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Dhir India Investments Plc ("the Company")

Result of Annual General Meeting

And

Change to Investing Policy

Result of Annual General Meeting 

The Company is pleased to announce that at the Annual General Meeting of the Company held today, all resolutions as set out in the notice of the Annual General Meeting were passed. 

Change to Investing Policy 

At the Annual General Meeting the shareholders approved amendments to the Investing Policy of the Company. The revised Investing Policy is set out below: 

Investing objective

The Company intends to invest in distressed companies and distressed assets in India with the objective of providing shareholders with income and capital growth.

Investing Strategy

The investments will be structured primarily in the following four types of transaction:

Turnaround of companies

In these transactions, the objective is to acquire an interest in a target company through its secured debt (and a minority equity interest where appropriate). The aim will be to benefit from the control taken of the target company, its operations and its assets and, if appropriate, to change or motivate existing management and implement a new strategy to turn around the business.

Target companies will typically be under-performing due to financial, operational or management constraints and an overhang of debt, but with the potential for achieving a turnaround through restructuring. In such transactions, the Manager may arrange to provide the target company with a range of technical, legal, management and financial inputs, as required.

The Directors believe that exits from such an investment will be achieved principally through selling the controlling interest in the target company to a third party or to the target's existing management or via public offering. The Company intends to work to a time frame of 24-36 months from acquisition to exit in such transactions.

Re-sale of assets or companies

The objective in these transactions is to obtain benefit from a change in control of the target company or its assets through the secured debt. The Company and its subsidiaries (the "Group") will consider acquiring a minority equity interest in target companies and/or assets but the Company would not acquire a majority of the equity interest.

The value in such transactions lies in being able to acquire or settle the debts of the target company at a discount to the market value of the underlying assets of the business as a whole and then to restructure the debts so as to achieve the desired return upon a sale of the target company or its assets.

An exit is achieved through the sale of its assets to a third party purchaser and/or the equity when sold. The Manager will seek to identify such transactions in sectors where there is demand for consolidation and capacity addition.

The Company intends to work to a time frame of 9-12 months from acquisition to exit in such transactions.

Break-up and sale of assets

The objective of these transactions is to obtain benefit from a change in control of the target company or its assets by taking a secured debt position with a view to realising latent value through the sale of individual assets or parts of the business to different buyers. The Group will consider acquiring a minority equity interest in target companies and / or assets, but the Company would not acquire a majority of the equity interest. This process will entail the negotiation and restructuring of debts with creditors and lenders, the consolidation of security and the sale of assets to third party buyers.

The Directors consider that this type of transaction is particularly attractive where there are high value assets in the target company, and the Company expects that the debt can be settled at a discount to market value. The Company intends to work to a time frame of 12-15 months from acquisition to exit in such transactions.

Bridge financing

In these transactions the objective is to provide short term bridge financing to target companies that are in need of immediate funds to complete one time settlements with secured creditors and which have cash flows to support the repayment of the financing (together with the Company's desired return) to the Group over a period of 6-9 months.

Gearing

The Directors anticipate that, due to a lack of sophisticated distress lenders in India and with the exception of bridge financing transactions, the Group's transactions will generally be funded by the Group from the proceeds of equity investments into the Group and not through debt.

Investing restrictions

The Company will only invest in Indian distressed companies and distressed assets. The Company will not have a predetermined preference of allocation in the type of transactions outlined above, but will aim to build a diversified portfolio by:

• investing no more than £5 million in transactions relating to one single entity;

  
  

• investing no more than 50 per cent. of the net asset value of its portfolio in one single transaction type; and

  
  

• not investing in transactions where the intrinsic value of the underlying assets is believed to be less than the amount of the investment required.

The Board may however consider deviation from the above parameters while evaluating specific proposals. 

These investment restrictions will apply at the time of the initial investment in a particular opportunity and subsequent transactions which affect these ratios will not lead to a requirement to divest any investment to rebalance the portfolio. There are no obligations on the Company or the Manager to make any investments or to return monies to shareholders within a minimum period of time.

26 October 2009 

Enquiries

Sarah Marshall, Company Secretary                            01624 689 589

Simcocks Trust Limited 

Jeremy Ellis / Chris Clarke                                              0207 071 4300

Evolution Securities Limited

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