered for allocation under the Non-Institutional Portion in terms of this Draft Red
Herring Prospectus. If, however, the Bidder does not either revise the Bid or make additional
payment and the Issue Price is higher than the cap of the Price Band prior to revision, the number
of Equity Shares Bid for shall be adjusted downwards for the purpose of allocation, such that no
214
SABARI INN LIMITED
additional payment would be required from the Bidder and the Bidder is deemed to have
approved such revised Bid at Cut-off Price.
(g) In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders
and Eligible Employees who have Bid at Cut-off Price could either revise their Bid or the excess
amount paid at the time of bidding would be refunded from the Escrow Account.
(h) The Company, in consultation with the BRLM, shall decide the minimum number of Equity Shares
for each Bid to ensure that the minimum application value is within the range of ` 5,000 to ` 7,000.
(i) Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft
for the incremental amount, if any, to be paid on account of the upward revision of the Bid. With
respect to the ASBA Bids, if revision of the Bids results in an incremental amount, the relevant
SCSB shall block the additional Bid Amount. In case of Bids, other than ASBA Bids, the Syndicate
shall collect the payment in the form of cheque or demand draft if any, to be paid on account of the
upward revision of the Bid at the time of one or more revisions by the QIB Bidders. In such cases,
the Syndicate will revise the earlier Bids details with the revised Bid and provide the cheque or
demand draft number of the new payment instrument in the electronic book. The Registrar will
reconcile the Bid data and consider the revised Bid data for preparing the Basis of Allotment.
(j) When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and may get a
revised TRS from the Syndicate or the SCSB, as applicable. It is the responsibility of the Bidder to
request for and obtain the revised TRS, which will act as proof of his or her having revised the
previous Bid.
Price Discovery and Allocation
1. After the Bid/Issue Closing Date, the BRLM shall analyze the demand generated at various price
levels and discuss pricing strategy with the Company.
2. The Company in consultation with Selling Shareholders and the BRLM, shall finalize the
Issue Price, the number of Equity Shares to be allotted in each investor category.
3. The allocation to QIBs will be upto 50% of the Net Issue and the availability for allocation to Non-
Institutional and Retail Individual Bidders will not less than 15% and 35% of the Net Issue
respectively, and, would be on proportionate basis, in the manner specified in the SEBI Regulations
and this Draft Red Herring Prospectus, in consultation with Designated Stock Exchange, subject to
valid Bids being received at or above the Issue Price.
4. Allocation to Anchor Investors shall be at the discretion of the Company in consultation with the
Selling Shareholders and BRLM, subject to the compliance with the SEBI Regulations.
5. Under-subscription, if any, in any category would be met with spill over from any other category at
the sole discretion of the Company in consultation with the Selling Shareholders and BRLM.
However, if the aggregate demand by Mutual Fund is less than [●] Equity Shares, the balance
Equity Shares available for allocation in the Mutual Fund Portion will first be added to the QIB
Portion and be allotted proportionately to the QIB Bidders. In the event that the aggregate demand
in the QIB Portion has been met, under subscription, if any, would be allowed to be met with spill-
over from any other category or combination of categories at the discretion of the Company, in
consultation with the BRLM and the Designated Stock Exchange. Any under-subscription in the
Equity Shares under the Employee Reservation Portion will be added back to the Issue.
Under-subscription, if any, in any category, would be met with spill over from other categories at
the sole discretion of the Company in consultation with the BRLM.
215
SABARI INN LIMITED
6. Allocation to Non-Residents, including Eligible NRI’s, FIIs and FVCIs registered with SEBI,
applying on repatriation basis will be subject to applicable law, rules, regulations, guidelines and
approvals.
7. The BRLM in consultation with Selling Shareholders and us, shall notify the members of the
Syndicate of the Issue Price and allocations to their respective Bidders, where the full Bid Amount
has not been collected from the Bidders.
8. The Company reserves the right to cancel the Issue any time after the Bid/Issue Opening Date
without assigning any reasons whatsoever. In terms of the SEBI Regulations, QIB Bidders shall not
be allowed to withdraw their Bid after the Bid/Issue Closing Date. Further the Anchor Investors
shall not be allowed to withdraw their Bids after the Anchor Investors Bid/Issue Period.
9. The allotment details shall be put on the website of the Registrar to the Issue.
Signing of the Underwriting Agreement and the RoC Filing
(a) The Company, the BRLM and the Syndicate Members shall enter into an Underwriting Agreement
on or immediately after the finalisation of the Issue Price.
(b) After signing the Underwriting Agreement, The Company will update and file the updated Red
Herring Prospectus with the RoC in accordance with the applicable law, which then would be
termed as the ‘Prospectus‘. The Prospectus will contain details of the Issue Price, Issue size,
underwriting arrangements and will be complete in all material respects.
Pre-Issue Advertisement
Subject to Section 66 of the Companies Act, The Company shall, after registering the Red Herring
Prospectus with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI
Regulations, in one English language national daily newspaper, one Hindi language national daily
newspaper and one regional language daily newspaper, each with wide circulation.
Advertisement regarding Issue Price and Prospectus
The Company will issue a statutory advertisement after the filing of the Prospectus with the RoC. This
advertisement, in addition to the information that has to be set out in the statutory advertisement, shall
indicate the Issue Priceand the Anchor Investor Issue Price. Any material updates between the date of
the Red Herring Prospectus and the date of Prospectus will be included in such statutory
advertisement.
Issuance of Confirmation of Allotment Note (“CAN”)
(a) Upon approval of the Basis of Allotment by the Designated Stock Exchange, the Registrar shall
send to the Syndicate a list of the Bidders who have been Allotted Equity Shares in the Issue. The
approval of the Basis of Allotment by the Designated Stock Exchange for QIB Bidders may be done
simultaneously with or prior to the approval of the Basis of Allotment for the Retail and Non-
Institutional Bidders. However, Bidders should note that The Company shall ensure that (i) the
Allotment of the Equity Shares and (ii) the instructions by the Company for the demat credit of the
Equity Shares, to all Bidders in this Issue shall be done on the same date.
(b) The Registrar will then dispatch a CAN to the Bidders who have been Allotted Equity Shares in the
Issue. The dispatch of a CAN shall be deemed a valid, binding and irrevocable contract for the
Bidder to pay the entire Issue Price for all the Equity Shares allocated to such Bidder.
(c) The Issuance of CAN shall be deemed a valid, binding and irrevocable contract for the Allotment of
Equity Shares to such Bidder.
216
SABARI INN LIMITED
(d) The Issuance of CAN is subject to “Notice to Anchor Investors – Allotment Reconciliation and
Revised CANs” as set forth below:
Notice to Anchor Investors: Allotment Reconciliation and CANs
A physical book will be prepared by the Registrar on the basis of the Bid cum Application Forms
received from Anchor Investors. Based on the physical book and at the discretion of the Company and
Selling Shareholders, in consultation with the BRLM selected Anchor Investors will be sent an Anchor
Investor Allocation Notice and/or a revised Anchor Investor Allocation Notice, as the case may be. All
Anchor Investors will be sent Anchor Investor Allocation Notice post Anchor Investor Bid/Issue Period
and in the event that the Issue Price is higher than the Anchor Investor Issue Price, the Anchor
Investors will be sent a revised Anchor Investor Allocation Notice within one day of the Pricing Date
indicating the number of Equity Shares allocated to such Anchor Investor and the pay-in date for
payment of the balance amount. Anchor Investors should note that they shall be required to pay any
additional amounts, being the difference between the Issue Price and the Anchor Investor Issue Price,
as indicated in the revised Anchor Investor Allocation Notice within the pay-in date referred to in the
revised Anchor Investor Allocation Notice. The revised Anchor Investor Allocation Notice will
constitute a valid, binding and irrevocable contract (subject to the issue of CAN) for the Anchor
Investor to pay the difference between the Issue Price and the Anchor Investor Issue Price and
accordingly the CAN will be issued to such Anchor Investors. In the event the Issue Price is lower than
the Anchor Investor Issue Price, the Anchor Investors who have been Allotted Equity Shares will
directly receive CAN.
The dispatch of CAN shall be deemed a valid, binding and irrevocable contract for the Allotment of
Equity Shares to such Anchor Investors. The final allocation is subject to the physical application being
valid in all respect along with receipt of stipulated documents, the Issue Price being finalised at a price
not higher than the Anchor Investor Issue Price and Allotment by the Board of Directors.
Designated Date and Allotment of Equity Shares
(a) The Company will ensure that (i) the Allotment of Equity Shares; and (ii) credit to the successful
Bidder‘s depositary account will be completed within 12 Working Days of the Bid/Issue Closing
Date.
(b) In accordance with the SEBI Regulations, Equity Shares will be issued and Allotment shall be made
only in the dematerialised form to the Allottees.
(c) Allottees will have the option to re-materialise the Equity Shares so Allotted as per the provisions
of the Companies Act and the Depositories Act.
Investors are advised to instruct their Depository Participant to accept the Equity Shares that may be
allocated/ Allotted to them pursuant to this Issue.
GENERAL INSTRUCTIONS
Do’s:
a) Check if you are eligible to apply;
b) Read all the instructions carefully and complete the applicable Resident Bid cum Application Form
(White in colour) or Non Resident Bid cum Application Form (Blue in colour);
c) Ensure that the details about Depository Participant and beneficiary account are correct as Allotment
of Equity Shares will be in the DEMATERIALIZED form only;
217
SABARI INN LIMITED
d) Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a
member of the Syndicate;
e) Ensure that have been given a TRS for all your Bid options;
f) Submit revised Bids to the same member of the Syndicate through whom the original Bid was placed
and obtain a revised TRS;
g) Each of the Bidders, should mention his/ her Permanent Account Number (PAN) allotted under the
IT Act;
h) Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all
respects; and
i) Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in
which the beneficiary account is held with the Depository Participant. In case the Bid cum
Application Form is submitted in joint names, ensure that the beneficiary account is also held in same
joint names and such names are in the same sequence in which they appear in the Bid cum
Application Form.
Don’ts:
a) Do not Bid for lower than the minimum Bid size;

b) Do not Bid/revise Bid Price to less than the lower end of the Price Band or higher than the higher end
of the Price Band;
c) Do not Bid on another Bid cum Application Form after you have submitted a Bid to the members of
the Syndicate;
d) Do not pay the Bid Price in cash, by money order or by postal order or by stockinvest;
e) Do not send Bid cum Application Forms by post; instead submit the same to a member of the
Syndicate only;
f) Do not Bid at Cut-off Price (for QIB Bidders, Non-Institutional Bidders, bidder in Employee
Reservation Portion, for bid amount in excess of ` 200,000);
g) Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the Issue size
and/or investment limit or maximum number of Equity Shares that can be held under the applicable
laws or regulations or maximum amount permissible under the applicable regulations;
h) Do not submit the Bid without the QIB Margin Amount, in case of a Bid by a QIB;
i) Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground.
Instructions for Completing the Bid cum Application Form
Bids must be:
a) Made only in the prescribed Bid cum Application Form or Revision Form, as applicable.
b) Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions
contained herein, in the Bid cum Application Form or in the Revision Form. Incomplete Bid cum
Application Forms or Revision Forms are liable to be rejected. Bidders should note that the
218
SABARI INN LIMITED
Syndicate and / or the SCSBs, as appropriate, will not be liable for errors in data entry due to
incomplete or illegible Bid cum Application Forms or Revision Forms.
c) Information provided by the Bidders will be uploaded in the online IPO system by the Syndicate
and the SCSBs, as the case may be, and the electronic data will be used to make allocation/
Allotment. The Bidders should ensure that the details are correct and legible.
d) For Retail Individual Bidders, the Bid must be for a minimum of [·] Equity Shares and in multiples
of [·] thereafter subject to a maximum Bid Amount of ` 200,000.
e) For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of
Equity Shares that the Bid Amount exceeds or equal to ` 200,000 and in multiples of [·] Equity
Shares thereafter. Bids cannot be made for more than the Issue size. Bidders are advised to ensure
that a single Bid from them should not exceed the investment limits or maximum number of Equity
Shares that can be held by them under the applicable laws or regulations.
f) For Anchor Investors, Bids must be for a minimum of such number of Equity Shares that the Bid
Amount exceeds or equal to ` 100 million and in multiples of [·] Equity Shares thereafter.
g) In single name or in joint names (not more than three, and in the same order as their Depository
Participant details).
h) Thumb impressions and signatures other than in the languages specified in the Eighth Schedule to
the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive
Magistrate under official seal.
Bidder’s PAN, Depository Account and Bank Account Details
Bidders should note that on the basis of PAN of the Bidders, DP ID and beneficiary account number
provided by them in the Bid cum Application Form, the Registrar will obtain from the Depository the
demographic details including address, Bidders bank account details, MICR code and occupation
(hereinafter referred to as “Demographic Details”). These bank account details would be used for
giving refunds (including through physical refund warrants, direct credit, NECS, NEFT and RTGS) or
unblocking of ASBA Account. Hence, Bidders are advised to immediately update their bank account
details as appearing on the records of the Depository Participant. Please note that failure to do so could
result in delays in despatch/ credit of refunds to Bidders or unblocking of ASBA Account at the
Bidders sole risk and neither the BRLM or the Registrar or the Escrow Collection Banks or the SCSBs
nor the Company shall have any responsibility and undertake any liability for the same. Hence, Bidders
should carefully fill in their Depository Account details in the Bid cum Application Form.
IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN

DEMATERIALIZED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY
PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND
BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS
MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY
THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE
BID CUM APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED
THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN
THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE BID CUM APPLICATION FORM.
These Demographic Details would be used for all correspondence with the Bidders including
mailing of the CANs/Allotment Advice and printing of Bank particulars on the refund orders. The
219
SABARI INN LIMITED
Demographic Details given by Bidders in the Bid cum Application Form would not be used for any other
purpose by the Registrar to the Issue.
By signing the Bid cum Application Form, the Bidder would have deemed to have authorized the
Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as
available on its records.
In case of Bidders not receiving refunds through electronic transfer of funds, delivery of refund
orders/ allocation advice/ CANs may get delayed if the same, once sent to the address obtained from
the Depositories, are returned undelivered. In such an event, the address and other details given by
the Bidder in the Bid cum Application Form would be used only to ensure dispatch of refund orders.
Please note that any such delay shall be at the Bidders sole risk and neither the Bank, the Registrar,
Escrow Collection Bank(s) nor the BRLM shall be liable to compensate the Bidder for any losses
caused to the Bidder due to any such delay or pay any interest for such delay. In case of Bidders
receiving refunds through electronic modes, Bidders may note that refunds may get delayed if Bank
particulars obtained from the Depository Participant are incorrect.
In case no corresponding record is available with the Depositories that matches three parameters,
namely, names of the Bidders (including the order of names of joint holders), the Depository Participant’s
identity (DP ID) and the beneficiary’s identity, then such Bids are liable to be rejected.
The Company in their absolute discretion, reserve the right to permit the holder of the power of attorney
to request the Registrar that for the purpose of printing particulars on the refund order and mailing of the
refund order/CANs/allocation advice/ refunds through electronic transfer of funds, the Demographic
Details given on the Bid cum Application Form should be used (and not those obtained from the
Depository of the Bidder). In such cases, the Registrar shall use Demographic Details as given in the Bid
cum Application Form instead of those obtained from the depositories.
Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only at
the prevailing exchange rate and net of bank charges and/or commission. In case of Bidders who
remit money through Indian Rupee drafts purchased abroad, such payments in Indian Rupees will be
converted into US Dollars or any other freely convertible currency as may be permitted by the RBI at
the rate of exchange prevailing at the time of remittance and will be dispatched by registered post or if
the Bidders so desire, will be credited to their NRE accounts, details of which should be furnished in
the space provided for this purpose in the Bid cum Application Form. The Company will not be
responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency.
Bids under Power of Attorney
In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies,
registered societies, a certified copy of the power of attorney or the relevant resolution or authority, as the
case may be, along with a certified copy of the Memorandum and Articles of Association and/or bye
laws must be along with the Bid cum Application Form. Failing this, the Company reserves the right to
accept or reject any Bid in whole or in part, in either case, without assigning any reason therefore.
In case of Bids made pursuant to a Power of Attorney by FIIs, a certified copy of the Power of Attorney or
the relevant resolution or authority as the case may be, along with a certified copy of their SEBI
registration certificate must be lodged along with the Bid cum Application Form. In case of Bids made by
Mutual Funds, venture capital funds registered with SEBI and FVCIs, a certified copy of their SEBI
registration certificate must be lodged along with the Bid cum Application Form. Failing this, the
220
SABARI INN LIMITED
Company reserves the right to accept or reject any Bid in whole or in part, in either case, without
assigning any reason therefore.
In case of the Bids made by insurance companies registered with the Insurance Regulatory and
Development Authority, a certified copy of certificate of registration issued by Insurance
Regulatory and Development Authority must be lodged along with the Bid cum Application Form.
Failing this, the Company reserves the right to accept or reject any Bid in whole or in part, in either case,
without assigning any reason therefore.
In case of the Bids made by provident funds with minimum corpus of ` 250 million (subject to applicable
law) and pension funds with minimum corpus of ` 250 million, a certified copy of certificate
from a chartered accountant certifying the corpus of the provident fund/pension fund must be
lodged along with the Bid cum Application Form. Failing this, the Company reserves the right to
accept or reject any Bid in whole or in part, in either case, without assigning any reason therefore.
We, in absolute discretion, reserves the right to relax the above condition of simultaneous
submission of the power of attorney along with the Bid cum Application Form, subject to such terms and
conditions that the Company and the BRLM may deem fit.
PAYMENT INSTRUCTIONS
Escrow Mechanism for Bidders other than ASBA Bidders
The Company and the Syndicate shall open Escrow Account(s) with one or more Escrow Collection
Bank(s) in whose favour the Bidders shall make out the cheque or demand draft in respect of his or her
Bid and/or revision of the Bid. Cheques or demand drafts received for the full Bid Amount from Bidders
would be deposited in the Escrow Account.
The Escrow Collection Banks will act in terms of the Red Herring Prospectus and the Escrow Agreement.
The Escrow Collection Bank(s) for and on behalf of the Bidders shall maintain the monies in the Escrow
Account. The Escrow Collection Banks shall not exercise any lien whatsoever over the monies deposited
therein and shall hold the monies therein in trust for the Bidders. On the Designated Date, the Escrow
Collection Bank(s) shall transfer the funds equivalent to the size of the Issue from the Escrow Account, as
per the terms of the Escrow Agreement, into the Issue Account shall be held for the benefit of the Bidders
who are entitled to refunds. Payments of refund to the Bidders shall also be made from the Refund
Account as per the terms of the Escrow Agreement and this Red Herring Prospectus.
The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established
as an arrangement between us, the Syndicate, the Escrow Collection Bank(s) and the Registrar to the Issue
to facilitate collections from the Bidders.
Payment mechanism for ASBA Bidders
The ASBA Bidders shall specify the bank account number in the ASBA Bid cum Application Form and
the SCSB shall block an amount equivalent to the Bid Amount in the bank account specified in the ASBA
Bid cum Application Form. The SCSB shall keep the Bid Amount in the relevant bank account blocked
until withdrawal/ rejection of the ASBA Bid or receipt of instructions from the Registrar to unblock the
Bid Amount. In the event of withdrawal or rejection of the ASBA Bid cum Application Form or for
unsuccessful ASBA Bid cum Application Forms, the Registrar shall give instructions to the SCSB to
unblock the application money in the relevant bank account within one day of receipt of such instruction.
221
SABARI INN LIMITED
The Bid Amount shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment in
the Issue and consequent transfer of the Bid Amount to the Public Issue Account, or until withdrawal/
failure of the Issue or until rejection of the ASBA Bid, as the case may be.
Payment into Escrow Account for Bidders other than ASBA Bidders
Each Bidder shall draw a cheque or demand draft or remit the funds electronically through the RTGS
mechanism for the amount payable on the Bid as per the following terms:
1. All Bidders would be required to pay the full Bid Amount at the time of the submission of the Bid cum
Application Form.
2. Bidders shall, with the submission of the Bid cum Application Form, draw a payment instrument for
the Bid Amount in favour of the Escrow Account and submit the same to the members of the Syndicate. If
the payment is not made favouring the Escrow Account along with the Bid cum Application Form, the
Bid of the Bidder shall be rejected.
3. The payment instruments for payment into the Escrow Account should be drawn in favor of:
(a) In case of Resident QIB Bidders: [•]

(b) In case of Non Resident QIB Bidders: [•]
(c) In case of Resident Retail and Non-Institutional Bidders: [•]
(d) In case of Non-Resident Retail and Non-Institutional Bidders: [•]
(e) In case of eligible employees: [•]
4. Anchor Investors would be required to pay the Bid Amount at the time of submission of the Bid cum
Application Form. In the event of the Issue Price being higher than the price at which allocation is made
to Anchor Investors, the Anchor Investors shall be required to pay such additional amount to the extent
of shortfall between the price at which allocation is made to them and the Issue Price as per the pay-in
date mentioned in the revised Anchor Investor Allocation Notice. If the Issue Price is lower than the price
at which allocation is made to Anchor Investors, the amount in excess of the Issue Price paid by Anchor
Investors shall not be refunded to them.
5. For Anchor Investors, the payment instruments for payment into the Escrow Account should be drawn
in favour of:
(a) In case of resident Anchor Investors: [•]

(b) In case of non-resident Anchor Investors: [•]
6. In case of Bids by NRIs applying on repatriation basis, the payments must be made through Indian
Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on application
remitted through normal banking channels or out of funds held in Non-Resident External (NRE)
Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorized to
deal in foreign exchange in India, along with documentary evidence in support of the remittance.
Payment will not be accepted out of Non-Resident Ordinary (NRO) Account of Non-Resident Bidder
bidding on a repatriation basis. Payment by drafts should be accompanied by bank certificate confirming
that the draft has been issued by debiting to NRE Account or FCNR Account.
7. In case of Bids by NRIs applying on non-repatriation basis, the payments must be made through Indian
222
SABARI INN LIMITED
Rupee Drafts purchased abroad or cheques or bank drafts, for the amount payable on application
remitted through normal banking channels or out of funds held in Non-Resident External (NRE)
Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to
deal in foreign exchange in India, along with documentary evidence in support of the remittance or out of
a Non-Resident Ordinary (NRO) Account of a Non-Resident Bidder bidding on a non-repatriation basis.
Payment by drafts should be accompanied by a bank certificate confirming that the draft has been issued
by debiting an NRE or FCNR or NRO Account.
8. In case of Bids by FIIs, the payment should be made out of funds held in a Special Rupee Account
along with documentary evidence in support of the remittance. Payment by drafts should be
accompanied by a bank certificate confirming that the draft has been issued by debiting the Special Rupee
Account.
9. The monies deposited in the Escrow Account will be held for the benefit of the Bidders (other than
ASBA Bidders) till the Designated Date.
10. On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow
Account as per the terms of the Escrow Agreement into the Public Issue Account with the Bankers to the
Issue.
11. On the Designated Date and no later than 10 Working Days from the Bid/Issue Closing Date, the
Escrow Collection Bank shall also refund all amounts payable to unsuccessful Bidders (other than ASBA
Bidders) and also the excess amount paid on Bidding, if any, after adjusting for allocation/Allotment to
such Bidders.
12. Payments should be made by cheque, or demand draft drawn on any Bank (including a Co-operative
Bank), which is situated at, and is a member of or sub-member of the bankers, clearing house located at
the centre where the Bid cum Application Form is submitted. Outstation cheques/bank drafts drawn on
banks not participating in the clearing process will not be accepted and applications accompanied by
such cheques or bank drafts are liable to be rejected. Cash/ Stockinvest/Money Orders/ Postal orders
will not be accepted.
Submission of Bid cum Application Form
All Bid/cum Application Forms or Revision Forms duly completed and accompanied by account payee
cheques or drafts shall be submitted to the members of the Syndicate at the time of submission of the Bid.
With respect to the ASBA Bidders, the ASBA Bid cum Application Form or the ASBA Revision Form shall
be submitted to the Designated Branches of the SCSBs.
Separate receipts shall not be issued for the money payable on the submission of Bid cum Application
Form or Revision Form. However, the collection centre of the members of the Syndicate will acknowledge
the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning
to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the
Bid cum Application Form for the records of the Bidder.
223
SABARI INN LIMITED
OTHER INSTRUCTIONS
Joint Bids in the case of Individuals
Bids may be made in single or joint names (not more than three). In the case of joint Bids, all refund
payments will be made out in favour of the Bidder whose name appears first in the Bid cum Application
Form or Revision Form. All communication will be addressed to the First Bidder and will be dispatched
to his or her address as per the Demographic Details received from the Depository.
Multiple Bids
A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares
required. Two or more Bids will be deemed to be multiple Bids if the sole or First Bidder is one and the
same. Bids by QIBs under the Anchor Investor Portion and QIB Portion (excluding Anchor Investor
Portion) will not be considered as multiple Bids.
The Company reserves the right to reject, in its absolute discretion, all or any multiple Bids in any or all
categories. In this regard, the procedures to be followed by the Registrar to the Issue to detect multiple
applications are given below:
1. All applications with the same name and age will be accumulated and taken to a separate process file
which would serve as a multiple master.
2. In this master, a check will be carried out for the same PAN/GIR numbers. In cases where
the PAN/GIR numbers are different, the same will be deleted from this master.
3. The Registrar to the Issue will obtain, from the depositories, details of the applicant’s address based
on the DP ID and Beneficiary Account Number provided in the Bid cum Application Form and create
an address master.
4. The addresses of all these applications in the multiple master will be strung from the address master.
This involves putting the addresses in a single line after deleting non-alpha and non-numeric
characters i.e. commas, full stops, hash etc. Sometimes, the name, the first line of address and pin
code will be converted into a string for each application received and a photo match will be carried
out amongst all the applications processed. A print-out of the addresses will be taken to check for
common names. The applications with same name and same address will be treated as multiple
applications.
5. The applications will be scanned for similar DP ID and Beneficiary Account Numbers. In case
applications bear the same DP ID and Beneficiary Account Numbers, these will be treated as multiple
applications.
6. Subsequent to the aforesaid procedures, a print out of the multiple master will be taken and the
applications physically verified to tally signatures as also father’s/husband’s names. On completion
of this, applications will finally be identified as multiple applications.
In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual funds
registered with SEBI and such Bids in respect of more than one scheme of the mutual funds will not be
treated as multiple Bids provided that the Bids clearly indicate the scheme for which the Bid has been
made.
224
SABARI INN LIMITED
Bids made by employees under both under the Employee Reservation Portion as well as in the Net Issue
shall not be treated as multiple bids.
The Company and Selling Shareholders, in consultation with the BRLM, reserves the right to reject, in its
absolute discretion, all or any multiple Bids in any or all categories.
Permanent Account Number or PAN
Pursuant to the circular MRD/DoP/Circ-05/2007 dated April 27, 2007, SEBI has mandated Permanent
Account Number (PAN) to be the sole identification number for all participants transacting in the
securities market, irrespective of the amount of the transaction with effect from July 2, 2007. Each of the
Bidders, should mention his/her PAN allotted under the IT Act. Applications without this information
will be considered incomplete and are liable to be rejected. It is to be specifically noted that Bidders
should not submit the GIR number instead of the PAN, as the Bid is liable to be rejected on this ground.
Unique Identification Number (“UIN”)
With effect from July 1, 2005, SEBI had decided to suspend all fresh registrations for obtaining UIN and
the requirement to contain/quote UIN under the SEBI MAPIN Regulations/Circulars vide its circular
MAPIN/Cir-13/2005. However, in a recent press release dated December 30, 2005, SEBI has approved
certain policy decisions and has now decided to resume registrations for obtaining UIN’s in a phased
manner. The press release states that the cut off limit for obtaining UIN has been raised from the existing
limit of trade order value of ` 100,000 to ` 500,000 or more. The limit will be reduced progressively. For
trade order value of less than ` 500,000, an option will be available to investors to obtain either the PAN
or UIN. These changes are, however, not effective as of the date of the Red Herring Prospectus and SEBI
has stated in the press release that the changes will be implemented only after necessary amendments are
made to the SEBI MAPIN Regulations.
Therefore, MAPIN is not required to be quoted with the Bids.
Right to Reject Bids
In case of QIB Bidders, The Company in consultation with Selling Shareholders and the BRLM may reject
Bids provided that the reasons for rejecting the same shall be provided to such Bidders in writing. In case
of Non-Institutional Bidders and Retail Individual Bidders, The Company has a right to reject Bids based
on technical grounds. Consequent refunds shall be made by RTGS/NEFT/NES/Direct Credit/cheque or
pay order or draft and will be sent to the Bidder‘s address at the Bidder‘s risk. With respect to ASBA Bids,
the Designated Branches of the SCSBs shall have the right to reject ASBA Bids if at the time of blocking
the Bid Amount in the Bidder‘s bank account, the respective Designated Branch of the SCSB ascertains
that sufficient funds are not available in the Bidder‘s bank account maintained with the SCSB. Subsequent
to the acceptance of the ASBA Bid by the SCSB, the Company would have a right to reject the ASBA Bids
only on technical grounds.
GROUNDS FOR TECHNICAL REJECTIONS
Bidders are advised to note that Bids are liable to be rejected inter alia on the following technical grounds:
a) Amount paid does not tally with the amount payable for the highest value of Equity Shares Bid for;
With respect to ASBA Bids, the amounts mentioned in the ASBA Bid cum Application Form does not
tally with the amount payable for the value of the Equity Shares Bid for;
225
SABARI INN LIMITED
b) Bank account details (for refund) are not given;

c) Age of First Bidder not given;
d) In case of partnership firms, Equity Shares may be registered in the names of the individual partners
and no firm as such shall be entitled to apply;
e) Bids by persons not competent to contract under the Indian Contract Act, 1872 including minors and
insane persons;
f) PAN not stated or copy of GIR number furnished instead of PAN. See the section titled "Issue
Procedure - PAN or GIR Number" beginning on page 225 of this Red Herring Prospectus;
g) GIR number furnished instead of PAN;
h) Bids for lower number of Equity Shares than specified for that category of investors;
i) Bids at a price less than lower end of the Price Band;
j) Bids at a price more than the higher end of the Price Band;
k) Bids at Cut-off Price by Non-Institutional, QIB Bidders and Bidders in the Employee Reservation
Portion whose Bid Amount exceeds Rs.200,000;
l) Bids for number of Equity Shares, which are not in multiples of [●];
m) Category not ticked;
n) Multiple Bids as defined in this Red Herring Prospectus;
o) In case of Bid under power of attorney or by limited companies, corporate, trust etc., relevant
documents are not submitted;
p) Bids accompanied by Stockinvest/ money order/postal order/cash;
q) Signature of sole and/or joint Bidders missing;
r) Bid cum Application Form does not have the stamp of the BRLM or the Syndicate Members;
s) Bid cum Application Form does not have the Bidder’s depository account details;
t) Bid cum Application Form is not delivered by the Bidder within the time prescribed as per the Bid
cum Application Forms, Bid/ Issue Opening Date advertisement and the Red Herring Prospectus
and as per the instructions in this Red Herring Prospectus and the Bid cum Application Forms;
u) In case no corresponding record is available with the Depositories that matches three parameters
namely, names of the Bidders (including the order of names of joint holders), the Depository
Participant’s identity (DP ID) and the beneficiary’s account number;
v) Bids for amounts greater than the maximum permissible amounts prescribed by the regulations;
w) Bids by QIBs not submitted through members of the Syndicate;
x) Bids in respect where the Bid cum Application form do not reach the Registrar prior to the
finalisation of the basis of allotment;
y) Bids where clear funds are not available in Escrow Accounts as per final certificate from the Escrow
Collection Banks;
z) Bids by OCBs;
aa) Bids by employees or directors of the Company or its subsidiaries who are not eligible to apply in the
Employee Reservation Portion;
bb) Bids by U.S. persons, other than “qualified institutional buyers” as defined in Rule 144A under the
Securities Act or other than in reliance on Regulation S under the Securities Act; and
cc) Bids by persons outside India if not in compliance with applicable foreign and Indian laws or by any
persons who are not eligible to acquire Equity Shares of the Company, in terms of all applicable laws,
rules, regulations, guidelines and approvals.
226
SABARI INN LIMITED
dd) Bids not uploaded on the terminals of the Stock Exchanges; and Bids by persons prohibited from
buying, selling or dealing in the shares directly or indirectly by SEBI or any other regulatory
authority.
IN CASE THE DP ID, CLIENT ID AND PAN MENTIONED IN THE BID CUM APPLICATION FORM
AND ENTERED INTO THE ELECTRONIC BIDDING SYSTEM OF THE STOCK EXCHANGES OR
THE SYNDICATE/THE SCSBs DO NOT MATCH WITH THE DP ID, CLIENT ID AND PAN
AVAILABLE IN THE RECORDS WITH THE DEPOSITARIES.
Equity Shares in Dematerialized Form with NSDL or CDSL
As per the provisions of Section 60B of the Companies Act, the Allotment of Equity Shares in this Issue
shall be only in a dematerialized form (i.e., not in the form of physical certificates but the fungible and be
represented by the statement issued through the electronic mode).
In this context, two agreements have been signed among the Company, the respective Depositories and
the Registrar to the Issue:
a) Agreement dated [●] with NSDL, the Company and the Registrar to the Issue;
b) Agreement dated [●] with CDSL, the Company and the Registrar to the Issue.
All bidders can seek Allotment only in dematerialized mode. Bids from any Bidder without relevant
details of his or her depository account are liable to be rejected.
a) A bidder applying for Equity Shares must have at least one beneficiary account with either of the
Depository Participant of either NSDL or CDSL prior to making the Bid.
b) The Bidder must necessarily fill in the details (including the Beneficiary Account Number and
Depository Participant’s identification number) appearing in the Bid-cum-Application Form or
Revision Form.
c) Allotment to a successful Bidder will be credited in electronic form directly to the beneficiary account
(with the Depository Participant) of the Bidder.
d) Names in the Bid-cum-Application Form or Revision Form should be identical to those appearing in
the account details in the Depository. In case of joint holders, the names should necessarily be in the
same sequence as they appear in the account details in the Depository.
e) If incomplete or incorrect details are given under the heading ‘Bidders Depository Account Details’ in
the Bid-cum-Application Form or Revision Form, it is liable to be rejected.
f) The Bidder is responsible for the correctness of his or her Demographic details given in the Bid-cum-
Application Form vis-à-vis those with his or her Depository Participant.
g) Equity Shares in electronic form can be traded only on the stock exchanges having electronic
connectivity with NSDL or CDSL. All the Stock Exchanges where the Equity Shares are proposed to
be listed have electronic connectivity with NSDL and CDSL.
h) The trading of the Equity Shares of the Company would be in dematerialized form only for all
investors in the demat segment of the respective Stock Exchanges.
Communications
All future communications in connection with Bids made in this Issue should be addressed to the
Registrar quoting the full name of the sole or First Bidder, Bid cum Application Form number, Bidders
227
SABARI INN LIMITED
Depository Account Details, number of Equity Shares applied for, date of Bid form, name and address of
the member of the Syndicate or the Designated Branch of the SCSBs where the Bid was submitted and
cheque or draft number and issuing bank thereof or with respect to ASBA Bids, bank account number in
which the amount equivalent to the Bid Amount was blocked.
Bidders can contact the Compliance Officer or the Registrar in case of any pre-Issue or post-Issue
related problems such as non-receipt of letters of Allotment, credit of Allotted shares in the respective
beneficiary accounts, refund orders etc. In case of ASBA Bids submitted to the Designated Branches of
the SCSBs, the Bidders can contact the Designated Branches of the SCSBs.
PAYMENT OF REFUND
Applicants should note that on the basis of name of the Applicant, Depository Participant’s name,
Depository Participant-Identification number and Beneficiary Account Number provided by them in the
Application Form, the Registrar to the Issue will obtain from the Depository the applicants bank account
details including nine digit MICR code. Hence, Applicants are advised to immediately update their bank
account details as appearing on the records of the depository participant. Please note that failure to do so
could result in delays in credit of refunds to applicants at his/her sole risk and neither the Book Running
Lead Manager to the Issue nor the Bank shall have any responsibility and undertake any liability for the
same.
Mode of making refunds for Bidders other than ASBA Bidders
The payment of refund, if any, would be done through various modes in the following order of
preference:
I. NECS - Payment of refund would be done through NECS for applicants having an account at any of
the 68 centres notified by SEBI, where clearing houses for ECS are managed by the RBI. This mode of
payment of refunds would be subject to availability of complete bank account details including the
nine-digit MICR code as appearing on a cheque leaf from the Depository. The payment of refund
through NECS is mandatory for applicants having a bank account at any of the sixty eight (68)
centres notified by SEBI, except where the applicant is otherwise disclosed as eligible to receive
refunds through direct credit or RTGS.
II. Direct Credit – Applicants having bank accounts with the Refund Banker(s), as mentioned in the bid
cum Application Form, shall be eligible to receive refunds through direct credit. Charges, if any,
levied by the Refund Bank(s) for the same would be borne by the Bank.
III. RTGS – Applicants having a bank account at any of the above mentioned fifteen centers and whose
refund amount exceeds Rs. 1 million, have the option to receive refund through RTGS. Such eligible
applicants who indicate their preference to receive refund through RTGS are required to provide the
IFSC code in the Bid-cum-application Form. In the event the same is not provided, refund shall be
made through ECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the
Bank. Charges, if any, levied by the applicant’s bank receiving the credit would be borne by the
applicant.
IV. NEFT (National Electronic Fund Transfer) – Payment of refund shall be undertaken through NEFT
wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can
be linked to a MICR, if any, available to that particular bank branch. IFSC Code will be obtained from
the website of RBI as on date immediately prior to the date of payment of refund, duly mapped with
228
SABARI INN LIMITED
MICR numbers. Whenever the applicants have registered their nine digit MICR number and their
bank account number while opening and operating the demat account, the same will be duly mapped
with the IFSC Code of that particular bank branch and the payment of refund will be made to the
applicants through this method. The process flow in respect of refunds by way of NEFT is at an
evolving stage and hence use of NEFT is subject to operational feasibility, cost and process efficiency.
V. Refund Orders - For all other applicants, including those who have not updated their bank
particulars with the MICR code, the refund orders will be dispatched “Under Certificate of Posting”
for value upto Rs. 1,500 and through Speed Post/Registered Post for refund orders of ` 1500 and
above. Such refunds will be made by cheques, pay orders or demand drafts drawn on the Escrow
Collection Banks and payable at par at places where Bids are received. Bank charges, if any, for
cashing such cheques, pay orders or demand drafts at other centers will be payable by the Bidders.
Please note that only applicants having a bank account at any of the centres where clearing houses for
NECS are managed by the RBI are eligible to receive refunds through the modes detailed in 1, 2, 3 & 4
Herein above. For all the other applicants, including applicants who have not updated their bank
particulars along with the nine digit MICR code, the refund orders would be dispatched “Under
Certificate of Posting” for refund orders of value upto ` 1,500 and through Speed Post / Registered
Post for refund orders of ` 1,500 and above.
Mode of making refunds for ASBA Bidders
In case of ASBA Bidders, the Registrar shall instruct the relevant SCSB to unblock the funds in the
relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum Application
Forms for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within ten (10) working
days of the Bid/Issue Closing Date.
DISPOSAL OF APPLICATIONS AND APPLICATION MONEYS AND INTEREST IN CASE OF

DELAY
The Company shall ensure dispatch of Allotment advice, refund orders (except for Bidders who receive
refunds through electronic transfer of funds) or instructions to Self Certified Syndicate Banks by the
Registrar to the Issue, in Application Supported by Blocked Amount process and give benefit to the
beneficiary account with Depository Participants and submit the documents pertaining to the
Allotment to the Stock Exchanges within 15 working days of the Bid/ Issue Closing Date.
In case of applicants who receive refunds through ECS, direct credit, RTGS or through unblocking the
relevant bank accounts, the refund instructions will be given to the clearing system within 15 days from
the Bid/ Issue Closing Date. A suitable communication shall be sent to the bidders receiving refunds
through this mode within 15 days of Bid/ Closing Date, giving details of the bank where refunds shall be
credited along with amount and expected date of electronic credit of refund.
The Company shall use best efforts to ensure that all steps for completion of the necessary formalities for
listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to
be listed are taken within seven working days of Allotment.
In accordance with the requirements of the Stock Exchanges and the SEBI Regulations, the Company
further undertakes that:
229
SABARI INN LIMITED
Ø Allotment of Equity Shares shall be made only in DEMATERIALIZED form within 15 (fifteen)
working days of the Bid/Issue Closing Date;
Ø Dispatch of refund orders or in case where the refund or portion thereof is made in electronic
manner, the refund instructions are given to the clearing system within 15 (fifteen) working days of
the Bid/Issue Closing Date would be ensured; and
Ø The Company shall pay interest at 15% (fifteen) per annum for any delay beyond the 15 (fifteen) day
time period as mentioned above, if Allotment is not made and refund orders are not dispatched or if,
in a case where the refund or portion thereof is made in electronic manner, the refund instructions
have not been given to the clearing system in the disclosed manner and/ or demat credits are not
made to investors within the 15 (fifteen) days time prescribed above as per the guidelines issued by
the Government of India, Ministry of Finance pursuant to their letter No. F/8/S/79 dated July 31,
1983, as amended by their letter no. F/14/SE/85 dated September 27, 1985, addressed to the stock
exchanges, and as further modified by SEBI’s Clarification XXI dated October 27, 1997, with respect to
the SEBI Guidelines.
IMPERSONATION
Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of
the Companies Act, which is reproduced below:
“Any person who:
(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares
therein, or person in a fictitious name, shall be punishable with imprisonment for a term which may
extend to five years.”
(b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other
person in a fictitious name, shall be punishable with imprisonment for a term which may extend to
five years.”
Interest on refund of excess Bid Amount
The Company shall pay interest at the rate of 15% per annum on the excess Bid Amount received if
refund orders /instruction to Self Certified Syndicate Banks by the Registrar are not dispatched within 15
working days from the Bid/Issue Closing Date.
Interest in case of delay in dispatch of Allotment Letters or Refund Orders/instruction to SCSB by

the Registrar to the Issue
Allotment of Equity Shares in the Issue, including the credit of Allotted Equity Shares to the beneficiary
accounts of the Depository Participants, shall be made not later than ten Working Days of the Bid
Closing Date. Our Company further agrees that it shall pay interest at the rate of 15% p.a. if the
allotment letters or refund orders have not been dispatched to the Bidders or if, in a case where the
refund or portion thereof is made in electronic manner, the refund instructions have not been given in
the disclosed manner within eight days from the day the Company becomes liable to repay (i.e. 15 Days
after the Bid Closing Date or the date of refusal by the Stock Exchange(s), whichever is earlier). If such
money is not repaid within eight days from the day the Company becomes liable to repay it, the
Company and every officer in default shall, on and from expiry of eight days, be liable to repay the
money with interest as prescribed under Section 73 of the Companies Act.
230
SABARI INN LIMITED
Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by our
Company as a Refund Bank and payable at par at places where Bids are received. Bank charges, if any,
for encashing such cheques, pay orders or demand drafts at other centres will be payable by the
Bidders.
BASIS OF ALLOTMENT
A. For Retail Individual Bidders
Ø Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped
together to determine the total demand under this category. The Allotment to all the successful
Retail Individual Bidders will be made at the Issue Price.
Ø The Net Issue size less Allotment to Non-Institutional and QIB Bidders shall be available for
Allotment to Retail Individual Bidders who have bid in the Issue at a price that is equal to or greater
than the Issue Price.
Ø If the aggregate demand in this category is less than or equal to [●] Equity Shares at or above the
Issue Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid
Bids.
Ø If the aggregate demand in this category is greater than [●] Equity Shares at or above the Issue
Price, the Allotment shall be made on a proportionate basis up to a minimum of [●] Equity Shares.
For the method of proportionate basis of Allotment, refer below.
B. For Non-Institutional Bidders
Ø Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together
to determine the total demand under this category. The Allotment to all successful Non-
Institutional Bidders will be made at the Issue Price.
Ø The Net Issue size less Allotment to QIBs and Retail Portion shall be available for Allotment to
Non-Institutional Bidders who have bid in the Issue at a price that is equal to or greater than the
Issue Price.
Ø If the aggregate demand in this category is less than or equal to [●]Equity Shares at or above the
Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand.
Ø In case the aggregate demand in this category is greater than [●] Equity Shares at or above the Issue
Price, Allotment shall be made on a proportionate basis up to a minimum of [●] Equity Shares. For
the method of proportionate basis of allotment, refer below.
C. For QIB Bidders
Ø Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to
determine the total demand under this portion. The Allotment to all the QIB Bidders will be made
at the Issue Price.
Ø The QIB Portion shall be available for Allotment to QIB Bidders who have bid in the Issue at a price
that is equal to or greater than the Issue Price.
Ø Allotment shall be undertaken in the following manner:
231
SABARI INN LIMITED
(a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion shall be
determined as follows:
(i) In the event that Mutual Fund Bids exceeds 5% of the QIB Portion, allocation to
Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion.
(ii) In the event that the aggregate demand from Mutual Funds is less than 5% of the
QIB Portion, then all Mutual Funds shall get full Allotment to the extent of valid bids
received above the Issue Price.
(iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds shall
be available to all QIB Bidders as set out in (b) below;
(b) In the second instance, Allotment to all QIBs shall be determined as follows:
(i) In the event that the oversubscription in the QIB Portion, all QIB Bidders who have
submitted Bids above the Issue Price shall be Allotted Equity Shares on a proportionate
basis for upto 95% of the QIB Portion.
(ii) Mutual Funds, who have received allocation as per (a) above, for less than the number of
Equity Shares Bid for by them, are eligible to receive Equity Shares on a proportionate
basis along with other QIB Bidders.
(iii) Under-subscription below 5% of the QIB Portion, if any, from Mutual Funds, would be
included for allocation to the remaining QIB Bidders on a proportionate basis.
Ø The aggregate Allotment to QIB Bidders shall be upto [●] Equity Shares.
D. Employee Reservation Portion
Ø Only Eligible Employees are eligible to apply under the Employee Reservation Portion
Ø Bids received from the Employees at or above the Issue Price shall be grouped together to
determine the total demand under this category. The allocation to all the successful Employees will
be made at the Issue Price.
Ø If the aggregate demand in this category is less than or equal to [●] Equity Shares at or above the
Issue Price, full allocation shall be made to the Employees to the extent of their demand.
Ø If the aggregate demand in this category is greater than [●] Equity Shares at or above the Issue
Price, the allocation shall be made on a proportionate basis up to a minimum of [●] Equity Shares
up to a minimum of [●] Equity Shares and in multiples of [●] Equity Shares thereafter. Only
Employees (as defined above) are eligible to apply under Employee Reservation Portion. For the
method of proportionate allocation, refer below.
E. For Anchor Investor Portion
Ø Allocation of Equity Shares to Anchor Investors at the Anchor Investor Issue Price will be at the
discretion of our Company, in consultation with the BRLMs, subject to compliance with the
following requirements:
a) not more than 30% of the QIB Portion will be allocated to Anchor Investors;
b) one-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,
subject to valid Bids being received from domestic Mutual Funds at or above the price at
which allocation is being done to other Anchor Investors;
232
SABARI INN LIMITED
c) allocation to Anchor Investors shall be on a discretionary basis and subject to a minimum

number of two Anchor Investors for allocation upto Rs. 2,500 million and minimum
number of five Anchor Investors for allocation more than Rs. 2,500 million.
Ø The number of Equity Shares Allotted to Anchor Investors and the Anchor Investor Issue Price,
shall be made available in the public domain by the BRLM and the Co-BRLM before the Bid/
Issue Opening Date by intimating the same to the Stock Exchanges.
Under-subscription, if any, in any category would be met with spill-over from other categories at the sole
discretion of company, in consultation with the BRLM.
Procedure and Time of Schedule for Allotment and Demat Credit of Equity
The Issue will be conducted through a "100% book building process" pursuant to which the members of
the Syndicate or SCSBs will accept bids for the Equity Shares during the Bidding/Issue Period.
Following the expiration of the Bidding/Issue Period, The Company and the Selling Shareholders, in
consultation with the BRLM will determine the Issue Price, and, in consultation with the BRLM the
basis of allocation and entitlement to Allotment based on the bids received and subject to confirmation
by the BSE. The SEBI (ICDR) Regulations require The Company to complete the Allotment to successful
Bidders within ten (10) working days of the expiration of the Bidding / Issue period. The equity shares
will be then be credited and Allotted to the investors’ Demat Accounts maintained with the relevant
depository participant. Upon approval by the Stock Exchanges, the Equity Shares will be listed and
trading will commence.
Method of Proportionate Basis of Allotment in the Issue
In the event the Issue is over-subscribed, the basis of Allotment shall be finalized by the Company, The
Selling Shareholders in consultation with the Designated Stock Exchange. The Executive Director (or any
other senior official nominated by them) of the Designated Stock Exchange along with the BRLM and the
Registrar to the Issue shall be responsible for ensuring that basis of allotment is finalized in a fair and
proper manner.
The Allotment shall be made in marketable lots, on a proportionate basis as explained below:
(a) Bidders will be categorized according to the number of Equity Shares applied for by them.
(b) The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a
proportionate basis, which is the total number of Equity Shares applied for in that category (number
of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the
inverse of the over-subscription ratio.
(c) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate
basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied
by the inverse of the over-subscription ratio.
(d) In all Bids where the proportionate Allotment is less than [●] Equity Shares per Bidder, the Allotment
shall be made as follows:
Ø The successful Bidders out of the total Bidders for a category shall be determined by draw of
lots in a manner such that the total number of Equity Shares Allotted in that portion is equal to
the number of Equity Shares calculated in accordance with (b) above; and
Ø Each successful Bidder shall be allotted a minimum of [●] Equity Shares.
233
SABARI INN LIMITED
(e) If the proportionate Allotment to a Bidder is a number that is more than [●] but is not a multiple of
one (which is the market lot), the decimal would be rounded off to the higher whole number if that
decimal is 0.5 or higher. If that number is lower than 0.5, it would be rounded off to the
lower whole number. Allotment to all Bidders in such categories would be arrived at after such
rounding off.
(f) If the Equity Shares allocated on a proportionate basis to any category are more than the
Equity Shares Allotted to the Bidders in that category, the remaining Equity Shares available
for Allotment shall be first adjusted against any other category, where the Allotted shares are not
sufficient for proportionate Allotment to the successful Bidders in that category. The balance Equity
Shares, if any, remaining after such adjustment will be added to the category comprising Bidders
applying for minimum number of Equity Shares.
(g) Subject to valid Bids being received, allocation of Equity Shares to Anchor Investors shall be at the
sole discretion of The Company, in consultation with the Selling Shareholders and BRLM
Illustration of Allotment to QIBs and Mutual Funds (“MF”)
A. Issue Details
Sr. Particulars Issue details

No.
1. Issue size 200 million equity shares
2. Allocation to QIB* 120 million equity shares
3. Anchor Investor Portion 36 million equity shares
4. Portion available to QIBs other than Anchor 84 million equity shares
Investors [(2) minus (3)]
Of which:
a. Allocation to MF (5%) 4.20 million equity shares
b. Balance for all QIBs including MFs 79.80 million equity shares
5. No. of QIB applicants 10
6. No. of shares applied for 500 million equity shares
B. Details of QIB Bids
Sr. Type of QIB bidders # No. of shares bid for (in million)
No.
1. A1 50
2. A2 20
3. A3 130
4. A4 50
5. A5 50
6. MF 1 40
7. MF 2 40
8. MF 3 80
9. MF 4 20
10. MF 5 20
Total 500
# A1-A5: (QIB bidders other than MFs), MF1-MF5 (QIB bidders which are Mutual Funds)
234
SABARI INN LIMITED
C. Details of Allotment to QIB Bidders/ Applicants

(Number of equity shares in million)
Type Shares Allocation of 35 Allocation of Aggregate
of bid for million balance 665 allocation to
QIB Equity Shares to MF million Equity MFs
bidders proportionately Shares to QIBs
(please see proportionately
note 2 below) (please see
note 4 below)
(I) (II) (III) (IV) (V)

A1 50 0 9.60 0
A2 20 0 3.84 0
A3 130 0 24.95 0
A4 50 0 9.60 0
A5 50 0 9.60 0
MF 1 40 1 7.48 8.48
MF 2 40 1 7.48 8.48
MF 3 80 2 14.97 16.97
MF 4 20 0.50 3.74 4.24
MF 5 20 0.50 3.74 4.24
500 5 95 42.42
Please note:
1. The illustration presumes compliance with the requirements specified in this Draft Red Herring
Prospectus in “Issue Structure” beginning on page 197.
2. Out of 100 million equity shares allocated to QIBs, 5 million (i.e. 5%) will be allocated on
proportionate basis among five Mutual Fund applicants who applied for 200 million equity shares
in QIB category.
3. The balance 95 million equity shares (i.e. 100 - 5 (available for MFs)) will be allocated on
proportionate basis among 10 QIB applicants who applied for 500 million equity shares (including
five MF applicants who applied for 200 million equity shares).
4. The figures in the fourth column entitled ―Allocation of balance 95 million equity shares to QIBs
proportionately‖ in the above illustration are arrived as under:
§ For QIBs other than Mutual Funds (A1 to A5) = No. of equity shares bid for (i.e. in column
II) X 95 / 495
§ For Mutual Funds (MF1 to MF5) = [(No. of shares bid for (i.e. in column II of the table
above) less equity shares allotted ( i.e., column III of the table above)] X 95 / 495
§ The numerator and denominator for arriving at allocation of 95 million equity shares to the
10 QIBs are reduced by 5 million equity shares, which have already been allotted to Mutual
Funds in the manner specified in column III of the table above.
Letters of Allotment or Refund Orders or instructions to the SCSBs
Bidders residing at the centres where clearing houses are managed by the RBI will get refunds through
NECS only, except where the Bidder is otherwise disclosed as eligible to get refunds through direct credit
235
SABARI INN LIMITED
and RTGS. The Company shall ensure dispatch of refund orders, if any, of value up to ` 1,500, under
certificate of posting, and shall dispatch refund orders above ` 1,500, if any, by registered or speed post
at the sole or first Bidder’s sole risk within 10 Working Days of the Bid Closing Date. Applicants to whom
refunds are made through electronic transfer of funds will be sent a letter through ordinary post,
intimating them of the mode of credit of refund within 10 Working Days of the Bid Closing Date.
In case of ASBA Bidders, the Registrar to the Issue shall instruct the relevant SCSB to unblock the funds
in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum
Application Forms for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within eight
Working Days of the Bid Closing Date, which shall be completed within one Working Day after the
receipt of such instruction from the Registrar to the Issue.
Signing of Underwriting Agreement and Filing with the Designated Stock Exchange
(a) We, the BRLM, Co-BRLM and the Syndicate Members shall enter into an Underwriting Agreement
on finalization of the Issue Price and allocation/ Allotment to the Bidders.
(b) After signing the Underwriting Agreement, we would update and file the updated Red Herring
Prospectus with the Designated Stock Exchange, which then would be termed ‘Prospectus’. The
Prospectus would have details of the Issue Price, Issue size, underwriting arrangements and would
be complete in all material respects.
Filing of the Prospectus with the Registrar of Companies
We will file a copy of the Prospectus with the Registrar of Companies in terms of Section 56, Section 60
and Section 60B of the Companies Act.
UNDERTAKINGS BY THE COMPANY AND THE SELLING SHAREHOLDERS
The Company undertakes that:
· The complaints received in respect of the captioned Public Issue shall be attended to by the Company
expeditiously and satisfactorily
· All steps for completion of the necessary formalities for listing and commencement of trading at all
stock exchanges where the securities are to be listed are taken within seven working days of
finalisation of basis of allotment
· The funds required for making refund to unsuccessful applicants as per the modes disclosed shall be
made available to the registrar to the captioned Public Issue.
· Where refunds are made through electronic transfer of funds, a suitable communication shall be sent
to the applicant within 15 days of closure of the issue, giving details of the bank where refund shall
be credited along with amount and expected date of electronic credit of refund.
· The promoters’ contribution in full, wherever required, shall be brought in advance before the Issue
opens for public subscription and the balance, if any, shall be brought in pro-rata basis before the
calls are made on public.
· The certificates of the shares/ refund orders to the Non-Resident Indians shall be dispatched within
the specified time.
· No further issue of securities shall be made till the shares offered through the prospectus are listed or
till the application moneys are refunded on account of non-listing, under-subscription, etc
· That at any given time there shall be only one denomination for the shares of the company,
· That the company shall comply with such disclosure and accounting norms specified by the Board
236
SABARI INN LIMITED
(SEBI) from time to time and

· That the adequate arrangements shall be made to collect all Applications Supported by Blocked
Amount (ASBA) and to consider them similar to non-ASBA applications while finalizing the basis of
allotment.
The Selling Shareholders, severally, undertake that:
· That the Equity Shares being sold pursuant to the Issue, have been held by them for a period of more
than one year;
· The Equity Shares being sold pursuant to the Offer for Sale in the Issue are free and clear of any liens
or encumbrances. Further the selling shareholders will extend full cooperation and required
assistance to ensure that the shares are transferred to eligible investors within the specified time.
· The Selling Shareholders have authorized the Compliance Officer and the Registrar to the Issue to
redress complaints, if any, of the investors;
· That the Selling Shareholders shall not have recourse to the proceeds of the Issue until approval for
trading of the Equity Shares from all Stock Exchanges where listing is sought has been received; and
· No further offer of Equity Shares shall be made till the Equity Shares offered through the Red
Herring Prospectus are listed or until the Bid monies are refunded on account of non-listing, under-
subscription etc.
UTILISATION OF ISSUE PROCEEDS
The Board of Directors certifies that:
(a) all monies received out of the issue to the public shall be transferred to a separate bank account other
than the bank account referred to in sub-section (3) of Section 73 of the Companies Act, 1956.
(b) details of all monies utilised out of the issue referred to in sub-item (a) shall be disclosed under an
appropriate separate head in the balance sheet of the Company indicating the purpose for which such
monies had been utilised, and
(c) details of all unutilised monies out of the issue, if any, referred to in sub-item (a) shall be disclosed
under an appropriate separate head in the balance sheet of the Company indicating the form in
which such unutilised monies have been invested.
(d) all monies received pursuant to the Offer for Sale in the Issue shall be transferred to selling
shareholders post approval for trading of the Equity Shares from all Stock Exchanges where listing is
sought has been received.
The Company shall not have recourse to the Issue proceeds until the approval for trading of the Equity
Shares from all the Stock Exchanges where listing is sought has been received.
The Board of Directors also certifies that:
· the utilization of monies received under the Employee Reservation shall be disclosed under an
appropriate head in the balance sheet of the issuer company, indicating the purpose for which such
monies have been utilized and,
· the details of all monies out of the funds received under Employee Reservation shall be disclosed
under a separate head in the balance sheet of the issuer company, indicating the form in which such
237
SABARI INN LIMITED
monies have been invested.
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
Foreign investment in Indian securities is regulated through the Industrial Policy of the Government of
India notified through press notes and press releases issued from time to time and FEMA and circulars
and notifications issued there under. While the policy of the Government prescribes the limits and the
conditions subject to which foreign investment can be made in different sectors of the Indian economy,
FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy
of the Government, unless specifically restricted, foreign investment is freely permitted in all sectors of
Indian economy up to any extent and without any prior approvals, but the foreign investor is required to
follow certain prescribed procedures and reporting requirements for making such investment.
By way of Circular No. 53 dated December 17, 2003, the RBI has permitted FIIs to subscribe to shares of
an Indian company in a public offer without prior RBI approval, so long as the price of equity shares to
be issued is not less than the price at which equity shares are issued to residents. In the Company, as of
date the aggregate FII holding cannot exceed 24% of the total post-Issue share capital.
Subscription by NRIs/ FIIs
It is to be distinctly understood that there is no reservation for Non-Residents, NRIs and FIIs and all Non-
Resident, NRI and FII applicants will be treated on the same basis as other categories for the purpose of
allotment.
As per the RBI regulations, OCBs cannot participate in this Issue.
The Equity Shares have not been and will not be registered under the Securities Act or any state securities
laws in the United States and may not be offered or sold within the United States or to, or for the account
or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act), except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Accordingly, the Equity Shares are only being offered and sold (i) in the United States to “qualified
institutional buyers”, as defined in Rule 144A of the Securities Act, and (ii) outside the United States to
certain persons in offshore transactions in compliance with Regulation S under the Securities Act and the
applicable laws of the jurisdiction where those offers and sales occur.
As per the current regulations, the following restrictions are applicable for investments by FIIs:
No single FII can hold more than 10% of the post-Issue paid-up capital of the Company. In respect of an
FII investing in The Equity Shares on behalf of its sub-accounts, the investment on behalf of each
subaccount shall not exceed 10% of the total issued capital or 5% of total issued capital of the Company
incase such sub account is a foreign corporate or an individual. The aggregate FII holding should not
exceed 24% of the total issued capital of the company.
The above information is given for the benefit of the Bidders. The Company and the BRLM are not liable
for any amendments or modification or changes in applicable laws or regulations, which may happen
after the date of this Red Herring Prospectus. Bidders are advised to make their independent
investigations and ensure that the number of Equity Shares bid for do not exceed the applicable limits
under laws or regulations.
238
SABARI INN LIMITED
SECTION VII
MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF THE COMPANY
Pursuant to Schedule II of the Companies Act and the SEBI Regulations, the main provisions of the
Articles of Association relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and
transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below.
Please note that each provision herein below is numbered as per the corresponding article number in the
Articles of Association and capitalized/defined terms herein have the same meaning given to them in the
Articles of Association.
Table A
Article 4
The regulation in Table 'A' in the Schedule I to the Act applicable to the Public Limited Company, shall
apply to the company except as herein otherwise provided in these articles..
Shares at the Disposal of the Directors
Article 5
Subject to the provisions of Sec.81 of the Act and these Articles, the shares in the capital of the company
for the time being shall be under the control of the Directors who may issue, allot or otherwise dispose of
the same or any of them to such persons in such proportion and on such terms and conditions and either
at a premium or at par or (subject to the compliance with the provision of Sec.79 of the Act) at a discount
and at such time as they may from time to time think fit and with the sanction of the company in the
General Meeting to give to any person or persons the option or right to call for any shares either at par or
premium during such time and for such consideration as the Directors think fit, and such shares may be
issued and allotted on payment in full or part of any property sold and transferred or for any services
rendered to the company in the conduct of its business and any shares which may so be allotted may be
issued as fully paid up shares and if so issued, shall be deemed to be fully paid shares. Provided that
option or right to call of shares shall not be given to any person or persons without the sanction of the
company in General Meeting.
Share/Debenture Certificate
Article 37-42
37. Every Member whose name is entered as Member in the Register of Members shall be entitled to
receive Share Certificate within three months after the date of allotment, unless the conditions of issue
thereof otherwise provide.
38. Every Share certificate shall be issued under the seal of the company and shall specify the number and
distinctive numbers, the amount paid up thereon, the name of the holder thereof and be in such form as
may be prescribed or approved by the Board and shall be under the printed or physical signatures of at
least two Directors and Secretary. The endorsement on transfer or transmission of shares shall be
authorized under the signature of Secretary or some other officer of the company authorized by the
Board for this purpose.
239
SABARI INN LIMITED
39. If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back for
endorsement of transfer, then upon the production and surrender thereof to the company, a new
certificate may be issued in lieu thereof.
40. If any share certificate is lost or destroyed then upon proof thereof to the satisfaction of the company
and the execution of such indemnity as the company may deem adequate, a new certificate may be issued
in lieu of the certificate lost or destroyed.
41. Transfer, Transmission, sub-division, consolidation or renewal of shares shall be attended to

expeditiously and the share certificate shall be ready for delivery within one month of the application
thereof.
42. The provisions of these articles on certificates shall mutatis mutandis apply to Debentures and other
Securities issued by the company.
Transfer and Transmission of Shares/Securities
Article 43-52
43. The Instrument of Transfer shall be in writing and all provisions of Section 108 of the Act and any
statutory modification thereof for the time being shall be duly complied with in respect of all transfer of
shares and registration thereof. Every instrument of transfer shall be deposited at the office of the
company for registration, accompanied by the documents and evidence as required under these
regulations and the Act.
44. The registration of Transfer of Shares or other Securities may be closed or suspended during such time
and for such periods not exceeding in the aggregate forty five days in each year, but not exceeding thirty
days at any one time as the Board may determine, from time to time, in accordance with Sec.154 of the
Act.
45. In case of the death of a member, the survivor, where the deceased was a joint holder and his legal
representative, executor or administrator where he was a sole holder, shall be the only persons
recognized by the company as having any title to his interest in the shares; but nothing contained herein
shall release the estate of the deceased joint holder from any liability in respect of any share which had
been jointly held by him with other persons. The Board may require any persons becoming entitled to
shares in consequence of the death of any member to obtain a Grant of Probate or Letter of
Administration or other legal representation, as the case may be, from a competent court. Provided it
shall be lawful for the Board in its absolute discretions to dispense with the production of Probate or
Letter of Administration or such other Legal representation upon such terms as to indemnify or
otherwise the Board may think fit, without in any case being bound to do so. The powers and discretions
of the Board under these regulations may be delegated and exercised by a committee of Directors or an
officer of the company duly authorized in this regard.
46. Any committee or Guardian of a person of unsound mind or minor or any person becoming entitled
to the transfer of a share in consequence of the death or bankruptcy or insolvency of any member or by
any other lawful means, upon producing such evidence that he sustains the character in respect of which
he proposes to act under these regulations or of his title as the Board may deem fit or sufficient, may
subject to the right of the Board to decline registration under these regulations, elect either:
240
SABARI INN LIMITED
(a) To be registered himself as a holder of the share or

(b) To make such transfer of shares as the deceased or the insolvent member could have made.
47. The Board may subject to the provisions of the Act, retain the dividends payable upon a share to
which any person becomes entitled under these regulations, until such person or his transferee shall
become a member in respect of such shares.
Board of Directors may refuse to register transfer
48. Every Transmission of share shall be verified in such manner as the Board may require and the
company may refuse to register any such transmission until the same be so verified or until or unless an
indemnity be given to the company with regard to such registration, which the Board at its discretion
shall consider sufficient, provided nevertheless there shall not be any obligation on the company or the
Board to accept any indemnity.
49. A person so becoming entitled to a share under this Transmission Article by reason of death, lunacy,
bankruptcy, or insolvency of the holder thereof or by any other lawful means shall be entitled dividends
and other rights and privileges as if he were the registered holder except that no person shall have
membership rights in relation to General meetings until he is registered as a member.
50. Joint holders: Where two or more persons are registered as the holder of any share, they shall be
deemed to be the joint holders with benefits of survivorship, but so that:
(a) The company shall be entitled to decline to register more than four persons as joint owners of any
share, and
(b) The joint holders of any share shall be liable severally as well as jointly for and in respect of all calls or
installments and other payments which ought to be made in respect of such share.
(c) Any one of the joint holders of a share may give effectual receipts for any dividends or other moneys
payable in respect of such share or bonus shares
(d) Only the person whose name stands first in the Register of members as one of the joint holders of any
share shall unless otherwise directed in writing by all joint holders and confirmed in writing by the
company be entitled to delivery of the certificate relating to such share or to receive notices (which
expression shall be deemed to include all documents) from the company and any notice given to or
served on such persons shall be deemed as a notice or service to all the joint holders.
(e) Subject to the provisions contained in these regulations, the person first named in the register as one of
the joint holders shall be deemed as a sole holder thereof for all the matters connected with the
company.
(f) Any one of the joint holders of a share may vote at any meeting personally or by proxy as if he were a
sole holder thereof provided that if more than one joint holder of the share is present personally or by
proxy then such of them whose name stands higher in the register in respect of such share shall alone
be entitled to vote in respect thereof.
51. The provisions of these regulations shall mutatis mutandis apply to the transfer or transmission by
operation of law of debentures or other securities of the company.
241
SABARI INN LIMITED
No fee on Transfer or Transmission
52. No fee shall be charged for registration of transfer, transmission, Probate, succession certificate and
Letters of Administration, Certificate of Death or Marriage, Power of Attorney or other similar document.
Advance Payment of Calls
Article 33-34
33. The Board may, if it thinks fit, agree to and receive from any member willing to advance the same, all
or any part of the amounts of his respective shares beyond the sums actually called up and upon the
moneys so paid in advance, or upon so much thereof, from time to time and at any time thereafter as –
exceeds the amount of the calls then made upon and due in respect of the shares on account of which
such advances are made, the Board may pay or allow interest, at such rate as the member paying the sum
in advance and the Board agree upon, the Board may agree to repay at any time an amount so advanced
or may at any time repay the same upon giving to the member three months’ notice in writing, provided
that moneys paid in advance of calls on any shares may carry interest but shall not confer a right to
dividend or to participate in profits.
34. No member paying any such sum in advance, shall be entitled to any voting right in respect of the
moneys so paid by him until the same would, but for such payment, become presently payable.
Share Capital: Increase, Reduction and Alteration
Increase in Share Capital
Articles 9a, 9b, 9c
(9)
(a) The Company in general meeting may, by ordinary resolution from time to time, increases the
Capital by the creation of new shares and divide the same into different classes and with such
preferential rights as to dividend and redemption of capital and with or without voting rights.
(b) The new shares may be issued upon such terms and conditions and with such rights and privileges
annexed thereto as the general meeting resolution creating the same shall direct, and if no such
direction is given, as the Directors shall determine, and in particular such shares may be issued with
a preferential or qualified right to dividends and in the distribution of the assets of the company and
with a special or without voting right.
(c) The company may also issue Sweat Equity Shares by a special resolution passed in the general
meeting under Sec.79A of the Act and in accordance with the guidelines issued thereat.
Reduction in Share Capital
Article 10a, 10b, 10c
10. The Company may by special resolution at any general meeting, reduce its share capital in accordance
with the provisions of Sec.100 to 105 of the Act and may:
242
SABARI INN LIMITED
(a) Extinguish or reduce the liability on any of its shares in respect of share capital not paid up;
(b) Either with or without extinguishing or reducing liability on any of its Shares, cancel any paid up
share capital which is lost or is unrepresented by available assets; or
(c) Either with or without extinguishing or reducing liability on any of its Shares, Pay off any paid up
share capital which is in excess of the wants of the company
Alteration of Share Capital
Articles 11(a, b, c, d, e)
11 The Company may by an ordinary resolution passed at any general meeting, in accordance with the
provisions contained under Sec.94 of the Act, can alter the conditions of its Memorandum by:
(a). increasing its share capital by such amount as it may deem fit by issue of new shares;
(b). consolidating and dividing all or any of its share capital into shares of a larger amount than its
existing shares;
(c). subdividing its shares or any of them into shares of smaller amount than is fixed by the
memorandum, so however, that in the sub-division the proportion between the amount paid and the
amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from
which the reduced share is derived;
(d). converting all or any of its fully paid up shares into stock and also for reconverting the stock into
fully paid up shares of any denomination;
(e). cancel the shares which have not been taken and diminish the amount of its share capital by the
amount of shares so cancelled.
Further Issue of equity Shares
Article 12
12. The Company may at any time at a General Meeting make further issue of share capital, by an
appropriate resolution under Sec. 189 of the Act and in accordance with Sec.81 of the Act, increase its
subscribed capital by allotment of further shares by way of Public offer of shares, Rights issue to the
existing shareholders and/or Private placement of Shares or preferential allotment of shares to financial
institutions in India, foreign financial institutions, Venture Capital funds, corporate bodies, persons,
individuals or firms, against cash or for consideration received whether at par or at a premium and in
doing so, it shall also comply with other statutes including the SEBI Guidelines (as applicable) and shall
also take all other permissions and approvals, as may be necessary, from the Reserve Bank of India
and/or Government of India and such other authorities, as may be prescribed from time to time.
243
SABARI INN LIMITED
Forfeiture of Shares
Articles 27-32
27. If a Member fails to pay any call, or installment of a call, on the day appointed for the payment
thereof, the Board may, at any time thereafter during such time as any part of the call or installment
remains unpaid, serve a notice on him requiring payment of so much of call or installment amount due
thereon with interest in accordance with the provisions contained in Table A Regulations under Schedule
I to the Act, on “Forfeiture of Shares” and if the requirements there under are not complied with, the
shares in respect of which notice has been given shall be forfeited by a resolution of the Board.
28. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the
Board thinks fit.
29. At any time before the sale or disposal, the Board may cancel the forfeiture on such terms as it thinks
fit.
30. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited
shares, but shall not withstand the forfeiture, remain liable to pay to the company all moneys which at
the date of the forfeiture, were presently payable by him to the company
In respect of those forfeited shares.
31. The liability of such person shall cease if and when the company shall have received the payment in
full of all such moneys in respect of the shares.
32. A duly verified declaration in writing that the declarant is a Director or Manager or Secretary of the
Company and that the shares are forfeited on a date stated in the declaration, shall be conclusive
evidence of the facts therein stated against all persons claiming to be entitled to those shares.
Company’s Lien on Shares/Debentures
Articles 18-20
18. The Company shall have a first and paramount lien upon all the shares/debentures (other than fully
paid up shares/debentures) registered in the name of each member (whether solely or jointly with
others) for all moneys presently payable to the company. And such lien shall extend to all dividends and
bonuses from time to time declared in respect of such shares/debentures.
19. The Board may sell the shares in which it has lien, but no sale shall be made of shares until the sum in
respect of which such lien exists is presently payable and until a notice in writing of the intention to sell
those shares have been served on such member, the Executor or Administrator or other legal
representative as the case may be and default has been made by him or them in the payment of the
money called or payable at a fixed time in respect of such share for 30 days after the date of such notice.
20. Unless otherwise agreed the registration of a transfer of shares/debentures shall operate as a waiver
of the company’s lien if any on such shares and debentures. The directors may at any time declare any
shares/debentures wholly or in part to be exempt from the provisions of this clause
244
SABARI INN LIMITED
Dematerialization of Securities
Articles 110-118
110. In this Article:
(i)“Beneficial Owner” shall mean beneficial owner as defined in clause (a) of sub section (1) of Section 2 of
the Depositories Act, 1996.
(ii) “Depositories Act 1996” shall include any statutory modification or re-enactment thereof.
(iii)”Depository” shall mean a Depository as defined in clause (e) of sub-section (1) of Section 2 of the
Depository Act, 1996
(iv) “SEBI” means the Securities and Exchange Board of India established under Section 3 of the Securities
and Exchange Board of India Act, 1992
(v).“Security” means such security as may be specified by SEBI from time to time.
(vi)”Member” means members of the company holding a share or shares of any class and includes the
beneficial owner in the records of the Depository.
(vii) “The Register” means the Register of Members to be kept in pursuant to the Companies Act and
where shares are held in dematerialized form and it includes the Register of Beneficial owners
maintained by a Depository.
111. Notwithstanding anything contained in these regulations, the Company shall be entitled to
dematerialize its existing shares, debenture and other securities, rematerialize its shares,
debentures and other securities held in the Depositories and/or to offer its fresh shares, debentures
and other securities, in a dematerialized form pursuant to the Depositories Act, 1996 and the
Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996.
112. Every person subscribing to securities offered by the Company shall have the option to receive
security certificates or to hold the securities with a depository. Such a person who is the beneficial
owner of the securities can at any time opt out of a Depository, if permitted by the law, in respect of
any security in the manner provided by the Depositories Act, and the company shall, in the manner
and within the time prescribed, issue to the beneficial owner the required Certificate of Securities. If
a person opts to hold his security with depository, the company shall intimate such depository the
details of allotment of the security, and on receipt of the information, the depository shall enter in
its record the name of the allottee as the beneficial owner of the security.
113. All securities held by a depository shall be dematerialized and be in fungible form. Nothing
contained in Sections 153, 153A, 153B, 187B, 187C and 372A of the Companies Act, 1956 shall apply
to a depository in respect of the securities held by it on behalf of the beneficial owners.
114. Notwithstanding anything to the contrary contained in the Act or these Articles, a depository shall
be deemed to be the registered owner for the purposes of effecting transfer of ownership of security
on behalf of the beneficial owner.
115. Save as otherwise provided above, the depository as the registered owner of the securities shall not
have any voting rights or any other rights in respect of the securities held by it.
116. The beneficial owner of securities shall be entitled to all the rights and benefits and be subject to all
the liabilities in respect of his securities which are held by a depository.
245
SABARI INN LIMITED
117. Notwithstanding anything in the Act or these Articles to the contrary, where securities are held in a
depository, the records of the beneficial ownership may be served by such depository on the
company by means of electronic mode.
118. Notwithstanding anything contained in these Articles, every holder of shares in or debentures of the
company may at any time nominate in the manner prescribed under the Act, a person to whom his
shares in or debentures of the company shall vest in the event of his death. Such nomination and
right of nominee to be registered as holder of shares/debentures as the case may be or for transfer
of the shares/debentures as the case may be shall be governed by the provisions of Section 109A
and 109B and other applicable provisions of the Companies Act, 1956.
118A. nothing contained in Section 108 of the Act or these Articles shall apply to a transfer of
securities affected by transferor and transferee both of who are entered as beneficial owners in the
records of a depository.
118B. Nothing contained in the Act or these regulations, regarding the necessity of having
distinctive numbers for securities issued by the company shall apply to securities held in the
depository mode.
Borrowings by the Company
Article 122.46
122.46 The Shareholders agree that the financing requirements including working capital requirements of
the Company shall be met in the first instance by internal accruals and any external financing will be
availed of only in accordance with the Business Plan and the Annual Budget approved by the Investor. In
the event of any future borrowings, the Investor shall not be required to provide any
guarantees/collaterals, etc. The Investor and its nominees shall not be required to pledge their Shares or
provide any other support or a negative lien to any third party, including without limitation the lenders
of the Company. The Promoters shall provide all support including without limitation guarantees, pledge
of their Shares, etc as may be approved by the Investor in writing, in respect of the borrowings by the
Company.
General Meetings
Article 54-61
54. ANNUAL GENERAL MEETING: An annual general meeting may be called subject to section 166
read with Section 210 of the Act by giving not less than 21 days notice.
55. EXTRAORDIANRY GENERAL MEETING: Any other General Meeting shall be “Extraordinary
General Meeting” and shall be called and convened by the Board to transact special business by giving
not less than 21 days notice.
56. GENERAL MEETING AT SHORT NOTICE: Any General meeting may be called after giving
shorter notice than the notice required above if consent thereto is accorded, in the case of an Annual
General Meeting, by all members entitled to vote threat and in the case of any other meeting, by members
of the Company holding not less than 95% of that part of the paid up share capital which gives the right
to vote on the matters to be considered at the meeting.
246
SABARI INN LIMITED
57. QUORUM FOR GENERAL MEETINGS: Five members personally present shall be the
quorum for General Meetings as per Sec. 174 of the Act.
58. MEMBERS’ MEETINGS : The Board may whenever it thinks fit, and shall on the requisition of the
members in accordance with the provisions of Sec. 169 of the Act, proceed to call an Extraordinary
General Meeting of the Company. The requisitionists may in default of the Board convening the same,
convene the Extraordinary General Meeting as provided by Section 169 of the Act. Provided that unless
the Board shall refuse in writing to permit the requisitionists to hold the said meeting at the Office, it shall
be held at the Office.
59. CHAIRMAN OF GENERAL MEETINGS: The Chairman of the Board shall preside at all general
meetings of the shareholders. In the event of the chairman being absent or his chair being vacant or if he
fails to serve as the presiding officer at any such general meeting, the Directors present at such meeting
shall appoint one amongst themselves to preside over the meeting. If any Poll is demanded on the
election of a Chairman of General Meeting, it shall be taken immediately.
60. ADJOURNMENT OF GENERAL MEETINGS: The Chairman may, with the consent of the meeting
and shall, if so directed by the meeting, adjourn the same, from time to time, and from place to place, but
no such business shall be transacted at any adjourned meeting other than the business left unfinished at
the meeting from which the adjournment took place. If any poll is demanded for the adjournment of
General Meeting it shall be taken immediately.
61. Conduct of the General Meeting:
(A). Every question submitted to a meeting shall be decided, in the first instance unless a poll is
demanded, in accordance with Section 179 of the Act, by a show of hands.
(B). A declaration by the Chairman that a resolution has, on a show of hands, been carried or carried
unanimously or by a particular majority or lost and an entry to that effect in the minutes shall be
conclusive evidence of the fact without further proof.
(C). any business in the agenda other than that upon which a poll has been demanded may be proceeded
with pending the taking of a poll.
(D). Casting Vote of Chairman: In the case of an equality of votes at General Meetings whether on a show
of hands or on a poll, the Chairman shall have a second or casting vote.
(E). Votes:
On a show of hands, every member present in person and being a holder of equity share(s) shall have one
vote and every person present as a duly authorized representative of a body corporate holding share(s) in
the company shall have one vote. On a poll, the voting rights of a holder of Equity share(s) shall be as per
the provisions of Sec.87 of the Act.
(F). Representation of Body Corporate:
A company or a body corporate which is a member of the company may exercise all its rights and powers
through its duly authorized representative pursuant to Sec. 187 of the Act who may vote by proxy. The
said authorized representative shall be entitled to exercise the same rights and powers (including the
right to vote by proxy) on behalf of the company as if it were an individual Member.
247
SABARI INN LIMITED
Board of Directors
Articles 62-78
62.The Company shall have not less than THREE and not more than TWELVE Directors.
63. The First Directors of the Company shall be:
(1). K.R.V.Ramani
(2). Mrs. Aruna Ramani
64. The First directors of the company shall not retire by rotation. All other Directors shall be
Liable to retirement by rotation under Sec.256 of the Act.
65. The Directors need not hold any qualification shares in the company.
66. Additional Directors: Subject to Sections 260 to 262 of the Act the Board shall have Power to co-opt
one or more persons to be Directors but the total number Directors shall not exceed Twelve. The
Additional Directors shall hold office upto the next Annual General Meeting but shall be eligible for
appointment as Director at that meeting subject to the provisions of the act.
67. Casual Vacancy Directors: The Board will entitled to fill up any Casual vacancy arising from the
vacation of office of any Director in accordance with the provisions of Sec. 262 of the Act.
68. Alternate Director: The Board may appoint an Alternate Director to act for a Director during his
absence from the State in which meetings of the Board are ordinarily held in accordance with the
provisions of Sec.313 of the Act.
69. Nominee Directors : In the event of the Company obtaining financial assistance from Public financial
institutions, Venture Capital funds and other financing institutions (hereinafter in this article called
“institutions”) by way of loan, subscription to shares or debentures or other securities of the company,
providing any guarantee or underwriting of subscription of shares, Debentures or securities of the
Company, or by any other mode of financing to meet the requirements of the business of the company,
the Directors shall have the power to agree that such Institutions shall have the right to nominate by
notice in writing addressed to the company one Director, on the Board of Directors of the Company on
such conditions as may be mutually agreed upon between the Institutions and the Board. Any such
Director shall be a Non rotational Director and shall hold office at the pleasure of the Institutions
appointing him which may remove him at any time and appoint another person in his place.
70. Sitting fees: Each Director excluding Managing Director and Whole time Director, shall be paid for
every meeting of the Board or a committee thereof, sitting fee as may be determined by the Board or
company in a General Meeting, from time to time, within the limits as may be prescribed for payment of
the sitting fee by the Central Government. The Board may waive sitting fees payable to its Directors from
time to time and for such periods as it may determine by a resolution passed in their meeting.
71. Remuneration of Directors: Subject to the provisions of Sections 198 309, 310 and 311 and any other
applicable provisions of the Act, the Directors shall be paid such remuneration, whether in the form of
monthly payment or by a percentage of profits or otherwise, as the company in General Meeting may
from time to time determine and such remuneration shall be divided amongst the Directors in such
248
SABARI INN LIMITED
proportion and in such manner as the Board may from time to time determine and in default of such
determination, shall be divided among the Directors equally or if so determined paid on a monthly basis .
72. Extra Services of Directors

Subject to the provisions of Sections 198, 309 and 310 of the Act, the Directors shall be paid such further
remuneration, where a Director may be called upon to perform any extra services or special exertions or
efforts (including as a member of any committee of the Board) the Board may pay special remuneration
for such services by way of a fixed sum or by percentage of profits of otherwise and may allow such
Director at the cost and expenses of the company such facilities or amenities (viz., rent free House, free
medical aid, free conveyance etc.) as the Board may determine from time to time.
73. The office of a Director shall become vacant:
(i). on the happening of any of the events provided for in Sec.283 of the Act.
(ii). on contravention of the provisions of Sec.314 of the Act or any statutory
modifications thereof;
(iii). If a person is a Director of more than Fifteen companies at a time or such other
numbers as per the act of any other law for the time being in force;
(iv). In case of Alternate Director, on return of the Original Director to the State in terms
of Sec.313 of the Act.
(v). resignation of his office by notice in writing.
OFFICE OR PLACE OF PROFIT IN THE COMPANY
74. Subject to the provisions of Section 314 and other applicable provisions, if any, of the Act, any Director
of the Company, any partner or relative of such Director, any firm in which such Director or a relative of
such Director is a partner, any private company of which such Director is a director or member, and any
director or manager of such private company, may hold any office or place of profit in the Company.
MANAGING DIRECTOR(S) AND WHOLE TIME DIRECTOR(S)
75. Subject to the provisions of Section 269, 198 and 309 of the Act, the Board of Directors may from time
to time appoint one or more of their body to the office of Managing Director(s) or Whole Time Director(s)
for a period not exceeding five years at a time and on such terms and conditions as the Board may think
fit and subject to the terms of any agreement entered into with him, may revoke such appointment. In
making such appointments the Board shall ensure compliance with the requirements of the Act and shall
seek and obtain such approvals as are prescribed by the Act.
76. Provided that a Director so appointed, shall not while holding such office, be subject to retirement by
rotation but his appointment shall be automatically determined if he ceases to be a Director.
77. Where more than one such Director is appointed, whether as Managing Director(s) and or Whole time
Director(s),the Board may bifurcate the duties and powers between them.
78. The Board may, entrust and confer upon Managing Director(s) or Whole Time Director(s) any of the
power of management which would not otherwise be exercisable by him upon such terms and conditions
and with such restrictions as the Board, may think fit, subject always to the superintendence, control and
direction of the Board and the Board may from time to time revoke, withdraw, alter or vary all or any of
such powers.
249
SABARI INN LIMITED
Dividend Policy
Article 104 (A, B, C, D, E, F, G, H, I)
A) The divisible profits of the Company, subject to any special rights relating thereto being created or
authorised to be created by the Memorandum or these Articles and subject to the provisions of these
Articles shall be divisible among the Members in proportion to the amount of Capital Paid-up or credited
as Paid-up and to the period during the year for which the Capital is Paid-up on the Shares held by them
respectively. Provided always that, (subject as aforesaid), any Capital Paid-up on a Share during the
period in respect of which a Dividend is declared, shall unless the Directors otherwise determine, only
entitle the holder of such Share to an apportioned amount of such Dividend as from the date of payment.
(B) Subject to the provisions of Section 205 of the Companies Act, 1956 the Company in General Meeting
may declare Dividends, to be paid to Members according to their respective rights and interests in the
profits but no Dividends shall exceed the amount recommended by the Board, but the Company in
General Meeting may declare a smaller Dividend, and may fix the time for payments not exceeding 30
days from the declaration thereof.
a) No Dividend shall be declared or paid otherwise than out of profits of the Financial Year arrived at
after providing for depreciation in accordance with the provisions of Section 205 of the Act or out of the
profits of the Company for any previous Financial Year or years arrived at after providing for
depreciation in accordance with those provisions and remaining undistributed or out of both provided
that:
(i) If the Company has not provided for depreciation for any previous Financial Year or years it shall,
before declaring or paying a Dividend for any Financial Year provide for such depreciation out of the
profits of that Financial Year or out of the profits of any other previous Financial Year or years,
(ii) if the Company has incurred any loss in any previous Financial Year or years the amount of the loss or
an amount which is equal to the amount provided for depreciation for that year or those years whichever
is less, shall be set off against the profits of the Company for the year for which the Dividend is proposed
to be declared or paid or against the profits of the Company for any previous Financial Year or years
arrived at in both cases after providing for depreciation in accordance with the provisions of sub-section
(2) of Section 205 of the Act or against both.
(iii) The decision of the Board as to the amount of the divisible profits shall be conclusive.
(b) The Board may from time to time, pay to the Members such interim Dividend as in their judgment the
position of the Company justifies.
(c) Where Capital is paid in advance of calls upon the footing that the same shall carry interest, such
Capital shall not whilst carrying interest, confer a right to participate in profits or Dividend.
(C). (i) Subject to the rights of Persons, if any, entitled to Shares with special rights as to Dividend, all
Dividends shall be declared and paid according to the amounts paid or credited as paid on the Shares in
respect whereof Dividend is paid but if and so long as nothing is Paid upon any Shares in the Company,
Dividends may be declared and paid according to the amount of the Shares.
(ii) No amount paid or credited as paid on Shares in advance of calls shall be treated for the purpose of
this regulation as paid on Shares.
250
SABARI INN LIMITED
(iii) All Dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid
on the Shares during any portion or portions of the period in respect of which the Dividend is paid, but if
any Shares are issued on terms providing that it shall rank for Dividend as from a particular date such
Shares shall rank for Dividend accordingly.
(D) Subject to the provisions of the Act and these Articles, the Board may retain the Dividends payable
upon Shares in respect of any Person, until such Person shall have become a Member, in respect of such
Shares or until such Shares shall have been duly transferred to him.
(E) Any one of several Persons who are registered as the joint-holders of any Share may give effectual
receipts for all Dividends or bonus and payments on account of Dividends or bonus or sale proceeds of
fractional certificates or other moneys payable in respect of such Shares.
(F). Subject to the provisions of the Act, no Member shall be entitled to receive payment of any interest or
Dividends in respect of his Share(s), whilst any money may be due or owing from him to the Company in
respect of such Share(s); either alone or jointly with any other Person or Persons; and the Board may
deduct from the interest or Dividend payable to any such Member all sums of money so due from him to
the Company.
(G). A transfer of Shares shall not pass the right to any Dividend declared thereon before the registration
of the transfer.
(H) Unless otherwise directed any Dividend may be paid by cheque or warrant or by a pay slip or receipt
(having the force of a cheque or warrant) and sent by post or courier or by any other legally permissible
means to the registered address of the Member or Person entitled or in case of joint-holders to that one of
them first named in the Register of Members in respect of the joint-holding. Every such cheque or
warrant shall be made payable to the order of the Person to whom it is sent and in case of joint-holders to
that one of them first named in the Register of Members in respect of the joint-holding. The Company
shall not be liable or responsible for any cheque or warrant or pay slip or receipt lost in transmission, or
for any Dividend lost to a Member or Person entitled thereto, by a forged endorsement of any cheque or
warrant or a forged signature on any pay slip or receipt of a fraudulent recovery of Dividend. If two or
more Persons are registered as joint holders of any Share(s) any one of them can give effectual receipts for
any moneys payable in respect thereof. Several Executors or Administrators of a deceased Member in
whose sole name any Share stands shall for the purposes of this Article be deemed to be jointholders
thereof.
(I) No unpaid Dividend shall bear interest as against the Company.
Unpaid or Unclaimed Dividend
Articles 105 (A, B)
A) If the Company has declared a Dividend but which has not been paid or the Dividend warrant in
respect thereof has not been posted or sent within 30 days from the date of declaration to any Member
entitled to the payment of such dividends, the Company shall within 7 days from the date of expiry of the
said period of 30 days, open a special account in that regard with any scheduled bank called the “Unpaid
Dividend of Reliance Power Limited” and transfer to the said account the total amount of Dividend
which remains unpaid or in relation to which no Dividend warrant has been posted.
251
SABARI INN LIMITED
(B) Any money so transferred to the unpaid dividend account of the Company which remains unpaid or
unclaimed for a period of 7 years from the date of such transfer, shall be transferred by the Company to
the Fund established under sub-section (1) of Section 205C of the Act, viz. “Investors Education and
Protection Fund”. (C) No unpaid or unclaimed Dividend shall be forfeited by the Board.
Capitalisation of Profits
Article 106
106. The Company in General Meeting may, upon the recommendation of the Directors, resolve that it is
desirable to capitalize any undivided profits of the company not required for paying the fixed dividends
on any Preference Shares (including profits carried and standing to the credit of any reserve or reserves
or other special account), and accordingly that the Directors be authorized and directed to appropriate
the profits resolved to be capitalized to the members who would have been entitled to receive the same
had such sums been distributed in cash in accordance with their rights, and to apply such profits on their
behalf, either in or towards paying up the amounts, if any for the time being unpaid on any shares held
by such members respectively, or in paying up in full unissued shares, debentures or securities of the
company of a nominal amount equal to such profits, such shares, debentures or securities to be allotted
and distributed, credited as fully paid up, to and amongst such members in the manner aforesaid, or
partly in one way and partly in the other. Whenever such a resolution as aforesaid shall have been
passed, the Directors shall make all appropriations and applications of the undivided profits resolved to
be capitalized thereby, and all allotments and issues of fully paid shares, debentures or other securities, if
any, and generally shall do all acts and things as may be required to give effect thereto. In such a case, the
Directors shall also have power to make such provision for the issue of fractional certificates or payment
in cash or otherwise as they may deem fit. In case of shares, debentures or securities becoming
distributable in fractions, the Directors shall authorize any person to enter on behalf of all the members
ed thereby into an agreement with the company providing for the allotment of full shares or debentures
to them respectively, credited as fully paid up, or for the payment of cash by the company on their behalf
against their fractional entitlements or by the application thereto of their respective proportions of the
profits resolved to be capitalized against the amounts or any part of the amounts remaining unpaid on
their existing shares, and any such agreement made under these conditions shall be effective and be
binding on all such members.
252
SABARI INN LIMITED
Reserve & Special Fund
Article 107
107.The Board may before recommending any dividend, set aside out of the profits of the company, such
sums as they think proper as Reserve Fund, to meet contingencies or for equalizing dividends or for
special dividends or for repairing, improving, and maintaining any of the property of the company and
for such other purposes as the Directors shall, in their absolute discretion, think conducive to the interest
of the company and may invest the several sums so set aside upon such investments (other than shares of
the company) as they may think fit, from time to time, deal with and vary such investments and dispose
of all or any part thereof for the benefit of the company and may divide the reserve funds into such
special funds as they think fit and employ the reserve funds or any part thereof in the business of the
company, without being bound to keep the same separate from other assets.
Accounts & Audit
Article 95-99
95. The Board shall keep or cause to be kept proper books of Account.
96. The books of accounts shall be kept at the registered office of the company or at such other place or
places as the Directors think fit.
97. The Board shall from time to time determine whether and to what extent and at what time and
places and under what conditions the accounts and the books of the company or any of them shall
be opened to inspection of the members not being directors.
98. No member (not being a Director) shall have any right of inspecting any accounts or books or
documents of the company except as conferred by law and authorized by the Board or by the
company in General Meeting.
99. The provisions in the Act relating to the appointment of auditors and the audit of the Books of
Account of the company shall apply.
Secrecy
Article 120 (a, b)
120.
(a) Subject to the provisions of the Companies Act, 1956, no member shall be entitled to inspect the
company’s books without the permission of Directors, or to require discovery of or any
information respecting any detail of the Company’s trading or any matter which is or may be in
the nature of a trade secret, mystery of trade or secret processes, which may relate to the conduct
of the business of the Company and which in the opinion of the Directors, is not expedient in the
interest of the members of the Company to communicated to the public.
(b) Every Director, Manager, Secretary, Auditor, Trustee, Member of Committee, Officer, Servant,
Agent, Accountant or other person employed in the business of the Company, shall maintain
253
SABARI INN LIMITED
strict secrecy respecting all transactions of the Company and shall pledge himself not to reveal
any of the matters which may come to his knowledge except in the discharge of duties when
required to do so by the Board or by a Court of Law or by law to comply with the provisions of
the Act and these articles.
254
SABARI INN LIMITED
SECTION VIII - OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
The following contracts and agreements (not being contracts entered into in the ordinary course of business
carried on or intended to be carried on by the Company or contracts entered into more than two years before
this Draft Red Herring Prospectus), which are or may be deemed material have been entered or to be entered
into by the Company. Copies of these contracts together with copies of documents referred under Material
Documents below all of which have been attached to the copy of this Draft Red Herring Prospectus may be
inspected at the Registered Office of the Company from 10:00 am to 5:00 pm on any working day from the
date of this Draft Red Herring Prospectus until the Bid/ Issue Closing Date.
Material contracts to the Issue
1. Memorandum of Understanding dated November 13, 2010 entered into amongst the Company and
Keynote Corporate Services Limited, Book Running Book Running Lead Manager to the Issue.
2. Memorandum of Understanding dated September 29, 2010 entered into between the Company and
Integrated enterprises (India) Limited, Registrar to the Issue.
3. Escrow Agreement dated [·], between the Company, the BRLM, the Escrow Collection Banks and the
Registrar to the Issue.
4. Syndicate Agreement dated [·] between the Company, BRLM and Syndicate Members.
5. Underwriting Agreement dated [·] between the Company, BRLM and Syndicate Members.
6. Copy of Tripartite agreement dated [·] entered into between the Company, CDSL and Registrar to the
Issue.
7. Copy of Tripartite agreement dated [·] entered into between the Company, NSDL and Registrar to the
Issue.
Material Documents
1. Certificate of Incorporation dated April 01, 1999 and Fresh Certificate of Incorporation dated July 20,
2010 consequent upon change of name on conversion into Public Limited Company issued by Registrar
of Companies, Tamil Nadu, Chennai.
2. Memorandum of Association and Articles of Association of the Company, as amended from time to
time.
3. Shareholders’ resolutions dated July 13, 2010 in relation to this Issue.
4. Copies of Auditors reports of the Company for the 3 month period ended June 30, 2010 and financial
years ending on March 31, 2006, 2007, 2008, 2009 and 2010.
5. Consents of Auditors, BRLM, Registrar to the Issue, Legal Advisor to the Issue, Directors of the
Company, Company Secretary and Compliance Officer, as referred to, in their respective capacities.
6. Legal Due Diligence Report dated December 08, 2010 by Corporate Law Chambers, Advocates, and
Solicitors & Notary.
7. Due Diligence Certificate dated December 09, 2010 to SEBI from Keynote Corporate Services Limited.
255
SABARI INN LIMITED
8. Copy of certificate dated December 08, 2010 issued by Essveeyar, Chartered Accountants and Statutory
Auditors of the Company in terms of Part II Schedule II of the Companies Act 1956 including
capitalisation statement, taxation statement and accounting ratio.
9. Copy of certificate dated December 08, 2010 issued by, Essveeyar, Chartered Accountants and Statutory
Auditors of the Company regarding tax benefits accruing to the Company and its shareholders.
10. Copy of certificate dated December 08, 2010 received from, Essveeyar, Chartered Accountants and
Statutory Auditors of Sabri Inn Limited regarding sources and deployment of funds.
11. In-principle approval dated [·] and [·] from BSE and NSE for listing of the securities of the
Company.
12. Report of the IPO grading agency, [·] dated [·], furnishing the rationale for its grading, disclosed in
this Offer Document.
13. SEBI Observation Letter No. [·] dated [·] issued by the Securities and Exchange Board of India &
Copy of the Compliance Letter dated [·] filed by Keynote Corporate Services Limited with Securities
and Exchange Board of India.
14. Shareholder’s agreement dated December 28, 2007 between promoters , Indian Opportunity Real
Estate Fund (Mauritius) and ICICI Prudential Asset Management Company; Portfolio Managers on
behalf of its clients
15. International & Domestic Franchisee and Marketing agreement with Choice Group dated January
01, 2008 & July 05, 2007
16. Hotel development services agreement with Carlson Hotel Asia Pacific Pty. Ltd dated July 07, 2010
17. Hotel management agreement with RHW Hotel management services limited dated August 24, 2010
18. Service contract dated September27, 2010 entered with Chairman & Managing Director
19. Term loan sanction letters for Bangalore Hotel Project as issued by State Bank of India, State Bank of
Travancore and State Bank of Mysore respectively vide letter dated ---------
20. Consent letter dated December 09, 2010 issued by the Selling Shareholders, ICICI Prudential Asset
Management Company Limited; Portfolio Managers on behalf of its clients, and Consent letter dated
December 08, 2010 issued by India Opportunity Real Estate Fund (Mauritius) in relation to the Offer
for Sale.
Any of the contracts or documents mentioned in this Red Herring Prospectus may be amended or
modified at any time if so required in the interest of the Company or if required by the other parties,
without reference to the shareholders subject to compliance of the provisions contained in the Companies
Act and other relevant statute.
256
SABARI INN LIMITED
PART III
SECTION IX- DECLARATION
DECLARATION BY THE SELLING SHAREHOLDER
The undersigned Selling Shareholder, hereby certifies that all statements made in this Draft Red Herring
Prospectus by the undersigned Selling Shareholder in relation to itself i.e. those relating to number of
shares held by it, they are held for more than one year and its registered office address are true and
correct. The undersigned Selling Shareholder assumes no responsibility for any of the statements made
by the Company or any other Selling Shareholder in this Draft Red Herring Prospectus.
Signed by the Selling Shareholders
ICICI Prudential Asset Management Company Limited; Portfolio Managers on behalf of its clients more
particularly described as INDIA OPPORTUNITIES PORTFOLIO – ICICI PRUDENTIAL PMS INDIA
REAL ESTATE SECURITIES SERIES-I
Sd/-
Pradeep Khanna
Senior Investment Manager –Real Estate Investment Business
Sd/-
Supriya Sapre
Head-Legal & Compliance
257
SABARI INN LIMITED
DECLARATION BY THE SELLING SHAREHOLDER
The undersigned Selling Shareholder, hereby certifies that all statements made in this Red Herring
Prospectus are true and correct, provided however, that the undersigned Selling Shareholder assumes no
responsibility for any of the statements made by the Company or any other Selling Shareholder in this
Red Herring Prospectus, except statements made by the undersigned Selling Shareholder in relation to
itself as a Selling Shareholder.
Signed by the Selling Shareholders
For India Opportunity Real Estate Fund (Mauritius)
Sd/-
Anil Sharma
Director
258
SABARI INN LIMITED
DECLARATION BY THE COMPANY
SABARI INN LIMITED
All the relevant provisions of the Companies Act, 1956, and the guidelines issued by the Government of
India or the regulations issued by Securities and Exchange Board of India, established under Section 3 of
the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and
no statement made in this Draft Red Herring Prospectus is contrary to the provisions of the Companies
Act, 1956, the Securities and Exchange Board of India Act, 1992 or rules made there under or regulations
issued, as the case may be. We further certify that all statements in this Draft Red Herring Prospectus are
true and correct.
SIGNED BY ALL DIRECTORS
Sd/- Sd/-
Mr. K.R.V Ramani Mr. K.R. Narayanan
Sd/- Sd/-
Mr. V.Janakiraman Mr. P.Vaidyanathan
Sd/- Sd/-
Mr.R.Thiagarajan Mr. T.R.Sridharan
Signed by the Chief Law Officer and Company Secretary &

Compliance Officer
Sd/-
Mr. K.R.Ramakrishnan
Date: December 09, 2010
Place: Chennai
259

Sabari Inn DRHP

Uploaded by

Copyright:

Available Formats

Sabari Inn DRHP

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sabari Inn DRHP

Uploaded by

Copyright:

Available Formats

DRAFT RED HERRING PROSPECTUS

Dated [●], 2010

SABARI INN LIMITED

KEYNOTE CORPORATE SERVICES LTD. INTEGRATED ENTERPRISES (INDIA) LIMITED

DEFINITIONS AND ABBREVIATIONS

COMPANY RELATED TERMS

ISSUE RELATED TERMS AND ABBREVIATIONS

GENERAL / CONVENTIONAL TERMS:

ABBREVIATION FULL FORM

ABBREVIATION FULL FORM

COMPANY & INDUSTRY RELATED TERMS

Notwithstanding the foregoing:

CERTAIN CONVENTIONS AND USE OF MARKET DATA

SECTION I - RISK FACTORS

The risk factors are as envisaged by the management.

Financial implications where quantifiable

The contingent liabilities not provided for as on 30/06/2010 are as follows:

Sr. Name of the Expired on Granting Status

and 5(2) of Tamil Nadu Lift Rules South Division done.

7. License under section 30 of the 31.10.2010 The Indian Renewal fees

Quality Inn Sabari Resorts Kodaikanal

5. FL.3 License under Tamil Nadu NA Commissioner P&E, Inspection

Sr. No Name of the Company For the period ended on

(i) effect any change in its capital structure

II. External Risks

3. The hotel industry is subject to significant regulations.

7. The Company’s business is exposed to the effects of exchange rate fluctuations.

Name of the Group Registered Office Nature of Interest

7. Details on Related Party Transactions, are as follows:

LIST OF RELATED PARTY DISCLOSURES

LIST OF RELATED PARTY DISCLOSURES

SUMMARY OF INDUSTRY AND BUSINESS OF THE COMPANY

Hotels Industry: Market Size

Number of hotel rooms by category

Business and Leisure Destinations

Cyclicality of ORs and ARRs

Business Destinations RevPAR growth

Source: CRISIL Research

Seasonal Nature of the Hotels Industry (ORs)

Business Destinations Leisure Destinations

Average Length of Stay (ALOS) and Occupancy Patterns

Review: 2009-10 over 2008-09

ORs show a recovery, but Average Room Rates (ARRs) decline

Source: CRISIL Research Source: CRISIL Research

Source: CRISIL Research Source: CRISIL Research

Table 1: India Review and Outlook Summary

Outlook: 2009-10 to 2014-15

Increasing ORs to drive hotel revenue growth

Nos. Per cent Rs./day Per cent

Source: CRISIL Research Source: CRISIL Research

Profitability of hotels players to improve in 2010-11

Real Estate Retail

Revenue Composition of main operations

F.Y. 2007-08 F.Y.2008-09 F.Y.2009-10

Total 1828.05 100.00 2579.01 100.00 4146.83 100.00

Revenue earned from owned Hotels & Resort in F.Y.2009-10 (` in lacs)

Revenue earned from Leased Hotels in F.Y.2009-10 (` in lacs)

Name of Hotel HRACC

Collaboration with Corporate:

SUMMARY OF FINANCIAL INFORMATION