Common use of RATIONALE OF THE SCHEME Clause in Contracts

RATIONALE OF THE SCHEME. 2.1. The Transferor Company is licensed to carry on the business of providing general insurance in India, by the Insurance Regulatory and Development Authority of India (“IRDAI”). 2.2. The Transferee Company is a wholly owned subsidiary of the Transferor Company. The Transferee Company is also licensed to carry on the business of providing general insurance in India by IRDAI. 2.3. The proposed Scheme will result in the following synergies: (a) The Scheme will result in the consolidation of the business of the Transferor Company and the Transferee Company, leading to synergy in operations, greater financial strength, and improve the position of the merged entity by offering unified yet comprehensive services to the customer(s) of the Transferor Company and the Transferee Company. (b) The Scheme will assist in achieving higher long term financial returns and will make available the assets, financial, managerial and technical resources, personnel, capabilities, skills, expertise and technologies of both the Transferor Company and the Transferee Company leading to synergistic benefits, enhancement of future business potential, cost reduction and efficiencies, productivity gains and logistical advantages, thereby contributing to significant future growth and enhancement of shareholder value. (c) The Scheme will result in rationalization and standardization of the business processes, economies of scale, corporate and administrative efficiencies, which will contribute to make the Transferee Company profitable, thereby further enhancing the overall shareholder value. For all of the aforesaid reasons, the Scheme will also be to the overall benefit of the policyholders of the Transferor Company and Transferee Company. 2.4. In view of the above, it is proposed that pursuant to Sections 391 to 394 and other relevant provisions of the Act, the Transferor Company be amalgamated/ merged into the Transferee Company, upon which the Transferor Company will stand dissolved without winding up. As a consequence of the arrangement, the equity share capital of the Transferee Company shall stand reorganized in the manner provided for at Part II and Part III of this Scheme. 2.5. The merger of the Transferor Company into the Transferee Company pursuant to this Scheme shall take place on and from the Appointed Date (as defined hereinbelow) but shall be effective/ operative on and from the Effective Date (as defined hereinbelow). 2.6. The merger of the Transferor Company into the Transferee Company in accordance with the terms of the Scheme shall be in compliance with the applicable provisions of the Income Tax Xxx, 0000, including Section 2(1B), as a result of which, by virtue of the merger all the assets, properties and liabilities of the Transferor Company existing immediately before the merger, shall become the assets, properties and liabilities of the Transferee Company. 2.7. The arrangement is expected to lead to creation of a stronger and larger entity which would be to the benefit of the shareholders of the Transferor Company and the Transferee Company. Moreover, since the arrangement is between a holding company and its wholly owned subsidiary company, the shareholders of the Transferor Company are to be allotted shares of the Transferee Company in the same proportion as they hold shares in the Transferor Company as of the Record Date. The Swap Ratio is set out at Clause 10.1 of the Scheme, which has been arrived at on the basis of a report of an independent expert. Hence, the Scheme will not prejudicially affect the interests of any shareholder, either of the Transferee Company or the Transferor Company. Moreover, as the Transferee Company is adopting all the assets and liabilities of the Transferor Company and will have sufficient assets to discharge these liabilities, the Scheme will not prejudicially affect the interests of the policyholders or creditors of either the Transferor Company or the Transferee Company. 2.8. The arrangement is not a result of any acquisition of property of the Transferor Company by the Transferee Company through purchase or a result of the distribution of such property to the Transferee Company pursuant to the winding up of the Transferor Company. 2.9. This Scheme has been drawn up to comply with applicable provisions of law, including the provisions of Section 2(1B) of the Income Tax Act, 1961. In the event any term of this Scheme is found or interpreted for any reason to be inconsistent with the provisions of the law at a subsequent date, including as a result of an amendment of the law, the Scheme shall stand modified to the extent necessary to comply with such amendments. The modification will however not affect other parts of the Scheme.

RATIONALE OF THE SCHEME. 2.1. The Transferor Company is licensed to carry on the business of providing general insurance in India, by the Insurance Regulatory and Development Authority of India (“IRDAI”). 2.2. The Transferee Company is a wholly owned subsidiary of the Transferor Company. The Transferee Company is also licensed to carry on the business of providing general insurance in India by IRDAI. 2.3. The proposed Scheme will result in the following synergies: (a) The Scheme will result in the consolidation of the Demerged Company has 2 (two) distinct business of the Transferor Company segments viz. (i) Consumer Product segment (‘CP’) (which includes appliances, fan and the Transferee Company, leading to synergy in operations, greater financial strength, consumer lighting products) and improve the position of the merged entity by offering unified yet comprehensive services to the customer(s(ii) of the Transferor Company Engineering Procurement and the Transferee CompanyConstruction segment (‘EPC’). The EPC segment primarily focuses on Illumination Business and Power Transmission and Power Distribution Business. (b) The Scheme will assist in achieving higher long term financial returns Illumination Business which is a part of EPC segment is more synergistic to CP segment and will make available the assets, financial, managerial its risk and technical resources, personnel, capabilities, skills, expertise and technologies rewards are also aligned to that of both the Transferor Company and the Transferee Company leading to synergistic benefits, enhancement of future business potential, cost reduction and efficiencies, productivity gains and logistical advantages, thereby contributing to significant future growth and enhancement of shareholder valueCP segment. (c) The Scheme will result in rationalization nature of risk, competition, challenges, opportunities and standardization business methods for the Power Transmission and Power Distribution Business (as defined hereinafter) is separate and distinct from the Remaining Business (as defined hereinafter) carried out by the Demerged Company. Further, the way the Power Transmission and Power Distribution Business is required to be handled and managed is not similar to that of the business processes, economies of scale, corporate and administrative efficiencies, which will contribute to make the Transferee Company profitable, thereby further enhancing the overall shareholder value. For all Remaining Business. (d) Each of the aforesaid reasonsvaried businesses carried out by the Demerged Company have significant potential for growth and profitability and can attract different set of investors, strategic partners, lenders, etc. Therefore, as these businesses approach their next phase of growth, it would be strategically apt to segregate the Power Transmission and Power Distribution Business from the Remaining Business. (e) The segregation shall enable them to move forward independently, with greater focus and specialization, building on their respective capabilities and their strong brand presence. It will also help to channelize resources required for all the businesses to focus on the growing businesses and attracting right talent and providing enhanced growth opportunities to existing talent in line with a sharper strategic focus on each business segment under separate entities. (f) The Scheme will also be to enable the overall benefit of the policyholders of the Transferor Company and Transferee Company. 2.4. In view of the above, it is proposed that pursuant to Sections 391 to 394 and other relevant provisions of the Act, the Transferor Company be amalgamated/ merged into the Transferee Company, upon which the Transferor Company will stand dissolved without winding up. As a consequence of the arrangement, the equity share capital of the Transferee Company shall stand reorganized in the manner provided for at Part II and Part III of this Scheme. 2.5. The merger of the Transferor Company into the Transferee Company pursuant to this Scheme shall take place on and from the Appointed Date (as defined hereinbelow) but shall be effective/ operative on and from the Effective Date (as defined hereinbelow). 2.6. The merger of the Transferor Company into the Transferee Company in accordance with the terms of the Scheme shall be in compliance with the applicable provisions of the Income Tax Xxx, 0000, including Section 2(1B), as a result of which, by virtue of the merger all the assets, properties and liabilities of the Transferor Company existing immediately before the merger, shall become the assets, properties and liabilities of the Transferee Company. 2.7. The arrangement is expected to lead to creation of a stronger and larger entity which would be to the benefit of the shareholders of the Transferor Demerged Company and the Transferee Company. Moreover, since the arrangement is between a holding company Resulting Company to focus and enhance its respective businesses by streamlining operations and its wholly owned subsidiary companymanagement structure ensuring better and more efficient management control. (g) Bifurcation of these businesses will enable unlocking value of each vertical thereby paving way for focused growth with a view to create significant stakeholder value and at the same time allow investors to allocate their portfolio into separate entities, focused on the distinct entities. Further, it will enable independent and distinct capital allocation approach and balance sheet management based on the distinct needs of each business. (h) Thus, the shareholders of demerger would help in achieving the Transferor Company are to be allotted shares of desired operating structure and shall inter- alia have following benefits: (i) Create sector focused companies; (ii) Streamline the Transferee Company in the same proportion as they hold shares in the Transferor Company as of the Record Date. The Swap Ratio is set out at Clause 10.1 of the Scheme, which has been arrived at on the basis of a report of an independent expert. Hence, the Scheme will not prejudicially affect the interests of any shareholder, either of the Transferee Company or the Transferor Company. Moreover, as the Transferee Company is adopting all the assets and liabilities of the Transferor Company and will have sufficient assets to discharge these liabilities, the Scheme will not prejudicially affect the interests of the policyholders or creditors of either the Transferor Company or the Transferee Companymanagement structure; (iii) Unlock value for shareholders; (iv) Ring-fence businesses from each other; and (v) Better risk management. 2.8. The arrangement is not a result of any acquisition of property of the Transferor Company by the Transferee Company through purchase or a result of the distribution of such property to the Transferee Company pursuant to the winding up of the Transferor Company. 2.9. This Scheme has been drawn up to comply with applicable provisions of law, including the provisions of Section 2(1B) of the Income Tax Act, 1961. In the event any term of this Scheme is found or interpreted for any reason to be inconsistent with the provisions of the law at a subsequent date, including as a result of an amendment of the law, the Scheme shall stand modified to the extent necessary to comply with such amendments. The modification will however not affect other parts of the Scheme.

RATIONALE OF THE SCHEME. 2.1. The Transferor Company is licensed to carry on the business of providing general insurance in India, by the Insurance Regulatory and Development Authority of India (“IRDAI”). 2.2. The Transferee Company is a wholly owned subsidiary of the Transferor Company. The Transferee Company is also licensed to carry on the business of providing general insurance in India by IRDAI. 2.3. The proposed Scheme will result in the following synergies: (a) The Scheme will result in the consolidation transfer and vesting of the business of the Transferor Company and the Transferee Company, leading to synergy in operations, greater financial strength, and improve the position of the merged entity by offering unified yet comprehensive services to the customer(s) of the Transferor Company and the Transferee Company. (b) The Scheme will assist in achieving higher long term financial returns and will make available the assets, financial, managerial and technical resources, personnel, capabilities, skills, expertise and technologies of both the Transferor Company and the Transferee Company leading to synergistic benefits, enhancement of future business potential, cost reduction and efficiencies, productivity gains and logistical advantages, thereby contributing to significant future growth and enhancement of shareholder value. (c) The Scheme will result in rationalization and standardization of the business processes, economies of scale, corporate and administrative efficiencies, which will contribute to make the Transferee Company profitable, thereby further enhancing the overall shareholder value. For all of the aforesaid reasons, the Scheme will also be to the overall benefit of the policyholders of the Transferor Company and Transferee Company. 2.4. In view of the above, it is proposed that pursuant to Sections 391 to 394 and other relevant provisions of the Act, the Transferor Company be amalgamated/ merged into the Transferee Company, upon which the Transferor Company will stand dissolved without winding up. As a consequence of the arrangement, the equity share capital of the Transferee Company shall stand reorganized in the manner provided for at Part II and Part III of this Scheme. 2.5. The merger of the Transferor Company CLG Business Undertaking into the Transferee Company pursuant to this Scheme shall take place on be in the interest of all concerned stakeholders including shareholders, customers, creditors, employees and from general public, in the Appointed Date following ways: (as i) The CLG Business and the Residual Business (defined hereinbelowhereinafter) but shall be effective/ operative on address different market segments with unique opportunities and from the Effective Date (as defined hereinbelow). 2.6dynamics in terms of business strategy, customer set, geographic focus, competition, capabilities set, talent needs and distinct capital requirements. The merger transfer of the Transferor Company CLG Business Undertaking into the Transferee Company will enable each business to sharpen their focus and organize their activities and resources to improve their offerings to their respective customers. This would help to improve their competitiveness, operational efficiency, agility and strengthen their position in accordance with relevant markets resulting in more sustainable growth and competitive advantage. (ii) Both businesses have attained a significant size, scale and have a large headroom for growth in their respective markets. As both these businesses are entering the terms next phase of growth, the transfer and vesting of the Scheme shall be in compliance with the applicable provisions of the Income Tax Xxx, 0000, including Section 2(1B), as a result of which, by virtue of the merger all the assets, properties and liabilities of the Transferor Company existing immediately before the merger, shall become the assets, properties and liabilities of the Transferee Company. 2.7. The arrangement is expected to lead to creation of a stronger and larger entity which would be to the benefit of the shareholders of the Transferor Company and the Transferee Company. Moreover, since the arrangement is between a holding company and its wholly owned subsidiary company, the shareholders of the Transferor Company are to be allotted shares of the Transferee Company in the same proportion as they hold shares in the Transferor Company as of the Record Date. The Swap Ratio is set out at Clause 10.1 of the Scheme, which has been arrived at on the basis of a report of an independent expert. Hence, the Scheme will not prejudicially affect the interests of any shareholder, either of the Transferee Company or the Transferor Company. Moreover, as the Transferee Company is adopting all the assets and liabilities of the Transferor Company and will have sufficient assets to discharge these liabilities, the Scheme will not prejudicially affect the interests of the policyholders or creditors of either the Transferor Company or the Transferee Company. 2.8. The arrangement is not a result of any acquisition of property of the Transferor Company by the Transferee Company through purchase or a result of the distribution of such property to CLG Business Undertaking into the Transferee Company pursuant to this Scheme would result in focused management attention and efficient administration to maximize their respective potential. (iii) Further, as the winding up two businesses have separate growth trajectories, risk profile and capital requirement, the segregation of the Transferor CompanyCLG Business Undertaking and the Residual Business will enable independent value discovery and lead to unlocking of value for each business. 2.9(iv) The Transferee Company is the existing wholly owned subsidiary of Transferor Company that provides managed training solutions which predominantly include technology-based solutions to customers. This Scheme Housing the CLG Business Undertaking in the Transferee Company is expected to be synergistic and will leverage the experience and expertise available in the Transferee Company of providing IP driven solutions including content, tools and platforms to customers in the education sector. (b) As on January 28, 2022, the Transferee Company has been drawn an existing paid up to comply with applicable provisions equity share capital of lawINR. 115,56,40,720 (Rupees One hundred and Fifteen Crore Fifty Six Lakh Forty Thousand Seven Hundred and Twenty only). However, including ongoing and accumulated losses have substantially wiped off the provisions of Section 2(1B) value represented by the paid up equity share capital. Accordingly, the restructuring of the Income Tax Act, 1961. In the event any term of this Scheme is found or interpreted for any reason to be inconsistent with the provisions equity share capital and securities premium of the law at a subsequent date, including as a result Transferee Company by way of an amendment reduction of the law, the Scheme shall stand modified to the extent necessary to comply with such amendments. The modification paid up equity share capital and securities premium will however not affect other parts of the Schemerationalise its capital structure.