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Draft Letter of Offer January 13, 2012

For Equity Shareholders of our Company only

EPC INDUSTRIÉ LIMITED

We (Corporate Identification Number L25200MH1981PLC025731) were incorporated in India on November 28, 1981 as “Exomet Plastics and Chemicals Private Limited”. Our name was changed to “EPC Industrié Private Limited” on December 8, 1987. Further, on conversion into a public company our name was changed to “EPC Industrié Limited” on August 24, 1992. Our name was further changed to EPC Irrigation Limited on September 11, 1992 and on October 13, 1997 the name of the Company was again changed to EPC Industrié Limited. For details of our change of name, please refer to the chapter “History and Other Corporate Matters” on page 52.

Registered Office and Corporate Office: H-109, MIDC Ambad, Nashik – 422 010, Maharashtra, India. Tel: +91 253 238 1081 Fax: +91 253 238 2975

Contact Person: Mr. Ratnakar Nawghare, Company Secretary and Compliance Officer E-mail: [email protected] Website: www.epcind.com

OUR PROMOTER: MAHINDRA & MAHINDRA LIMITED

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY

ISSUE OF [●] EQUITY SHARES WITH A FACE VALUE OF ` 10 EACH AT A PREMIUM OF ` [●] PER EQUITY SHARE(“RIGHTS ISSUE EQUITY SHARES”) FOR AN AMOUNT NOT EXCEEDING ` 4,500 LACS ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF EPC INDUSTRIÉ LIMITED (THE “COMPANY” OR THE “ISSUER”) IN THE RATIO OF [●] EQUITY SHARE(S) FOR EVERY [●] FULLY PAID-UP EQUITY SHARE(S) HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON [●] (THE “ISSUE”). FOR FURTHER DETAILS, PLEASE REFER TO THE CHAPTER “TERMS OF THE ISSUE” ON PAGE 216.

GENERAL RISK Investment 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 our Company and the Issue including the risks involved. The securities being offered in the Issue have not been recommended or approved by Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy. Investors are advised to refer to the “Risk Factors” on page IX before making an investment in the Issue.

COMPANY’S ABSOLUTE RESPONSIBILITYOur Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in the Draft Letter of Offer 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 Letter of Offer as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING The existing Equity Shares are listed on the Bombay Stock Exchange Limited (“BSE”). We have received “in-principle” approval from the BSE for listing the Rights Issue Equity Shares arising from the Issue vide letter dated [●]. For the purposes of the Issue, the Designated Stock Exchange is BSE.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

Kotak Mahindra Capital Company Limited 1st Floor, Bakhtawar, 229, Nariman Point, Mumbai – 400 021, Maharashtra, India. Tel: +91 22 6634 1100 Fax: +91 22 2282 6632 E-mail: [email protected] Investor Grievance Email: [email protected] Website: www.investmentbank.kotak.com Contact Person: Mr. Ganesh Rane SEBI Registration No.: INM000008704

Sharepro Services (India) Private Limited 13 AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone Exchange Lane, Off Andheri-Kurla Road, Sakinaka, Andheri (East), Mumbai – 400 072, Maharashtra, India. Tel: +91 22 6772 0300/403 Fax: +91 22 6772 0416 Website: www.shareproservices.com Email: [email protected] Contact Person: Mr. Satheesh H K SEBI Registration No: INR000001476

ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS

ISSUE CLOSES ON

[●] [●] [●]

TABLE OF CONTENTS SECTION I – GENERAL .................................................................................................................................. I

DEFINITIONS AND ABBREVIATIONS................................................................................................................................ I NOTICE TO OVERSEAS SHAREHOLDERS ...................................................................................................................... VI PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA ...................................................... VII FORWARD LOOKING STATEMENTS ............................................................................................................................. VIII

SECTION II - RISK FACTORS ..................................................................................................................... IX

SECTION III – INTRODUCTION .................................................................................................................. 1

SUMMARY OF INDUSTRY .................................................................................................................................................. 1 SUMMARY OF BUSINESS ................................................................................................................................................... 3 SUMMARY FINANCIAL INFORMATION ........................................................................................................................... 6 THE ISSUE ............................................................................................................................................................................ 9 GENERAL INFORMATION ............................................................................................................................................... 10 CAPITAL STRUCTURE ..................................................................................................................................................... 15

SECTION IV – PARTICULARS OF THE ISSUE ....................................................................................... 24

OBJECTS OF THE ISSUE .................................................................................................................................................. 24 BASIS OF ISSUE PRICE .................................................................................................................................................... 29 STATEMENT OF TAX BENEFITS ..................................................................................................................................... 31

SECTION V – ABOUT US ............................................................................................................................. 32 INDUSTRY OVERVIEW ..................................................................................................................................................... 32 OUR BUSINESS .................................................................................................................................................................. 36 KEY INDUSTRY REGULATIONS ...................................................................................................................................... 49 HISTORY AND OTHER CORPORATE MATTERS............................................................................................................ 52 MANAGEMENT .................................................................................................................................................................. 58 PROMOTER AND GROUP COMPANIES......................................................................................................................... 67 DIVIDEND POLICY ......................................................................................................................................................... 131

SECTION VI – FINANCIAL INFORMATION ......................................................................................... 132 FINANCIAL STATEMENTS ............................................................................................................................................. 132 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ..................................................................................................................................................................... 161 MARKET PRICE INFORMATION ................................................................................................................................... 175 FINANCIAL INDEBTEDNESS ......................................................................................................................................... 176

SECTION VII – LEGAL AND OTHER INFORMATION ....................................................................... 178

OUTSTANDING LITIGATIONS AND DEFAULTS ......................................................................................................... 178 GOVERNMENT AND OTHER APPROVALS .................................................................................................................. 202 OTHER REGULATORY AND STATUTORY DISCLOSURES ......................................................................................... 208

SECTION VIII – OFFERING INFORMATION ....................................................................................... 216

TERMS OF THE ISSUE .................................................................................................................................................... 216 TERMS OF THE ARTICLES OF ASSOCIATION ............................................................................................................ 241 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .............................................................................. 260

DECLARATION ........................................................................................................................................... 262

EPC Industrié Limited

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SECTION I – GENERAL

DEFINITIONS AND ABBREVIATIONS In this Draft Letter of Offer, unless the context otherwise requires, the terms defined and abbreviations expanded herein below shall have the same meaning as stated in this section. In this Draft Letter of Offer, unless otherwise indicated or the context otherwise requires, all references to “EPC Industrié Limited”, “EPC”, the/our “Company”, “we”, “our” or “us” are to EPC Industrié Limited or, as the context requires, and references to “you” are to the prospective investors in the Issue. Conventional/ General Terms

Term Description

Act/ Companies Act The Companies Act, 1956 and amendments thereto Depositories Act The Depositories Act, 1996 and amendments thereto IT Act The Income Tax Act, 1961 and amendments thereto Indian GAAP Generally Accepted Accounting Principles In India SEBI Act, 1992 Securities and Exchange Board of India Act, 1992 and amendments thereto SEBI Regulations/ SEBI ICDR Regulations

The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and amendments thereto

Securities Act The United States Securities Act of 1933, as amended Takeover Code The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and

amendments thereto Takeover Regulations The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 Wealth Tax Act The Wealth Tax Act, 1957 and amendments thereto Issue related terms

Term Description

Abridged Letter of Offer The abridged letter of offer to be sent to the Eligible Equity Shareholders with respect to this Issue in accordance with SEBI ICDR Regulations

Allot/ Allotted/ Allotment Unless the context requires, the allotment of Rights Issue Equity Shares pursuant to the Issue

Allottees Persons to whom Rights Issue Equity Shares are issued pursuant to the Issue Application Supported by Blocked Amount/ ASBA

The application (whether physical or electronic) used compulsorily by QIB and Non Institutional Investor and optionally by Retail Individual Investors to make an application authorizing the SCSB to block the amount payable on application in their specified bank account

ASBA Account Account maintained by an ASBA Investor with a SCSB which will be blocked by such SCSB to the extent of the appropriate amount in relation to an application by an ASBA Investor

ASBA Investor Equity Shareholders proposing to subscribe to the Issue through ASBA process and: a) Are holding the Equity Shares in dematerialized form as on the Record Date and have

applied for their Rights Entitlements and/or additional Equity Shares in dematerialized form;

b) Have not renounced their Rights Entitlements in full or in part; c) Are not Renouncees; and d) Are applying through blocking of funds in a bank account maintained with SCSBs All QIBs and Non-Insitutional Investors, complying with the above conditions, must mandatorily invest through the ASBA process.

Bankers to the Issue [●] Composite Application Form / CAF

The form used by an Investor to make an application for the Allotment of Rights Issue Equity Shares in the Issue

Consolidated Certificate In case of holding of Equity Shares on physical form, the certificate that we would issue for the Rights Issue Equity Shares Allotted to one folio


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Term Description

Controlling Branches/ Controlling Branches of the SCSBs

Such branches of the SCSBs which coordinate with the Lead Manager, the Registrar to the Issue and the Stock Exchange, a list of which is available on http://www.sebi.gov.in/pmd/scsb.html

Designated Stock Exchange

Bombay Stock Exchange Limited

Designated Branches Such branches of the SCSBs which shall collect application forms used by ASBA Investors and a list of which is available on http://www.sebi.gov.in

Draft Letter of Offer This Draft Letter of Offer dated January 13, 2012 filed with SEBI and which does not contain complete particulars of the Issue Price and the Issue Size in terms of the number of Rights Issue Equity Shares proposed to be offered in this Issue

Equity Share(s) Equity shares of our Company having a face value of ` 10 each unless otherwise specified in the context thereof

Eligible Equity Shareholder / Shareholder

Means a holder of Equity Shares as on the Record Date

Group Companies Includes those companies, firms and ventures that are promoted by our Promoter, irrespective whether these entities are covered under Section 370(1)(B) of the Companies Act.

Investor(s) Equity Shareholders as on Record Date and/or Renouncees applying in the Issue. Issue/ Rights Issue Issue of [●] Equity Shares with a face value of ` 10 each at a premium of ` [●] per Equity

Share for an amount not exceeding ` 4,500 Lacs on a rights basis to the existing Equity Shareholders in the ratio of [●] Equity Share(s) for every [●] fully paid-up Equity Share(s) held by the existing Equity Shareholders on the Record Date. The issue price is [●] times the face value of the Equity Shares.

Issue Closing Date [●] Issue Opening Date [●] Issue Price ` [●] per Rights Issue Equity Share Issue Proceeds The proceeds of the Issue that are available to us Issue Size The issue of [●] Equity Shares not exceeding ` 4,500 Lacs Lead Manager Kotak Mahindra Capital Company Limited Letter of Offer The final letter of offer to be filed with the Stock Exchange after incorporating the

observations received from the SEBI on the Draft Letter of Offer Listing Agreement The listing agreement entered into between us and the Bombay Stock Exchange Net Proceeds The Issue Proceeds less the Issue related expenses. For further details, please refer to the

chapter “Objects of the Issue” on page 24. Non Institutional Investors All Investors including sub-accounts of FIIs registered with SEBI, which are foreign

corporate or foreign individuals, that are not QIBs or Retail Individual Investors and who have applied for Rights Issue Equity Shares for an cumulative amount more than ` 2 Lacs.

Net Proceeds The Issue Proceeds less the Issue related expenses. For further details, please refer to the chapter “Objects of the Issue” on page 24.

Promoter/ M&M Our Promoter being Mahindra & Mahindra Limited

Promoter Group Unless the context requires otherwise, the entities forming part of the promoter group in accordance with the SEBI ICDR Regulations or which are disclosed by us to the Stock Exchange from time to time

QIBs or Qualified Institutional Buyers

Public financial institutions as specified in Section 4A of the Companies Act, scheduled commercial banks, mutual fund registered with SEBI, FIIs and subaccount registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual, multilateral and bilateral development financial institution, venture capital fund registered with SEBI, foreign venture capital investor registered with SEBI, state industrial development corporation, insurance company registered with IRDA, provident fund with minimum corpus of ` 2,500 Lacs, pension fund with minimum corpus of ` 2,500 Lacs, National Investment Fund set up by the Government of India and insurance funds set up and managed by the army, navy or air force of the Union of India and insurance funds set up and managed by the Department of Posts, India

Record Date [●]


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Term Description

Refund through electronic transfer of funds

Refunds through NECS, Direct Credit, NEFT or ASBA process, as applicable.

Registrar of Companies/ RoC

The Registrar of Companies, Maharashtra, Mumbai, 100, Everest, Marine Drive, Mumbai – 400 002, Maharashtra, India.

Registrar to the Issue Sharepro Services (India) Private Limited Renouncees Any persons who has / have acquired Rights Entitlements from the Equity Shareholders Retail Individual Investors Individual Investors who have applied for Equity Shares for an amount not more than ` 2

Lacs (including HUFs applying through their Karta) Rights Entitlement The number of Equity Shares that an Investor is entitled to in proportion to the number of

Equity Shares held by the Investor on the Record Date Rights Issue Equity Share(s)

The Equity Share(s) offered in this Issue

SAF(s) Split Application Form(s)

SCSB(s) A Self Certified Syndicate Bank, registered with SEBI, which acts as a banker to the Issue and which offers the facility of ASBA. A list of all SCSBs is available at http://www.sebi.gov.in

Share Certificate The certificate in respect of the Rights Issue Equity Shares allotted to a folio Stock Exchange BSE where the Equity Shares are presently listed and traded Company Related and Industry Related Terms

Term Description

Articles/ Articles of Association

The articles of association of our Company, as amended

Auditor M/s. Deloitte Haskins & Sells, Chartered Accountants, our statutory auditor Board/ Board of Directors Board of Directors of our Company including any committees thereof

Erstwhile Promoters Trenton Investments Company Private Limited, Shishilin Investments Private Limited, Garuda Plant Products Limited, Ms. Indrani Khanna, Mr. Anirudh Khanna, Ms. Neelanjana Khanna and Ms. Deepanjali Chhapwale

ESOS 2010 / ESOS Employee Stock Option Scheme 2010 for our employees as approved by the shareholders by way of resolution dated July 21, 2010 and subsequent amendments thereto

Financial Year/ Fiscal/ Fiscal Year/ FY

Any period of twelve months ended March 31 of that particular year, unless otherwise stated.

Memorandum/ Memorandum of Association

The memorandum of association of our Company, as amended

Preference Shares 12% redeemable preference shares having a face value of ` 100 unless otherwise specified in the context thereof

Registered Office/ Corporate Office

Our registered and corporate office, located at H-109, MIDC Ambad, Nashik – 422 010, Maharashtra, India

Share Subscription Agreement

Share subscription agreement dated June 27, 2011 between us, our Promoter, Trenton Investments Company Private Limited, Garuda Plant Products Limited, Mr. K L Khanna, Ms. Indrani Khanna, Mr. Anirudh Khanna, Ms. Neelanjana Khanna and Ms. Deepanjali Chhapwale. For further details, please refer to the Chapter “History and Other Corporate Matters” on page 52.

Shareholders Agreement Shareholders agreement dated June 27, 2011 between us, our Promoter, Trenton Investments Company Private Limited, Garuda Plant Products Limited, Kimplas Piping Systems Limited, Mr. K L Khanna, Ms. Indrani Khanna, Mr. Anirudh Khanna, Ms. Neelanjana Khanna and Ms. Deepanjali Chhapwale. For further details, please refer to the Chapter “History and Other Corporate Matters” on page 52.


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Abbreviations

Term Description

AGM Annual General Meeting AS Accounting Standards issued by the Institute of Chartered Accountants of India BSE Bombay Stock Exchange Limited CDSL Central Depository Services (India) Limited DP Depository Participant DR Depository Receipts EBITDA Earnings before Interest, Tax, Depreciation and Amortisation ECB External Commercial Borrowing ECB Guidelines The ECB guidelines issued by the RBI on 1 July 2009 (RBI/2009-10/27 Master Circular

No. /07 /2009-10) EGM Extraordinary General Meeting EPS Earnings Per Share FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999 FII(s) Foreign Institutional Investors registered with SEBI under applicable laws FIPB Foreign Investment Promotion Board GDR Global Depository Receipt HUF Hindu Undivided Family ICAI The Institute of Chartered Accountants of India IFRS International Financial Reporting Standards Indian GAAP Generally accepted accounting principles followed in India ISIN International Securities Identification Number IT Information Technology IT Act The Income Tax Act, 1961, as amended JV Joint Venture MIS Micro Irrigation System MI Micro Irrigation MICR Magnetic Ink Character Recognition NAV Net Asset Value NECS National Electronic Clearing Services NEFT National Electronic Funds Transfer NR Non Resident NRI(s) Non Resident Indian(s) NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited OCB Overseas Corporate Body OCCD Optionally convertible cumulative debenture PAN Permanent Account Number PAT Profit After Tax PBT Profit Before Tax PLR Prime Lending Rate QPC Quick Pipe Coupling RBI Reserve Bank of India Regulation S Regulation S of the Securities Act Rs./`/Rupees/INR Indian Rupees. RTGS Real Time Gross Settlement. SEBI Securities and Exchange Board of India.Securities Act U.S. Securities Act of 1933, as amendedSensex Bombay Stock Exchange Sensitive Index STT Securities Transaction Tax TP Act The Transfer of Property Act, 1882

The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms under


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the Companies Act, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder.

Notwithstanding the foregoing, terms in “Terms of the Articles of Association”, “Statement of Tax Benefits”, “Key Industry Regulations” and “Financial Statements” on pages 241, 31, 49 and 132, respectively, shall have the meanings given to such terms in these respective sections.


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NOTICE TO OVERSEAS SHAREHOLDERS

The rights and the securities of our Company have not been and will not be registered under the United States Securities Act of 1933, as amended (“Securities Act”), or any U.S. state securities laws and may not be offered, sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof (the “United States” or “U.S.”), except in a transaction exempt from the registration requirements of the Securities Act. The rights referred to in the Draft Letter of Offer are being offered in India, but not in the United States. The offering to which the Draft Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or rights for sale in the United States or as a solicitation therein of an offer to buy any of the said Rights Issue Equity Shares or rights. Accordingly, the Draft Letter of Offer or Letter of Offer and the enclosed CAF should not be forwarded to or transmitted in or into the United States at any time. Neither we nor any person acting on behalf of us will accept subscriptions or renunciation from any person, or the agent of any person, who appears to be, or who we or any person acting on behalf of us has reason to believe is in the United States when the buy order is made. Envelopes containing a CAF should not be postmarked in the United States or otherwise dispatched from the United States or any other jurisdiction where it would be illegal to make an offer, and all persons subscribing for the Rights Issue Equity Shares and wishing to hold such Rights Issue Equity Shares in registered form must provide an address for registration of the Rights Issue Equity Shares in India. We are making the issue of Rights Issue Equity Shares on a rights basis to Equity Shareholders on the Record Date and the Letter of Offer and CAF will be dispatched only to Equity Shareholders who have an Indian address. Any person who acquires rights and the Rights Issue Equity Shares will be deemed to have declared, represented, warranted and agreed, (i) that it is not and that at the time of subscribing for the Rights Issue Equity Shares or the Rights Entitlements, it will not be, in the United States when the buy order is made, (ii) it does not have a registered address (and is not otherwise located) in the United States, and (iii) it is authorised to acquire the rights and the Rights Issue Equity Shares in compliance with all applicable laws and regulations. We reserve the right to treat as invalid any CAF which: (i) does not include the certification set out in the CAF to the effect that the subscriber does not have a registered address (and is not otherwise located) in the United States and is authorized to acquire the rights and the Rights Issue Equity Shares in compliance with all applicable laws and regulations; (ii) appears to us or our agents to have been executed in or dispatched from the United States; (iii) where a registered Indian address is not provided; or (iv) where we believe that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements; and we shall not be bound to allot or issue any Rights Issue Equity Shares or Rights Entitlement in respect of any such CAF.


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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Unless stated otherwise, the financial data in this Draft Letter of Offer is derived from the Standalone Restated Financial Information of our Company which has been prepared in accordance with Indian GAAP and are included in the Draft Letter of Offer. Our financial year commences on April 1 and ends on March 31. In this Draft Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off, and unless otherwise specified, all financial numbers in parenthesis represent negative figures. All references in the Draft Letter of Offer to “Rupees”, “`”, “Rs.”, “Indian Rupees” and “INR” are to Indian Rupees, the official currency of the Republic of India. All references to “U.S. $”, “U.S. Dollar”, “USD” or “$” are to United States Dollars, the official currency of the United States of America. All references to “CHF” are to Swiss Francs, the official currency of Switzerland. All references to SGD are to Singapore Dollars, the official currency of Republic of Singapore. Please Note:

One million is equal to 10,00,000/10 Lacs / Lakhs One billion is equal to 1,000 million/100 crores One Lacs / lakhs is equal to 100 thousand One crore is equal to 10 million/100 Lacs / Lakhs

Unless stated otherwise, industry data used throughout this Draft Letter of Offer has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that industry data used in this Draft Letter of Offer is reliable, it has not been independently verified. Fluctuations in the exchange rate between the Rupee and the U.S. Dollar will affect the U.S. Dollar equivalent of the Rupee price of the Equity Shares on the Stock Exchange. These fluctuations may also affect the conversion into U.S. Dollars of any cash dividends paid in Rupees on the Equity Shares.


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FORWARD LOOKING STATEMENTS Certain statements in this Draft Letter of Offer which contain words or phrases such as “will”, “may”, “aim”, “is likely to result”, “believe”, “expect”, “continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “pursue” and similar expressions or variations of such expressions, that are “forward looking statements”. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to:

Disruptions in our manufacturing facilities Disruption in raw material supply and prices Increase in cost of power or other fuel Competition from existing and new players Working capital arrangements Growth of unorganized sector and threat from national/regional players Our ability to successfully implement our growth strategy Changes in laws and regulations relating to the industry in which we operate Changes in political and social conditions in India Loss or shutdown of our operations at any time due to strike or labour unrest or any other reason Our ability to successfully implement our strategy, growth and expansion plans Non renewal or receipt of government approvals Changes in government policies and regulatory actions that apply to or affect our business General economic conditions The outcome of legal or regulatory proceedings that we are or might become involved in Contingent liabilities, environmental problems and uninsured losses Developments affecting the Indian economy Uncertainty in global financial markets

For a further discussion of factors that could cause the actual results to differ, please refer to the chapter “Risk Factors” on page IX. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither we nor the Lead Manager nor any of their respective affiliates or advisors have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI and Stock Exchange’s requirements, we and Lead Manager shall ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchange.


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SECTION II - RISK FACTORS

An investment in equity and equity related securities involves a high degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing all or a part of their investment. You should carefully consider all of the information in this Draft Letter of Offer, including the risks and uncertainties described below, before making an investment. In making an investment decision, prospective investor must rely on their own examination of us and terms of the Issue, including the merits and risk involved. If any of the following risks actually occur, our business, financial condition, results of operations and prospects could suffer, the trading price of our Equity Shares could decline and you may lose all or part of your investment. The risk and uncertainties described below are not the only risks that we currently face. Additional risk and uncertainties not presently known to us or that we currently believe to be immaterial may also have an adverse effect on results of operations and financial condition. This Draft Letter of Offer also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the considerations described below and elsewhere in this Draft Letter of Offer. The financial and other implications of material impact of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However there are few risk factors where the impact is not quantifiable and hence the same has not been disclosed in such risk factors. Internal Risk Factors 1. We, our Promoter, one of our Directors and certain constituents of our Group Companies are involved in

litigation proceedings and we cannot assure you that we or they will be successful in any or all of these actions. In the event we are unsuccessful in litigating any or all of the disputes described below, our business, reputation and results of operations may be adversely affected

We, our Promoter, one of our Directors and certain constituents of our Group Companies are party to litigations and are subject to legal notices. No assurances can be given that these proceedings will be determined in our or their favour. If a claim is determined against us and we are required to pay all or a portion of the disputed amount, it could have an adverse effect on our results of operations and cash flows. A classification of the legal proceedings instituted against and by us, our Promoter, our Director and certain constituents of our Group Companies and the monetary amount involved, wherever quantifiable, in these cases is mentioned in brief below:

Litigation against us

Sr. No.

Nature of the litigation Number of outstanding litigations Aggregate amount ascertainable (`) in Lacs

1. Civil 7 0.20 2. Tax 5 128.873. Tax notices 5 277.62

Total 17 406.69 Litigation by us

Sr. No.

Nature of the litigation Number of outstanding litigations Aggregate amount ascertainable (`) in lacs

1. Criminal 6 37.19 2. Civil 5 78.33 3. SEBI related litigation 2 Not ascertainable 4. Tax 2 198.16

Total 15 313.68 Litigation against our Directors

Names of the Director Nature of the litigation

Number of outstanding litigations

Aggregate amount ascertainable (`) in lacs

S. Durgashankar Criminal 1 Not ascertainable Total 1 Not ascertainable


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Litigation against our Promoter

Sr. No.

Nature of the litigation Number of outstanding litigations


1. Criminal 57 Not ascertainable 2. Civil 3,144 15,390.31 3. Arbitration 2 Not ascertainable 4. Civil notices 2,064 2,879.90 5. Tax 311 1,08,188.54 6. Tax notices 93 45,060.39Total 5,672 171,519.14

Litigation by our Promoter

Sr. No.



1. Criminal 171 11,265.57 2. Civil 34 2,849.38 3. Arbitration 1 Not ascertainable 4. Intellectual property notices 3 Not ascertainable 5. Tax 86 30,292 Total 295 44,006.95

Litigation against our top 5 listed Group Companies

Sr. No.



1. Criminal 238 144.762. Civil 1,732 19,990.61 3. Arbitration 1 1,256.15 4. Tax cases 43 13,688.97 5. Tax notices 2 260.64 Total 1,995 2,016

Litigation by our top 5 listed Group Companies

Sr. No.



1. Criminal 24,341 33,173.55 2. Civil 63 10,107.96 3. Arbitration 69,606 1,69,414.12 4. Civil notices 11,290 2,178.955. Tax cases 2 65,481.66 Total 1,05,302 2,80,356.24

Note: The amounts indicated in the columns above are approximate amounts.

For further details, please see “Outstanding Litigations and Material Developments” beginning on page 178.

2. Our operations are significantly dependent on the timely procurement of raw materials and any delay in such

procurement or procurement on commercially unviable terms may adversely affect our business and results of operations. We are engaged in the business of manufacturing drip and sprinkler irrigation systems, its components, specialized pipes for water and gas distribution and industrial pipes. These products are manufactured from raw materials of high, medium and linear low density polyethylene which we procure from third parties. We place orders for the raw materials on a monthly basis with the quantity of our orders dependent on internal estimates. In the event our estimates prove to be incorrect on grounds of higher purchase orders than expected in a particular month or quarter, we may be unable to procure additional raw material from our suppliers. While occasions of incorrect monthly estimates of raw materials have occurred in the past, the same has not affected our production or has hampered our ability to supply our products to our customers as we have been able to procure additional raw materials from the


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open market. However, in the event of such miss-estimation of the requirements of raw material in future, we are unable to assure you that we shall be able to procure raw materials from other sources on commercially viable terms, if at all and occurrence of the same shall not affect our ability to deliver our products to our customers in time. Moreover, the manufacture of the raw materials is dependent on crude oil and the price of crude oil globally determinates the prices of the raw materials. In recent times, the price of crude oil globally has been volatile. In the event of any material upswing of crude oil prices globally or locally the price of the raw materials may increase which would consequently increment the cost of manufacture of our products. In the event we are unable to pass on this cost to our customers, our margins and results of operations may be adversely affected.

3. The micro irrigation industry is substantially dependent on government subsidies under various mega MIS

projects and any delay in receipt or non-receipt of such subsidies requires greater infusion of funds into the business by us which we may not be able to generate in time or at all

The micro irrigation industry is significantly dependent on government subsidies. Our customers are primarily farmers and horticulturists who are entitled to government subsidies. We market our products either through our channel partners in “open markets” or arrangements with nodal agencies. For products sold through the arrangements with the nodal agencies, we receive payment from such nodal agencies consequent to fulfillment of procedural compliances. In the event there is a delay in receipt of the subsidy component, our margins for a particular period or year may be adversely affected. Moreover, in the event the government withdraws or reduces the subsidy currently being offered to the industry, which ranges from 50 % to 100 % of the approved product cost depending on the subsidy policies of the respective state governments, the farmers and the horticulturists may not be in a position to afford micro irrigation systems which would adversely affect our business and results of operations. Further, eligibility to receive subsidies is subject to fulfillment of certain condition by the company applying for the subsidy. Such conditions include the quality of the products manufactured by such a company, the nature of the after sales service, etc. While we are in compliance with all such eligibility parameters as on date, we are unable to assure you that we shall continue to comply with such conditions in the future. In case we are unable to meet any or all of such eligibility parameters, we shall be unable to market our products under the subsidy scheme which shall materially increase the cost of our products from the farmers’ perspective and consequently may adversely affect our sales and results of operations.

4. The loss of or shutdown of operations at our production facility may have a material adverse effect on our business, financial condition and results of operations.

We have one facility for undertaking the manufacture of our products which is located at Nashik. The breakdown or failure of the equipments and/ or civil structure can disrupt our production schedules, resulting in performance being below expected levels. In addition, the development or operation of our facilities may be disrupted for reasons that are beyond our control, including explosions, fires, earthquakes and other natural disasters, breakdown, failure or sub-standard performance of equipment, improper installation or operation of equipment, accidents, operational problems, transportation interruptions, other environmental risks, and labour disputes. Our manufacturing facility was shut down for approximately three months in 2001 due to a labour strike. Such inadvertent incidences in the future may adversely affect our business. Our manufacturing facility is also subject to mechanical failure and equipment shutdowns. Our machineries may be susceptible to malfunction. Moreover, since the manufacture of our products is concentrated on only one manufacturing unit, occurrence of any or all of the above events may significantly disrupt our operations and affect our business, financial condition and results of operations. We employ significant number of employees at our manufacturing facility. We are unable to assure you that we will not experience disruptions to our operations due to disputes or other problems with our work force, which may lead to strikes, lock - outs or increased wage demands. Such issues could have an adverse effect on our business, and results of operations.

5. We face stiff competition in our business from organized and unorganized players, which may adversely affect

our business operation and financial condition. Moreover, we have a limited product portfolio when compared to industry peers in the organized sector which may affect our ability to compete effectively

The market for our products is highly competitive on account of both the organized and unorganized players. Players in this industry generally compete with each other on key attributes such as the quality of products, the quality of the after sales services, the strength of the distribution network and pricing. Some of our competitors may have greater financial, technical and other resources and greater market share and goodwill which may enable them


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to compete effectively. We also anticipate entry by international players into the domestic market which should further increase the competition. Moreover, the unorganized sector offers their products at highly competitive prices which may not be matched by us and consequently affect our sales volume and growth prospects. Growing competition may result in a decline in our market share and may affect our margins which may adversely affect our business operations and our financial condition.

As part of our MIS business, we manufacture drip and sprinkler irrigation systems and their components. However, our industry peers are engaged in manufacturing a more diverse product portfolio which includes pressure compensating drippers, sub-surface irrigation, foggers and misters. While we believe we are able to compete effectively with our product portfolio, our competitors’ wider product range offers them the opportunity to cater to wider customer base and develop a greater brand recall. We propose to diversify our product portfolio but are unable to assure you whether the same shall be as successful as our existing products. In the event we are unable to compete effectively with our existing product range and are unable to successfully develop and market the new product range within a definite timeline or at all, our business and results of operations shall be adversely affected.

6. We outsource the manufacture of certain components used in the manufacture of our products to third parties

which increase our operating costs. Moreover, we do not have long term agreements with such parties and any breakdown of our relationship with our suppliers may adversely affect our business and results of operations.

We outsource the production of certain components forming part of our final products to independent third parties.

Such components include sprinkler nozzles, risers, insert for PCN, serrated nipples, rubber seals, gaskets, Mild Steel clamps, rivets, metallic saddles and other similar components. These components formed 15.93% of our operating expenditure for the year ended March 31, 2011 and 16.27% of our operating expenditure for the period of September 30, 2011.

Due to such procurement from third parties, our operating expenses increase which we believe would have been substantially lesser, on an internal estimate, if we would have manufactured these components in house. Moreover, we do not have any long terms agreements for procurement of such components with any of our suppliers. While we believe we have stable business relationship with all our suppliers, any break down of our relationship with any or all of our suppliers may adversely affect our business and results of operations.

7. Costs associated with warranty and liability due to defects in our products may adversely affect our business and

results of operations and could also lead to adverse publicity.

Warranty claims can reduce our profitability. Any defect in our products could affect the demand for our products and could result in customer claims for damages against us. We offer a five year warranty on drip and sprinkler irrigation systems and any defects in these products may expose us to claims for damages. For products marketed pursuant to arrangements with nodal agencies, we provide a warranty on the final finished product and for products sold though our channel partners in “open markets”, we provide a warranty for defects only in the parts manufactured by us. While we have resolved consumer complaints in the past by replacement of some of the products sold, there has not been any case of claim settlement in cash. Any warranty claims and liability suits in future may adversely affect our business and results of operations.

8. Our inability to develop and promote our brands may impede our growth rate and our profitability.

We believe that brand building is an essential component of business growth particularly in the industry in which we operate and more particularly in the organized sector of which we are a part of. Our brands enable our customer to distinguish our products from competitors’ and other players in the unorganized sector. While we believe we have established our brands “EPC” in certain regions, we intend to expand our operations which would require additional investment towards brand promotion. Our inability to successfully promote and market our brand may adversely affect our business and results of operations.

9. Various trademarks pertaining to our name, logo and products are not registered and it may lead to the dilution of our trademarks and limits our ability to defend our trade marks in infringement or passing off proceedings.

We have filed applications for registering the various trademarks and a design pertaining to our products under various classes under the Trade Marks Act, 1999 and the Designs Act, 2000 and these applications are currently pending. There can be no assurance that our trade mark and design applications will be accepted and the trademarks and design will be registered. Details of our intellectual properties which are yet to be registered are as follows:


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Sr. No.

Description Class Date of application

1. Shaktiman (Trademark) 7 September 16, 1999 2. Shaktiman (Trademark) 16 September 16, 1999 3. EPC (Trademark) 17 November 22, 2010 4. EPC – Logo (Trademark) 17 November 22, 2010 5. EPC – Logo (Trademark) 21 November 22, 20106. Piper Coupler for use of flowing fluid in the irrigation system (Design) Design November 10, 2011

Our Promoter has licensed the right to state “A Mahindra Group Company” as part of our logo, as appearing on the cover page, pursuant to an agreement dated December 2, 2011. Further, our applications for the registration of certain trademarks and designs may be opposed by third parties, and we may have to incur significant cost and spend time in litigations in relation to these oppositions. In the event we are not able to obtain registrations or if any injunctive or other adverse order is issued against us in respect of any of our trademarks or designs for which we have applied for registration, we may not be able to avail the legal protection and legal remedies (in case of infringement) or prohibit unauthorised use of such mark by third parties by means of statutory protection, available as a proprietor of registered trademarks or designs.

10. Our inability to maintain distribution network can adversely affect our revenues.

We sell our products in open markets with the help of our distribution network. We have entered into formal arrangements with 113 channel partners and informal arrangements with a number of other channel partners to market and sell our products in 17 states. Our inability to maintain our existing distribution network or to expand it further consistent with our business growth and in order to compete effectively, can adversely affect our growth and revenues.

11. We have been subject to BIFR proceedings in the past which may result in negative sentiments about us.

We had filed a reference with the BIFR based on our audited balance sheet as on July 31, 2000. The BIFR in its hearing held on 2 July, 2001, declared the Company 'sick' in terms of the provisions of the SICA. The reason for the erosion of our networth during this period was disruption in the subsidy schemes provided to the farmers by the government for procurement of micro irrigation systems. The payment of subsidy by the Government was delayed due to a number of factors which correspondingly affected our sales adversely. Our loan accounts were deemed “Non-Performing Assets” and the accumulated losses converted our status to a “sick company”. The BIFR vide its order dated June 29, 2007 discharged the Company from the purview of SICA/BIFR. This corporate history may result in negative sentiments about us which may consequently affect the trading price of our Equity Shares. For further details please refer to chapter titled “History and Other Corporate Matters” beginning on page 52.

12. As a manufacturing business, our success depends on the smooth supply and transportation of our products from our plants to our channel partners and customers. Supply and transportation are subject to various uncertainties and risks, and delays in delivery or delivery of non conforming shipments may result in rejected or discounted deliveries.

We depend on trucking to deliver our products from our manufacturing facilities to our customers. We rely on third parties to provide such services. Disruptions of transportation services because of weather-related problems, strikes, lock-outs, inadequacies in road infrastructure or other events could impair our procurement of raw materials and our ability to supply our products to our customers. There is no assurance that such disruptions will not occur in the future. While we can claim compensation from the transportation service providers, under the terms of their engagement, for any delay in the timely delivery of our products, any such delays may adversely affect our relationship with our customers and consequently our goodwill. Any such disruptions could materially adversely affect our business, financial condition and results of operations.

13. The sale of products forming part of our micro irrigation system business is susceptible to the seasonal nature of

the industry they cater to which affects our results of operations during the off season

As part of our micro irrigation system business, we manufacture drip and sprinkler irrigation systems. Drip irrigation systems is generally used for row crops such as vegetables, flowers, fruits, plantation crops, etc., while the sprinkler irrigation systems is largely used for broadcast crops such as cereals, oilseeds, etc. Most of these crops are seasonal in nature and consequently utilisation of our products is also restricted to these periods. Due to such


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periodic usage of our products, their life cycle tends to increase which affects our recurring sales.

14. We have not entered into any long-term contracts with any of our customers which may affect our business in case of change in buying patterns

We do not have any long-term contracts with our customers and any change in the buying pattern of the customers could adversely affect our business. While we believe that the quality of our products and goodwill has ensured repeat business, there is no certainty that the same will continue in the years to come which may consequently affect our profitability.

15. We have an export obligation in terms of the licenses granted under the Export Promotion Capital Goods

Scheme and in the event we are unable to meet the obligation, we may have to pay import duty which may affect our profits We have obtained licenses dated August 27, 1992 and May 9, 2011 under the Export Promotion Capital Goods Scheme (‘EPCG Scheme”) under which we are eligible for concessional rate of custom duty on import of capital goods with a five years and six years export obligation respectively amounting to “free on board” value of four times the “cost insurance freight” value of capital goods imported by us. In the past, we have not been able to meet our export obligations with the requisite time frame. As on September 30, 2011, the total outstanding export obligations pursuant to the terms of the grant of the above licenses are ` 1,654.89 Lacs. We are obligated to meet the export obligation under the August 27, 1992 license by March 31, 2015 and the May 9, 2011 license by May 8, 2017. In the event we are unable to comply with the export obligations, we shall have to pay duty proportionate to unfulfilled obligation along with the interest, which may adversely affect our profits.

16. Our business entails high working capital requirements and cash flows and our inability to arrange for the

same, in a timely manner or at all, may adversely impact on the results of our operations.

Our business demands substantial fund and non-fund based working capital facilities. For products marketed in open markets, the working capital requirement is significantly lesser as the majority of the consideration is paid up-front. However, for project market sales, our requirement of working capital funds increments substantially as the consideration is not received upfront. For further details of our sales model, please see “Our Business” on page 36. In case there is insufficient cash flows to meet our working capital requirement or our inability to arrange for the same from other sources or due to other factors including delay in disbursement of arranged funds, resulting in our inability to finance our working capital needs when needed or there is any increase in interest rate on our borrowings, it may adversely affect our performance.

17. Our success is dependent on the quality control processes and any failure to maintain the quality of our products

may affect our reputation and business.

Our quality management system is ISO 9001:2008 certified. Our quality assurance department is equipped with equipments and resources necessary to carry out various tests in order to ensure the quality of our products prior to delivery to our customers. The British Gas Transco Technical Specifications for Polyethylene Pipes and Fittings for Natural Gas and Suitable Manufactured Gas has approved the quality of the pipes diameter 20 mm to 125 mm manufactured by us in BP Rigidex PC 2040 and Finathene 3802 YCF. Further, the following products manufactured by us are “ISI” marked:

IS Standard Description

IS : 4984 – 1995 High Density Polyethylene Pipes for Water Supply. IS : 14151 (P-1) -1999 Irrigation Equipment - Sprinkler Pipes. IS : 14151 (P-2) -2008 Irrigation Equipment - Quick Coupled Sprinkler Pipe. IS : 12786 – 1989 Irrigation Equipment - Polyethylene Pipes for Irrigation Laterals. IS : 13488 – 2008 Irrigation Equipment - Emitting Pipe Systems. IS : 14482 – 1997 Irrigation Equipment – Polyethylene Micro Tubes For Drip Irrigation. IS : 14885 – 2001 Polyethylene Pipes for Supply of Gaseous Fuel. IS : 14333 – 1996 High Density Polyethylene Pipe for Sewerage. IS : 13487 – 1992 Irrigation Equipment – Emitters.


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IS Standard Description

IS : 12785 – 1994 Irrigation Equipment – Strainer - Type Filters. IS : 14606 – 1998 Irrigation Equipment – Media Filters IS : 14743 – 1999 Irrigation Equipment – Hydro cyclone Filters IS : 12232-1996 Irrigation Equipment – Rotating Sprinkler

We believe that the quality control processes undertaken by us at stages of procurement and at various stages of manufacture ensures the quality of our products. Inconsistent performance of our quality control processes may affect quality of our products and consequently, our goodwill, business and results of operations.

18. A majority of the machinery installed at our manufacturing facility has been in usage since 1998 and the age of

the machinery and the dated technology increases our operating costs.

A majority of the machinery installed at our manufacturing facility at Nashik was installed prior to 1998. While there has been no breakdown of the machineries in the past, we believe that the relative age of our machinery, as compared to our competitors, increases our operating costs. While we have installed machinery post 1998 and we propose to install new machinery at the plant in the future, we are unable to commit on a definite time frame within which such installation would be complete and on the means of finance that would be utilized for such upgradation. While our profitability has not been affected, we are unable to assure you that the age of the installed machinery shall not adversely affect our results of operations.

19. Our exposure to interest rates and the right of our lenders to recall the indebtedness on demand may adversely

affect our results of operations.

We have incurred substantial floating interest rate debt, we are exposed to interest rate risk. As of December 31, 2011, we had floating interest rate indebtedness of ` 1,648.71 Lacs which is around 70.00 % of our total borrowings. Moreover, as of December 31, 2011, the working capital facilities are recallable at demand by the lenders. Some of our current debt facilities carry interest at floating rates with the provision for periodic reset of interest rates. We do not currently enter into any swap or interest rate hedging transactions in connection with such loan agreements to mitigate our interest rate exposure. Any increase in interest rates may have an adverse effect on our business prospects, financial condition and results of operations.

20. We are dependent on our Promoter, Mahindra and Mahindra Limited, for their expertise and market goodwill and our separation from the Mahindra group may adversely affect our business. Also, the loss of the members of our senior management team may adversely affect our growth prospects. Mahindra and Mahindra Limited acquired control and management stake in us in September 2011. The Mahindra group is one of the leading and one of the largest business conglomerates in India. We believe that our association with the Mahindra Group lends strength to the trust and reliability reposed in us and enables us to attract and retain fresh talent. We further believe that sharing goals and objectives with the Mahindra Group enables us to utilize various synergies which aid in our business and operations. Consequently, our separation from Mahindra group for any reason whatsoever shall adversely affect our business and results of operations.

Moreover, our success and future performance is substantially dependent on the guidance and foresight of our senior management team who oversee the operations and management of our businesses. The loss of the services of such management personnel or other key personnel could have an adverse effect on our business and results of operations. Further, our ability to maintain and improve on our market position in micro irrigation business depends on our ability to attract, train, motivate and retain highly skilled personnel. If we are unable to recruit and retain professionals, our business and results of operations may be adversely affected.

21. Our agreements with various banks for financial arrangements contain restrictive covenants for certain

activities and if we are unable to get their approval, it might restrict our scope of activities and impede our growth plans.

We have entered into agreements for short term and long term borrowings with certain banks and financial institutions. These agreements include restrictive covenants which mandate certain restrictions in terms of our business operations such as change in capital structure, declaring dividends, further expansion of business, taking up


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new business activity or setting up/ investing in subsidiary except in the ordinary course of business and which require us to obtain prior approval of the lenders for any of the above activities. Although we have received approvals for this Issue, we are unable to assure you that our lenders will provide us with these approvals in the future. For details of these restrictive covenants, please see “Financial Indebtedness” beginning on page 176.

22. Our Promoter and members of the Promoter Group will continue jointly to retain control over us after the Issue,

which will allow them to determine the outcome of matters submitted to shareholders for approval.

After completion of the Issue, our Promoter and Promoter Group will continue to collectively exercise control over us and consequently, will continue to have the ability to cause us to take actions that may not be in, or may conflict with, your interests or the interests of some or all of our creditors or minority shareholders, and we cannot assure you that such actions will not have an adverse effect on our future financial performance or the price of our Equity Shares.

23. Our business is subject to government regulations and requires periodic approvals and renewals and changes in

these regulations or in their implementation, or our failure to obtain or renew certain approvals or licenses in the ordinary course of business in a timely manner or at all, may adversely affect our operations.

Our business is subject to pollution control laws like the Environmental Protection Act, 1986, the Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981 and the Hazardous Waste (Management and Handling) Rules, 1989 and labour laws such as the Factories Act, 1948, the Industrial Disputes Act, 1947, the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, etc. For more details on the regulations and the policies that regulate our industry, please see “Key Industry Regulations” on page 49. If we cannot comply with all applicable regulations, our business prospects and results of operations could be adversely affected. Further, some of our licenses for our existing operations have expired and we are in the process of renewing the same. We have applied for some but are yet to receive the respective licenses. For further details, please see “Government and Other Approvals” on page 202. If we are unable to obtain the requisite licenses in a timely manner or at all, our business operations and results may be affected.

24. Any inability to manage our growth could disrupt our business and reduce our profitability.

Since our discharge from the purview of the BIFR, we have experienced significant growth in our total income. We expect this growth to place significant demands on both our management and our resources. This will require us to evolve and improve our operational, financial and internal controls across our organization. In particular, continued expansion increases the challenges involved in recruiting, training and retaining sufficient skilled technical, sales and management personnel; adhering to our quality and process execution standards; maintaining high levels of customer satisfaction; and developing and improving our internal administrative infrastructure, particularly our financial, operational, communications and other internal systems. Any inability to manage growth may have an adverse effect on our business, results of operations and financial condition.

25. We have entered into a number of related party transactions, which may involve conflict of interest.

We have entered into a number of related party transactions. Such transactions or any future transactions with related parties may potentially involve conflicts of interest and impose certain liabilities on us. For further details, please refer to the statement of related party transactions in “Annexure - XVII” beginning on page 159 under the section “Financial Statements”.

26. Some of our Group Companies have incurred losses during the last three years and/ or have negative net worth

as per their audited financial statements, as set forth in the table below. Further one of our group companies has been declared sick in terms of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985.

The following Group Companies have incurred losses as set forth in the table below:

(` in Lacs, unless expressly stated) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Mahindra First Choice Wheels Limited (2,181.60) (871.76) (613.39) Mahindra Engg & Chem Products Limited 730.24 652.85 (851.69) Mahindra Navistar Automotives Limited (2,514.31) (2,565.93) (18,630.19) Mahindra Shubhlabh Services Limited* (67.83) 54.25 (815.70) Bristlecone Limited (563.79) (677.61) (696.56)


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Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Mahindra Automobile Distributor Private Limited* (49,021) (8,153) (2,084) Mahindra Ugine Steel Company Limited (1883.00) 467.00 (597) Mahindra Castings Limited (4,285.79) (783.70) (744.14)Mahindra Forgings Limited (1,17,10.80) (1,84,48.74) 376.18 Mahindra Logistics Limited 446.26 (283.60) (705.24) Mahindra Aerospace Private Limited (26.18) (89.30) (355.84) Mahindra First Choice Services Limited (586.23) (618.04) (1,058.13) Mahindra Navistar Engines Private Limited (709.49) (1,408.79) (5,036.53) Mahindra Gears International Limited (10.39) (9.84) (8.60) Mahindra Two Wheelers Limited* (2,250.40) (9,691.06) (16,921.86)Mahindra Automotive Australia Pty. Limited* (266.30) (404.51) (372.30) Mahindra Defence Land Systems Private Limited NA (7.43) (65.23) Mahindra EcoNova Private Limited NA NA (0.37) Mahindra Reva Electric Vehicles Private Limited (2,099.23) (1,712.94) (2,828.08) Bristlecone Singapore Pte. Limited (123.90) (195.13) (34.61) Mahindra Integrated Township Limited 42.96 (444.156) (569.07) Bristlecone Inc. (28.30) (1,211.89) (801.00) Mahindra-BT Investment Company (Mauritius) Limited 948.56 (1,476.63) (154.29) Mahindra (China) Tractor Company Limited (2,002.95) (1378.30) (1,469.07) Mahindra World City (Maharashtra) Limited (1.34) (0.82) (103.06)Mahindra Engineering GmbH* (19.16) (83.85) (307.66) Stokes Group Limited* (4113.00) (2,996.74) (829.90) Mahindra Holidays & Resorts (USA) Inc. (414.54) 80.37 (17.52) Mahindra Forgings International Limited (213.76) (1,698.38) (435.10) Mahindra Forgings Global Limited (1.16) 2.32 (14.78) Schöneweiss & Co. GmbH (293.74) (5,328.65) (993.36) Mahindra Hotels and Residences India Limited (0.57) (0.43) (0.50) Knowledge Township Limited (17.98) (1.20) (1.49) Heritage Bird (M) Sdn Bhd* (7.44) (14.65) (21.08) Mahindra Graphic Research Design srl (188.26) (476.38) (431.23) Mahindra Gears Global Limited (14.75) (14.99) (97.44) Mahindra Gears Cyprus Limited (2.98) (18.44) (5.79) Metalcastello S.p.A (173.64) (5,247.5) (3,900.31) Engines Engineering S.r.l. (129.41) (333.84) (278.59) EFF Engineering S.r.l. 17.92 0.36 (14.95) Mahindra Bebanco Developers Limited* (31.97) (1.14) (5.34) Mahindra Electrical Steel Limited* NA (12.28) (1.97) Raigad Industrial and Business Park Limited* NA (6.35) (0.93) Mahindra Retail Private Limited (3,725.99) (4,412.14) (6,021.24) Retail Initiative Holdings Limited* (44.36) (51.85) (0.43) Mahindra Technologies Services Inc.* NA 32.51 (80.04) Mahindra Punjab Tractors Private Limited NA (0.25) (0.11) BAH Hotelanlagen AG (177.37) (34.34) (104.85)Mahindra Aerospace Australia Pty. Limited NA (4.76) (2.94) Aerostaff Australia Pty. Limited* 398.94 (312.08) (354.17) Anthurium Developers Limited NA NA (1.15) Watsonia Developers Limited NA NA (1.14) Gipp Aero Investments Pty. Limited NA NA (7.61) Gippsaero Pty. Limited NA (55.70) (631.51) Bristlecone Consulting Limited* NA NA (2.59) Mahindra Emirates Vehicle Armouring FZ-LLC NA NA (211.66) Mahindra Aerostructures Private Limited* NA NA (190.15) Mahindra EPC Services Private Limited NA NA (21.84)Officemartindia.com Limited* (0.29) (0.18) (0.17) Mahindra Construction Company Limited* (30.42) (10.84) (14.15) Vayugrid Marketplace Services Private Limited* (11.86) (119.53) (600.23) Mega One Stop Farm Services Limited* (1.35) (0.96) (0.39) Mriyalguda Farm Solutions Limited* (0.10) (0.33) (0.07) Kota Farm Services Limited* (0.17) (0.07) (0.07) Ssangyong European Parts Center B.V.* (in Euro €) (2,89,505) (2,150,549) (215,836) Mahindra Forging Europe A.G. (in Euro €) (27,88,997) (1,50,27,066) (10,84,820)


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* Group Companies having negative net worth Group Company declared Sick as per SICA:


Mahindra Gujarat Tractor Limited (139.21) 302.21 390.79 27. We have experienced negative cash flows and any negative cash flows in the future could adversely affect our

financial conditions and results of operations.

We have experienced negative cash flows in the recent past, the details of which are as follows: (` in Lacs)

Particulars For the six months ended September 30,

2011

For the financial year ending on March 31,

2011 March 31,

2010 March 31,

2009 Net cash from/ (used in) operating activities (A) (202.78) 380.60 141.86 26.80 Net cash from/ (used in) investing activities (B) (460.74) (509.23) (52.73) (243.40) Net cash from/ (used in) financing activities (C) (1,645. 60) 3,802.04 (60.61) 367.88

Any negative cash flows in the future could adversely affect our results of operations and financial condition. For further details, please see “Financial Statements” beginning on page 132.

28. We have not provided for certain contingent liabilities which could adversely affect our financial condition, if

these liabilities are crystallized.

For the period ended September 30, 2011, we have not provided for the following contingent liabilities: (` in Lacs)

Particulars Amount

Guarantees issued by Banks secured by Fixed Deposits 710.47 Custom Duty / Interest on account of commitment to Export, under Export Promotion Capital Goods Scheme 314.91 Show Cause cum Demand Notices received from Excise Authorities 79.44 Loans & Advances includes refund claim made for excise duty paid under protest 166.79 Income Tax Demand Disputed Appeal (AY 1993-94) 23.67

Total 1,295.28 29. We do not own certain of our offices and certain other premises from which we operate. Any dispute in relation

to the lease of our premises would have a material adverse effect on our business and results of operations.

We do not own the certain of our offices and certain other premises from which we operate. If the owners of any of these premises do not renew the agreements under which we occupy the premises or renew such agreements on terms and conditions that are unfavorable to us, we may suffer a disruption in our operations or may have to pay increased rentals which could have a adverse effect on our business, financial condition and results of operations. For more information, please see “Our Business” on page 36.

30. The insurance coverage taken by us may not be adequate to protect against certain business risks. This may

adversely affect our financial condition and result of operations.

Operating and managing a business involves many risks that may adversely affect our operations and the availability of insurance is therefore important to our operations. We believe that our insurance coverage is generally consistent with industry practice. However, to the extent that any uninsured risks materialize or if it fails to effectively cover any risks, we could be exposed to substantial costs and losses that would adversely affect our financial condition. In addition, we cannot be certain that the coverage will be available in sufficient amounts to cover one or more large claims or that our insurers will not disclaim coverage as to any particular claim or claims. A successful assertion of one or more large claims against us that exceeds our available insurance coverage or that leads to adverse changes in our insurance policies, including premium increases or the imposition of a large deductible or coinsurance requirement, could adversely affect our financial condition and results of operations.


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31. We may require further equity issuances to satisfy our capital needs, which we may not be able to procure. Further, any future issuance of Equity Shares by us may dilute your shareholding and adversely affect the trading price of the Equity Shares.

We may need to raise additional capital from time to time, dependent on business requirements. Some of the factors that may require us to raise additional capital include (i) business growth beyond what the current balance sheet can sustain, (ii) additional capital requirements imposed due to changes in regulatory regime or new guidelines, and (iii) significant depletion in our existing capital base due to unusual operating losses. We may not be able to raise such additional capital at the time it is needed or on terms and conditions favorable to us or to the existing shareholders. Further, any future issuance of Equity Shares by us may dilute your shareholding in us, adversely affect the trading price of our Equity Shares and our ability to raise capital through an issue of our securities. In addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares. Additionally the disposal, pledge or encumbrance of Equity Shares by any of our major shareholders, or the perception that such transactions may occur may affect the trading price of the Equity Shares. We are unable to assure you that we will not issue Equity Shares or that such shareholders will not dispose of, pledge or encumber their Equity Shares in the future.

32. Our ability to pay dividends in the future will depend upon our future earnings, financial condition, cash flows,

working capital requirements, capital expenditures and restrictive covenants in our financing arrangements.

Our revenues are dependent on various factors such as future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants in our financing arrangements.

Our business is capital intensive and we may plan to make additional capital expenditures for our objects of the Issue or to undertake new projects. Our ability to pay dividends is also restricted under certain financing arrangements that we have entered into and expect to enter into.

The combination of these factors may result in significant variations in our revenues and profits and thereby may impact our ability to pay dividends. Therefore, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful and should not be relied upon as indicative of our future performance. If in the future our results of operations are below market expectations, the price of our Equity Shares could decline.

33. There is no guarantee that our Rights Issue Equity Shares will be listed on the BSE in a timely manner or at all.

You will not be able to sell immediately on an Indian stock exchange any of the Rights Issue Equity Shares until the Issue receives appropriate trading approvals

The Rights Issue Equity Shares will be listed on BSE. Pursuant to Indian regulations, certain actions must be completed before the Rights Issue Equity Shares can be listed and trading may commence. Investors demat accounts with depository participants in India are expected to be credited within two working days of the date on which the basis of allotment is approved by BSE. Thereafter, upon receipt of final approval from BSE, trading in the Rights Issue Equity Shares is expected to commence within four working days of the date on which the basis of allotment is approved by the Designated Stock Exchange. We cannot assure you that the Rights Issue Equity Shares will be credited to investors’ demat accounts, or that trading in the Rights Issue Equity Shares will commence, within the time periods specified above. Any delay in obtaining the approvals would restrict your ability to dispose of the Rights Issue Equity Shares. Any failure or delay in obtaining the approval would restrict your ability to dispose of the Rights Issue Equity Shares. In accordance with section 73 of the Companies Act, in the event that the permission of listing the Rights Issue Equity Shares is denied by the Stock Exchange, we are required to refund all monies collected to investors and any delay in providing such refunds shall mandate us to pay interest at specified statutory rates.

34. The objects of the Issue for which funds are being raised have not been appraised by any bank or financial

institution. Any variation between the estimation and actual expenditure on the objects could result in execution delays or influence our profitability adversely.

The objects for which the funds are being raised have not been appraised by any bank or financial institution. The estimate of costs is based on quotations received from vendors and management estimates. Though these quotes/ estimates have been taken recently, they are subject to change and may result in cost escalation. The requirement of working capital has been determined based on our Company’s estimates inline with the past trends. Any change or


xx

cost escalation can significantly increase the cost of the machineries as stated in “Objects of the Issue” on page 24. 35. We propose to install the machineries procured from the Net Proceeds of the Issue at our manufacturing facility

at Nashik or any other location which is commercially viable. In the event we do not install the machinery at Nashik, we may face time and cost overruns. We propose to install the machineries procured from the Net Proceeds of the Issue at our manufacturing facility at Nashik. However, we may choose to install such machineries at an alternate location which may be more commercially feasible in terms of location and costs. Installation of the machineries at any alternative location other than Nashik may require us to apply for industrial, labour, environmental and other approvals which we may not receive in time. In the event of delay in receipt of such approvals, we shall face time and cost overruns which may affect our results of operations.

36. We have not placed orders for the machinery and equipment, as disclosed in “Objects of the Issue” on page 24

and as a result, we may face time and cost overruns. The completion of installation of the plant and machineries is dependent on performance of external agencies and any shortfall in the performance of these external agencies may adversely affect our growth plans.

We are yet to enter into definitive agreements or are yet to place orders for any the machinery and equipment proposed to be acquired with the Issue proceeds and as disclosed in “Objects of the Issue” on page 24. The total cost of plant and machinery proposed to be installed is estimated to be ` 2,005.48 Lacs. The completion of installation of the machineries is dependent on performance of external agencies, which are responsible for supply, installation, commissioning and testing of the machineries. We cannot assure you that the performance of external agencies will meet the required specifications, performance parameters and shall deliver the plant and machineries on time. If the performance of these agencies is inadequate in terms of these requirements, this may result in incremental cost and time overruns, which in turn may adversely affect our growth plans. Further, some of the quotations in foreign currency denominations and the cost of the machineries have been estimated at the prevailing conversion rate. The payment for the machinery has to be made in the currency of the quotation and at the exchange rates prevailing on the date of the actual payment. The respective conversion rates may undergo a change at the time of delivery of the machinery and consequent payment. Such a change in conversion rate may affect the value of the machinery and consequently the estimated cost of the machineries. These factors may increase the overall cost of the machineries and in order to fund such additional expenditure, we may have to raise additional funds by way of additional debt or equity placement, which may have an adverse effect on our business and results of operations.

37. We are yet to initiate the process of recruiting the manpower required to work the machineries proposed to be acquired, as disclosed in the “Objects of the Issue” on page 24 and any delay in recruiting the suitable personnel or the required number of people to operate the machineries effectively may result in time and cost overruns. We estimate that we require 25 to 30 personnel to work the machineries proposed to be purchased with the Issue proceeds. We propose to hire the required personnel locally. In the event we are unable to recruit the suitable personnel or the required number of people to operate the machineries effectively, we may face time and cost overruns, which may have an adverse effect on our business and results of operations

38. We have not entered into any definitive agreements to monitor the utilization of the Issue proceeds.

As per the SEBI ICDR Regulation, appointment of monitoring agency is required only for Issue size above ` 50,000 Lacs. Hence we have not appointed any monitoring agency and the deployment of funds as stated in the “Objects of the Issue” beginning on page 24 is entirely at our discretion and is not subject to monitoring by any independent agency. We have not entered into any definitive agreements to utilise a portion of the Issue proceeds. In the event, for whatsoever reason, we are unable to execute our plans to set up the machineries as disclosed in the section “Objects of the Issue” on page 24, we could have a significant amount of unallocated net proceeds. In such a situation, we would have broad discretion in allocating these net proceeds from the Issue without any action or approval of our shareholders. Due to the number and variability of factors that we will analyze before we determine how to use these un-utilised net proceeds, we presently cannot determine how we would reallocate such proceeds. Accordingly, investors will not have the opportunity to evaluate the economic, financial and other relevant information that will be considered by us in the determination on the application of any such net proceeds in these circumstances.


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39. We have not identified alternate sources for financing the ‘Objects of the Issue’. If we fail to mobilize the resources as per our plans, our growth plans may be affected.

We have not identified any alternate source of funding the cost of acquisition of the machineries proposed to be purchased as part of our objects of this Issue. Any failure or delay on our part to mobilize the required resources or any shortfall in the Issue Proceeds may delay the implementation schedule of our objects of the issue and could adversely affect our growth plans.

40. Under-utilisation of our proposed expanded capacities may adversely impact our financial performance

We propose to expand our production capacities based on our estimates of market demand and profitability. In the event of non-materialisation of our estimates and expected order flow for our products, due to factors including adverse economic scenario, change in demand or for any other reason, our capacities may not be fully utilised thereby adversely impacting our financial performance.

41. In the event there is any delay in the completion of the Issue, there would be a corresponding delay in the

completion of the objects of this Issue which would in turn affect our revenues and results of operations.

The funds that we receive would be utilized for the objects of the Issue as has been stated in the section “Objects of the Issue” on page 24. The proposed schedule of implementation of the objects of the Issue is based on our management’s estimates. If the schedule of implementation is delayed for any other reason whatsoever, including any delay in the completion of the Issue, we may face time and cost overruns and this may affect our revenues and results of operations.

42. The funds proposed to be utilized for general corporate purposes may constitute more than 25% of the Issue Size. As on date we have not identified the use of such funds and the same are at the discretion of the Board of Directors. The funds proposed to be utilized for general corporate purposes may constitute more than 25% of the Issue Size. We have not identified the general corporate purposes for which these funds may be utilized. We are unable to currently identify the use of proceeds proposed to be allocated toward the general corporate component. The deployment of such funds is entirely at the discretion of our management in accordance with policies established by our Board of Directors from time to time and subject to compliance with the necessary provisions of the Companies Act.

43. Our Company has issued Equity Shares in the last 12 months at prices that may be lower than the Issue Price. Our Company has issued Equity Shares during the last 12 months at a price that may be lower than the Issue Price. The details of such Equity Share issuances are as follows:

Date of Allotment of the Equity

Shares

No. of Equity Shares allotted

Face Value

(`)

Issue Price

(`)

Issued Equity

Capital (`)

Nature of consideration

Nature of Allotment

March 17, 2011 65,58,065 10 66.10 6,55,80,650 Cash Preferential allotment of Equity Shares to Mahindra

and Mahindra Limited December 12, 2011 9,500 10 35 95,000

Cash Allotment pursuant to

ESOS 2010

External Risk Factors

44. Outbreak of contagious diseases in India may have a material adverse impact on our business and results of operations.

Recently, there have been threats of epidemics, including the H1N1 virus that causes “swine flu” and which the World Health Organization has declared a pandemic, in the Asia Pacific region, including India, and in other parts of the world. If any of our personnel are suspected of having contracted any of these infectious diseases, we may be required to quarantine such persons or the affected areas of our facilities and temporarily suspend a part or all of our operations. Further, such contagious diseases could prevent our clients from travelling, which would have a material adverse effect on our business, prospects, financial condition and results of operations and could cause the price of


xxii

our Equity Shares to decline.

45. There could be political, economic or other factors that are beyond our control but may have a material adverse impact on our business and results of operations should they materialize.

The following external risks may have a material adverse impact on our business and results of operations should any of them materialize: Political instability, a change in the Government or a change in the economic and deregulation policies could

adversely affect economic conditions in India in general and our business in particular; A slowdown in economic growth in India could adversely affect our business and results of operations. The

growth of our business and our performance is linked to the performance of the overall Indian economy. We are also impacted by consumer spending levels and businesses such as ours would be particularly affected should Indian consumers in our target segment have reduced access to disposable income;

Civil unrest, acts of violence, terrorist attacks, regional conflicts or situations or war involving India or other

countries could materially and adversely affect the financial markets which could impact our business. Such incidents could impact economic growth or create a perception that investment in Indian companies involves a higher degree in risk which could reduce the value of our Equity Shares;

Natural disasters in India may disrupt or adversely affect the Indian economy, the health of which our business

depends on; Any downgrading of India's sovereign rating by international credit rating agencies may negatively impact our

business and access to capital. In such event, our ability to grow our business and operate profitably would be severely constrained;

Instances of corruption in India have the potential to discourage investors and derail the growth prospects of the

Indian economy. Corruption creates economic and regulatory uncertainty and could have an adverse effect on our business, profitability and results of operations; and

The Indian economy has had sustained periods of high inflation. Should inflation continue to increase sharply,

our profitability and results of operations may be adversely impacted. High rates of inflation in India could increase our employee costs, decrease the disposable income available to our customers and decrease our operating margins, which could have an adverse effect on our profitability and results of operations.

46. You may be subject to Indian taxes arising out of capital gains.

Under current Indian tax laws and regulations, capital gains arising from the sale of shares in an Indian company are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if Securities Transaction Tax (“STT”) has been paid on the transaction. STT will be levied on and collected by the domestic stock exchange on which our Equity Shares are sold. Any gain realised on the sale of equity shares in an Indian company held for more than 12 months that are sold other than on a recognised stock exchange and on which no STT has been paid, will be subject to long term capital gains tax in India. Any gain realised on the sale of listed equity shares held for a period of 12 months or less will be subject to short term capital gains tax in India. Further, Indian tax on capital gains may be relieved under certain tax treaties.

47. We will be required to prepare our financial statements in accordance with IFRS. There can be no assurance that our adoption of ‘Indian Accounting Standards converged with IFRS (“IND-AS”) will not adversely affect our reported results of operations or financial condition. We would need to prepare annual and interim financial statements under IND-AS in the near future. There is currently a significant lack of clarity on the adoption and timing of, and convergence to, IND-AS and we currently do not have a set of established practices on which to draw on in forming judgments regarding its implementation and application, and we have not determined with any degree of certainty the impact that such adoption will have on our financial reporting. There can be no assurance that our financial condition, results of operations, cash flows or changes in shareholders’ equity will not appear materially worse under IND-AS than under Indian GAAP. As we


xxiii

transition to IND-AS reporting, we may encounter difficulties in the ongoing process of implementing and enhancing our management information systems. Moreover, there is increasing competition for the small number of IFRS-experienced accounting personnel as more Indian companies begin to prepare IND-AS financial statements. There can be no assurance that our adoption of IND-AS will not adversely affect our reported results of operations or financial condition.

48. Pursuant to the regulations of the Competition Act, 2002, if the Allotment results in a change in control of our

Company, we are required to seek the approval of the Competition Commission of India for the allotment and any delay or failure to receive such approval may adversely affect this Issue. The provisions of the Competition Act, 2002 relating to regulations of combinations became effective from June 1, 2011. The Competition Commission of India (“CCI”) notified the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 on May 11, 2011. The regulations require, among other things, that in the event of a change in control of a company consequent to a rights issue, we will be required to notify the CCI and await the CCI’s approval for the allotment of shares. While we do not believe that the Allotment will result in a change in control of our Company, it can only be finally ascertained on finalisation of the basis of allotment. If the Allotment results in a change in control of our Company, the notification and approval process with the CCI would delay the process of Allotment and consequently, we may have to pay interest for the delayed period. In addition, in the event that the CCI does not approve the Allotment, those Rights Issue Equity Shares that, through their allotment, would have resulted in a change in control of our Company, would instead form part of the unsubscribed portion. Consequently, if our Promoter is unable to subscribe to the unsubscribed portion for any reason whatsoever, the Issue may fail.

Prominent Notes

1. This is an Issue of [●] Equity Shares at a premium of ` [●] per Equity Share for an amount not exceeding `

4,500 Lacs on a rights basis to the existing Equity Shareholders in the ratio of [●] Equity Share(s) for every [●] fully paid-up Equity Share(s) held by the Eligible Equity Shareholders on the Record Date.

2. The net worth of our Company ((Equity share capital + securities premium + reserves and surplus (excluding

revaluation reserve) – miscellaneous expenditure (to the extent not adjusted or written off) - deficit in profit and loss account)) as on September 30, 2011 was ` 5,244.48 Lacs.

3. We have, in the course of our business, entered into transactions with related parties including entities forming

part of our Promoter Group and our key managerial personnel. For details of related party transactions entered into by us please see “Financial Information- Annexure XVII” beginning on page 159.

4. There has been no financing arrangement whereby the Promoter Group, the Directors of the Company, who are

the Promoter and their relatives, have financed the purchase by any other person of securities of our Company other than in the normal course of business of the financing entity during the period of six months immediately preceding the date of filing of the Draft Letter of Offer with SEBI.

5. The Lead Manager and we shall update this Draft Letter of Offer and keep our shareholders / public informed of

any material changes till listing and trading permission in respect of the Rights Issue Equity Shares is received.

Investors may contact the Lead Manager for any complaint, clarifications and information pertaining to the Issue. Any clarification or information relating to this Issue shall be made available by the Lead Manager to the public and investors at large and no selective or additional information would be made available only to a section of the investors in any manner. All grievances relating to ASBA process may be addressed to the Registrar to the Issue, with a copy to the relevant SCSBs, giving full details such as name, address of the applicants, application number, number of Rights Issue Equity Shares applied for, Bid Amounts blocked, ASBA Account number and the Designated Branch of the SCSBs where the ASBA Bid-cum-Application Form has been submitted by the ASBA Bidder. For contact details please see “General Information” beginning on page 24.


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SECTION III – INTRODUCTION

SUMMARY OF INDUSTRY

The information presented in this section has been obtained from publicly available documents from various sources, including officially prepared materials from the Government of India and its various ministries, industry websites/publications and company estimates. Industry websites/publications generally state that the information contained in therein has been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe industry, market and government data used in this Draft Letter of Offer is reliable, it has not been independently verified. Similarly, our internal estimates, while believed by us to be reliable, have not been verified by any independent agencies. For further details of the industry in which we operate, please see “Industry” on page 32.

The gross domestic product (GDP) of agriculture and its allied sectors and their share in total GDP of the country during the last 3 years including the current year, at 2004-05 prices is as follows:

(` in crore) Year 2006-07 2007-08 2008-09 2009-10 2010-11

GDP of Agriculture and Allied Sectors 6,19,190 6,55,080 6,54,118 6,56,975 6,92,499

Per cent to total GDP 17.4 16.8 15.7 14.6 14.2

Source: Central Statistical Organization, Ministry of Statistics and Programme Implementation, Govt. of India. Micro irrigation was introduced in India in 1986 and is one of the most water and fertilizer efficient irrigation systems. The Task Force on micro irrigation was established under the Ministry of Agriculture, Department of Agriculture & Cooperation, Government of India which in its report dated January 2004 (“Report”), inter alia, assessed the following projected benefits as a consequence of implementation of micro irrigation technology: Potential Water Savings through Implementation of Micro irrigation: S. No

Crop Area expected to be brought under Micro Irrigation, million ha

Estimated Water

Requirement, mm/annum

Estimated Water Requirement,

Water, Billion meter/annum

Savings in Billion cubic

meters/ annum Without Drip With Drip Without Drip With Drip

[1] [2] [3] [4] = [1]*[2]/1000

[5] = [1]*[3]/1000

[5]-[4]

1. Widely Spaced Crops suitable for Drip Irrigation

4.440 900 600 40 27 13

2. Closely Spaced Crops suitable for Drip Irrigation

7.560 1700 1200 129 91 38

3. Crops suitable for Sprinkler Irrigation

5.000 500 350 25 18 8

Total 17.000 193 135 59

Saving in Water required for Irrigation and consequent Indirect Benefit by Saving in Infrastructural Investments on Irrigation Projects, due to adoption of micro irrigation techniques (MITs). Sr. No

Year

Proposed area for adoption, million ha Water Saving, BCM/year Value of infrastructure

investment saved @ `770 Crores/ BCM,* ` Crores

Widely Spaced Crops

suitable for Drip

Irrigation

Closely Spaced Crops

suitable for Drip

Irrigation

Crops suitable for Sprinkler Irrigation

Total Widely Spaced Crops

suitable for Drip

Irrigation


suitable for Drip

Irrigation


Total

1 2004-05 0.190 0.310 0.250 0.75 0.57 1.55 0.38 2.50 1,921 2 2005-06 0.260 0.440 0.350 1.05 0.78 2.20 0.53 3.51 2,6993 2006-07 0.300 0.500 0.400 1.20 0.90 2.50 0.60 4.00 3,080 Xth Plan 0.750 1.250 1.000 3.000 2.250 6.250 1.500 10.000 7,7004 2007-08 0.370 0.630 0.600 1.60 1.11 3.15 0.90 5.16 3,973


2

Sr. No

Year

Proposed area for adoption, million ha Water Saving, BCM/year Value of infrastructure

investment saved @ `770 Crores/ BCM,* ` Crores

Widely Spaced Crops

suitable for Drip

Irrigation


suitable for Drip

Irrigation



suitable for Drip

Irrigation


suitable for Drip

Irrigation


Total

5 2008-09 0.550 0.950 0.700 2.20 1.65 4.75 1.05 7.45 5,7376 2009-10 0.740 1.260 0.800 2.80 2.22 6.30 1.20 9.72 7,4847 2010-11 0.930 1.570 0.900 3.40 2.79 7.85 1.35 11.99 9,2328 2011-12 1.110 1.890 1.000 4.00 3.33 9.45 1.50 14.28 10,996 XIth Plan 3.700 6.300 4.000 14.000 11.100 31.500 6.000 48.600 37,422 Total 4.45 7.55 5.00 17.00 13.35 37.75 7.50 58.60 45,122Assumption: * Based on the principle of Water Saved is Water Created it is estimated that investment on Major/Medium irrigation projects for creating 1MCM of water potential is ` 77 lakhs or ` 770 Crores per BCM Savings in Fertilizer Subsidy due to reduced Fertilizer Consumption with implementation of MITs Sr. No

Year

Fertilizer Saving, Million MT/year Amount of Fertilizer Subsidy Saved on account

of reduced Fertilizer Consumption due to

adoption of MITs @ ` 5800 per MT, ` Crores

Cumulative Saving in on account of reduced

Fertilizer Consumption, `

Crore

Widely Spaced Crops suitable

for Drip Irrigation

Closely Spaced Crops suitable

for Drip Irrigation

Crops suitable for Sprinkler

Irrigation Total

Total

1 2004-05 0.228 0.140 0.038 0.405 235 2352 2005-06 0.312 0.198 0.053 0.563 326 5613 2006-07 0.360 0.225 0.060 0.645 374 9354 2007-08 0.444 0.284 0.090 0.818 474 1,4095 2008-09 0.660 0.428 0.105 1.193 692 2,1016 2009-10 0.888 0.567 0.120 1.575 914 3,0157 2010-11 1.116 0.707 0.135 1.958 1,135 4,1508 2011-12 1.332 0.851 0.150 2.333 1,353 5,503

Total 4.008 2.547 0.600 7.155 5,503 17,909 Consequently, the National Mission on Micro Irrigation (NMMI) was implemented as a part of the XIth Plan from June 2010 which aimed to improve water use efficiency and efficient use of fertilizers on account of fertigation. The savings in water can be used to augment area under irrigation and thereby increase productivity. The potential for micro irrigation in India: The potential for coverage under drip and sprinkler irrigation is estimated to be about 27 and 42.5 million ha respectively as per the following break up:

Crop Area Drip Sprinkler Total

Cereals - 27.6 27.6Pulses - 7.6 7.6Oil seeds 3.8 1.1 4.9Cotton 7.0 1.8 8.8Vegetables 3.6 2.4 6.0Spices and condiments 1.4 1.0 2.4Flowers and Medicinal and aromatic plants - 1.0 1.0Sugarcane 4.3 - 4.3Fruits 3.9 - 3.9Coconut & Plantation Crops, Oil Palm 3.0 - 3.0

Total 27.0 42.5 69.5Source: 1. Agricultural Statistics at a glance 2003, Ministry of Agriculture, New Delhi.

Horticulture Database 2002, National Horticulture Board, Ministry of Agriculture, Gurgaon.


3

SUMMARY OF BUSINESS

We believe that we are one of the pioneers in the Micro Irrigation industry in India. We are into manufacture and sale of Micro Irrigation System (MIS) consisting of Drip Irrigation System and Sprinkler Irrigation System and its components. We are registered in 17 states of India as approved manufacturer of MIS with respective state government authorities under the National Mission on Micro Irrigation and Micro Irrigation Scheme. Micro irrigation is working capital intensive and subsidy driven business. The subsidy schemes provide for subsidy portion of about 50% to 100% of the approved cost of MIS. The disbursement of the subsidy portion to the farmer is typically phased out over a period of 12 weeks to 36 weeks and is dependent on completion of installation of MIS and compliance of certain prescribed conditions under the respective subsidy schemes. Our business model can be categorized broadly into two categories – project markets and open market sales. Sales through open market secure receipt of a majority of the sale proceeds of MIS upfront from our channel partners. The channel partners in turn sell the MIS to the customer/ farmer whereby subsidy disbursement exposure is taken by the channel partners or the customers. Consequently, a majority of our inventory costs and working capital requirements is funded by our channel partners. We operate under the project market model in the states of Gujarat, Andhra Pradesh and Tamil Nadu. As per the requirement of nodal agencies in the states of Gujarat, Andhra Pradesh and Tamil Nadu, we enter into an agreement with the farmer, nodal agencies and with banks, wherever applicable. After the loan tie ups and subsidy eligibility is approved by the nodal agency in these states, we install MIS and submit our claim for payment to the nodal agency. We have also been appointed as an empanelled company under the recently launched Pundit Deendayal Kisan Bagawan Samridhhi Yojna (Part II), 2010 – 2011, in Himachal Pradesh. Consequently, in the project market, the exposure of subsidy disbursement is taken by us as we are able to receive sales proceeds from the nodal agency/ project implementing agency post installation of MIS. We recently became a part of the Mahindra group of companies, pursuant to M&M acquiring control and management stake in 2011. Our promoter, M&M has strong presence in the tractor and farm machinery business and has developed sound understanding of the rural markets. We believe the agricultural business vertical of M&M complements our business and can provide us with management bandwidth and competence in marketing and operations thereby enhancing scope for development of synergies to create value for our business. Our product portfolio includes mainly the Drip Irrigation Systems and the Sprinkler Irrigation Systems. Drip Irrigation Systems includes online drippers, inline drip laterals, plain laterals, drip fittings, filters, fertigation equipments while Sprinkler Irrigation System includes sprinkler irrigation pipes, pipe fittings, sprinkler nozzles. As part of project market sales we undertake supply, installation and provision of agronomical services to farmers. We also manufacture specialized pipes for water and gas distribution as well as pipes required for industrial and agricultural purposes with complete fitting and installation tools. We manufacture our products at our plant at Nashik, Maharashtra. The capacity of the plant is 15,561.84 MT/year. Raw material is mostly sourced from the distributors of the reputed suppliers of polymers in India. We are committed to maintaining our quality management systems. The design, development, manufacture and supply of plastic pipe fittings and components for irrigation, infrastructure and industrial applications by us has been certified to confirm to the “Quality Management Systems Standard ISO 9001:2008” by Det Norske Veritas Management Systems Certificate. All our products are ISI marked. We have entered into formal arrangements with 113 channel partners and informal arrangements with a number of other channel partners to market and sell our products in 17 states. Our Competitive Strengths: We believe that following are our key competitive strengths: Our brand image and product quality We have been in the business of manufacturing MIS since the introduction of MIS in India in 1986 and have developed technical expertise for providing reliable and quality products. The quality of the hardware delivered to the farmer is a very crucial aspect in determining the performance of the MIS with reference to the yield of the crop, quantity of water applied, quantity of fertilizers delivered to the plant, energy consumption etc. The regulatory requirements prescribe adherence to stringent quality norms in order to be eligible for registration as approved manufacturer as well as receipt of subsidy. We are registered as approved manufacturer of MIS with respective state government authorities under the


4

National Mission on Micro Irrigation and Micro Irrigation Scheme in 17 states of India. The quality of our products has enabled us to be one of the eligible manufacturer and supplier of MIS in various states such as Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Rajasthan, Karnataka and few others since last many years. We believe that our dealer relationships and market position for providing reliable and high quality MIS has built a significant goodwill of our brand in the industry.

All our products are compliant with the prescribed Indian Standards (BIS). The design, development, manufacture and supply of plastic pipe fittings and components for irrigation, infrastructure and industrial applications by us has been certified to conform to the “Quality Management Systems Standard ISO 9001:2008” by Det Norske Veritas Management Systems Certificate. For further details of quality certifications of our products, please see “History and Other Corporate Matters - Awards, Achievements and Certifications” on page 56. Given our experience, product quality and brand image in MIS we believe we are well positioned to capitalise on the growth opportunities in the Indian MI sector. Wide consumers reach through presence in key states and strategic utilization of the network of channel partners MIS sales are driven by strong demand in states like Gujarat, Rajasthan, Madhya Pradesh Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu, Rajasthan and Haryana in India. The state governments of Gujarat, Andhra Pradesh, Tamil Nadu, Chattisgarh, Himachal Pradesh and Bihar have also conceived MIS projects as a part of the Micro Irrigation Scheme. We have presence in most of these states through a network of sales/branch offices supported by our channel partners. We have entered into formal arrangements with 113 channel partners and informal arrangements with a number of other channel partners to market and sell our products in 17 states. We also believe that our existing distribution network creates visibility for our brand and our association with M&M further enhances our rural reach and access to customer base of the farm and equipment sector of M&M. By customizing MIS for each farm given the water source, terrain, crop sown, climatic conditions, etc we are able to adapt to the evolving needs of the markets in which we operate. In addition through our channel partners we provide our farmers after sales services, including supply of spare parts which enhances customer’s satisfaction. Robust business model Micro irrigation is working capital intensive and subsidy driven business. The subsidy portion is about 50% to 100% of the approved cost of MIS. The disbursement of the subsidy portion to the farmer is typically phased out over a period of 12 weeks to 36 weeks and dependent on compliance of certain prescribed conditions under the respective subsidy scheme. We mostly operate under the “open market” business model. We believe our open market business model in India enhances our working capital efficiency. We believe our business model of open market sales secures receipt of the majority of the sale proceeds of MIS upfront from our channel partners. In open market sales, we generally appoint dealers who fund the inventory costs and the working capital. The channel partners in turn sell the MIS to the customer /farmer whereby subsidy disbursement exposure is taken by the channel partners or the customers. We also operate in the projects market. As per the requirement of nodal agencies in the states of Gujarat, Andhra Pradesh and Tamil Nadu where we operate under the project market, the exposure of subsidy disbursement is taken by us. Work Orders are issued to the Company by the nodal agencies after the loan tie ups and subsidy eligibility is approved by the nodal agency in these states. MIS is installed only after receipt of the work order from the nodal agencies which enables us to secure release of payments under the project markets. We have also been appointed as an empanelled company under the recently launched Pundit Deendayal Kisan Bagawan Samridhhi Yojna (Part II), 2010 - 2011. Under this scheme in order to avail of the subsidy benefits, we enter into an agreement with the farmers. Subsequently, 20 % of the cost of the MIS can be obtained by us as advance from the farmer and the balance amount would be released to us through the farmer upon successful installation of the MIS to the satisfaction of the farmer and the project implementing agency. Association with the “Mahindra Group” M&M acquired control and management stake in us in 2011. Consequently, we became a part of the Mahindra group of companies, one of the largest business groups in India. The Mahindra Group’s has presence in the tractor and farm


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equipment business and the agriculture domain through Mahindra Samriddhi centers across the country. While we have recently associated with M&M, we believe that the agricultural business vertical of Mahindra and Mahindra complements our business and provides scope for exploiting synergies to create value for our business. Our promoter has developed significant understanding of the rural markets in which we operate. We believe we can benefit from the Mahindra’s Farm Equipment sector’s management bandwidth and competence in marketing and operations. We believe M&M enhances our ability for sizeable investment in the working capital, expansion of our manufacturing capacity and distribution network, technology up gradation and implementation of new generation irrigation technology. We further believe that sharing goals and objectives with the Mahindra group enables us to utilize various synergies which aid in our business and operations. Experienced executive management team

We believe that our qualified and experienced management team has substantially contributed to the growth of our business operations. Our senior management team, have helped us to leverage our existing in-house production skills and market visibility to further enhance our existing strength in the industry and to expand our product offerings and geographic presence. We believe that the experience of our senior management team has translated into our product quality, increased profitability and improved margins which give us a competitive edge. Our Strategies We intend to pursue the following principal strategies to leverage our competitive strengths and grow our business: Increase in manufacturing capacities in line with demand and geographic spread We propose to increment our production line and existing capacity. We propose to establish plants in areas of potential growth. Our strategy includes establishment of plants at strategic locations going forward which enables us to procure raw material from the nearby areas and cater in the nearby regions, thereby ensuring logistic benefits in distribution vis-à-vis other players. Moreover, we propose to enter into tie ups with international partners for export of our products. We believe that there is significant demand of MIS internationally. We believe that the goodwill of the Mahindra group internationally should allow us to compete effectively in such markets. Expanding product and service portfolio As part of our MIS vertical, we are engaged in the manufacture of drips and sprinklers. We propose to strategically move along the production chain and diversify our product offerings to include flat inlines and other niche products. We also propose to introduce products allied to MIS such as pumps. We believe that a larger product portfolio would allow us to increase our market share and our customers a larger product basket to choose from. We believe that a larger product portfolio would also cater to a larger customer base. To increase brand visibility The market for our products is highly competitive on account of both the organized and unorganized players. Our market goodwill is significantly dependent on brand recall and our ability to compete effectively is would significantly depend on our ability to promote and develop our brand. We propose to increase the number of channel partners in order to broaden our reach. We believe greater visibility of our brand and our association with M&M would ensure brand retention in the minds of the customers and would in effect further enhance our reach. We may also undertake brand building and other exercises in order to build upon and improve our brand visibility. To provide quality agronomy services Increasing awareness about the benefits of micro irrigation is one of the key business drivers. We intend to strengthen our agronomy services to train and educate our customers to get maximum benefit out of our MIS.


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SUMMARY FINANCIAL INFORMATION

RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES ` In Lacs

As at As at As at As at As at As at 30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 Fixed Assets:

Gross Block 4414.85 4360.44 4275.37 4260.61 3854.65 4087.14 Less: Depreciation (2584.96) (2523.02) (2442.45) (2362.46) (2195.49) (2122.67)Net Block 1829.89 1837.42 1832.92 1898.15 1659.16 1964.47 Less : Revaluation Reserve (358.52) (374.20) (418.33) (455.20) (490.25) (734.32)

(See note no. 1C in Annexure IV) & (See note no. 4 in Annexure V) Net Block after adjustment for Revaluation Reserve 1471.37 1463.22 1414.59 1442.95 1168.91 1230.15

Capital Work in Progress 828.64 365.36 24.71 40.61 175.48 35.28 Investments: 0.81 0.81 1.37 0.82 0.82 0.85 (See Annexure – XV) Deferred Tax Asset: 35.13 50.05 140.47 182.47 - - (See Note No. 5 in Annexure – IV) Current Assets, Loans and Advances:

Inventories 1948.93 1475.40 722.97 794.03 761.65 488.36 Sundry Debtors 2783.16 2777.74 2201.29 1851.13 1154.66 287.54 (See Annexure – XII) Cash and Bank Balances 1806.85 4115.97 442.56 414.04 262.76 1179.64 Other Current Assets 8.13 14.65 11.20 4.04 3.32 4.15 Loans and Advances 446.24 442.10 447.48 418.06 526.33 418.86

(See Annexure – XIV) Total 9329.26 10,705.30 5,406.64 5,148.15 4,053.93 3,644.83

Less: Liabilities and Provisions: Secured Loans 1331.72 1484.82 1275.11 845.06 554.06 - (See Annexure – IX) Unsecured Loans 695.90 2083.59 2180.73 2322.17 2362.23 2414.28 (See Annexure – X) Current Liabilities 1961.50 1988.73 1164.63 1347.04 844.44 438.40 Provisions 95.66 90.75 88.52 106.25 94.01 27.88

Total 4084.78 5647.89 4708.99 4620.52 3854.74 2880.56 NET WORTH 5244.48 5057.41 697.65 527.63 199.19 764.27 Net worth represented by: Share Capital 1725.57 1725.57 1069.76 949.76 949.76 949.76Share Application Money - - - 500.00 - - Employees Stock Options Outstanding 11.02 17.55 - - - - (See note no. 8 in Annexure IV) & (See note no. 5 in Annexure V) Reserves and Surplus 6677.58 6693.26 3192.74 2735.81 2783.99 3029.46 Less : Revaluation Reserve (358.52) (374.20) (418.33) (455.20) (490.25) (734.32) (See note no. 1C in Annexure IV) & (See note no. 4 in Annexure V) 8055.65 8062.18 3844.17 3730.37 3243.50 3244.90 Less: Profit and Loss Account (2811.17) (3004.77) (3146.52) (3202.74) (3044.31) (2480.63) NET WORTH 5244.48 5057.41 697.65 527.63 199.19 764.27

Note: The above statement should be read with the Notes on Adjustment to Restated Financial Statements, Significant

Accounting Policies and Notes on Accounts as appearing in Annexures IV and V.


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RESTATED SUMMARY STATEMENT OF PROFITS AND LOSSES ` In Lacs

Particulars For six months Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 INCOME Sales / Services Rendered 4626.34 8754.98 7292.70 6102.86 4268.03 1278.09 (See Note No. 5 in Annexure – V) Less: Excise Duty on Sales 36.18 88.51 48.77 96.86 76.28 55.75 (See Note No. 5 in Annexure – V) 4590.16 8666.47 7243.93 6006.00 4191.75 1222.34 Other Income 112.78 101.91 124.72 105.80 42.48 88.91 (See Note No. 5 in Annexure – V) & (See Annexure – XI) Total Income 4702.94 8768.38 7368.65 6111.80 4234.23 1311.25 EXPENDITURE Raw Material, Finished and Semi-Finished Products

2860.06 5323.42 4499.23 4098.68 2994.98 935.59

(See Note No. 5 in Annexure – V) Personnel Expenses 540.02 958.10 758.53 609.72 518.78 303.12 Other Expenses 902.33 1593.64 1367.98 1209.25 915.70 576.24 Interest Expenses 104.78 482.00 443.68 369.94 235.60 58.74 (See Note No. 5 in Annexure – V) Depreciation / Amortisation 87.23 177.14 162.92 144.26 125.10 154.83 Total Expenditure 4494.42 8534.30 7232.34 6431.85 4790.16 2028.52 Profit / (Loss) before Exceptional Items 208.52 234.08 136.31 (320.05) (555.93) (717.27) Exceptional Items - - - - - 4203.03 (See Note No. 7 in Annexure – IV) Profit / (Loss) before Taxation 208.52 234.08 136.31 (320.05) (555.93) 3485.76

Provision for Taxation Current Income Tax 4.00 (0.04) (0.87) - 7.75 -Income Tax for Prior Years - - - 2.26 (2.09) Fringe Benefit Tax - - - 11.50 - 4.00Minimum Alternate Tax (Credit) (4.00) - - - - -Deferred Tax Expense / (Credit) 14.92 90.42 42.00 (182.47) - 1490.75

Total Tax Expense 14.92 90.38 41.13 (168.71) 7.75 1492.66 Net Profit / (Loss) before adjustments 193.60 143.70 95.18 (151.34) (563.68) 1993.10 Adjustments (See Note No. 1 in Annexure – V) - 26.80 (19.71) (7.09) - 1490.75Net Profit / (Loss) as Restated (*) 193.60 170.50 75.47 (158.43) (563.68) 3483.85 Profit & Loss Account at the beginning of the year (See Note No. 6 in Annexure – V)

(3004.77) (3146.52) (3202.74) (3044.31) (2480.63) (7033.84)

Balance available for appropriation as Restated

(2811.17) (2976.02) (3127.27) (3202.74) (3044.31) (3549.99)

Appropriations Transfer to Debenture Redemption Reserve - (28.75) (19.25) - - -Transfer from General Reserve 1069.36 Total Appropriations - (28.75) (19.25) - - 1069.36 BALANCE CARRIED FORWARD TO THE RESTATED BALANCE SHEET

(2811.17) (3004.77) (3146.52) (3202.74) (3044.31) (2480.63)

Earnings Per Share - Rs. [Face Value of Rs. 10 each] (See Note No. 10 in Annexure – IV) Basic 1.12 1.55 0.77 (1.67) (5.93) 59.55 Diluted 1.12 1.55 0.77 (1.67) (5.93) 59.55 Notes:

1. The above statement should be read with the Notes on Adjustment to Restated Financial Statements, Significant Accounting Policies and Notes on Accounts as appearing in Annexures IV and V.

2. The reconciliation between the audited and restated accumulated profit and loss balance as at April 1, 2006 is given in Note No. 6 of Annexure V.

3. (*)There is no Current Tax or Deferred Tax impact due to restatement.


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RESTATED STATEMENT OF CASH FLOWS ` In Lacs


Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit / (Loss) Before Taxation – as restated 208.52 260.88 116.60 (327.14) (555.93) 3485.76 Adjusted for:

Depreciation / Amortisation 87.23 177.14 162.92 144.26 125.10 154.83 Provision for Doubtful Debts 4.38 19.15 35.52 15.91 43.09 - (Profit) / Loss on Sale of Fixed Assets 9.70 15.29 (1.68) (1.37) (0.22) 14.16 (Profit) / Loss on Investments - 0.57 4.55 - - - Dividend Earned (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) Interest Income (99.48) (74.90) (77.21) (40.38) (20.93) (7.59) Exchange (Gain) / Loss (0.01) (0.87) 1.31 0.26 (0.27) - Interest Expenses 104.78 482.00 443.68 369.94 235.60 58.74 Amortisation of Deferred Employee Stock Option

Expenses 1.64 3.33 - - - -

Extinguishment of Debts - - - - - (3007.72) Interest Waiver under OTS with Banks and NCD Holders - - - - - (3294.65) Bad Debts and Advances Written off / Provision for

Doubtful Debts - - - - - 1713.21

Provision for Obsolete Stocks - - - - - 180.92 Impairment of Intangible Assets - - - - - 205.21

Sub-total 108.22 621.69 569.07 488.60 382.35 (3982.91) Operating Profit / (Loss) before Working Capital Changes 316.74 882.57 685.67 161.46 (173.58) (497.15) Adjustment for:

Trade Debtors & Other Receivable (10.35) (588.46) (376.62) (595.57) (1010.67) 219.51 Inventories (473.53) (752.43) 71.06 (32.38) (273.29) (297.33) Trade Payable & Other Liabilities (22.31) 828.79 (197.49) 511.60 470.31 (234.65)

Sub-total (506.19) (512.10) (503.05) (116.35) (813.65) (312.47) Cash (Used In)/ Generated from Operations (189.45) 370.47 182.62 45.11 (987.23) (809.62)

Direct Tax Refund / (Paid) net (13.33) 10.13 (40.76) (18.31) (13.02) (12.25) Net Cash Flows (Used in) / Generated from Operating Activities

(202.78) 380.60 141.86 26.80 (1000.25) (821.87)

B. CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Fixed Assets (570.23) (585.68) (129.45) (285.46) (273.57) (56.07) Sale of Fixed Assets 6.09 0.98 4.86 3.39 70.07 0.28 Sale of Investments - - (0.55) - 0.03 - Interest Received 103.38 75.45 72.39 38.65 21.44 6.26 Dividend Received 0.02 0.02 0.02 0.02 0.02 0.02 Net Cash Flows Used in Investing Activities (460.74) (509.23) (52.73) (243.40) (182.01) (49.51) C. CASH FLOWS FROM FINANCING ACTIVITIES

Interest Paid (104.81) (482.23) (443.79) (369.92) (262.44) (31.50) Proceeds from Issue of Shares/ Share Application Money - 4334.88 100.00 500.00 - 2205.00 Proceeds from /(Repayment of ) OCC Debentures (1300.00) - (100.00) - - 1800.00 Proceeds from/ (Repayment of ) borrowing (Bank Term

Loan) - (83.33) (100.00) 83.33 100.00 -

Proceeds from/ (Repayment of) borrowings (Bank Cash Credit)

(150.09) 326.92 530.56 211.86 404.86 -

Share Issue Expenses - (163.19) (5.44) (13.13) (1.41) (19.90) Proceeds from/ (Repayment of ) other borrowings (90.70) (131.01) (41.94) (44.26) 24.37 (2003.52)

Net Cash Flows (Used in)/ generated from Financing Activities

(1645.60) 3802.04 (60.61) 367.88 265.38 1950.08

NET INCREASE /(DECREASE) IN CASH & CASH EQUIVALENT (A+B+C)

(2309.12) 3673.41 28.52 151.28 (916.88) 1078.70

Opening Cash & Cash Equivalent 4115.97 442.56 414.04 262.76 1179.64 100.94 Closing Cash & Cash Equivalent 1806.85 4115.97 442.56 414.04 262.76 1179.64 Notes: 1. Cash Flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3 “Cash Flow

Statements” as specified in the Companies (Accounting Standards) Rules, 2006. 2. Closing Cash & Cash Equivalent includes Fixed Deposits with maturity over three months lodged with banks as margin for non-

funded working capital facility and balance in Debt Service Reserve Account with a bank.


9

THE ISSUE The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in its entirety by, more detailed information in “Terms of the Issue” on page 216. Equity Shares outstanding prior to the Issue 1,72,63,665 Equity Shares Equity Shares outstanding after the Issue (assuming full subscription for and allotment of the Rights Entitlement)

[●] Equity Shares

Rights Entitlement [●] Equity Share(s) for every [●] fully paid-up Equity Share(s) held on the Record Date

Record Date

[●]

Face Value per Equity Share

` 10 each

Issue Price per Rights Issue Equity Share

` [●] each

Terms of the Issue For more information, please see “Terms of the Issue” on page 216. Use of Issue Proceeds For further information, please see “Objects of the Issue” on page 24. Terms of Payment The full amount is payable on application. ESOS 2010 ESOS 2010 was approved by the Equity Shareholders vide a special resolution passed in the Annual General Meeting held on July 21, 2010 and in accordance with the provisions of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended. The grant date for ESOS 2010 is November 19, 2010. Under ESOS 2010, the total outstanding options are 28,500. For further details please see “Capital Structure” on page 15.


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GENERAL INFORMATION Registered and Corporate Office of our Company H-109, MIDC Ambad, Nashik – 422 010, Maharashtra, India. Tel: +91 253 238 1081 Fax: +91 253 238 2975 Website: www.epcind.com Email: [email protected] Corporate Identification No.: L25200MH1981PLC025731 Address of the Registrar of Companies The Registrar of Companies, Maharashtra, Mumbai 100, Everest, Marine Drive, Mumbai – 400 002, Maharashtra, India. Board of Directors Our Board comprises of five Directors.

Name, Designation and Occupation Age (Years) DIN Address

Mr. Ashok Sharma Designation Executive Director and Chief Executive Officer Occupation Service

47 02766679 4, 4th Floor, Melrose, 16th Road, Bandra (West), Mumbai – 400 050, Maharashtra, India.

Mr. S. Durgashankar Designation Non-Executive Director Occupation Service

52 00044713 Flat No. 203, Ganga Towers, Atur Park, Sion-Trombay Road, Chembur, Mumbai – 400 071, Maharashtra, India.

Mr. Nikhilesh Panchal Designation Independent Director Occupation Advocate

44 00041080 502, Ajay Apartment, T. H. Kataria Marg, Matunga (West), Mumbai – 400 016, Maharashtra, India.

Mr. Anand Daga Designation Independent Director Occupation Professional

40 00696171 Suman – Smruti, Gole Colony, Nashik – 422 002, Maharashtra, India.

Mr. Vinayak Patil 68 00616009 “Babul” Kadambvan,


11

Name, Designation and Occupation Age (Years) DIN Address

Designation Independent Director Occupation Agriculturist

Satpur-Ambad Link Road, Behind Jyoti Farms, Satpur, Nashik – 422 007 Maharashtra, India

For a brief profile of the Directors please see “Management” on page 58. Company Secretary and Compliance Officer Ratnakar Nawghare EPC Industrié Limited H-109, MIDC Ambad, Nashik – 422 010, Maharashtra, India. Tel: +91 253 238 1081 Fax: +91 253 238 2975 Email: [email protected] Lead Manager to the Issue Kotak Mahindra Capital Company Limited 1st Floor, Bakhtawar, 229, Nariman Point, Mumbai - 400 021, Maharashtra, India. Tel: + 91 22 6634 1100 Fax: + 91 22 2282 6632 E-mail: [email protected] Investor Grievance Email: [email protected] Website: www.investmentbank.kotak.com Contact Person: Mr. Ganesh Rane SEBI Registration No.: INM000008704 Statutory Auditors of our Company M/s Deloitte Haskins & Sells Chartered Accountants, 12, Dr. Annie Besant Road, Opp. Shiv Sagar Estate, Worli, Mumbai - 400 018, Maharashtra, India. Tel: +91 022 6667 9000 Fax: +91 022 6667 9025 / 9421/ 9100 Email: [email protected] Firm Registration No.: 117364W Membership No.: 100459


12

Bankers to our Company IDBI Bank Limited IDBI House, Dnyaneshwar Paduka Chowk, F.C. Road, Shivaj Nagar, Pune – 411 004, Maharashtra, India Contact Person: Mr. V G Gramopadhye; AGM Tel: +91 20 2567 7481/484 (Pune)

+91 253 2222334 (Nashik) Fax: +91 20 2567 6132 (Pune)

+91 253 2312418 (Nashik) Email: [email protected]

YES Bank Limited 9th Floor, Nehru Centre, Discovery of India, Dr. Annie Besant Road, Worli, Mumbai – 400 018, Maharashtra, India Contact Person: Mr. Prashant Patil, AVP Tel: +91 22 6669 9000

+ 91 20 66200861 Fax: +91 22 6669 9010

+ 91 20 6620860 Email: [email protected]

Bankers to the Issue [●] Legal Counsel to the Issue Khaitan & Co One Indiabulls Centre, Tower 1, 13th Floor, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai – 400 013, Maharashtra, India. Tel: + 91 22 6636 5000 Fax: + 91 22 6636 5050 Email: [email protected] Registrar to the Issue Sharepro Services (India) Private Limited 13 AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone Exchange Lane, Off Andheri-Kurla Road, Sakinaka, Andheri (East), Mumbai – 400 072, Maharashtra, India. Tel: +91 22 6772 0300/403 Fax: +91 22 6772 0416 Website: www.shareproservices.com Email: [email protected] Contact Person: Mr. Satheesh H K SEBI Registration No: INR000001476 Self Certified Syndicate Banks All QIBs and Non–Institutional Investors must mandatorily and Retail Individual Investors may optionally apply through the ASBA process provided that they hold Equity Shares as on the Record Date in dematerialised form. The Equity Shareholders are required to fill the ASBA Form and submit the same to their Self Certified Syndicate Banks (“SCSB”) which in turn will block the amount as per the authority contained in the ASBA Form and undertake other tasks as per the specified procedure. The list of banks that have been notified by SEBI to act as SCSB for the ASBA Process are


13

provided in the SEBI website www.sebi.gov.in. On Allotment, the amount would be unblocked and the account would be debited only to the extent required to pay for the Rights Issue Equity Shares allotted. For further details on the ASBA process, please refer to details given in ASBA form and also see “Terms of the Issue” on page 216. The list of banks that have been notified by SEBI to act as SCSBs for the ASBA Process are available at the SEBI website (URL reference: http:// www.sebi.gov.in). Details relating to designated branches of SCSBs collecting the ASBA forms are available at the above mentioned link. Investors may please contact the Registrar to the Issue or our Company Secretary and Compliance Officer for any pre-issue /post-issue related matter. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of Rights Issue Equity Shares applied for, Amount blocked, ASBA Account number and the Designated Branch of the SCSB where the CAF was submitted by the ASBA Investors. Allocation of responsibilities Kotak Mahindra Capital Company Limited is the sole Lead Manager to this Issue, the list of major responsibilities of the Lead Manager inter alia, are as follows: Sr. No.

Activities

1. Capital structuring with the relative components and formalities such as composition of debt and equity, type of instruments.

2. Drafting and design of the offer document and of advertisement / publicity material including newspaper advertisements and brochure / memorandum containing salient features of the offer document. To ensure compliance with the SEBI ICDR Regulations and other stipulated requirements and completion of prescribed formalities with Stock Exchange and SEBI.

3. Retail/Non-institutional marketing strategy which will cover, inter alia, preparation of publicity budget, arrangements for selection of (i) ad-media, (ii) collection centres (iii) distribution of publicity and issue material including composite application form and the Abridged Letter of Offer and the draft letter of offer to the extent applicable.

4. Institutional marketing strategy to the extent applicable. 5. Selection of various agencies connected with the issue, namely Registrar to the Issue, Bankers to the Issue printers,

and advertisement agencies. 6. Follow-up with bankers to the issue to get quick estimates of collection and advising the issuer about closure of the

issue, based on the correct figures. 7. The post-issue activities will involve essential follow-up steps, which must include finalisation of basis of allotment

/ weeding out of multiple applications, listing of instruments and dispatch of certificates and refunds, with the various agencies connected with the work such as registrars to the issue, bankers to the issue, and bank handling refund business. Even if many of these post-issue activities would be handled by other intermediaries, the Lead Manager shall be responsible for ensuring that these agencies fulfill their functions and enable him to discharge this responsibility through suitable agreements with the Issuer.

Issue Schedule Issue Opening Date: [●] Last date for receiving requests for split forms: [●] Issue Closing Date: [●] Credit rating As the Issue is a rights issue of Equity Shares, no credit rating is required. No ratings have been received by us in the past. Monitoring Agency We are not required to appoint a monitoring agency pursuant to Regulation 16 of the SEBI ICDR Regulations.


14

Appraisal Reports None of the purposes for which the Net Proceeds are proposed to be utilised have been financially appraised. Principal Terms of Loans and Assets charged as security For details of the principal terms of loans and assets charged as security, please see “Financial Indebtedness” on page 176. Expert Except for (i) the reports of the Auditor on the restated financial information and (ii) the statement of tax benefits included in the Draft Letter of Offer, we have not obtained any expert opinions. Underwriting The Issue shall not be underwritten.


15

CAPITAL STRUCTURE

The share capital structure of our Company and related information as on date of this Draft Letter of Offer, prior to and after the proposed Issue, is set forth below:

(in ` except per share data) Particulars Aggregate value at

Face value Aggregate value at

Issue price Authorized Share Capital 3,20,00,000 Equity Shares 32,00,00,000 18,00,000 Preference Shares 18,00,00,000 Issued, Subscribed and Paid-up Capital before the Issue1,72,63,665 Equity Shares 17,26,56,1501 Preference Shares -

Present Issue being offered to the Equity Shareholders through the Draft Letter of Offer2 [●] Equity Shares at a premium of ` [●], i.e. at a price of ` [●] per share [●] [●] Paid up capital after the Issue [●] Equity Shares [●] [●] Preference Shares - Share premium Account Before the Issue 61,94,98,8283 After the Issue [●] 1. The unpaid allotment money for 3,900 Equity Shares was not received by the due date and the Board of Directors forfeited 3,900 Equity Shares and the outstanding Equity Share Capital is inclusive of an amount received on such Equity Shares. 2. This Issue has been authorized by resolution of our Board dated November 12, 2011. 3. As the unpaid allotment money for 3,900 Equity Shares was not received by the due date, the Board of Directors forfeited 3,900 Equity Shares and the outstanding Cumulative Equity Share Premium is inclusive of an amount received on such Equity Shares and `24,155,119 written off as share issue expenses. Details of increase in the Authorized Share Capital since incorporation Sr. No.

Particulars Date of the shareholders

resolution 1. The authorized share capital of ` 1,00,000 comprising of 10,000 Equity Shares. Incorporation

2. The initial authorized share capital of ` 1,00,000 comprising of 10,000 Equity Shares was increased

to ` 10,00,000 divided into 1,00,000 Equity Shares. November 04, 1987

3. The authorized share capital of our company of ` 10,00,000 comprising of 1,00,000 Equity Shares was further increased to ` 50,00,000 divided into 5,00,000 Equity Shares.

December 02, 1987

4. The authorized share capital of our company of ` 50,00,000 comprising of 5,00,000 Equity Shares was further increased to ` 2,00,00,000 divided into 20,00,000 Equity Shares.

March 20, 1992

5. The authorized share capital of our company of ` 2,00,00,000 comprising of 20,00,000 Equity Shares was further increased to ` 5,00,00,000 divided into 50,00,000 Equity Shares.

September 16, 1992

6. The authorized share capital of our company of ` 5,00,00,000 comprising of 50,00,000 Equity Shares was further increased to ` 15,00,00,000 divided into 1,50,00,000 Equity Shares.

September 20, 1994

7. The authorized share capital of our Company of ` 15,00,00,000 comprising of 1,50,00,000 Equity Shares was further increased and reclassified to ` 30,00,00,000 divided into 1,40,00,000 Equity Shares and 16,00,000 Preference Shares.

December 11, 2006

8. The authorized share capital of our company of ` 30,00,00,000 comprising of 1,40,00,000 Equity Shares and 16,00,000 Preference Shares was further increased to ` 32,00,00,000 divided into 1,40,00,00 Equity Shares and 18,00,000 Preference Shares.

May 22, 2007

9. The authorized share capital of our company of ` 32,00,00,00 comprising of 1,40,00,000 Equity Shares and 18,00,00,000 Preference Shares was further increased to ` 50,00,00,000 divided into 3,20,00,000 Equity Shares and 18,00,000 Preference Shares.

July 30, 2008


16

Notes to the Capital Structure 1. Share Capital History

(a) Equity share capital history of our Company

Date of Allotment of the Equity

Shares

No. of Equity Shares allotted

Face Value

(`)

Issue Price

(`)

Issued Equity Capital

(`)

Nature of Consideration

Nature of Allotment

Cumulative number of

Equity Shares

Cumulative Equity Share

Capital (`)


Premium (`)

November 28, 1981

20 10 10 200 Cash Initial Allotment based on

subscription to Memorandum of Association1

20 200 Nil

January 2, 1982 500 10 10 5,000 Cash Further allotment of

Equity Shares2

520 5,200 Nil

December 26, 1985

4,000 10 10 40,000 Cash Further allotment of

Equity Shares3

4,520 45,200 Nil

March 30, 1988 45,480 10 10 4,54,800 Cash Further allotment of

Equity Shares4

50,000 5,00,000 Nil

March 21, 1992 5,50,000 10 Nil 55,00,000 Bonus Shares Bonus Issue5 6,00,000 60,00,000 Nil

March 21, 1992 8,00,000 10 10 80,00,000 Cash Further allotment of

Equity Shares6

14,00,000 14,000,000 Nil

February 5, 1993 26,00,000 10 30 2,60,00,000 Cash Allotment of shares under initial public

offering7

40,00,000 4,00,00,000 5,20,00,000

September 03, 2005

10,00,000 10 10 1,00,00,000 Cash Preferential allotment of

Equity Shares8

50,00,000 4,99,76,000A 4,81,51,036B

January 22, 2007 45,00,000 10 49 4,50,00,000 Cash Preferential Allotment of

Shares9

95,00,000 9,49,76,000 A 22,36,51,036 B

December 11, 2009

12,00,000 10 50 1,20,00,000 Cash Preferential allotment of

Equity Schares10

1,07,00,000 10,69,76,000 A 26,96,60,655 C

March 17, 2011 65,58,065 10 66.10 6,55,80,650 Cash Preferential allotment of

Equity Shares11

1,72,58,065 17,25,56,650 A 61,92,52,328 D

December 12, 2011

9,500 10 35 95,000 Cash Allotment pursuant to

ESOS 201012

1,72,67,565

17,26,51,650A

61,94,89,828D

December 20, 2011

(3,900) 10 The Board of Directors have in their meeting held on December 20, 2011 forfeited 3,900 Equity Shares13

1,72,63,665

17,26,56,150E

61,94,98,828E

List of allottees: 1. Initial subscription to MoA by Mrs. Indrani Khanna (10 Equity Shares) and Mrs. Srilekha Bose (10 Equity Shares).

2. Further allotment of shares to Mrs. Indrani Khanna (500 Equity Shares).

3. Further allotment of shares to Mrs. Indrani Khanna (500 Equity Shares), Ms. Deepanjali Khanna (1,000 Equity Shares), Ms.

Neelanjaya Khanna (1,000 Equity Shares) and Mr. Anirudh Khanna (1,500 Equity Shares).


17

4. Further allotment of shares to Trenton Investments Company Private Limited (45,480 Equity Shares).

5. Bonus issue of ` 55,00,000 was done by utilizing the profit and loss account and export benefit reserve to Trenton Investments Company Private Limited (5,49,890 Equty Shares) and Mrs. Indrani K. Khanna (110 Equity Shares).

6. Further allotment of shares to Trenton Investments Company Private Limited (8,00,000 Equity Shares).

7. Further allotment of shares in initial public offering (26,00,000 Equity Shares).

8. Further allotment of shares to Shishilin Investments Private Limited (10,00,000 Equity Shares).

9. Further allotment of shares to Credit Renaissance Fund Limited (37,50,000 Equity Shares) and Credit Renaissance Development Fund LP (7,50,000 Equity Shares).

10. Further allotment of shares to Credit Renaissance Development Fund LP (1,83,333 Equity Shares), Credit Renaissance Fund

Limited (9,16,667 Equity Shares) and Garuda Plant Products Limited (1,00,000 Equity Shares). 11. Further allotment of shares to Mahindra and Mahindra Limited (65,58,065 Equity Shares).

12. Allotment of Equity Shares in terms of ESOS 2010 Scheme approved by our Shareholders vide a special resolution passed in the

Annual General Meeting held on July 21, 2010. For details please refer to Note 5 below on page 20.

13. The unpaid allotment money for 3,900 Equity Shares was not received by the due date and the Board of Directors forfeited and cancelled 3,900 Equity Shares in their meeting held on December 20, 2011.

A. Allotment money amounting to `24,000 in arrears. B. Share issue expenses amounting to `38,00,964 for the Financial Year 1994-95 written-off and allotment money amounting to

`48,000 in arrears. C. Share issue expenses amounting to `38,00,964 for the Financial Year 1994-95, `19,90,381 for the Financial Year 2006-07, written-

off and allotment money amounting to `48,000 in arrears. D. Share issue expenses amounting to `38,00,964 for the Financial Year 1994-95, `19,90,381 for the Financial Year 2006-07,

`1,40,500 for the Financial Year 2007-08, `13,12,801 for the Financial Year 2008-09, `5,43,923 for the Financial Year 2009-10,` 1,63,18,550 for the Financial Year 2010-11 written-off and allotment money amounting to `48,000 in arrears.

E. On November 17, 2011 a call for unpaid allotment money on shares to be paid on or before December 10, 2011 was made and

pursuant to this notice unpaid allotment money was received for 900 Equity Shares. Thus the Equity Share Capital was increased to ` 17,26,56,150 and the Cumulative Equity Share Premium increased to ` 61,94,98,828. As the unpaid allotment money for 3,900 Equity Shares was not received by the due date, the Board of Directors forfeited 3,900 Equity Shares and the outstanding Equity Share Capital is inclusive of an amount received on such Equity Shares and the outstanding Cumulative Equity Share Premium is inclusive of an amount received on such Equity Shares and `24,155,119 written off as share issue expenses.

All issuances of Equity Shares by us after the Equity Shares were listed were made in compliance with applicable laws

(b) Equity Shares allotted for consideration other than Cash:

Date of allotment of Equity Shares

No. of Equity Shares of ` 10

issued as bonus

Issue Price (`)

Reasons for allotment Persons to whom the Equity Shares were issued

Benefits to us

March 21, 1992 5,50,000 Nil Bonus Issue in the ratio of 11 Bonus Shares for every 1 Equity Share held

All our existing shareholders as on the record date for declaration of bonus issue

Nil

(c) Equity Shares issued under the Employee Stock Options Scheme indicating the aggregate number of Equity

Shares issued:

Allotment of Equity Shares made during the

Quarter

Number of

Equity Shares

Issue Price

(`)

Consideration Nature of allotment Cumulative number of

Equity Shares


Capital (`)


Premium (`)

Q3, 2011 9,500 35 Cash Allotment pursuant to ESOS 20101

9,500 95,000 237,500

Total 9,500 95,000 237,500


18

1. Allotment of Equity Shares on December 11, 2011 in terms of ESOS 2010 Scheme. For details please refer to Note 5 below on page 20.

2. Share Capital Build up for the shareholding of the Promoter in the Company

a) Details of buildup of the shareholding of our Promoter / acquisitions made by the Promoter in last one year

Name of the

Promoter

Date of Allotment/ Transfer

Number of Equity

Shares allotted

Face Value

(`)

Acquisition Price

(`)

Consideration (`)

Nature of the transaction (Cash, consideration other

than cash)

Allotment / Transfer

M&M March 17, 2011 65,58,065* 10 66.10 43,34,88,096.50 Cash Allotment M&M September 8, 2011 19,800 10 67.55 13,17,690.00 Cash Transfer

Total 65,77,865# 10 43,48,05,786.50 # amounts to 38.10% of the Paid-up capital *Upon preferential allotment to M&M 65,58,065 Equity Shares are subject to lock-in from March 25, 2011 upto March 16, 2012. Under the provisions of regulation 3 read with regulation 10 (4) of the Takeover Regulations a shareholder is exempt from the obligation of making an open offer for acquiring share(s) under the Issue (including Rights Issue Equity Shares acquired beyond Rights Entitlement), upon fulfillment of conditions stated therein. In the event, the acquisition of Rights Issue Equity Shares beyond the Rights Entitlement results in acquisition of control of the Company by the acquirer, the Takeover Regulations does not provide for an exemption from making an open offer. The Promoter and Promoter Group have confirmed that they intend to subscribe to the full extent of their Rights Entitlement in the Issue. Subject to compliance with the Takeover Regulations, the Promoter and Promoter Group reserve their right to subscribe for Rights Issue Equity Shares in this Issue by subscribing to Rights Issue Equity Shares beyond Rights Entitlement. The Promoter and Promoter Group have provided an undertaking dated December 20, 2011 to us to apply for Rights Issue Equity Shares to the extent of the under-subscribed portion of the Issue. As a result of this subscription and consequent Allotment, the Promoter and Promoter Group may acquire Rights Issue Equity Shares beyond their Rights Entitlement in the Issue, which may result in an increase of their shareholding being above their current shareholding with the Rights Entitlement. Such subscription and acquisition of Rights Issue Equity Shares beyond Rights Entitlement by the Promoter and the Promoter Group through this Issue, if any, will not result in change of control of the management of our Company. We hereby certify that such subscription to any unsubscribed portion of the Issue by the Promoter and the Promoter Group, in the manner contemplated above, shall be subject to compliance with the provisions of Rule 19(2)(b) of the SCRR and clause 40A of the Listing Agreement with respect to the requirement of minimum public shareholding of 25% of the post-Issue paid-up capital of our Company. 3. Shareholding pattern of our Company

The table below presents the shareholding pattern of our Company as on January 6, 2012: Category of

Shareholder Number

of Share

holders

Total Number of Shares

Number of Shares held in

Dematerialized Form

Total Shareholding as a Percentage of Total Number of Shares

Shares Pledged or Otherwise

Encumbered As a

Percentage of(a+b)

As a Percentage of (a+b+c)

Number of Shares

As a percentage of Total no. of Shares

(A) Shareholding of Promoter and Promoter Group

1 Indian Bodies Corporate 1 65,77,865 65,77,865 38.10 38.10 - - Sub total 1 65,77,865 6,577,865 38.10 38.10 - -

2 Foreign Total shareholding of

Promoter and Promoter Group (A)

1 65,77,865 6,577,865 38.10 38.10 - -

(B) Public Shareholding (1) Institutions - - - - - - -

Financial Institutions/Banks 1 200 - - - - - B1 Sub Total 1 200 - - - - -


19

Category of Shareholder

Number of

Share holders

Total Number of Shares

Number of Shares held in

Dematerialized Form

Total Shareholding as a Percentage of Total Number of Shares

Shares Pledged or Otherwise

Encumbered As a

Percentage of(a+b)

As a Percentage of (a+b+c)

Number of Shares

As a percentage of Total no. of Shares

(2) Non-Institutions Bodies Corporate 95 26,74,675 26,50,175 15.49 15.49 - - Individuals Individual shareholders

holding nominal share capital up to ` 1 Lac

6,541 14,94,148 7,65,548 8.65 8.65 - -

Individual shareholders holding nominal share capital in excess of ` 1 Lac

21 7,48,391 7,48,391 4.34 4.34 - -

Any Others (Specify) Non Resident Indians 327 1,67,886 45,286 0.97 0.97 - - Overseas Corporate Bodies 3 56,00,500 56,00,000 32.44 32.44 - -

B2 Sub Total 6,987 1,06,85,600 98,09,400 61.90 61.90 - - Total Public shareholding (B)

= (B1)+(B2) 6,988 1,06,85,800 98,09,400 61.90 61.90 - -

Total (A)+(B) 6,989 1,72,63,665 1,63,87,265 100.00 100.00 - -

(C) Shares held by Custodians and against which Depository Receipts have been issued 1 Promoter and Promoter Group - - - - - - - 2 Public - - - - - - - Sub-Total - - - - - - - Total (A)+(B)+(C) 6,989 1,72,63,665 1,63,87,265 100.00 100.00 - -

Statement showing Shareholding of persons belonging to the category Promoter and Promoter Group Sr. No.

Name of the Shareholder Total Share held Share pledged or otherwise encumbered Number As a % of grand

total (A)+(B)+(C)

Number As a percentage As a % of grand total (A)+(B)+(C) of

sub-clause (I) (a) (I) (II) (III) (IV) (V) (VI)=(V)/(III)*100 (VII) 1 Mahindra & Mahindra Limited 65,77,865 38.10 0 0.00 0.00 Total 65,77,865 38.10 0 0.00 0.00

Statement showing Shareholding of persons belonging to the category “Public” and holding more than 1% of the total number of shares

Sr. No. Name of the Shareholder Number of Shares Shares as % of Total Number of Shares

1 Credit Renaissance Fund Limited 46,66,667 27.03 2 Trenton Investments Company Private Limited 23,29,500 13.49 3 Credit Renaissance Development Fund LP 9,33,333 5.41 4 Ms. Indrani Khanna 2,20,500 1.28 5 Garuda Plant Products Limited 2,06,800 1.20

Total 83,56,800 48.40 4. Top Ten Shareholders The list of the top ten shareholders of our Company and the number of Equity Shares held by them is provided below:

a) The top ten shareholders of our Company and the number of Equity Shares held by them as close to the date of filing this Draft Letter of Offer are as follows:

Sr. No.

Shareholder Total No. of Equity Shares Held

Pre Issue %

1. Mahindra & Mahindra Limited 65,77,865 38.10


20

Sr. No.


Pre Issue %

2. Credit Renaissance Fund, Limited 46,66,667 27.03 3. Trenton Investments Company Private Limited 23,29,500 13.49 4. Credit Renaissance Development Fund L.P 9,33,333 5.415. Ms. Indrani Khanna 2,20,500 1.28 6. Garuda Plant Products Limited 2,06,800 1.20 7. Ms. Smita Patel 60,000 0.35 8. Mr. Anil Pandit 60,000 0.35 9. Ms. Hima Sheth 52,554 0.30 10. Mr. Surjit Uberoi 50,000 0.29

b) The top ten shareholders of our Company and the number of Equity Shares held by them ten days prior to

the date of this Draft Letter of Offer are as follows:

Sr. No.


Pre Issue %

1. Mahindra & Mahindra Limited 65,77,865 38.10 2. Credit Renaissance Fund, Limited 46,66,667 27.03 3. Trenton Investments Company Private Limited 23,29,500 13.49 4. Credit Renaissance Development Fund L.P 9,33,333 5.41 5. Ms. Indrani Khanna 2,20,500 1.28 6. Garuda Plant Products Limited 2,06,800 1.20 7. Ms. Smita Patel 60,000 0.35 8. Mr. Anil Pandit 60,000 0.35 9. Ms. Hima Sheth 52,554 0.30 10. Mr. Surjit Uberoi 50,000 0.29

c) Our top ten shareholders and the number of Equity Shares held by them two years prior to date of this Draft

Letter of Offer are as follows:

Sr. No.


Pre Issue %

1. Credit Renaissance Fund Limited 46,66,667 43.61 2. Trenton Investments Company Private Limited 13,29,800 12.43 3. Shishilin Investments Private Limited 9,99,700 9.34 4. Credit Renaissance Development Fund LP. 9,33,333 8.72 5. Ms. Indrani Khanna 2,20,500 2.06 6. Garuda Plant Products Limited 2,06,800 1.93 7. Mr. Paresh Sheth 78,193 0.73 8. Ms. Smita Patel 60,274 0.56 9. Mr. Aniket P. Sheth 36,543 0.3410. Ms. Neelanjana Khanna 29,500 0.28

5. Employee Stock Option Scheme (“ESOS 2010”)

The details of ESOS 2010, pursuant to which options to acquire Equity Shares will be granted to our Employees are as provided below:

ESOS Outstanding Options as on

December 31, 2011

Details

ESOS 2010

28,500 The Employee Stock Option Scheme (“ESOS 2010”) was approved by our Shareholders vide a special resolution passed in the Annual General Meeting held on July 21, 2010 and in accordance with the provisions of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended. The grant date for ESOS 2010 is November 19, 2010.


21

Sr. No.

Particulars ESOS 2010 Scheme Grant till date

FY 2010-11 FY 2011-12 (From April 1, 2011 upto

the date of filing of the DLOF)

A. Options granted 60,500 Nil B. Pricing Formula Fixed price of ` 35 per

Equity Share Fixed price of ` 35 per

Equity share C. Options Vested Nil 9,500 D. Options Exercised Nil 9,500 E. Total number of shares arising as result of exercise of options Nil 9,500 F. Options lapsed Nil 22,500 G. Variation of terms of options Nil Nil H. Money realised by exercise of options (` in Lacs) Nil 3,32,500 I. Total number of options in force 60,500 28,500 J. Employee wise details of options granted to:

(i) Senior Management Personnel Mr. Jayendra Shah 10,000 Lapsed Mr. Vinayak Patil 10,000 7,500

(exercised 2500 Options) Mr. Bhoopendra Sharma 10,000 Lapsed

(ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year.

Nil

(iii) Identified employees who were granted options, during any one year equal to or exceeding 1% of the issued equity shares (excluding outstanding warrants and conversions) at the time of grant

Nil

K. Vesting schedule/ conditions Options granted under ESOS 2010, will vest in four equal installments in November 2011, 2012, 2013 and 2014 in not more than 2 years from the date of grant of such options.

L. Diluted EPS in accordance with AS 20 ‘Earnings Per Share’ based on audited financial statements for the Financial Year 2010-11

1.31

M. In case the employee compensation cost is calculated using intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options and the impact of this difference on the profits and on the earnings per share of our Company for the Financial Year 2010-11

Particulars ` in Lacs (except for

EPS) Net income

As reported 143.71

Add: intrinsic value compensation cost 3.33

Less: Fair value compensation cost 4.80

Adjusted Proforma net income - 142.24

Earnings Per Share: Basic

As reported 1.31

Adjusted proforma 1.30

Earnings Per Share: Diluted

As reported 1.31

Adjusted proforma 1.30

N. Weighted average exercise price of options granted during the year

Weighted average fair value of options granted during the year whose Financial Year ended March 31, 2011 (a) Exercise price equals market price: nil (b) Exercise price is greater than market price: nil (c) Exercise price is less than market price: ` 41.84 (date of allotment November 10, 2010)


22

Sr. No.

Particulars ESOS 2010 Scheme Grant till date

FY 2010-11 FY 2011-12 (From April 1, 2011 upto

the date of filing of the DLOF)

Financial Year ended March 31, 2012 No options have been granted as on January 3, 2012

O. Method and significant assumptions used to estimate the fair value of options granted during the year:

The fair value of the options granted has been estimated using the Black-Scholes option pricing Model.

P. Risk free interest rate 7.65% Q. Expected life 3.50 years. R. Expected volatility 58.12%. S. Expected Dividends Nil T. Price of underlying shares in market at the time of grant ` 64

(The financial numbers disclosed in the ESOS 2010 disclosure above are as per the audited accounts for the Financial Year ended March 31, 2011)

6. There are no financing arrangements whereby our Promoter Group, Directors of our Promoter, our Directors and

their relatives have financed the purchase by any other person of the Equity Shares during the period of 6 months immediately preceding the date of filing of the Draft Letter of Offer with SEBI.

7. The Issue being a rights issue, as per Regulation 34(c) of the SEBI Regulations, the requirement of promoters’

contribution and lock-in are not applicable. 8. The Promoter, Directors, immediate relatives of the Directors and members of the Promoter Group have not

undertaken/ financed, directly or indirectly, any transaction in the Equity Shares in the six months preceding the date of filing of this Draft Letter of Offer except acquisition of September 8, 2011 Equity Shares by our Promoter on September 8, 2011 as a part of the Open Offer.

9. Our Company has not raised any bridge loans against the Net Proceeds. 10. Neither our Company, nor the Directors or the Promoter, or the Lead Managers have entered into any buy-back

and/or standby arrangements for the purchase of the Equity Shares. 11. We have not issued any Equity Shares for consideration other than cash except the following:

Date of allotment of the Equity Shares

No. of Equity Shares Issue Price (`) Nature of Allotment

March 21, 1992 5,50,000 Nil Bonus issue

12. There are no outstanding warrants, financial instruments or any rights, which would entitle the Promoter or the

shareholders of our Company or any other person any option to acquire any of the Equity Shares, except than options granted under the ESOS 2010 as set forth in note number 5.

13. Except for the initial public offering of our Company which closed in December 1992 our Company has not made

any public issue or rights issue of any kind or class of securities since incorporation.

14. The Rights Issue Equity Shares shall be made fully paid-up at the time of Allotment. All our outstanding Equity Shares are fully paid-up.

15. No further issue of capital by way of issue of bonus shares, preferential allotment, rights issue or public issue or in

any other manner which will affect the equity capital of our Company, shall be made during the period commencing from the filing of the Draft Letter of Offer with the SEBI to the date on which the Rights Issue Equity Shares are listed or application moneys refunded on account of the failure of the Issue, except that upon vesting our Company may allot further Equity Shares to our employees pursuant to exercise of options granted under ESOS 2010.

16. Further, our Company has no intention to alter the equity capital structure by way of split/consolidation of the


23

denomination of the shares, or issue of shares on preferential basis or issue of bonus rights or public issue of shares or any other securities for a period of six months from the date of the opening of the Issue, except than options granted under the ESOS 2010 as set forth in note number 5.

17. Except as disclosed in the chapter titled “Management” on page 58, none of our Directors or Key Managerial

Personnel holds any Equity Shares. 18. Our Company has not issued or allotted any Equity Shares in terms of scheme approved under sections 391-394 of

the Companies Act.

19. Since incorporation, our Company has revalued its fixed assets on June 24, 1998. However, there have been no issuances of Equity Shares from the revaluation reserves. For further details, please see “Other Regulatory and Disclosures” on page 208.

20. Our Company, Directors, Promoter or Promoter Group shall not make any payments direct or indirect, discounts,

commissions, allowances or otherwise under this Issue except as disclosed in this Draft Letter of Offer. 21. There shall be only one denomination of Equity Shares, unless otherwise permitted by law. Our Company shall

comply with such disclosure and accounting norms as may be specified by SEBI from time to time. 22. As of January 6, 2011, the total number of holders of Equity Shares is 6,989.

23. Except under for issuance of Equity Shares under ESOS 2010, our Company has not made any issue of specified

securities at a price lower than the Issue Price during the preceding one year.

24. Following Equity Shares have been issued during the preceding one year from the date of filing of this Draft Letter of Offer to the Promoter or the Promoter Group:

Name of the

Promoter Date of

Allotment /Transfer

Number of Equity Shares

allotted

Face Value

(`)

Acquisition Price

(`)

Consideration (`)

Nature of the transaction (Cash, consideration other

than cash)

% to Share Capital Post Preferential Allotment

Allotment / Transfer

M&M March 17, 2011

65,58,065 10 66.10 43,34,88,096.50 Cash 38.00 Allotment

25. Further, none of the Equity Shares have been issued to Promoter or member of the Promoter Group for consideration

other than cash.

26. The Issue will remain open for 15 (fifteen) days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 (thirty) days including the Issue Opening Date.


24

SECTION IV – PARTICULARS OF THE ISSUE

OBJECTS OF THE ISSUE

We intend to deploy the Net Proceeds of the Issue to: 1. Fund the procurement of plant and machinery. 2. Fund working capital requirements. 3. Fund expenditure for general corporate purposes. The main objects set out in our Memorandum of Association enables us to undertake our existing activities and the activities for which the funds are being raised by us through this Issue. Net Proceeds of the Issue

(` in Lacs) Particulars Estimated Amount

Gross proceeds of the Issue 4,500 Issue related expenses* [●] Net Proceeds of the Issue [●] *to be finalized upon determination of the Issue Price Schedule of Implementation and Use of Net Proceeds We intend to utilise the Net Proceeds of ` [●] Lacs for financing the objects as set forth below:

(` in Lacs) Particulars Amount proposed to

be financed from Net Proceeds

Fiscal 2013 Fiscal 2014

Procurement of plant and machinery 2,005.48 1,569.21 436.26 Fund working capital requirements 1,200.00 1,200.00 - General Corporate Purposes* [●] [●] [●]

Total [●] [●] [●] *to be finalized upon determination of the Issue Price While we intend to utilise the Net Proceeds in the manner provided above, in the event of a surplus, we will use such surplus towards general corporate purposes, including meeting future growth requirements. Means of finance The entire requirements of the objects detailed above are intended to be funded from the Net Proceeds of the Issue. Accordingly, we confirm that there is no requirement for us to make firm arrangements of finance through verifiable means towards at least 75% of the stated means of finance, excluding the amount to be raised through the Issue. The fund requirement and deployment are based on internal management estimates and have not been appraised by any bank or financial institution. These are based on current conditions and are subject to change in light of changes in external circumstances or costs, or in our financial condition, business or strategy, as discussed further below. Our management, in response to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan and estimates from time to time and consequently our funding requirements and deployment of funds may also change. This may also include rescheduling the proposed utilization of Net Proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilization of Net Proceeds, subject to compliance with applicable law. In case of variations in the actual utilization of funds earmarked for the purposes set forth above, increased fund requirements for a particular purpose may be financed by surplus funds, if any, available in respect of the other purposes for which funds are being raised in this Issue. If surplus funds are unavailable or in case of cost overruns, we expect that the shortfall will be met from internal accruals and/or entering into debt or equity arrangements as required. We may have to revise our expenditure and fund requirements as a result of variations in the cost structure, changes in estimates and external factors, which may not be within the control of our management. This may entail rescheduling, revising or canceling the planned expenditure and fund requirements and increasing or decreasing the expenditure for a particular purpose from its planned expenditure mentioned below at the discretion of our management. In addition, the


25

estimated dates of completion of the installation of the plants and machineries, as described in this section, are based on management’s current expectations and are subject to change due to various factors including those described above, some of which may not be in our control. Accordingly, the net proceeds of the Issue would be used to meet all or any of the uses of the funds described herein. Details of the Objects

1. Procurement of plant and machinery In line with our strategy of increasing our manufacturing capacities and expanding portfolio, we propose to purchase extruders, moulding machines and other machinery. We propose to acquire equipment which is ready to use. The equipment that we acquire may be installed at our Nashik facility or at any other property then found commercially viable and in the interest of the Company and our shareholders. The break-up of the machinery proposed to be acquired and other incidental expenses is as follows:

Sr. No. Item Particulars Estimated

Cost (` in Lacs)

Details of Quotations

1. Extruders 756.03 Based on quotations dated December 15, 2011 received from Maillefer Extrusion and December 16, 2011 received from R R Plast Extrusions Private Limited.

2. Other Plant and Machineries

Moulding Machines, Moulds and Dies

560.94 Based on a) quotations dated December 14, 2011 received from L&T

Plastics Machinery Limited b) quotation dated December 14, 2011 received from Protool

Systems International Pte Limited c) quotations dated December 14, 2011 and December 15, 2011

received from Mold Makers Private Limited d) quotations dated December 14, 2011 from Sahil Enterprises e) quotation dated December 16, 2011 from Mold Masters

Technologies Private Limited QA Testing Labs 23.67 Based on quotations dated December 14, 2011 from Kaiser

Technic and dated December 7, 2011 from Drip Irrigation Systems (USA)

Other machinery 115.53 Based on a) quotation dated December 1, 2011 from Shree Engineers b) quotation dated December 14, 2011 from Advance Cooling

Towers Private Limited c) quotation dated December 14, 2011 from ARS Engineering

Private Limited d) quotation dated December 14, 2011 from Pearl Engineering

Consultancy e) quotation dated December 15, 2011 from Orbital Systems

(Bombay) Pvt. Ltd f) quotation dated December 17, 2011 from Voltas Limited

3. Provisions 366.99 Provisions include management estimates for customs duty, excise, VAT, sales tax, freight, octroi and other taxes/duties as applicable.

4. Contingencies

182.32 Towards any contingencies that may arise in the implementation including increase in cost of equipments/ machinery and other reasons.

Total 2,005.48

Some of the above quotations are in foreign currency denominations such as Swiss Francs, Singapore Dollar and U.S. Dollar. For the purposes of arriving at the total cost estimate of the above machineries, we have assumed the conversion rates prevailing as at December 31, 2011:

Sr. No. Foreign Currency Conversion Rate* 1. Swiss Francs (CHF) 1 CHF = ` 56.63 2. Singapore Dollar (SGD) 1 SGD = ` 40.93 3. United States Dollar (USD) 1 USD = ` 53.07


26

* Source: Bloomberg Approvals The proposed installation of the machineries at Nashik does not require us to take any new approvals or licenses or modification of existing licenses and approvals. The existing approvals under labour laws and environment protection laws allow the installation of the new machineries stated in this section at Nashik. In the event we choose to install the machineries at any other location, we may be required to procure labour, industrial, environmental and other clearances. Labour We estimate that we would require approximately 25 to 30 additional workers for the planned installation of the machineries at Nashik. This addition is within the permitted limits under our factory license. We do not intend to utilize the Net Proceeds of the Issue to procure any second hand equipment/ machinery. The Promoters or the Directors or the Promoter Group entities do not have any interest in the proposed procurement of any equipment/ machinery as stated above or any of the entities from whom we have obtained quotations/ machinery. 2. Working capital requirements Our business is working capital intensive and we fund majority of our working capital requirements in the ordinary course of our business from internal accruals and financing from various banks and financial institutions. As of September 30, 2011, our working capital facility consisted of an aggregate fund based limit of ` 1,950 Lacs million and an aggregate non-fund based sub-limit of ` 1,850 Lacs. For further details of the working capital facilities currently availed by us, see “Financial Indebtedness” on page 176. Basis of estimation of working capital requirement and estimated working capital requirement

(` in Lacs unless otherwise stated) Sr No.

Particulars FY 2010-11 FY 2011-12 FY 2012-13 Holding levels

(No. of days)

(` in Lacs)

Holding levels (No. of days)

(` in Lacs)

Holding levels (No. of days)

(` in Lacs)

I Current Assets 1 Inventories 62.14 1,475 63.7 2,094 65.0 3,205 2 Sundry Debtors 116.99 2,778 115.0 3,781 115.0 5,671 Total Current Assets 179.12 4,253 178.7 5,875 180.0 8,877

II Current Liabilities 1 Sundry Creditors 49.78 1,182 50.0 1,644 50.0 2,466

Total Current Liabilities 49.78 1,182 50.0 1,644 50.0 2,466 III Total Working Capital Requirement 129.34 3,071 4,231 6,411 IV Funding Pattern Increase in working capital 905 1,160 2,180 - Working capital facilities from Bank 327 526 980 - Internal Accruals 12 634 -

- Proceeds of the preferential allotment made to M&M in 2011 566

-Net Proceeds of the Issue 1,200

Based on internal estimates and projections as reflected above, we would require total working capital to the tune of `3,340 Lacs during the financial year 2011-12 and 2012-13. We propose to avail additional working capital facility of ` 1,506 Lacs from various banks. We propose to utilise ` 1,200 Lacs of the Net Proceeds towards working capital requirements for meeting our future business requirements. Justification for holding period levels: Inventories Inventory holding levels are expected to increase from 62.14 days in the Financial Year 2010-11 to

63.7 days in the Financial Year 2011-12 and 65 days in the Financial Year 2012-13. The inventory holding levels are expected to increase as we expect an increase in sales.

Sundry Debtors Debtors are expected to reduce marginally by monitoring and implementing the credit management


27

function Sundry creditors As we propose to buy larger quantities from the vendors, we expect them to enhance the credit terms. Desai Associates, Chartered Accountants, have by a certificate dated December 23, 2011, certified the working capital requirements of the Company. 3. General Corporate purposes We, in accordance with the policies set up by our Board, will have flexibility in utilising the remaining Net Proceeds of this Issue for general corporate purposes to drive our business growth including to meet our working capital requirements, strategic initiatives, strengthening our marketing capabilities, brand building exercises as well as meeting exigencies which we may face in the ordinary course of business, or any other purposes as may be approved by the Board of Directors. 4. Issue Expenses The Issue related expenses include, among others, fees to various advisors, printing and distribution expenses, advertisement expenses, and registrar and depository fees. The estimated Issue related expenses are as follows:

Activity Expense (in ` Lacs)*

Expense (% of total expenses)*

Expense (% of Issue Size)*

Fees of bankers to the Issue, legal advisor, for other professional services and statutory fees

[●] [●] [●]

Fees of the Lead Manager [●] [●] [●]Fees of Registrar to the Issue [●] [●] [●]Commission of SCSBs [●] [●] [●]Advertising expenses [●] [●] [●]Listing fees [●] [●] [●]Printing and stationery expenses [●] [●] [●]

Total estimated Issue expenses [●] [●] [●]*Amount will be finalized at the time of filing the Letter of Offer and determination of Issue Price and other details. Interim Use of Funds The management, in accordance with the policies set up by the Board, will have flexibility, in deploying the Net Proceeds. Pending utilization for the purposes described above, we intend to temporarily invest the funds in interest / dividend bearing liquid instruments including deposits with banks, investments in money market mutual funds and other financial products and investment grade interest bearing securities, for the necessary duration. Our Company confirms that pending utilization of the Net Proceeds it shall not use the funds for any investments in the equity markets. Monitoring of the utilization of funds There is no requirement for a monitoring agency as the Issue size is less than ` 50,000 Lacs. Our audit committee shall monitor the utilization of the proceeds of the Issue. We will disclose the utilization of the Net Proceeds, including interim use, under a separate head specifying the purpose for which such proceeds have been utilized along with details, if any in relation to all such proceeds of the Issue that have not been utilised thereby also indicating investments, if any, of such unutilized proceeds of the Issue in our annual report. We will disclose the details of the utilization of the Net Proceeds of the Issue, including interim use, under a separate head in our financial statements specifying the purpose for which such proceeds have been utilized or otherwise disclosed as per the disclosure requirements of our listing agreements with the Stock Exchanges. As per the requirements of Clause 49 of the listing agreement, we will disclose to the audit committee the uses/ applications of funds on a quarterly basis as part of our quarterly declaration of results. Further, on an annual basis, we shall prepare a statement of funds utilized for purposes other than those stated in this Draft Letter of Offer and place it before the audit committee. The said disclosure shall be made till such time that the full proceeds raised through the Issue have been fully spent. The statement shall be certified by our Statutory Auditors. Further, in terms of Clause 43A of the listing agreement, we will furnish to the Stock Exchanges on a quarterly basis, a statement indicating material deviations, if any, in the use of proceeds from the objects stated in this Draft Letter of Offer. Further, this information shall be furnished to the Stock Exchanges along with the interim or annual financial results submitted under Clause 41 of the listing agreement and be published in the newspapers simultaneously with the interim or annual financial results, after placing it before the audit committee in terms of Clause


28

49 of the listing agreement. No part of the Issue Proceeds will be paid by us as consideration to the Promoters, the Directors, our key management personnel or companies promoted by the Promoters, except in the usual course of business.


29

BASIS OF ISSUE PRICE

The Issue Price will be determined by our Company, in consultation with the Lead Manager, on the basis of market conditions and on the basis of the following quantitative and qualitative factors. The face value of each Equity Share is ` 10. The Issue Price is [•] times the face value of Equity Shares. Qualitative Factors Competitive strengths 1. Our brand image and product quality; 2. Wide consumers reach through presence in key states and strategic utilization of the network of channel

partners; 3. Robust business model; 4. Association with the “Mahindra Group”; and 5. Experienced executive management team. For further details regarding some of the qualitative factors, which form the basis for computing the Issue Price, please see “Our Business - Competitive Strengths” and “Risk Factors” on pages 37 and IX, respectively. Quantitative Factors The information presented in this section is derived from our restated audited standalone financial information, prepared in accordance with Indian GAAP and the Companies Act and restated in accordance with the SEBI ICDR Regulations. Some of the quantitative factors which may form the basis for computing the Issue Price are as follows: 1. Basic and Diluted Earnings per Share (“EPS”): Basic EPS:

Period Standalone (` per Equity Share)

Weights

Year ended March 31, 2009 (1.67) 1 Year ended March 31, 2010 0.77 2 Year ended March 31, 2011 1.55 3 Weighted Average 0.75

Diluted EPS:

Period Standalone (` per Equity Share)

Weights

Year ended March 31, 2009 (1.67) 1 Year ended March 31, 2010 0.77 2 Year ended March 31, 2011 1.55 3 Weighted Average 0.75

Earnings/ (Loss) per share (`) = Net Profit/(loss) after Tax (as restated)

Weighted average number of equity shares outstanding during the year/periodEarnings per Share calculations are done in accordance with Accounting Standard (AS) 20 “Earnings per Share” notified under the Companies (Accounting Standards) Rules, 2006.

2. Price Earning Ratio (“P/E”) in relation to the Issue Price of ` [●] per equity share of face value of ` 10 each

Sr. No.

Particulars Standalone

1. P/E ratio based on Basic EPS for the year ended March 31, 2011 at the Issue Price [●] 2. P/E ratio based on Diluted EPS for the year ended March 31, 2011 at the Issue Price [●]


30

Industry P/E Particulars P/E Ratio Name of the Company Highest 12.48 Jain Irrigation Systems Lowest 3.17 Texmo Pipes & Products Industry Composite ** 7.82 Computed based on the closing price on BSE as on January 11, 2012 and EPS for the year ended March 31, 2011 extracted from the respective annual reports of the companies ** Average of industry peers as mentioned below 3. Return on Net worth (“RoNW”)

Period Standalone (%) Weights

Year ended March 31, 2009 (30.03) 1 Year ended March 31, 2010 10.82 2 Year ended March 31, 2011 3.37 3 Weighted Average 0.29 -

Return on Net Worth (%) = Net Profit/(loss) after Tax (as restated) Net worth excluding revaluation reserve at the end of the year / period

Minimum Return on Net Worth after Issue needed to maintain Pre-Issue EPS for the Fiscal 2011:

a) Based on Basic EPS

At the Issue Price – [●] % based on standalone financial statements.

b) Based on Diluted EPS

At the Issue Price – [●] % based on standalone financial statements.

4. Net Asset Value per Equity Share

Period Standalone (`) Year ended March 31, 2009 5.55Year ended March 31, 2010 6.52 Year ended March 31, 2011 29.30 NAV after the Issue Issue Price* * The Issue Price will be determined inconsulation with the Stock Exchange and the Lead Manager.

Net Asset Value per share (`) = Net worth excluding revaluation reserve and preference share capital at the end of

the year / period Number of equity shares outstanding at the end of year/period

5. Comparison with industry peers

Consolidated/ Standalone

Face Value per equity share (`)

Year Ended

EPS (`) P/E# RoNW (%)

NAV (`)

EPC * Standalone 10 March 31, 2011 1.55 [●] 3.37 29.30 Peer Group** Jain Irrigation Systems Standalone 2 March 31, 2011 7.75 12.48 16.34 46.84 Texmo Pipes & Products Standalone 10 March 31, 2011 6.03 3.17 10.89 55.35 *Based on restated financial statements for the year ended March 31, 2011. ** Source: Respective annual reports of the companies for the year ended March 31, 2011 #Computed based on the closing price on BSE as on January 11, 2012 and EPS for the year ended March 31, 2011 extracted from the respective annual reports of the companies except for EPC.


31

STATEMENT OF TAX BENEFITS

To The Board of Directors, EPC Industrié Limited, Nashik. Dear Sirs. We hereby report that there are no special tax benefits available to EPC Industrié Limited ('the Company) and to the shareholders of the Company under The Income Tax Act, 1961 (provisions of Finance Act. 2011) and Wealth Tax Act, 1957 which are presently in force in India. This is based on the information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and interpretations of the current relevant laws. For Desai Associates Chartered Accountants Firm registration number: 102286W Iqbal Mukadam Partner, Membership No: 016865 Mumbai, January 4, 2012


32

SECTION V – ABOUT US

INDUSTRY OVERVIEW

The information presented in this section has been obtained from publicly available documents from various sources, including officially prepared materials from the Government of India and its various ministries, industry websites/publications and company estimates. Industry websites/publications generally state that the information contained therein has been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe industry, market and government data used in this Draft Letter of Offer is reliable, it has not been independently verified. Similarly, our internal estimates, while believed by us to be reliable, have not been verified by any independent agencies. The agriculture sector is vital for the food and nutritional security of the nation. The sector remains the principal source of livelihood for more than 58% of the population. As one of the world's largest agrarian economies, the agriculture sector contributed approximately 14.6% of India's GDP (at 2004-05 prices) during 2009-10. (Source: Annual Report - Department of Agriculture and Cooperation Ministry of Agriculture, Government of India, March, 2011) The gross domestic product (GDP) of agriculture and its allied sectors and their share in total GDP of the country during the last 5 years including the current year, at 2004-05 prices is as follows:

(` in crore) Year 2006-07 2007-08 2008-09 2009-10 2010-11

GDP of Agriculture and Allied Sectors 6,19,190 6,55,080 6,54,118 6,56,975 6,92,499Per cent to total GDP 17.4 16.8 15.7 14.6 14.2Source: Central Statistical Organization, Ministry of Statistics and Programme Implementation, Govt. of India. For agriculture, land and water are the predominant resources and consequently, effective water management is imperative. Most agricultural fields are irrigated by use of underground water. Unfortunately, monsoon based rainfall, which is the source for such means of irrigation, is erratic. Droughts are common in India and depleting water resources may lead to acute shortage of irrigation water over the coming years. Flood irrigation is a common mean of irrigation in India. However, such means of irrigation results in wastage of water in conveyance, distribution and evaporation. As a result, approximately 30 – 40% of applied water would be actually utilized by the crop and the remaining water is drained out or evaporated. Consequently, micro irrigation was introduced in India in 1986 and is one of the most water and fertilizer efficient irrigation systems. The Government of India has systematically effected the popularization of micro irrigation systems in India. The Task Force on micro irrigation was established under the Ministry of Agriculture, Department of Agriculture & Cooperation, Government of India which in its report dated January 2004 (“Report”), inter alia, recommended the following:

a. Large scale adoption of micro irrigation technologies needs to be encouraged as a key Government Policy in order to take complete advantage of the benefits offered by these technologies.

b. Micro irrigation technologies should be viewed as total plant support systems instead of just considering them as

water conservation measures, as these technologies help in improving the individual and combined efficiency of all other agricultural inputs such as fertilizers, energy, plant protection measures, etc.

c. Wasteland Development policies involving agro-forestry should include and rely upon micro irrigation for its

benefits such as better establishment of plants, cultivation of inter-crops in between the rows of trees, suitability of micro irrigation for the hilly, undulated areas, sandy, salt-affected soils/terrains and carbon sequestration through increased tree cover.

d. Ensure equitable and efficient groundwater management: For the country as a whole about 56% of the irrigation is

currently provided by underground water sources (Dug, Tube and Bore wells). It is well established that grain productivity/ yield with groundwater is 1.5 to 2.0 times more than the canal irrigated water sources. In quite a number of areas, the ground water levels are fast depleting because more water is pumped out than natural recharge. Groundwater in 877 blocks (17%) in the country is overexploited or nearly overexploited and new areas are being added to the list every year. This has not only reduced the irrigation potential but has caused drinking water


33

scarcity, problem of water quality and land degradation. Punjab, Gujarat and Tamil Nadu are explicit examples. To remedy the situation, government may have to consider the use of micro irrigation as far as possible, compulsory in all such critical, semi-critical areas. Since subsidized power supply is one of the major reasons for such a situation, preferential connections be given to owner who agrees to use micro irrigation and the banks should finance combined loan for pump and micro irrigation. Making micro irrigation compulsory in agriculture (at least for commercial crops) would release enough water for drinking and save public expenditure on distant supply of piped drinking water schemes.

e. Different options for routing of credit support from the Central Government to the State Governments were

considered. It was felt that the route adopted under APMIP was possibly the ideal method of providing credit delivery from Central Government to the State Government. Under APMIP, the credit assistance to Government of Andhra Pradesh to the tune of 95% of the State Government's contribution has been assured through the RIDF administered by NABARD. There is a need to step up the provisions for RIDF for enabling the flow of more funds to States for micro-irrigation projects.

The Report also noted micro irrigation technologies can substantially impact the performance of several other related sectors. The immense impact of micro irrigation technologies will enhance the returns on investments made by each of these sectors for their individual inputs to Indian agriculture. The state funding and/or subsidized provision of resources to the farmers under each of these sectors will have larger impact and meaning if such funding and/or assistance are integrated with micro irrigation. Some of the sectors whose performance can be immensely improved by the micro irrigation technologies or whose future can be impacted substantially are a) Irrigation & Water Resource Sector b) Fertilizer Sector c) Power Sector d) Banking Sector e) Agriculture Sector f) Forest & Environment Sector g) Petroleum Sector and h) Petrochemicals Sector. The Report assessed the following projected benefits as a consequence of implementation of micro irrigation technology: Potential Water Savings through Implementation of Micro irrigation by end of XI Five-Year Plan: S. No

Crop Area expected to be brought under Micro Irrigation, million ha

Estimated Water

Requirement, mm/annum

Estimated Water Requirement,

Water, Billion cubic meter/annum

Savings in Billion cubic

meters/ annum Without Drip With Drip Without Drip With Drip

[1] [2] [3] [4] = [1]*[2]/1000

[5] = [1]*[3]/1000

[5]-[4]

1. Widely Spaced Crops suitable for Drip Irrigation

4.440 900 600 40 27 13

2. Closely Spaced Crops suitable for Drip Irrigation

7.560 1700 1200 129 91 38

3. Crops suitable for Sprinkler Irrigation

5.000 500 350 25 18 7

Total 17.000 194 136 58

Based on the saving in irrigation water as shown in the above table, the total value of the savings which otherwise will have incurred for creating equal amount of irrigation potential works out to ` 45,000 crores. Saving in Water required for Irrigation and consequent Indirect Benefit by Saving in Infrastructural Investments on Irrigation Projects, due to adoption of micro irrigation techniques (MITs).

Sr. No

Year

Proposed area for adoption, million ha Water Saving, BCM/year Value of infrastructure investment

saved @ `770 Crores/

BCM,* ` Crores

Widely Spaced Crops

suitable for Drip

Irrigation


suitable for Drip

Irrigation

Crops suitable

for Sprinkler Irrigation


suitable for Drip

Irrigation


suitable for Drip

Irrigation

Crops suitable


Total

1 2004-05 0.190 0.310 0.250 0.75 0.57 1.55 0.38 2.50 1,921 2 2005-06 0.260 0.440 0.350 1.05 0.78 2.20 0.53 3.51 2,699 3 2006-07 0.300 0.500 0.400 1.20 0.90 2.50 0.60 4.00 3,080 Xth Plan 0.750 1.250 1.000 3.000 2.250 6.250 1.500 10.000 7,700


34

Sr. No

Year

Proposed area for adoption, million ha Water Saving, BCM/year Value of infrastructure investment

saved @ `770 Crores/

BCM,* ` Crores

Widely Spaced Crops

suitable for Drip

Irrigation


suitable for Drip

Irrigation

Crops suitable



suitable for Drip

Irrigation


suitable for Drip

Irrigation

Crops suitable


Total

4 2007-08 0.370 0.630 0.600 1.60 1.11 3.15 0.90 5.16 3,973 5 2008-09 0.550 0.950 0.700 2.20 1.65 4.75 1.05 7.45 5,737 6 2009-10 0.740 1.260 0.800 2.80 2.22 6.30 1.20 9.72 7,484 7 2010-11 0.930 1.570 0.900 3.40 2.79 7.85 1.35 11.99 9,232 8 2011-12 1.110 1.890 1.000 4.00 3.33 9.45 1.50 14.28 10,996

XIth Plan 3.700 6.300 4.000 14.000 11.100 31.500 6.000 48.600 37,422 Total 4.45 7.55 5.00 17.00 13.35 37.75 7.50 58.60 45,122

Assumption: * Based on the principle of Water Saved is Water Created it is estimated that investment on Major/Medium irrigation projects for creating 1MCM of water potential is ` 77 lakhs or ` 770 Crores per BCM Savings in Fertilizer Subsidy due to reduced Fertilizer Consumption with implementation of MITs

Sr. No

Year

Fertilizer Saving, Million MT/year Amount of Fertilizer Subsidy Saved on account

of reduced Fertilizer Consumption due to

adoption of MITs @ ` 5800 per MT, ` Crores

Cumulative Saving in on account of reduced

Fertilizer Consumption, `

Crore

Widely Spaced Crops suitable

for Drip Irrigation

Closely Spaced Crops suitable

for Drip Irrigation

Crops suitable for Sprinkler

Irrigation Total

Total

1 2004-05 0.228 0.140 0.038 0.405 235 2352 2005-06 0.312 0.198 0.053 0.563 326 5613 2006-07 0.360 0.225 0.060 0.645 374 9354 2007-08 0.444 0.284 0.090 0.818 474 1,4095 2008-09 0.660 0.428 0.105 1.193 692 2,1016 2009-10 0.888 0.567 0.120 1.575 914 3,0157 2010-11 1.116 0.707 0.135 1.958 1,135 4,1508 2011-12 1.332 0.851 0.150 2.333 1,353 5,503

Total 4.008 2.547 0.600 7.155 5,503 17,909 Consequently, the National Mission on Micro Irrigation (NMMI) was implemented as a part of the XIth Plan from June 2010 which aimed to improve water use efficiency and efficient use of fertilizers on account of fertigation. The savings in water can be used to augment area under irrigation and thereby increase productivity. The NMMI now has a three tier structure encompassing the “National”, “State” and the “District” level for its implementation, coordination and monitoring. Expected outcomes of the NMMI are as under:

a. 2.85 million hectares to be brought under micro irrigation. b. Saving in use of irrigation water, fertilizers and electricity. c. Increase in production and productivity of crops. d. Convergence with other ongoing schemes of DAC & schemes of other Ministries on creation of water

harvesting structures and linking the same with Micro Irrigation system for higher water use efficiency. e. Enhanced return to the farmers.

The salient features of the NMMI Scheme include:

a. 40% of the cost of the Ml system will be borne by the Central Government, 10% by the State Government and the remaining amount will be borne by the beneficiary either through his / her own resources or loan from financial institutions.

b. Additional assistance of 10% of the cost of the Ml system will be borne by the Central Government in respect of small and marginal farmers.

c. All categories of farmers are eligible to avail assistance under this scheme. d. Assistance to farmers will be limited to a maximum area of five ha per beneficiary. e. 75% of the cost of drip and sprinkler demonstration for a maximum area of 0.5 ha per demonstration will be

borne by the Central Government.


35

The NMMI has being implemented with an outlay of ` 8,032.90 crores of which ` 3,409.26 crores will be contributed by DAC as Central share comprising 40% subsidy for general farmers and 50% subsidy for small and marginal farmers. Since 2009-10, an area of 8.22 lakh ha. has been covered of which 4.00 lakh ha. has been covered under the drip system and 4.22 lakh ha. under the sprinkler system. While the outlay for 2010- 11 have been `1000.00 crores, an amount of `1150.00 crores have been allocated as outlay for 2011-12. The water demand pattern in India (km3) is as follows: Sr. No. Area 1985 2025

1. For Agriculture 470 7402. For Non Agriculture use 70 280

The potential for micro irrigation in India: The potential for coverage under drip and sprinkler irrigation is estimated to be about 27 and 42.5 million ha respectively as per the following break up:

Crop Area

Drip Sprinkler Total

Cereals - 27.6 27.6Pulses - 7.6 7.6Oil seeds 3.8 1.1 4.9Cotton 7.0 1.8 8.8Vegetables 3.6 2.4 6.0Spices and condiments 1.4 1.0 2.4Flowers and Medicinal and aromatic plants - 1.0 1.0Sugarcane 4.3 - 4.3Fruits 3.9 - 3.9Coconut & Plantation Crops, Oil Palm 3.0 - 3.0

Total 27.0 42.5 69.5Source: 1. Agricultural Statistics at a glance 2003, Ministry of Agriculture, New Delhi.

2. Horticulture Database 2002, National Horticulture Board, Ministry of Agriculture, Gurgaon.


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OUR BUSINESS

This section should be read in conjunction with, and is qualified in its entirety by, the more detailed information about us and our financial statements, including the notes thereto, the “Risk Factors”, “Financial Statements” and “Management Discussions and Analysis of Financial Condition and Results of Operation” on pages IX, 58 and 161 respectively. We believe that we are one of the pioneers in the Micro Irrigation industry in India. We are into manufacture and sale of Micro Irrigation System (MIS) consisting of Drip Irrigation System and Sprinkler Irrigation System and its components. We are registered in 17 states of India as approved manufacturer of MIS with respective state government authorities under the National Mission on Micro Irrigation and Micro Irrigation Scheme. Micro irrigation is working capital intensive and subsidy driven business. The subsidy schemes provide for subsidy portion of about 50% to 100% of the approved cost of MIS. The disbursement of the subsidy portion to the farmer is typically phased out over a period of 12 weeks to 36 weeks and is dependent on completion of installation of MIS and compliance of certain prescribed conditions under the respective subsidy schemes. Our business model can be categorized broadly into two categories – project markets and open market sales. Sales through open market secure receipt of a majority of the sale proceeds of MIS upfront from our channel partners. The channel partners in turn sell the MIS to the customer/ farmer whereby subsidy disbursement exposure is taken by the channel partners or the customers. Consequently, a majority of our inventory costs and working capital requirements is funded by our channel partners. We operate under the project market model in the states of Gujarat, Andhra Pradesh and Tamil Nadu. As per the requirement of nodal agencies in the states of Gujarat, Andhra Pradesh and Tamil Nadu, we enter into an agreement with the farmer, nodal agencies and with banks, wherever applicable. After the loan tie ups and subsidy eligibility is approved by the nodal agency in these states, we install MIS and submit our claim for payment to the nodal agency. We have also been appointed as an empanelled company under the recently launched Pundit Deendayal Kisan Bagawan Samridhhi Yojna (Part II), 2010 – 2011, in Himachal Pradesh. Consequently, in the project market, the exposure of subsidy disbursement is taken by us as we are able to receive sales proceeds from the nodal agency/ project implementing agency post installation of MIS. We recently became a part of the Mahindra group of companies, pursuant to M&M acquiring control and management stake in 2011. Our promoter, M&M has strong presence in the tractor and farm machinery business and has developed sound understanding of the rural markets. We believe the agricultural business vertical of M&M complements our business and can provide us with management bandwidth and competence in marketing and operations thereby enhancing scope for development of synergies to create value for our business. Our product portfolio includes mainly the Drip Irrigation Systems and the Sprinkler Irrigation Systems. Drip Irrigation Systems includes online drippers, inline drip laterals, plain laterals, drip fittings, filters, fertigation equipments while Sprinkler Irrigation System includes sprinkler irrigation pipes, pipe fittings, sprinkler nozzles. As part of project market sales we undertake supply, installation and provision of agronomical services to farmers. We also manufacture specialized pipes for water and gas distribution as well as pipes required for industrial and agricultural purposes with complete fitting and installation tools. We manufacture our products at our plant at Nashik, Maharashtra. The capacity of the plant is 15,561.84 MT/year. Raw material is mostly sourced from the distributors of the reputed suppliers of polymers in India. We are committed to maintaining our quality management systems. The design, development, manufacture and supply of plastic pipe fittings and components for irrigation, infrastructure and industrial applications by us has been certified to confirm to the “Quality Management Systems Standard ISO 9001:2008” by Det Norske Veritas Management Systems Certificate. All our products are ISI marked. We have entered into formal arrangements with 113 channel partners and informal arrangements with a number of other channel partners to market and sell our products in 17 states. Our Competitive Strengths: We believe that following are our key competitive strengths: Our brand image and product quality We have been in the business of manufacturing MIS since the introduction of MIS in India in 1986 and have developed technical expertise for providing reliable and quality products. The quality of the hardware delivered to the farmer is a


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very crucial aspect in determining the performance of the MIS with reference to the yield of the crop, quantity of water applied, quantity of fertilizers delivered to the plant, energy consumption etc. The regulatory requirements prescribe adherence to stringent quality norms in order to be eligible for registration as approved manufacturer as well as receipt of subsidy. We are registered as approved manufacturer of MIS with respective state government authorities under the National Mission on Micro Irrigation and Micro Irrigation Scheme in 17 states of India. The quality of our products has enabled us to be one of the eligible manufacturer and supplier of MIS in various states such as Gujarat, Maharashtra, Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Rajasthan, Karnataka and few others since last many years. We believe that our dealer relationships and market position for providing reliable and high quality MIS has built a significant goodwill of our brand in the industry.

All our products are compliant with the prescribed Indian Standards (BIS). The design, development, manufacture and supply of plastic pipe fittings and components for irrigation, infrastructure and industrial applications by us has been certified to conform to the “Quality Management Systems Standard ISO 9001:2008” by Det Norske Veritas Management Systems Certificate. For further details of quality certifications of our products, please see “History and Other Corporate Matters - Awards, Achievements and Certifications” on page 56. Given our experience, product quality and brand image in MIS we believe we are well positioned to capitalise on the growth opportunities in the Indian MI sector. Wide consumers reach through presence in key states and strategic utilization of the network of channel partners MIS sales are driven by strong demand in states like Gujarat, Rajasthan, Madhya Pradesh Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu, Rajasthan and Haryana in India. The state governments of Gujarat, Andhra Pradesh, Tamil Nadu, Chattisgarh, Himachal Pradesh and Bihar have also conceived MIS projects as a part of the Micro Irrigation Scheme. We have presence in most of these states through a network of sales/branch offices supported by our channel partners. We have entered into formal arrangements with 113 channel partners and informal arrangements with a number of other channel partners to market and sell our products in 17 states. We also believe that our existing distribution network creates visibility for our brand and our association with M&M further enhances our rural reach and access to customer base of the farm and equipment sector of M&M. By customizing MIS for each farm given the water source, terrain, crop sown, climatic conditions, etc we are able to adapt to the evolving needs of the markets in which we operate. In addition through our channel partners we provide our farmers after sales services, including supply of spare parts which enhances customer’s satisfaction. Robust business model Micro irrigation is working capital intensive and subsidy driven business. The subsidy portion is about 50% to 100% of the approved cost of MIS. The disbursement of the subsidy portion to the farmer is typically phased out over a period of 12 weeks to 36 weeks and dependent on compliance of certain prescribed conditions under the respective subsidy scheme. We mostly operate under the “open market” business model. We believe our open market business model in India enhances our working capital efficiency. We believe our business model of open market sales secures receipt of the majority of the sale proceeds of MIS upfront from our channel partners. In open market sales, we generally appoint dealers who fund the inventory costs and the working capital. The channel partners in turn sell the MIS to the customer /farmer whereby subsidy disbursement exposure is taken by the channel partners or the customers. We also operate in the projects market. As per the requirement of nodal agencies in the states of Gujarat, Andhra Pradesh and Tamil Nadu where we operate under the project market, the exposure of subsidy disbursement is taken by us. Work Orders are issued to the Company by the nodal agencies after the loan tie ups and subsidy eligibility is approved by the nodal agency in these states. MIS is installed only after receipt of the work order from the nodal agencies which enables us to secure release of payments under the project markets. We have also been appointed as an empanelled company under the recently launched Pundit Deendayal Kisan Bagawan Samridhhi Yojna (Part II), 2010 - 2011. Under this scheme in order to avail of the subsidy benefits, we enter into an agreement with the farmers. Subsequently, 20 % of the cost of the MIS can be obtained by us as advance from the farmer and the balance amount would be released to us through the farmer upon successful installation of the MIS to the satisfaction of the farmer and the project implementing agency.


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Association with the “Mahindra Group” M&M acquired control and management stake in us in 2011. Consequently, we became a part of the Mahindra group of companies, one of the largest business groups in India. The Mahindra Group’s has presence in the tractor and farm equipment business and the agriculture domain through Mahindra Samriddhi centers across the country. While we have recently associated with M&M, we believe that the agricultural business vertical of M&M complements our business and provides scope for exploiting synergies to create value for our business. Our promoter has developed significant understanding of the rural markets in which we operate. We believe we can benefit from the Mahindra’s Farm Equipment sector’s management bandwidth and competence in marketing and operations. We believe M&M enhances our ability for sizeable investment in the working capital, expansion of our manufacturing capacity and distribution network, technology up gradation and implementation of new generation irrigation technology. We further believe that sharing goals and objectives with the Mahindra group enables us to utilize various synergies which aid in our business and operations. Experienced executive management team

We believe that our qualified and experienced management team has substantially contributed to the growth of our business operations. Our senior management team, have helped us to leverage our existing in-house production skills and market visibility to further enhance our existing strength in the industry and to expand our product offerings and geographic presence. We believe that the experience of our senior management team has translated into our product quality, increased profitability and improved margins which give us a competitive edge. Our Strategies We intend to pursue the following principal strategies to leverage our competitive strengths and grow our business: Increase in manufacturing capacities in line with demand and geographic spread We propose to increment our production line and existing capacity. We propose to establish plants in areas of potential growth. Our strategy includes establishment of plants at strategic locations going forward which enables us to procure raw material from the nearby areas and cater in the nearby regions, thereby ensuring logistic benefits in distribution vis-à-vis other players. Moreover, we propose to enter into tie ups with international partners for export of our products. We believe that there is significant demand of MIS internationally. We believe that the goodwill of the Mahindra group internationally should allow us to compete effectively in such markets. Expanding product and service portfolio As part of our MIS vertical, we are engaged in the manufacture of drips and sprinklers. We propose to strategically move along the production chain and diversify our product offerings to include flat inlines and other niche products. We also propose to introduce products allied to MIS such as pumps. We believe that a larger product portfolio would allow us to increase our market share and our customers a larger product basket to choose from. We believe that a larger product portfolio would also cater to a larger customer base. To increase brand visibility The market for our products is highly competitive on account of both the organized and unorganized players. Our market goodwill is significantly dependent on brand recall and our ability to compete effectively is would significantly depend on our ability to promote and develop our brand. We propose to increase the number of channel partners in order to broaden our reach. We believe greater visibility of our brand and our association with M&M would ensure brand retention in the minds of the customers and would in effect further enhance our reach. We may also undertake brand building and other exercises in order to build upon and improve our brand visibility.


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To provide quality agronomy services Increasing awareness about the benefits of micro irrigation is one of the key business drivers. We intend to strengthen our agronomy services to train and educate our customers to get maximum benefit out of our MIS. Product portfolio and business activities The details of our product portfolio and business activities are as follows:

1. Micro Irrigation Systems MIS comprises of drip and sprinkler irrigation systems. Drip irrigation systems are used primarily for irrigating row crops such as vegetables, flowers, fruits, plantation crops, etc., while the sprinkler irrigation system is used primarily for irrigating broadcast crops such as cereals, oilseeds, etc. Details of the product portfolio forming part of the drip irrigation system are as follows:

Sr. No.

Components of Drip Irrigation

Systems

Details and uses

1. ODLPC dripper These are non-pressure compensating drippers are used for variable flow requirement by operating at different pressure range, larger / wider path enables to make ODLPC dripper clog resistant. It can be opened by un-screwing the cap for cleaning manually as and when required. It is suitable for flat lands or land with slight slopes

2. Filters a. Screen and Disc

Filters Screen filter element is made up of buckle-resistant plastic cylinder embedded with stainless steel (anti-rust steel) screen for longer life, fine and efficient filtration up to 150 mesh (100 microns) particle size. Disc filter element consists of sharp grooved discs. which can be removed from the filter body for effective cleaning their stacked disc structure provides three-dimensional filtration of particles up to 120 mesh (130 microns) filters are provided with quick drain valve for draining out impurities without opening it and mobile pressure gauge for quick pressure measurement. O-Rings for filter element ensures pressure sealing.

b. Sand (media) filters

EPC sand media filters are fabricated from MS and are powder - coated for corrosion resistance. For higher water flow capacity two or more filters can be connected together in battery. It is effective for filtration of organic matter like algae, plant / insect fragments, etc.

c. Hydro cyclone filters

Hydro cyclone filters are specially designed to create centrifugal force to separate suspended sand and solid particles heavier than water through critical cylindrical vortex flow and then settle to an underflow dirt collection chamber. Dirt can be easily flushed or removed from the dirt collection chamber by opening the valve or by removing the cover from top of the chamber. It is use in MIS to remove sand and silt particles from irrigation water.

3. Fertigation Equipments a. Fertilizer Tank Fertilizer tanks are fabricated from MS with powder coating to protect it from corrosion and the weather.

Separate valves are provided with flexible transparent tube on inlet and outlet to control the injection rate and drain outlet for draining out the remaining chemicals they are used for application of fertilizers and chemicals along with water through drip system.

b. Fertilizer Injector or Ventury

It is of non corrosive plastic construction. Concentration of fertilizer / chemicals remains constant with respect to time. It is suitable for small to medium sized farms.

4. Integrated Dripline

EPC Integrated drip lines are manufactured in accordance with the latest advanced technology and have the IS 13488 certification. These drip lines have been designed after taking into consideration water scarcity problem and suitability to various crops grown in different parts of India. In the integrated drip lines, drippers are permanently welded inside the tube at regular intervals at the time of manufacturing. Integrated drip lines are ideal for close-spaced and row crops. Drippers are in built and positioned inside the lateral at preset intervals at the time of manufacturing, as per the requirement. By using compatible raw material compound, drippers are permanently bonded to the lateral inner wall.

5. Plain Laterals EPC Online laterals are made from completely from virgin polymers specifically formulated for the drip laterals. These laterals are manufactured as per Indian / International standards. Their wall thickness and test results indicate their life to be well over 10 to 15 years.


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Details of the product portfolio forming part of the sprinkler irrigation system are as follows:

Components of sprinkler irrigation

systems

Details and uses

Quick Pipe Coupling (“QPC”) System

It is a patented QPC sprinkler system. While using EPC QPC system for joints, it ensures leak-proof operation and facilitates quick jointing without using tools. The locking system ensures trouble free operation and restricts accidental opening of coupler lock due to surge pressure during initial priming. EPC QPC systems are socket - fusion welded to withstand high pressure operation and have longer life.

2. Gas and Water Pipes and Industrial Pipes We manufacture gas and water pipes of diameter size: 20 mm to 355 mm for conveyance of gas & water for infrastructure projects and other industrial applications. Details of the product portfolio for pipes and connectors are as follows:

Irrigation products Details and uses Irrigation lines

HDPE Irrigation Lines of diameter size: 20 mm to 355 mm with pressure rating ranging from 4kg to upto 16 kg. The irrigation lines are supplied in lengths of 6 meters.

HDPE Tees Tees used as connectors for the HDPE Irrigation Lines. Available in various diameters HDPE Bends Bends used as connectors for the HDPE Irrigation Lines. Available in various diameters HDPE Cap ends Cap Ends used terminal end for the HDPE Irrigation Line. Available in various diameters HDPE Cap Reducers Reducers used to regulate the flow of water through the HDPE Irrigation Line HDPE main pump connectors Connects the HDPE pipes to the pumps Manufacturing process

The following is the process flowchart for manufacture of injection moulding products:


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Process flow chart for the manufacture of high density polyethylene pipes, for both our verticals:


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The processes involved in the manufacture of the MIS and the pipes are similar, the details of which are as follows: Details of the manufacturing process are as follows: a. Extruders

The extruder is used to heat the raw material and then force the resulting melted polymer through the pipe extrusion die.

b. Breaker Plate/Screen Pack

The molten polymer leaves the extruder in the form of two ribbons. It then goes through a screen pack which consists of one or more wire mesh screens, positioned against the breaker plate. The breaker plate is a perforated solid steel plate. Screen packs prevent foreign contaminants from entering the pipe wall and assist in the development of a pressure gradient along the screw. This helps to homogenize the polymer.

c. Die Head

The pipe extrusion die supports and distributes the homogeneous polymer melt around a solid mandrel, which forms it into an annular shape for solid wall pipe.

d. Pipe Sizing

The dimensions and tolerances of the pipe are determined and set during the sizing and cooling operation. The sizing operation holds the pipe in its proper dimensions during the cooling of the molten material. For solid wall pipe, the process is accomplished by drawing the hot material from the die through a sizing sleeve and into a cooling tank.


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Sizing may be accomplished by using either vacuum or pressure techniques. Vacuum sizing is generally the preferred method.

e. Cooling

For either the vacuum or pressure sizing technique, the pipe must be cool enough so that it maintains its circularity before it exits the cooling tank. Various methods of cooling are utilized to remove the residual heat out of the PE pipe. Depending up on the pipe size, the system may use either total immersion or spray cooling.

f. Traction

The puller must provide the necessary force to pull the pipe through the entire cooling operation. It also maintains the proper wall thickness control by providing a constant pulling rate.

g. Coiler Most pipe of diameter four inches or smaller can be coiled for handling and shipping convenience. Some manufacturers have coiled pipe as large as 6 inch diameter. Equipment allows the pipe to be coiled in various lengths.

The details of the stages involved in the commissioning of Drip Irrigation System are follows: Survey, designing and installation Our sales team liaises with the dealers in processing sales enquiries from farmers. The dealers collect data through a survey process and prepare designs of the drip/ sprinkler irrigation system on technical and commercial parameters. Our sales team provides assistance to the dealers on a need basis. Post preparation of the complete proposal with all technical specifications, short quotations including major items and assuming certain percentage of fitting and accessories, the same is submitted to the farmer which indicates ruling prices. If the farmer is ready to buy the system, then the installation is carried out at his farm. Installation of the MIS are either “On-line” which implies that the dripper is appended on the pipe or “In-line” which implies that the dripper is embedded inside the pipe. The following are the steps involved in installation of MIS: a. We or our dealer’s representative visits the field and mark the plot as per the installation sketches which include

outlining the field necessary for trenching work in order to lay the mains and submains and finalise the location for the filters.

b. The farmer ensures that trenches are dug with a minimum depth and width of 1.5 feet. If both the mains and sub-mains are to run through one trench, the dimensions of the trench should be greater.

c. Once digging of the trench is completed, the installation of the drip irrigation system is undertaken which includes:

i. Fitting of filter station / control valves.

ii. Connecting mains and submains.

iii. Laying of In-line or On-line lateral with drippers.

Our raw material and support requirements Our products are manufactured from virgin raw materials of high, medium and linear low density polyethylene. We source the raw materials from independent third parties. Our agreements with nodal agencies In furtherance of the objective of promoting micro irrigation technology for improving crop yield the state governments of certain states including Gujarat, Andhra Pradesh, Tamil Nadu, Himachal Pradesh have implemented Micro Irrigation


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Projects. MIS suppliers who have met with several technical, production and financial parameters are recognized as approved MIS supplier under the Micro Irrigation Projects. As part of the Micro Irrigation Projects, the state governments of Gujarat, Andhra Pradesh, Tamil Nadu and Himachal Pradesh have approved us as one of the supplier for participation in the respective Micro Irrigation Projects. We have entered into agreements with Gujarat Green Revolution Company, Andhra Pradesh Micro Irrigation Program and Tamil Nadu Horticulture Development Agency, the nodal agencies who are responsible for administering subsidy programmes under the Micro Irrigation Projects. We have also been appointed as an empanelled company under the recently launched Pundit Deendayal Kisan Bagawan Samridhhi Yojna (Part II), 2010 – 2011 in Himachal Pradesh. In some cases we have been allotted specific areas for the implementation of the Micro Irrigation Project by the respective nodal agencies. The prices for supply are pre determined and renewed on regular basis. The bi party/ tri partite/four party agreements between us, the nodal agency, farmers and the bank, as applicable, are entered into after the subsidy eligibility is approved by the nodal agency and arrangements for funding the balance cost of MIS are put in place either by way of own contribution by the farmer or a bank loan. Typically the agreements provide for release of 90% of the project cost against completion of installation of MIS in accordance with the terms of the agreement. The brief details of these agreements are as follows: 1. Agreement with Andhra Pradesh Micro Irrigation Project (“APMIP”) We have entered into an agreement with the government of Andhra Pradesh under the Andhra Pradesh Micro irrigation Project (“APMIP”), on non-exclusive basis, for supply of MIS at agreed rates to farmers in the State of Andhra Pradesh. Under the agreement GoAP has allotted specific areas in different districts of Andhra Pradesh to us for the installing of the MIS. The Andhra Pradesh state Government provides a subsidy of 90% of the cost of installation of the MIS. We are entitled to obtain the first installment of 10% of the costs upon submission of the benchmark survey report. The second installment of 85 % is paid within 15 days after installation and production of competition certificate from the project director. We receive the balance amount of 5% on a quarterly basis over a period of time against submission of bank guarantee for a period of 5 years from the year of installation. Further, we also receive compensation at mutually agreed rates for agronomical services. 2. Agreement with Tamil Nadu Horticulture Development Agency (“TANHODA”) We are registered with TANHODA pursuant to its letter dated April 27, 2011, on non-exclusive basis, for supply and installation MIS at mutually agreed rates. We are registered in all zones in the State of Tamil Nadu for the period between 2011 and 2014. The Tamil Nadu State Government provides a subsidy of 100% (of which 50% is contributed by Central Government and 50% by Tamil Nadu state Government) of the cost of MIS to small and marginal farmers. Further, the subsidy is 75 % (of which 50% is contributed by Central Government, 25% by Tamil Nadu State Government and balance 25% is contributed by the farmer) of cost of MIS to other farmers in the state. In order to avail the subsidy benefits a tripartite agreement is entered into by us with the farmer and the district level agency. A claim for 90 % of the subsidy amount shall be submitted upon successful installation of the equipment and submission of requisite documents to the government. The balance 10% subsidy amount will be paid to us after a period of one year from installation subject to satisfactory performance of the equipment. 3. Agreement with Gujarat Green Revolution Company Limited (“GGRCL”) We have been registered with GGRCL vide its letter dated February 19, 2011, to supply and install MIS, on non exclusive basis, at agreed rates. We are registered to provide MIS in the entire state of Gujarat for the period of April 1, 2011 to March 31, 2012 and shall be responsible for the implementation of the micro irrigation scheme of the government of Gujarat. The state government of Gujarat provides a subsidy of 50 % of the cost of the equipment with a ceiling of ` 60,000 per hectare, whichever is lower. In order to avail of the subsidy benefits, we enter into a tripartite agreement with GGRCL, the farmer and bank (in case bank finance is availed by the farmer) for supply of MIS. Subsequently, a claim for 25 % of the cost of the equipment shall be submitted as advance to GGRCL upon receipt of such a tripartite agreement and of the balance amount 20% is paid by GGRC and 50% is paid by the farmer through GGRC upon successful installation of the


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equipment. We receive the balance amount of 5% (Retention money against the performance guarantee) on a quarterly basis over a period of time against submission of bank guarantee. Further, we also receive compensation at mutually agreed rates for agronomical services. 4. Subsidy scheme under the Pundit Deendayal Kisan Bagawan Samridhhi Yojna (Part II), 2010 – 2011 in Himachal

Pradesh The empanelled companies shall enter to an agreement with the farmers and for that format has been prescribed. The company will not charge more than 20% of the total project cost as an advance. The company will take advance at the time of dumping of material at the site as per agreement. The project assistance shall be released to the companies through farmer after testing of MI system installed to the entire satisfaction of the farmer and PIA. In case farmer had availed bank loan then the assistance will be released to those beneficiaries through bank Our Marketing, Sales Network and Channel Development Teams The function of inquiry generation and sales is done by our channel partners. Our sales teams liaise with the channel partners in procuring sales orders, managing and finalising subsidy documentation, coordinating system designs and offer technical guidance, order dispatches and are responsible for collections. Our sales network comprises of channel partners who include the distributors and dealers. We have entered into formal arrangements with 113 channel partners and informal arrangements with a number of other channel partners to market and sell our products in 17 states. We identify sales in the micro irrigation segment as “open market” sales and as “projects market” sales. In the open market sales, we generally appoint dealers who fund the inventory costs and the working capital. We sell our products to the dealers. The dealers earn through margins on sales of our products. The dealers are remunerated on an advance payment basis. In order to reduce the working capital requirements, we are in the process of deploying 2-tier sales channel in a few states. We appoint distributors who fund the inventory costs and the working capital for the dealers appointed under them. The distributors earn through margins on sales. The function of inquiry generation and sales will be done by the dealers. This sales model is under the process of implementation in few states in which we operate. In the project sales, we sell our products to the farmers through the dealers who are paid commissions based on the volume of the sales while we receive sales receipts for our products from the nodal agency of the respective states. In project market we are able to recover subsidy upon complete installation of MIS. Our agronomy and technician teams coordinate in agri-counselling and after sale services. In addition to the above, we also actively participate in domestic as well as overseas agri-exhibitions. We have also appointed agencies for providing clearing, forwarding, storing and dispatching services for our products in certain states. These agencies also obtain all licenses and registrations as may be required for providing such services. After-sale Services

We believe that by providing quick solutions to any complaints that a customer may have improves customer satisfaction. We maintain a team of qualified personnel in order to provide after sales services to any customer in the necessary event and are currently in the process of growing this team. We are also planning to develop training programmes for our technical team which we believe shall improve after-sales services. Quality control process We are accredited with ISO 9001 for quality processes. We have a dedicated quality assurance department equipped with the testing equipments necessary to carry out various tests in order to assure the quality of our products. The quality control process is conducted in two stages. As a part of the first stage, we check the quality of the raw materials received from the suppliers. The tests are conducted to determine the melt flow index and density of the raw materials. Further there are different tests conducted for extrusion process, moulding process and fabricated items which are generally bought out items. In the manufacturing process, we conduct quality control tests during extrusion process, moulding process and fabricated components through visual inspection, conformance of the dimensions and quality of markings. The tests which are carried post production of pipes and lateral after extrusion process are carbon content test, pressure test, environmental


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stress crack test and other test to determine the strength and other quality parameters of the pipe and laterals. On similar lines tests for moulded and fabricated components are carried out to ascertain the quality of the products. Enterprise Resource Planning (“ERP”) We have implemented ERP system at our manufacturing unit at Nashik in the year 2008 – 2009. The ERP system delivers integrated functionality to support business activities for financial, manufacturing, distribution, customer relationship management, purchase, human resources, quality, export, import, excise and e-commerce. The ERP system has been upgraded in 2011. Export Obligations We have obtained a license under the Export Promotion Capital Goods Scheme (‘EPCG Scheme”) under which we are eligible for concessional rate of custom duty on import of capital goods with a five year export obligation amounting to “free on board” value of four times the “cost insurance freight” value of capital goods imported by us. We have been unable to meet our export obligations in the past. For further details, please see “Risk Factors” on page IX. Intellectual Property Rights We believe that we are not dependent on any of our intellectual property rights individually, although collectively, they are of material significance to our business. We have entered into a trademark licensing agreement with our Promoter dated December 2, 2011 for grant of a non-exclusive license to us to use the trademarks of our Promoter, namely the registered trademark and trade name / label “Mahindra” and the “stylized M Logo” known as the “Corporate Logo”, as part of our corporate name and / or on the products manufactured/ services rendered by us. For further details of our intellectual properties, please see “Government and Other and Approvals” on page 202. Properties The details of our properties on lease or leave and license are as follows: Sr. No.

Details of Deed / Agreement Nature of right Granted

Particulars of the Property, Description & Area

Tenure/ (Term)

1. Lease Agreement dated May 08, 1995 between Maharashtra Industrial Development Corporation (“Lessor”) and us (“Lessee”)

Lease Factory on Plot No. H-109, Additional Nashik Industrial Area, village: Chunchale, district: Nashik and admeasuring 40588 sq. meters.

95 years commencing from January 1, 1995.

2. Lease Agreement dated October 1, 2009 between Mr. E. Venkat Reddy and Mr. E. Madhukar Reddy (collectively, the “Lessor”) and us (“Lessee”)

Lease Warehouse premises bearing Sy No. 57, H No. 7-2-162, Shakti Nagar, LB Nagar, Chintalakuntha, Hyderabad 500074.

4 years commencing from October 1, 2009

3. Leave and License Agreement dated October 1, 2011 between Mr. E. Prathap Reddy (“Licensor”) and us (“Licensee”)

Leave and License

Warehouse situated at D. No. 8-2-99/3, Survey No. 53, Bairamalaguda, Sagar Road, LB Nagar, Hyderabad-500074 admeasuring 15,000 sq. feet.

36 months commencing from September 10, 2011 to September 9, 2014.

4. Leave and License Agreement dated November 23, 2010 between Ms. Suchitra Shashidhar (“Licensor”) and us (“Licensee”)

Leave and License

Premises situated at ‘Aathira’, Sungrace Avenue, Chiyyaram, Thrissur, Kerala

36 months commencing from November 1, 2010 to October 31, 2013

5. Leave and License Agreement dated October 1, 2007 between Dinkar Kashinath Unune (“Licensor”) and us (“Licensee”)

Leave and License

Premises situated at 1st floor, Udyog Mandir, Maln Road, Madhavnagar, Sangli

October 1, 2011 to August 31, 2012 (11 months)

6. Leave and License Agreement dated September 1, 2011 between Harnathka Corporation (“Licensor”) and us (“Licensee”)

Leave and License

Premises situated at 303 B, Sukriti Complex, S.P. Varma Road, Patna-1.

September 1, 2011 to August 31, 2014 (36 months)

7. Lease Agreement dated April 1, 2011 between Suresh Kumar Aggarwal (“Lessor”) and us (“Lessee”)

Lease Premises situated at 118, Bhatli Road, Bargarh Orissa

April 1, 2011 to March 31, 2013 (36 months)


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Sr. No.

Details of Deed / Agreement Nature of right Granted


Tenure/ (Term)

8. Leave and License Agreement dated September 19, 2011 between Manjit Kaur (“Licensor”) and us (“Licensee”)

Leave and License

Premises situated at HL 243, Phase 9, SAS Nagar, Mohali,

September 19, 2011 to August 18, 2011 (11 months)

9. Leave and License Agreement dated September 16, 2011 between Prabhawati Sharanappa Agre (“Licensor”) and us (“Licensee”)

Leave and License

Premises situated at Shop No. 1, Suryoday Complex, Barshi Road, Latur

September 1, 2011 to July 31, 2012 (11 months)

10. Leave and License Agreement between Ms. Gauriben Satasiya (“Licensor”) and us (“Licensee”)

Leave and License

Premises situated at 2, Amrut Apartment, MDS College Road, Junagadh

June 1, 2011 to May 31, 2014 (36 months)

11. Leave and License Agreement dated April 16, 2011 between Ms. Shanti Devi (“Licensor”) and us (“Licensee”)

Leave and License

Premises situated at B - 12, Jaipur Tower, M. I. Road, Jaipur


12. Lease Agreement dated May 1, 2009 between Mr. Gurusiddalinge, Shwar Enterprises (“Lessor”) and us (“Lessee”)

Lease Premises situated at Pinto road, C.T.S. no. 504/A (part), Muncipal no. 136/2/1, Hubli - 580 020.

May 1, 2009 to April 30, 2012 (36 months)

13. Leave and License Agreement between Gujarat State Cooperative Marketing Federation Limited (“Licensor”) and us (“Licensee”)

Leave and License

Office premises at Gujcomasol Compound, Near GSFC Marketing Gate, Channi-Bajwa Road, Bajwa -391 310


The details of our properties on lease or leave and license which are under the process of renewal are as follows: Sr. No.

Details of Deed / Agreement Nature of right

Granted


1. Leave and License Agreement dated February 01, 2009 between Ms. Ashwini Deshmukh (“Licensor”) and us (“Licensee”)

Leave and License

Commercial premises situated at Gulmohar, 1st floor, near Dr. Bhambhurkar Hospital, Neckless Road, Tapadiya Nagar, Akola – 444 001.

2. Leave and License Agreement between Vinit Sharma(“Licensor”) and us (“Licensee”)

Leave and License

Premises situated at 635, Mahadeoghat Road, Sunder Nagar Gate, Raipur

The details of our owned properties are as follows: Sr. No.


Nature of right

1. Shop No. E, Mezannine floor, Plot No. E2/21, Arera Colony, Bhopal admeasuring 850 sq. feet. Owned 2. Shop no. 63, Sarovar Complex, Lane opposite to Aniket Building, Sardar Patel Nagar, Off. C G Road,

Navrangpura, Ahmedabad – 380 009, admeasuring 691 sq. feet. Owned

3. Shop no. 64, Sarovar Complex, Lane opposite to Aniket Building, Sardar Patel Nagar, Off. C G Road, Navrangpura, Ahmedabad – 380 009, admeasuring 652 sq. feet.

Owned

Insurance We maintain insurance against various risks inherent in our business activities, including property damage caused by fire, earthquake, flood, explosion and similar catastrophic events that may result in physical damage to or destruction of our equipment or stocks. Although we consider our insurance coverage to be of a type and level that is economically prudent, we cannot assure you that we will be able to maintain insurance at rate which we consider commercially reasonable or that such coverage will be adequate to cover any claims that may arise. The insurance policies in respect of certain of our plant and machinery, stocks and book debts have been endorsed in favour of the lending banks that have provided us finance. Overall, we generally maintain insurance covering our assets and operations at levels that we believe to be appropriate for our business. Competition Our competition depends on the products being offered by various companies in the organized segment besides several


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other factors like quality, price, and timely delivery. Competition emerges not only from organized sector but also from the unorganized sector and from both small and big players. In an organized segment we face competition from Jain Irrigation Systems Limited, Netafim Irrigation India Pvt. Limited, Texmo Pipes and Products Limited, Finolex Plasson Industries Limited, Premier Irrigation, Parixit Industries Limited and Nagarjuna Palma. Human Resource Management We believe that our employees are key contributors to our business success. To achieve this, we focus on hiring and retaining the best talent in the industry. We have formulated certain programmes to groom them like on-job training so as to absorb them as regular and effective employees. Our human resource (“HR”) management team is in the overall control of recruitment, training, performance management, OD initiatives, system implementation and strategic HR business partnership. The HR team’s responsibilities include i) manpower recruitment, compliance and retention of budgeted manpower; ii) identifying training needs of the employees, training employees and evaluation effectiveness and induction and orientation for every new employees in the organisation; iii) timely performance management system and its effective implementation; iv) implementation of HR policies and processes as per group guidelines, to create and manage the HR strategy and processes within the company as per the group standards; and v) monitor activities such as monthly confirmations, transfer, relocation, complete management information systems and budgeting. The break- up of employee strength as on November 30, 2011 is given below:

Category Number of Employees

Managerial and technical 201 Commercial and non-technical 134

Total 335 We also employ personnel on temporary basis as and when required. Unions We have entered into an agreement dated April 1, 2008 with Bhartiya Kamgar Sena Union, a registered union, for determining the wages, increment and various allowances of the member workers. The said agreement is valid upto March 31, 2012. The wages, increment and various allowances of the member workers are determined as per the terms of the agreement.


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KEY INDUSTRY REGULATIONS

The following description is a summary of certain laws and regulations in India, which are applicable to us. The information detailed in this chapter has been obtained from publications available in the public domain. The regulations set below are not exhaustive, and are only intended to provide general information to the investors and are neither designated nor intended to be a substitute to professional legal advice. We are engaged in the business of micro irrigation in India. We may be required to obtain licenses and approvals depending upon prevailing laws and regulations. For details of such approvals, please see “Government and Other Approvals” beginning on page 202. Policies on micro-irrigation Eleventh Five Year Plan (2007-2012) The main objectives of the Eleventh Five Year Plan (“Eleventh Plan”) include the following: Creation of additional irrigation potential of over 16 mha; Reducing gap between potential created & its utilization; Mitigation of flood damages; and Promotion of mass awareness on water related issues.

Accordingly, the Eleventh Plan sought to lay emphasis on the use of efficient systems for delivering the water and its optimal use at the application level to create additional irrigation potential of over 16 mha during the eleventh plan period. The effective and speedy implementation of the centrally sponsored ‘Micro Irrigation’ programme, approved by the government during the tenth plan period, to help spread the network of micro irrigation implements such as sprinkler and drip irrigation throughout the country was identified as a major thrust area. Micro irrigation systems help save water, fertilizer as well as electricity and distribute water evenly unlike other irrigation systems. The scheme on Micro Irrigation, which was launched during the year 2005-06, has been upscaled to be implemented as the National Mission on Micro Irrigation (“NMMI”) during the eleventh plan period. National Mission on Micro Irrigation To fulfill its objectives of increasing the area under micro irrigation and promote the efficient use of water resources in the country the NMMI was sought to be implemented using the following strategy: Provision of most appropriate irrigation system whether drip or sprinkler depending on agro-climatic conditions; Supply of good quality systems to the farmers; Easy flow of credit to the farmers; and Capacity building of farmers through training and demonstrations.

The NMMI also envisaged the creation of state level and district level micro irrigation committees and an implementation committee for the implementation of the Micro Irrigation Scheme (“MI Scheme”). A gross budgetary support of ` 3,000 crore was envisaged for the said purpose. Micro Irrigation Scheme Under the MI Scheme of the Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India the following subsidies on the cost of implementing the Micro Irrigation Systems (“MI Systems”) are offered to farmers: 40% of the cost will be borne by the central government; 10% of the cost will be borne by the state government; and 50% of the cost will be borne by the beneficiary through his own resources or through a soft loan from financial

institutions. A manufacturer of MI Systems, which includes drip and sprinkler irrigation systems, must register with the relevant state authorities for sale of MI Systems pursuant to the MI Scheme wherein subsidy can be claimed by the buyer. In addition to the MI Scheme implemented by the Central Government, respective state governments have also extended certain subsidies in connection with the MI System.


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Certification Marks License The quality and design of irrigation equipment manufactured by us is monitored by the Bureau of Indian Standards (“BIS”). BIS monitors our products by granting separate “certification marks licenses” for various equipments manufactured by us. Such certifications need to be renewed periodically by us. Environmental Laws Some of the important environmental legislations that are applicable to us are the Water (Prevention and Control of Pollution) Act, 1974 (“Water Pollution Act”), the Air (Prevention and Control of Pollution) Act, 1981 (“Air Pollution Act”), the Water (Prevention and Control of Pollution) Cess Act, 1977 (“Water Pollution Cess Act”) and the Environment Protection Act, 1986 (“Environment Protection Act”). Water (Prevention and Control of Pollution) Act, 1974 The Water Pollution Act aims at the prevention and control of water pollution. This legislation provides for the constitution of a Central Pollution Control Board (“Central Board”) and State Pollution Control Boards (“State Boards”). The functions of the Central Board include coordination of activities of the State Boards, collecting data relating to water pollution and the measures for the prevention and control of water pollution and prescription of standards for streams or wells. The State Boards are responsible for the planning of programmes for prevention and control of pollution of streams and wells, collecting and disseminating information relating to water pollution and its prevention and control, inspection of sewage or trade effluents, works and plants for their treatment and to review the specifications and data relating to plants set up for treatment and purification of water; laying down or annulling the effluent standards for trade effluents and for the quality of the receiving waters, and laying down standards for treatment of trade effluents to be discharged. The Water Pollution Act debars any person from establishing any industry, operation or process or any treatment and disposal system, which is likely to discharge trade effluent into a stream, well or sewer without taking prior consent of the State Board. Air (Prevention and Control of Pollution) Act, 1981 The Central and State Boards constituted under the Water Pollution Act also perform functions under the Air Pollution Act for the prevention and control of air pollution. The Air Pollution Act aims at prevention, control and abatement of air pollution. Under the Air Pollution Act, no person can establish or operate any industrial plant in an air pollution control area without prior consent of the State Board. No person operating any industrial plant, in any air pollution control area shall discharge or cause emission of any air pollutant in excess of the standards prescribed by the State Board in this regard. The Water (Prevention and Control of Pollution) Cess Act, 1974 The Water Pollution Cess Act has been enacted to provide for the levy and collection of a cess on water consumed by persons carrying on certain Industries to augment the resources of the Central and State Boards. The Water Pollution Cess Act also provides for a rebate to the extent of 25% of the cess payable, in favour of persons who, being liable to cess under the Water Pollution Cess Act, install any plant for the treatment of sewage or effluents. However this rebate is not applicable to persons consuming water in excess of the maximum prescribed quantity or who fail to comply with the provisions of section 25 of the Water Pollution Act or who fail to adhere to standards laid down by the Central Government under the Environment Protection Act. Penalties for noncompliance include imprisonment of any person in contravention of the provisions of the Water Pollution Cess Act for a period up to six months specified or both. Environment (Protection) Act, 1986 The Environment Protection Act 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 Environment Protection 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 the Water Pollution Act and the Air Pollution Act. It includes water, air and land and the interrelationships which exist among water, air and land, and human beings and other living creatures, plants, micro-organisms and property.


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The Hazardous Wastes (Management and Handling) Rules, 1989 The Hazardous Wastes (Management and Handling) Rules, 1989 provides for control and regulation of hazardous wastes by undertakings and imposes an obligation on every occupier generating hazardous waste to dispose of such hazardous wastes properly including proper collection, treatment, storage and disposal. Every occupier generating hazardous waste is required to obtain an approval from the Pollution Control Board for collecting, storing and treating the hazardous waste. Miscellaneous With respect to forest conservation, the Forest (Conservation) Act, 1980 prevents State Governments from making any order directing that any forest land be used for a non-forest purpose or that any forest land is assigned through lease or otherwise to any private person or corporation not owned or controlled by the Government without the approval of the Government of India. The Ministry of Environment and Forests mandates that Environment Impact Assessment must be conducted for such projects. In the process, the Ministry receives proposals for the setting up of projects and assesses their impact on the environment before granting clearances to the projects. Intellectual Property There are both statutory and common law remedies for protection of intellectual property in India. Statutory remedies are provided under the Patents Act, 1970 and the Trade Marks Act, 1999. The aforesaid statutes provide for the protection of intellectual property by imposing civil and criminal liability for infringement. Labour Laws India, being a welfare state, has stringent labour related legislation. The following is an indicative list of legislations which are applicable to our operations and workmen:

1. Factories Act, 1948 2. Minimum Wages Act, 1948 3. Contract Labour (Regulation and Abolition) Act, 1970 4. Payment of Bonus Act, 1945 5. Payment of Gratuity Act, 1972 6. Employee State Insurance Act, 1948 7. Employees Provident Fund and Miscellaneous Provisions Act, 1952 8. Workmen‘s Compensation Act, 1923 9. Industrial Disputes Act, 1947 10. Industrial Employment (Standing Orders) Act, 1946

Regulation of Foreign Investment in India and Foreign Ownership Foreign investment in India is primarily governed by the Reserve Bank of India (“RBI”) through 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 prohibits, restricts and regulates the transfer or issue of securities to a person resident outside India. 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 exceeding the specified sectoral limits under the automatic route, approval for such investment may be required from the Foreign Investment Promotion Board and/or the RBI. Further, Foreign Institutional Investors (“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 mandates 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. Under the Industrial Policy and FEMA, 100% FDI is permitted in Companies engaged in the manufacture of micro-irrigation equipment.


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HISTORY AND OTHER CORPORATE MATTERS Corporate Profile and Brief History We (Corporate Identification Number L25200MH1981PLC025731) were incorporated in India on November 28, 1981 as “Exomet Plastics and Chemicals Private Limited”. Our name was changed to “EPC Industrié Private Limited” on December 8, 1987. Further, on conversion into a public company our name was changed to “EPC Industrié Limited” on August 24, 1992. Our name was further changed to EPC Irrigation Limited on September 11, 1992 and on October 13, 1997 our name was again changed to EPC Industrié Limited. We manufacture micro irrigation systems such as drip and sprinkler irrigation systems and parts thereof and polyethylene pipes. Our manufacturing unit is situated at MIDC, Ambad, Nashik. In December 1992 we made an initial public offering amounting to ` 780 Lacs comprising of 26,00,000 Equity Shares at ` 30 per Equity Share through 100% book building process. The Equity Shares are listed on the BSE. In 2001, we had made a reference to the Board for Industrial and Financial Reconstruction (“BIFR”). Our networth had eroded due to accumulated losses consequent to changes in Government policy regarding grant of subsidy to farmers. The subsidy entitlement rates were increased substantially but the same was not followed by corresponding increase in allocation by State Governments, which significantly reduced cash inflow into us. The delay in realisation of subsidy resulted in substantial lock-up of our working capital, eventually leading to erosion of our networth. The BIFR, at its hearing held on July 2, 2001, declared us ‘sick’ in terms of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The BIFR pursuant its order dated 14 May, 2004, sanctioned a rehabilitation scheme (“BIFR Scheme 2004”) for our revival. Due to the failure of the BIFR Scheme 2004 to revive us, we vide its letter dated October 13, 2006, submitted a draft modified rehabilitation scheme (“BIFR Scheme 2006”) to the BIFR proposing to settle the outstanding dues by re-payment on “One Time Settlement” (“OTS”) basis. SBI (acting in its capacity as the monitoring agency) vide its letter dated November 29, 2006, submitted its report in respect of the BIFR Scheme 2006 wherein they confirmed that the financial institutions/banks(s) have in principle accepted the OTS offer. Specific reliefs under the BIFR Scheme 2006 were: (i) Full and final settlement of the entire outstanding dues of all the three banks i.e. SBI, BOI and SBICI for a sum of `

1,000 Lacs to be divided proportionately by the banks amongst themselves on the basis of value of charges held by each bank. The payment was to be made by deposit of sum of ` 1,000 Lacs in an escrow account with the SBI and once this is accomplished all dues of all banks would cease to exist with immediate effect. Each bank was required to issue the 'no dues' certificate to us;

(ii) Full and final settlement of all outstanding dues of each debenture holder at 40% of the principal amount of their

outstanding dues. Pursuant to a debenture subscription agreement dated January 17, 2007 entered into between Schroder Credit Renaissance Fund Limited, Schroder Credit Renaissance Fund L.P., Trenton Investments Company Private Limited, Shishilin Investments Private Limited, Garuda Plant Products Limited, Ms Indrani Khanna and us, on January 22, 2007, our Company issued 18,00,000 OCCDs of ` 100 each amounting to ` 1,800 Lacs to Schroder Credit Renaissance Fund Limited and Credit Renaissance Development Fund L.P. We also entered into an Share Subscription Agreement dated January 17, 2007 with Schroder Credit Renaissance Fund Limited, Schroder Credit Renaissance Fund L.P., Trenton Investments Company Private Limited, Shishilin Investments Private Limited, Garuda Plant Products Limited and Ms Indrani Khanna for the issue of 45,00,000 Equity Shares aggregating to 47.37% of our total paid-up capital as on the date of the Share Subscription Agreement. Upon all bankers and each Debenture Holder having issued no dues /settlement of claims certificate to us, we were discharged from the purview of SICA/BIFR vide order dated June 29, 2007 issued by the BIFR. Our initial promoters were Trenton Investments Company Private Limited, Shishilin Investments Private Limited, Garuda Plant Products Limited, Ms. Indrani Khanna, Mr. Anirudh Khanna, Ms. Neelanjana Khanna and Ms. Deepanjali Chhapwale (“Erstwhile Promoters”).


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The Promoter had entered into a Share Subscription Agreement dated February 9, 2011 (“SSA”) with (i) us, (ii) Schroder Credit Renaissance Fund Limited (“SCRF”) and Credit Renaissance Development Fund LP (formerly known as Schroder Credit Renaissance Development Fund LP), (“CRDF”) (collectively referred to as “Existing Investor”), (iii) Mr. K.L. Khanna and (iv) the Erstwhile Promoters whereby 65,58,065 Equity Shares constituting 38.00% of the post preferential issue paid-up capital of our Company would be issued, on a preferential basis, to the Promoter, for cash at a price of ` 66.10 per Share (“Preferential Issue”), resulting in substantial acquisition of shares accompanied with change in control of over us as per the Takeover Code. Subsequently the SSA was terminated and replaced by a new share subscription agreement (“New SSA”) dated June 27, 2011 so as to (a) exclude the Existing Investor from the SSA and (b) remove all references to the Existing Investor and make the consequential modifications. In addition to the SSA, the Promoter had entered into a shareholders’ agreement on February 9, 2011 (“SHA”), with the Existing Investor, Erstwhile Promoters, Mr. K.L. Khanna, Kimplas Piping Systems Limited and us, which was subsequently terminated and replaced by a new shareholders agreement (“New SHA”) dated June 27, 2011 so as to (a) exclude the Existing Investor from the SHA and (b) remove all references to the Existing Investor and make the consequential modifications. The Board of Directors in their meeting held on February 9, 2011 passed appropriate resolutions, inter alia, (a) to approve the issue of 65,58,065 Shares at a price of ` 66.10 per share to the Acquirer; (b) to convene an extra-ordinary general meeting to obtain approval of Shareholders in terms of section 81(1A) of the Companies Act, 1956 for Preferential Allotment; (c) to authorize the Board to allot the above mentioned Shares to the Acquirer and (d) to approve the change of promoters as defined in regulation 2(1)(h) of the SEBI Takeover Regulations so as to classify the Acquirer as the promoter of the Target Company upon completion of Offer. On February 10, 2011, the Promoter made an open offer under the Takeover Code to the Equity Shareholders for acquisition of 34,51,613 Equity Shares at ` 66.55 per Equity Share (Besides above, interest of ` 1.00 per share for delay in the offer schedule was paid to eligible shareholders) for cash representing 20.00% of the post preferential issue paid-up capital our Company. The Shareholders in an extra-ordinary general meeting held on March 9, 2011 approved the issue of Equity Shares to the Promoter and the allotment was made on March 17, 2011. Pursuant to the open offer the Promoter acquired 19,800 Equity Shares amounting to 0.11% of the post preferential issue paid-up capital our Company. Presently the Promoter holds 38.10% of the post preferential issue paid-up capital of our Company. Main Objects The main objects of our Company are: 1. To carry on the business of manufacture of irrigation pipes and sale of irrigation systems and manufacture and sale

of industrial pipes including the business of manufacturers, processors, exporters and importers of and dealers in plastics polymers, reinforced plastics, resins fibers of vegetable or synthetic origin, plasticizers, related chemicals and articles, materials and things.

2. To carry on the business as manufacturers, processors, exporters and importers of and dealers in aromatic chemicals,

basic chemicals used or capable of being used in the perfumery industry, perfumery compounds and preparations scents, attars, perfumers, essential oils, cosmetics, lotions flower concentrates, absolutes, synthetics and industrial perfumes, food and flavouring essence, toilet requisites detergents.

3. To carry on the business as manufacturers, processors, exporters and importers of and dealers in chemicals capable

of being used in pharmaceutical industry agricultural chemicals, fertilizers, organic and inorganic chemicals, petrochemicals, industrial chemicals, any mixtures, derivatives and compound thereof, acids, alkalis, drugs, medicines, antibiotics, tannins, tannin extracts; essences, solvents, dyestuffs, intermediates, cellophanes, colours, dyes, paints, varnishes, vat and organic dye stuffs, chemical auxiliaries, disinfectants, insecticides, fungicides, deodorants and bio- chemicals.

Amendments to our Memorandum of Association Since our incorporation, the following changes have been made to our Memorandum of Association: EGM/ AGM/ Date of declaration of Postal Ballot

Nature of amendment

Incorporation The authorized share capital of ` 1,00,000 comprising of 10,000 Equity Shares.


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EGM/ AGM/ Date of declaration of Postal Ballot

Nature of amendment

November 04, 1987 The initial authorized share capital of ` 1,00,000 comprising of 10,000 Equity Shares was increased to ` 10,00,000 divided into 1,00,000 Equity Shares. Our name was changed from “Exomet Plastics and Chemicals Private Limited” to “EPC Industrié Private Limited”. The revised Certificate of Incorporation was issued on December 8, 1987.

December 02, 1987 The authorized share capital of our Company of ` 10,00,000 comprising of 1,00,000 Equity Shares was further increased to ` 50,00,000 divided into 5,00,000 Equity Shares.

March 20, 1992 The authorized share capital of our Company of ` 50,00,000 comprising of 5,00,000 Equity Shares was further increased to ` 2,00,00,000 divided into 20,00,000 Equity Shares.

May 20, 1992 We were converted into a public company and our name was changed to “EPC Industrié Limited” The revised Certificate of Incorporation was issued on August 24, 1992.

September 7, 1992 Our name was further changed to “EPC Industrié Limited” to “EPC Irrigation Limited”. The revised Certificate of Incorporation was issued on September 11, 1992.

September 16, 1992 The authorized share capital of our Company of ` 2,00,00,000 comprising of 20,00,000 Equity Shares was further increased to ` 5,00,00,000 divided into 50,00,000 Equity Shares.

September 20, 1994

The authorized share capital of our Company of ` 5,00,00,000 comprising of 50,00,000 Equity Shares was further increased to ` 15,00,00,000 divided into 1,50,00,000 Equity Shares. New clause 105 was added to the “Other Objects” of the Company i.e. “To produce, import, export, buy, sell, indent and deal in and establish, conduct, develop and carry o business as producers, importers, exporters, buyers, sellers, agents, wholesalers, distributors and retailers in plants, flower seeds and other agricultural, horticultural and plantation products through the process of mass propagation or otherwise”

September 30, 1997 The name of our Company was changed from “EPC Irrigation Limited” to “EPC Industrié Limited” The revised Certificate of Incorporation was issued on October 13, 1997.

December 11, 2006 The authorized share capital of our Company of ` 15,00,00,000 comprising of 1,50,00,000 Equity Shares was further increased and reclassified to ` 30,00,00,000 divided into 1,40,00,000 Equity Shares and 16,00,000 Preference Shares.

May 22, 2007

The authorized share capital of our Company of ` 30,00,00,000 comprising of 1,40,00,000 Equity Shares and 16,00,000 Preference Shares was further increased to ` 32,00,00,000 divided into 1,40,00,00 Equity Shares and 18,00,000 Preference Shares. Clause III (A)(1) of the Memorandum of Association of the Company (Main objects clause) was substituted with “To carry on the business of manufacture of irrigation pipes and sale of irrigation systems and manufacture and sale of industrial pipes including the business of manufacturers, processors, exporters and importers of and dealers in plastics polymers, reinforced plastics, resins fibers of vegetable or synthetic origin, plasticizers, related chemicals and articles, materials and things.”

July 30, 2008 The authorized share capital of our Company of ` 32,00,00,00 comprising of 1,40,00,000 Equity Shares and 18,00,00,000 Preference Shares was further increased to ` 50,00,00,000 divided into 3,20,00,000 Equity Shares and 18,00,000 Preference Shares.

Changes in the Registered Office Sr. No.

Date From To Reason

1. April 23, 1990 401 Kakad Chambers, 132 Dr. Annie Beasant Road, Worli, Bombay 400 018, Maharashtra, India

206 Kakad Chambers, 132 Dr. Annie Beasant Road, Worli, Bombay 400 018, Maharashtra, India

Administrative convenience

2. December 31, 1991 206 Kakad Chambers, 132 Dr. Annie Beasant Road, Worli, Bombay 400 018, Maharashtra, India

401 Kakad Chambers, 132 Dr. Annie Beasant Road, Worli, Bombay 400 018, Maharashtra, India


3. June 12, 1998 401 Kakad Chambers, 132 Dr. Annie Beasant Road, Worli, Bombay 400 018, Maharashtra, India

201, Delta, Hiranandani Gardens, Powai, Mumbai – 400 076, Maharashtra, India


4. September 16, 2005 201, Delta, Hiranandani Gardens, Powai, Mumbai – 400 076, Maharashtra, India

Plot No. H-109, MIDC, AMBAD, Nashik – 422 010, Maharashtra, India



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Major events in our history

Year Major Event 1981 Company Incorporation 1985 Collaboration with Kulker S.A. of France 1992 Maiden Public Issue of 26,00,000 Equity Shares of `10 each at a premium of ` 20 each. 1995 Company set up manufacturing facilities at Plot No. H-109, MIDC Ambad, Nashik. 2000 Company Registered with BIFR 2007 Investment of `4,005 Lacs by Credit Renaissance Partners, LLC, USA.

Post Investment, revamping of the Company’s Operations Company Released from the purview of BIFR

2011 Mahindra & Mahindra Limited acquired 38% stake in the Company in March 2011 Mahindra & Mahindra Limited acquired the Management Control of the Company in September 2011.

Injunction or Restraining Order We are not operating under any injunction or restraining order. Our Shareholders As on January 6, 2011, the total number of holders of Equity Shares, including nominees was 6,989. For further details of our shareholding pattern, please see “Capital Structure” on page 15. Revaluation of Assets We had revalued our fixed assets in Financial Year 1997-98. However, there have been no issuances of Equity Shares from the revaluation reserves. Revaluation of assets on June 24, 1998: On June 24, 1998, we revalued our fixed assets. The leasehold land, building, plant and machinery, factory equipment, electrical installations, moulds and dies were revalued and stated at revised values. The addition on account of revaluation was included in the gross block as under:

(` in Lacs) Nature of Asset Revaluation uplift

Leasehold Land 361.09 Building 194.00 Plant and machinery 499.13Factory equipment 13.60 Electrical installations 16.35 Moulds and dies 104.39

Total 1,188.42 As a result of the revaluation of fixed assets, capital revaluation reserve of ` 1,188.42 Lacs was created. Issuance of Equity or Debt Other than as disclosed in “Capital Structure” and “Financial Indebtedness” on pages 15 and 176, we have not issued any capital in the form of equity or debt. For details on the description of our activities, our growth, please see “Our Business”, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” on pages 36 and 161.


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Awards, Achievements and Certifications We have received the following awards: Sr. No.

Quality standard Description Date of grant

1. ISO 9001:2008 Design, development, manufacture, and supply of plastic pipe fittings and components for irrigation, infrastructure, and industrial applications

July 1, 1999

2. Transco Technical Specification PL2: Part 1 pipes for use at pressures up to 5.5 bar. Provided by Advantica Technology

Phase 1 and Phase 2 approval for pipes of diameter 20 mm to 250 mm manufactured in Rigidex PC 2040

July 31, 2001

3. Transco Technical Specification PL2: Part 1 pipes for use at pressures up to 5.5 bar. Provided by Advantica Technology

Phase 1 and Phase 2 approval for pipes of diameter 20 mm to 125 mm manufactured in Finathene 3802 YCF

July 31, 2001

4. British Transco Technical Specification PL2: Part 1 pipes for use at pressures up to 5.5 bar (1995)

Phase 1 and Phase 2 approval for pipes of diameter 20 mm to 250 mm manufactured in Rigidex PC 2040

February 15, 1999

5. British Transco Technical Specification PL2: Part 1 pipes for use at pressures up to 5.5 bar (1995)

Phase 1 and Phase 2 approval for pipes of diameter 20 mm to 125 mm manufactured in Finathene 3802 YCF

February 15, 1999

6. IS 13487:1992 Irrigation equipment – emitters September 16, 2011

7. IS 12785:1994 Irrigation equipment – strainer type filters December 02, 2009

8. IS 14151:Part1:1999 Irrigation equipment – sprinkler – part 1 : polyethylene pipes August 01, 2011

9. IS 14151:Part2:2008 (previously, this standard was the IS 14151:Part2:1999)

Irrigation equipment – sprinkler pipes – part 2 : quick coupled polyethylene pipes

September 01, 2011

10. IS 14333:1996 High density polyethylene pipe for sewerage May 01, 2011

11. IS 4984:1995 High density polyethylene pipes for potable water supplies April 01, 2011

12. IS 12232:Part1:1996 Irrigation equipment – rotating sprinkler: part 1 design and operational requirements

March 01, 2011

13. IS 12786:1989 Irrigation equipment – polyethylene pipes for irrigation laterals March 01, 2011

14. IS 13488:2008 Emitting pipes system April 16, 2011

15. IS 14606:1998 Irrigation equipment – media filter March 31, 2011

16. IS 14743:1999 Irrigation equipment – hydrocyclone filters March 31, 2011

17. IS 14885:2001 Polyethylene pipes for the supply of gaseous fuels September 29, 2011

18. IS 14482:1997 Irrigation equipment – polyethylene micro tubes for drip irrigation April 24, 2011

For details on the certifications received by our Company, please see “Government and Other Approvals” on pages 202. Changes in our activities during the last five years There are no changes in the activities undertaken by us during the last five years, other than in the normal course of business. Defaults or Rescheduling of borrowings with financial institutions/ banks Except as disclosed in this section, there have been no defaults or rescheduling of borrowings with the financial institutions / banks.


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Lock-out or strikes On January 8, 2001 some our workmen went on strike (“Strike”). We filed a complaint in the Industrial Court, Nashik. The Industrial Court, by its interim order dated January 1, 2001 declared the Strike to be illegal and ordered the workers to discontinue the Strike. The interim order of the Industrial Court was challenged by the Nashik workers union and the workers concerned in the Bombay High Court, which, by its order permitted the workers concerned to occupy a defined area of the factory premises for the purpose of the Strike and directed the matter to be disposed of by the Industrial Court. On April 24, 2001, the workers withdrew the Strike. Business Acquisitions We have not made any business acquisitions. Subsidiaries We have no subsidiaries. Material Agreements There are no material agreements, apart from those entered into in the ordinary course of business carried on or intended to be carried on by us. Strategic Partners As on the date of the Draft Letter of Offer, we do not have any strategic partners. Financial Partners As on the date of the Draft Letter of Offer, apart from the various arrangements with bankers and lenders which we undertake in the ordinary course of business, we do not have any other financial partners.


58

MANAGEMENT

Board of Directors The Articles of Association provides that we shall not have less than three Directors and not more than twelve Directors. We currently have five Directors on our Board of Directors. The following table sets forth details of the Board of Directors as of the date of filing of this Draft Letter of Offer with SEBI:

Name, Designation, Occupation, DIN, Address, Date of appointment and Term

Nationality Age (Years)

Other Directorships

Mr. Ashok Sharma Designation: Executive Director and Chief Executive Officer Occupation Service DIN: 02766679 Address: 4, 4th Floor, Melrose, 16th Road, Bandra (West), Mumbai – 400 050, Maharashtra, India. Date of appointment: As a Director August 5, 2011 and as a Whole Time Director October 1, 2011. Term: Liable to retire by rotation

Indian 47 1. Mahindra Shubhlabh Services Limited 2. Mahindra EcoNova Private Limited 3. Vayugrid Marketplace Services Private

Limited

Mr. S. Durgashankar Designation Non-Executive Director Occupation Service DIN: 00044713 Address: Flat No. 203, Ganga Towers, Atur Park, Sion-Trombay Road, Chembur, Mumbai – 400 071, Maharashtra, India. Date of appointment: Appointed as an Additional Director August 5, 2011 and confirmed as a Director on September 29, 2011 Term: Liable to retire by rotation

Indian 52 Nil


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Other Directorships

Mr. Nikhilesh Panchal Designation Independent Director Occupation Advocate DIN: 00041080 Address: 502, Ajay Apartment, T. H. Kataria Marg, Matunga (West), Mumbai – 400 016, Maharashtra, India. Date of appointment: Appointed as an Additional Director August 5, 2011 and confirmed as a Director on September 29, 2011 Term: Liable to retire by rotation

Indian 44 1. Mahindra Forgings Limited 2. Mahindra Ugine Steel Company Limited

Mr. Anand Daga Designation Independent Director Occupation Professional DIN: 00696171 Address: Suman – Smruti, Gole Colony, Nashik – 422 002, Maharashtra, India. Date of appointment: Appointed as an Additional Director August 5, 2011 and confirmed as a Director on September 29, 2011 Term: Liable to retire by rotation

Indian 40 1. City Centre Mall Nashik Private Limited 2. MSS India Private Limited

Mr. Vinayak Patil Designation Independent Director Occupation Agriculturist DIN: 00616009

Indian 68 1. Richfield Fertilisers Private Limited


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Other Directorships

Address: “Babul” Kadambvan, Satpur-Ambad Link Road, Behind Jyoti Farms, Satpur, Nashik – 422 007 Maharashtra, India Date of appointment: July 8, 2003 Term: Liable to retire by rotation Except as disclosed below, none of our Directors hold current and/ or past directorship(s) for a period of five years in listed companies whose shares have been or were suspended from being traded on the BSE or the NSE or in listed companies who have been / were delisted from stock exchanges: Relationship between Directors None of the Directors are related to each other. Brief Profile of our Directors Mr. Ashok Hiralal Sharma, 47 years, is the whole time director on our Board and our chief executive officer. He has a bachelor’s degree in mechanical engineering from University of Bombay and has done his masters in management studies from the Jamnalal Bajaj Institute, Mumbai. He is working as the Executive Vice President for Agri & Engine Application Business at M&M. He has an overall experience of 24 years in industry functions like sales, marketing and has held various management positions. Mr. S. Durgashankar, 52 years, is a non-executive director on our Board. He has a bachelor’s degree in commerce from University of Madras and he is a member of the Institute of Chartered Accountants of India, New Delhi. Mr. Durgashankar has over 28 years of experience in investment banking, international investor relations, treasury, project evaluation, risk assessment and restructuring of sick industrial enterprises. He is presently working as Executive Vice President for Mergers & Acquisitions and Secretarial of M&M. Mr. Nikhilesh Panchal, 44 years, is an independent director on our Board. He has a bachelor’s degree in commerce from University of Mumbai and bachelor’s and masters degree in law from University of Mumbai. He is a solicitor. As a corporate attorney for approximately 21 years, Mr. Panchal has experience in acquisitions, takeover and mergers, foreign collaborations, joint venture transactions, structuring foreign exchange laws, corporate law, intellectual property rights, commercial litigations, corporate and commercial matters. Mr. Panchal is currently a partner of Khaitan & Co, Advocates, Mumbai and Khaitan & Co LLP, New Delhi. Mr. Anand Daga, 40 years, is an independent director on our Board. He has a bachelor’s degree in commerce from University of Poona and he is a member of the Institute of Cost and Works Accountants of India and a fellow member of the Institute of Chartered Accountants of India, New Delhi. Mr. Daga has experience of 16 years in the areas of taxation, audit, finance, corporate strategic planning, restructuring advisory services, mergers and acquisitions. Mr. Daga is a practising chartered accountant since 1994 and is a partner in M/s Daga & Chaturmutha, Chartered Accountants. Mr. Vinayak Patil, 68 years, is an independent director on our Board. He is an agriculturist and social activist. Mr. Patil has been a member of the Maharashtra State Legislative Assembly from 1978 to 1980. He was also a member of the Legislative Council of the State of Maharashtra from 1983 to 1988. During the period 1978 to 1980, he was also a Minister for State for Industry, Maharashtra. Mr. Patil has been associated with various state level government/ cooperative organisations. He received Maharashtra State’s Krishi Bhushan Award for his work in the field of agriculture. Borrowing Powers of the Board The Articles of Association, subject to the provisions of the Companies Act, authorise the Board, at its discretion, to


61

generally raise or borrow or secure the payment of any sum or sums of money for our purposes. However, the Board of Directors shall not without the sanction of the Shareholders exceed the aggregate of our paid up capital and free reserves. The consent of the Shareholders was accorded, vide resolution passed at the Annual General Meeting held on September 20, 1994, authorizing the Board of Directors to borrow at any time amount not exceeding ` 5,000 Lacs over and above our paid up capital and free reserves. Details of Service Contracts We have not entered into any service contracts with the present Board of Directors. Remuneration of the Directors During the Financial Year 2010-11, we have not paid any remuneration and sitting fees to the present Board of Directors except ` 80,000 paid to Mr. Vinayak Patil. ESOS granted to the Directors During the Financial Year 2010 –11, we have not granted any options under the ESOS 2010 scheme to the present Board of Directors except 10,000 Options granted to Mr. Vinayak Patil. Shareholding of Directors in our Company Except as disclosed below, none of our Directors hold any Equity Shares: Name Number of Equity Shares held Mr. Vinayak Patil 4,500 Payment or benefit to Directors Except as disclosed in the “Annexure XVII - Related Party Transactions” under “Financial Information” on page 159, no amount or benefit has been paid or given within the two preceding years or is intended to be paid or given to any of our officers except the normal remuneration for services rendered as Directors, officers or employees. Interest of the Directors All of our Directors may be deemed to be interested to the extent of fees payable to them for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration and reimbursement of expenses payable to them under our Articles of Association, and to the extent of remuneration paid to them for services rendered as our officer or employee. Some of the Directors may be deemed to be interested to the extent of consideration received/paid or any loan or advances provided to any body corporate including companies and firms and trusts, in which they are interested as directors, members, partners or trustees. There are no service contracts between us and any of the Directors for payment of benefit upon termination of employment. Our Directors may also be regarded as interested in the Equity Shares, if any, held by them or that may be subscribed by and allotted to the companies, firms, and trusts, if any, in which they are interested as directors, members, promoters, and /or trustees pursuant to this Issue. Some of our Directors also hold directorships in the Promoter and Promoter Group. None of our Directors have been appointed on our Board pursuant to any arrangement with our major shareholders, customers, suppliers or others. Except as stated in this section “Management” or “Annexure XVII - Related Party Transactions” under “Financial Information” on page 159, our Directors do not have any other interest in our business. Our Directors have no interest in any property acquired by us within two years of the date of the Draft Letter of Offer. Our Directors are not interested in the appointment of or acting as Registrar and Bankers to the Issue or any such


62

intermediaries registered with SEBI. Changes in the Board in the last three years The following changes have occurred in Board of Directors in the last three years:

Name Date of Appointment (Re-appointment) / Cessation

Reason for change

Mr. Ashok Sharma Appointed as Director on September 29, 2011 and as Whole Time Director on October 1, 2011 to be as the Executive Director (Appointed as Additional Director on August 05, 2011)

Appointment

Mr. S Durgashankar September 29, 2011 (Appointed as Additional Director on August 05, 2011)

Appointment

Mr. Nikhilesh Panchal September 29, 2011 (Appointed as Additional Director on August 05, 2011)

Appointment

Mr. Arvind Daga September 29, 2011 (Appointed as Additional Director on August 05, 2011)

Appointment

Mr. Jayendra Shah

September 29, 2011 Resignation

Mr. Bhoopendra Sharma


Mr. Krishen Lal Khanna


Corporate Governance We have complied with the provisions of the Listing Agreement including Clause 49 of the Listing Agreement and other requirements under the Listing Agreement in relation to the meetings of the Audit Committee and the Shareholders’/ Investor’s Grievance Committee. The Board of Directors consists of a total of 5 Directors of which 3 are independent Directors (as defined under Clause 49), which constitutes 50% of the Board of Directors. This is in compliance with the requirements of Clause 49. The details of the Audit Committee, Remuneration/Compensation Committee, Shareholders’/Investors’ Grievance Committee and Rights Issue Committee are given below: Committees of the Board

A. Audit Committee

The Board of Directors of the Company has an Audit Committee which comprises of Mr. Vinayak Patil as the Chairman of the Committee and Mr. Anand Daga and Mr. S. Durgashankar as other members of the Committee. Mr. Ratnakar Nawghare, Company Secretary is the Secretary of the Audit Committee. The terms of reference of this Committee are very wide. The broad terms of reference of the Audit Committee include:

Review of the Company’s financial reporting process and its financial statements. Review of accounting and financial policies and practices. Review of the internal control and internal audit system. Discussing with statutory Auditors to ascertain any area of concern.

Generally all items listed in Clause 49 II(D) of the Listing Agreement are covered in the terms of reference. The Audit Committee has been granted powers as prescribed under Clause 49 II(C) of the Listing Agreement. The Audit Committee also periodically reviews the uses/ applications of funds raised by the Company under Preferential Issue of Shares. The Meetings of the Audit Committee are also attended by the Whole Time Director, CFO, Statutory Auditors, Internal Auditor and the Company Secretary.


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The Committee met four times during FY 2010-11.

B. Shareholders’/Investors’ Grievance Committee

The Company’s Shareholders/Investors Grievance Committee functions under the Chairmanship of Mr. Vinayak Patil. Mr. Ashok Sharma and Mr. Nikhilesh Panchal are the other Members of the Committee. Mr. Ratnakar Nawghare, Company Secretary is the Compliance Officer of the Company. The Shareholders/Investors Grievance Committee monitors redressal of complaints from the Shareholders. This Committee met four times during FY 2010-11. C. Remuneration/ Compensation Committee

The role of the Remuneration/ Compensation Committee is to review performance of the Managing Director or Whole Time Director and recommend to the Board the salary, perquisites and performance pay payable to him. Mr. Anand Daga is the Chairman of the Committee. Mr. S Durgashankar and Mr. Vinayak Patil are the other members of the Committee. Recently the Remuneration and Compensation Committee for ESOS Scheme are clubbed together hence this Committee also looks after the administration of ESOS Scheme. The Committee met on October 1, 2011 for appointment of Whole Time Director and on December 12, 2011 for allotment of Equity Shares on exercise of Options. D. Rights Issue Committee The role of the Rights Issue Committee is to take all decisions relating to the Rights Issue as it may, in its absolute discretion, deem fit and proper in the best interest of the Company, without requiring any further approval of the Board of Directors of the Company or its equity shareholders. Mr. Ashok Sharma, Mr. S Durgashankar and Mr. Nikhilesh Panchal are the members of the committee. The Rights Issue Committee is authorised:

i. to appoint lead managers, legal advisors, registrars, escrow collection banks or bankers to the Issue, printers,

advertisement agencies and all other intermediaries and advisors necessary for the Rights Issue and to negotiate, authorise and approve fees in connection therewith by way of payment of commission, brokerage, fees, reimbursement of expenses incurred in relation to the Rights Issue and any other expenses, if any;

ii. to finalise the Draft Letter of Offer, Letter of Offer, Composite Application Form, Split Application Form,

abridged Letter of Offer and any other documents as may be required and to file the same with the SEBI, Stock Exchanges and other concerned authorities and issue the same to the equity shareholders of the Company;

iii. to approve and issue in such newspapers as it may deem fit and proper all notices, including any advertisement(s)/

supplement(s) / corrigendum required to be issued in terms of SEBI ICDR Regulations or other applicable SEBI guidelines and regulations or in compliance with any direction from SEBI and/or such other applicable authorities and to decide on other terms and conditions of the Rights Issue;

iv. to decide the final size of the Rights Issue, ratio, price and premium of the equity shares to be offered through

Rights Issue, in consultation with the Lead Manager;

v. to decide the treatment to be given to the fractional entitlements, if any;

vi. to decide the record date in consultation with the designated stock exchange for the purpose of Rights Issue for ascertaining the name of shareholders who will be entitled to the aforesaid offer of equity shares;

vii. to take necessary actions and steps for obtaining relevant approvals, consents from FIPB, SEBI, Stock Exchanges,

RBI and such other governmental authorities or departments, as may be necessary in relation to the Rights Issue;

viii. to make application(s) and obtain necessary approval(s) for listing and trading of renouncement of rights


64

entitlement and equity shares issued in Rights Issue from the Stock Exchanges;

ix. to open bank accounts with any nationalised bank / private bank / foreign bank for the purpose of receiving applications along with application monies and handling refunds in respect of the Right Issue ;

x. to decide date of opening and closing of the Rights Issue and to extend, vary or alter the same as it may deem fit in

consultation with the Lead Manager or as may be suggested or stipulated by SEBI, Stock Exchanges or other authorities from time to time;

xi. to do all such necessary acts, deeds or things for listing and trading of the shares issued in the Rights Issue on the

Stock Exchanges;

xii. to finalise the basis of allotment in consultation with the Lead Manager, registrar, the designated stock exchange and other stock exchanges where existing shares are listed and issue and allot equity shares in accordance therewith, in one or more tranches, and to do all necessary acts, deeds or things with NSDL / CDSL in connection with admitting of shares issued in Rights issue;

xiii. to incur necessary expenses such as fees of lead manager, legal advisors, various intermediaries appointed in

connection with the Issue, filing fees payable to various agencies to obtain their observation, permission or approval, stamp duty, and printing of various documents and for various other purposes in connection with the Issue etc;

xiv. to issue the letters of allotment and share certificates to the proposed allottees either in dematerialised form or in

physical form as may be required by the allottees;

xv. to make necessary changes and to enter the names of the renouncees, if they are not members of the Company in the register of members of the Company;

xvi. to decide the mode and manner of allotment of equity shares if any not subscribed and left / remaining after

allotment of equity shares and additional equity shares applied by the shareholders and renouncees;

xvii. to settle any question, difficulty or doubt that may arise in connection with the Rights Issue including the issue and allotment of the equity shares as aforesaid and to do all such acts, deeds and things as the Board may in its absolute discretion consider necessary, proper, desirable or appropriate for settling such question, difficulty or doubt and making the said Rights Issue and allotment of equity shares;

xviii. to file necessary returns, make declarations / announcements, furnish information, etc., to the concerned

authorities in connection with the Rights Issue;

xix. to sign and execute any other document, agreement, undertaking in connection with the Rights Issue to be submitted with to the SEBI or other governmental authorities or departments and to the relevant stock exchanges, where the equity shares of the Company under the Rights Issue are to be listed and provide clarifications or explanations, if any, required, and;

xx. to take all such other steps as may be necessary in connection with this Rights Issue; and

xxi. to dispose of the unsubscribed portion in such manner as it may think most beneficial to the Company.

xxii. to authorise, one or more, singly or jointly, officials of the company to execute the activities mentioned above Till date, the Committee has met 2 times during FY 2011-12. Policy on Prevention of Insider Trading We are in compliance with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992. Mr. Ratnakar Nawghare, Company Secretary and Compliance Officer, is responsible for setting forth policies, procedures, monitoring and adhering to the rules for the prevention of dissemination of price sensitive information and the implementation of the code of conduct under the overall supervision of the Board.


65

Managerial Organizational Structure

Key Management Personnel as of the date of this Draft Letter of Offer are as follows: Subhash Modak, aged 58 years, is our chief operating officer. He holds a bachelors’ degree in mechanical engineering from College of Engineering, University of Poona He joined our Promoter on May 1, 1978. He is on deputation from our Promoter since September 9, 2011 and is responsible for supervision over manufacturing, supply chain management, product development, sourcing, industrial relations and quality control. He has vast experience of over 33 years. No remuneration was paid to him in the last Financial Year. Sunil Johnson, aged 47 years, is the vice president, sales and marketing. He holds a bachelors’ degree in agriculture technology from Univeristy of Allahabad in 1986 and Diploma in Marketing from All India Management Association in 1998. He joined our Promoter on November 17, 2009. He is on deputation from our Promoter since September 9, 2011. He has experience of over 25 years and is responsible for domestic and international sales, channel development and agronomical services. Prior to joining our Promoter, Mr. Johnson was self employed. No remuneration was paid to him in the last Financial Year. Anant Kshirsagar, aged 57 years, is the head – finance, accounts and information technology. He holds a bachelors degree and Masters degree in commerce from University of Poona. He is also a fellow member of the Institute of Chartered Accountants of India. He joined us on June 9, 1998. He has experience of over 32 years and in finance and accounts functions. Prior to joining us he was associated with Saw Pipes Limited. The remuneration paid to him in the last Financial Year was ` 30.00 Lacs. Ratnakar Nawghare, aged 46 years, is the company secretary and compliance officer. He holds a bachelors degree from in commerce and law from University of Poona. He is also an associate member of the Institute of Company Secretaries of India. He joined us on August 16, 2004. He has experience of over 20 years in corporate secretarial matters and is responsible for corporate secretarial and legal matters. Prior to joining us he was associated with Haldex India Limited. The remuneration paid to him in the last Financial Year was ` 15.57 Lacs. Terrence Vaz, aged 32 years, is the head of human resources. He holds a bachelors degree in engineering from Visveswaraiah Technological University, Belgaum and holds a post graduate diploma in Personnel Management and Industrial relation from XLRI, Jamshedpur. He joined our Promoter on August 18, 2011. He is on deputation from our Promoter since September 9, 2011 and is responsible for handling recruitments, confirmations, appraisals, training and development, policy making, employment engagements. Prior to joining us he was associated with Skoda Auto India Limited. No remuneration was paid to him in the last Financial Year. Except Mr. Subhash Modak, Mr. Sunil Johnson and Mr. Terrence Vaz, who are on deputation from our Promoter, all the key managerial personnel are permanent employees of the Company. Nature of any family relationship between the Key Managerial Personnel None of the Key Managerial Personnel are in any way related to each other. Shareholding of Key Managerial Personnel Except as stated below none of the Key Managerial Personnel hold any Equity Shares:

A.R. Kshirsagar Head, Finance &

Accounts

Ashok Sharma Executive Director & CEO

Subhash Modak Chief Operating

Officer

R. Nawghare Head, Company

Secretary & Legal

Sunil Johnson VP, Sales & Marketing

Terrence Vaz Head, Human

Resources


66

Sr. No. Name No. of Shares allotted on exercise of Stock Options 1. Anant Kshirsagar 1,625 2. Ratnakar Nawghare 750

ESOSs granted to our Key Managerial Personnel Except as disclosed in the chapter titled “Capital Structure” on page 15, there are no other ESOS’s granted to our Key Managerial Personnel. Changes in Key Managerial Personnel The following are the changes in Key Managerial Personnel during the last three years:

Sr. No.

Name of employee Designation Date of change Reason

1. S B Patel CEO - Special. Project Business Unit April 30, 2009 Resignation 2. Sunil Johnson Vice President - Sales & Marketing September 9, 2011 Appointment 3. Satish Shekade DGM – Marketing July 12, 2011 Resignation 4. Terrence Vaz Head – Human Resources September 9, 2011 Appointment 5. Subhash Modak Chief Operating Officer September 9, 2011 Appointment

Bonus or profit sharing plan for Directors and Key Managerial Personnel We do not have a performance linked bonus or a profit sharing plan for the present Directors and Key Managerial Personnel. Interest of Key Managerial Personnel The Key Managerial Personnel do not have any interest in us other than to the extent of the remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business. Arrangements and Understanding with Major Shareholders None of our key management personnel have been selected pursuant to any arrangement or understanding with any of our major shareholders, customers or suppliers, or others except Mr. Subhash Modak, Chief Operating Officer; Mr. Sunil Johnson, VP – Sales & Marketing and Mr. Terrence Vaz, Senior Manager – Human Resource who have been deputed by our Promoter on September 9, 2011. Payment of Benefits to Officers Except as disclosed in the Draft Letter of Offer, other than statutory payments and remuneration, in the last two years we have not paid or has intended to pay any non-salary amount or benefit to any of its officers. Loans taken by Directors / Key Managerial Personnel None of the Directors / Key Managerial Personnel has taken loan from us.


67

PROMOTER AND GROUP COMPANIES

Mahindra & Mahindra Limited is our Promoter and holds 38.10% of the paid up Equity Capital. A US $14.4 billion multinational group based in Mumbai, India, Mahindra group employs more than 1,44,000 people in over 100 countries. In 2011, M&M featured on the Forbes Global 2000 list, a listing of the biggest and most powerful listed companies in the world. Dun & Bradstreet also ranked Mahindra at No. 1 in the automobile sector in its list of India’s Top 500 Companies. In 2010, Mahindra featured in the Credit Suisse Great Brands of Tomorrow. The Mahindra Group focuses on enabling people to rise. Mahindra operates in the key industries that drive economic growth, enjoying a leadership position in tractors, utility vehicles, information technology and vacation ownership. Mahindra has a presence in the automotive industry, agribusiness, aerospace, components, consulting services, defence, energy, financial services, industrial equipment, logistics, real estate, retail, steel and two wheelers. Mahindra and Mahindra Limited M&M was incorporated on October 2, 1945 under the Indian Companies Act, VII of 1913 as Mahindra and Mohammed Limited. Its name was changed to Mahindra and Mahindra Limited with effect from January 13, 1948. M&M’s equity shares are presently listed on the BSE and NSE. The Global Depository Receipts of M&M are listed on the Luxembourg Stock Exchange and are also admitted for trading on the International Order Book (IOB) of London Stock Exchange. M&M’s main business is the manufacture and sale of utility vehicles, three-wheelers and tractors. It is one of the market leader by sales of utility vehicles and tractors in India. In the year ended March 31, 2011, M&M sold 3,54,073 vehicles and 2,14,325 tractors through its extensive dealer network in India and through exports. M&M has recently acquired Ssangyong Motor Company Limited, a manufacturer of sports utility vehicles (“SUV”) and recreational vehicles (“RV”) in Korea. M&M has two main operating divisions: The Automotive Division, which designs, manufactures and sells UVs, and three-wheelers and their spare parts and

accessories. The Farm Division, makes and sells agricultural tractors. The Farm Division also sells tractor spare parts through its

dealer and spare parts stockist network. This division has also ventured into the industrial engines business in order to leverage its design and manufacturing expertise.

M&M employs around 18,034 permanent employees and it has 5 manufacturing facilities for Automotive Division and has 8 manufacturing facilities for Farm Division including Swaraj Division. Automotive Division has 18 Area offices that are supported by a network of around 400 dealers and for Farm Division including Swaraj division there are around 1,217 dealers across country. This network is connected to its sales department by an extensive IT infrastructure. M&M is the only tractor manufacturing organization to have received the Deming Prize in 2003 and subsequently the Japan Quality Medal in 2007, in recognition of ‘Outstanding Business Performance’ by practicing Total Quality Management Methodology. These awards are awarded by the ‘Union of Japanese Scientists & Engineers’ (JUSE). Mr. Keshub Mahindra and Mr. Anand Mahindra are the promoters of M&M. Shareholding Pattern The shareholding pattern of M&M as on September 30, 2011 is as follows: Category of shareholder

No of share

holders

Total number of shares

No of shares held in

dematerialized form

Total shareholding as % of total no of shares

Shares pledged or otherwise encumbered

As a % of (A+B)

As a % of (A+B+C)

Number of shares

As a % (VIII) =

(VII)/(III)* 100

(I) (II) (III) (IV) (V) (VI) (VII)


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Category of shareholder

No of share

holders

Total number of shares

No of shares held in

dematerialized form

Total shareholding as % of total no of shares


As a % of (A+B)

As a % of (A+B+C)

Number of shares

As a % (VIII) =

(A) PROMOTER AND PROMOTER GROUP (1)Indian Individuals / Hindu Undivided Family

19 39,53,087 39,53,087 0.69 0.64 40,000 1.01

Bodies Corporate 22 6,80,70,330 6,80,70,330 11.86 11.09 79,94,000 11.74 Any Others (Specify) M&M Benefit Trust 1 5,18,35,214 5,18,35,214 9.03 8.44 - - Employee Welfare Trust

4 21,52,160 21,52,160 0.37 0.35 - -

ESOP Trusts 3 2,78,41,335 2,78,41,335 4.85 4.54 - - Sub Total 49 15,38,52,126 15,38,52,126 26.80 25.06 80,34,000 5.22(2)Foreign Individuals (Non-Residents Individuals)

1 7,31,772 7,31,772 0.13 0.12 - -

Sub Total 1 731,772 731,772 0.13 0.12 - -Total shareholding of Promoter and Promoter Group (A)

50 15,45,83,898 15,45,83,898 26.93 25.18 80,34,000 5.20

(B) PUBLIC (1) Institutions

Mutual Funds / UTI 213 2,16,28,757 2,16,27,737 3.77 3.52 - - Financial Institutions / Banks

77 5,00,623 4,55,691 0.09 0.08 - -

Central Government / State Government(s)

2 4,49,422 7,290 0.08 0.07 - -

Insurance Companies 26 10,41,40,785 10,41,34,873 18.14 16.96 - - Foreign Institutional Investors

681 16,20,41,227 16,20,33,491 28.23 26.39 - -

Sub Total 999 28,87,60,814 28,82,59,082 50.31 47.02 - - (2) Non-Institutions

Bodies Corporate 2,285 5,74,71,273 5,73,79,761 10.01 9.36 - - Individuals - -Individual shareholders holding nominal share capital up to ` 1 Lac

1,69,123 4,04,57,969 3,44,16,033 7.05 6.59 - -


144 88,47,460 85,89,136 1.54 1.44 - -

Any Others (Specify) Non Resident Individuals

5,339 18,47,057 14,30,063 0.32 0.30 - -

Foreign Nationals 4 972 972 0.00 0.00 - -Overseas Corporate Bodies

3 16,07,628 16,07,388 0.28 0.26 - -

Trusts 34 1,53,585 1,53,585 0.03 0.03 - -Clearing Members 301 6,59,093 6,59,093 0.12 0.11 - - Foreign Bodies 7 1,95,83,596 1,95,83,596 3.41 3.19 - -

Sub Total 1,77,240 13,06,28,633 12,38,19,627 22.76 21.28 - -Total Public shareholding (B)

1,78,239 41,93,89,447 41,20,78,709 73.07 68.30 - -

Total (A)+(B) 178,289 573,973,345 566,662,607 100.00 93.48 80,34,000 (C) Shares held by Custodians and against which Depository Receipts have been issued

(1) Promoter and Promoter Group

- - - - - - -

(2) Public 3 4,00,01,494 4,00,00,262 - 6.52 - - Total (A)+(B)+(C) 1,78,292 61,39,74,839 60,66,62,869 - 100.00 80,34,000 1.31


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Board of Directors As on the date of this Draft Letter of Offer, the board of directors of M&M comprises of the following persons: Name Designation

Mr. Keshub Mahindra Chairman Mr. Anand G. Mahindra Vice Chairman & Managing Director Mr. Bharat Doshi Executive Director and Group Chief Financial Officer Dr. Ashok Ganguly Director Mr. Nadir B. Godrej Director Mr. R. K. Kulkarni Director Mr. M. M. Murugappan Director Mr. A. K. Nanda Director Mr. Deepak Parekh Director Mr. Anupam Puri Director Mr. Narayanan Vaghul Director Financial Information The summary of audited financial statements of M&M is set forth below:

(` in Lacs) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Equity Share Capital 27,262 28,295 29,362 Reserves and Surplus (excluding revaluation reserve if any) 4,97,737 7,53,215 10,00,857 Total Income 13,36,402 18,80,146 23,80,324 Profit/(Loss) after Tax 83,678 2,08,775 2,66,210 Earnings Per Share (EPS) (basic) (in `) 15.92 37.97 46.21 Earnings Per Share (EPS) (diluted) (in `) 15.01 35.61 44.33 Profit and Loss Account (debit balance) Nil Nil Nil Miscellaneous Expenditure (to the extent not written off) 1,255 - -Networth 5,24,999 7,81,510 10,30,221 Net Asset Value (NAV) per share / BV per share (in `) 192.12 138.1@ 175.43 @ - Book Value per share is shown after giving effect to the sub-division of each ordinary (equity) share of the face value `10 each fully paid up into two ordinary (equity) shares of `5 each fully paid up in March 2010 Share price information The equity shares of M&M are listed on the NSE and the BSE. The details of the highest and lowest price on the NSE during the preceding six months are as follows: Month Monthly High Monthly Low

July, 2011 753.45 688.35 August, 2011 745.60 632.60 September, 2011 823.90 740.80 October, 2011 877.30 773.80 November, 2011 863.00 681.20 December, 2011 762.95 632.20 Source: www.nse-india.com The details of the highest and lowest price on the BSE during the preceding six months are as follows: Month Monthly High Monthly Low

July, 2011 752.00 688.10 August, 2011 746.10 633.00 September, 2011 820.80 740.00


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Month Monthly High Monthly Low

October, 2011 874.75 775.00 November, 2011 862.95 681.70 December, 2011 762.55 633.40 Source: www.bseindia.com Mechanism for redressal of investor grievance The board of directors of M&M constituted the Investor Grievances-cum-Share Transfer Committee. Mr. Keshub Mahindra is the Chairman of the Committee. Mr. Anand Mahindra, Mr. Bharat Doshi, Mr. Arun Kumar Nanda and Mr. R.K. Kulkarni are the other members of this committee. Mr. Narayan Shankar, the company secretary is the compliance officer of M&M. The Committee meets as and when required, to inter alia deal with matters relating to transfer of shares and monitor redressal of complaints from shareholders of M&M relating to transfers, non-receipt of balance sheet, non-receipt of dividends declared, etc. With a view to expediting the process of share transfers, necessary authority has been delegated to approve the transfers of not more than 10,000 Ordinary (Equity) Shares per transfer, provided the transferee does not hold 2,00,000 or more Ordinary (equity) shares in M&M. The Committee met two times during the last Financial Year. Both the Meetings were well attended by its Members. During the last financial year, 36 complaints were received from the Shareholders, all of which have been attended to/resolved to date. Interests of Promoter and Common Pursuits The Promoter is interested in us to the extent that it is the promoter of our Company, its shareholding in our Company, dividend payable, other distributions in respect of the Equity Shares and to the extent of appointment / deputation of director and/ or key managerial personnel to us. Further, Mr. Ashok Sharma, Executive Vice President, Agri & Engine Application Business in M&M and Mr. S. Durgashankar, Executive Vice President – M&A and Secretarial in M&M, are our Directors and may additionally be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration payable or reimbursement of expenses to them, if any, as per the terms of appointment. Except as stated in the “Financial Information - Related Party Transactions” as stated on page 158, we have not entered into any contract, agreements or arrangements in which our Promoter is directly or indirectly interested and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be made with them including the properties purchased by us other than in the normal course of business. Payment or benefits to our Promoter in the last two years Except as stated in this section “Financial Information - Related Party Transactions” on page 158, no benefits have been paid or given to our Promoter within the two years preceding the date of the Draft Letter of Offer. Other confirmations M&M is neither a sick company within the meaning of SICA nor under winding up. There are no violations of securities laws committed by our Promoter in the past or are pending against them. Our Promoter is not interested in any property acquired by us in the two years immediately preceding the date of the Draft Letter of Offer, or proposed to be acquired by us. There has been no change in the control or management of our Promoter in the preceding three years prior to the filing of this Draft Letter of Offer with SEBI. None of our Promoter, Promoter Group entities or persons in control of our Promoter or bodies corporate forming part of the Promoter Group have been (i) prohibited from accessing the capital markets under any order or direction passed by SEBI or any other authority or (ii) refused listing of any of the securities issued by such entity by any stock exchange, in India or abroad.


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We confirm that the PAN, Bank Account Number, the Company Registration Number and the addresses of the Registrars of Companies with respect to our Promoter will be submitted to the BSE at the time of filing the draft offer document with them. Companies with which our Promoter has disassociated in the last three years In keeping with the Mahindra Group strategy to concentrate on its core businesses, shareholding in the following companies have been diluted/ divested. Sr. No.

Name of Company Date

1. Engines Engineering S.r.l September 26, 2011 2. EFF Engineering S.r.l September 26, 2011 3. Owens Corning (India) Limited November 24, 2010 4. ID-EE S.r.l., Italy August 3, 2010 5. Mahindra Technologies Inc. March 10, 2010 Takeover and change in control Our original promoters were Trenton Investments Company Private Limited, Shishilin Investments Private Limited (since merged with Trenton Investments Company Private Limited), Garuda Plant Products Limited, Ms. Indrani Khanna, Mr. Anirudh Khanna, Ms. Neelanjana Khanna (Banerjee) and Ms. Deepanjali Chhapwale (“Erstwhile Promoters”). Our Promoter had entered into a Share Subscription Agreement dated February 9, 2011 (“SSA”) with (i) us, (ii) Credit Renaissance Fund Limited (formerly known as Schroder Credit Renaissance Fund Limited (“SCRF”)) and Credit Renaissance Development Fund LP (formerly known as Schroder Credit Renaissance Development Fund LP), (“CRDF”) (collectively referred to as “Existing Investor”), (iii) Mr. K.L. Khanna and (iv) the Erstwhile Promoters whereby 65,58,065 Equity Shares constituting 38.00% of the post preferential issue paid-up capital of our Company would be issued, on a preferential basis, to our Promoter, for cash at a price of ` 66.10 per Equity Share (“Preferential Issue”), resulting in substantial acquisition of shares accompanied with change in control over us as per the Takeover Code. Subsequently the SSA was terminated and replaced by a new share subscription agreement (“New SSA”) dated June 27, 2011 so as to (a) exclude the Existing Investor from the SSA and (b) remove all references to the Existing Investor and make the consequential modifications. In addition to the SSA, the Promoter had entered into a shareholders’ agreement on February 9, 2011 (“SHA”), with the Existing Investor, Erstwhile Promoters, Mr. K.L. Khanna, Kimplas Piping Systems Limited and us, which was subsequently terminated and replaced by a new shareholders agreement (“New SHA”) dated June 27, 2011 so as to (a) exclude the Existing Investor from the SHA and (b) remove all references to the Existing Investor and make the consequential modifications. The Board of Directors in their meeting held on February 9, 2011 passed appropriate resolutions, inter alia, (a) to approve the issue of 65,58,065 Shares at a price of ` 66.10 per share to the Acquirer; (b) to convene an extra-ordinary general meeting to obtain approval of Shareholders in terms of section 81(1A) of the Companies Act, 1956 for Preferential Allotment; (c) to authorize the Board to allot the above mentioned Shares to the Acquirer and (d) to approve the change of promoters as defined in regulation 2(1)(h) of the SEBI Takeover Regulations so as to classify the Acquirer as the promoter of the Target Company upon completion of Offer. On February 10, 2011, the Promoter made an open offer under the Takeover Code to the Equity Shareholders for acquisition of 34,51,613 Equity Shares at ` 66.55 per Equity Share (Besides above, interest of ` 1.00 per share for delay in the offer schedule was paid to eligible shareholders) for cash representing 20.00% of the post preferential issue paid-up capital our Company. The Shareholders in an extra-ordinary general meeting held on March 9, 2011 approved the issue of Equity Shares to the Promoter and the allotment was made on March 17, 2011. Our Promoter made a public announcement dated February 10, 2011 to acquire 34,51,613 Equity Shares i.e. 20% of the post preferential issue paid-up capital our Company. The offer was open between July 21, 2011 and August 9, 2011. Pursuant to the open offer our Promoter acquired 19,800 Equity Shares amounting to 0.11% of the post preferential issue paid-up capital our Company at ` 66.55 per share alongwith an interest of `1 for delay in offer schedule. Presently the Promoter holds 65,77,865 Equity Shares i.e. 38.10% of the paid-up capital of our Company. For further details please see “History and Other Corporate Matters” on page 52.


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Natural Persons in control of the Promoter Mr. Keshub Mahindra Mr. Keshub Mahindra, aged 87, Chairman of M&M, is a graduate from Wharton, University of Pennsylvania, USA. He joined M&M in 1948 and was appointed its Chairman in 1963. Mr. Mahindra is the Chairman of the Board of Governors of Mahindra United World College of India, Chairman of Mahindra Ugine Steel Company Limited, Mahindra Holdings Limited, Tech Mahindra Foundation, Vice-Chairman of Housing Development Finance Corporation Limited and a Director of several Companies including Bombay Burmah Trading Corporation Limited, The Bombay Dyeing & Manufacturing Co. Limited, Indian Institute for Human Settlements and Prudential Management & Services Private Limited. Mr. Mahindra is also associated with several eminent institutions as Employers’ Federation of India (President Emeritus), President of Centre for Research in Rural & Industrial Development Society, Chairman – Mahindra Foundation. He is a Member of the Apex Advisory Council of ASSOCHAM, President of the Governing Council of University of Pennsylvania Institute for the Advanced Study of India, New Delhi and Member of International Advisory Board of University of Pennsylvania Centre for the Advanced Study of India, Philadelphia and Member of the United World Colleges (International) U. K., amongst others. Mr. Mahindra was a member of the Prime Minister’s Council on Trade & Industry (2004-2010), President of the Bombay Chamber of Commerce and Industry, the Indo- American Society and Chairman of India Nominating Committee “Single Nation Programme” – Eisenhower Exchange Fellowships, USA. He was also Chairman of the Governing Council of the Indian Institute of Management, Ahmedabad and was appointed by the Government to serve on a number of high level Committees, including the Sachar Commission on Company Law and Monopolies and Restrictive Trade Practices Act, 1969 and the Central Advisory Council of Industries. Mr. Mahindra has received several national and international awards for his contributions to public life and industry, including the Chevalier De La Legion D’honneur, “Businessman of the Year” Award from Business India, Sir Jehangir Ghandy Medal for Industrial Peace from XLRI, Jamshedpur; Giants International Business Leadership Award; IMC Diamond Jubliee Endowment Trust Award, Dadabhai Naoroji International Award for Excellence and Lifetime Achievement, All India Management Association Lifetime Achievement Award for Management; Ernst & Young Entrepreneur of the Year Lifetime Achievement Award 2007; Institute of Company Secretaries of India (ICSI) Lifetime Achievement Award for Excellence in Corporate Governance; Society of Indian Automobile Manufacturers (SIAM) Award for “Lifetime Contribution to the Automotive Industry”; CNBC TV 18 India Business Leaders Lifetime Achievement Award 2008; ACMA Lifetime Achievement Award; Economic Times Lifetime Achievement Award. Mr. Anand Mahindra Mr. Anand Mahindra, aged 56, Vice Chairman & Managing Director of M&M graduated with Honours (Magna cum laude) from Harvard College, Cambridge, Massachusetts, in 1977. In 1981 he secured an MBA degree from the Harvard Business School, Boston, Massachusetts. He returned to India that year and joined Mahindra Ugine Steel Company Limited (“MUSCO”) as Executive Assistant to the Finance Director. In 1989 he was appointed President and Deputy Managing Director of MUSCO. In the summer of 1991, he was appointed as Deputy Managing Director of M&M. In April 1997, he was appointed Managing Director of M&M, and in January 2001 he was given the additional responsibility of Vice Chairman. Mr. Anand Mahindra is the co-founder of the Harvard Business School Association of India. Mr. Anand Mahindra, in the past, has served as the President of the Confederation of Indian Industry and of the Automotive Research Association of India. He also served on the Boards of the National Stock Exchange of India Limited and the National Council of Applied Economic Research. Mr. Anand Mahindra has received several awards, including the ‘Knight of the Order of Merit’ by the President of the French Republic, 2005 Leadership Award from the American India Foundation for his and the Mahindra Group’s commitment to corporate social responsibility, CNBC Asia Business Leader Award for the year 2006, The Most Inspiring Corporate Leader of the year 2007 from NDTV Profit, Business Man of the Year 2007 from Business India, Harvard Business School Alumni Achievement Award 2008, CNBC TV18 Outstanding Business Leader of the Year 2009, Business Leader of the Year 2009 by Economic Times, Ernst & Young Entrepreneur of the Year India award for


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2009, Indian of the Year award 2009 by NDTV and Lloyds Banking Group Business Leader of the Year Award at The Asian Awards 2011. Fortune magazine has included Mr. Anand Mahindra in list of Asia’s 25 most powerful business people of 2011. Mr. Anand Mahindra is on the Board of Trade, Government of India and a member of Mission Steering Group (MSG) – Jawaharlal Nehru National Solar Mission (JNNSM). He is also the Chairman of India Design Council, member of the council and the executive committee of the National Sports Development Fund (NSDF), Government of India, member of the executive committee The Nehru Centre, Mumbai, member of the India Council for Sustainable Development and of the Council of Scientific & Industrial Research Society. Mr. Anand Mahindra is a Trustee of the K.C. Mahindra Education Trust, which provides scholarships to students, and is also on the Board of Governors of the Mahindra United World College of India. Mr. Mahindra is currently the Vice-Chairman & Managing Director of Mahindra & Mahindra Limited, Vice Chairman of Mahindra Ugine Steel Company Limited, Chairman of Tech Mahindra Limited, Mahindra Navistar Automotives Limited, Mahindra First Choice Wheels Limited, Mahindra Two Wheelers Limited, Defence Land Systems India Private Limited and Director of Mahindra Holdings Limited, Tech Mahindra Foundation, Prudential Management & Services Private Limited, Araku Originals Limited, Naandi Community Water Services Private Limited, Avion Aerosols Private Limited, M.A.R.K. Hotels Private Limited and Prana Holdings Inc. Group Companies Unless otherwise stated none of the companies or other entities forming part of Group Companies is a sick company under the meaning of Sick Industrial Companies (Special Provisions) Act, 1985, has negative networth in the last financial year and none of them are in the process of winding up. Further, unless otherwise stated all information pertaining to direct/ indirect shareholding of our Promoter is as of November 30, 2011. Listed Group Companies

1. Tech Mahindra Limited 2. Mahindra & Mahindra Financial Services Limited 3. Mahindra Holidays & Resorts India Limited 4. Ssangyong Motor Company Limited 5. Mahindra Lifespace Developers Limited 6. Swaraj Engines Limited 7. Mahindra Forgings Limited 8. Mahindra Ugine Steel Company Limited 9. Mahindra Composites Limited 10. Swaraj Automotives Limited

Un-listed Group Companies Subsidiary companies of our Promoter

Sr. No. Name of Subsidiary of M&M Sr. No. Name of Subsidiary of M&M

1. Mahindra Engineering and Chemicals Products Limited

2. Retail Initiative Holdings Limited

3. Mahindra Retail Private Limited 4. Mahindra Conveyor Systems Private Limited 5. Mahindra Intertrade Limited 6. Mahindra Middleeast Electrical Steel Service

Centre (FZC) 7. Mahindra Steel Service Centre Limited 8. Mahindra Electrical Steel Limited 9. Mahindra Consulting Engineers Limited 10. MHR Hotel Management GmbH 11. Mahindra Holidays & Resorts USA Inc. 12. Mahindra Hotels and Residences India Limited 13. Heritage Bird (M) SDN.BHD 14. BAH Hotelanlagen AG 15. NBS International Limited 16. Navyug Special Steel Private Limited 17. Mahindra Holdings Limited 18. Mahindra United Football Club Private Limited 19. Mahindra Punjab Tractors Private Limited 20. Mahindra EPC Services Private Limited 21. Mahindra BPO Services Private Limited 22. Mahindra Telecommunications Investment Private


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Sr. No. Name of Subsidiary of M&M Sr. No. Name of Subsidiary of M&M Limited

23. Mahindra Infrastructure Developers Limited 24. Mahindra World City Developers Limited 25. Mahindra World City (Jaipur) Limited 26. Mahindra Integrated Township Limited 27. Mahindra Residential Developers Limited 28. Mahindra World City (Maharashtra) Limited 29. Knowledge Township Limited 30. Mahindra Bebanco Developers Limited 31. Raigad Industrial & Business Park Limited 32. Industrial Township (Maharashtra) Limited 33. Anthurium Developers Limited 34. Watsonia Developers Limited 35. Mahindra Insurance Brokers Limited 36. Mahindra Rural Housing Finance Limited 37. Mahindra Business & Consulting Services Private

Limited 38. Mahindra-BT Investment Company (Mauritius)

Limited 39. Bristlecone Inc. 40. Bristlecone India Limited 41. Bristlecone (Singapore) Pte. Limited 42. Bristlecone GmbH 43. Bristlecone UK Limited 44. Bristlecone (Malaysia) SDN.BHD 45. Bristlecone Consulting Limited 46. Bristlecone International AG 47. Mahindra First Choice Wheels Limited 48. Mahindra USA Inc. 49. Mahindra Gujarat Tractor Limited 50. Mahindra Shubhlabh Services Limited 51. Mahindra & Mahindra South Africa (Proprietary)

Limited 52. Mahindra Overseas Investment Company

(Mauritius) Limited 53. Mahindra (China) Tractor Company Limited 54. Bristlecone Limited55. Mahindra Europe S.r.l. 56. Mahindra Graphic Research Design S.r.l. 57. Mahindra Yeuda (Yancheng) Tractor Company

Limited 58. Mahindra Emirates Vehicle Armouring FZ-LLC

59. Mahindra Gears & Transmissions Private Limited 60. Mahindra Engineering Services Limited 61. Mahindra Engineering Services (Europe) Limited 62. Mahindra Engineering GmbH 63. Mahindra Technologies Services Inc 64. Stokes Group Limited 65. Stokes Forgings Dudley Limited 66. Jensand Limited 67. Stokes Forgings Limited 68. Mahindra Forgings Global Limited 69. Mahindra Forgings International Limited 70. Mahindra Forgings Europe AG 71. Gesenkschmiede Schneider GmbH 72. JECO Jellinghaus GmbH 73. Falkenroth Umformetchnik GmbH 74. Schoneweiss & Co. GmbH 75. Mahindra Automobile Distributor Private Limited 76. Mahindra Navistar Automotives Limited 77. Mahindra Hinoday Industries Limited 78. Mahindra Vehicle Manufacturers Limited 79. Mahindra Logistics Limited 80. Mahindra Navistar Engines Private Limited 81. Mahindra Aerospace Private Limited 82. Mahindra Aerospace Australia Pty. Limited 83. Aerostaff Australia Pty. Limited 84. Gipp Aero Investments Pty. Limited 85. Gippsaero Pty. Limited 86. GA8 Airvan Pty. Limited 87. GA200 Pty. Limited 88. Airvan Flight Services Pty. Limited 89. Gipp Aero International Pty. Limited 90. Normad TC Pty. Limited 91. Mahindra Aerostructures Private Limited 92. Mahindra First Choice Services Limited 93. Mahindra Gears International Limited 94. Mahindra Gears Global Limited 95. Mahindra Gears Cyprus Limited 96. Metalcastello S.p.A. 97. Crest Geartech Private Limited 98. Mahindra Automotive Australia Pty. Limited 99. Mahindra Two Wheelers Limited 100. Defence Land Systems India Private Limited 101. Mahindra EcoNova Private Limited 102. Mahindra Reva Electric Vehicles Private Limited 103. Ssangyong European Parts Center B. V. 104. Ssangyong Motor (Shanghai) Company Limited 105. Ssangyong (Yizheng) Auto Parts Manufacturing

Company Limited 106. Bell Tower Resorts Private Limited*

* w.e.f. 21st December, 2011 Other Direct Associates/Joint Ventures of our Promoter Sr. No. Name of Direct Associates/Joint Ventures Sr. No. Name of Direct Associates/Joint Ventures

1. Mahindra Construction Company Limited 2. Mahindra & Mahindra Contech Limited3. Officemartindia.com Limited 4. Mega One Stop Farm Services Limited


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Sr. No. Name of Direct Associates/Joint Ventures Sr. No. Name of Direct Associates/Joint Ventures

5. Vayugrid Marketplace Services Private Limited 6. Mriyalguda Farm Solutions Limited 7. Mahindra Sona Limited 8. Kota Farm Services Limited 9. PSL Media & Communication Limited

Entities under winding up Sr. No. Name of Direct Associates/Joint Ventures Sr. No. Name of Direct Associates/Joint Ventures

1. Machinery Manufacturers Corporation Limited 2. Montreal Engineering International Limited 3. Triton Overwater Transport Agency Limited 4. Roplas (India) Limited

Entities whose names have been struck of the RoC records Sr. No. Name of Direct Associates/Joint Ventures Sr. No. Name of Direct Associates/Joint Ventures

1. Richfield Crop Solutions Private Limited 2. Srinivasa Farm Solutions Private Limited

Details of the top five Group Companies: The top five Group Companies is as follows: 1. Tech Mahindra Limited (“TML”) Corporate Information TML was incorporated as a joint venture between Mahindra & Mahindra and British Telecom plc under the name of ‘Mahindra British Telecom’ on October 24, 1986 in the state of Maharashtra. The name of the Company was subsequently changed to ‘Tech Mahindra Limited’ on February 3, 2006. The registered office of TML is at Gateway Building, Apollo Bunder, Mumbai – 400 001, Maharashtra, India. TML is principally engaged in the business of Software solutions for global telecommunications and other industries and consulting. Interest of the Promoter M&M, as on September 30, 2011, holds 6,06,76,252 equity shares of ` 10.00 each, which constitute 47.66 % of the issued and paid-up share capital of TML. M&M is one of the promoters of TML as per the filing made to stock exchanges under clause 35 of the Listing Agreement. Shareholding Pattern as on September 30, 2011

Category of Shareholder No. of Share

holders

Total No. of Shares

Total No. of Shares held in Dematerialized

Form

Total Shareholding as a % of total No. of

Shares

Shares pledged or otherwise

encumbered As a % of

(A+B) As a % of (A+B+C)

No. of shares

As a% of Total No. of Shares

(A) Shareholding of Promoter and Promoter Group (1) Indian Bodies Corporate 1 6,06,76,252 6,06,76,252 47.70 47.70 0 0.00Sub Total 1 6,06,76,252 6,06,76,252 47.70 47.70 0 0.00(2) Foreign Bodies Corporate 2 2,96,07,649 2,96,07,649 23.28 23.28 0 0.00Sub Total 2 2,96,07,649 2,96,07,649 23.28 23.28 0 0.00


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holders

Total No. of Shares


Form

Total Shareholding as a % of total No. of

Shares


encumbered As a % of

(A+B) As a % of (A+B+C)

No. of shares

As a% of Total No. of Shares

Total shareholding of Promoter and Promoter Group (A)

3 9,02,83,901 9,02,83,901 70.98 70.98 0 0.00

(B) Public Shareholding (1) Institutions Mutual Funds / UTI 20 11,20,008 11,20,008 0.88 0.88 0 0.00Financial Institutions / Banks 27 1,30,28,694 1,30,28,694 10.24 10.24 0 0.00Insurance Companies 3 53,64,651 53,64,651 4.22 4.22 0 0.00Foreign Institutional Investors 51 56,43,033 56,43,033 4.44 4.44 0 0.00Sub Total 101 2,51,56,386 2,51,56,386 19.78 19.78 0 0.00(2) Non-Institutions Bodies Corporate 1,344 9,26,351 9,26,351 0.73 0.73 0 0.00Individuals 0 0.00Individual shareholders holding nominal share capital up to ` 1 Lac

1,36,092 74,79,221 73,71,527 5.88 5.88 0 0.00


24 26,27,927 26,27,927 2.07 2.07 0 0.00

Clearing Members 240 2,35,950 2,35,950 0.19 0.19 0 0.00Non Resident Indians 1,526 3,87,117 3,48,452 0.30 0.30 0 0.00Hindu Undivided Families 875 42,685 42,685 0.03 0.03 0 0.00Trusts 3 137 137 0.00 0.00 0 0.00Foreign Nationals 6 39,505 39,280 0.03 0.03 0 0.00Market Maker 54 13,596 13,596 0.01 0.01 0 0.00Sub Total 1,40,164 1,17,52,489 1,16,05,905 9.24 9.24 0 0.00Total Public shareholding (B) 1,40,265 3,69,08,875 3,67,62,291 29.02 29.02 0 0.00Total (A)+(B) 1,40,268 12,71,92,776 12,70,46,192 100.00 100.00 0 0.00(C) Shares held by Custodians and against which Depository Receipts have been issued(1) Promoter and Promoter Group 0 0 0 0 0 0 0.00(2) Public 0 0 0 0 0 0 0.00Sub Total 0 0 0 0 0 0 0.00Total (A)+(B)+(C) 1,40,268 12,71,92,776 12,70,46,192 100.00 100.00 0 0.00 Financial Performance The summary audited consolidated financial statements of TML for the last three years are as follows:

(in ` Lacs) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Equity Share Capital (par value ` 10 per equity share) 12,173 12,232 12,596 Reserves and Surplus (excluding revaluation reserve if any) 181,095 275,366 321,495 Total Income 442,686 470,084 525,763Profit/(Loss) after Tax 101,456 70,043 64,417 Earnings Per Share (EPS) (basic ) after exceptional items (in `) 83.41 57.41 51.60 Earnings Per Share (EPS) (diluted ) after exceptional items (in `) 78.82 53.72 49.34 Profit and Loss Account (debit balance) Nil Nil Nil Miscellaneous Expenditure (to the extent not written off) Nil Nil Nil Networth 202,628 248,817 302,900 Net Asset Value (NAV) per share (in `) 166 203 240


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Share price information The equity shares of TML are listed on the NSE and the BSE. The details of the highest and lowest price on the NSE during the preceding six months are as follows: Month Monthly High Monthly Low

July, 2011 798 714.35 August, 2011 786.25 602.00 September, 2011 699.60 555.55 October, 2011 615 529.70 November, 2011 634.00 550.00 December, 2011 618.75 528.00 Source: www.nse-india.com The details of the highest and lowest price on the BSE during the preceding six months are as follows: Month Monthly High Monthly Low

July, 2011 797.70 715.00 August, 2011 784.00 604.00 September, 2011 699.00 524.20 October, 2011 615.85 531.00 November, 2011 635.00 550.10 December, 2011 602.45 537.20 Source: www.bseindia.com TML has not made any public or rights issue in the last three years. There has been no change in the capital structure in the last six months except as disclosed below:

Date of Allotment No. of Shares Issue Price (in `) Nature of Allotment

June 27, 2011 1,00,000 Multiple issue prices based on market price prior to grant

Pursuant to Employees Stock Option Plan 2004

June 27, 2011 1,58,435 Multiple issue prices based on market price prior to grant


July 25, 2011 45,045 Multiple issue prices based on market price prior to grant


August 29, 2011 44,625 Multiple issue prices based on market price prior to grant


September 21, 2011 1,15,365 Multiple issue prices based on market price prior to grant


October 21, 2011 56,040 Multiple issue prices based on market price prior to grant


Interest in the Company TML does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. TML is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects TML has utilised all the funds raised from its initial public offer made in August 2006, amounting to ` 11,630 Lacs for the purposes stated as under: Initial public offering proceeds and utilization thereof is as follows:


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(` in Lacs) Objects of the Issue Fund Requirement Utilization of funds

Enhancing infrastructure 11,042 11,111.08 Estimated Issue expenses 588 519.57

Total 11,630 11,630.65 Mechanism for redressal of investor grievance The board of directors of TML constituted the Investor Grievances-cum-Share Transfer Committee in its meeting held on May 4, 2006. Mr. Ulhas N. Yargop, a non-executive director is the Chairman of the Committee. Mr. Vineet Nayyar and Mr. Richard Cameron are the other members of this committee. However, Mr. Richard Cameron has resigned as a director on December 23, 2011 and the committee would thus be reconstituted at the ensuing board meeting of TML. Mr. Anil Khatri, the company secretary of TML is the compliance officer of this committee. During the last financial year, the committee held one meeting on April 29, 2010 and passed 2 circular resolutions on June 14, 2010 and December 23, 2010 for transfer of shares and issue of duplicate share certificates. This committee looks into the redressal of shareholder and investor complaints, issue of duplicate/consolidated share certificates, allotment and listing of shares and review of cases of refusal of transfer/transmission of shares and debentures and reference to statutory and regulatory authorities. TML also has an investor relations department focused on servicing the needs of the investors, analysts, brokers and the general public. A total of 247 investor complaints were disposed of satisfactorily during the last financial year. 2. Mahindra & Mahindra Financial Services Limited (“MMFSL”) Corporate Information MMFSL was incorporated on January 1, 1991 as Maxi Motors Financial Services Limited and received Certificate of Commencement of Business on February 19, 1991. The name was changed to Mahindra & Mahindra Financial Services Limited and the Fresh Certificate of Incorporation was received on November 3, 1992. MMFSL is having a valid certificate of Registration No. 13.00996 dated March 21, 2007 in lieu of certificate No. 13.00996 dated September 4, 1998 in terms of Section 45 A of the Reserve Bank of India Act 1934. The registered office of MMFSL is at Gateway Building, Apollo Bunder, Mumbai - 400 001, Maharashtra, India. MMFSL is a Non-Banking Financial Company registered with the RBI as an Asset Finance Company - Deposit Taking, primarily engaged in the business of providing finance for new and pre-owned auto and utility vehicles, tractors, cars and commercial vehicles, personal loans, construction equipment loans, mutual fund distribution services and related financial services. Interest of the Promoter M&M holds 5,82,41,532 equity shares of ` 10.00 each, which constitute 56 % of the issued and paid-up share capital of MMFSL. Shareholding Pattern as on September 30, 2011

Category of shareholder Number of shareholders

Total number of

shares

Number of shares held in

dematerialized form

Total shareholding as a percentage of total

number of shares


encumbered % of

shares (A+B)1

% of shares (A+B+C)

Number of shares

% No. of

shares Shareholding of Promoter and Promoter GroupIndian Individuals/ Hindu Undivided Family 0 0 0 0.00 0.00 0 0.00

Central Government/ State Government(s) 0 0 0 0.00 0.00 0 0.00

Bodies Corporate 1 5,82,41,532 5,82,41,532 56.00 56.00 0 0.00Financial Institutions/ Banks 0 0 0 0.00 0.00 0 0.00


79

Category of shareholder Number of shareholders

Total number of

shares

Number of shares held in

dematerialized form

Total shareholding as a percentage of total

number of shares


encumbered % of

shares (A+B)1

% of shares (A+B+C)

Number of shares

% No. of

shares Any Other (specify) ESOP TRUST 2 14,61,166 14,61,166 1.40 1.40 0 0.00Sub-Total (A)(1) 3 5,97,02,698 5,97,02,698 57.40 57.40 0 0.00Foreign Individuals (Non- Resident Individuals/ Foreign Individuals) 0 0 0 0.00 0.00 0 0.00

Bodies Corporate 0 0 0 0.00 0.00 0 0.00Institutions 0 0 0 0.00 0.00 0 0.00Any Other (specify) 0 0 0 0.00 0.00 0 0.00Sub-Total (A)(2) 0 0 0 0.00 0.00 0 0.00Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2)

3 5,97,02,698 5,97,02,698 57.40 57.40 0 0.00

Public shareholding3 Institutions Mutual Funds/ UTI 35 46,34,253 46,34,253 4.46 4.46 0 0.00Financial Institutions/ Banks 2 21,000 21,000 0.02 0.02 0 0.00Central Government/ State Government(s) 0 0 0 0.00 0.00 0 0.00

Venture Capital Funds 0 0 0 0.00 0.00 0 0.00Insurance Companies 0 0 0 0.00 0.00 0 0.00Foreign Institutional Investors 106 3,56,97,140 3,56,97,140 34.32 34.32 0 0.00Foreign Venture Capital Investors 0 0 0 0.00 0.00 0 0.00

Any Other (specify) 0 0 0 0.00 0.00 0 0.00Sub-Total (B)(1) 143 4,03,52,393 4,03,52,393 38.80 38.80 0 0.00Non-institutions Bodies Corporate 465 5,43,135 4,58,637 0.52 0.52 0 0.00Individuals Individual shareholders holding nominal share capital up to ` 1 Lac

27,809 24,02,658 22,11,137 2.31 2.31 0 0.00


26 7,95,044 6,71,421 0.77 0.77 0 0.00

Any Other (specify) Trusts 6 2,181 2,181 0.00 0.00 0 0.00Non resident indians 453 1,53,517 1,53,517 0.15 0.15 0 0.00Clearing members 52 51,109 51,109 0.05 0.05 0 0.00Sub-Total(B)(2) 28,811 39,47,644 3,548,002 3.80 3.80 0 0.00Total Public Shareholding (B)= (B)(1)+(B)(2) 28,954 4,43,00,037 4,39,00,395 42.60 42.60 0 0.00

TOTAL(A)+(B) 28,957 10,40,02,735 10,36,03,093 100.00 100.00 0 0.00Shares held by Custodians and against which Depository Receipts have been issued Promoter and Promoter group 0 0 0 0.00 0 0.00Public 0 0 0 0.00 0 0.00Total C=C1+C2 0 0 0 0.00 0 0.00GRAND TOTAL (A)+(B)+(C) 28,957 10,40,02,735 10,36,03,093 100.00 100.00 0 0.00

Financial Performance The summary audited consolidated financial statements of MMFSL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 9,571 9,598 10,245


80


Reserves and Surplus (excluding revaluation reserve if any) 1,38,535 1,65,758 2,44,044 Total Income 1,40,045 1,59,560 2,07,439 Profit/(Loss) after Tax 21,970 35,582 49,277 Earnings Per Share (EPS) - Basic (`) 23.01 37.15 50.92 Earnings Per Share (EPS) - Diluted (`) 22.67 36.72 47.38 Profit and Loss Account (debit balance) 0 0 0 Miscellaneous Expenditure (to the extent not written off) 0 0 0 Networth 1,48,106 1,75,356 2,54,289 Net Asset Value (NAV) per share (`) # 154.74 182.70 248.20 # excluding equity shares held by Mahindra & Mahindra Financial Services Limited Employees Stock Option Trust. Share price information The equity shares of MMFSL are listed on the NSE and the BSE. The details of the highest and lowest price on the NSE during the preceding six months are as follows: Month Monthly High Monthly Low


July, 2011 718.00 620.85 August, 2011 713.00 590.00September, 2011 693.90 610.00 October, 2011 689.70 616.55 November, 2011 707.90 611.50 December, 2011 712.60 590.10 Source: www.bseindia.com MMFSL has not made any public or rights issue in the last three years and there has been no change in the capital structure in the last six months. Interest in the Company MMFSL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MMFSL is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects MMFSL has utilised all the funds raised from its initial public offer made in February 2006, amounting to ` 20,000 Lacs for the purposes stated as under: Initial public offering proceeds and utilization thereof is as follows:

(` in Lacs)


81

Objects of the Issue Fund Requirement Utilization of funds

Augment our capital base to meet our future capital requirements arising out of growth in our business and for other general corporate purposes

18,780 18,729

Estimated Issue expenses 1,220 1,271 Total 20,000 20,000

Mechanism for redressal of investor grievance The Board of Directors of MMFSL has constituted a Share Transfer and Shareholders/Investors Grievance Committee comprising of Mr. M.G. Bhide, Independent Director as the Chairman of the Committee, Mr. Ramesh Iyer, Managing Director of MMFSL and Mr.Uday Y. Phadke, Director, to inter alia look into the complaints pertaining to transfers/ transmission of shares, non-receipt of dividend/interest, and any other related matters. Karvy Computershare Private Limited, Registrar & Share Transfer Agents redress the Investor Complaints received directly by them. MMFSL has also designated “[email protected]” as an email id for the purpose of registering complaints by investors and displayed the same on the company’s website. Typically the routine investor grievances are redressed within two weeks of the receipt of the complaint. 3. Ssangyong Motor Company Limited (“Ssangyong Motor”) Corporate Information Ssangyong Motor Company Limited was incorporated on December 06, 1962. Its registered office is located at 150-3, Chilgoe-dong, Pyeongtaek-si, 459 – 711, Gyeonggi-do, Korea. It is involved in the business of manufacture sedans, vans, and sport utility vehicles. Ssangyong Motor also provides auto parts. Ssangyong Motor markets its products to domestic and overseas markets. Interest of the Promoters M&M holds 85,419,047 equity shares, which constitute 70.04% of the issued and paid-up share capital of Ssangyong Motor. Financial Performance The summary audited consolidated financial statements of Ssangyong Motor for the last three years are as follows:

( in million KRW) Particulars Fiscal Year Ending

December 31, 2008

December 31, 2009

December 31, 2010

Equity Share Capital (par value [KRW 5,000] per equity share) 604,023 542,052 182,688 Reserves and Surplus (excluding revaluation reserve if any) (346,153) (241,431) 126,198 Total Income (Revenue) 2,495,217 1,066,816 2,070,482 Profit/(Loss) after Tax (709,684) (346,270) 8,115 Earnings Per Share (EPS) (basic) (in KRW) (5,875) (32,499) 224 Earnings Per Share (EPS) diluted) (in KRW) (5,875) (32,499) 223 Profit and Loss Account (debit balance) (Accumulate deficit) (709,684) (722,815) (714,700) Miscellaneous Expenditure (to the extent not written off) 19,065 105,695 49,126 Networth (Net Asset) 257,870 300,621 308,886 Net Asset Value (NAV) per share (in KRW) 2,135 2,773 8,454 Share price information The equity shares of Ssangyong Motor are listed on the Korean Stock Exchange. The details of the highest and lowest price during the preceding six months are as follows:

(in KRW) Month Monthly High

Monthly Low

July, 2011 9,120 8,360


82

Month Monthly High

Monthly Low

August, 2011 8,570 5,900 September, 2011 6,500 4,925 October, 2011 6,020 5,050 November, 2011 5,800 4,855 December, 2011 5,340 4,500 Source: Bloomberg Ssangyong Motor has not made any public or rights issue in the last three years. There have been no changes in Ssangyong’s capital structure in the past 6 months. Interest in the Company Ssangyong Motor does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. Ssangyong Motor is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects No public or rights issues have been undertaken by Ssangyong Motors in the last 10 years. Mechanism for redressal of investor grievance In case shareholders suffer from damages due to violation of the posting regulations of the stock exchange or accounting fraud, they can get compensation from a derivative suit by shareholders, in accordance with the South Korean law. Miniscule complaints are dealt with by the Planning 2 team of Ssangyong Motors, which is in charge of share-related issues. 4. Mahindra Holidays & Resorts India Limited (“MHRIL”) Corporate Information MHRIL was incorporated as Mahindra Holidays & Resorts India Private Limited on September 20, 1996 as a private limited company. The status of MHRIL was changed to a public limited company by a special resolution of the members passed at the annual general meeting held on January 29, 1998. The fresh certificate of incorporation consequent upon conversion was issued to MHRIL on April 17, 1998, by the Registrar of Companies, Tamil Nadu at Chennai. The registered office of MHRIL is at Mahindra Towers, 2nd Floor, No. 17 / 18, Patullos Road, Chennai – 600 002, India. MHRIL is in the Business of Hotel, Guest house, restaurant, conference centre, providing consultancy services for management of hotels, hospitality management schools and to purchase, sale, acquire, take on lease any real estate including land for holiday resort business of Company. Interest of the Promoter M&M holds 6,99,85,642 equity shares of ` 10.00 each, which constitute 83.09 % of the issued and paid-up share capital of MHRIL. Shareholding Pattern as on September 30, 2011 Sr. No.

Category of shareholder Number of share holders

Total number of

shares

Number of shares held

in de materialized

form

Total shareholding as a percentage of total number

of shares


encumbered

% of shares (A+B)1

% of shares (A+B+C)

Number of shares

% No. of shares

(A) Shareholding of Promoter and Promoter Group

(1) Indian


83

(a) Individuals/ Hindu Undivided Family

0 0 0 0.00 0.00 0 0.00

(b) Central Government/ State Government(s)

0 0 0 0.00 0.00 0 0.00

(c) Bodies Corporate 1 6,99,85,642 6,99,85,642 83.09 83.09 0 0.00

(d) Financial Institutions/ Banks 0 0 0 0.00 0.00 0 0.00

(e) Any Other (specify)

Any Other Total 0 0 0 0.00 0.00 0 0.00

Sub-Total (A)(1) 1 6,99,85,642 6,99,85,642 83.09 83.09 0 0.00

(2) Foreign

(a) Individuals (Non- Resident Individuals/ Foreign Individuals)

0 0 0 0.00 0.00 0 0.00

(b) Bodies Corporate 0 0 0 0.00 0.00 0 0.00

(c) Institutions 0 0 0 0.00 0.00 0 0.00

(d) Any Other (specify)

Any Other Total 0 0 0 0.00 0.00 0 0.00

Sub-Total (A)(2) 0 0 0 0.00 0.00 0 0.00

Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2)

1 6,99,85,642 6,99,85,642 83.09 83.09 0 0.00

(B) Public shareholding3

(1) Institutions

(a) Mutual Funds/ UTI 2 1,34,952 1,34,952 0.16 0.16 0 0.00

(b) Financial Institutions/ Banks 3 12,50,376 12,50,376 1.48 1.48 0 0.00

(c) Central Government/ State Government(s)

0 0 0 0.00 0.00 0 0.00

(d) Venture Capital Funds 0 0 0 0.00 0.00 0 0.00

(e) Insurance Companies 0 0 0 0.00 0.00 0 0.00

(f) Foreign Institutional Investors

17 27,18,227 27,18,227 3.23 3.23 0 0.00

(g) Foreign Venture Capital Investors

0 0 0 0.00 0.00 0 0.00

(h) Any Other (specify)

Any Other Total 0 0 0 0.00 0.00 0 0.00

Sub-Total (B)(1) 22 41,03,555 41,03,555 4.87 4.87 0 0.00

(2) Non-institutions

(a) Bodies Corporate 360 31,55,940 31,55,940 3.75 3.75 0 0.00

(b) Individuals

(i) Individual shareholders holding nominal share capital up to ` 1 Lac

9765 14,61,433 14,47,256 1.74 1.74 0 0.00

(ii) Individual shareholders holding nominal share capital in excess of ` 1 Lac

82 38,82,405 38,82,405 4.61 4.61 0 0.00

(c) Any Other (specify)

NRI’s 151 2,39,673 2,39,673 0.28 0.28 NA NA

Clearing Members 60 13,340 13,340 0.02 0.02 NA NA


84

HUF 369 95,786 95,786 0.11 0.11 NA NA

Foreign Corporate Bodies 1 8,24,565 8,24,565 0.98 0.98 NA NA

Trusts 2 4,67,433 4,67,433 0.55 0.55 NA NA

Any Other Total 583 16,40,797 16,40,797 1.95 1.95 0 0.00

Sub-Total(B)(2) 10,790 10,14,0575 1,01,26,398 12.04 12.04 0 0.00

Total Public Shareholding (B)= (B)(1)+(B)(2)

10,812 1,42,44,130 1,42,29,953 16.91 16.91 0 0.00

TOTAL(A)+(B) 10,813 8,42,29,772 8,42,15,595 100.00 100.00 0 0.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

C1 Promoter and Promoter group

0 0 0 0.00 0 0.00

C2 Public 0 0 0 0.00 0 0.00

Total C=C1+C2 0 0 0 0.00 0 0.00

GRAND TOTAL (A)+(B)+(C)

10,813 8,42,29,772 8,42,15,595 N.A. 100.00 0 0.00

Financial Performance The summary audited consolidated financial statements of MHRIL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 7,698 8,329 8,361 Reserves and Surplus (excluding revaluation reserve if any) 12,099 35,525 41,650 Total Income 44,212 52,128 54,644 Profit/(Loss) after Tax 7,971 11,707 10,029 Earnings Per Share (EPS) Basic (in `) 10.36 14.34 12.01 Earnings Per Share (EPS) Diluted (in `) 10.18 14.18 11.92 Profit and Loss Account (debit balance) Nil Nil Nil Miscellaneous Expenditure (to the extent not written off) Nil Nil Nil Networth 19,797 43,854 50,011 Net Asset Value (NAV) per share (in `) 25.27 52.07 59.37

Share price information The equity shares of MHRIL are listed on the NSE and the BSE. The details of the highest and lowest price on the NSE during the preceding six months are as follows:


July, 2011 411.95 341.55 August, 2011 386.85 340.25 September, 2011 359.95 306.00 October, 2011 341.85 304.00 November, 2011 347.80 287.00December, 2011 314.25 253.00

Source: www.nse-india.com The details of the highest and lowest price on the BSE during the preceding six months are as follows:


July, 2011 412.30 341.95 August, 2011 381.85 341.20 September, 2011 359.95 304.15 October, 2011 348.95 310.00


85

November, 2011 341.00 284.05 December, 2011 312.95 266.05

Source: www.bseindia.com In June 2009, MHRIL made an Initial Public Offer (IPO) for 92,65,275 equity shares of ` 10 each for cash at a premium of ` 290 per shares (including 33,69,191 equity shares offered for sale by M&M). The fresh issue aggregating to ` 17,688.25 Lacs out of which ` 12,093.74 Lacs have been spent towards the object of the issue as amended by shareholders in the Annual General Meeting on July 25, 2011 (` 10,648.00 Lacs were utilized for construction of resorts and ` 1,445.74 Lacs towards issue expenses) and the balance has been invested in debt schemes of mutual funds. Other than as stated above, MHRIL has not made any public or rights issue in the last three years and there has been no change in the capital structure in the last six months. Interest in the Company MHRIL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MHRIL is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects The IPO comprised a fresh issue of 58,96,084 equity shares and offer for sale of 33,69,191 equity shares by M&M. The fresh issue was aggregating to ` 17,688.25 Lacs and the net proceeds to the Company after final issue expenses was `16,243 Lacs out of which ` 12,093.74 Lacs have been spent towards the object of the issue as amended by shareholders in the Annual General Meeting on July 25, 2011 (`10,648.00 Lacs were utilized for construction of resorts and ` 1,445.74 Lacs towards issue expenses) and the balance has been invested in debt schemes of mutual funds. The IPO of the Company was planned with certain objects, as more particularly stated and described under section titled “Objects of the Issue” of the Prospectus, as were considered appropriate and necessary by the management at that point of time and as detailed hereunder:

(` in Lacs) Resorts / Projects for which Net Proceeds

from the IPO was proposed to be utilized as per prospectus

Total fund Requirement

Estimated amount to be utilized as per

Prospectus

Amount utilised till March 31, 2011

Ashtamudi 368 2,522 623Coorg 1,631 700 700Ooty 1,217 1,025 903Tungi 9,696 7.600 6,810Theog 7,465 4,275 658

Total 23,689 16,123 9,694 Out of the total Net Proceeds to the Issue being ` 16,243 Lacs through the IPO, ` 9,694 Lacs has been utilized as of March 31, 2011 in accordance with the objects set out in the ‘Objects of the Issue’ section in the Prospectus. The company at their Annual General Meeting held on July 25, 2011 has taken approval of shareholder to utilize the balance proceeds to part finance the construction and development of a new project at Virajpet, enhanced funds requirement at Tungi and some funds requirements for Ashtamudi and Theog Simla. The balance amount of ` 6,549 Lacs is substantially to be utilized for the existing resorts / new projects. Mechanism for redressal of investor grievance The board of MHRIL has formed the share allotment/transfer cum investor grievances committee. The Chairman of this committee is Mr. A K Nanda. Mr. Uday Y Phadke, a Non-Executive Director and Mr. Rajiv Sawhney, Managing Director & CEO are other members of the committee The committee meets as and when required, to inter-alia deal with matters relating to its terms of reference which include transfer of shares and monitoring redressal of complaints from shareholders relating to transfers, non-receipt of balance sheet and non-receipt of dividends declared. A total of 13 investor complaints were received during the last financial


86

year, all of which were disposed of satisfactorily. 5. Mahindra Lifespace Developers Limited (“MLDL”) Corporate Information MLDL was incorporated as “GESCO Corporation Private Limited” on March 16, 1999 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. Further, on conversion into a public company its name was changed to “Gesco Corporation Limited” on August 25, 1999. The name of the company was further changed to “Mahindra Gesco Developers Limited” on December 24, 2002. The name of the company was subsequently changed from “Mahindra Gesco Developers Limited” to “Mahindra Lifespace Developers Limited” on October 25, 2007. The registered office of MLDL is at Mahindra Towers, 5th Floor, Worli, Mumbai – 400 018. MLDL is principally engaged in the business of development of real estate, residential facilities, commercial complexes, and through its subsidiary companies is involved in various infrastructure projects including development of Special Economic Zones. Interest of the Promoter M&M holds 2,08,46,126 equity shares of ` 10.00 each, which constitute 51.05 % of the issued and paid-up share capital of MLDL. Shareholding Pattern as on September 30, 2011


holders

Total No. of Shares


Form

Total Shareholding as a % of total No. of Shares


As a % of (A+B)

As a % of (A+B+C)

Number of shares

As a % of Total No. of

Shares(A) Shareholding of Promoter and Promoter Group

(1) Indian Bodies Corporate 1 20,846,126 20,846,126 51.16 51.05 - -

Sub Total 1 20,846,126 20,846,126 51.16 51.05 - - (2) Foreign

Total shareholding of Promoter and Promoter Group (A) 1 20,846,126 20,846,126 51.16 51.05 - -

(B) Public Shareholding (1) Institutions

Mutual Funds / UTI 23 1,920,731 1,918,763 4.71 4.70 - - Financial Institutions / Banks 116 72,784 67,338 0.18 0.18 - - Insurance Companies 7 376,065 376,009 0.92 0.92 - -Foreign Institutional Investors 88 10,547,944 10,545,177 25.89 25.83 - -

Sub Total 234 12,917,524 12,907,287 31.70 31.63 - - (2) Non-Institutions

Bodies Corporate 1,157 2,422,312 2,410,672 5.94 5.93 - - Individuals - - Individual shareholders holding nominal share capital up to ` 1 Lac

74,735 3,811,420 3,088,155 9.35 9.33 - -


16 548,979 548,979 1.35 1.34 - -

Any Others (Specify) 704 202,719 197,460 0.50 0.50 - - Non Resident Indians 686 196,688 191,715 0.48 0.48 - -Overseas Corporate Bodies 8 307 21 - - - - Trusts 10 5,724 5,724 0.01 0.01 - -

Sub Total 76,612 6,985,430 6,245,266 17.14 17.11 - - Total Public shareholding (B) 76,846 19,902,954 19,152,553 48.84 48.74 - - Total (A)+(B) 76,847 40,749,080 39,998,679 100.00 99.79 - -


87


holders

Total No. of Shares


Form

Total Shareholding as a % of total No. of Shares


As a % of (A+B)

As a % of (A+B+C)

Number of shares

As a % of Total No. of

Shares(C) Shares held by Custodians and against which Depository Receipts have been issued

(1) Promoter and Promoter Group - - - - - - - (2) Public 2 86,070 85,790 0.21 0.21 - - Sub Total 2 86,070 85,790 0.21 0.21 - -

Total (A)+(B)+(C) 76,849 40,835,150 40,084,469 - 100.00 - - Financial Performance The summary audited consolidated financial statements of MLDL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 4,080.92 4,080.92 4,083.52 Reserves and Surplus (excluding revaluation reserve if any) 88,388.26 93,755.33 1,02,371.20 Total Income 37,117.82 43,995.46 62,701.50 Profit/(Loss) after Tax 6,564.11 7,849.05 10,817.27 Earnings Per Share (EPS) (basic and diluted) (in `) 15.79 18.93 26.20 Profit and Loss Account (debit balance) 0.00 0.00 0.00 Miscellaneous Expenditure (to the extent not written off) 0.00 0.00 0.00Networth 93,490.60 98,876.42 1,06,518.46 Net Asset Value (NAV) per share (in `) 226.64 239.84 260.85 Share price information The equity shares of MLDL are listed on the NSE and the BSE. The details of the highest and lowest price on the NSE during the preceding six months are as follows: Month Monthly High Monthly Low


July, 2011 385.00 352.20 August, 2011 361.50 300.00 September, 2011 328.00 287.05 October, 2011 316.00 281.00 November, 2011 313.00 260.00 December, 2011 276.00 235.00 Source: www.bseindia.com MLDL has not made any public or rights issue in the last three years and there has been no change to the capital structure in the last six months. Interest in the Company


88

MLDL does not have any interest, including any business or other interest, in the Company. Further, it has no interest in our promotion. MLDL is not interested in any property acquired by us within the last two years or proposed to be acquired by us. Promise vis-à-vis Objects MLDL has not a public issue / rights issue in last 10 years. Mechanism for redressal of investor grievance The registrar and transfer agents (RTA) of the company, M/s. Sharepro Services (I) Private Limited attend to correspondence with the shareholders/ investors. RTA submits its periodical report on the complaints received, resolved and pending to the company secretary & compliance officer of the company. At every Board meeting, the Board reviews the status of Investor's complaints, if any. The Board has constituted a shareholder's and investor's grievance committee to look into the complaints pertaining to transfers/ transmission of shares, non-receipt of dividend / interest, and any other related matters. The shareholder’s and investor’s grievance committee of MLDL comprises two non executive directors, Mr. Arun Nanda and Dr. Prakash Hebalkar. Mr. Arun Nanda is the chairman of the committee. Typically the investor grievances are dealt within 14 days of filing the complaint. During the financial year 2010 – 2011 the committee met on February 05, 2011. A total of 13 investor complaints were received during the last financial year, all of which were disposed of satisfactorily. Group Companies which have become sick industrial companies and/or are under winding-up and/or with negative networth: 1. Mahindra Gujarat Tractor Limited (“MGTL”) Corporate Information MGTL was incorporated on March 31, 1978 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Gujarat. The registered office of MGTL is at Mahindra Gujarat Tractor Limited, Vishwamitri Railway Over Bridge, Vadodara - 390 011, Gujarat, India. equity shares of MGTL are not listed on any stock exchange. MGTL is principally engaged in the business of manufacture and sale of tractors in a range from 30HP to 60HP marketed under the “SHAKTIMAAN” brand. Interest of the Promoters M&M, together with its wholly owned subsidiary Mahindra Holdings Limited (“MHL”), holds 91,81,188 equity shares of ` 10.00 each, which constitute 60% of the issued and paid-up share capital of MGTL. Financial Performance The summary audited consolidated financial statements of MGTL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 1,530.20 1,530.20 1,530.20 Preference Share Capital of MGTL (par value ` 10 per share) 500.00 500.00 500.00 Reserves and Surplus (excluding revaluation reserve if any) 217.13 217.13 217.13 Total Income 7,409.77 7,618.30 8,737.63 Profit/(Loss) after Tax (139.21) 302.21 390.79 Earnings Per Share (EPS) (basic and diluted) (in `) (1.23) 1.65 2.23 Profit and Loss Account (debit balance) (4,484.09) (4,181.88) (3,791.09) Miscellaneous Expenditure (to the extent not written off) 0.00 0.00 0.00Networth (2,236.76) (1,934.55) (1,543.76) Net Asset Value (NAV) per share (in `) (17.88) (15.91) (13.35)


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Interest in the Company MGTL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MGTL is not interested in any property acquired by us within the last two years or proposed to be acquired us. Reference to BIFR under the provisions of SICA The Company filed a mandatory reference with the Board for Industrial and Financial Reconstruction (BIFR) u/s 15(1) of SICA which was registered as Case No. 389/2002. The said reference was taken up for consideration by the BIFR for the first time on 7th July, 2004, whereat the BIFR declared the Company sick within the meaning of section 3(1)(o) of the SICA and directed the Company to submit its Draft Rehabilitation Scheme u/s 17(2) of SICA. BIFR at the hearing held on 23.07.2008 appointed State Bank of India (SBI) as Operating Agency (OA) under SICA with directions to prepare revival scheme. After several hearings since then and after considering submissions of the Company and SBI, the BIFR at its last meeting directed, inter-alia, the Company to submit revised Draft Rehabilitation Scheme (DRS). Accordingly Draft Rehabilitation Scheme has been submitted with SBI and BIFR. Further, directions from BIFR are awaited. 2. Mahindra Shubhlabh Services Limited (“MSSL”) Corporate Information MSSL was incorporated on April 11, 2000 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The registered office of MGTL is at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra, India. Equity shares of MSSL are not listed on any stock exchange. MSSL is principally engaged in the business of production & trading of agri-inputs and domestic sales & export of fresh fruit produce. Interest of the Promoters M&M, together with its wholly owned subsidiary MHL, holds 61,14,514 equity shares of ` 10.00 each, which constitute 100% of the issued and paid-up share capital of MSSL. Financial Performance The summary audited consolidated financial statements of MSSL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 3893.35 3893.35 611.45 Reserves and Surplus (excluding revaluation reserve if any) 505.30 505.30 0 Total Income 5,066.25 8,457.03 2,787.65 Profit/(Loss) after Tax (67.83) 54.25 (815.70) Earnings Per Share (EPS) (basic and diluted) (in `) (0.23) 0.14 (13.34) Profit and Loss Account (debit balance) 2,991.20 2,936.95 795.65 Miscellaneous Expenditure (to the extent not written off) 0 0 0 Networth 1,407.45 1,461.70 (184.20) Net Asset Value (NAV) per share (in `) 3.62 3.75 (3.01) MSSL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company MSSL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion.


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MSSL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 3. Mahindra Automobile Distributor Private Limited (“MADPL”) Corporate Information MADPL (earlier Mahindra Renault Private Limited) was incorporated on June 2, 2005 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The registered office of MADPL is at Gateway Building, Apollo Bunder, Mumbai – 400 001, Maharashtra, India. Equity shares of MADPL are not listed on any stock exchange. MADPL is principally engaged in the business of designing, developing, manufacturing, producing, assembling, selling, distributing, exporting, importing and/or marketing automotive vehicles and related parts, components, spare parts and accessories manufacture. It manufactures Light Motor Vehicles under the brand “Verito”. Interest of the Promoters M&M, together with its wholly owned subsidiary MHL, holds 35,54,55,040 equity shares of MADPL i.e. 95% of the issued and paid-up share capital of MADPL. Financial Performance The summary audited consolidated financial statements of MADPL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 19,926 19,926 37,416 Reserves and Surplus (excluding revaluation reserve if any) 10,248 10,248 10,231 Total Income 60,914 30,832 51,881 Profit/(Loss) after Tax (49,021) (8,153) (2,084) Earnings Per Share (EPS) (basic and diluted) (in `) (24.60) (4.09) (0.67) Profit and Loss Account (debit balance) (58,062) (66,215) (68,299) Miscellaneous Expenditure (to the extent not written off) - - - Networth (47,358) (61,333) (37,372) Net Asset Value (NAV) per share (in `) (23.77) (30.78) (9.99) MADPL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company MADPL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MADPL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 4. Mahindra Two Wheelers Limited (“MTWL”) Corporate Information MTWL was incorporated on August 5, 2008 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The registered office of MTWL is at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. Equity shares of MTWL are not listed on any stock exchange. MTWL is principally engaged in the business of designing, developing, manufacturing, assembling, testing, producing, buying, selling, distributing, servicing, dealing in two wheeled vehicles. Interest of the Promoters M&M holds 29,72,99,975 equity shares of ` 10.00 each, which constitute 82.93% of the issued and paid-up share capital


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of MTWL. Financial Performance The summary audited consolidated financial statements of MTWL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 14,750 14,750 14,750 Reserves and Surplus (excluding revaluation reserve if any) (2,250) (11,941) (28,863) Total Income 1,670 23,763 51,711 Profit/(Loss) after Tax (2,250) (9,691) (16,922) Earnings Per Share (EPS) (basic and diluted) (in `) (2.74) (6.57) (11.47) Profit and Loss Account (debit balance) (2,250) (11,941) (28,863) Miscellaneous Expenditure (to the extent not written off) - - - Networth 12,500 2,809 (14,113) Net Asset Value (NAV) per share(in `) 8.47 1.90 (9.57) MTWL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company MTWL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MTWL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 5. Mahindra Automotive Australia Pty. Limited (“MAAPL”) Corporate Information MAAPL was incorporated on September 23, 2008. The registered office of MAAPL is at Level 1, 1 Kiora Rd (cnr Kumbardang Ave), Miranda, Sydney, NSW 2228, Australia. Equity shares of MAAPL are not listed on any stock exchange. MAAPL is principally engaged in the business of importing and distributing Mahindra vehicles, accessories and spare parts in Australia. Interest of the Promoters M&M holds 2,375,000 equity shares of AUD 1 each, which constitute 100% of the issued and paid-up share capital of MAAPL. Financial Performance The summary audited consolidated financial statements of MAAPL for the last three years are as follows:

(in AUD) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Equity Share Capital 875,000 875,000 2,375,000 Reserves and Surplus (excluding revaluation reserve if any) (644,942) (1,750,107) (2,517,801) Total Income 391490 5148573 5188554 Profit/(Loss) after Tax (644,942) (1,105,165) (864,607) Earnings Per Share (EPS) (basic and diluted) (0.74) (1.26) (0.36) Profit and Loss Account (debit balance) Miscellaneous Expenditure (to the extent not written off) - - - Networth 230,058 (778,194) (142,801) Net Asset Value (NAV) per share 0.26 (0.89) (0.06) MAAPL is not a sick company and is not under the process of winding-up.


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Interest in the Company MAAPL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MAAPL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 6. Kota Farm Services Limited (“KFSL”) Corporate Information Kota Farm Services Limited was incorporated on April 20, 2001 under the Companies Act. Its registered office is located at Mahindra Towers, 5th Floor, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. Equity shares of KFSL are not listed on any stock exchange.It is involved in the business of Agri farm business and services. Interest of the Promoters M&M holds 2,73,420 equity shares constituting 45% of the issued and paid-up share capital of KFSL. Financial Performance The summary audited consolidated financial statements of KFSL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 60.76 60.76 60.76 Reserves and Surplus (excluding revaluation reserve if any) - - - Total Income - - - Profit/(Loss) after Tax (0.17) (0.07) (0.07)Earnings Per Share (EPS) (basic and diluted) (in `) (0.03) (0.01) (0.01) Profit and Loss Account (debit balance) 90.96 91.04 91.11 Miscellaneous Expenditure (to the extent not written off) - - - Networth (30.20) (30.28) (30.35) Net Asset Value (NAV) per share(in `) (4.97) (4.98) (4.99) KFSL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company KFSL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. KFSL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 7. Mriyalguda Farm Solution Limited (“MGFSL”) Corporate Information MGFSL was incorporated on October 11, 2000 under the Companies Act. Its registered office is located at Mahindra Towers, 5th Floor, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. Equity shares of MGFSL are not listed on any stock exchange.It is involved in the business of Agri farm business and services. Interest of the Promoters M&M holds 3,37,500 equity shares constituting 45 % of the issued and paid-up share capital of MGFSL. Financial Performance The summary audited consolidated financial statements of MGFSL for the last three years are as follows:


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Equity Share Capital (par value ` 10 per equity share) 75.00 75.00 75.00 Reserves and Surplus (excluding revaluation reserve if any) - - -Total Income 0.00 0.02 - Profit/(Loss) after Tax (0.10) (0.33) (0.07) Earnings Per Share (EPS) (basic and diluted) (in `) 0.00 0.00 0.00 Profit and Loss Account (debit balance) 78.89 79.22 79.29 Miscellaneous Expenditure (to the extent not written off) - - - Networth (3.89) (4.22) (4.29) Net Asset Value (NAV) per share (in `) (0.52) (0.56) (0.57) MGFSL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company MGFSL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MGFSL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 8. Mega One Stop Farm Services Limited (“MOSFSL”) Corporate Information MOSFSL was incorporated on September 18, 2000 under the Companies Act. Its registered office is located at Mahindra Towers, 5th Floor, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. Equity shares of MOSFSL are not listed on any stock exchange. It is involved in the business of distributing and retailing of seeds, fertilizers, agro chemicals, nutrients and all other type of related activity. Interest of the Promoters M&M holds 3,51,000 equity shares constituting 45% of the issued and paid-up share capital of MOSFSL. Financial Performance The summary audited consolidated financial statements of MOSFSL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 78.00 78.00 78.00 Reserves and Surplus (excluding revaluation reserve if any) - - - Total Income 0.00 0.01 - Profit/(Loss) after Tax (1.35) (0.96) (0.39) Earnings Per Share (EPS) (basic and diluted) (in `) (0.02) (0.01) (0.00) Profit and Loss Account (debit balance) 130.47 131.43 131.81 Miscellaneous Expenditure (to the extent not written off) - - - Networth (52.47) (53.43) (53.81) Net Asset Value (NAV) per share(in `) (6.73) (6.85) (6.90) MOSFSL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company MOSFSL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MOSFSL is not interested in any property acquired by us within the last two years or proposed to be acquired us.


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9. Vayugrid Marketplace Services Private Limited (“VMSPL”) Corporate Information VMSPL was incorporated on October 16, 2008 under the Companies Act. Its registered office is located at 129A, Shaniwar Peth, Pune - 411 030, Maharashtra, India. It is involved in the business of contract farming. Interest of the Promoters M&M holds 10,00,000 equity shares constituting 21.83 % of the issued and paid-up share capital of VMSPL. Financial Performance The summary audited consolidated financial statements of VMSPL for the last three years are as follows:

( ` in Lac) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Equity Share Capital (par value ` 10 per equity share) 1 202.00 458.12 Share Application Money 71.91 131.85 29.68 Reserves and Surplus (excluding revaluation reserve if any) - - - Total Income (Revenue) - 1.20 241.12 Profit/(Loss) after Tax (11.86) (199.53) (600.23)Earnings Per Share (EPS) (basic and diluted) (118.57) (9.88) (13.10)Profit and Loss Account (debit balance) (11.86) (211.38) (811.61) Miscellaneous Expenditure (to the extent not written off) 29.28 1.23 Networth 61.06 122.47 (323.82) VMSPL is not a sick company and is not under the process of winding-up. Interest in the Company VMSPL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. VMSPL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 10. Mahindra Construction Company Limited (“MCCL”) Corporate Information MCCL was incorporated on September 30, 1992 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is engaged in the business of construction. Interest of the Promoters M&M holds 9,00,000 equity shares constituting 37.49 % of the issued and paid-up share capital of MCCL. Financial Performance The summary audited consolidated financial statements of MCCL for the last three years are as follows:

(` in Lac) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Equity Share Capital (par value ` 10 per equity share) 240.05 240.05 240.05 Reserves and Surplus (excluding revaluation reserve if any) - - - Total Income 3.32 9.87 11.27 Profit/(Loss) after Tax (30.42) (10.84) (14.15) Earnings Per Share (EPS) (basic and diluted) (in `) (1.28) (0.45) (0.59) Profit and Loss Account (debit balance) 1,648.55 1,659.38 1,673.54


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Miscellaneous Expenditure (to the extent not written off) - - - Networth (868.49) (879.33) (893.49) Net Asset Value (NAV) per share(in `) (36.18) (36.63) (37.22) MCCL is not a sick company and is not under the process of winding-up. Interest in the Company MCCL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MCCL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 11. Officemartindia.com Limited (“OMIL”) Corporate Information OMIL was incorporated on May 17, 2000 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai – 400 001, Maharashtra, India. It is involved in the business of buying, selling, procuring, hiring, trading in stationery, supplies, furniture, equipments, materials, devices, and providing consulting services, technical knowhow, management resources etc. Interest of the Promoters M&M holds 7,49,997 equity shares constituting 49.99 % of the issued and paid-up share capital of OMIL. Financial Performance The summary audited consolidated financial statements of OMIL for the last three years are as follows:

( ` in Lac) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Equity Share Capital (par value ` 10 per equity share) 149.99 149.99 149.99 Reserves and Surplus (excluding revaluation reserve if any) - - - Total Income - - - Profit/(Loss) after Tax (0.29) (0.18) (0.17)Earnings Per Share (EPS) (basic and diluted) (in `) -0.02 -0.01 -0.01 Profit and Loss Account (debit balance) (172.71) (172.89) (173.06) Miscellaneous Expenditure (to the extent not written off) - - - Networth (22.71) (22.89) (23.06)Net Asset Value (NAV) per share(in `) (1.51) (1.53) (1.54) OMIL is not a sick company and is not under the process of winding-up. Interest in the Company OMIL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. OMIL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 12. Mahindra Engineering GmbH (“MEG”) Corporate Information MEG was incorporated on October 29, 2001 under the provisions of the prevalent laws governing companies in Germany. The registered office of MEG is at Leonardo-da-Vinci- Allee 3, 60486 Frankfurt am Main, Germany. Equity shares of MEG are not listed on any stock exchange.


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MEG is principally engaged in the business of providing Information technology enabled engineering services. Interest of the Promoters M&M controls 87.39% of the total voting rights of MEG. Financial Performance The summary audited consolidated financial statements of MEG for the last three years are as follows:

(in €) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Equity Share Capital 59,000 59,000 59,000Reserves and Surplus (excluding revaluation reserve if any) - - - Total Income 50,421 81,834 107,995 Profit/(Loss) after Tax (31,690) (132,719) (486,956) Earnings Per Share (EPS) (basic and diluted) (0.54) (2.25) (8.25) Profit and Loss Account (debit balance) 38,894 171,613 658,569 Miscellaneous Expenditure (to the extent not written off) - - - Networth 20,106 (112,613) (599,569)Net Asset Value (NAV) per share 0.34 (1.91) (10.16) MEG is not a sick company and is not under the process of winding-up. Interest in the Company MEG does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MEG is not interested in any property acquired by us within the last two years or proposed to be acquired us. 13. Stokes Group Limited (“SGL”) Corporate Information SGL was incorporated on December 12, 1990 in United Kingdom under the English Companies Act of 1989. The registered office of SGL is at Victor Works Northcote Street Walsall, West Midlands, WS2 8BH. Equity shares of SGL are not listed on any stock exchange. SGL is principally engaged in the business of manufacturing of metal forgings for the automotive industry and general engineering. Interest of the Promoters M&M controls 52.93% of the total voting rights of SGL. Financial Performance The summary audited consolidated financial statements of SGL for the last three years are as follows:

(In £) Particulars Fiscal 2009 Fiscal 2010 Fiscal 2011

Allotted, issued and fully paid - 15,477,310 (5,477,310 2009) Ordinary Shares of 0.10

547,731 1,547,731 1,547,731

Reserves and Surplus (excluding revaluation reserve if any) - - - Total Income 27,225,364 19,334,768 21,999,876 Profit/(Loss) after Tax (6,491,929) (3,746,579) (1,153,449) Earnings Per Share (EPS) (basic and diluted) 0 0 0 Miscellaneous Expenditure (to the extent not written off) 0.00 0.00 0.00 Networth (3,139,793) (1,886,372) (3,039,821) Net Asset Value (NAV) per share (0.57) (0.12) (0.20)


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SGL is not a sick company and is not under the process of winding-up. Interest in the Company SGL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. SGL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 14. Heritage Bird (M) Sdn Bhd (“Heritage”) Corporate Information Heritage was incorporated on July 7, 2007 in Malaysia. The registered office of Heritage is at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor, Malaysia. Equity shares of Heritage are not listed on any stock exchange. Heritage is principally engaged in the business of general merchants, traders, suppliers, importers, exporters, storers, storekeepers, brokers, distributors, manufacturers, manufacturers’ representatives, commission, managing and general agents, franchisers, and or in any other capacity and to carry on, in all or any of their respective branches, all or any of the business of general contractors, contractors, developers and property developers. Interest of the Promoters M&M controls 83.09% of the total voting rights of Heritage. Financial Performance The summary audited consolidated financial statements of Heritage for the last three years are as follows:


Equity Share Capital (par value Myr 1* per equity share) 44.70 44.70 44.70 Reserves and Surplus (excluding revaluation reserve if any) (11.59) (26.24) (47.32) Total Income 87.17 116.22 120.24 Profit/(Loss) after Tax (7.44) (14.65) (21.08) Earnings Per Share (EPS) (basic and diluted) (in `) (0.17) (0.33) (0.47) Profit and Loss Account (debit balance) (11.59) (26.24) (47.32)Miscellaneous Expenditure (to the extent not written off) 0.00 0.00 0.00 Networth 33.11 18.60 (2.62) Net Asset Value (NAV) per share (in `) 0.74 0.42 (0.06) (1 Myr = ` 14.90) Heritage is not a sick company and is not under the process of winding-up. Interest in the Company Heritage does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. Heritage is not interested in any property acquired by us within the last two years or proposed to be acquired us. 15. Mahindra Bebanco Developers Limited (“MBDL”) Corporate Information MBDL was incorporated on June 3, 2008 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The registered office of MBDL is at 5th Floor, Mahindra Towers, P.K. Kurne chowk, Worli, Mumbai – 400 018. Equity shares of MBDL are not listed on any stock exchange.


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MBDL is principally engaged in the business of establishing, acquiring, developing and maintaining Industrial Parks, Technology Parks, Software Parks, Special Economic zones, Export Processing Zones, Industrial Areas and Industrial estates for industries. Interest of the Promoters M&M controls 35.73% of the total voting rights of MBDL. Financial Performance The summary audited consolidated financial statements of MBDL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 5.00 5.00 5.00 Reserves and Surplus (excluding revaluation reserve if any) 0.00 0.00 0.00 Total Income 0. 25 0.00 0.00 Profit/(Loss) after Tax (31.97) (1.14) (5.34) Earnings Per Share (EPS) (basic and diluted) (in `) (66.13) (2.29) (10.67) Profit and Loss Account (debit balance) 31.97 33.11 38.45 Miscellaneous Expenditure (to the extent not written off) 0.00 0.00 0.00 Networth (26.97) (28.11) (33.45) Net Asset Value (NAV) per share (in `) (53.94) (56.23) (66.90) MBDL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company MBDL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MBDL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 16. Raigad Industrial and Business Park Limited (“RIBPL”) Corporate Information RIBPL was incorporated on June 18, 2009 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The registered office of RIBPL is at 5th Floor, Mahindra Towers, P.K. Kurne chowk, Worli, Mumbai – 400 018, Maharashtra, India. Equity shares of RIBPL are not listed on any stock exchange. RIBPL is principally engaged in the business developing and maintaining Industrial Parks, Technology Parks, Software Parks, Special Economic Zones, Export Processing Zones, Industrial Areas and Industrial Estates for industries. Interest of the Promoters M&M controls 51.05% of the total voting rights of RIBPL. Financial Performance The summary audited consolidated financial statements of RIBPL for the last two years are as follows:

(` in Lacs) Particulars Fiscal 2010* Fiscal 2011

Equity Share Capital (par value ` 10 per equity share) 5.00 5.00 Reserves and Surplus (excluding revaluation reserve if any) - - Total Income - - Profit/(Loss) after Tax (6.35) (0.93)


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Particulars Fiscal 2010* Fiscal 2011

Earnings Per Share (EPS) (basic and diluted) (in `) (16.27) (1.86) Profit and Loss Account (debit balance) 6.35 7.28 Miscellaneous Expenditure (to the extent not written off) - - Networth (1.34) (2.27)Net Asset Value (NAV) per share (in `) (2.70) (4.56) *As RIBPL was incorporated in June 2009 no accounts were prepared for Fiscal 2009 and accounts for 2010 are from June 10, 2009. RIBPL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company RIBPL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. RIBPL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 17. Mahindra Electrical Steel Limited (“MESL”) Corporate Information MESL was incorporated on June 10, 2009 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The registered office of MESL is at Mahindra Towers, P.K. Kurne chowk, Worli, Mumbai – 400 018, Maharashtra, India. Equity shares of MESL are not listed on any stock exchange. MESL is principally engaged in the business of manufacturing, processing, dealing, exporting and importing non-ferrous / ferrous materials including electrical steel. Interest of the Promoters M&M controls 100% of the total voting rights of MESL. Financial Performance The summary audited consolidated financial statements of MESL for the last two years are as follows:

(` in Lacs) Particulars Fiscal 2010* Fiscal 2011

Equity Share Capital (par value ` 10 per equity share) 5.00 5.00 Reserves and Surplus (excluding revaluation reserve if any) - - Total Income - -Profit/(Loss) after Tax (12.28) (1.97) Earnings Per Share (EPS) (basic and diluted) (in `) (24.57) (2.95) Profit and Loss Account (debit balance) 12.28 14.26 Miscellaneous Expenditure (to the extent not written off) - -Networth (7.28) (9.26) Net Asset Value (NAV) per share (in `) (14.57) (18.52)

*As MESL was incorporated in June 2009 no accounts were prepared for Fiscal 2009 and accounts for 2010 are from June 10, 2009. MESL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company MESL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion.


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MESL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 18. Retail Initiative Holdings Limited (“RIHL”) Corporate Information RIHL was incorporated on December 11, 2008 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The registered office of RIHL is at Mahindra Towers, P.K. Kurne chowk, Worli, Mumbai – 400 018, Maharashtra, India. Equity shares of RIHL are not listed on any stock exchange. RIHL is principally engaged in the business investing in companies /entities. Interest of the Promoters M&M controls 100% of the total voting rights of share capital of RIHL. Financial Performance The summary audited consolidated financial statements of RIHL for the last three years are as follows:


Equity Share Capital (par value ` 10 per equity share) 5.00 5.00 5.00 Reserves and Surplus (excluding revaluation reserve if any) - - - Total Income - - - Profit/(Loss) after Tax (44.36) (51.85) (0.44) Earnings Per Share (EPS) (basic and diluted) (in `) (291.74) (103.69) (0.88) Profit and Loss Account (debit balance) (44.36) (96.21) (96.65) Miscellaneous Expenditure (to the extent not written off) - - - Networth (39.36) (91.21) (91.65) Net Asset Value (NAV) per share (in `) (78.72) (182.42) (183.29) RIHL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company RIHL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. RIHL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 19. Mahindra Technologies Services Inc. (“MTS”) Corporate Information MTS was incorporated on June 4, 2009. The registered office of MTS is at 101 W Big Beaver Road, 14th Floor, Troy, Michigan 48084, USA. Equity shares of MTS are not listed on any stock exchange. MTS is principally engaged in the business of rendering engineering services. Interest of the Promoters M&M controls 87.39% of the total voting rights of MTS. Financial Performance The summary audited consolidated financial statements of MTS for the last two years are as follows:


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(in US$) Particulars Fiscal 2010 Fiscal 2011

Equity Share Capital 50,000 50,000Reserves and Surplus (excluding revaluation reserve if any) 72,740 (106,375) Total Income 1,331,142 3,320,278 Profit/(Loss) after Tax 72,740 (179,115) Earnings Per Share (EPS) (basic and diluted) 14.55 (35.82) Profit and Loss Account (debit balance) 0 (106,375) Miscellaneous Expenditure (to the extent not written off) 0 0 Networth 122,740 (56,375) Net Asset Value (NAV) per share 24.55 (11.28) MTS is not a sick company and is not under the process of winding-up. Interest in the Company MTS does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MTS is not interested in any property acquired by us within the last two years or proposed to be acquired us. 20. Aerostaff Australia Pty Limited (“AAPL”) Corporate Information AAPL was incorporated on March 2, 1990. The registered office of AAPL is at 32, Network Drive, Port Melbourne, Victoria – 3207, Australia. Equity shares of AAPL are not listed on any stock exchange. AAPL is principally engaged in the business of manufacture of aerospace components & assemblies. Interest of the Promoters M&M controls 66.67% of the total voting rights of AAPL. Financial Performance The summary audited consolidated financial statements of AAPL for the last three years are as follows:

(in AU$) Particulars Fiscal 2009

Fiscal 2010

9 months

ended March 2011

Equity Share Capital 4 4 350,004Reserves and Surplus (excluding revaluation reserve if any) 326,392 - - Total Income 7,709,652 2,747,698 2,155,588 Profit/(Loss) after Tax 9,98,153 (6,77,103) (768,433) Earnings Per Share (EPS) (basic and diluted) 99,815 (67,710) (2.20) Profit and Loss Account (debit balance) - (248,711) (1,017,144) Miscellaneous Expenditure (to the extent not written off) - - - Networth 326,396 (248,707) (667,140) Net Asset Value (NAV) per share 32,639 (24,871) (1.91) AAPL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company AAPL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. AAPL is not interested in any property acquired by us within the last two years or proposed to be acquired us.


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21. Bristlecone Consulting Limited (“BCL”) Corporate Information BCL was incorporated on June 1, 2010. The registered office of RIHL is at 1500 Royal Centre, 1055 West Georgia Street, Vancouver, BC, V6E 4N7. Equity shares of BCL are not listed on any stock exchange. BCL is principally engaged in the business of providing information technology consulting services. Interest of the Promoters M&M controls 79.71% of the total voting rights of share capital of BCL. Financial Performance The summary audited consolidated financial statements of BCL for the last 1 year* are as follows:

(in Canadian $) Particulars Fiscal 2011

Equity Share Capital 1.00 Reserves and Surplus (excluding revaluation reserve if any) - Total Income - Profit/(Loss) after Tax (5,556) Earnings Per Share (EPS) (basic and diluted) (in `) (5,556) Profit and Loss Account (debit balance) (5,556) Miscellaneous Expenditure (to the extent not written off) - Networth (5,555) Net Asset Value (NAV) per share (in `) (5,555) * As BCL was established in June 2010. Therefore Audited numbers for 2010 are not available # 1 Canadian $ = ` 46.54 BCL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company BCL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. BCL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 22. Ssangyong European Parts Center B.V. (“SEPC”) Corporate Information SEPC was incorporated on December 11, 2006. The registered office of SEPC is at IABC 5253, 4814 RD Breda, the Netherlands. Equity shares of SEPC are not listed on any stock exchange. SEPC is principally engaged in the business of distributing Ssangyong automotive spare parts to the distributor companies in Europe. Interest of the Promoters M&M controls 70.04% of the total voting rights of SEPC. Financial Performance The summary audited consolidated financial statements of SEPC for the last three years* are as follows:

(in €) Particulars CY 2008 CY 2009 CY 2010

Equity Share Capital (par value Euro 100 per equity share) 700,000 700,000 700,000


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Particulars CY 2008 CY 2009 CY 2010

Reserves and Surplus (excluding revaluation reserve if any) (1,803,852) (3,954,401) (4,170,237)Total Income 14,501,563 9,557,130 10,727,795Profit/(Loss) after Tax (289,505) (2,150,549) (215,836)Earnings Per Share (EPS) (basic and diluted) in Euro (41.36) (307.22) (30.83)Profit and Loss Account (debit balance) 1,803,852 3,954,401 4,170,237Miscellaneous Expenditure (to the extent not written off) - - -Networth (1,103,852) (3,254,401) (3,470,237)Net Asset Value (NAV) per share in Euro (157.69) (464.91) (495.75)*Financial Year ending December 31 SEPC is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company SEPC does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. SEPC is not interested in any property acquired by us within the last two years or proposed to be acquired us. 23. Mahindra Aerostructures Private Limited (“MAPL”) Corporate Information MAPL was incorporated on January 27, 2011 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The registered office of MAPL is at Mahindra Towers, P.K. Kurne chowk, Worli, Mumbai – 400 018, Maharashtra, India. Equity shares of MAPL are not listed on any stock exchange. MAPL is principally engaged in the business of conceptualizing, designing, developing, manufacturing, assembling, testing, overhauling, importing, exporting, reconditioning, renovating, inventing, repairing, maintaining, operating for hire, or otherwise dealing in aircraft and spacecraft of all descriptions including but not limited to aeroplanes, airships, hovercrafts, seaplanes, helicopters, space launchers, satellites, missiles, unmanned aircraft, other flying machines of all kinds. Interest of the Promoters M&M controls 66.67% of the total voting rights of MAPL. Financial Performance The summary audited consolidated financial statements of MAPL for the last three years are as follows:

(` in Lacs) Particulars Fiscal 2011

Equity Share Capital (par value ` 10 per equity share) 1.00 Reserves and Surplus (excluding revaluation reserve if any) - Total Income - Profit/(Loss) after Tax (190.15) Earnings Per Share (EPS) (basic and diluted) (in `) (1901.52) Profit and Loss Account (debit balance) (190.15) Miscellaneous Expenditure (to the extent not written off) - Networth (189.15) Net Asset Value (NAV) per share (in `) (1,891.5) MAPL is not a sick company under Sick Industrial Companies (Special Provisions) Act, 1985 and is not under the process of winding-up. Interest in the Company MAPL does not have any interest, including any business or other interest, in us. Further, it has no interest in our


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promotion. MAPL is not interested in any property acquired by us within the last two years or proposed to be acquired us. 24. Machinery Manufacturers Corporation Limited (“MMCL”) Corporate Information Machinery Manufacturers Corporation Limited has been directed for winding up vide order dated April 26, 1989 by the High Court of Judicature at Bombay. All records of Machinery Manufacturers Corporation Limited had been handed over to the liquidator appointed by the High Court. Financial information The last available financial statement of Machinery Manufacturers Corporation Limited is as follows:

(` in Lacs except share data) Particulars For the year ending September 30, 1987

Equity Capital 356 Reserves and Surplus (excluding revaluation reserves) - (3035)Total revenue 1577 Profit (Loss) after Tax (1332) EPS (in `) (42.13) NAV per share (in `) (77.96) 25. Montreal Engineering International Limited Corporate Information Montreal Engineering International Limited is under Members’ Voluntary winding up since December 14, 1979 and all the records have been handed over to the liquidator. The financial information is thus not available. 26. Triton Overwater Transport Agency Limited Corporate Information Triton Overwater Transport Agency Limited was in the business of providing ferry water hovercraft services and its operations were rendered unviable due to a variety of reasons including the lack of adequate infrastructure at landing points, suspension of services during monsoons and high operational costs. Triton Overwater Transport Agency Limited is under liquidation. All records Triton Overwater Transport Agency Limited had been handed over to the liquidator appointed by the High Court. Financial information The last available financial statement of Triton Overwater Transport Agency Limited is as follows:

(` in Lacs except share data) Particulars For the year ending March 31, 2003

Equity Capital 265 Reserves and Surplus (excluding revaluation reserves) - (1863) Total revenue Nil Profit (Loss) after Tax (199) EPS (in `) (8.29) NAV per share (in `) (66.66)

27. Roplas (India) Limited Corporate Information


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The High Court of Judicature, Bombay passed a winding up order dated January 23, 2003 for winding up of Roplas (India) Limited. All records of Roplas (India) Limited had been handed over to the liquidator appointed by the High Court. Financial Performance The last available financial statements of Roplas (India) Limited as follows:

(` in Lacs except share data) Particulars For the year ending March 31, 2001

Equity Capital 48 Reserves and Surplus (excluding revaluation reserves) - (955) Total revenue 704 Profit (Loss) after Tax (887) EPS (in `) (184.76) NAV per share (in `) (188.90) Details of other Group Companies: Other listed Group Companies 1. Swaraj Engines Limited (“SEL”) Corporate Information SEL was incorporated on September 24, 1985 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Punjab as a joint venture between Punjab Tractors Limited (“PTL”), since merged with M&M & Kirloskar Oil Engines Limited. Our Promoter entered into a Share Purchase Agreement (“SPA”) with Actis Group and Burman Family to acquire 26,325,370 fully paid up equity shares representing 43.3% of total issued and fully paid up equity capital of PTL resulting in our Promoter indirectly acquiring a 33.17% stake in SEL. Pursuant to the open offer for SEL triggered upon said transaction, our Promoter equity stake reached 33.22% of total issued and fully paid up equity capital of SEL. SEL is principally engaged in the business of manufacture of engines for tractors and hi-tech engine components for commercial vehicles. The various products manufactured by SEL include internal combustion diesel engines, diesel engine components, spare parts etc. SEL is listed on BSE and NSE. The registered office of SEL is at Phase IV, Industrial Area, Sahibzada Ajit Singh Nagar (Mohali), Punjab 160 055. Interest of the Promoter M&M holds 41,26,417 equity shares of ` 10.00 each, which constitute 33.22 % of the issued and paid-up share capital of SEL. Kirloskar Industries Limited, co-promoters of SEL also hold 17.39 % of the shareholding of SEL. Interest in the Company SEL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. SEL is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects SEL has not a public issue / rights issue in last 10 years. Mechanism for redressal of investor grievance The shareholder / investor relations committee of SEL comprises of Dr. T.N.Kapoor (chairman), Mr. Bishwambhar Mishra, Mr. A.M.Sawhney, Mr. M.N.Kaushal and Mr. M.S.Grewal is the compliance officer. The committee meets at periodic intervals, to approve inter alia, transfer / transmission of shares, issue of duplicate share certificates and review


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status of investors grievances and the functioning of the share department / registrar & share transfer agents in order to render effective and quality services to investors. During the financial year 2010-2011 SEL had received 53 enquiries/complaints from its shareholders and all of them have been resolved. 2. Mahindra Forgings Limited (“MFL”) MFL was incorporated as Public Limited Company on August 13, 1999 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra. The name of the company was subsequently changed to Mahindra Forgings Limited. MFL is principally engaged in the manufacturers of dealers in and marketing, selling of special steel rolled and forged long products, heavy castings, forgings, aluminum founders, iron founders, brass founders, etc. MFL is listed on BSE and NSE. The registered office of MFL is at Mahindra Towers, P.K. Kurne Chowk, Worli, Mumbai – 400 018. Interest of the Promoter M&M holds 4,88,25,609 equity shares of ` 10.00 each, which constitute 52.97 % of the issued and paid-up share capital of MFL. Interest in the Company MFL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MFL is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects No public or rights issues have been undertaken by MFL in the last 10 years Mechanism for redressal of investor grievance The board of directors of the company has an investor’s grievance committee comprising of Mr. Daljit Mirchandani, Mr. V. K. Chanana and Mr. Fali P. Mama, the non executive directors of the MFL. Mr. Daljit Mirchandani is the chairman of the committee. The Committee meets as and when required, to inter alia deal with matters relating to transfers of shares and monitors redressal of complaints from shareholders relating to transfers, non-receipt of balance-sheet etc. The Committee met two times during the year under review on January 21, 2011 and March 10, 2011. During the year, no complaints were received from shareholders. Mr. Krishnan Shankar, company secretary & head of legal is the compliance officer of MFL. 3. Mahindra Ugine Steel Company Limited (“MUSCO”) Corporate Information MUSCO was incorporated on December 19, 1962 as a public company and received its certificate of commencement of business on May 16, 1963. MUSCO is involved in manufacturing and sale of alloy and special steels and Bearing Races at Khopoli. It also manufactures pressed sheet metal components and assemblies at Nashik, Kanhe and Rudhrapur. MUSCO is listed on BSE and NSE. Its registered office is located at 74, Ganesh Apartment, Opp. Sitaladevi Temple, L.J. Road, Mahim (West), Mumbai- 400 016. Interest of the Promoters M&M holds 1,64,66,789 equity shares of ` 10.00 each, which constitute 50.69% of the issued and paid-up share capital of MUSCO.


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Interest in the Company MUSCO does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MUSCO is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects MUSCO has not a public issue / rights issue in last 10 years. Mechanism for redressal of investor grievance MUSCO, has Shareholders Grievance Committee (comprising of Non-Executive Directors), which periodically reviews the complaints, queries of shareholders/investors of the Company. Apart from this, the Company Secretary who is the Compliance Officer, regularly monitors and attends all the investors’ grievances, queries, information required by the Investors or regulators. MUSCO has dedicated email id i.e. [email protected] for Investors on which investors can send their queries, complaints and other requests to the Compliance officer, all queries and complaints are promptly attended by the Company. Also, all complaints lodged against the Company with SEBI are monitored and are promptly addressed/ attended. The Registrar and Share Transfer Agent of MUSCO also promptly attend and redress the queries and complaints of investors. 4. Mahindra Composites Limited (“MCL”) Corporate Information MCL was incorporated on August 18, 1982 as Siro Plast Limited and obtained a certificate of commencement of business on January 14, 1983. MCL is involved in the business of manufacturing sheet moulding compounds, dough moulding compounds and components. MCL is listed on BSE and NSE. Its registered office is located at 145, Nehru Nagar Road, Mumbai-Pune Road Pimpri, Pune – 411 018. Interest of the Promoters M&M holds 13,41,203 equity shares of ` 10.00 each, which constitute 30.39% of the issued and paid-up share capital of MCL. Interest in the Company MCL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. MCL is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects MCL has not a public issue / rights issue in last 10 years. Mechanism for redressal of investor grievance MCL, has Shareholders Grievance Committee (comprising of Non-Executive Directors), which periodically reviews the complaints, queries of shareholders/investors of the Company. Apart from this, the Chief Financial Officer who is the Compliance Officer, along with Company Secretary regularly monitors and attends all the investors’ grievances, queries, information required by the Investors or regulators. Investors can send queries, complaints and other requests to the Compliance officer directly to his email id. All their queries and complaints are promptly attended by the Company. Also, all complaints lodged against the Company with SEBI are monitored and are promptly addressed/ attended. The Registrar and Share Transfer Agent of MCL also promptly attend and redress the queries and complaints of investors.


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5. Swaraj Automotives Limited (“SAL”) Corporate Information SAL was incorporated as Punjab Scooters Limited on November 20, 1974. It was promoted by the Government of Punjab in technical collaboration with Scooters India Limited. On October 8, 1998, its name was changed from Punjab Scooters Limited to Swaraj Automotives Limited. Our Promoter acquired control over Punjab Tractors Limited in the year 1997. Punjab Tractors Limited held 24.2% of the issued and paid-up share capital of SAL. Pursuant to an open offer M&M acquired a further 20% of the issued and paid-up share capital of SAL. SAL is listed on DSE. SAL is involved in the business of manufacture of automobile seats and recliners for tractosr, light commercial vehicles and cars. The registered office of SAL is at Phase IV,S.A.S Nagar, Distt. Mohali, Punjab - 160055, India. Interest of the Promoters M&M holds 10,59,543 equity shares of ` 10.00 each, which constitute 44.19% of the issued and paid-up share capital of SAL. M&M is in process of consolidating its shareholding in SAL and has made a voluntary offer to the shareholders of the SAL for acquiring up to 6,47,382 equity shares constituting 27% of the Voting Share Capital SAL at a price of `90 per equity share. Interest in the Company SAL does not have any interest, including any business or other interest, in us. Further, it has no interest in our promotion. SAL is not interested in any property acquired by us within the last two years or proposed to be acquired us. Promise vis-à-vis Objects SAL has not a public issue / rights issue in last 10 years. Mechanism for redressal of investor grievance The Board has constituted the Shareholder/Investor Relations committee which meets as and when required, to inter alia deal with matters relating to transfer/transmission of shares and to monitor redressal of investors’ grievances relating to share transfers, non receipt of annual report, non receipt of dividends etc with a view to render effective and quality services to investors. Other unlisted Group Companies 1. Mahindra Intertrade Limited Corporate Information Mahindra Intertrade Limited was incorporated on March 20, 1978 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of steel processing and trading, import, indenting & marketing of machine tools and technical equipments, exports of engineering items. Interest of the Promoters M&M, together with its wholly owned subsidiary MHL, holds2,71,00,007 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra Intertrade Limited. 2. NBS International Limited Corporate Information


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NBS International Limited was incorporated on December 19, 1995 under the Companies Act. Its registered office is located at 10 Stone Building, Shop No.1, Opp Chowpatty Sea Face, Mumbai – 400 007, Maharashtra, India. It is an authorised dealer for M&M’s range of vehicles and accessories. It own and operates its service centre. Interest of the Promoters M&M, together with its wholly owned subsidiary MHL, holds 50,500 equity shares, which constitute 100% of the issued and paid-up share capital of NBS International Limited. 3. Mahindra Engineering Services Limited Corporate Information Mahindra Engineering Services Limited was incorporated on August 7, 1995 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai - 400 001, Maharashtra, India. It is involved in the business of product development and research and development (r&d) services to customers in the automotive industry. its main activities include designing, prototyping, validation, testing, simulation, reverse engineering and tool design. Interest of the Promoters M&M holds 81,26,218 equity shares, which constitute 87.39% of the issued and paid-up share capital of Mahindra Engineering Services Limited. 4. Mahindra Gears & Transmissions Private Limited Corporate Information Mahindra Gears & Transmissions Private Limited was incorporated on August 27, 2004 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of manufacturer of auto components. Interest of the Promoters M&M holds 76,57,472 equity shares, which constitute 68.47% of the issued and paid-up share capital of Mahindra Gears & Transmissions Private Limited. 5. Mahindra Vehicle Manufacturers Limited Corporate Information Mahindra Vehicle Manufacturers Limited was incorporated on May 25, 2007 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of, manufacturing, selling, dealing in, automotive vehicles. Interest of the Promoters M&M holds 96,22,50,000 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra Vehicle Manufacturers Limited. 6. Mahindra Holdings Limited

Corporate Information Mahindra Holdings Limited was incorporated on November 2, 2007 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of investing in group and other companies, providing fund support and earning dividend and/or interest.


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Interest of the Promoters M&M, together with its wholly owned subsidiary Mahindra Intertrade Limited, holds 4,75,50,000 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra Holdings Limited. 7. Mahindra Consulting Engineers Limited Corporate Information Mahindra Consulting Engineers Limited was incorporated on October 26, 1993 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai - 400 001, Maharashtra, India. It is involved in the business of providing engineering advisory, project advisory, monitoring and supervision activities, infrastructure consulting activities covering water, wastewater, waste management, environment, urban planning, urban infrastructure, industrial infrastructure, utility networks, transportation including roads, highways, sea ports, airports, marine infrastructure, agricultural/horticultural infrastructure, social infrastructure, power and energy, sustainability studies, institutional strategies/ planning studies, industrial plants and systemsX and other infrastructure sectors. Interest of the Promoters M&M holds 11,51,000 equity shares, which constitute 54.16 % of the issued and paid-up share capital of Mahindra Consulting Engineers Limited. 8. Mahindra Navistar Automotives Limited Corporate Information Mahindra Navistar Automotives Limited was incorporated on June 2, 1994 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai – 400 001, Maharashtra, India. It is involved in the business of manufacturing of commercial vehicles, parts and components in India. Interest of the Promoters M&M holds 35,69,72,300 equity shares, which constitute 51% of the issued and paid-up share capital of Mahindra Navistar Automotives Limited. 9. Mahindra Hinoday Industries Limited Corporate Information Mahindra Hinoday Industries Limited was incorporated on August 30, 2007 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of forgings and castings of ferrous and non-ferrous, steels and their alloys and foundry work. Interest of the Promoters M&M holds 3,02,54,052 equity shares, which constitute 64.95% of the issued and paid-up share capital of Mahindra Hinoday Industries Limited. 10. Mahindra Logistics Limited Corporate Information Mahindra Logistics Limited was incorporated on August 24, 2007 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of providing logistics including warehousing and transportation services. Interest of the Promoters M&M, together with its wholly owned subsidiary Mahindra Engineering and Chemical Products Limited, holds


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5,77,00,000 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra Logistics Limited. 11. Mahindra Aerospace Private Limited Corporate Information Mahindra Aerospace Private Limited was incorporated on February 28, 2008 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of design, development and manufacturing of aircrafts and other incidental and ancillary business. Interest of the Promoters M&M holds 5,49,35,426 equity shares, which constitute 66.67% of the issued and paid-up share capital of Mahindra Aerospace Private Limited. 12. Mahindra First Choice Services Limited Corporate Information Mahindra First Choice Services Limited was incorporated on March 24, 2008 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of operating, owning any workshops, service centres / stations rendering after sales/market support with respect to servicing, overhauling relating to all kind and description of automobile vehicles. Interest of the Promoters M&M holds 3,55,00,000 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra First Choice Services Limited. 13. Mahindra Navistar Engines Private Limited Corporate Information Mahindra Navistar Engines Private Limited was incorporated on April 9, 2007 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of stocking and selling engines and spare parts for engines. Interest of the Promoters M&M holds 8,41,50,000 equity shares, which constitute 51% of the issued and paid-up share capital of Mahindra Navistar Engines Private Limited. 14. Defence Land Systems India Private Limited Corporate Information Defence Land Systems India Private Limited was incorporated on March 4, 2009 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of manufacturing, dealing and trading in all kinds of weapon systems, surveillance communication equipments, armaments, simulators and devices and all kinds of vehicles for use by armed forces. Interest of the Promoters M&M holds 4,38,82,000 equity shares, which constitute 74.00% of the issued and paid-up share capital of Defence Land Systems India Private Limited. 15. Mahindra EcoNova Private Limited Corporate Information


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Mahindra EcoNova Private Limited was incorporated on February 2, 2010 under the Companies Act. Its registered office is located at Mahindra Towers, 5th Floor, G. M. Bhosale Marg, Worli, Mumbai – 400 018, Maharashtra, India. It is involved in the business of transforming worn durable goods, including but not limited to internal combustion engines used as prime movers or as part of power generating equipment, including gears, transmission, axles, joints and springs. Interest of the Promoters M&M holds 10,000 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra EcoNova Private Limited. 16. Mahindra Reva Electric Vehicles Private Limited Corporate Information Mahindra Reva Electric Vehicles Private Limited was incorporated on April 2, 1996 under the Companies Act. Its registered office is located at 122E, Bommasandra Industrial Area, Bommasandra, Bangalore – 560 099, Karnataka, India. It is involved in the business of manufacture and sale of battery operated vehicles. Interest of the Promoters M&M holds 1,16,72,409 equity shares, which constitute 58.35% of the issued and paid-up share capital of Mahindra Reva Electric Vehicles Private Limited. 17. Mahindra First Choice Wheels Limited Corporate Information Mahindra First Choice Wheels Limited was incorporated on December 12, 1994 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai - 400 001, Maharashtra, India. It is involved in the business of sale and purchase of used cars. Interest of the Promoters M&M holds 3,47,77,255 equity shares, which constitute 52.15% of the issued and paid-up share capital of Mahindra First Choice Wheels Limited. 18. Mahindra Engineering and Chemical Products Limited Corporate Information Mahindra Engineering and Chemical Products Limited was incorporated on June 7, 1954 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai – 400 001, Maharashtra, India. It is involved in the business of manufacturing lift / bucket elevators (bulk material handling systems). Interest of the Promoters M&M, together with its wholly owned subsidiary MHL, holds 53,98,472 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra Engineering and Chemical Products Limited. 19. Mahindra Sona Limited Corporate Information Mahindra Sona Limited was incorporated on September 30, 1994 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai – 400 001, Maharashtra, India. It is involved in the business of manufacture and sale of auto components.


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Interest of the Promoters M&M holds 13,10,000 equity shares, which constitute 29.77% of the issued and paid-up share capital of Mahindra Sona Limited. 20. Bristlecone Limited Corporate Information Bristlecone Limited was incorporated on February 3, 2004. Its registered office is located at M&C Corporate Services Ltd., P.O. Box 309GT, Ugland House, South Church St., George Town, Grand Cayman, Cayman Islands. It is involved in the business of IT consulting services. Interest of the Promoters M&M holds 42,22,250 equity shares, which constitute 79.71% of the issued and paid-up share capital of Bristlecone Limited. 21. Mahindra Gears International Limited Corporate Information Mahindra Gears International Limited was incorporated on May 22, 2008. Its registered office is located at IFS Court, TwentyEight Cybercity, Ebene, Mauritius. It is an investment company. Interest of the Promoters M&M holds 2,07,00,001 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra Gears International Limited. 22. Mahindra Overseas Investment Company (Mauritius) Limited Corporate Information Mahindra Overseas Investment Company (Mauritius) Limited was incorporated on December 7, 2004. Its registered office is located at IFS Court TwentyEight, Cybercity Ebene- Mauritius. It is involved in the business of investment holding. Interest of the Promoters M&M holds 68,484,000 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra Overseas Investment Company (Mauritius) Limited. 23. Mahindra & Mahindra South Africa (Proprietary) Limited Corporate Information Mahindra & Mahindra South Africa (Proprietary) Limited was incorporated on November 22, 1996. Its registered office is located at PO Box 69079, Highveld Park 0169, Eco Fusion no 6, Block C, First floor, 324 Witch Hazel Street, Highveld X59, Pretoria, South Africa. It is involved in the business of importing and distributing Mahindra vehicles, accessories and spare parts. Interest of the Promoters M&M holds 5,20,00,000 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra & Mahindra South Africa (Proprietary) Limited. 24. Mahindra USA Inc.


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Corporate Information Mahindra USA Inc. was incorporated on June 08, 1994. Its registered office is located at 17723 FM 2920, Tomball Texas-77377, USA. It is involved in the business of wholesale distribution of farm equipment and accessories. Interest of the Promoters M&M holds 14,00,00,000 equity shares, which constitute 100% of the issued and paid-up share capital of Mahindra USA Inc. 25. Mahindra & Mahindra Contech Limited

Corporate Information Mahindra & Mahindra Contech Limited was incorporated on April 30, 1992 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai – 400 001. It is a service provider, advisor and provides consultancy services. Interest of the Promoters M&M holds 35,000 equity shares constituting 23.33 % of the issued and paid-up share capital of Mahindra & Mahindra Contech Limited. 26. PSL Media & Communications Limited Corporate Information PSL Media & Communications Limited was incorporated on February 6, 1939. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai – 400 001, Maharashtra, India. Its main business is to start, acquire, print, publish and circulate or deal with any newspaper, journal, magazines, books and other literary works and publications and to carry out the business of newpaper proprietors and general publishers in all branches. Interest of the Promoters M&M holds 19,750 equity shares constituting 18.56 % of the issued and paid-up share capital of PSL Media & Communications Limited. 27. Mahindra Infrastructure Developers Limited Corporate Information Mahindra Infrastructure Developers Limited was incorporated on May 10, 2001 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of Real Estate and Infrastructure Builders and Developers. Interest of the Promoters Mahindra Infrastructure Developers Limited is the subsidiary of MLDL. M&M controls 51.05% of the total voting rights of Mahindra Infrastructure Developers Limited. 28. Mahindra World City Developers Limited Corporate Information Mahindra World City Developers Limited was incorporated on February 19, 1997 under the Companies Act. Its registered office is located at Ground Floor, Mahindra Towers, 17/18,Patulous Road, Chennai - 600 002, Tamil Nadu. It is involved in the business of Real Estate and Infrastructure Development.


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Interest of the Promoters Mahindra World City Developers Limited is the subsidiary of MLDL. M&M controls 42.18% of the total voting rights of Mahindra World City Developers Limited. 29. Mahindra World City (Jaipur) Limited Corporate Information Mahindra World City (Jaipur) Limited was incorporated on August 26, 2005 under the Companies Act. Its registered office is located at 4th Floor, 411, Neelkanth Tower, Bhawani Singh Road, C-Scheme. Jaipur, Rajasthan. It is involved in the business of development of SEZ at Jaipur and domestic tariff area. Interest of the Promoters Mahindra World City (Jaipur) Limited is the subsidiary of MLDL. M&M controls 37.78% of the total voting rights of Mahindra World City (Jaipur) Limited. 30. Mahindra Integrated Township Limited Corporate Information Mahindra Integrated Township Limited was incorporated on June 24, 1996 under the Companies Act. Its registered office is located at Administrative Block, Central Avenue, Mahindra World City, Natham Sub(PO);Chengelpet, Kancheepuram 603 002, Tamil Nadu. It is involved in the business of development of integrated township and infrastructure development. Interest of the Promoters Mahindra Integrated Township Limited is the subsidiary of MLDL. M&M controls 48.39% of the total voting rights of Mahindra Integrated Township Limited. 31. Mahindra World City (Maharashtra) Limited Corporate Information Mahindra World City (Maharashtra) Limited was incorporated on September 21, 2005 under the Companies Act. Its registered office is located at 5th Floor, Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of establishing, acquiring, developing and maintaining residential facilities, industrial parks, special economic zones, technology parks, software parks, industrial areas and industrial estates, for industries and software and other knowledge based units. Interest of the Promoters Mahindra World City (Maharashtra) Limited is the subsidiary of MLDL. M&M controls 51.05% of the total voting rights of Mahindra World City (Maharashtra) Limited. 32. Knowledge Township Limited Corporate Information Knowledge Township Limited was incorporated on August 16, 2007 under the Companies Act. Its registered office is located at 5th Floor, Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of establishing, acquiring, developing and maintaining Industrial Parks, Technology Parks, Software Parks, Special Economic zones, Export Processing Zones, Industrial Areas and Industrial estates for industries. Interest of the Promoters Knowledge Township Limited is the subsidiary of MLDL. M&M controls 51.05% of the total voting rights of


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KnowledgeTownship Limited. 33. Industrial Township (Maharashtra) Limited Corporate Information Industrial Township (Maharashtra) Limited was incorporated on July 2, 2008 under the Companies Act. Its registered office is located at 5th Floor, Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of establishing, acquiring, developing and maintaining Industrial Parks, Technology Parks, Software Parks, Special Economic zones, Export Processing Zones, Industrial Areas and Industrial estates for industries. Interest of the Promoters Industrial Township (Maharashtra) Limited is the subsidiary of MLDL. M&M controls 51.05% of the total voting rights of Industrial Township (Maharashtra) Limited. 34. Anthurium Developers Limited Corporate Information Anthurium Developers Limited was incorporated on June 2, 2010 under the Companies Act. Its registered office is located at 5th Floor, Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of establishing, acquiring, developing and maintaining Industrial Parks, Technology Parks, Bio-tech Parks, Software Parks, Special Economic Zones, Export Processing Zones, Industrial Areas, Industrial estates, Integrated Townships, Residential and/or Commercial Complexes, Housing Facility. Interest of the Promoters Anthurium Developers Limited is the subsidiary of MLDL. M&M controls 51.05% of the total voting rights of Anthurium Developers Limited. 35. Watsonia Developers Limited Corporate Information Watsonia Developers Limited was incorporated on June 2, 2010 under the Companies Act. Its registered office is located at 5th Floor, Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of establishing, acquiring, developing and maintaining Industrial Parks, Technology Parks, Bio-tech Parks, Software Parks, Special Economic Zones, Export Processing Zones, Industrial Areas, Industrial estates, Integrated Townships, Residential and/or Commercial Complexes, Housing Facility. Interest of the Promoters Watsonia Developers Limited is the subsidiary of MLDL. M&M controls 51.05% of the total voting rights of Watsonia Developers Limited. 36. Mahindra Conveyor Systems Private Limited Corporate Information Mahindra Conveyor Systems Private Limited was incorporated on January 4, 2010 under the Companies Act. Its registered office is located at Mahindra Towers, P.K. Kurne Chowk, Worli, Mumbai – 400 018. It is involved in the business of manufacturing lift / bucket elevators (bulk material handling system). Interest of the Promoters Mahindra Conveyor Systems Private Limited is the subsidiary of Mahindra Conveyor Systems Private Limited. M&M controls 91.50% of the total voting rights of Mahindra Conveyor Systems Private Limited.


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37. MHR Hotel Management GmbH Corporate Information MHR Hotel Management GmbH was incorporated on February 16, 2007. Its registered office is located at Mullerstrasse 3, 6020 Innsbruck, Austria. It is involved in the business of managing hotels. Interest of the Promoters MHR Hotel Management GmbH is the subsidiary of MHRIL. M&M controls 62.32% of the total voting rights of MHR Hotel Management GmbH. 38. Mahindra Holidays and Resorts USA Inc Corporate Information Mahindra Holidays and Resorts USA Inc. was incorporated on October 24, 2003. Its registered office is located at 2711, Centerville Rd. Wilmington, USA. It is involved in the business of building, renting, managing and promoting resorts, hotels, vacation facilities, leisure activities and engaging in the business of sales, rentals, transfers, exchanges and sharing those facilities. Interest of the Promoters Mahindra Holidays and Resorts USA Inc is the subsidiary of MHRIL. M&M controls 83.09% of the total voting rights of Mahindra Holidays and Resorts USA Inc. 39. Mahindra Hotels and Residences India Limited Corporate Information Mahindra Hotels and Residences India Limited was incorporated on April 26, 2007 under the Companies Act. Its registered office is located at NO.17 & 18, Mahindra Towers, 2nd Floor, Pattulos Road, Chennai 600002, Tamil Nadu. It is involved in the business of hoteliers, restaurant, café, tavern with facilities; building music halls, swimming pools, cinema theater, warehouses, to decore offices, flats, houses, hotels and business of agents for railway, shipping and airway business. Interest of the Promoters Mahindra Hotels and Residences India Limited is the subsidiary of MHRIL. M&M controls 83.09% of the total voting rights of Mahindra Hotels and Residences India Limited. 40. Bell Tower Resorts Private Limited Corporate Information Bell Tower Resorts Private Limited was incorporated on April 24, 1995 under the Companies Act. Its registered office is located Plot No.223/1&222/2, Pedda, Uttordoxi Village, Varca, District Salcete, Goa – 403721, Goa. It is involved in hotel and tourism activities. Interest of the Promoters MHRIL, a subsidiary of our Promoter acquired the entire paid-up share capital of Bell Tower Resorts Private Limited on December 21, 2011. M&M as on the day of acquisition controlled 83.09% of the total voting rights of Bell Tower Resorts Private Limited. 41. BAH Hotelanlagen AG Corporate Information


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BAH Hotelanlagen AG was incorporated on December 14, 2006. Its registered office is located at Hilberstrase 8, 6080 Igls, Innsbruck, Austria. It is involved in the hotel and tourism activities as well as their operation or leasing as well as all other actions which are purposeful in this regard. Interest of the Promoters BAH Hotelanlagen AG is the subsidiary of MHRIL. M&M controls 82.20% of the total voting rights of BAH Hotelanlagen AG. 42. Mahindra Middleeast Electrical Steel Service Centre (FZC) Corporate Information Mahindra Middleeast Electrical Steel Service Centre (FZC) was incorporated on August 8, 2004. Its registered office is located at Sharjah Airport International Free Zone, P3 11/12 Post Box: 8114, Sharjah UAE. It is involved in the business of processing of electrical steel. Interest of the Promoters Mahindra Middleeast Electrical Steel Service Centre (FZC) is the subsidiary of Mahindra Intertrade Limited. M&M controls 90.00% of the total voting rights of Mahindra Middleeast Electrical Steel Service Centre (FZC). 43. Mahindra Steel Service Centre Limited Corporate Information Mahindra Intertrade Limited was incorporated on January 15, 1993 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of processing of steel for the requirements of automobile, electric power and home appliances industries. Interest of the Promoters Mahindra Steel Service Centre Limited is the subsidiary of Mahindra Intertrade Limited. M&M controls 61.00% of the total voting rights of Mahindra Intertrade Limited. 44. Mahindra Insurance Brokers Limited Corporate Information Mahindra Insurance Brokers Limited was incorporated on February 18, 1987 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of insurance broking and auxiliary services. Interest of the Promoters Mahindra Insurance Brokers Limited is the subsidiary of MMFSL. M&M controls 56.00% of the total voting rights of Mahindra Insurance Brokers Limited. 45. Mahindra Rural Housing Finance Limited Corporate Information Mahindra Rural Housing Finance Limited was incorporated on April 9, 2007 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of providing loans for purchase, construction, renovation and repairing of houses. Interest of the Promoters Mahindra Rural Housing Finance Limited is the subsidiary of MMFSL. M&M controls 49.00% of the total voting rights of Mahindra Rural Housing Finance Limited.


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46. Mahindra Business & Consulting Services Private Limited Corporate Information Mahindra Business & Consulting Services Private Limited was incorporated on September 16, 2008 under the Companies Act. Its registered office is located at Mahindra Towers, P. K. Kurne Chowk, Worli, Mumbai – 400 018, Maharashtra. It is involved in the business of a captive staffing company and for providing allied services. Interest of the Promoters Mahindra Business & Consulting Services Private Limited is the subsidiary of MMFSL. M&M controls 56.00% of the total voting rights of Mahindra Business & Consulting Services Private Limited. 47. Mahindra Engineering Services (Europe) Limited Corporate Information Mahindra Engineering Services (Europe) Limited was incorporated on November 24, 2000. Its registered office is located at Atrium Court, The Ring Brancknell, Berkshire RG 12, 1BW, United Kingdom. It is involved in the business of providing information technology enabled engineering services. Interest of the Promoters Mahindra Engineering Services (Europe) Limited is the subsidiary of Mahindra Engineering Services Limited. M&M controls 87.39% of the total voting rights of Mahindra Engineering Services (Europe) Limited. 48. Mahindra Forgings Global Limited Corporate Information Mahindra Forgings Global Limited was incorporated on December 5, 2006. Its registered office is located at IFS Court, TwentyEight, Cybercity, Ebene- Mauritius. It is an investment holding company. Interest of the Promoters Mahindra Forgings Global Limited is the subsidiary of MFL. M&M controls 52.97% of the total voting rights of Mahindra Forgings Global Limited. 49. Mahindra Forgings International Limited Corporate Information Mahindra Forgings Global Limited was incorporated on August 18, 2006. Its registered office is located at IFS Court TwentyEight, Cybercity, Ebene- Mauritius. It is involved in the business of investment holdings. Interest of the Promoters Mahindra Forgings Global Limited is the subsidiary of MFL. M&M controls 52.97% of the total voting rights of Mahindra Forgings Global Limited. 50. Navyug Special Steel Private Limited Corporate Information Navyug Special Steel Private Limited was incorporated on November 8, 2011 under the Companies Act. Its registered office is located at 74, Ganesh Apartment, Opp. Sitaladevi Temple, L.J. Road, Mahim (W), Mumbai- 400 016. It is involved in the business of manufacturing of alloy special steel products.


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Interest of the Promoters Navyug Special Steel Private Limited is the subsidiary of Mahindra Ugine Steel Company Limited. M&M controls 50.69% of the total voting rights of Navyug Special Steel Private Limited. 51. Mahindra United Football Club Private Limited Corporate Information Mahindra United Football Club Private Limited was incorporated on November 3, 2008 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of promotion of football, conducting football events, matches, etc. Interest of the Promoters Mahindra United Football Club Private Limited is the subsidiary of Mahindra Holding Limited. M&M controls 100% of the total voting rights of Mahindra United Football Club Private Limited. 52. Mahindra Punjab Tractors Private Limited Corporate Information Mahindra Punjab Tractors Private Limited was incorporated on October 9, 2009 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of manufacturing of tractors, tractors equipments and implements, agricultural machinery and implements. Interest of the Promoters Mahindra Punjab Tractors Private Limited is the subsidiary of Mahindra Holding Limited. M&M controls 100% of the total voting rights of Mahindra Punjab Tractors Private Limited. 53. Mahindra EPC Services Private Limited Corporate Information Mahindra EPC Services Private Limited was incorporated on September 19, 2010 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of Engineering, Procurement and Construction work, primarily in the solar power industry. Interest of the Promoters Mahindra EPC Services Private Limited is the subsidiary of Mahindra Holding Limited. M&M controls 100% of the total voting rights of Mahindra EPC Services Private Limited. 54. Mahindra BPO Services Private Limited Corporate Information Mahindra BPO Services Private Limited was incorporated on January 18, 2011 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business as providers and suppliers of all kinds of services and end to end solutions to businesses and enterprises in respect of all matters and issues relating to accounting, billing, financial accounting, book keeping, fixed asset accounting and related documentation, invoice verification, bill passing, customer’s bills and receipts processing, management of accounts payable and receivable, sale and purchase management and processing of related documents, inventory management, direct and indirect taxes, payroll processing, human resources services including recruitment and induction and staffing in any form, deputation of staff, search and selection, benefits and compensation, performance management, training and development, managing and monitoring training delivery process, separation, personnel referencing, administration services, management and organization, commerce, materials and quality control, time share services, facilities management, supply chain management services, customer relationship management etc.


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Interest of the Promoters Mahindra BPO Services Private Limited is the subsidiary of Mahindra Holding Limited. M&M controls 100% of the total voting rights of Mahindra BPO Services Private Limited. 55. Mahindra Telecommunications Investment Private Limited Corporate Information Mahindra Telecommunications Investment Private Limited was incorporated on February 3, 1993 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai – 400 001, Maharashtra. It is involved in the business of financing industrial enterprises and in particular the enterprises engaged in telecommunication business of all kinds. Interest of the Promoters Mahindra Telecommunications Investment Private Limited is the subsidiary of Mahindra Holding Limited. M&M controls 100 % of the total voting rights of Mahindra Telecommunications Investment Private Limited.

56. Mahindra Aerospace Australia Pty. Limited

Corporate Information Mahindra Aerospace Australia Pty. Limited was incorporated on February 16, 2010. Its registered office is located at C/- Pitcher Partners, Level 19, 15 William Street, Melbourne Vic 3000. It is an investment vehicle & holding company. Interest of the Promoters Mahindra Aerospace Australia Pty. Limited is the subsidiary of Mahindra Aerospace Private Limited. M&M controls 66.67% of the total voting rights of Mahindra Aerospace Australia Pty. Limited. 57. Bristlecone Inc.

Corporate Information Bristlecone Inc. was incorporated on May 18, 1998. Its registered office is located at 488 Ellis Street, Mountain View, CA 94043. It is involved in the business of providing IT consulting solutions. Interest of the Promoters Bristlecone Inc. is the subsidiary of Bristlecone Limited. M&M controls 79.71% of the total voting rights of Bristlecone Inc. 58. Bristlecone India Limited Corporate Information Bristlecone India Limited was incorporated on December 10, 1991 under the Companies Act. Its registered office is located at Gateway Building, Apollo Bunder, Mumbai - 400 001, Maharashtra. It is involved in the business of providing IT software services. It specializes in enterprise applications and extended supply chain management. It also provides offshore application management and support services and application development and implementation services. Interest of the Promoters Bristlecone India Limited is the subsidiary of Bristlecone Limited. M&M controls 79.71% of the total voting rights of Bristlecone India Limited. 59. Bristlecone UK Limited


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Corporate Information Bristlecone UK Limited was incorporated on March 17, 1996. Its registered office is located at Abacus House, 33, Gutter Lane, London-EC2V8AR. It is involved in the business of providing IT consulting solutions. Interest of the Promoters Bristlecone UK Limited is the subsidiary of Bristlecone Limited. M&M controls 79.71% of the total voting rights of Bristlecone UK Limited. 60. Bristlecone (Malaysia) SDN. BHD.

Corporate Information Bristlecone (Malaysia) SDN. BHD. was incorporated on May 4, 2007. Its registered office is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, It is involved in the business of providing IT consulting solutions. Interest of the Promoters Bristlecone (Malaysia) SDN. BHD. is the subsidiary of Bristlecone Limited. M&M controls 79.71% of the total voting rights of Bristlecone (Malaysia) SDN. BHD. 61. Bristlecone International AG

Corporate Information Bristlecone International AG was incorporated on June 21, 2011. Its registered office is located at BMO Treuhand AG, Rundbuckstrasse 6, 8212 Neuhausen am Rheinfall. It is involved in the business of software consultancy. Interest of the Promoters Bristlecone International AG is the subsidiary of Bristlecone Limited. M&M controls 79.71% of the total voting rights of Bristlecone International AG. 62. Mahindra (China) Tractor Company Limited Corporate Information Mahindra (China) Tractor Company Limited was incorporated on January 11, 2005. Its registered office is located at Jiaoqiao, Changbei Economic Development Zone, Nanchang, PRC 330044. It is involved in the business of developing, manufacturing, assembling, marketing selling and exporting of self-manufactured, locally procured and/or imported tractors and derivatives thereof, engines, generator sets, components, accessories and tractor implements, loaders, dozers and providing after sales service/repair. Interest of the Promoters Mahindra (China) Tractor Company Limited is the subsidiary of Mahindra Overseas Investment Company (Mauritius) Limited. M&M controls 86.36% of the total voting rights of Mahindra (China) Tractor Company Limited. 63. Mahindra-BT Investment Company (Mauritius) Limited Corporate Information Mahindra-BT Investment Company (Mauritius) Limited was incorporated on May 9, 2005. Its registered office is located at IFS Court, TwentyEight, Cybercity Ebene – Mauritius. It is involved in the business of investment holding. Interest of the Promoters


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Mahindra-BT Investment Company (Mauritius) Limited is the subsidiary of Mahindra Overseas Investment Company (Mauritius) Limited. M&M controls 57% of the total voting rights of Mahindra-BT Investment Company (Mauritius) Limited. 64. Mahindra Europe S.r.l. Corporate Information Mahindra Europe S.r.l. was incorporated on September 19, 2002. Its registered office is located at Mahindra Europe Srl Via Cancelliera, 3500040 – Ariccia – Roma, Italy. It is involved in the business of importing and distribution of Mahindra vehicles, accessories and spare parts. Interest of the Promoters Mahindra Europe S.r.l. is the subsidiary of Mahindra Overseas Investment Company (Mauritius) Limited. M&M controls 80% of the total voting rights of Mahindra Europe S.r.l. 65. Mahindra Graphic Research Design S.r.l. Corporate Information Mahindra Graphic Research Design S.r.l. was incorporated on February 12, 2008. Its registered office is located at Via della Mercede 11 – 00187 Roma - Italy. It is involved in the business of providing engineering services. Interest of the Promoters Mahindra Graphic Research Design S.r.l. is the subsidiary of Mahindra Overseas Investment Company (Mauritius) Limited. M&M controls 100% of the total voting rights of Mahindra Graphic Research Design S.r.l. 66. Mahindra Yueda (Yancheng) Tractor Company Limited Corporate Information Mahindra Yueda (Yancheng) Tractor Company Limited was incorporated on November 28, 2008. Its registered office is located at 9, Nenjiang Road, Yancheng Economic Development Zone, Jiangsu Province, China. It is involved in the business of developing, assembling, manufacturing, sales, import, export and trading of tractors, agricultural machinery, implements, attachments, instruments, accessories, components, sub assemblies and parts thereof in china and overseas; self-moving reaping machines and parts, transmutation transports of tractors and parts, engines, generator sets, components, loaders, dozers, sales of metal materials (excluding noble and rare metals) and relevant technology; sale and purchase of raw and supplementary materials, manufacturing, assembling and machining components and assemblies for others; provide after sales service/ repair, sales of advanced technical services and know how; to handle processing with imported materials and “three processing industries and one compensation”. Interest of the Promoters Mahindra Yueda (Yancheng) Tractor Company Limited is the subsidiary of Mahindra Overseas Investment Company (Mauritius) Limited. M&M controls 51% of the total voting rights of Mahindra Yueda (Yancheng) Tractor Company Limited. 67. Mahindra Emirates Vehicle Armouring FZ-LLC Corporate Information Mahindra Emirates Vehicle Armouring FZ-LLC was incorporated on August 5, 2010. Its registered office is located at P.O. Box No. 39893, Al Jazeera, Al Hamra. (Free Zone), RAKIA Industrial park, WFZ-08, Ras Al Khaimah, United Arab Emirates. It is involved in the business of Automobile Special Accessories Fittings, Assembling, Bodies Manufacturing, Upholstery Services, Trading, Spare Parts and Components Trading, etc.


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Interest of the Promoters Mahindra Emirates Vehicle Armouring FZ-LLC is the subsidiary of Mahindra Overseas Investment Company (Mauritius) Limited. M&M controls 51.00% of the total voting rights of Mahindra Emirates Vehicle Armouring FZ-LLC. 68. Mahindra Gears Global Limited Corporate Information Mahindra Gears Global Limited was incorporated on June 3, 2008. Its registered office is located at IFS Court, TwentyEight Cybercity, Ebene, Mauritius. It is involved in the business as an investment company. Interest of the Promoters Mahindra Gears Global Limited is the subsidiary of Mahindra Gears lnternational Limited. M&M controls 53.34% of the total voting rights of Mahindra Gears Global Limited. 69. Ssangyong (Yizheng) Auto Parts Manufacturing Company Limited Corporate Information Ssangyong (Yizheng) Auto Parts Manufacturing Company Limited was incorporated on March 5, 2004. Its registered office is located at No. 192 Gongnongbei Road Zhenzhouzhen Yizheng City Jiangsu province, China. It is involved in the business of manufacturing Istana manual transmission. Interest of the Promoters Ssangyong (Yizheng) Auto Parts Manufacturing Company Limited is the subsidiary of Ssangyong Motor Company Limited. M&M controls 70.04% of the total voting rights of Ssangyong (Yizheng) Auto Parts Manufacturing Company Limited. 70. Ssangyong Motor (Shanghai) Company Limited Corporate Information

Ssangyong Motor (Shanghai) Company Limited was incorporated on December 2, 2003. Its registered office is located at Room 1209 No. 500 Binke Road Baoshuiqu Waigaoqiao Shanghai, China. It is involved in the business of supplying Istana localized parts to Huizhong, who is the manufacturer of Istana in China and distribution of vehicle manufactured by Ssangyong Motor in China.

Interest of the Promoters Ssangyong Motor (Shanghai) Company Limited is the subsidiary of Ssangyong Motor Company Limited. M&M controls 70.04% of the total voting rights of Ssangyong Motor (Shanghai) Company Limited. 71. Mahindra Retail Private Limited Corporate Information Mahindra Retail Private Limited was incorporated on September 3, 2007 under the Companies Act. Its registered office is located at Mahindra Towers, G. M. Bhosale Marg, Worli, Mumbai 400 018, Maharashtra. It is involved in the business of trading/retailing through retail formats. Interest of the Promoters Mahindra Retail Private Limited is the subsidiary of Retail Initiative Holdings Limited. M&M controls 89.51% of the total voting rights of Mahindra Retail Private Limited.


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72. Mahindra Residential Developers Limited Corporate Information Mahindra Residential Developers Limited was incorporated on February 01, 2008 under the Companies Act. Its registered office is located at Mahindra World City Administrative Block, Chegalpattu, Tamil Nadu – 603 002. It is involved in the business of establishing, acquiring, developing and maintaining residential facilities, integrated townships, industrial parks, special economic zones, technology parks, software parks, industrial areas and industrial estates, for industries and software and other knowledge based units. Interest of the Promoters Mahindra Residential Developers Limited is the subsidiary of Mahindra Integrated Township Limited. M&M controls 24.68% of the total voting rights of Mahindra Residential Developers Limited.

73. Bristlecone (Singapore) Pte. Limited Corporate Information Bristlecone (Singapore) Pte. Limited was incorporated on January 21, 2003. Its registered office is located at 3, Anson Road, # 27-01 Springleaf Tower, Singapore 079909. It is involved in the business of IT Services. Interest of the Promoters Bristlecone (Singapore) Pte. Limited is the subsidiary of Bristlecone India Limited. M&M controls 79.71 % of the total voting rights of Bristlecone (Singapore) Pte. Limited. 74. Bristlecone GmbH Corporate Information Bristlecone GmbH was incorporated on December 9, 2003. Its registered office is located at Kennedyallee 97a, 60596 Frankfurt am Main, Germany. It is involved in the business of IT Services. Interest of the Promoters Bristlecone GmbH is the subsidiary of Bristlecone India Limited. M&M controls 79.71% of the total voting rights of Bristlecone GmbH. 75. Stokes Forgings Dudley Limited Corporate Information Stokes Forgings Dudley Limited was incorporated on September 19, 2001. Its registered office is located at Victor Works Northcote Street, Walsall, West Midlands, WS2 8BH. It is involved in the business of manufacturing forgings and general engineering. Interest of the Promoters Stokes Forgings Dudley Limited is the subsidiary of Stokes Group Limited. M&M controls 52.93% of the total voting rights of Stokes Forgings Dudley Limited. 76. Jensand Limited Corporate Information Jensand Limited was incorporated on June 11, 1980. Its registered office is located at Victor Works Northcote Street, Walsall, West Midlands, WS2 8BH. It is involved in the business of provision of services to industry and general trading.


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Interest of the Promoters Jensand Limited is the subsidiary of Stokes Group Limited. M&M controls 52.93% of the total voting rights of Jensand Limited. 77. Stokes Forgings Limited Corporate Information Stokes Forgings Limited was incorporated on June 10, 1939. Its registered office is located at Victor Works Northcote Street, Walsall, West Midlands, WS2 8BH. It is involved in the business of manufacturing forgings and general engineering. Interest of the Promoters Stokes Forgings Limited is the subsidiary of Stokes Group Limited. M&M controls 52.93% of the total voting rights of Stokes Forgings Limited. 78. Mahindra Forgings Europe AG Corporate Information Mahindra Forgings Europe AG was incorporated in December, 1999. Its registered office is located at Ulmer str 112, D- 73431, Aalen Germany. It acts as a group holding company, managing and holding the shares in the subsidiaries. Interest of the Promoters Mahindra Forgings Europe AG is the subsidiary of Mahindra Forgings International Limited. M&M controls 52.97% of the total voting rights of Mahindra Forgings Europe AG. 79. Gesenkschmiede Schneider GmbH Corporate Information Gesenkschmiede Schneider GmbH was incorporated in 1891. Its registered office is located at Ulmer str 112, D- 73431, Aalen Germany. It operates in segments of tool and die fabrication and forming technology. Interest of the Promoters Gesenkschmiede Schneider GmbH is the subsidiary of Mahindra Forgings Europe AG. M&M controls 52.97% of the total voting rights of Gesenkschmiede Schneider GmbH. 80. JECO Jellinghaus GmbH Corporate Information JECO Jellinghaus GmbH was incorporated in 1885. Its registered office is located at Feldstrasse 30 D-58285 Gevelsberg, Germany. It operates in segments of tool and die fabrication and forming technology, Manufacturing of forging tolls, processes and sells them. Interest of the Promoters JECO Jellinghaus GmbH is the subsidiary of Mahindra Forgings Europe AG. M&M controls 52.97% of the total voting rights of JECO Jellinghaus GmbH. 81. Falkenroth Umformetchnik GmbH Corporate Information


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Falkenroth Umformetchnik GmbH was incorporated in 1829. Its registered office is located at Asenbach 1 D-58579 Schalksmühle, Germany. It operates in segments of tool and die fabrication and forming technology, Manufacturing of forging tolls, processes and sells them. Interest of the Promoters Falkenroth Umformetchnik GmbH is the subsidiary of Mahindra Forgings Europe AG. M&M controls 52.97% of the total voting rights of Falkenroth Umformetchnik GmbH. 82. Schoneweiss & Co. GmbH Corporate Information Schoneweiss & Co. GmbH was incorporated on 1866. Its registered office is located at Delsterner Strasse, 170, Hagen, Germany 58091. It is involved in the business of production of drop Forgings from all current steel qualities from 1 kg to 150 kg and with a maximum length of 2000 mm. Interest of the Promoters Schoneweiss & Co. GmbH is the subsidiary of Mahindra Forgings Europe AG. M&M controls 52.97% of the total voting rights of Schoneweiss & Co. GmbH. 83. Gipp Aero Investments Pty. Limited Corporate Information Gipp Aero Investments Pty. Limited was incorporated on June 16, 1998. Its registered office is located at Latrobe Valley Airfield, 75 Airfield Road, Traralgon Vic 3844. It is involved in the business of investment vehicle & holding company. Interest of the Promoters Gipp Aero Investments Pty. Limited is the subsidiary of Aerostaff Australia Pty. Limited. M&M controls 50.07% of the total voting rights of Gipp Aero Investments Pty. Limited. 84. Gippsaero Pty. Limited Corporate Information Gippsaero Pty. Limited was incorporated on November 25, 2009. Its registered office is located at Latrobe Valley Airfield, 75 Airfield Road, Traralgon Vic 3844. It is involved in the business of manufacture of aircrafts. Interest of the Promoters Gippsaero Pty. Limited is the subsidiary of Gipp Aero Investments Pty. Limited. M&M controls 50.07% of the total voting rights of Gippsaero Pty. Limited. 85. GA8 Airvan Pty. Limited Corporate Information GA8 Airvan Pty. Limited was incorporated on May 03,2006. Its registered office is located at Latrobe Valley Airfield, 75 Airfield Road, Traralgon Vic 3844. It hols “Type Certificates”. Interest of the Promoters GA8 Airvan Pty. Limited is the subsidiary of Gipp Aero Investments Pty. Limited. M&M controls 50.07% of the total voting rights of GA8 Airvan Pty. Limited.


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86. GA200 Pty. Limited Corporate Information GA200 Pty. Limited was incorporated on May 05, 2006. Its registered office is located at Latrobe Valley Airfield, 75 Airfield Road, Traralgon Vic 3844. It holds "Type Certificates". Interest of the Promoters GA200 Pty. Limited is the subsidiary of Gipp Aero Investments Pty. Limited. M&M controls 50.07% of the total voting rights of GA200 Pty. Limited. 87. Airvan Flight Services Pty. Limited Corporate Information Airvan Flight Services Pty. Limited was incorporated on March 13, 2007. Its registered office is located at Latrobe Valley Airfield, 75 Airfield Road, Traralgon Vic 3844. It holds "Air Operator Certificate". Interest of the Promoters Airvan Flight Services Pty. Limited is the subsidiary of Gipp Aero Investments Pty. Limited. M&M controls 50.07% of the total voting rights of Airvan Flight Services Pty. Limited. 88. Gipp Aero International Pty. Limited Corporate Information Gipp Aero International Pty. Limited was incorporated on October 09, 2007. Its registered office is located at Latrobe Valley Airfield, 75 Airfield Road, Traralgon Vic 3844. It holds “Type Certificates”. Interest of the Promoters Gipp Aero International Pty. Limited is the subsidiary of Gipp Aero Investments Pty. Limited. M&M controls 50.07% of the total voting rights of Gipp Aero International Pty. Limited. 89. Normad TC Pty. Limited Corporate Information Normad TC Pty. Limited was incorporated on September 10, 2007. Its registered office is located at Latrobe Valley Airfield, 75 Airfield Road, Traralgon Vic 3844. It holds "Type Certificates". Interest of the Promoters Normad TC Pty. Limited is the subsidiary of Gipp Aero Investments Pty. Limited. M&M controls 50.07% of the total voting rights of Normad TC Pty. Limited. 90. Mahindra Gears Cyprus Limited Corporate Information Mahindra Gears Cyprus Limited was incorporated on July 25, 2007. Its registered office is located at 48, Themistokli Dervi Street, Centennial Building, 7th floor, office 701, 1066 Nicosia, Cyprus. It is an Investment Company. Interest of the Promoters Mahindra Gears Cyprus Limited is the subsidiary of Mahindra Gears Global Limited. M&M controls 53.34% of the total voting rights of Mahindra Gears Cyprus Limited.


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91. Metalcastello S.p.A. Corporate Information Metalcastello S.p.A. was incorporated on May 23, 2008. Its registered office is located at Via della Mercede, 11 00187 Roma RM. It is involved in the business of manufacturing auto components. Interest of the Promoters Metalcastello S.p.A. is the subsidiary of Mahindra Gears Cyprus Limited. M&M controls 51% of the total voting rights of Metalcastello S.p.A. 92. Crest Geartech Private Limited Corporate Information Crest Geartech Private Limited was incorporated on July 18, 1994 under the Companies Act. Its registered office is located at 12/7, Mathura road, Faridabad-121003, Haryana, India. It is involved in the business of manufacturing of auto components. Interest of the Promoters Crest Geartech Private Limited is the subsidiary of Metalcastello S.p.A. M&M controls 51% of the total voting rights of Crest Geartech Private Limited. Promoter Group Companies

(I) Listed Subsidiaries of M&M 1. Mahindra & Mahindra Financial Services Limited 2. Mahindra Lifespace Developers Limited 3. Mahindra Ugine Steel Company Limited 4. Mahindra Forgings Limited 5. Mahindra Holidays and Resorts India Limited 6. Ssangyong Motor Company Limited

(II) Unlisted Subsidiaries of M&M 1. Mahindra Engineering and Chemical Products Limited 2. Mahindra Forgings Global Limited 3. Mahindra Steel Service Centre Limited 4. Schöneweiss & Co. GmbH 5. Mahindra First Choice Wheels Limited 6. Mahindra Hinoday Industries Limited 7. Mahindra USA, Inc. 8. Mahindra Navistar Engines Private Limited 9. Mahindra Gujarat Tractor Limited 10. Mahindra Aerospace Private Limited 11. Mahindra Shubhlabh Services Limited 12. Heritage Bird (M) Sdn Bhd 13. Mahindra and Mahindra South Africa (Proprietary) Limited 14. Mahindra First Choice Services Limited 15. Mahindra Engineering Services Limited 16. Mahindra Graphic Research Design srl 17. Mahindra Gears & Transmissions Private Limited 18. Mahindra Gears International Limited 19. Mahindra Overseas Investment Company (Mauritius ) Ltd 20. Mahindra Gears Global Limited 21. Mahindra Europe s.r.l. 22. Mahindra Gears Cyprus Limited 23. Mahindra (China) Tractor Company Limited 24. Metalcastello S.P.A 25. Mahindra-BT Investment Company (Mauritius) Limited 26. Mahindra Bebanco Developers Limited 27. Mahindra Intertrade Limited 28. Industrial Township (Maharashtra) Ltd 29. Mahindra MiddleEast Electrical Steel Service Centre (FZC) 30. Crest Geartech Private Limited 31. Mahindra Consulting Engineers Limited 32. Mahindra Business & Consulting Services Private

Limited 33. Mahindra Holidays and Resorts USA Inc. 34. Mahindra Two Wheelers Limited 35. MHR Hotel Management GmbH 36. Mahindra Automotive Australia Pty. Ltd. 37. Mahindra Hotels and Residences India Limited 38. Mahindra United Football Club Private Limited 39. Mahindra Holdings Limited 40. Defence Land Systems India Private Limited 41. NBS International Limited 42. Mahindra Yueda (Yancheng) Tractor Company Limited 43. Mahindra Insurance Brokers Limited 44. Mahindra Electrical Steel Limited 45. Mahindra Rural Housing Finance Limited 46. Raigad Industrial & Business Park Limited


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47. Bristlecone Limited 48. Retail Initiative Holdings Limited 49. Bristlecone Inc. 50. Mahindra Retail Private Limited 51. Bristlecone (UK) Limited 52. Mahindra Technologies Services Inc. 53. Bristlecone India Limited 54. Mahindra Punjab Tractors Private Limited 55. Bristlecone (Singapore) Pte. Limited 56. Mahindra EcoNova Private Limited 57. Bristlecone GmbH 58. Mahindra Conveyor Systems Private Limited 59. Bristlecone (Malaysia) SDN.BHD 60. BAH Hotelanlagen AG 61. Mahindra Automobile Distributor Private Limited 62. Mahindra Aerospace Australia Pty. Ltd 63. Mahindra Navistar Automotives Limited 64. Aerostaff Australia Pty. Ltd 65. Mahindra Engineering Services (Europe) Limited 66. Mahindra Reva Electric Vehicles Private Limited 67. Mahindra Engineering GmbH 68. Bristlecone Consulting Limited 69. Mahindra Infrastructure Developers Limited 70. Anthurium Developers Limited 71. Mahindra World City (Jaipur) Limited 72. Watsonia Developers Limited 73. Mahindra Integrated Township Limited 74. Gipp Aero Investments Pty. Limited 75. Mahindra Residential Developers Limited 76. Gippsaero Pty. Limited 77. Mahindra World City Developers Limited 78. GA8 Airvan Pty. Limited 79. Mahindra World City (Maharashtra) Limited 80. GA200 Pty. Limited 81. Knowledge Township Ltd 82. Airvan Flight Services Pty. Limited 83. Mahindra Vehicle Manufacturers Limited 84. Gipp Aero International Pty. Limited 85. Mahindra Logistics Limited 86. Nomad TC Pty. Limited 87. Mahindra Forgings International Limited 88. Mahindra Emirates Vehicle Armouring FZ-LLC 89. Mahindra Forgings Europe AG 90. Mahindra BPO Services Private Limited 91. Gesenkschmiede Schneider GmbH 92. Mahindra Aerostructures Private Limited 93. JECO-Jellinghaus GmbH 94. Ssangyong European Parts Center B.V 95. Falkenroth Umformtechnik, GmbH 96. Ssangyong Motor (Shanghai) Co., Ltd 97. Mahindra Telecommunications Investment Private Limited 98. Ssangyong (Yizheng) Auto Parts Manufacturing Co., Ltd 99. Jensand Limited 100. Mahindra EPC Services Private Limited 101. Stokes Forgings Dudley Limited 102. Bristlecone International AG 103. Stokes Forgings Limited 104. Stokes Group Limited 105. Navyug Special Steel Private Limited 106. Bell Tower Resorts Private Limited*

* w.e.f. 21st December, 2011

(III) Companies other than subsidiaries in which M&M holds 10 % or more than 10% 3. Officemartindia.com Limited 4. Yadgiri Farm Solutions Private Limited * 5. Richfield Crop Solutions Private Limited (ROC

Record- Struck-off) * 6. Srinivasa Farm Solutions Private Limited (ROC Record-

Struck-off)* 7. Vayugrid Marketplace Services Private Limited 8. Farm Vision Agri-Tech Private Limited* 9. Mega One Stop Farm Services Limited* 10. Sowbhagya Krishi Vikas Private Limited * 11. Mriyalguda Farm Solutions Limited* 12. Bhuvi Care Private Limited* 13. Kota Farm Services Limited* 14. Mahindra Construction Company Limited 15. Mahindra Sona Limited 16. Covai Crop Care India Private Limited* 17. PSL Media & Communication Limited 18. Manjara Agri Tech Private Limited* 19. Mahindra & Mahindra Contech Limited 20. Swaraj Engines Limited – Listed Company 21. Indian NGOs.com Private Limited 22. Swaraj Automotives Limited - Listed Company 23. Hadoti Krishi Vihar Private Limited* 24. Mahindra Composites Limited - Listed Company 25. Harsolia Agri Sales and Services Private Limited* 26. Tech Mahindra Limited - Listed Company

*Investment through Mahindra Shubhlabh Services Limited pursuant to de-merger

(IV) Companies Under Liquidation (V) Ventures from which M&M has disassociated during the last three years

1. Machinery Manufacturers Corporation Limited 1. Owens Corning (India) Limited (November, 2010) 2. Montreal Engineering International Limited 2. Engines Engineering S.r.l (September 26, 2011) 3. Triton Overwater Transport Agency Limited 3. EFF Engineering S.r.l (September 26, 2011) 4. Roplas (India) Limited 4. ID-EE S.r.l., Italy (August 3, 2010)

5. Mahindra Technologies Inc. (March 10, 2010)


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DIVIDEND POLICY

Under the Companies Act, an Indian company pays dividends upon a recommendation by its board of directors and approval by a majority of the shareholders, who have the right to decrease but not to increase the amount of dividend recommended by the board of directors. Under the Companies Act, dividends may be paid out of profits of a company in the year in which the dividend is declared or out of the undistributed profits or reserves of the previous Fiscal Years or out of both. We do not have a formal dividend policy. Any dividends declared are recommended by the Board of Directors depending upon the financial condition, results of operations, capital requirements and surplus, contractual obligations and restrictions, the terms of the credit facilities and other financing arrangements at the time a dividend is considered, and other relevant factors and approved by the Equity Shareholders at their discretion. We have not paid any dividend in the previous 5 Financial Years. Dividends are payable within 30 days of approval by the Equity Shareholders at its annual general meeting. The Articles also give the Board of Directors the discretion to declare and pay interim dividends without obtaining Shareholder approval. When dividends are declared, all the Equity Shareholders whose names appear in the Register of Members as on the “record date” are entitled to be paid the dividend declared by us. Any Equity Shareholder who ceases to be an Equity Shareholder prior to the record date, or who becomes an Equity Shareholder after the record date, will not be entitled to the dividend declared by us.


132

SECTION VI – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

To, The Board of Directors EPC Industrié Limited Plot No. H – 109, MIDC, Ambad, Nashik 422 010 Maharashtra, India. Dear Sirs,

1) We have examined the attached financial information of EPC Industrié Limited (the “Company”), as approved

by the Board of Directors of the Company, prepared in terms of the requirements of Paragraph B, Part II of Schedule II of the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended to date (SEBI Guidelines) and in terms of our arrangement letter dated January 6, 2011 in connection with the proposed issue of Equity Shares of the Company.

2) This information has been extracted by the Company from the financial statements for the years ended March

31, 2011, 2010, 2009, 2008 and 2007.Audit for the financial years ended March 31, 2011 and 2010 was conducted by the previous auditors, Desai Associates; audit for the financial years ended March 31, 2009, 2008 and 2007 was conducted by the previous auditors, Mukadam and Associates, and accordingly reliance has been placed on the financial information examined and restated by Desai Associates for the said years. The financial information included for these years, i.e., 2011, 2010, 2009, 2008 and 2007 is based solely on the report submitted by them.

3) We have also examined the financial information of the Company for the period April 1, 2011 to September 30,

2011 prepared and approved by the Board of Directors for the purpose of disclosure in the offer document of the Company mentioned in Paragraph (1) above.

The Financial information for the above period was examined to the extent practicable, for the purpose of audit of the financial information in accordance with the Auditing and Assurance Standards issued by the Institute of Chartered Accountants of India. Those Standards require that we plan and perform our audit to obtain reasonable assurance, whether the financial information under examination is free of material misstatement. Based on the above, we report that in our opinion and according to the information and explanations given to us, we have found the same to be correct and the same have been accordingly used in the financial information appropriately.

4) In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines

and terms of our engagement agreed with you, we further report that: a) The Restated Summary Statement of Assets and Liabilities of the Company, including as at March 31,

2011, 2010, 2009, 2008 and 2007 examined and reported on by Desai Associates on which reliance has been placed by us, and as at September 30, 2011 examined by us, as set out in Annexure - I to this report, are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies, Note and Changes in Significant Accounting Policies (Refer Annexures IV and V).

b) The Restated Summary Statement of Profit or Loss of the Company for the Year then ended, including for

the years ended March 31, 2011, 2010, 2009, 2008 and 2007 examined and reported on by Desai Associates on which reliance has been placed by us, and for the period April 1, 2011 to September 30, 2011 examined


133

by us, as set out in Annexure - II to this report, are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies, Note and Changes in Significant Accounting Policies (Refer Annexures IV and V).

c) The Restated Summary Statement of Cash flows of the Company for the year then ended, including for the years ended March 31, 2011, 2010, 2009, 2008 and 2007 examined and reported on by Desai Associates on which reliance has been placed by us, and for the period April 1, 2011 to September 30, 2011 examined by us, as set out in Annexure - III to this report, are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies, Note and Changes in Significant Accounting Policies (Refer Annexures IV and V).

d) Based on the above and also as per the reliance placed on the reports submitted by the previous auditors, Desai Associates for the respective years, we are of the opinion that the restated financial information has been made after incorporating:

(i) adjustments for the changes in accounting policies retrospectively in respective financial years to

reflect the same accounting treatment as per changed accounting policy for all the reporting periods;

(ii) adjustments for the material amounts in the respective financial years to which they relate; and, (iii) there are no extra-ordinary items that need to be disclosed separately in the accounts and

qualification requiring adjustments.

e) We have also examined the following other financial information set out in Annexures prepared by the management and approved by the Board of Directors relating to the Company for the years ended March 31, 2011, 2010, 2009, 2008 and 2007 and for the period from April 1, 2011 to September 30, 2011.In respect of the years ended March 31, 2011, 2010, 2009, 2008 and 2007, this information has been based upon the reports submitted by the previous auditors Desai Associates and relied upon by us.

(i) Statement of Dividend paid/proposed included in Annexure VI;

(ii) Statement of Accounting Ratios included in Annexure VII;

(iii) Statement of Capitalisation as at September 30, 2011 included in Annexure VIII;

(iv) Statement of Secured and Unsecured Loans included in Annexures IX and X respectively;

(v) Statement of Other Income included in Annexure XI;

(vi) Statement of Tax Shelter included in Annexure XII;

(vii) Statement of Debtors included in Annexure XIII;

(viii) Statement of Loans and Advances included in Annexure XIV;

(ix) Statement of Investments included in Annexure XV;

(x) Statement of Contingent Liabilities not provided for included in Annexure XVI;

(xi) Statement of Related Party Transactions included in Annexure XVII.

In our opinion the financial information contained in Annexures VI to XVII of this report, read along with the Significant Accounting Policies, Changes in Significant Accounting Policies and Notes (Refer Annexures I to V) prepared after making adjustments and regrouping as considered appropriate, have been prepared in accordance with Part IIB of Schedule II of the Act and the SEBI Guidelines.


134

5) Our report is intended solely for use of the management and for inclusion in the offer document in connection with the proposed issue of equity shares of the Company. Our report should not be used for any other purpose except with our consent in writing.

For Deloitte Haskins and Sells Chartered Accountants (Registration No. 117364W)

Ketan Vora Mumbai Partner Date: January 11, 2012 Membership No: 100459


135

ANNEXURE – I RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES

` In Lacs

As at As at As at As at As at As at 30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 Fixed Assets:

Gross Block 4414.85 4360.44 4275.37 4260.61 3854.65 4087.14 Less: Depreciation (2584.96) (2523.02) (2442.45) (2362.46) (2195.49) (2122.67) Net Block 1829.89 1837.42 1832.92 1898.15 1659.16 1964.47 Less : Revaluation Reserve (358.52) (374.20) (418.33) (455.20) (490.25) (734.32)

(See note no. 1C in Annexure IV) & (See note no. 4 in Annexure V) Net Block after adjustment for Revaluation Reserve 1471.37 1463.22 1414.59 1442.95 1168.91 1230.15

Capital Work in Progress 828.64 365.36 24.71 40.61 175.48 35.28 Investments: 0.81 0.81 1.37 0.82 0.82 0.85 (See Annexure – XV) Deferred Tax Asset: 35.13 50.05 140.47 182.47 - - (See Note No. 5 in Annexure – IV) Current Assets, Loans and Advances:

Inventories 1948.93 1475.40 722.97 794.03 761.65 488.36 Sundry Debtors 2783.16 2777.74 2201.29 1851.13 1154.66 287.54 (See Annexure – XII) Cash and Bank Balances 1806.85 4115.97 442.56 414.04 262.76 1179.64 Other Current Assets 8.13 14.65 11.20 4.04 3.32 4.15 Loans and Advances 446.24 442.10 447.48 418.06 526.33 418.86

(See Annexure – XIV) Total 9329.26 10,705.30 5,406.64 5,148.15 4,053.93 3,644.83

Less: Liabilities and Provisions: Secured Loans 1331.72 1484.82 1275.11 845.06 554.06 - (See Annexure – IX) Unsecured Loans 695.90 2083.59 2180.73 2322.17 2362.23 2414.28(See Annexure – X) Current Liabilities 1961.50 1988.73 1164.63 1347.04 844.44 438.40 Provisions 95.66 90.75 88.52 106.25 94.01 27.88

Total 4084.78 5647.89 4708.99 4620.52 3854.74 2880.56 NET WORTH 5244.48 5057.41 697.65 527.63 199.19 764.27 Net worth represented by: Share Capital 1725.57 1725.57 1069.76 949.76 949.76 949.76 Share Application Money - - - 500.00 - - Employees Stock Options Outstanding 11.02 17.55 - - - - (See note no. 8 in Annexure IV) & (See note no. 5 in Annexure V) Reserves and Surplus 6677.58 6693.26 3192.74 2735.81 2783.99 3029.46 Less : Revaluation Reserve (358.52) (374.20) (418.33) (455.20) (490.25) (734.32) (See note no. 1C in Annexure IV) & (See note no. 4 in Annexure V) 8055.65 8062.18 3844.17 3730.37 3243.50 3244.90 Less: Profit and Loss Account (2811.17) (3004.77) (3146.52) (3202.74) (3044.31) (2480.63) NET WORTH 5244.48 5057.41 697.65 527.63 199.19 764.27

Note: The above statement should be read with the Notes on Adjustment to Restated Financial Statements, Significant

Accounting Policies and Notes on Accounts as appearing in Annexures IV and V.


136

ANNEXURE – II RESTATED SUMMARY STATEMENT OF PROFITS AND LOSSES

` In Lacs Particulars For six

months Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 INCOME Sales / Services Rendered 4626.34 8754.98 7292.70 6102.86 4268.03 1278.09 (See Note No. 5 in Annexure – V) Less: Excise Duty on Sales 36.18 88.51 48.77 96.86 76.28 55.75 (See Note No. 5 in Annexure – V) 4590.16 8666.47 7243.93 6006.00 4191.75 1222.34 Other Income 112.78 101.91 124.72 105.80 42.48 88.91 (See Note No. 5 in Annexure – V) & (See Annexure – XI) Total Income 4702.94 8768.38 7368.65 6111.80 4234.23 1311.25 EXPENDITURE Raw Material, Finished and Semi-Finished Products

2860.06 5323.42 4499.23 4098.68 2994.98 935.59

(See Note No. 5 in Annexure – V) Personnel Expenses 540.02 958.10 758.53 609.72 518.78 303.12 Other Expenses 902.33 1593.64 1367.98 1209.25 915.70 576.24 Interest Expenses 104.78 482.00 443.68 369.94 235.60 58.74 (See Note No. 5 in Annexure – V) Depreciation / Amortisation 87.23 177.14 162.92 144.26 125.10 154.83 Total Expenditure 4494.42 8534.30 7232.34 6431.85 4790.16 2028.52 Profit / (Loss) before Exceptional Items 208.52 234.08 136.31 (320.05) (555.93) (717.27) Exceptional Items - - - - - 4203.03 (See Note No. 7 in Annexure – IV) Profit / (Loss) before Taxation 208.52 234.08 136.31 (320.05) (555.93) 3485.76

Provision for Taxation Current Income Tax 4.00 (0.04) (0.87) - 7.75 -Income Tax for Prior Years - - - 2.26 (2.09) Fringe Benefit Tax - - - 11.50 - 4.00 Minimum Alternate Tax (Credit) (4.00) - - - - -Deferred Tax Expense / (Credit) 14.92 90.42 42.00 (182.47) - 1490.75

Total Tax Expense 14.92 90.38 41.13 (168.71) 7.75 1492.66 Net Profit / (Loss) before adjustments 193.60 143.70 95.18 (151.34) (563.68) 1993.10 Adjustments (See Note No. 1 in Annexure – V) - 26.80 (19.71) (7.09) - 1490.75Net Profit / (Loss) as Restated (*) 193.60 170.50 75.47 (158.43) (563.68) 3483.85 Profit & Loss Account at the beginning of the year (See Note No. 6 in Annexure – V)

(3004.77) (3146.52) (3202.74) (3044.31) (2480.63) (7033.84)


(2811.17) (2976.02) (3127.27) (3202.74) (3044.31) (3549.99)

Appropriations Transfer to Debenture Redemption Reserve - (28.75) (19.25) - - -Transfer from General Reserve 1069.36 Total Appropriations - (28.75) (19.25) - - 1069.36

BALANCE CARRIED FORWARD TO THE RESTATED BALANCE SHEET

(2811.17) (3004.77) (3146.52) (3202.74) (3044.31) (2480.63)

Earnings Per Share - Rs. [Face Value of Rs. 10 each] (See Note No. 10 in Annexure – IV) Basic 1.12 1.55 0.77 (1.67) (5.93) 59.55 Diluted 1.12 1.55 0.77 (1.67) (5.93) 59.55 Notes:

4. The above statement should be read with the Notes on Adjustment to Restated Financial Statements, Significant Accounting Policies and Notes on Accounts as appearing in Annexures IV and V.

5. The reconciliation between the audited and restated accumulated profit and loss balance as at April 1, 2006 is given in Note No. 6 of Annexure V.

6. (*)There is no Current Tax or Deferred Tax impact due to restatement.


137

ANNEXURE – III RESTATED STATEMENT OF CASH FLOWS


months Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit / (Loss) Before Taxation – as restated 208.52 260.88 116.60 (327.14) (555.93) 3485.76 Adjusted for:

Depreciation / Amortisation 87.23 177.14 162.92 144.26 125.10 154.83 Provision for Doubtful Debts 4.38 19.15 35.52 15.91 43.09 - (Profit) / Loss on Sale of Fixed Assets 9.70 15.29 (1.68) (1.37) (0.22) 14.16 (Profit) / Loss on Investments - 0.57 4.55 - - - Dividend Earned (0.02) (0.02) (0.02) (0.02) (0.02) (0.02) Interest Income (99.48) (74.90) (77.21) (40.38) (20.93) (7.59) Exchange (Gain) / Loss (0.01) (0.87) 1.31 0.26 (0.27) - Interest Expenses 104.78 482.00 443.68 369.94 235.60 58.74 Amortisation of Deferred Employee Stock Option

Expenses 1.64 3.33 - - - -

Extinguishment of Debts - - - - - (3007.72) Interest Waiver under OTS with Banks and NCD Holders - - - - - (3294.65) Bad Debts and Advances Written off / Provision for

Doubtful Debts - - - - - 1713.21

Provision for Obsolete Stocks - - - - - 180.92 Impairment of Intangible Assets - - - - - 205.21

Sub-total 108.22 621.69 569.07 488.60 382.35 (3982.91) Operating Profit / (Loss) before Working Capital Changes 316.74 882.57 685.67 161.46 (173.58) (497.15)Adjustment for:

Trade Debtors & Other Receivable (10.35) (588.46) (376.62) (595.57) (1010.67) 219.51 Inventories (473.53) (752.43) 71.06 (32.38) (273.29) (297.33) Trade Payable & Other Liabilities (22.31) 828.79 (197.49) 511.60 470.31 (234.65)

Sub-total (506.19) (512.10) (503.05) (116.35) (813.65) (312.47) Cash (Used In)/ Generated from Operations (189.45) 370.47 182.62 45.11 (987.23) (809.62)

Direct Tax Refund / (Paid) net (13.33) 10.13 (40.76) (18.31) (13.02) (12.25) Net Cash Flows (Used in) / Generated from Operating Activities

(202.78) 380.60 141.86 26.80 (1000.25) (821.87)

B. CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Fixed Assets (570.23) (585.68) (129.45) (285.46) (273.57) (56.07) Sale of Fixed Assets 6.09 0.98 4.86 3.39 70.07 0.28 Sale of Investments - - (0.55) - 0.03 - Interest Received 103.38 75.45 72.39 38.65 21.44 6.26 Dividend Received 0.02 0.02 0.02 0.02 0.02 0.02Net Cash Flows Used in Investing Activities (460.74) (509.23) (52.73) (243.40) (182.01) (49.51) C. CASH FLOWS FROM FINANCING ACTIVITIES

Interest Paid (104.81) (482.23) (443.79) (369.92) (262.44) (31.50) Proceeds from Issue of Shares/ Share Application Money - 4334.88 100.00 500.00 - 2205.00 Proceeds from /(Repayment of ) OCC Debentures (1300.00) - (100.00) - - 1800.00 Proceeds from/ (Repayment of ) borrowing (Bank Term

Loan) - (83.33) (100.00) 83.33 100.00 -

Proceeds from/ (Repayment of) borrowings (Bank Cash Credit)

(150.09) 326.92 530.56 211.86 404.86 -

Share Issue Expenses - (163.19) (5.44) (13.13) (1.41) (19.90) Proceeds from/ (Repayment of ) other borrowings (90.70) (131.01) (41.94) (44.26) 24.37 (2003.52)

Net Cash Flows (Used in)/ generated from Financing Activities

(1645.60) 3802.04 (60.61) 367.88 265.38 1950.08

NET INCREASE /(DECREASE) IN CASH & CASH EQUIVALENT (A+B+C)

(2309.12) 3673.41 28.52 151.28 (916.88) 1078.70

Opening Cash & Cash Equivalent 4115.97 442.56 414.04 262.76 1179.64 100.94 Closing Cash & Cash Equivalent 1806.85 4115.97 442.56 414.04 262.76 1179.64 Notes:


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3. Cash Flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3 “Cash Flow Statements” as specified in the Companies (Accounting Standards) Rules, 2006.

4. Closing Cash & Cash Equivalent includes Fixed Deposits with maturity over three months lodged with banks as margin for non-funded working capital facility and balance in Debt Service Reserve Account with a bank.


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ANNEXURE – IV SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS – AS RESTATED

1. Significant Accounting Policies:

A. Basis of Accounting: The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles (GAAP) and in compliance with the provisions of the Companies Act, 1956 and the Accounting Standards, as specified in the Companies (Accounting Standards) Rules, 2006, prescribed by the Central Government.

B. Use of Estimates: The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balance of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Differences, if any, between the actual results and estimates, is recognised in the period in which the results are known.

C. Fixed Asset:

Fixed assets are carried at cost less depreciation. Cost includes cost of acquisition or construction and is stated at historical cost. Fixed assets (other than office premises at Ahmedabad, Furniture & fixtures, Office equipment and Vehicles) have been re-valued as on 24thJune, 1998 and the resultant surplus has been added to the block of the assets. Depreciation on all assets, other than Computer & Accessories, is provided on Straight Line Method in accordance with Schedule XIV of the Companies Act, 1956. Depreciation is provided on Computer & Accessories using Straight Line Method over a period of 3 years. Leasehold Assets are written off over the period of lease. Depreciation on additions to assets or on sale / disposal of assets is calculated from the beginning of the month of such addition or up to the month of such sale / scrapped, as the case may be. As at each Balance sheet date, the carrying amount of the assets is tested for impairment, so as to determine the provision for impairment loss, if any, is required to be made.

D. Intangible Assets:

Intangible assets are recognised only when economic benefit attributable to the assets will flow to the enterprise and cost can be measured reliably and are being amortised over its useful life of three years.

E. Investments:

Long term investments are stated at cost. Provision is made for any diminution other than temporary in the value of the investments.

F. Inventories:

Stock of raw materials and components are valued on" weighted average basis". Stock of finished goods is valued at cost or net realisable value, whichever is lower. Cost for this purpose includes raw materials, wages, manufacturing expenses, overheads and depreciation.

G. Foreign Exchange Transactions:

Transaction in foreign currency is recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated at the year-end rates. The exchange difference between the rate prevailing on the date of


140

transaction and on the date of settlement as also on translation of monetary items at the end of the year is recognised as income or expense, as the case may be.

H. Revenue Recognition:

a) Sales Sales are recorded exclusive of Sales Tax / Value Added Tax and do not include recovery such as freight, insurance etc. which are set off against respective expense head. b) Interest Income Interest Income is recognised on a time proportion basis taking into account the amount outstanding and the applicable rates. Revenue is recognised when the risks and rewards of ownership are passed on to the customers and no significant uncertainty as to its measurability and collectability exists.

I. Government Grants:

Capital Incentive Subsidy, not specifically related to fixed assets, is credited to Capital Incentive Reserve and retained till the requisite conditions are fulfilled.

J. Employee Benefits:

a) Short term employee benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences, etc. and the expected cost of bonus, ex-gratia, are recognised in the period in which the employee renders the related service. b) Post-employment benefits

i. Defined contribution plans: The Company operates Defined Contribution Scheme like Provident Fund

and Superannuation schemes. Contributions to Provident Fund are made by the Company, based on current salaries, to the funds maintained by the Government. In case of Provident Fund Schemes, contributions are also made by the employees. Contribution to Superannuation Schemes, as applicable for certain categories of employees and the contribution by the Company is invested with an Insurance Company.

ii. Defined benefit plans: The employees’ gratuity fund scheme, managed by LIC is a defined benefit

plan. The present value of obligation is determined based on actuarial valuation carried out as at the end of each financial year using the Projected Unit Credit Method.

The obligation is measured at the present value of the estimated future cash flows. The discount rate used of determining the present value of the obligation under defined benefit plans, is based on the market yield on government securities, of a maturity period equivalent to the weighted average maturity profile of the related obligations at the Balance Sheet date.

Actuarial gains and losses are recognised immediately in the Profit and Loss Account.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined plans to recognise the obligation on the net basis.

Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs. Past service cost is recognised as expenses on a straight line basis over the period until benefit become vested.

c) Long term employee benefits


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The obligation for long term employee benefits such as long term compensated absences, long service award, etc. is recognised in the similar manner as in the case of defined benefit plans as mentioned in (b) (ii) above.

d) Employee Stock Compensation Cost

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India (ICAI). The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortised over the vesting period of the options on a straight line basis.

K. Leases:

In respect of Operating Leases, lease payments are recognised as expenses and lease income are recognised as income on a straight line basis over the lease term. Initial direct costs are recognised immediately as expenses.

L. Taxes on Income:

Income Taxes are accounted for in accordance with Accounting Standard on "Accounting for Taxes on Income", (AS-22), issued by the Institute of Chartered Accountants of India. Tax Expenses comprises both current tax and deferred tax. Current tax is measured at the amount expected to be paid / recovered from the tax authorities using the applicable tax rates.

Deferred tax asset is measured based on the tax rates and the laws enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In respect of carry forward losses and unabsorbed depreciation, deferred tax assets are recognized only to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

M. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

2. Estimated amounts of Contracts remained to be executed on Capital Account and not provided for (Net of Advance)

` In Lacs As at

30-Sep-11 As at

31-Mar-11 As at

31-Mar-10 As at

31-Mar-09 As at

31-Mar-08 As at

31-Mar-07 45.11 467.22 57.72 8.92 147.56 39.72

3. Claims against the Company not acknowledged as debt ` In Lacs

As at 30-Sep-11

As at 31-Mar-11

As at 31-Mar-10

As at 31-Mar-09

As at 31-Mar-08

As at 31-Mar-07

11.95 11.86 48.09 15.66 15.66 10.05

4. The depreciation charge for the year excludes amount of depreciation on the increase due to Revaluation

of fixed assets. ` In Lacs

For six months ended Year ended Year ended Year ended Year ended Year ended 30-Sep-11 31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07

15.49 35.19 35.19 35.05 38.19 40.08


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5. Deferred Tax Assets & Liabilities 2006-07: The Company as on 31st March, 2006, recognised Deferred Tax Assets (DTA) of Rs. 1850.48 Lacs comprising of unabsorbed business losses of Rs. 1236.70 Lacs and unabsorbed depreciation of Rs. 613.78 Lacs. The basis used was not strictly in line with requirements of Accounting Standard Interpretation – 9 issued by the Institute of Chartered Accountants of India to determine virtual certainty. In the year ended 31st March, 2007, the Management assessed these Deferred Tax Assets and was of the view that the requirement of virtual certainty was not fulfilled and that the full Deferred Tax Asset should be expensed out. Consequently, the Deferred Tax Liability on account of timing difference of Rs. 359.73 Lacs was also been written back. The said write off of Deferred Tax Assets net of the Deferred Tax Liability has been adjusted in the financial year ended 31st March, 2006 in view of the absence of virtual certainty and convincing evidence as required by the ASI 9 in compliance with Accounting Standard 22 relating to “Accounting for Taxes on Income”.

2008-09: Deferred Tax Asset has been recognized on carry forward business losses and depreciation to the extent of the Deferred Tax Liability, which will be reversed in the future years based on the committed orders on hand, improved financial performance and project work orders being executed through government funded irrigation schemes, the Company has considered profit as virtually certain and recognized Deferred Tax Assets on the loss for the year. With respect to other Deferred Tax Assets, the same have been recognized considering that there is reasonable certainty of their realisation.

6. Remuneration to Managing Director:

Particulars For six

months ended

Year ended

30-Sep-11 31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07 Salaries & Allowances 24.00 52.60 30.00 30.00 30.00 5.67 Contribution to Superannuation Fund

1.50 3.00 3.00 3.00 3.00 -

Provision for Gratuity 4.23 3.11 0.83 0.83 1.00 - Leave Encashment 14.42 - - - - - Subscriptions & Perquisites - - 0.26 0.39 0.37 0.14

In the year ended 31st March, 2007, provision was made in the accounts for remuneration to the Managing Director w.e.f. 22nd January, 2007, on the basis of resolution passed in the Extra-ordinary General Meeting of the Members held on 22nd May, 2007, for which approval of the Central Government was received on 29th August, 2007.

7. Exceptional items include extinguishment of debts / waiver of interest relating to One Time Settlement with

Company’s bankers and debenture holders, write off / provision for bad and doubtful debts and provision for obsolete stock in accordance with Amended / Modified Revival Scheme approved by BIFR.

8. Employees Stock Option Scheme:

Pursuant to the “Employees Stock Option Scheme - 2010” (ESOS) approved by the Shareholders in Annual General Meeting held on 21stJuly 2010, the Company had granted 60,500 Stock Options to the three non-executive Directors and some permanent employees on 19thNovember, 2010, as per the recommendation of the Compensation Committee, at exercise price of Rs. 35 /- each.

In respect of the options granted, the equity settled options vest in 4 tranches of 25% each upon the expiry of 12 months, 24 months, 36 months and 48 months respectively from the date of the grant. Each tranche is


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exercisable within two years from the respective date of vesting. The number of options exercisable in each tranche is minimum 25% of the options vested, except in case of the last date of the exercise, where the employee can exercise all the options vested but not exercised till that date.

In case the option is not exercised by the Employee within the time limits as prescribed in the Scheme, the Options would lapse and no right shall be deemed to accrue or arise after that date.

The compensation costs of the stock options granted are accounted by the Company on the basis of intrinsic value of share on the date of grant of options.

Summary of Stock Options

Particulars No of Stock Options Weighted Average Exercise Price (Rs.)

Options outstanding as on 1st April 2011 60,500 35 Options granted during the period Nil - Options forfeited/lapsed during the period 22,500 35 Options exercised during the period Nil - Options outstanding on 30th September, 2011 38,000 35

Information in respect of options outstanding as at 30th September, 2011:

The range exercise price is Rs. 35 in respect of 38000 Stock Options, whose weighted average remaining life is 4.13 years. The fair value has been calculated using the Black Scholes Option Pricing Model and the significant assumptions made in this regard are as follows:

Grant dated 19th November, 2010

Risk free interest rate 7.65% Expected life 3.50 years Expected volatility 58.12% Expected dividend yield Nil Exercise price (Rs.) 35 Stock price (Rs.) 64

In respect of Options granted under the Employee Stock Option Plan, in accordance with guidelines issued by SEBI, the accounting value of options is accounted as deferred employee compensation, which is amortised on straight line basis over the period between date of grant of option and eligible date for conversion into equity shares. Consequently, Personnel expenses include Rs. 1.63 Lacs being the amortisation of deferred employee compensation, after adjusting for reversal on account of options lapsed. Had the company adopted fair value method in respect of options granted, the employee compensation cost would have been higher by Rs. 0.72 Lacs, profit after tax lower by Rs. 0.72 Lacs and the basic and diluted earnings per share would have been lower by Rs. 0.0042 & Rs. 0.0042 respectively.

9. Investment by Mahindra & Mahindra Ltd.

In March, 2011, Mahindra & Mahindra Limited (M&M) was issued and allotted Equity Shares on preferential basis. Subsequently, in compliance with SEBI (Acquisition of Share & Takeover) Regulations, 1997, M&M made an open offer and acquired additional Equity Shares from the Public Shareholders and is now the Promoter of the Company. The utilization of the funds received from the Preferential Issue of Shares is as under:

` In Lacs Utilisation of Funds As at 30-09-11 As at 31-Mar-11

Working Capital 1117.87 565.71 Capital Expenditure 544.76 - Share Issue Expenses 119.17 119.17


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Margin Money for Bank Guarantees 353.08 - Redemption of Debentures 1300.00 - Funds Utilised 3434.88 684.88 Surplus Fund in Bank Current / Deposit Account 900.00 3650.00 Total 4334.88 4334.88

10. Basic and Diluted Earnings per Share:

For six

months ended Year ended

Year ended

Year ended

Year ended

Year ended

30-Sep-11 31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07 A Net Profit / (Loss) available for equity

shareholders (` in Lacs) 193.60 170.50 75.47 (158.43) (563.68) 3483.85

B Weighted average number of equity shares outstanding during the period for Basic EPS (Nos)

1,72,53,265 1,09,69,510 98,64,932 95,00,000 95,00,000 58,50,685

C Effect of potential number of equity shares on exercise of options (Nos)

28,354 9,989 - - - -

D Weighted average number of equity shares outstanding during the period for Diluted EPS (Nos)

1,72,81,619 1,09,79,499 98,64,932 95,00,000 95,00,000 58,50,685

E Basic Earnings Per Share (Rs.) 1.12 1.55 0.77 (1.67) (5.93) 59.55 F Diluted Earnings Per Share (Rs.) 1.12 1.55 0.77 (1.67) (5.93) 59.55

11. There are no amounts due to investor education and protection fund.

12. Micro and small enterprises:

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end, together with interest paid / payable under this Act, have not been given.

13. Segment Reporting:

The Company is mainly engaged in the business of “Micro Irrigation Systems” (MIS). All other activities of the Company revolve around the main business and accordingly there are no separate reportable segments for the six months ended 30th September, 2011, as per the Accounting Standard on “Segment Reporting” (AS 17) notified under the Companies (Accounting Standards) Rules, 2006. Segment information for the preceding financial years:

` In Lacs Year ended Year ended Year ended Year ended Year ended

31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07 1 Segment Revenue: Sales to external customers MIS 7,807.41 6,675.13 5,216.96 3,452.57 754.91 IIP 859.06 568.80 789.04 739.18 467.43 Total Segment Revenue 8,666.47 7,243.93 6,006.00 4,991.75 1,222.34 2 Segment Results: Segment results before exceptional items MIS 2,690.18 2,072.21 1,337.70 955.99 100.34 IIP 60.38 15.86 (62.43) (211.58) (46.99) Sub Total 2,750.56 2,088.07 1,275.27 7,44.41 53.35 Exceptional items allocated to Segment MIS - - - - (2,019.05) IIP - - - - (41.96) Sub Total - - - - (2,061.01) Segment results after exceptional items MIS 2,690.18 2,072.21 1,337.70 955.99 (1,918.71) IIP 60.38 15.86 (62.43) (211.58) (88.95) 2,750.56 2,088.07 1,275.27 744.41 (2,007.66) Add: Unallocable Income 72.35 122.65 103.61 42.48 6,391.28


145

Year ended Year ended Year ended Year ended Year ended 31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07

Less: Interest expense not allocable 482.00 443.68 369.94 235.60 58.74 Less: Other Expenses not allocable 2,106.83 1,630.73 1,328.99 1,107.22 839.12 Profit / (Loss) Before Tax 234.08 136.31 (320.05) (555.93) 3,485.76 3 Segment Assets: Segment Assets MIS 4,512.10 2,919.27 2,661.95 1,991.15 1,786.30 IIP 670.37 577.58 500.78 417.05 343.77 Sub Total 5,182.47 3,496.85 3,162.73 2,408.20 2,130.07 Unallocable Assets 5,522.83 1,909.79 1,985.42 1,645.73 1,514.76 Total Assets 10,705.30 5,406.64 5,148.15 4,053.93 3,644.83 4 Segment Liabilities: Segment Liabilities MIS 1,573.14 920.25 1,110.74 732.75 214.19 IIP 89.08 2.41 4.86 55.02 4.08 Sub Total 1,662.22 922.66 1,115.60 787.77 218.27 Unallocable Liabilities 3,985.67 3,786.33 3,504.92 3,066.97 2,662.29 Total Liabilities 5,647.89 4,708.99 4,620.52 3,854.74 2,880.56 5 Capital Expenditure: Capital Expenditure MIS 302.25 - - - - IIP - - - - - Sub Total 302.25 - - - - Unallocable Capital Expenditure 283.42 129.46 285.46 273.57 56.07 Total Capital Expenditure 585.67 129.46 285.46 273.57 56.07 6 Depreciation / Amortisation: Depreciation / Amortisation: MIS 61.46 55.54 38.80 39.92 14.78 IIP 12.04 9.62 13.41 17.36 13.13 Sub Total 73.50 65.16 52.21 57.28 27.91 Unallocable depreciation/ amortisation 103.64 97.76 92.05 67.82 126.92 Total depreciation/ amortisation 177.14 162.92 144.26 125.10 154.83 7 Non cash expenses other than

depreciation / amortization 42.71 22.75 22.43 67.33 28.15

8. OTHER INFORMATION:

A. The Company has disclosed Business Segments as the Primary segments. Segments have been identified by the Management taking into account the nature of products, customer profiles and other relevant factors.

B. The Company’s operations have been mainly classified between two primary segments, “Micro Irrigation System” (MIS) and “Industrial and Infrastructure Piping” (IIP).

C. Composition of business segments is as follows: a. Micro Irrigation Systems (MIS) b. Industrial and Infrastructure (Gas and Water) Pipes (IIP)

D. Segmentwise Revenue, Results, Assets and Liabilities include the respective amounts identifiable to either of the segments as also amount allocated on reasonable basis. The expenses, which are not directly attributable to the business segment, are shown as unallocated costs. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated assets and liabilities respectively.

E. There are no inter segment transfer of material.


146

ANNEXURE – V NOTES ON ADJUSTMENTS FOR RESTATED FINANCIAL STATEMENTS

1. Below mentioned is the summary of results of restatement made in the audited accounts for the respective years and its impact on the profits of the Company

Particulars For six months ended

Year ended

Year ended

Year ended

Year ended

Year ended

30-Sep-11 31-Mar-11 31-Mar-10 31-Mar-09 31-Mar-08 31-Mar-07 Adjustment for A. Prior Period Item - 26.80 (19.71) (7.09) - -

(See Note 3A below) B. Write off of deferred tax asset - - - - - 1490.75

(See Note 3B below)

2. Changes in Accounting Policies There were no changes in the accounting policies except for: A. change in accounting of employment benefits in the nature of leave encashment and gratuity. The

accounting was changed in the year ended 31st March, 2007 from cash to accrual basis. B. Change in determination of cost of inventory from First - in – first - out (FIFO) to weighted average

method. The basis was changed in the year ended 31st March, 2010.

3. Other Adjustments A. Prior Period Items:

In the financial statements of the year ended 31st March, 2011, certain material items of income / expenses have been identified as prior period items. For the purpose of this statement, such prior period items have been appropriately adjusted in the respective years.

B. Deferred tax adjustment: During the year ended 31s March, 2006 and earlier, the Company had recognised Deferred Tax Assets (DTA) of Rs. 1,850.48 Lacs comprising unabsorbed business losses of Rs. 1,236.70 Lacs and unabsorbed depreciation of Rs. 613.78 Lacs. The basis used was not strictly in line with requirements of Accounting Standard Interpretations – 9 issued by the Institute of Chartered Accountants of India to determine virtual certainty. Management had assessed these deferred tax assets as at 31st March, 2007 and were of the view that the requirement of virtual certainty was not fulfilled and that the full deferred tax asset should be expensed out. Consequently, the deferred tax liability on account of timing difference of Rs. 359.73 Lacs was also written back. Accordingly, the deferred tax write off has been made in the year ended March 31, 2006 and the brought forward balance in the Profit & Loss Account.

4. Asset Revaluation Reserve

In accordance with Clause IX (B) (9) (f) of the Issue of Capital and Disclosure Requirements Regulations, 2009 issued by the Securities and Exchange Board of India (SEBI), the statement of Assets and Liabilities as restated has been prepared after deducting the balance in revaluation reserve from the carrying amount of fixed assets and reserves and surplus. Further, depreciation on the re-valued amount was provided over the original life of the asset instead of balance life of the asset as required by the Accounting Standard. The adjustment has been made in the respective financial years.


147

5. Material Regrouping: a. Excise Duty – Upto the year ended 31st March, 2008, excise duty on sale of goods was included in the

material cost. This has been now correctly reduced from the sales for the purpose of this restated financial information.

b. Value Added Tax / Sales Tax – Upto the year ended 31st March, 2010 Sales was recorded inclusive of Value Added Tax / Sales Tax with the corresponding effect in Rates and Taxes. Sales Tax has been reduced from Sales and Rates & Taxes for the purpose of this re-stated financial information.

c. Interest - Interest income was adjusted from interest expense and shown as net amount. The same have been segregated for the purpose of this re-stated financial information.

d. In the year ended 31st March, 2011 deferred employee compensation cost was adjusted from the ESOS outstanding liability reflected in Shareholders’ Funds. The same has been regrouped for the purpose of this re-stated financial information.

6. Profit and Loss Account as at 1st April, 2006 (Restated):

` In Lacs Deficit in Profit and Loss Account brought forward as at 1st April, 2006 (Audited) 5543.09 Deferred Tax Assets written off (See Note No 3B above) 1490.75 Deficit in Profit and Loss Account carried to Balance Sheet as at 1st April, 2006 (Restated) 7033.84

7. Non – Adjusted Items:

A. During the year ended 31st March, 2007, provision for leave encashment was made on the basis of actuarial

valuation in compliance with Accounting Standard 15 – Employee Benefits notified under the Companies (Accounting Standards) Rules, 2006, which was earlier accounted for on cash basis. Accordingly, provision for leave encashment pertaining to earlier years has been recognised in the year ended 31st March, 2007 and the effect on the opening balance of Profit and Loss Account has not been ascertained.

B. During the year ended 31st March, 2007, provision for gratuity being the difference between actuarial valuation and the fund available with LIC under the Group Gratuity Scheme was provided for, which was earlier accounted for on cash basis. Accordingly, provision for gratuity shortfall pertaining to the earlier years has been recognised in the year ended 31st March, 2007 and the effect on the opening balance of Profit and Loss account has not been ascertained.

C. During the year ended 31st March, 2010, determination of cost of inventory was changed to weighted average method, which was earlier on First in First out (FIFO) method. Adjustment on this account has not been made in the financial statements for the year ended 31st March, 2009, 2008 and 2007 and brought forward in Profit and Loss Account as at 1st April, 2006 in the absence of available information. However, in the opinion of the Company the impact of the same on the Summary Statements of Profits and Losses is not material.

8. Auditors Qualification

Auditors’ Report and Annexure to Auditors’ Report, CARO 2003 There were no qualifications in the Auditors’ Report and the Annexure to the Auditors’ Report in respect of the financial years ended 31st March 2011, 2010, 2009, 2008 and 2007 and in the Auditors’ Report for the six months ended 30th September, 2011.


148

ANNEXURE – VI STATEMENT OF DIVIDEND PAID / PROPOSED

` per Share Particulars For six months

Ended Year

Ended Year

Ended Year

Ended Year

Ended Year

Ended 30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 On Equity Shares Nil Nil Nil Nil Nil Nil On Preference Shares Nil Nil Nil Nil Nil Nil - - - - - -


149

ANNEXURE – VII STATEMENT OF ACCOUNTING RATIOS Particulars For six

months Ended Year

Ended Year

Ended Year

Ended Year

Ended Year

Ended 30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07

A Net Profit / (Loss) (As Restated) after Tax

` In Lacs

193.60 170.50 75.47 (158.43) (563.68) 3483.85

B Net Profit / (Loss) (As Restated) attributed to Equity Shareholders

` In Lacs

193.60 170.50 75.47 (158.43) (563.68) 3483.85

C Net Worth excluding Preference Shares and Revaluation Reserve

` In Lacs

5244.48 5057.41 697.65 527.63 199.19 764.27

D (i) Weighted average number of equity shares outstanding during the year / period (For Basic EPS)

Nos 1,72,53,265 1,09,69,510 98,64,932 95,00,000 95,00,000 58,50,685

(ii) Weighted average number of equity shares outstanding during the year / period (For Diluted EPS)

Nos 1,72,81,619 1,09,79,499 98,64,932 95,00,000 95,00,000 58,50,685

E Total number of equity shares outstanding at the end of the year / period

Nos 1,72,53,265 1,72,58,065 1,07,00,000 95,00,000 95,00,000 95,00,000

F (i) Basic Earnings Per Share – Rs.

B/D(i) 1.12 1.55 0.77 (1.67) (5.93) 59.55

(ii) Diluted Earnings Per Share – Rs.

B/D(ii) 1.12 1.55 0.77 (1.67) (5.93) 59.55

G Return on Net Worth – % (A/C) 3.69% 3.37% 10.82% -30.03% -282.99% 455.84% H Net Asset value per Equity

Share – Rs. (C/E) 30.40 29.30 6.52 5.55 2.10 8.04

Notes: 1. The ratios have been computed as under:

(I). Earnings per Share (Rs.)

Net Profits (after Tax) attributable to Equity shareholders___ Weighted average number of Equity shares outstanding during the year / period

(II). Return on Net Worth (%)

Net Profit after Tax_______________ Net worth excluding revaluation reserve at the end of the year / period

(III). Net Asset value per Equity Share (Rs.)

Net worth excluding revaluation reserve and preference share capital at the end of the year / period

Number of Equity Shares outstanding at the end of the year / period

2. Net Profit, as restated as appearing in the Statement of Profits and Losses has been considered for the purpose of computing the above ratios. These ratios are computed on the basis of the standalone (unconsolidated) restated financial statements.

3. Earnings per Share calculations are done in accordance with Accounting Standard 20 “Earnings per Share” notified under the Companies (Accounting Standards) Rules, 2006.


150

ANNEXURE - VIII

STATEMENT OF CAPITALISATION ` In Lacs

Notes: 1. Debts repayable within one year from 30th September, 2011 are considered as short term Debts. 2. Balance in Profit and Loss Account includes profit for the six months ended 30th September, 2011 as per the

Audited Accounts. 3. Since 30th September, 2011, which is the last date as of which financial information has been given, share

capital was increased from Rs.1,725.57 Lacs to Rs. 1,726.56 Lacs on exercise of options under the Employees Stock Options Scheme – 2010 and forfeiture of shares for non-payment of call money.

Pre – issue As at 30th September, 2011 Debt: Short Term Debt 1821.59 Long Term Debt 206.03 Total Debt 2027.62 Shareholders’ Funds: Share Capital 1725.57 Employee Stock Options Outstanding 11.02 Reserves (excluding Revaluation Reserve) 6319.06 Less: Profit and Loss Account (2811.17) Total Shareholders’ Funds 5244.48 Long Term Debt / Equity Ratio 0.393 : 1 Post Issue Figures not yet crystallized


151

ANNEXURE - IX STATEMENT OF SECURED LOANS

` In Lacs As at

30-Sep-11

As at 31-Mar-

11

As at 31-Mar-

10

As at 31-Mar-

09

As at 31-Mar-

08

As at 31-Mar-

07 From Banks: Cash Credit 1324.12 1474.21 1147.29 616.73 404.86 - Secured by exclusive charge over Fixed Assets, Current Assets, equitable mortgage by deposit of Title Deeds, personal guarantee of Mr. K. L. Khanna, erstwhile promoter of the Company and maintenance of Debt Service Reserve Account for the amount equivalent to the interest amount for two months.

Term Loan - - 83.33 183.33 100.00 - FROM COMPANIES: Term Loan from a Finance Company for Machineries

- - 22.75 36.65 49.20 -

(Secured by the hypothecation of the machineries) Term Loan from a Finance Companies for Vehicles 7.60 10.61 21.74 8.35 - -

(Secured by the hypothecation of the vehicles) 1331.72 1484.82 1275.11 845.06 554.06 -


152

ANNEXURE - X STATEMENT OF UNSECURED LOANS

` In Lacs Particulars As at

30/09/11 As at

31/09/11 As at

31/09/10 As at

31/09/09 As at

31/09/08 As at

31/09/07 Optionally Convertible Cumulative Debentures (OCCD) 400.00 1700.00 1700.00 1800.00 1800.00 1800.00 Interest Accrued and Due on Debentures - - - - - 27.22 Interest Free Loan Under Sales Tax Deferral Scheme 295.90 383.59 480.73 522.17 562.23 587.06 695.90 2083.59 2180.73 2322.17 2362.23 2414.28

Note: The Company had issued OCCD carrying interest @ 12% p.a. (Net of Withholding Tax) between 1st April, 2009 upto 31st March 2012. The Debenture holders had an option to convert these Debentures (equivalent to the face value) into 12% Preference Shares of Rs. 100/- each from 30th September, 2009 to 31st March, 2012. In accordance with the Shareholders’ Agreement and Amendment to the Debenture Subscription Agreement, both dated 9th February, 2011, entered into with Mahindra & Mahindra Limited, the terms of the Debentures have been changed so as to make them compulsorily redeemable by 28th February 2012 in a phased manner.


153

ANNEXURE – XI STATEMENT OF OTHER INCOME

` In Lacs


Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 Interest from Banks 62.81 34.72 21.52 12.55 19.87 5.54 Dividend on Shares 0.02 0.02 0.02 0.02 0.02 0.02 Interest from Debtors / Deposits 35.04 32.26 2.07 2.19 - - Interest from Others 1.63 7.92 53.62 25.64 1.06 2.05 Refund of Sales Tax - 3.84 - 1.62 6.31 1.10 Foreign Exchange Gain / (Loss) (Net) 0.01 0.87 (1.31) (0.26) 0.27 - Miscellaneous Receipts 4.72 7.00 4.78 4.29 4.02 11.32 Sundry Credit Balances Written Back 4.76 3.50 12.27 27.60 0.01 40.50Excess Provisions Written Back 0.79 11.78 12.48 32.15 6.01 27.79 Bad Debts Recovered 3.00 - 19.27 - 4.91 0.59 112.78 101.91 124.72 105.80 42.48 88.91


154

ANNEXURE - XII STATEMENT OF TAX SHELTER


months Ended Year

Ended Year

Ended Year

Ended Year

Ended Year

Ended 30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07

Profit / (Loss) before current & deferred taxes 208.52 234.08 136.30 (320.05) (555.93) 3485.76 Adjustments for Restatement - 26.80 (19.70) (7.09) - - A Profit / (Loss) before current & deferred

taxes, as restated 208.52 260.88 116.60 (327.14) (555.93) 3485.76

B Applicable Income Tax Rate 30.90% 30.90% 30.90% 30.90% 30.90% 33.66% C Tax at notional rates 64.43 80.61 36.03 (101.09) (171.78) 1173.31 D Adjustments: Donations - 0.11 1.25 - - - Loss / (Profit) on Sale of Fixed Assets 6.10 15.29 2.87 (1.37) (0.22) 14.16 Capital Receipts not taxable / Capital

Expenditure not deductible - - - - 36.46 (2795.71)

Others 10.20 10.75 63.30 10.60 10.00 28.15 Total 16.30 26.15 67.42 9.23 46.24 (2753.40) E Temporary Differences Difference between Book Depreciation and

Tax Depreciation 14.20 3.22 20.17 (47.55) 32.73 68.91

Provision for Doubtful Debts / Advances - 19.15 - 15.91 43.09 158.10 Tax Duty & other sum U/s 43B 21.10 (46.71) 6.88 11.47 94.94 (949.02) Sum U/s 40 a (ia) 160.65 (77.53) 60.10 109.94 (231.69) Carry Forward / (Set off) of Loss (2155.56) (2155.56) (2738.89) (3101.10) (4292.10) (4760.00) Total (2120.26) (2019.25) (2789.37) (3061.17) (4011.40) (5713.70) F Net Adjustment (D + E) (2103.96) (1993.10) (2721.95) (3051.94) (3965.16) (8467.10) G Tax Expenses / (Saving) thereon (650.12) (615.87) (841.08) (943.05) (1225.23) (2850.03) H Net Tax Expense (C + G) (585.69) (535.26) (805.05) (1044.14) (1397.01) (1676.72) Book Profit for Tax U/s 115 JB 208.52 234.08 136.30 - - 3485.76 Adjustments 583.90 1014.60 1014.60 - - NIL

Net Book Profit for Tax U/s 115 JB (375.38) (780.52) (878.29) - - 3485.76* Tax Rate for MAT U/s 115 JB 19.06% 18.54% 15.45% 10.30% 10.30% 11.22%

I Tax Liability U/s 115 JB (MAT) ** 4.00 NIL NIL NIL NIL NIL J Total Tax Liability (Higher of H and I) 4.00 NIL NIL NIL NIL NIL Notes: *For FY 2006-07 no tax liability has been considered u/s 115 JB, since the Company was registered with BIFR under SICA having accumulated losses equal to or exceed net worth. **For six months ended 30th September, 2011, tax liability has been considered u/s 115JB based on the best estimate of the weighted average annual income tax rate expected for the full financial year as per the requirements of AS 25 – “Interim Financial Reporting.”


155

ANNEXURE - XIII STATEMENT OF SUNDRY DEBTORS

` In Lacs Particulars As at As at As at As at As at As at

30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 Sundry Debtors (Unsecured, Considered Good unless otherwise Stated) Debts outstanding for more than six months Considered Good Promoter Group Company* 53.78 152.12 36.18 0.12 154.21 - Others 550.25 1045.39 707.00 349.60 85.15 145.02 Considered Doubtful Promoter Group Company* - - - - - - Others 275.93 271.55 252.39 216.87 200.96 157.87 879.96 1469.06 995.57 566.59 440.32 302.89 Less: Provision for doubtful debts (275.93) (271.55) (252.39) (216.87) (200.96) (157.87) 604.03 1197.51 743.18 349.72 239.36 145.02 Other Debts – Considered good Promoter Group Company* 350.26 305.44 333.18 261.34 103.80 118.74 Others 1828.87 1274.79 1124.93 1240.07 811.50 23.78 2179.13 1580.23 1458.11 1501.41 915.30 142.52 2783.16 2777.74 2201.29 1851.13 1154.66 287.54 *In March 2011, Mahindra & Mahindra Limited (M&M) was issued and allotted Equity Shares on preferential basis. Subsequently, in compliance with SEBI (Acquisition of Shares & Takeover) Regulations, 1997, M&M made an open offer and acquired additional Equity Shares from Public Shareholders and is now the Promoter of the Company. The figures given against Promoter Group Company above are not related to M&M but related to erstwhile Promoter Group Company.


156

ANNEXURE - XIV STATEMENT OF LOANS AND ADVANCES


30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 Advances Recoverable in Cash or in Kind or for value to be recieved

241.08 254.48 207.97 203.14 303.17 248.16

Balance with Excise Authorities 59.23 53.36 54.50 51.39 36.04 4.30 Advance income Tax (Net of Provisions) 92.59 83.27 94.72 56.93 49.42 42.40 Minimum Alternate Tax Credit Entitlement 4.00 - - - - - Deposits 49.34 49.42 87.72 104.71 136.84 123.13 Interest Accrued on Deposits - 1.57 2.57 1.89 0.86 0.87 446.24 442.10 447.48 418.06 526.33 418.86


157

ANNEXURE - XV STATEMENT OF INVESTMENTS


30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 INVESTMENTS (LONG TERM, NON-TRADE) Government Securities National Savings Certificate / Indira Vikas Patra (Pledged with Government Authorities)

0.70 0.70 0.70 0.15 0.15 0.18

Shares (Unquoted) Shriram Co-operative Bank Limited of Rs. 10 each - - 0.54 0.54 0.54 0.54 Saraswat Co-operative Bank Limited of Rs. 10 each 0.11 0.11 0.11 0.11 0.11 0.11 Charotar Nagrik Sahakari Bank Limited of Rs. 10 each - - 0.02 0.02 0.02 0.02 Total 0.81 0.81 1.37 0.82 0.82 0.85


158

ANNEXURE - XVI STATEMENT OF CONTINGENT LIABILITIES NOT PROVIDED FOR


30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07 Guarantees issued by Banks secured by Fixed Deposits 710.47 301.78 244.64 262.04 164.67 114.90 Custom Duty / Interest on account of commitment to Export, under Export Promotion Capital Goods Scheme

314.91 179.51 171.76 160.78 153.03 145.57

Show Cause cum Demand Notices received from Excise Authorities

79.44 79.44 79.44 79.44 1745.68 1514.46

Loans & Advances includes refund claim made for excise duty paid under protest

166.79 166.79 166.79 166.79 166.79 166.79

Income Tax Demand Disputed Appeal (AY 1993-94) 23.67 23.67 23.67 23.67 23.67 23.67Sales Tax demand disputed in Appeal - - - - - 13.44

Total 1295.28 751.19 686.30 692.72 2253.84 1978.83


159

ANNEXURE – XVII STATEMENT OF RELATED PARTY TRANSACTIONS (A). List of Related Parties with whom transactions have taken place Sr. No.

Name of the Related Party Relation

1 Credit Renaissance Fund Ltd Significant Influence 2 Credit Renaissance Development Fund LP. Significant Influence 3 Kimplas Piping Systems Ltd. Significant Influence of relative of Key Management Personnel upto

30.09.2011 4 Trans Continental Capital Advisors Pvt. Ltd. Significant Influence of Key Management Personnel upto 29.09.2011 5 Garuda Plant Products Ltd. Significant Influence of Key Management Personnel upto 30.09.2011 6 Patkaai Plastics Pvt. Ltd. Significant Influence of relative of Key Management Personnel upto

30.09.2011 7 Kimplas UK. Significant Influence of relative of Key Management Personnel upto

30.09.2011 8 Mr. K. L. Khanna Key Management Personnel upto 30.09.2011* 9 Mr. Jayendra Shah Key Management Personnel upto 29.09.2011* *Mr. K. L. Khanna and Mr. Jayendra Shah are no more Key managerial personnel post reconstitution of the Board of Directors (B). Transactions with related parties

` In Lacs For Six

Months Ended

Year Ended

Sr. No.

Name of the Related Party 30/09/ 2011

31/03/11 31/03/10 31/03/09 31/03/08 31/03/07

1 Credit Renaissance Fund Ltd Interest on Debentures (Gross) 62.36 215.5 224.33 190.15 152.54 28.68 Issue of Shares - - 91.67 - - -2 Credit Renaissance Development Fund LP. Interest on Debentures (Gross) 11.59 39.99 41.64 35.29 28.31 5.34 Issue of Shares - - 18.33 - - -3 Kimplas Piping Systems Ltd. Sales & Job Work 346.63 843.17 596.64 970.81 858.91 564.19 Sales Returns - - (11.46) (1.12) (2.26) - Service Charges & Other Income - - - 24.98 4.00 9.60 Purchases 103.69 140.89 121.67 148.56 193.77 12.15 Commission & Installation - 9.38 - - - 121.44 Sale of Assets - - - - 68.45 - Interest Received (34.75) (29.56) (53.62) - - -4 Trans Continental Capital Advisors Pvt. Ltd Professional Fees (Included in Share Issue

Expenses) - 126.85 - - - -

5 Garuda Plant Products Ltd Office & Accommodation Charges - - - - - 6.50 Issue of Shares - - 10.00 - - - Hire Charges Paid - - - - - 0.84 Professional Fees (Capitalised) - 177.64 - - - -6 Patkaai Plastics Pvt. Ltd Sales 23.75 50.29 - - - - 7 KIMPLAS Ltd. UK Sales – Export - - - - 27.07 - Sales Return – Export - - - - (17.96) - (C). Related Parties Outstanding Balances:

` In Lacs Sr. No.

Name of the Related Party As at As at As at As at As at As at 30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07

1 Credit Renaissance Fund Ltd


160

Sr. No.

Name of the Related Party As at As at As at As at As at As at 30/09/11 31/03/11 31/03/10 31/03/09 31/03/08 31/03/07

Debentures 333.33 1416.67 1416.67 1500.00 1500.00 1500.00 2 Credit Renaissance Development Fund LP. Debentures 66.67 283.33 283.33 300.00 300.00 300.00 3 Kimplas Piping Systems Ltd. Debtors 404.04 457.56 369.36 261.46 258.01 118.74 Advances - - - - 65.73 - 5 Garuda Plant Products Ltd Advances - - - - - 0.17 Amount Written off during the year - - - - - 3.00 6 Patkaai Plastics Pvt. Ltd Debtors 4.07 13.01 - - - - 7 Trenton Investments Co. Pvt. Ltd. Advances - - - - - 1.16


161

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATION The following discussion of our financial condition and results of operations should be read in conjunction with our restated standalone financial statements as of and for the Financial Years 2009, 2010, 2011 and for the six months ended September 30, 2011 as prepared in accordance the Companies Act, Indian GAAP and restated in accordance with the SEBI Regulations, including the schedules, annexures and notes thereto and the reports thereon, included in the section titled “Financial Statements” in this Draft Letter of Offer. You should also read the section titled "Risk Factors" on page IX, which discusses a number of factors and contingencies that could impact our financial condition and results of operations. Unless otherwise stated, financial information included in this section for Financial Years 2009, 2010 and 2011 and for the six months ended September 30, 2011 has been derived from our restated standalone financial statements as of and for the Financial Years ended March 31, 2009, March 31, 2010 and March 31, 2011 and for the six months ended September 30, 2011. For further information, see the section titled “Certain Conventions, Use of Financial Information and Market Data and Currency of Presentation – Financial Information”. Overview We believe that we are one of the pioneers in the Micro Irrigation industry in India. We are into manufacture and sale of Micro Irrigation System (MIS) consisting of Drip Irrigation System and Sprinkler Irrigation System and its components. We are registered in 17 states of India as approved manufacturer of MIS with respective state government authorities under the National Mission on Micro Irrigation and Micro Irrigation Scheme. Micro irrigation is working capital intensive and subsidy driven business. The subsidy schemes provide for subsidy portion of about 50% to 100% of the approved cost of MIS. The disbursement of the subsidy portion to the farmer is typically phased out over a period of 12 weeks to 36 weeks and is dependent on completion of installation of MIS and compliance of certain prescribed conditions under the respective subsidy schemes. Our business model can be categorized broadly into two categories – project markets and open market sales. Sales through open market secure receipt of a majority of the sale proceeds of MIS upfront from our channel partners. The channel partners in turn sell the MIS to the customer/ farmer whereby subsidy disbursement exposure is taken by the channel partners or the customers. Consequently, a majority of our inventory costs and working capital requirements is funded by our channel partners. We operate under the project market model in the states of Gujarat, Andhra Pradesh and Tamil Nadu. As per the requirement of nodal agencies in the states of Gujarat, Andhra Pradesh and Tamil Nadu, we enter into an agreement with the farmer, nodal agencies and with banks, wherever applicable. After the loan tie ups and subsidy eligibility is approved by the nodal agency in these states, we install MIS and submit our claim for payment to the nodal agency. We have also been appointed as an empanelled company under the recently launched Pundit Deendayal Kisan Bagawan Samridhhi Yojna (Part II), 2010 – 2011, in Himachal Pradesh. Consequently, in the project market, the exposure of subsidy disbursement is taken by us as we are able to receive sales proceeds from the nodal agency/ project implementing agency post installation of MIS. We recently became a part of the Mahindra group of companies, pursuant to M&M acquiring control and management stake in 2011. Our promoter, M&M has strong presence in the tractor and farm machinery business and has developed sound understanding of the rural markets. We believe the agricultural business vertical of M&M complements our business and can provide us with management bandwidth and competence in marketing and operations thereby enhancing scope for development of synergies to create value for our business. Our product portfolio includes mainly the Drip Irrigation Systems and the Sprinkler Irrigation Systems. Drip Irrigation Systems includes online drippers, inline drip laterals, plain laterals, drip fittings, filters, fertigation equipments while Sprinkler Irrigation System includes sprinkler irrigation pipes, pipe fittings, sprinkler nozzles. As part of project market sales we undertake supply, installation and provision of agronomical services to farmers. We also manufacture specialized pipes for water and gas distribution as well as pipes required for industrial and agricultural purposes with complete fitting and installation tools. We manufacture our products at our plant at Nashik, Maharashtra. The capacity of the plant is 15,561.84 MT/year. Raw material is mostly sourced from the distributors of the reputed suppliers of polymers in India. We are committed to maintaining our quality management systems. The design, development, manufacture and supply of plastic pipe fittings and components for irrigation, infrastructure and industrial applications by us has been certified to confirm to the


162

“Quality Management Systems Standard ISO 9001:2008” by Det Norske Veritas Management Systems Certificate. All our products are ISI marked. We have entered into formal arrangements with 113 channel partners and informal arrangements with a number of other channel partners to market and sell our products in 17 states. Factors Affecting Our Results of Operations Our financial conditions, results of operations and cash flows are affected by a number of factors, including the following: Change in government policies regarding the subsidy granted to this industry The micro irrigation industry is significantly dependent on government subsidies. Our customers are primarily farmers and horticulturists who are entitled to government subsidies. The subsidy schemes provide for subsidy portion of about 50% to 100% of the cost of installation of the MIS. The disbursement of the subsidy portion to the farmer is typically phased out over a period of 12 weeks to 36 weeks and dependent on completion of installation of MIS and compliance of certain prescribed conditions under the respective subsidy schemes. Our business model can be categorized broadly into two categories – project market and open market sales. We believe our business model of open market sales secures receipt of sale proceeds of MIS upfront from our channel partners. Our channel partners fund our inventory costs and working capital. The channel partners in turn sell the MIS to the customer /farmer whereby subsidy disbursement exposure is taken by the channel partners or the customers. We operate under the project market model in the states of Gujarat, Andhra Pradesh and Tamil Nadu. As of the six months ended September 30, 2011 and the year ended March 31, 2011, sales through the nodal agencies constituted 30.90 % and 33.37 % respectively of our total sales and sales in the open market constituted 61.45 % and 56.72 % respectively of our total sales. In the event there is a delay in receipt of the subsidy component, our margins for a particular period or year may be adversely affected. Moreover, in the event the government withdraws or reduces the subsidy currently being offered to the industry, the farmers and the horticulturists may not be in a position to afford micro irrigation systems which would adversely affect our business and results of operations. In the past, reduction and inconsistency in the implementation of the subsidy schemes had eroded our networth and we were referred to the BIFR. For further details, please see “Risk Factors” on page IX. Timely procurement of raw materials We manufacture micro irrigation systems from virgin raw materials of high, medium and linear low density polyethylene. We procure such raw materials from third parties with whom we place orders on a monthly basis and the quantity of our orders is dependent on internal estimates. In the event our estimates prove to be incorrect on grounds of higher purchase orders than expected in a particular month or quarter, we procure additional raw material from our suppliers or from the open market. However, in the event of such mis-estimation of the requirements of raw material, we may not be able to procure raw materials from other sources on commercially viable terms, if at all and occurrence of the same shall not affect our ability to deliver our products to our customers in time. Ability to source certain components of our finished products from third parties We outsource the production of certain components forming part of our final products to independent third parties. These components formed 15.93 % of our operating expenditure for the year ended March 31, 2011 and 16.27 % of our operating expenditure for the period of September 30, 2011. We do not have any long terms agreements for procurement of such components from any of our suppliers. Any break down of our relationship with any or all of our suppliers may adversely affect our business and results of operations. Ability to maintain our distribution network MIS sales are driven by strong demand in states like Gujarat, Rajasthan, Madhya Pradesh Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu, Rajasthan and Haryana in India. The State Governments of Gujarat, Andhra Pradesh, Tamil Nadu, Chattisgarh, Himachal Pradesh and Bihar have also conceived MIS projects as a part of the Micro Irrigation Scheme. We have presence in most of these states through a network of sales/branch offices supported by our channel partners. We have entered into formal arrangements with 113 channel partners and informal arrangements with a number of other channel partners to market and sell our products in 17 states. We believe that our distribution network enhances our ability to market our brand and concurrently increase the volume of sales. Our inability to maintain and grow our distribution network may hamper our ability to compete effectively and adversely affect our results of operations.


163

Ability to arrange for working capital requirements and cash flows The micro irrigation industry is working capital intensive. For products marketed in open markets, the working capital requirement is significantly lesser as the consideration is paid up-front. However, for project market sales, our requirement of working capital funds increments substantially as the consideration is not received upfront. The disbursement of the subsidy portion to the farmer is typically phased out over a period of 12 weeks to 36 weeks and dependent on compliance of certain prescribed conditions under the respective subsidy scheme during which period we require funds as part of our working capital requirements. As of December 31, 2011, we have an outstanding indebtedness of ` 2,344.61 Lacs. The success of our business is dependent on our ability to obtain and maintain sufficient cash flow, credit facilities and other sources of funding. Our Significant Accounting Policies Our financial statements are prepared under historical cost convention on an accrual basis and in accordance with the generally accepted accounting principles in India (“Indian GAAP”), the accounting standards issued by ICAI, the requirements of the Companies Act and the accounting principle of ‘going concern’. The most significant accounting conventions and principles used by us and our critical accounting policies followed by us in preparing our financial statements are set out below. For details, see “Significant Accounting Policies” in the chapter “Financial Statements” beginning on page 139. Summary of Results of Operations The following is a summary of our profit and loss account as per our restated audited financial statements for the periods indicated:

Particulars For six months Ended September 30, 2011

Year Ended March 31, 2011



Rupees in Lacs

Percentage (%)

Rupees in Lacs

Percentage (%)

Rupees in Lacs

Percentage (%)

Rupees in Lacs

Percentage (%)

Income Sales / Services Rendered

4626.34 98.37 8754.98 99.85 7292.70 98.97 6102.86 99.85

Less: Excise Duty on Sales

36.18 0.77 88.51 1.01 48.77 0.66 96.86 1.58

4590.16 97.60 8666.47 98.84 7243.93 98.31 6006.00 98.27 Other Income 112.78 2.40 101.91 1.16 124.72 1.69 105.80 1.73 Total Income 4702.94 100.00 8768.38 100.00 7368.65 100.00 6111.80 100.00 Expenditure Raw Materials, Finished and Semi-Finished Products

2860.06 63.64 5323.42 62.38 4499.23 62.21 4098.68 63.72

Personnel Expenses 540.02 12.02 958.10 11.23 758.53 10.49 609.72 9.48 Other Expenses 902.33 20.08 1593.64 18.67 1367.98 18.91 1209.25 18.80 Interest Expenses 104.78 2.33 482.00 5.65 443.68 6.13 369.94 5.75 Depreciation / Amortisation

87.23 1.94 177.14 2.08 162.92 2.25 144.26 2.24

Total Expenditure 4494.42 100.00 8534.30 100.00 7232.34 100.00 6431.85 100.00 Profit / (Loss) before Exceptional Items

208.52 234.08 136.31 (320.05)

Exceptional Items - - - - Profit / (Loss) before Taxation

208.52 234.08 136.31 (320.05)

Provision for Taxation

(a) Current Income Tax

4.00 (0.04) (0.87) -

(b) Income Tax for Prior Years

2.26

(c) Fringe Benefit Tax 11.50


164

Particulars For six months Ended September 30, 2011




Rupees in Lacs

Percentage (%)

Rupees in Lacs

Percentage (%)

Rupees in Lacs

Percentage (%)

Rupees in Lacs

Percentage (%)

(d) Minimum Alternate Tax (Credit)

(4.00) - - -

(e) Deferred Tax Expense / (Credit)

14.92 90.42 42.00 (182.47)

Total Tax Expense 14.92 90.38 41.13 (168.71) Net Profit / (Loss) before adjustments

193.60 143.70 95.18 (151.34)

Adjustments - 26.80 (19.71) (7.09) Net Profit / (Loss) as Restated

193.60 170.50 75.47 (158.43)

Profit & Loss Account at the beginning of the year

(3004.77) (3146.52) (3202.74) (3044.31)


(2811.17) (2976.02) (3127.27) (3202,74)

Appropriations Transfer to Debenture Redemption Reserve

- (28.75) (19.25) -

Transfer from General Reserve

Total Appropriations

- (28.75) (19.25) -

Balance carried forward to the restated balance sheet

(2811.17) (3004.77) (3146.52) (3202.74)

Adjustments for Restatement We have included in this Draft Letter of Offer our restated standalone financial statements as of and for the years ended March 31, 2007, March 31, 2008, March 31, 2009, March 31, 2010, March 31, 2011 and the six months ended September 30, 2011. These restated and audited financial statements have been prepared in accordance with Indian GAAP and the Companies Act and have been restated in accordance with the SEBI Regulations. Below is a brief discussion on the restated adjustments made to our historical audited financial statements in the preparation of our restated and audited financial statements included in this Draft Letter of Offer as of and for the years ended March 31, 2009, March 31, 2010, March 31, 2011 and the six months ended September 30, 2011. For further details, please see “Financial Statements” on page 132. The following table sets forth information relating to the restatement adjustments for the periods indicated:

(` in Lacs) Particulars For six months

ended September 30, 2011

Year ended March 31, 2011

Year ended March 31,

2010

Year ended March 31,

2009 Adjustment for Prior Period Item - 26.80 (19.71) (7.09)

In the financial statements of the year ended March 31, 2011, certain material items of income / expenses have been identified as prior period items. For the purpose of this statement, such prior period items have been appropriately adjusted in the respective years. Asset Revaluation Reserve


165

In accordance with Clause IX (B) (9) (f) of the SEBI, the statement of Assets and Liabilities as restated has been prepared after deducting the balance in revaluation reserve from the carrying amount of fixed assets and reserves and surplus. Further, depreciation on the re-valued amount was provided over the original life of the asset instead of balance life of the asset as required by the Accounting Standard. The adjustment has been made in the respective financial years. Material Regrouping a. Upto the year ended March 31, 2008, excise duty on sale of goods was included in the material cost. This has

been reduced from the sales for the purpose of this restated financial information.

b. Upto the year ended March 31, 2010 Sales was recorded inclusive of value added tax / sales tax with the corresponding effect in rates and taxes. Sales tax has been reduced from sales and rates and taxes for the purpose of this restated re-stated financial information.

c. Interest income was adjusted from interest expense and shown as net amount. The same have been segregated for the purpose of this restated financial information.

d. In the year ended March 31, 2011 deferred employee compensation cost was adjusted from the ESOS outstanding liability reflected in Shareholders’ Funds. The same has been regrouped for the purpose of this re-stated financial information.

Our Business Segments Our business segments comprises of (i) manufacture of micro irrigation systems and (ii) manufacture of industrial and infrastructure pipes (“IIP”) for transmission of gas and water. We are primarily engaged in the business of manufacture of micro irrigation systems. All our other activities revolve around this main business and accordingly there are no separate segments for the six months ended September 30, 2011 as per the According Standard on “Segment Reporting” (“AS 17”) notified under the Companies (Accounting Standards) Rule, 2006. The table below sets forth our gross revenue for each segment for the fiscal years 2011, 2010 and 2009:

` In Lacs Year ended Year ended Year ended

31-Mar-11 31-Mar-10 31-Mar-09 1 Segment Revenue: Sales to external customers MIS 7807.41 6675.13 5216.96 IIP 859.06 568.80 789.04 Total Segment Revenue 8666.47 7243.93 6006.00 2 Segment Results: Segment results before exceptional items MIS 2690.18 2072.21 1337.70 IIP 60.38 15.86 (62.43) Sub Total 2750.56 2088.07 1275.27 Exceptional items allocated to Segment MIS - - - IIP - - - Sub Total - - - Segment results after exceptional items MIS 2690.18 2072.21 1337.70 IIP 60.38 15.86 (62.43) 2750.56 2088.07 1275.27 Add: Unallocable Income 72.35 122.65 103.61 Less: Interest expense not allocable 482.00 443.68 369.94 Less: Other Expenses not allocable 2106.83 1630.73 1328.99 Profit / (Loss) Before Tax 234.08 136.31 (320.05) 3 Segment Assets:


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Year ended Year ended Year ended 31-Mar-11 31-Mar-10 31-Mar-09

Segment Assets MIS 4512.10 2919.27 2661.95 IIP 670.37 577.58 500.78 Sub Total 5182.47 3496.85 3162.73 Unallocable Assets 5522.83 1909.79 1985.42 Total Assets 10705.30 5406.64 5148.15 4 Segment Liabilities: Segment Liabilities MIS 1573.14 920.25 1110.74 IIP 89.08 2.41 4.86 Sub Total 1662.22 922.66 1115.60 Unallocable Liabilities 3985.67 3786.33 3504.92 Total Liabilities 5647.89 4708.99 4620.52 5 Capital Expenditure: Capital Expenditure MIS 302.25 - - IIP - - - Sub Total 302.25 - - Unallocable Capital Expenditure 283.42 129.46 285.46 Total Capital Expenditure 585.67 129.46 285.46 6 Depreciation / Amortisation: Depreciation / Amortisation: MIS 61.46 55.54 38.80 IIP 12.04 9.62 13.41 Sub Total 73.50 65.16 52.21 Unallocable depreciation/ amortisation 103.64 97.76 92.05 Total depreciation/ amortisation 177.14 162.92 144.26 7 Non cash expenses other than depreciation / amortization 42.71 22.75 22.43 8. Other Information: A. The Company has disclosed Business Segments as the Primary segments. Segments have been identified by the

Management taking into account the nature of products, customer profiles and other relevant factors. B. The Company’s operations have been mainly classified between two primary segments, “Micro Irrigation System”

(MIS) and “Industrial and Infrastructure Piping” (IIP). C. Composition of business segments is as follows:

a. Micro Irrigation Systems (MIS) b. Industrial and Infrastructure (Gas and Water) Pipes (IIP)

D. Segmentwise Revenue, Results, Assets and Liabilities include the respective amounts identifiable to either of the segments as also amount allocated on reasonable basis. The expenses, which are not directly attributable to the business segment, are shown as unallocated costs. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated assets and liabilities respectively.

E. There are no inter segment transfer of material. Components of Income and Expenditure Our income comprises of income from sales of products manufactured which comprises of micro irrigation systems and industrial pipes and interest received from banks, debtors, etc., dividend received from investments, sundry credit balance written back, miscellaneous receipts, bad debts recovered etc. Break up of our total gross income is set forth:

(` in Lacs) Particulars Six months ended

September 30, 2011 Fiscal 2011 Fiscal 2010 Fiscal 2009

Sales / Services Rendered 4,590.16 8,666.47 7,243.93 6,006.00 Other Income 112.78 101.91 124.72 105.80 Total Gross Income (less excise duty on sales) 4,702.94 8,768.38 7,368.65 6,111.80 Expenditure


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Our total expenditure consists primarily of expenditure on procurement of raw materials, expenditure incurred on purchasing of components forming part of the final products, employee cost, welfare expenses, depreciation, interest expenses, etc. Raw materials, finished and semi finished products This includes consumption of virgin raw materials of high, medium and linear low density polyethylene and outsourced components such as sprinkler nozzles, risers, insert for PCN, serrated nipples, rubber seals, gaskets, MS clamps, rivets and metallic saddles, which forms part of our final products. Personnel expenses It includes expenses such as salary, bonus, gratuity, directors’ remuneration, other allowances, costs attached to maintaining canteen and other facilities for the employees. Depreciation/ Amortisation Our depreciation and amortisation expense comprises our depreciation and amortisation of our fixed assets including the plant and machineries installed at our factory. Other Expenses Other expenses includes expenses incurred on fuel consumption, water and electricity charges, repairs to machinery, packing and logistics costs, advertisement expenses, rent expenditure, etc. Interest Expenses Interest expenses includes interest paid on working capital limits and debentures. Discussion on Results of Operations FY 2011 compared to FY 2010 For FY 2011, our revenue was derived predominantly from products manufactured by us. Our gross revenue for FY 2011, less excise duty on sales, was ` 8,768.38 Lacs which was ` 7,368.65 Lacs in FY 2010. The increase in income was due to expansion of our distribution network, execution of the arrangements with the nodal agencies and our association with the Mahindra group which resulted in increased goodwill and value. Revenue from sales Our revenue from sales, less excise duty on sales, increased by 19.64 % from ` 7,243.93 Lacs in FY 2010 to ` 8,666.47 Lacs in FY 2011. This was also primarily due to expansion of our distribution network and execution of the arrangements with the nodal agencies. Revenue from other income Our revenue from other income decreased by 18.29 % from ` 124.72 in FY 2010 to ` 101.91 in FY 2011. This was also primarily due to decrease in the interest received on overdue outstanding from certain debtors. Expenditure Our total expenditure increased in FY 2011 to ` 8,534.30 Lacs from ` 7,232.34 Lacs in FY 2010. Raw material finished and semi finished products Our consumption of raw materials, finished and semifinished products increased by 18.32 % from ` 4,499.23 Lacs in FY 2010 to ` 5,323.42 Lacs in FY 2011. This increase was primarily due to increase in demand of our products that mandated higher quantity of raw materials and components.


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Personnel Expenses Our expenditure towards personnel expenses increased by 26.31% from ` 758.53 Lacs in FY 2010 to ` 958.10 Lacs in FY 2011. This was predominantly due to revamping of the sales force and increments given to the employees during the year. Other expenditure Other expenditure increased by 16.50% from ` 1,367.98 Lacs in FY 2010 to ` 1,593.64 Lacs in FY 2011. This increase was primarily due to increase in manufacturing costs due to increase in the volume of products manufactured. Interest Expenses Interest expenses increased by 8.64% from ` 443.68 Lacs in FY 2010 to ` 482.00 Lacs in FY 2011. This was primarily due to optimum utilization of working capital limits. Depreciation/ amortisation Depreciation increased by 8.73% from ` 162.92 Lacs in FY 2010 to ` 177.14 Lacs in FY 2011. This increase was primarily due to depreciation on additions to fixed assets during the financial year. Profit before tax Due to the reasons discussed above, our profit before tax, after accounting for depreciation, increased by 71.73% from ` 136.31 Lacs in FY 2010 to ` 234.08 Lacs in FY 2011. Provision for taxation The provision of taxation increased by 119.74% from ` 41.13 Lacs in FY 2010 to ` 90.38 Lacs in FY 2011. This was primarily due to increase in the provision for deferred tax. Net profit after taxes The net profit after taxes increased by 125.92% from ` 75.47 Lacs in FY 2010 to ` 170.50 Lacs in 2011 due to the factors discussed above. FY 2010 compared with FY 2009 For FY 2010, our revenue was derived predominantly from products manufactured by us. Our gross revenue for FY 2010, less excise duty on sales, was ` 7,368.65 Lacs which was ` 6,111.80 Lacs in FY 2009. The increase in income was due to our release from the BIFR which allowed us easier access to debt funding, increase in our dealership network, which resulted in increased sales and greater operational efficiencies. Revenue from sales Our revenue from sales, less excise duty on sales, increased by 20.61% from ` 6,006.00 Lacs in FY 2009 to ` 7,243.93 Lacs in FY 2010. The increase in income was due to our release from the BIFR which allowed us easier access to debt funding, increase in our dealership network, which resulted in increased sales and greater operational efficiencies. Revenue from other income Our revenue from other income increased by 17.88% from ` 105.80 Lacs in FY 2009 to ` 124.72 Lacs in FY 2010. This was also primarily due to increase in interest income received from banks, recovery of bad debts and others. Expenditure Our total expenditure increased in FY 2010 to ` 7,232.34 Lacs from ` 6,431.85 Lacs in FY 2009 due to the following


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factors. Raw material finished and semi finished products Our consumption of raw materials, finished and semifinished products increased by 9.77% from ` 4,098.68 Lacs in FY 2009 to ` 4,499.23 Lacs in FY 2010. This increase was primarily due to increase in demand of our products that mandated consumption of higher quantity of raw materials. Personnel Expenses Our expenditure towards personnel expenses increased by 24.41% from ` 609.72 Lacs in FY 2009 to ` 758.53 Lacs in FY 2010. This increase was primarily due to increase in the number of employees. Other expenditure Other expenditure increased by 13.13% from ` 1,209.25 Lacs in FY 2009 to ` 1,367.98 Lacs in FY 2010. This was primarily due to increase of cost of power, fuel and other materials and increase in rates of taxation. Interest expenses Interest expenses increased by 19.93% from ` 369.94 Lacs in FY 2009 to ` 443.68 Lacs in FY 2010. This was primarily due to increase in the rate of interest on debentures and interest on enhanced working capital limits. Depreciation/ Amortisation Depreciation increased by 12.93% from ` 144.26 Lacs in FY 2009 to `162.92 Lacs in FY 2010. This increase was primarily due to additions to fixed assets during the year. Profit before tax Due to the reasons discussed above, we have earned a profit before tax of ` 136.31 Lacs in FY 2010 as against loss of ` 320. 05 Lacs in FY 2009. Provision for taxation The provision of taxation decreased from credit of `168.71 Lacs in FY 2009 to provision of `41.13 Lacs in FY 2010. This was primary due to change in provision for deferred tax. Net Profit after taxes The Company posted net profit of ` 75.47 Lacs in FY 2010 as against net loss of `158.43 in FY 2009. Liquidity and Capital Resources The industry in which we operate is working capital intensive and our primary liquidity requirements have been to finance our working capital requirements. We finance our capital expenditure significantly through working capital financing, debentures and cash flows from operating activities. As of December 31, 2011, our total outstanding debt is `2,344.61 Lacs. We believe that our cash flow from operations, the net proceeds of the Issue and our borrowings will be sufficient to provide us with the funds for our working capital and capital expenditure requirements for at least the next 12 months. In the future, as we expand our business, our capital needs will increase and we may need to raise additional capital through further debt finance and additional issues of Equity Shares. Cash Flows The table below summarises our cash flow for the periods indicated:

(` in Lacs) Particulars For the six months ended For the financial year ending on


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September 30, 2011 March 31, 2011 March 31, 2010 March 31, 2009 Opening cash and cash equivalents

4,115.97 442.56 414.04 262.76

Net cash from/ (used in) operating activities (A)

(202.78)

380.60

141.86

26.80

Net cash from/ (used in) investing activities (B)

(460.74)

(509.23)

(52.73)

(243.40)

Net cash from/ (used in) financing activities (C)

(1,645. 60)

3,802.04

(60.61)

367.88

Net increase/ (decrease) in cash and cash equivalents (A + B + C)

(2,309.12)

3,673.41

28.52

151.28

Closing cash and cash equivalents 1,806.85

4,115.97

442.56

414.04

Operating Activities For the six months ended September 30, 2011, the net cash used in operating activities was ` 202.78 Lacs, consisting of net profit before tax of ` 208.52, adjusted predominately for cash outflows of interest expenses of ` 104.78 Lacs, depreciation of ` 87.23 Lacs, provision for doubtful debts of ` 4.38 Lacs and loss on sale of fixed assets of ` 9.70 Lacs. Our operating profit was adjusted for working capital changes such as cash outflows for trade debtors and other receivables of ` 10.35 Lacs, cash outflows for inventories of ` 473.53 Lacs and cash outflows for trade payable and other liabilities of ` 22.31 Lacs. For the year ended March 31, 2011, the net cash from operating activities was ` 380.60 Lacs, consisting of net profit before tax of ` 260.88 Lacs adjusted predominately for cash outflows of interest expenses of ` 482.00 Lacs, depreciation of ` 177.14 Lacs, provision for doubtful debts of ` 19.15 Lacs and loss on sale of fixed assets of ` 15.29 Lacs. Our operating profit was adjusted for working capital changes such as cash outflows for trade debtors and other receivables of ` 588.46 Lacs, cash outflows for inventories of ` 752.43 Lacs and cash inflows for trade payable and other liabilities of ` 828.79 Lacs. For the year ended March 31, 2010, the net cash from operating activities was ` 141.86 Lacs, consisting of net profit before tax of `116.60 Lacs adjusted predominately for cash outflows of interest expenses of `443.68 Lacs, depreciation of ` 162.92 Lacs provision for doubtful debts of ` 35.52 Lacs and profit on sale of fixed assets of ` 1.68 Lacs. Our operating profit was adjusted for working capital changes such as cash outflows for trade debtors and other receivables of ` 376.62 Lacs cash inflows for inventories of ` 71.06 Lacs and cash outflows for trade payable and other liabilities of ` 197.49 Lacs. For the year ended March 31, 2009, the net cash from operating activities was ` 26.80 Lacs, consisting of net loss of ` 327.14 Lacs adjusted predominately for cash outflows of interest expenses of ` 369.94 Lacs, depreciation of ` 144.26 Lacs provision for doubtful debts of ` 15.91 Lacs and profit on sale of fixed assets of ` 1.37 Lacs. Our operating profit was adjusted for working capital changes such as cash outflows for trade debtors and other receivables of ` 595.57, cash outflows for inventories of ` 32.38 Lacs and cash inflows for trade payable and other liabilities of ` 511.60 Lacs. Investing Activities For the six months ended September 30, 2011, the net cash used in investing activities was ` 460.74 Lacs primarily incurred on purchase of fixed assets of ` 570.23 Lacs, primarily related to installation of plant and machinery and electrical installations and other equipments partially offset by the sale of fixed assets of ` 6.09 Lacs primarily related to sale of discarded equipments and interest and dividend income of ` 103.40 Lacs. For the year ended March 31, 2011, the net cash used in investing activities was ` 509.23 Lacs primarily incurred on purchase of fixed assets of ` 585.68 Lacs, primarily related to installation of plant and machinery and electrical installations and other equipments partially offset by the sale of fixed assets of ` 0.98 Lacs primarily related to sale of discarded equipments and interest and dividend income of ` 75.45 Lacs. For the year ended March 31, 2010, the net cash used in investing activities was ` 52.73 Lacs primarily incurred on purchase of fixed assets of ` 129.45 Lacs, primarily related to installation of plant and machinery and electrical installations and other equipments partially offset by the sale of fixed assets of ` 4.86 Lacs primarily related to sale of discarded equipments, sale of investments of ` 0.55 Lacs and interest and dividend income of ` 72.41 Lacs.


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For the year ended March 31, 2009, the net cash used in investing activities was ` 243.40 Lacs primarily incurred on purchase of fixed assets of ` 285.46 Lacs, primarily related to installation of plant and machinery and electrical installations and other equipments partially offset by the sale of fixed assets of ` 3.39 Lacs primarily related to sale of discarded equipments and interest and dividend income of ` 38.67 Lacs. Financing Activities For the six months ended September 30, 2011, the net cash used in financing activities was ` 1,645.60 Lacs, comprising of interest paid of ` 104.81 Lacs and repayment of borrowings of ` 1,540.79 Lacs. For the year ended March 31, 2011, the net cash from financing activities was ` 3,802.04 Lacs, comprising proceeds from share issue of ` 4,334.88 Lacs and proceeds from borrowings of ` 326.92 Lacs partially offset by interest paid of ` 482.23 Lacs, share issue expenses of ` 163.19 Lacs, and repayment of borrowings of ` 214.34 Lacs. For the year ended March 31, 2010, the net cash used in financing activities was ` 60.61 Lacs, comprising of interest paid of ` 443.79 Lacs, share issue expenses of ` 5.44 Lacs, and repayment of borrowings of ` 241.94 Lacs and partially offset by proceeds from share issue of ` 100.00 Lacs and proceeds from borrowings of ` 530.56 Lacs. For the year ended March 31, 2009, the net cash from financing activities was ` 367.88 Lacs, comprising of interest paid of ` 369.92 Lacs, share issue expenses of ` 13.13 Lacs, and repayment of borrowings of ` 44.26 Lacs and partially offset by proceeds from share issue of ` 500.00 Lacs and proceeds from borrowings of ` 295.19 Lacs. Related Party Transactions We have entered and may in the future continue to enter into transactions of a material nature with certain of our Promoters, and Directors and entities controlled by such persons that may have a potential conflict of interest with our interests. We intend that all our related party transactions will be in the normal course of business and conducted on an arm’s length commercial basis, in compliance with applicable laws. For further details of our related party transactions, please see “Financial Statements - Annexure XVII – Related party Transactions” on page 158. Off balance sheet items We have the following off balance sheet items: Estimated amounts of Contracts remained to be executed on Capital Account and not provided for (Net of Advance)

` in Lacs As at September 30, 2011 As at March 31, 2011 As at March 31, 2010 As at March 31, 2009

45.11 467.22 57.72 8.92 Claims against the Company not acknowledged as debt

` in Lacs As at September 30, 2011 As at March 31, 2011 As at March 31, 2010 As at March 31, 2009

11.95 11.86 48.09 15.66

The depreciation charge for the year excludes amount of depreciation on the increase due to Revaluation of fixed assets. ` in Lacs

As at September 30, 2011 As at March 31, 2011 As at March 31, 2010 As at March 31, 2009 15.49 35.19 35.19 35.05

Indebtedness Details of our indebtedness as of September 30, 2011 are as follows:

Particulars Amount (` in Lacs)

Secured Loans Cash Credit from Banks 1,324.12Secured by exclusive charge over Fixed Assets, Current Assets, equitable mortgage by deposit of Title Deeds, personal guarantee of one of the shareholders and maintenance of Debt Service Reserve Account for the amount equivalent to the interest amount of two months.


172

Term Loan from Finance Companies for Vehicles 7.60 Secured by Hypothecation of Vehicles Total Secured Loans 1,331.72 Unsecured Loans 400,000 Optionally Convertible Cumulative Debentures of `100 each* 400.00 Interest free Loan Under Sales Tax Deferral Scheme 295.90 Total Unsecured Loans 695.90

Note: The Company had issued OCCD carrying interest @ 12% p.a. (Net of Withholding Tax) between 1st April, 2009 upto 31st March 2012. The Debenture holders had an option to convert these Debentures (equivalent to the face value) into 12% Preference Shares of Rs. 100/- each from 30th September, 2009 to 31st March, 2012. In accordance with the Shareholders’ Agreement and Amendment to the Debenture Subscription Agreement, both dated 9th February, 2011, entered into with Mahindra & Mahindra Limited, the terms of the Debentures have been changed so as to make them compulsorily redeemable by 28th February 2012 in a phased manner. Contingent Liabilities For the period ended September 30, 2011, we have not provided for the following contingent liabilities:

(` in Lacs) Particulars Amount

Guarantees issued by Banks secured by Fixed Deposits 710.47 Custom Duty / Interest on account of commitment to Export, under Export Promotion Capital Goods Scheme 314.91 Show Cause cum Demand Notices received from Excise Authorities 79.44 Loans & Advances includes refund claim made for excise duty paid under protest 166.79 Income Tax Demand Disputed Appeal (AY 1993-94) 23.67 Sales Tax demand disputed in Appeal -

Total 1,295.28 Quantitative and qualitative disclosures about market risk General Market risk is the risk of loss of future earnings, to fair values or to future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the foreign currency exchange rates, interest rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments, foreign currency payables and debt. Commodity price risk We are exposed to fluctuations in the price of high, medium and linear low density polyethylene, which is the raw material for the manufacture of our products. The manufacture of these raw materials is dependent on crude oil and the price of crude oil globally determinates the prices of the raw materials. In recent times, the price of crude oil globally has been volatile. Therefore, fluctuations in the price of crude oil have a significant effect on our business, financial conditions and results of operations. Interest Rate Risk As of December 31, 2011, we have an outstanding indebtedness of ` 2,344.61 Lacs, out of which ` 1648. 71 Lacs, i.e. around 70% of our outstanding loans, is subject to floating interest rates. Floating rate debt exposes us to market risk as a result of changes in interest rates. We undertake debt obligations to support capital expenditures, working capital needs, and general corporate purposes. Upward fluctuations in interest rates increase the cost of new debt and interest cost of outstanding variable rate borrowings, which may in turn adversely affect our results of operations. Uncertainty in the Government’s subsidy scheme We are significantly dependent on the government subsidies. Delay in receipt of the subsidy component, our margins for


173

a particular period or year may be adversely affected. Moreover, in the event the government withdraws or reduces the subsidy currently being offered to the industry, the farmers and the horticulturists may not be in a position to afford micro irrigation systems Recent accounting pronouncements Our Company would need to prepare annual and interim financial statements under IND-AS in the near future. There is currently a significant lack of clarity on the adoption and timing of, and convergence to, IND-AS and we currently do not have a set of established practices on which to draw on in forming judgments regarding its implementation and application, and we have not determined with any degree of certainty the impact that such adoption will have on our financial reporting. Information as per Schedule VII Part A (IX) (E) of SEBI Regulations Unusual or infrequent events or transactions There have been no other events or transactions that, to our knowledge, may be described as “unusual” or “infrequent”. Known trends or uncertainties Other than as described in the section titled “Risk Factors” at page IX and and this chapter, there are no known trends or uncertainties that have or are expected to have a material adverse impact on our revenue from continuing operations. Temporal & spatial distribution of rainfall and seasonality of business The demand of micro irrigation systems is dependent on the temporal and spatial distribution of rainfall and consequently, temporal and spatial distribution of rainfall over a period may lead to a decrease in the demand of micro irrigation systems and consequently affect our business and results of operations. Moreover, most of the crops which are irrigated with the aid of micro irrigation systems are seasonal in nature and consequently utilisation of our products is also restricted to these periods. Due to such period usage of our products, their life cycle tends to increase which affects our recurring sales and also our limits our after sales services, for which we charge a fee after a certain period of time. Future relationship between expenditure and revenue in case of events such as future increase in labour or material costs or price that will cause a material change are known Other than as described in the section entitled “Risk Factors” at page IX and this chapter, respectively, there are no future relationship between costs and income that have or had or are expected to have a material adverse impact on our operations and finances. Extent of material increases in revenue due to increased operations and introduction of new products or services or increased prices Changes in revenues during the last three Fiscals are explained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the subsections titled “Result of Operations”. Competitive conditions We expect competition in the MIS segment from existing and potential competitors, both in the organized and unorganized sectors, pursuant to greater financial and other resources, better access to capital than we do, ability to offer goods at more competitive prices, which may enable them to compete more effectively than us, which may impact our operations. For further details please refer to the discussions of our competitive conditions in the section entitled “Risk Factors” and “Our Business” at pages IX and 36, respectively. Any significant dependence on a single or few suppliers or customers We are not dependent on a single or a few suppliers or customers. Total turnover of each major industry segment in which we operate


174

We are primarily engaged in the business of manufacture of micro irrigation systems. All our other activities revolve around this main business and accordingly there are no separate segments for the six months ended September 30, 2011 as per the According Standard on “Segment Reporting” (“AS 17”) notified under the Companies (Accounting Standards) Rule, 2006. The turnover for the two segments in which we operate for the last three financial years are as follows:

(` in Lacs) Segments Year ended March

31, 2011 Year ended March

31, 2010 Year ended March

31, 2009 MIS 7,807.41 6,675.13 5,216.96 IIP 859.06 568.80 789.04 Total Segment Revenue 8,666.47 7,243.93 6,006.00

Status of any publicly announced new products or business segment. We have not publicly announced any new products. Significant economic changes that materially affected or are likely to affect income from continuing operations Other than as mentioned under “Factors Affecting Our Results of Operations” in this chapter at page 162, we do not believe that there are any other significant economic changes that materially affect or are likely to affect income from continuing operations. Significant developments after Fiscal 2011 that may affect our future results of operations To our knowledge and belief, no circumstances other than those disclosed in this Draft Letter of Offer have arisen since the date of the last financial statements contained in this Draft Letter of Offer which materially affect or are likely to affect, the trading and profitability of our Company, or the value of our assets or our ability to pay material liabilities within the next 12 months.


175

MARKET PRICE INFORMATION

BSE The high and low closing prices recorded on the BSE for Fiscal 2011, 2010, 2009 and 2008 and the number of Equity Shares traded on the days the high and low prices were recorded are stated below: Fiscal Year

High (`)

Date of High Volume on date of High

(Number of Equity Shares)

Low (`)

Date of Low

Volume on date of Low (Number of

Equity Shares)

Average Price for the Year

(`)FY08 80.25 January 18, 2008 4,132 26.60 April 16, 2007 1,750 44.97 FY09 45.00 April 3, 2008 160 18.10 March 26, 2009 750 27.36 FY10 63.40 January 19, 2010 39,167 16.90 May 4, 2009 400 44.77 FY11 122.60 March 31, 2011 17,280 51.00 January 19, 2011 701 68.27 BSE The high and low prices and volume of Equity Shares traded and the total number of trading days on the respective dates on the BSE during the last six months is as follows:

Month, Year High (`)

Date of High Volume on date

of High*

Low (`)

Date of Low Volume on date of Low*

Average Price for

the Month (`)

Total Noof

Trading Days

July, 2011 149.90 July 4, 2011 617 132.60 July 27, 2011 657 139.95 21August, 2011 149.70 August 3, 2011 5,499 120.50 August 22, 2011 1,667 133.63 21September, 2011 140.00 September 12, 2011 2,096 128.00 September 23, 2011 1,130 127.29 21October, 2011 155.55 October 17, 2011 1,008 126.05 October 3, 2011 1,066 136.83 19November, 2011 165.00 November 9, 2011 7,914 126.10 November 24, 2011 625 137.87 20December, 2011 154.70 December 1, 2011 1,168 88.00 December, 2011 1,371 116.05 21* Number of Equity Shares Closing market price on the date of Board resolution of approving the Issue The closing market price on BSE immediately after the date on which the resolution of the Board of Directors approving the Issue was approved i.e. November 14, 2011, was ` 140.15.


176

FINANCIAL INDEBTEDNESS Secured Loans Name of the lender and

Amount sanctioned

(In ` Lacs)

Description of loan

Repayment

Rate of Interest (% per annum)

Amount availed and outstanding

on December 31, 2011

(In ` Lacs)

Security

YES Bank Limited Date of Loan Agreement: October 13, 2010

Cash Credit Facility – 950.00 Letter of Credit (sub-limit of Cash Credit Facility) – 800.00 Bank Guarantee (Sub-limit of Cash Credit Facility) – 100.00

On demand/ annual review Letter of Credit Usance + validity not to exceed 90 days. 12 months (including claim periods)

Interest will be charged at Yes Bank prime lending rate prevailing 2% per annum plus applicable taxes 2% per annum plus applicable taxes

880.16 The whole of the current assets of our stocks of raw material, semi-finished and finished goods, stores and spares including relating to plant and machinery (consumable stores and spares), bills receivables and book debts and all other receivables and movables, both present and future whether lying or stored in or about our factories, premises and godowns situate anywhere and as the same may be or be held by any party to the order or disposition of the borrower or in the course of transit or on the high seas or on order or delivery, howsoever or wheresoever in the possession and/or control of us and either by way of substitution or addition. The whole of the moveable and immoveable fixed assets including plant and machinery located at H-109, MIDC Ambad, Nashik – 422010, both present and future or shall hereinafter from time to time during the security of these presents brought into to our order or disposition or in the course of transit or in high seas or on order or delivery, howsoever or whosoever in our possession and either by way of substitution or addition. Equitable mortgage on our property located at H-109, MIDC Ambad, Nashik – 422010.

IDBI Bank Limited Date of Loan Agreement: Loan Facility Agreement dated December 18, 2009 along with Supplemental Loan Facility Agreement dated September 24, 2010

Cash Credit - 1,000.00 (Sublimit of CC -Letter of Credit - 1,000.00)

12 months line. Repayment on demand

Base rate + 6% p.a. payable

monthly or Rate of Interest

charged by Yes Bank whichever is higher

768.55 A first charge by way of hypothecation over the movables including stock of raw materials, semi finished and finished goods, consumable stores, book debts and such other movables as may be agreed to by the lender for securing the borrowings for working capital requirements in the ordinary course of business. A first charge by way of hypothecation over Company’s entire movables including movable machinery, machinery spares, tools and accessories, present and future, subject to prior charges created and/or to be created by Company in favour of its term lenders and on specific items of machinery as permitted by the lender and/or to be purchased by Company from and out of the financial assistance from the lender. A first pari passu mortgage and charge in favour of the lender in a form satisfactory to the lender of all the borrower’s immovable properties, both present and future. A first pari passu equitable mortgage and charge


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Name of the lender and

Amount sanctioned

(In ` Lacs)

Description of loan

Repayment

Rate of Interest (% per annum)

Amount availed and outstanding

on December 31, 2011

(In ` Lacs)

Security

in favour of the lender on the immovable property situated at Plot number H.-109, MIDC Ambad, Nashik-422 010 An irrevocable and unconditional guarantee from Mr. Kishen Lal Khanna in favour of the lenders.

Unsecured Loans OCCDs On 22 January, 2007, we issued 18,00,000 OCCDs of ` 100 each amounting to ` 1,800 Lacs to Schroder Credit Renaissance Fund Limited and Credit Renaissance Development Fund L.P @ 12% p.a. (Net of Withholding Tax) between 1st April, 2009 upto 31st March 2012. The issue was made pursuant to a debenture subscription agreement dated January 17, 2007 (“DSA”) which has been subsequently amended vide Amendment Agreement to Debenture Subscription Agreement (“Amendment to DSA”) dated February 9, 2011. The debenture holders have an option to convert the outstanding OCCDs into Preference Shares from September 30, 2009 to March 31, 2012. In accordance with the Shareholders Agreement and amendment to DSA both dated February 9, 2011 entered into with M&M the OCCDs are redeemable by February 28, 2012 in a phased manner. As on December 31, 2011, 4,00,000 OCCDs of ` 100 each amounting to ` 4,00,00,000 were outstanding. Sales Tax Deferral Scheme As on December 31, 2011 outstanding amount of interest free loan under Sales Tax Deferral Scheme stood at `295.90 Lacs.


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SECTION VII – LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND DEFAULTS

Except as stated below there are no outstanding litigations, suits, criminal or civil prosecutions, statutory or administrative proceedings, including those for economic offences, or tax liabilities show cause notices or legal notices against us, our Directors, our Promoter and Group Companies and there are no defaults, non payment of statutory dues, over-dues to banks/financial institutions, defaults against banks/financial institutions, defaults in dues payable to holders of any debenture, bonds and fixed deposits and arrears of preference shares issued by us, default in creation of full security as per terms of issue/other liabilities, no amounts owed to small scale undertakings exceeding ` 1 Lac, which is outstanding for more than 30 days, no proceedings initiated for economic/civil/any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule XIII of the Companies Act, 1956) other than our unclaimed liabilities and no disciplinary action has been taken by SEBI or any stock exchanges against us, our Promoter and our Group Companies, other than as qualified in this section. Neither us nor our Directors, our Promoter and Group Companies have been declared as willful defaulters by the RBI or any other Governmental authority and there are no violations of securities laws committed by them in the past or pending against them or any person or entity connected with them, except as mentioned below. Litigations against us We have individually summarized legal proceedings involving us except proceedings relating to dishonour of cheques under sections 138 and 141 of the Negotiable Instruments Act, 1881. Civil Cases

1. Ms. Kamla Bhattar (“Petitioner”) filed civil petition bearing number 285/2011 dated July 26, 2011 in the Court of Civil Judge (Senior Division), Baripada (“CJSD”) against Mr. Biswamohan Das, Sharepro Services (India) Private Limited and us seeking an injunction restraining the transfer of 400 shares from the Petitioner to Mr. Biswamohan Das. We have, vide our reply, submitted that we would abide by the order of the CJSD. The matter is currently pending.

Consumer Cases

1. Mr. Pandurang Banka Kolge (“Complainant”) filed a consumer complaint bearing number 285/2011 dated

August 06, 2011 against us before the District Consumer Forum, Usmanabad (“District Forum”) alleging delay in the supply of irrigation equipment and seeking compensation of ` 0.20 Lacs. The aggregate amount involved is ` 0.20 Lacs. The matter is currently pending.

Labour cases

1. Umar Hanif Ansari (“Complainant”) filed complaint bearing number 28/2002 dated January 15, 2002 (“Complaint”) under the provisions of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act, 1971 before the Labour Court, Nashik against us. In the Complaint it has been alleged that we have engaged in unfair labour practices by harassing the Complainant and illegally terminating his services for joining an unrecognized trade union and participating in a strike. The matter is currently pending.

2. Shivaji Waman Barve (“Complainant”) filed complaint bearing number 323/2000 dated December 11, 2000

(“Complaint”) under the provisions of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act, 1971 before the Labour Court, Nashik against us. In the Complaint it has been alleged that we have engaged in unfair labour practices by harassing the Complainant and illegally terminating his services for not complying with a transfer order. The matter is currently pending.

3. Vasant Anant More (“Complainant”) filed complaint bearing number 61/2002 dated January 13, 2002 (“Complaint”) under the provisions of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act, 1971 before the Labour Court, Nashik against us. In the Complaint it has been alleged that


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we have engaged in unfair labour practices by harassing the Complainant and illegally terminating his services for joining an unrecognized trade union and participating in a strike. The matter is currently pending.

4. Rajaram Ramji Rode (“Complainant”) filed complaint bearing number 26/2002 dated January 15, 2002 (“Complaint”) under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 before the Labour Court, Nashik against us. In the Complaint it has been alleged that we have engaged in unfair labour practices by harassing the Complainant and illegally terminating his services for joining an unrecognized trade union and participating in a strike. The matter is currently pending.

5. Sunil Ramchandra Saptal (“Complainant”) filed complaint bearing number 27/2002 dated January 15, 2002

(“Complaint”) under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 before the Labour Court, Nashik against us. In the Complaint it has been alleged that we have engaged in unfair labour practices by harassing the Complainant and illegally terminating his services for joining an unrecognized trade union and participating in a strike. The matter is currently pending.

Tax litigations

1. The Commissioner of Central Excise, Nashik (“CCE”) filed an appeal dated May 24, 2004 bearing numbers E/1768/04, E/1769/04, E/1770/04 and E/1771/04 before the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (“CESTAT”) against order dated February 23, 2004 bearing numbers CEX XI/JMJ/53, 54, 55 and 56/916/NSK/APL/2004 (“Orders”) passed by the Commissioner of Central Excise and Customs (Appeals), Nashik (“CCE(A)”) allowing refund of ` 99.11 Lacs claimed by us. Show cause notices bearing numbers V Ch 39(18)R/12-164/99, V.Ch.84(18)R/04-89/2001, V.Ch.84(18)R/04-88/2001 and V.Ch.39(18)R/06-165/2001 dated April 10, 2000, May 31, 2001, May 31, 2001 and August 07, 2001 respectively were issued by the Assistant Commissioner of Central Excise and Customs, Nashik II alleging inter alia that the duty paid under protest by us has been recovered from the customers and the MODVAT credit availed by us has not been properly reversed. We submitted our replies to the show cause notices on November 20, 2000, July 27, 2001, July 27, 2001 and September 21, 2001 respectively. The CCE vide order bearing number CEX XI/JMJ/53/54,55 & 56/916/NSK/APL/2004 dated February 23, 2004 confirmed the demand, subsequent which we filed the appeal before the CCE(A). CCE filed appeals bearing numbers E/1768/04, E/1769/04, E/1770/04 and E/1771/04 against the Orders submitting that the duty paid by us had been passed on to the final consumer and accordingly our claim for refund of MODVAT was unjustified. The CESTAT, vide order bearing number A/833-846/11/EB/C-II dated August 24, 2011 remanded the matter to the CCE for examination and submission of a report within 3 months. The aggregate amount involved is ` 99.11 Lacs. The matter is currently pending.

2. A notice dated August 06, 2009 was issued to us under section 143(2) of the Income Tax Act, 1961 calling for

certain details regarding return of income filed on September 28, 2008 for the financial year ending March 31, 2008. In response to the said notice we made submissions vide letter dated June 18, 2010, June 28, 2010, August 09, 2010, November 10, 2010, November 17, 2010 and November 23, 2010. The Assistant Commissioner of Income Tax vide assessment order dated November 26, 2010 assessed the total loss to us to be ` 79.19 Lacs as against ` 200.06 Lacs claimed by us, and made a demand for additional ` 6.18 Lacs as income tax for the particular assessment year. Aggrieved by the assessment order, we filed an appeal dated December 23, 2010 before the Commissioner of Income Tax (Appeals), Mumbai (“Commissioner (Appeals)”). The Commissioner (Appeals) has upheld the order passed by the Assistant Commissioner of Income Tax levying the additional tax. The matter is currently pending.

3. The Assistant Commissioner of Income Tax vide assessment order dated November 28, 1997 assessed our total

income to be ` 62.69 Lacs as against losses of ` 69.53 Lacs claimed by us, and made a demand for payment of additional tax of ` 46.59 Lacs as income tax for the particular assessment year. Aggrieved by the assessment order, we filed an appeal dated December 31, 1997 before the Commissioner of Income Tax (Appeals), Mumbai (“Commissioner (Appeals)”). The Commissioner (Appeals) has partially upheld the order passed by the Assistant Commissioner of Income Tax levying the additional tax of ` 5.38 Lacs. Aggrieved, we and the Income Tax department filed cross appeals before the Income Tax Appellate Tribunal, Mumbai (“ITAT”). The ITAT has partially allowed our appeal vide its order dated December 08, 2006. The matter is currently pending.

4. A notice dated September 17, 2008 was issued to us under section 143(1) of the Income Tax Act, 1961 calling for certain details regarding return of income filed on October 31, 2007 for the financial year ending March 31, 2007. In response to the said notice we made submissions in person before the Assessing Officer. The Assistant


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Commissioner of Income Tax vide assessment order dated November 30, 2009 has made certain disallowances and has not granted certain deductions. Aggrieved by the assessment order, we filed an appeal dated January 11, 2010 before the Commissioner of Income Tax (Appeals), Mumbai (“Commissioner (Appeals)”). The Commissioner (Appeals) has dismissed the appeal filed by us. We have filed appeal before the Income Tax Appellate Tribunal, Mumbai. The matter is currently pending.

5. A notice of demand dated December 27, 1995 was issued by the Deputy Commissioner of Income Tax (“DCIT”) under section 156 of the Income Tax Act, 1961 (“IT Act”), demanding a sum of ` 27.90 Lacs for the assessment year 1993-94. On December 27, 1995 the DCIT passed an assessment order (“Assessment Order”) determining the total income of ` 22.24 Lacs upon which the income tax department issued a demand notice dated March 11, 1996 under section 156 of the IT Act, demanding a sum of ` 26.34 Lacs for the assessment year 1993-94. Aggrieved by the Assessment Order we filed an appeal number CIT(A)XXI/SR47/IT/20/95-96 with the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide its order dated December 19, 1996 partly allowed our appeal directing the assessing officer to delete from the total income an amount of ` 5.87 Lacs on account of royalty and contribution to provident fund, upon which the income department issued a demand notice dated March 26, 1997 under section 156 of the IT Act, demanding a sum of ` 18.20 Lacs for the assessment year 1993-94. On February 11, 1999 the Joint Commissioner of Income Tax passed an order determining the total income of ` 21.53 Lacs (“Order”). Aggrieved by the Order we filed an appeal with the Income Tax Appellate Tribunal (“ITAT”). ITAT vide its order dated March 22, 2005 recalled its previous order dated March 15, 2004 passed in this regard.

Show Cause Notices

1. A show cause notice dated January 03, 1997 bearing number R-III/MODVAT-SCN/EPC/96/1718 was issued to

us by the Superintendent of Central Excise and Customs, Nashik (“Authority”) alleging wrongful availment of MODVAT credit of ` 35.76 Lacs under rule 57Q of Central Excise Rules, 1944 (“Rules”). We were asked to show cause as to why penalty should not be imposed under rule 173Q of the Rules. We filed our reply on January 28, 1997 submitting that we have utilized the un-utilized credit of capital goods with the permission of the Assistant Commissioner of Central Excise and Customs, Nashik. We have availed the un-utilized credit of capital goods lying at old plant B-20 to the new plant at H-109, after receiving the permission from the Authority. The aggregate amount involved is ` 35.76 Lacs. The matter is currently pending.

2. The Superintendent of Central Excise and Customs, Nashik (“Authority”) had issued show cause notice bearing

number R-III/EPC/57F(4)/SCN/98/446, dated March 25, 1998 (“SCN”) to us alleging that we had wrongly cleared plastic cuttings i.e., scrap, under rule 57F(4) of Central Excise Rules, 1944 (“Rules”) instead of clearing them under rule 57F(5) of the Rules. Under rule 57F(4) of the Rules, we would have been liable to pay a differential duty of ` 6.58 Lacs. We were asked to show cause as to why penalty should not be imposed under rule 173Q of the Rules. We filed our reply vide our letter dated April 13, 1998. The aggregate amount involved is ` 6.58 Lacs. The matter is currently pending.

3. The Superintendent of Central Excise and Customs, Nashik (“Authority”) had issued show cause notice bearing number R-III/EPC/57F(4)/SCN/98 dated August 03, 1998 (“SCN”) to us. The Authority has alleged that we had wrongly cleared plastic cuttings i.e., scrap, under rule 57F(4) of Central Excise Rules, 1944 (“Rules”) instead of rule 57F(5) of the Rules. Under rule 57F(4) of the Rules, we would have been liable to pay a differential duty of ` 1.54 Lacs. We were asked to show cause as to why penalty should not be imposed under rule 173Q of the Rules. We filed our reply vide our letter dated September 09, 1998. The aggregate amount involved is ` 1.54 Lacs. The matter is currently pending.

4. The Joint Commissioner of Central Excise and Customs, Nashik (“Authority”) had issued a show cause notice bearing number V(39)15-91/NSK-II/EPC/ Adj./08/404, dated August 01, 1998 to us alleging that we had wrongly availed exemption for manufacture of MDPE Pipes under notification no. 06/2006 CEX without payment of duty of ` 35.56 Lacs and had contravened provisions of rule 4(1) and 6 of Central Excise Rules, 1944 (“Rules”). We were asked to show cause as to why penalty should not be imposed under rule 173Q of the Rules. The aggregate amount involved is ` 35.56 Lacs. The matter is pending.

5. The Assistant Commissioner of Central Excise and Customs, Nashik (“Authority”) issued show cause notice bearing numbers VCh39 (18)12-397/R/11 and VCh39 (18)12-398/R/11/4083 dated December 16, 2011 (“SCN”) to us alleging unjust enrichment as we had allegedly recovered duty paid by it from its customers, that reversal of MODVAT credit had been done on proportionate basis instead of on actual basis and that we had failed to


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provide certificate issued by the Commissioner, Agricultural Commisionerate, Pune which regulates prices of our products. We received the SCN on December 20, 2011. We were asked to show cause within 15 days of receipt of the SCN as to why refund claims for ` 130.50 Lacs and ` 67.68 Lacs arising out of order bearing number A/833-846/11/EB/C-II dated August 24, 2011 should not be rejected for the reasons stated in allegations. We had requested the Authority vide our letter dated January 2, 2012 that process of compiling information and submission of reply to the SCN would take a further 30 days and also requested the Authority to grant us a personal hearing considering the time it would take us to file a reply. The Authority has granted us a personal hearing on January 16, 2012 at 15.00 hours vide its order dated January 05, 2012. The aggregate amount involved is ` 198.18 Lacs. The matter is pending.

Litigations by us Criminal cases

1. Six cases have been filed by us under section 138 of the Negotiable Instruments Act, 1881 (“NI Act”) against various defendants which relate to dishonour of cheques received towards payment of outstanding dues. The aggregate amount involved in these cases is approximately ` 37.19 Lacs. These cases are at various stages of adjudication.

Civil cases

1. We have filed a Civil Petition bearing number 57/1998, dated February 14, 1998 before the High Court of Judicature at Madras against Maxworth Orchards (India) Limited (“Defendant”), alleging nonpayment of ` 52.01 Lacs outstanding against supply of irrigation equipment. The aggregate amount involved is ` 52.01 Lacs. The matter is currently pending.

2. We have filed a summary suit bearing number 4717/1999, dated March 22, 1999 before the High Court of

Judicature at Bombay (“High Court”) against Batliboi and Company Limited (“Defendant”), alleging nonpayment of dues amounting to ` 14.57 Lacs outstanding against supplies. The aggregate amount involved is ` 14.57 Lacs. The matter is currently pending.

Consumer cases

1. We filed appeal dated January 27, 2011 (“Appeal”) before the Karnataka State Consumer Disputes Redressal Forum, Bangalore (“State Commission”) against order dated December 27, 2010 passed by the District Consumer Forum, Bijapur (“District Forum”). Mr. Santaram Jadhav (“Complainant”) filed a consumer complaint bearing number 71/2002, dated June 18, 2002 against us before the District Forum alleging supply of defective irrigation systems and seeking compensation of ` 4.99 Lacs. The District Forum, vide order dated May 23, 2007 (“Order”), upheld the claims of the Complainant and directed us to pay compensation of ` 10.84 Lacs to the Complainant. We filed an appeal bearing number 1359/2007 against the Order before the State Commission. The State Commission, vide order dated June 24, 2008, remanded the matter back to the District Forum to decide the matter afresh. The District Forum vide order dated December 27, 2010 upheld its earlier Order and awarded compensation of ` 11.75 Lacs to the Complainant. Subsequently we filed the Appeal. The aggregate amount involved is ` 11.75 Lacs. The matter is currently pending.

Intellectual property litigation

1. We filed a petition dated January 08, 2004 (“Petition”) against Arihant Evergreen Agro Plast and Textiles Private Limited (“Defendant”) before the District Court, Jaipur (“District Court”) under section 104, 106 and 108 of the Patents Act, 1970 (“Act”) alleging infringement of patent by the Defendant and seeking an order restraining the Defendant. The petition was transferred as civil petition number 1/2006 to the High Court of Rajasthan at Jaipur (“High Court”) under section 104 of the Act as a counter claim had been filed by the Defendant before the High Court. The matter is currently pending.

2. We filed a patent suit bearing number 10/2007 dated October 04, 2007 (“Petition”) against Nagurjana

Fertilizers and Chemicals Limited (“Defendant”) before the District Court, Pune (“District Court”) praying the District Court to restrain the Defendant from infringing our patent. The Petition was transferred to the High Court of Judicature at Bombay (“High Court”) under section 104 of the Patents Act, 1970 as a counter claim had been filed by the Defendant before the High Court praying for revocation of the us patent bearing number


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187281. The District Court vide order dated December 15, 2007 allowed transfer of the suit to the Bombay High Court. The matter is currently pending.

SEBI related litigation:

1. Garuda Plant Products Limited (“GPPL”), filed a consent application dated September 15, 2011 (“Consent Application”) with SEBI as per the guidelines specified in circular bearing number EFD/ED/Cir-1/2007 dated April 20, 2007 requesting for compounding and condonation of our non compliance with the requirements of regulation 7(1A) of the Takeover Code which requires any person who acquires 2 percent or more of the shares/voting rights of a company to disclose such acquisition to the company and the stock exchanges where the securities of the company are listed. As GPPL, our erstwhile promoter group company, did not comply with the said requirements on acquisition of our Equity Shares on March 31, 2003, it filed the Consent Application. The matter is pending.

2. We have filed a consent application dated February 26, 2011 (“Consent Application”) with SEBI as per the guidelines laid down in Circular bearing number EFD/ED/Cir-1/2007 dated April 20, 2007 requesting for compounding and condonation of the non compliance with the requirements of regulation 7(3) and 8(3) of the Takeover Code. Any person who acquires 2 percent or more of the shares/voting rights is required to disclose such acquisition to the company within 2 working days as per the requirements of regulation 7(1A) of the Takeover Code. Regulation 7(3) of the Takeover Code requires the disclosure of the aggregate shareholding of any person who has acquired shares in terms of regulation 7(1A) to be disclosed to the stock exchanges where the securities of the company are listed within a period of 7 days and interms of regulation 8(3), requiring annual disclosure. As the acquisition of shares by GPPL was not disclosed to us as per the requirements of regulation 7(1A) of the Takeover Code, we were unable to comply with the requirement of regulation 7(3) and 8(3) of the Takeover Code. Consequently, we have filed the Consent Application. The matter is pending.

Tax litigation

1. We have filed an appeal dated May 21, 2004 bearing numbers E/1730/04, E/1753/04, E/1752/04 and E/1751/04 before the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (“CESTAT”) against orders dated February 23, 2004 bearing numbers CEX XI/JMJ/53, 54, 55 and 56/916/NSK/APL/2004 passed by the Commissioner of Central Excise and Customs (Appeals), Nashik (“CCE(A)”) disallowing refund of ` 31.38 Lacs on the grounds of excess MODVAT. Show cause notices bearing numbers V Ch 39(18) R/12-164/99, V Ch 39(18) R/04-89/2001, V Ch 39(18) R/04-88/2001 and V Ch 39(18) R/06-165/2001 dated April 10, 2000, May 31, 2001, May 31, 2011 and August 07, 2001 respectively was issued by the Assistant Commissioner, Central Excise and Customs, Nashik (“AC”) alleging inter alia that the duty paid under protest by us has been recovered from the customers and the MODVAT credit availed by us has not been properly reversed. In our replies dated November 20, 2000, July 27, 2001, July 27, 2001 and September 21, 2001 respectively, we had stated that the duty had been paid under protest at the intermediate stage and not at the final sale. The CCE(A) passed orders bearing number CEX XI/JMJ/53, 54, 55 and 59/916/NSK/APL/2004 dated February 23, 2004 (“Orders”) disallowing the credit of ` 31.38 Lacs claimed by us. We filed appeals bearing numbers E/1730/04, E/1753/04, E/1752/04/E/1751/04 (“Appeals”) against the Orders. In our Appeals, we submitted that the cost accountant’s certificates evidencing that duty paid under protest had not been passed on to the final consumer had not been considered. The CESTAT, vide order bearing number A/833-846/11/EB/C-II dated August 24, 2011, remanded the matter to the CCE for examination and submission of a report within 3 months. The aggregate amount involved is ` 31.38 Lacs. The matter is currently pending.

2. We have two filed appeals dated May 30, 2008 and July 04, 2008 bearing numbers E/534/08-MUM and

E/710/08-MUM (“Appeals”) before the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (“CESTAT”) against order dated August 02, 2006 and March 30, 2008 bearing numbers CEX/AKD/184/APL/NSK/06/7183 and AKD/69/NSK/2008 (“Orders”) passed by the Commissioner of Central Excise and Customs (Appeals), Nashik (“CCE(A)”). Show cause notices bearing numbers Vch 39(18)R/02-39/2002/50, Vch 39(18)R/03-195/2002/1075, Vch 39(18)R/03-194/2002/1074 and 39(18)R/03-46/04/2090 dated January 08, 2003, March 22, 2004, March 22, 2004 and June 11, 2004 respectively were issued by the Assistant Commissioner of Central Excise and Customs, (“Assistant Commissioner”) alleging that the refund claim is hit by unjust enrichment. We submitted our reply dated March 24, 2003, April 16, 2004 April 16, 2004 and June 24, 2004 respectively. The Assistant Commissioner passed an order bearing number 170(R)/2005-06 and 71/2004 dated March 10, 2006 and September 20, 2004 sanctioning on merit the refund of ` 67.67 Lacs and ` 99.11 Lacs and ordered to credit it to the consumer welfare fund on the grounds of unjust enrichment, to


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which we filed an appeal before the CCE(A)submitting that the cost accountant’s certificates evidencing that duty paid under protest had not been passed on to the final consumer had not been considered. The CCE(A), vide the said Orders, upheld the orders passed by the Assistant Commissioner. We filed the Appeals before the CESTAT against the said Orders. The CESTAT, vide Order bearing number A/833-846/11/EB/C-II, remanded the matter to the CCE for examination and submission of a report within 3 months. The aggregate amount involved is ` 166.78 Lacs. The matter is currently pending.

Litigations against our Directors

1. Criminal Complaint bearing number 1002/SEM/2005 (“Criminal Complaint”) was filed before the Special Metropolitan Magistrate Municipal Bench Court, Bhoiwada, Dadar, Mumbai (“Metropolitan Magistrate”)by Mr. S.P. Sonavane, Inspector, Shops and Establishments, Municipal Corporation of Greater Mumbai (“Complainant”) against Mr S. Durgashankar, our Director and 3 others ( “Accused”) regarding non-registration of the shop premises and non display of registration certificate on the shop premises as required under the Bombay Shops and Establishments Act, 1948. Criminal Application bearing number 1109/2006 was filed by the Accused before the High Court of Judicature at Bombay (“High Court”) challenging the Criminal Complaint. The High Court, vide order dated June 13, 2006 (“Order”), allowed the Accused to approach the Court of Sessions for Greater Bombay, Mazgaon (“Sessions Court”). Criminal Revision Application bearing number 164/2006 (“Revision Application”) was filed before the Sessions Court. The Sessions Court, vide order dated October 20, 2007, dismissed the Revision Application. Aggrieved by the same, the Accused filed a Criminal Miscellaneous Petition bearing number 3934/2007 (“CMP”) before the High Court. The matter is pending.

Litigations involving our Promoter We have individually summarized the significant legal proceedings involving our Promoter in relation to civil cases, arbitration proceedings, public interest litigation, tax related proceedings, proceedings relating to dishonour of cheques under sections 138 and 141 of the Negotiable Instruments Act, 1881 and with respect of all other proceedings involving our Promoter for claims exceeding a monetary value of ` 10,313 Lacs i.e. 1% of net worth of our Promoter. For other cases, we have disclosed all the legal proceedings pending by and against our Promoter in an aggregated manner. Litigations against our Promoter Criminal cases:

1. First information report number 05/2009 was filed by Vaishnav Tractors Limited at the Khiri Police Station against Mr. N.K. Bhogra in his capacity as an employee of Punjab Tractors Limited, an entity that was merged into our Promoter (“Representative”) alleging offences under sections 407, 420, 421 and 506 of the Indian Penal Code, 1860 for misuse of blank cheques issued to the Representative. Investigation in this matter is currently pending.

2. Lakshmi Prasad Nayak (“Complainant”) filed criminal application number 673C/2008 (“Complaint”) before the Judicial Magistrate, First Class, Arariya (“Court”) against Mr. Gautam Khajuria, Mr. Kaushik and Mr. A. M. Sawney in their capacity as employees of our Promoter (“Representatives”) alleging offences under sections 380, 465 and 120B of the Indian Penal Code, 1860 for misuse of blank cheques issued to the Representatives. The Complainant has prayed the Court for initiation of criminal proceedings against the Representatives. The Representatives filed criminal miscellaneous application number 28159/2010 before the High Court of Judicature at Patna (“High Court”) praying the High Court to stay the proceedings in the Complaint. The High Court, vide order dated September 30, 2011, stayed further proceedings in the Complaint. The matter is currently pending.

3. Parnami Enterprises Limited (“Complainant”) filed criminal application number 98/10 of 2006 before the Chief Judicial Magistrate, Panipat (Court“) against Mr. J.P. Singh, Mr. A.M. Sahwney, Mr. Yash Majahan and Mr. P.Sivram in their capacity as employees of Punjab Tractors Limited, an entity that was merged into our Promoter (“Representatives”) alleging offences under sections 120B, 420, 465, 466, 467, 471 and 477A of the Indian Penal Code, 1860 for misuse of blank cheques issued to the Representatives. The Complainant has prayed the Court for initiation of criminal proceedings against the Representatives. The Representatives filed criminal miscellaneous application number 21295M/2007 before the High Court of Punjab and Haryana at Chandigarh (“High Court”) praying the High Court to stay the proceedings in the Complaint. The High Court,


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vide order dated April 04, 2007, stayed further proceedings in the Complaint. The matter is currently pending.

4. Mr. Kamta Prasad filed criminal application number 2852/2010 before the Chief Judicial Magistrate, Purnia against Mr. Gautam Khajuria, Mr. Arun Arora, Mr. Vishvambhar Mishra and Mr. G.P. Kaushik in their capacity as employees of our Promoter (“Representatives”), alleging offences under sections 380, 384, 467, 468, 469 and 511 of the Indian Penal Code, 1860 for theft of blank cheques and praying for initiation of criminal proceedings against the Representatives. The Representatives filed criminal miscellaneous application number 31234/2011 before the High Court of Judicature at Patna (“High Court”) praying the High Court to stay the proceedings in the Complaint. The High Court, vide order dated December 14, 2011, stayed further proceedings in the Complaint. The matter is currently pending.

5. Mr. Puran Singh Jatav (“Petitioner”) filed writ petition number 4984/2010 before the Gwalior Bench of the Madhya Pradesh High Court (“High Court”) under article 226 of the Constitution of India against the Union of India and certain tractor manufacturing companies including Punjab Tractors Limited, an entity that has been merged into our Promoter (“Respondents”), alleging that certain companies were misrepresenting the horse power of the tractors manufactured by them. The Petitioner has further alleged that the Bureau of Indian Standard (“BIS”) guideline for labelling tractors was being violated. The Petitioner has prayed the High Court to direct the Respondents to label tractors as per the BIS guidelines and to stop the Respondents from marketing their tractors with wrong specifications. The matter is currently pending.

6. Criminal complaint number 340/2009 was filed before Magistrate First class, District Court, Narnaul against Mr. Narinder Kumar (“Accused”) alleging offences under section 420, 467, 468, 471 and 120B of the Indian Penal Code, 1860 in respect of issuance of a forged invoice by the Accused. Mr. Ashok Kumar had filed first information report number 340/2009 against the Accused and Mr. Anand Mahindra amongst other parties. There were no findings against Mr. Anand Mahindra in the final report under section 173 of the Code of Criminal Procedure, 1973. The matter is currently pending.

7. Various parties have made a total of 51 applications under section 482 and 561A of the Code of Criminal Procedure, 1973 for quashing of criminal proceedings instituted by our Promoter including proceedings relating to dishonour of cheques under sections 138 and 141 of the Negotiable Instruments Act, 1881. These applications are currently pending.

Civil cases:

1. Usha Enterprises and 2 others (“Applicants”) filed civil suit number 977/2011 before the Court of the Civil Judge, Senior Division, Pune (“Court”) seeking an injunction against our Promoter from using the Applicants’ property as access for our Promoter’s property located at Wagholi. The matter is currently pending.

2. AK Verma (“Appellant”) filed appeal number 115/2002 before the City Sessions Court, Kolkata (“Court”) against an order dated October 30, 2001 passed by the First Court of the Additional District Judge, Kolkata in title suit 95/1987 (“Order”), directing the Appellant to vacate the premises of our Promoter located at flat no 403 block 'G at Alipore Calcutta. Our Promoter has filed execution petition number 4/2004 before the Court, claiming mesne profits and for execution of the Order. The matter is currently pending.

3. Zenith Metaplast filed writ petition number 25513/2006 before the High Court of Judicature at Bombay challenging the allotment of certain land by the MIDC to our Promoter. The matter is currently pending.

4. Sidh Tractors Limited (“Plaintiff”) filed civil suit number 283/2007 before the Court of the Additional Civil Judge, Senior Division, Safidon praying for reconciliation of statements of accounts. Our Promoter had terminated the Plaintiff’s dealership arrangement and had invoked bank guarantees in this respect. The Plaintiff has alleged some accounting irregularities in this regard. Our Promoter has filed a written statement dated March 2008, disputing the claims made by the Plaintiff. The amount involved in this suit is indeterminate. The matter is currently pending.

5. Hind Tractors Limited (“Plaintiff”) filed a civil suit before the Court of the Civil Judge, Junior Division, Bhiwani praying for declaration and settlement of amounts due to the Plaintiff in respect of sales promotions from our Promoter during the Plaintiff’s tenure as dealer for products of our Promoter. The amount involved in this suit is indeterminate. The matter is currently pending.


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6. Rashtravadi Surakasha Rakshak and General Manager Union (“Petitioners”) filed writ petition bearing number 332/2007 dated December 01, 2006 (“Writ Petition”) before the High Court of Judicature at Bombay (“High Court”) for issuance of a direction to our Promoter to get itself registered with the security guard board under the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 (“Act”) and to continue to employ present security guard in their establishment. Furthermore the Petitioners sought issuance of a direction to the security board to take appropriate action against our Promoter for contravening the provisions of Act. Our Promoter has filed a reply dated August 08, 2007 disputing the applicability of the Act to our Promoter. The matter is currently pending.

7. Various parties have filed five civil suits pending before various courts impleading our Promoter as a necessary party. No claims have been made against our Promoter in respect of these suits.

8. 18 proceedings relating to transfer of shares of our Promoter are pending before various courts. The opposite parties have prayed for an injunction restraining our Promoter from transferring the disputed shares.

9. There are 62 civil proceedings pending at various stages of adjudication for actions such as recovery proceedings, declaration suits and suits for compensation against our Promoter and the aggregate monetary value of these proceedings is approximately ` 5,838.50 Lacs.

10. Ankush+ (Environment Protection Organisation) has filed writ petition bearing number 3575/2010 (“Writ Petition”) before the High Court of Judicature of Andhra Pradesh at Hyderabad (“High Court”) against the Government of Andhra Pradesh, The Andhra Pradesh Pollution Control Board and certain three-wheeler manufacturers including our Promoter (“Defendants”). The Writ Petition has been filed praying the High Court issue a writ of mandamus restraining all three-wheeler manufacturers from converting their vehicles into 18-seaters. The High Court subsequently issued a show cause notice dated June 09, 2010 calling upon the Defendants to show cause why action should not be taken against them. The matter is yet to be listed as all respondents have not yet been served and is currently pending.

11. Credential Finance Limited (“Plaintiff”) has filed civil suit number 3328/2000 (“Suit”) before the High Court of Judicature at Bombay praying for recovery of monies with interest @ 21% p.a. from the date of the suit till payment and/or realisation and for a declaration that the 50 non-convertible debentures of ` 10.00 Lacs each amounting to a total of ` 500.00 Lacs and bearing distinctive nos. 1000001 to 1000050 issued by the Plaintiff in favour of the Defendant are not enforceable and the same is to be delivered to the Plaintiff for cancellation. The total amount claimed through the Suit is ` 686.75 Lacs. The matter is currently pending.

12. Holloway Motor Cars of Manchester, LLC, Peters Auto Sales Inc. and Crest Chevrolet Inc. (“Applicants”) filed an application dated July 12, 2011 before the State of New Hampshire Motor Vehicle Industry Board (“Board”) in respect of a distributor agreement dated September 28, 2006 (“Agreement”) between Global Vehicles USA Inc. (“GV”) and our Promoter. The Applicants have prayed the Board to pass an order directing our Promoter to distribute its vehicles to the Applicants through Global Vehicles USA Inc. The matter is currently pending.

13. Jerry Ackerman and Automotive Leasing Corporation have filed a suit before the United States District Court, Eastern District of Missouri, Eastern Division (“Court”) for civil action number 4:11-cv-00687-RWS (“Civil Action”) on behalf of all individuals and entities that entered into an agreement with Global Vehicles USA Inc. (“GV”) for the right to sell our Promoters vehicles praying the Court to conduct a trial by jury to determine the appropriate compensatory damages payable by our Promoter and GV in respect of breach of a distributor agreement dated September 28, 2006 between GV and our Promoter. The matter is currently pending.

14. Presidential Auto Leasing and Sales Inc., Tamiami Ford Inc. and Bill Ray Nissan Inc. (“Applicants”) filed 3 civil case numbers 11:0061-63 (“Applications”) respectively before the Florida Department of Highway Safety and Motor Vehicles, Division of Administrative Hearings (“Department”) praying for an administrative hearing to obtain a declaration determining the propriety of our Promoter’s conduct under Florida laws and its impact on future requests for license and for an opportunity to take discovery in advance of the requested hearing as per Florida rules of Civil Procedure. The Applications were filed in respect of a distributor agreement dated September 28, 2006 between Global Vehicles USA Inc. (“GV”) and our Promoter. The matter is being held in abeyance till an arbitration proceeding between our Promoter and GV is concluded.

15. Shree Lakshmi Tractors Limited (“Plaintiff”) filed civil suit number 364/2011 before the Court of the Civil Judge (Junior Division), Patna praying for mandatory injunction restraining our Promoter from supplying


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tractors to Venkateshwara Tractors Limited and to resume supply to the Plaintiff. The matter is currently pending.

16. The Inspector of Legal Metrology sent our Promoter a notice dated December 05, 2011 alleging contravention of section 18 (1) of the Legal Metrology Act, 2009 stating that a certain product of our Promoter had irregularities relating to the price displayed on it and that the customer care number had not been displayed on it. The matter is currently pending.

Insurance related cases: Our Promoter is involved in a total of 924 proceedings in respect of insurance claims. All the insurance claims have been made by survivors or their heirs and relate to third party claims, personal injury and fatal accidents occurring during the transit of vehicles manufactured by our Promoter. The claims are usually filed before the Motor Accidents Claims Tribunal (“MACT”) and the Commissioner of Workmen’s Compensation. The following is a break up of these proceedings:

1. 75 cases are pending against our Promoter before various forums where insurance companies have declined their liability under the terms of the insurance policy. The aggregate amount of claims arising from these cases is approximately ` 739.20 Lacs.

2. 463 cases are pending against our Promoter and various insurance companies before the MACT and/or the Commissioner of Workmen’s Compensation in respect of accidents involving our Promoter’s vehicles. Our Promoter has been joined only as necessary party in respect of these cases. The aggregate claim made under cases is approximately ` 2,207.60 Lacs. There is no financial implication on our Promoter under these cases as the respective insurance companies would be liable for the same.

3. 340 cases are pending against our Promoter and various insurance companies, where the insurance company has still not declined liability and our Promoter has not been served yet. The amount involved in such cases is not ascertainable.

4. There are 46 cases where the insurance company has preferred an appeal against the order passed by the MACT,

wherein our Promoter has been made formal party to the proceeding. The amount involved is ` 494.20 Lacs. Arbitration proceedings:

1. Jain Udyog Limited (“Applicant”) filed arbitration application number 138/2011 (“Application”) before the High Court of Judicature at Bombay (“Bombay High Court”) under section 11 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) for appointment of an arbitrator in respect of a dispute involving the Applicant’s dealership arrangement with our Promoter. The Applicant had previously filed miscellaneous arbitration application number 1/2007 before the Court of the Sub-Judge I, Saraikela (“District Court”) under section 9 of the Arbitration Act, which was dismissed by the District Court. Thereafter, the Applicant filed arbitration appeal number 2/2009 (“Appeal”) before the Jharkhand High Court under section 11 of the Arbitration Act. The Appeal was dismissed on grounds of jurisdiction vide order dated July 23, 2010. The Applicant has thus filed the Application at the Bombay High Court. The Bombay High Court, vide order dated September 02, 2011 (“Order”), appointed Justice (retired) Babulal Jain as the sole arbitrator (“Arbitrator”). Our Promoter has filed a special leave petition number 33867/2011 dated December 02, 2011 before the Supreme Court of India challenging the Order. The Supreme Court of India has stayed the arbitration proceedings before the Arbitrator vide its order dated January 04, 2012. The matter is currently pending.

2. Global Vehicles USA Inc. (“Applicant”) submitted a statement of claim dated June 11, 2010 before an arbitral tribunal consisting of Mr. John Beechey, Mr. William Rowley and Mr. Peter Leaver (“Tribunal”) alleging that our Promoter had breached a distributor agreement dated September 28, 2006 (“Agreement”) between the Applicant and our Promoter making our Promoter the exclusive distributor of all Mahindra vehicles in the USA. The Applicant has prayed the Tribunal for a declaration of the rights and duties owed by the parties to each other in respect of the Agreement and for an order directing our Promoter for specific performace of the Agreement. The matter is currently pending.

Consumer cases


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1. There are 1,850 consumer cases pending against our Promoter claiming, amongst other things, deficiency in services and mental agony. The aggregate monetary value of these proceedings is approximately ` 2599.81 Lacs.

2. 2,059 legal notices have been received by our Promoter in respect of vehicles claiming, amongst other things, deficiency in services and mental agony. The aggregate monetary value claimed through these notices is approximately ` 2,879.90 Lacs.

Labour cases:

1. There are 198 proceedings including writ petitions relating to labour and industrial laws filed by various parties pending before various courts at various stages of adjudication, claiming, amongst other things, reinstatement, reinstatement with full back wages, permanency benefits, demanding bonuses and challenging awards, including voluntary retirement scheme compensations, passed by various labour tribunals. The total amount involved in these proceedings is approximately ` 2,819.25 Lacs.

2. There are four cases filed by various parties pending before various courts at various stages of adjudication claiming permanency benefit under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The amount claimed through these cases in not ascertainable.

3. There are 19 cases filed by various parties pending before various courts at various stages of adjudication, claiming reinstatement with full back wages under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The amount claimed through these cases in not ascertainable.

4. There are 39 cases filed by various parties pending before various courts at various stages of adjudication, claiming reinstatement under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The amount claimed through these cases in not ascertainable.

5. Writ petition number 1034/2011 (“Petition”) was filed by Mr. Chandrashekhar Chawande and Mr. Francis D’Souza (“Petitioners”), workmen of our Promoter before the High Court of Judicature at Bombay (“Court”). The Petition was filed for declaration that our Promoter indulged in unfair labour practices under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The Petitioners have also challenged the voluntary retirement scheme compensation awarded to the Petitioner vide order dated December 16, 2010 passed by the Industrial Court, Mumbai in complaint number 1162/2000 and has claimed the differential wage amount. The matter is currently pending.

6. Writ petition number 1774/2006 (“Petition”) was filed by Ms. Bhanumati Dayaram Mhatre (“Petitioner”), the mother of Mr. Kushal Mhatre, a workman of our Promoter under article 226 of the Constitution of India before the High Court of Judicature at Bombay (“Court”). The Petition was filed challenging the compensation for family pension claim awarded to the Petitioner. The matter is currently pending.

7. The Deputy Director of Industrial Safety (“Complainant”) filed criminal application 17 to 22 of 2005 (“Complaints”) before the 22nd Court of the Metropolitan Magistrate at Andheri, Mumbai against Our Promoter alleging that our Promoter was making its employees work overtime without suitable compensation, thereby leading to contravention of sections 54 and 59 of the Factories Act, 1948 (“Act”). The Complainant has prayed for issuance of process under section 92 of the Act against our Promoter’s representatives. Our Promoter sent letter dated March 18, 2010 to the Complainant intimating that the dispute had been settled and that Complaints should be withdrawn. The matter is currently pending.

8. Mr. SM Avhad filed special leave petition bearing number 3427/2011 (“Special Leave Petition”) before the Supreme Court of India (“Supreme Court”) challenging order dated October 08, 2010 passed by the High Court of Judicature at Bombay in respect of reimbursement of fake petrol bills. Our Promoter filed a counter affidavit dated March 17, 2011 before the Supreme Court challenging maintainability of the Special Leave Petition. The Supreme Court has admitted the Special Leave Petition vide its order dated August 16, 2011. The matter is currently pending.

9. Writ petition number 25586/2009 (“Petition”) was filed by the M&M Employees Union (“Petitioners”) under article 226 of the Constitution of India before the High Court of Judicature at Bombay (“Court”) praying the


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Court to issue a writ of mandamus declaring the proceedings number AP/SRO/PTC/17733/ENF/2009 dated August 19, 2009 (“Proceedings”) initiated by the Regional Provident Fund Commissioner as illegal and improper. The Proceedings were inititated reversing an exemption granted vide relaxation order number AP/17733/Exem.Cell/1993/4739 dated March 3, 1993 to the Petitioners to set up a trust for accumulation of employees’ provident fund. The matter is currently pending.

10. Application number 97/2011 (“Application”) was filed by the M&M Employees Union (“Applicants”) before the Industrial Court, Nashik (“Court”) challenging the terms and conditions of a settlement scheme dated July 28, 2009 and for upgradation of certain employees of our Promoter under schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. Our Promoter has filed reply dated August 05, 2011 before the Court denying committing any unfair labour practices and praying the Court to reject the Application. The matter is currently pending.

11. Appeal number 8925/2007 (“Appeal”) was filed by the Employees’ State Insurance Corporation challenging an order dated January 20, 2006 (“Original Order”) passed by the Employees’ State Insurance Court, Nashik (“ESI Court”) in application number 3/2000 filed before the ESI Court awarding a compensation of 20% permanent disability to Mr. L.D. Sansare (“Workman”), a contract workman of our Promoter and also challenging order dated October 09, 2006 passed by the ESI Court in review application number 2/2006 (“Confirming Order”) confirming the Original Order. The Original Order and the Confirming Order have been challenged on grounds that the Workman was granted a certificate for disability of 20% whereas the Medical Board constituted under the Employees’ State Insurance Act, 1948 was of the view that the Workman’s disability was of 3%. The matter is currently pending.

12. The Regional Provident Fund Commissioner, Haldwani (“Authority”) issued a show cause notice dated May 28, 2010 to our Promoter for violation of section 7A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 alleging irregularities in contribution to the provident fund account (“Contribution”) from July, 2005 to March, 2010. Our Promoter filed reply dated August 05, 2010 stating that the alleged violation occurred as the Authority had considered food allowances extended by our Promoter as part of the salary of employees of our Promoter, which did not actually form a part of their salary and was not meant to be considered in calculation of the Contribution. The matter is currently pending.

13. The Assistant Provident Fund Commissioner, Nashik (“Authority”) issued a show cause notice dated November 23, 2011 summoning our Promoter for violation of section 7A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 alleging irregularities in contribution to the provident fund account (“Contribution”) as our Promoter had not extended provident fund benefits to its contractors’ and transporters’ employees. The matter is currently pending.

14. The Commissioner of Labour, Mumbai (“Authority”) sent a show cause notice dated September 19, 2011 (“SCN”) to all directors of our Promoter, directing our Promoter to appear before the Authority, alleging violation of rule 25(2)(iv)(b) and 54 of the Maharashtra Contract Labour (Regulation & Abolition) Rules, 1971 under the Contract Labour (Regulation and Abolition) Act, 1970. The matter is currently pending.

Intellectual property

1. Notice dated August 12, 2009 (“Notice”) received by our Promoter from Macropack Solutions Private Limited and others (“Opposite Party”) regarding infringement of their trademark ‘Mom n Me’ (“Trademark”). Reply dated September 30, 2009 was sent by our Promoter denying the allegations leveled by the Opposite Party. Our Promoter thereafter sent the the Opposite Party a letter dated November 01, 2011 claiming that the Trademark was registered in a different class as the one used by the Opposite Party.

2. Naresh Balram Khattar, Me & Moms Private Limited and others (“Petitioners”) filed suit bearing number

2507/2010 dated August 24, 2010 (“Suit”) against our Promoter before the High Court of Judicature at Bombay (“High Court”) alleging infringement of the “M&M” logo and trademark and praying for a relief of ` 5.00 Lacs. Cease and desist notice dated August 13, 2010 (“Notice”) had been sent by the Petitioners asking our Promoter to refrain from using the “M&M” logo and trademark, claiming that it was owned by the Petitioners. Reply dated August 31, 2010 was sent by our Promoter denying the allegations leveled in the Notice. Subsequently, the Petitioners filed the Suit. The matter is currently pending.

Tax litigation:


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1. There are 100 proceedings relating to alleged contraventions of customs, excise and service tax against our

Promoter at various appellate levels. The aggregate monetary value of these proceedings is approximately ` 73,713.55 Lacs. This includes one proceeding in which 33 show cause notices were issued to our Promoter by the Excise Department (“Authority”) who confirmed a demand of ` 21,602.50 Lacs as differential excise duty and penalty of ` 8,807.50 Lacs alleging wrong classification of goods by our Promoter during the period from April 1991 to July 1996. This demand and penalty was confirmed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal bench at Mumbai (“Tribunal”) vide order dated December 07, 2009 (“Order”). Our Promoter also paid a sum of ` 4,000.00 Lacs vide challans dated January 15, 2010 and January 17, 2010 as part payment towards the demand made by the Authority. Our Promoter subsequently filed an appeal number 957/2010 before the Supreme Court of India (“Supreme Court”) challenging the Order and praying for interim stay restraining the Authority from taking any coercive steps till further orders. The Supreme Court granted interim stay vide its order dated February 02, 2010 restraining the Authority from taking any coercive steps till further orders since a considerable amount had already been paid by our Promoter. The matter is currently pending.

2. There are 85 Income Tax related cases filed by the Income Tax Authorities pending against our Promoter at various forums. The aggregate amount claimed from our Promoter through these cases is approximately ` 7,098 Lacs.

3. There are 126 proceedings of legal disputes of sales tax litigations of our Promoter across India which the company has disputed with the appellate authorities which are at present pending with them. The value of such pending disputed sales tax demands is approximately ` 27,376.99 Lacs.

4. Our Promoter has received notices in respect of 93 issues amounting to approximately ` 45,060.39 Lacs from various authorities for alleged contraventions of the customs, excise and service tax laws. These demands are pending adjudication.

Litigations by our Promoter Criminal cases:

1. Our Promoter has filed 166 proceedings in various courts relating to dishonour of cheques under sections 138 and 141 of the Negotiable Instruments Act, 1881 and the aggregate monetary value of these proceedings is approximately ` 11,265.57 Lacs.

2. Our Promoter has filed criminal miscellaneous application number 301/2007 before the High Court of Uttarakhand at Nainital (“High Court”) under section 482 of the Code of Criminal Procedure, 1973 praying for quashing of order dated December 15, 2006 (“Order”) passed by the Chief Judicial Magistrate, Rudrapur in criminal case number 4088/2006 (“Criminal Application”) and for stay on further proceedings against our Promoter by way of the Criminal Application. The Criminal Application had been filed against our Promoter in respect of allegations under the Contract Labour (Regulation and Abolition) Act, 1970. The High Court was pleased to grant a stay on the Order vide order dated May 21, 2007. The matter is currently pending.

3. Our Promoter has filed revision application number 79/2007 before the Industrial Court at Mumbai (“Industrial Court”) praying for quashing of order issuing process dated October 12, 1999 passed by the VIIth Labour Court, Mumbai in criminal miscellaneous application (ULC) number 116/1999 (“Criminal Application”) and for stay on further proceedings against our Promoter by way of the Criminal Application. The Industrial Court was admitted the revision application vide order dated July 20, 2007. The Criminal Application had been filed against directors of our Promoter in respect of termination of services of an employee of our Promoter. The matter is currently pending.

4. Our Promoter has filed criminal miscellaneous application number 25623/2007 before the High Court of Punjab and Haryana at Chandigarh (“High Court”) under section 482 of the Code of Criminal Procedure, 1973 praying for quashing of order dated September 04, 2004 (“Order”) passed by the Chief Judicial Magistrate, Karnal in criminal complaint number 136/2004 (“Criminal Application”) and for stay on further proceedings against our Promoter by way of the Criminal Application. The Criminal Application had been filed against our Promoter alleging that our Promoter had stolen 6 cheques from Hari Tractors Limited. The Order was stayed by the High


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Court vide order dated October 31, 2008. The matter is currently pending.

5. Our Promoter has filed criminal miscellaneous application number 30316/2008 before the High Court of Judicature at Allahabad (“High Court”) praying for quashing of order dated July 24, 2006 (“Order”) passed by the Additional Chief Judicial Magistrate, Khurja in criminal complaint number 952/2006 (“Criminal Complaint”), issuing a bailable warrant against representatives of our Promoter. The Criminal Complaint had been filed in respect of offences under sections 420, 467, 468, 471, 384, 34 and 147 of the Indian Penal Code, 1860 alleging fabrication of cheques. The Order was stayed by the High Court vide order dated October 24, 2008. The matter is currently pending.

6. Our Promoter has filed a criminal miscellaneous application number 31120/2011 before the High Court of Judicature at Patna (“High Court”) under section 482 of the Code of Criminal Procedure, 1973 for quashing of order dated February 14, 2008 (“Order”) passed by the Judicial Magistrate, First Class, Chapra in criminal complaint number 2691/2007 (“Complaint”) under section 406 and 420 of the Indian Penal Code, 1870 in which our Promoter alleged of selling a faulty vehicle. Our Promoter had been summoned vide the Order. The High Court has stayed further proceedings in the Complaint vide its order dated December 01, 2011. The matter is currently pending.

Civil cases:

1. Our Promoter filed a writ petition bearing number 888/2008 dated September 2008 (“Writ Petition”) before the Allahabad High Court (“High Court”) challenging the order dated August 27, 2008 (“Confirming Order”) passed by the Court of the District Judge, Balia (“District Court”) confirming order dated July 23, 2008 (“Original Order”) passed by the Civil Judge, Senior Division, Balia (“CJSD”). Our Promoter had been restrained from invoking a bank guarantee of ` 50.00 Lacs by the CJSD vide its Original Order in petition bearing number 292/2007, dated August 10, 2007 filed by Singh Tractors Agency before the CJSD. The matter is currently pending.

2. Our Promoter filed a writ petition bearing number 2668/2001 (“Writ Petition”) before the High Court of Judicature at Bombay (“High Court”) seeking the release of a helicopter in the possession of the Airport Authority of India (“AAI”). The High Court, vide an interim order dated October 03, 2002, allowed our Promoter to take back the helicopter subject to a bank guarantee of ` 250.00 Lacs. The matter is currently pending.

3. Our Promoter has filed writ petition bearing number 1403/2010 (“Writ Petition”) before the High Court of Punjab and Chandigarh at Chandigarh praying for quashing of show cause notice dated October 09, 2009 (“SCN”) and stay on any resultant proceedings. The SCN was served on our Promoter by the Controller of Weights and Measures, Haryana, alleging offences under the Standards of Weights and Measures Act, 1976, calling our Promoter to get their offences compounded. The Assistant Controller of Legal Metrology, Faridabad filed written statement dated March 15, 2010 challenging maintainability of the Writ Petition. The matter is currently pending.

4. Our Promoter has filed 26 civil proceedings for recovery of sums amounting to ` 2,844.38 Lacs approximately. These cases are currently pending.

Arbitration proceedings:

1. Our Promoter sent notice dated November 30, 2011 invoking arbitration against Vikas Infrastructure and Telecom Solutions Limited (“Opposite Party”) before Mr. Ranbir Krishnan, sole arbitrator in respect of violation by the Opposite Party of the terms of a service contract for servicing of diesel generator sets dated August 12, 2008 between our Promoter and the Opposite Party.

Labour cases:

1. Writ petition number 469/2009 (“Petition”) was filed by our Promoter before the High Court of Judicature at Bombay. The Petition was filed challenging an award dated June 26, 2008 passed by the IInd Labour Court at Mumbai in reference (IDA) number 729/2000 directing our Promoter to pay a sum of ` 5.00 Lacs in lieu of reinstatement of Mr. D.M. Shinde, a workman of our Promoter. The matter is currently pending.


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2. Application number 79/2011 (“Application”) was filed by our Promoter before the Industrial Court, Nashik seeking a declaration that the tool strike dated March 07, 2011 was illegal under section 24 of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act, 1971 and that the employees’ union of our Promoter had indulged in unfair labour practices. The matter is currently pending.

3. Application number 14/2009 (“Application”) was filed by our Promoter before the Labour Court, Nashik seeking a declaration that the strike dated May 04, 2009 was illegal under section 24 of the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act, 1971 and that the employees’ union of our Promoter had indulged in unfair labour practices. The matter is currently pending.

Intellectual property

1. Our Promoter filed suit bearing number 2502/11 dated June 24, 2011 against Mr. Yanakiev (“Defendant”) in Sophia Court, Bulgaria regarding use of the ‘M&M’ logo. The matter is pending.

2. Suit bearing number 2038/2003 dated November 25, 2003 (“Suit”) was filed by our Promoter against Bhalla

Singh Mohan Trading Limited (“Defendant”) before the High Court of Judicature, Delhi (“High Court”) regarding infringement of ‘Mahindra & Mahindra’ trademark and the ‘coloured wheel Mahindra’ logo & infringement of copyright in the original artistic work comprised in the said trademarks and logos. First information report bearing number 561/2002 had been filed by our Promoter against the Defendant alleging infringement of the trademark and the copyright comprised in the said trademarks and logos. Subsequently our Promoter filed the Suit. The matter is currently pending.

3. Our Promoter sent notice dated November 18, 2008 bearing number MA1/C&DNimbus to Nimbus Automotive (“Nimbus”) regarding the use of the name and logo ‘Mahindra’ on the website of Nimbus. Reply dated March 14, 2009 (“Reply”) was received from Nimbus wherein it was stated that Nimbus would remove the said logo from their website. Despite the assurance contained in the said Reply the logo was not removed from the website of Nimbus. A final reminder cum notice dated July 08, 2010 was sent to Nimbus.

4. Cease and desist notice dated May 17, 2010 bearing number JM/SLM/ANS/MN (“Notice”) had been sent to Mr.

Kabeer Chaudhary (“Defendant”) regarding use of the name ‘Mahindra’ in a website owned by the Defendant, thereby infringing the trademark of our Promoter. Subsequently, a complaint was also filed with the World Intellectual Property Organization bearing number D2011-1930 dated November 05, 2011 for transfer of the said domain name to our Promoter.

5. Our Promoter sent cease and desist notice dated December 05, 2011 bearing number JM/ADN/mn (“Notice”) to Honey Mahindra Motors (“Defendant”) regarding use of the name ‘Mahindra’ and our Promoter’s logo on a shop by the Defendant, thereby infringing the trademark of our Promoter.

Tax litigations:

1. There are 85 Income Tax related cases filed by our Promoter against the levy of income tax pending at various forums for adjudication. The aggregate amount claimed from our Promoter through these cases is approximately ` 15,904 Lacs.

2. The Additional Commissioner of Income Tax, Range 2(2), Mumbai (“CIT”) passed order dated October 24, 2011 (“Demand”) under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 (“Act”) raising a demand of ` 84,416 Lacs on our Promoter for the Assessment Year 2007-08 on account of various disallowances. The Demand included a disallowance of ` 1,34,989 Lacs under section 40(a)(ia) of the Act arising out of order dated March 25, 2008 (“Order”) passed by the Additional Commissioner of Income Tax, Nashik under section 194C read with sections 201(1) and 201(1)A of the Act for alleged non-deduction of the tax deducted at source. Our Promoter filed appeal bearing number NSK/CIT(A)-II/62/10-11 (“Appeal”) before the Income Tax Appellate Tribunal, Pune (“ITAT”) against the Order. The Appeal was allowed by the ITAT and as per the ITAT’s direction, the Commissioner of Income Tax (Appeals), Nashik (“CIT(A)”), vide his order dated November 11, 2011 (“CIT(A)’s Order”) quashed the Order. This will reduce the demand of ` 84,816 by ` 70,428 Lacs. Our Promoter subsequently filed an appeal before the Income Tax Appellate Tribunal, Mumbai against the said order passed by the Additional Commissioner of Income Tax. Circle 2(2) to revise the Demand in accordance with the CIT(A) Order. The matter is currently pending.


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Litigations involving our Group Companies Mahindra and Mahindra Financial Services Limited (“MMFSL”) We have individually summarized the significant legal proceedings involving MMFSL in relation to civil cases, arbitration proceedings, public interest litigation, tax related proceedings, proceedings relating to dishonour of cheques under sections 138 and 141 of the Negotiable Instruments Act, 1881 and with respect of all other proceedings involving MMFSL for claims exceeding a monetary value of ` 2,488.00 Lacs i.e. 1% of net worth of MMFSL. Significant criminal proceedings involving MMFSL have also been summarised. For other cases, we have disclosed all the legal proceedings pending by and against MMFSL in an aggregated manner. Litigations against MMFSL Criminal cases:

1. MMFSL has undertaken measures to recover dues from various parties (“Opposite Parties”) for sums due to MMFSL in respect of vehicles financed by MMFSL. The financial dues recoverable aggregate to approximately ` 144.76 Lacs. There are 233 criminal proceedings against MMFSL pending before various courts in this respect, including petitions filed by the Opposite Parties praying for quashing of criminal proceedings initiated by MMFSL against the Opposite Parties, appeals against the Opposite Parties’ conviction (in which MMFSL has been joined as a necessary party to the litigation) and other complaints alleging MMFSL of, amongst others, theft, robbery, trespass, extortion and criminal intimidation.

2. There are three criminal proceedings pending before various courts in which MMFSL has been joined as a necessary party. These cases have been filed in respect of claims made before the Motor Accident Claims Tribunal and no action or claim has been made against MMFSL in these proceedings.

3. MMFSL filed special leave petition bearing number 35036/2009 before the Supreme Court of India (“Supreme Court”) praying the Supreme Court for special leave to appeal against judgment dated November 18, 2009 (“Impugned Judgment”) passed by a division bench of the High Court of Kerala at Ernakulam (“Division Bench”) in writ appeal number 764/2007 (“Writ Appeal”) confirming order dated February 14, 2007 (“Order”) passed by a single judge of the High Court of Kerala at Ernakulam (“Single Judge”) in writ petition number 14005/2006 (“Writ Petition”) filed by MMFSL. MMFSL filed the Writ Petition before the Single Judge challenging applicability of the Kerala Moneylender’s Act, 1958 (“Act”) to MMFSL and for quashing of notice dated April 05, 2006 issued by the Inspecting Assistant Commissioner, Department of Commercial Taxes, Thrissur to MMFSL alleging that MMFSL had violated provisions of the Act by lending money in lieu of interest and by accepting post dated cheques without the requisite license. The Single Judge dismissed the Writ Petition vide the Order. The Supreme Court granted status quo vide its order dated December 16, 2009. The matter is currently pending.

Civil proceedings:

1. There are 151 civil proceedings against MMFSL pending before various courts seeking injunction restraining MMFSL from initiating recovery proceedings against them and the aggregate monetary value of these proceedings is approximately ` 616.99 Lacs.

2. There are 416 civil proceedings against MMFSL pending before various courts seeking injunction restraining MMFSL from initiating recovery proceedings against them. The liability in respect of these proceedings is not ascertainable

Consumer cases:

1. There are 461 consumer cases pending against MMFSL claiming, amongst other things, deficiency in services and mental agony. The aggregate monetary value of these proceedings is approximately ` 940.95 Lacs.

2. There are 522 other consumer cases pending against MMFSL claiming, amongst other things, deficiency in services and mental agony, the monetary value of which is not ascertainable.

Litigations by MMFSL


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Criminal cases:

1. MMFSL has filed 24,339 proceedings in various courts relating to dishonour of cheques under sections 138 and 141 of the Negotiable Instruments Act, 1881 and the aggregate monetary value of these proceedings is approximately ` 33,023.55 Lacs.

Arbitration proceedings

1. MMFSL has filed 63,839 arbitration proceedings against various parties in respect of non-payment of dues. These proceedings are pending before various arbitral tribunals and the total amount claimed by MMFSL through these proceedings is approximately ` 1,54,144.17 Lacs.

2. MMFSL has filed 5,765 execution petitions pending before various district courts alleging non-payment of outstanding amount as per the arbitration award. The total amount claimed through these execution petitions is approximately ` 15,159.18 Lacs.

Consumer cases

1. MMFSL has filed nine appeals against orders of various consumer forums in consumer cases against MMFSL in respect of deficiency in services and for repossession of items financed by MMFSL. The aggregate monetary value claimed through these proceedings is approximately ` 16.52 Lacs.

2. MMFSL has filed 37 appeals against orders of various consumer forums in consumer cases against MMFSL claiming, amongst other things, deficiency in services and mental agony. The monetary value of these proceedings is not ascertainable.

3. MMFSL has served 11,260 legal notices upon various parties in respect of Additional Financial Charges to be recovered from them. The aggregate monetary value claimed through these notices is approximately ` 2,178.95 Lacs.

4. MMFSL has sent 30 replies to notices received by MMFSL, including demand notices, recall notices, replies against claims by MMFSL, notices seeking information and for settlement of disputes received by MMFSL from its customers. The amount claimed vide these notices is not ascertainable.

Mahindra Lifespace Developers Limited (“MLDL”) We have individually summarized the significant legal proceedings involving MLDL in relation to civil cases, consumer cases, tax related proceedings, labour cases and with respect of all other proceedings involving MLDL for claims involving a monetary value of ` 1,028.28 Lacs i.e. 1% of net worth of MLDL or more. For other cases, we have disclosed all the legal proceedings pending by and against MLDL in an aggregated manner. Cases filed against MLDL Criminal Cases

1. Mr. Rajendra K. Verma (“Petitioner”) filed criminal revision petition bearing number 5251/2011 (“Revision Petition”) before the District Court, Pune (“District Court”) against order dated September 23, 2011 (“Order”) passed by the Judicial Magistrate First Class, Pune (“JMFC”). The Petitioner filed criminal complaint bearing number 1055/2010 (“Complaint”) before the JMFC against MLDL and others (“Defendants”) alleging that the Defendants had illegally entered and occupied the premises of the Petitioner. The JMFC dismissed the Complaint vide the said Order. Aggrieved, the Petitioner filed the Revision Petition. The matter is currently pending.

Civil cases

1. Yashomala CHS Limited (“Petitioner”) filed original suit bearing number 142/2010 against Pimpri Chinchwad Municipal Corporation and others, including MLDL (“Defendants”) before the Pimpri Chinchwad Municipal


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Corporation Court (“CJJD PCMC Court”) objecting to the sanctioning of the access to one of MLDL’s projects in the area. The matter is currently pending.

2. Bennett Coleman and Company Limited (“Petitioner”) filed a suit bearing number 2165/2004 (“Suit”) against Bite Advertising Private Limited and MLDL (“Defendants”) before the High Court of Judicature at Bombay (“High Court”) alleging insertion of pamphlets in newspapers without its permission. In its reply, MLDL submitted that as per the work order Bite Advertising Private Limited is responsible for the act. The matter is currently pending.

3. Orchid Daffodils and others (“Petitioners”) filed appeals bearing numbers 899/04 (“Appeal”) before the High Court of Judicature at Bombay against order dated March 31, 2004 passed by the City Civil Court, Mumbai (“City Civil Court”). Suit bearing number 6863/2002 was filed by the Petitioners against MLDL before the City Civil Court alleging issues about deficiency in services regarding private garden, recreation garden, handing over of corpus fund and conveyance of the property in favour of the respective societies and other issues under the Maharashtra Ownership Flat Act, 1963. The matter is currently pending.

4. Karan Promoters Private Limited (“Appellants”) filed a revision petition bearing number 32/2009 (“Revision Petition”) before the High Court at Delhi (“High Court”) against the order dated March 04, 2009 passed by the High Court (“Order”). Suit bearing number 408/1999 (“Suit”) had been filed by the Petitioners before the High Court alleging that there was an agreement between the Appellants and MLDL for leasing out of certain premises. The High Court dismissed the Suit vide the said Order. Subsequently, the Appellants filed the Revision Petition. The aggregate amount involved is ` 42.66 Lacs. The matter is currently pending.

5. Ms. Ramila Kilachand (“Plaintiff”) has filed a suit bearing number 1355/2004 (“Suit”) against Mr. Harsh Kilachand and others including MLDL (“Defendant”) before the High Court of Judicature at Bombay (“High Court”) claiming her right over certain property located at Goregaon, Mumbai (“Property”). MLDL, in its reply, submitted that the Property had been sold by Kesar Enterprises Limited as its owner and that the Property should not be a subject matter of the Suit and that it was not a necessary party to the Suit. The matter is currently pending.

6. Two civil suits are pending against MLDL at various levels of adjudication where MLDL has been made a necessary party the dispute between Gulab Farm Private Limited and certain residents of Central Park relating to delay in delivery of possession of the premises purchased by the said residents. MLDL has filed applications stating that it had acted in the capacity of an agent of Gulab Farms Private Limited in accordance with the terms and conditions stipulated in the project management agreement and there was no privity of contract between the aggrieved residents and MLDL. No claim has been made against MLDL in respect of these proceedings.

7. Mr. P.G. Vora (“Appellant”) filed appeal bearing number 560/2010 dated March 08, 2010 before the High Court of Judicature at Bombay (“High Court”) against arbitral award dated September 30, 2009 (“Award”) passed by Mr. E. P. Bharucha (“Arbitrator”). The Arbitrator vide the said Award dismissed the claim of the Appellant for compensation based on the saleable area and failure to purchase and develop transferable development rights to its maximum potential. The matter is currently pending.

8. Aidqua Holdings (Mauritius) Inc. (“Petitioner”) filed a petition before the Addlitional Principal Bench, Company Law Board, Chennai (“CLB”) under sections 397, 398, 402 and 403 of the Companies Act, 1956 against New Tirupur Area Development Corporation Limited and 37 others including MLDL (“Respondents”) praying the CLB to restrain the Respondents from implementing a corporate debt restructuring sceme dated December 02, 2011 and acting in a manner contrary to the interest of the Petitioner. The matter is currently pending.

9. Miscellaneous application bearing number 161/1995 (“Miscellaneous Application”) was filed by the custodian (“Custodian”) appointed under the Special Court (Trial of offences relating to Transactions in Securities) Rules, 1992 before the Special Court (Trial of offences relating to Transactions in Securities) at Mumbai (“Special Court”) seeking to make MLDL a party in the matter wherein Mr. Fazal M. K. Ali (“Shareholder”) has claimed 2,000 shares from the Custodian as 800 rights shares which were in abeyance relating to right issue by Great Eastern Shipping Company Limited in 1993 had been allotted by MLDL as per the order dated November 23, 2007 of the Special Court. MLDL has filed reply dated March 23, 2010 stating that the shares and benefits accrued to the Shareholder had already been dispatched to him and that the original shares had been dematerialised by the broker of the Shareholder. The matter is currently pending.


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10. Daffodil Mahindra Garden Cooperative Housing Society Limited, Mumbai (“Complainant”) filed suit bearing

number 1966/2002 dated October 09, 2002 before the Court of Small Causes at Mumbai against the Brihanmumbai Municipal Corporation (“Municipal Corporation”) and MLDL stating that the property tax assessed by the Municipal Corporation is not valid and is excessive. The matter is currently pending.

Consumer cases

1. There are three consumer cases pending against MLDL at various forums where MLDL has been made a necessary party to the dispute between the developer of the property and aggrieved residents (“Residents”) relating to delay in delivery of possession of the premises purchased by the Residents. MLDL filed applications stating that it had acted in the capacity of an agent of the developer and had acted in accordance with the terms and conditions stipulated in the project management agreement and there was no privity of contract between the Residents and MLDL.

2. There are five consumer cases pending against MLDL at various forums claiming, amongst other things, compensation for deficiency in services and delay in delivery of possession. The aggregate monetary value of these proceedings is approximately ` 239.87 Lacs.

Labour cases

1. Kamgar Aghadi Union (“Complainant”) filed complaint bearing number 68/2011 dated March 28, 2011 (“Complaint”) against MLDL and others (“Defendants”) before the 11th Labour Court, Bandra (“Court”) alleging non-payment of wages by the contractors of MLDL. The Complainant has subsequently made an application dated April 13, 2011 before the Court praying the Court to dispose the matter as the same has been settled. The matter is currently pending.

2. Nasruddin S. Ansari (“Complainant”) filed complaint bearing number 834/2011 (“Complaint”) against Kalpana Structure Construction Private Limited, MLDL and others before the Office of the II Labour Court, Bandra (“Labour Court”). The Complaint was filed for recovery of a sum of ` 4.24 Lacs which was the aggregate amount of wages unpaid to the deceased son of the Complainant (“Deceased”). MLDL has made application bearing number (WCA)374/B-57/2006 dated March 25, 2011 (“Application”) before the Court praying the Court to implead Ekesha Construction Company Private Limited, the contractor employing the Deceased as a party to the Complaint. MLDL has also filed written statement dated April 11, 2011 stating that the Deceased was not an employee of MLDL and MLDL was thus not liable. MLDL further filed reply dated September 22, 2011 disputing deletion of Kalpana Structure Construction Private Limited from the Complaint. The matter is currently pending.

Tax litigation

1. Show cause notice bearing number V/ST/HQ/AE/E/12/10/119 (“SCN”) dated April 20, 2011 was issued by the Service Tax Commissioner-I, Mumbai asking MLDL to show cause as to why a demand of ` 77.54 Lacs as service tax should not be levied on sale proceeds received by MLDL in relation to residential complexes under the service tax category for construction of complex services under section 65(106)(zzzh) read with section 65(30A) of chapter V of the Finance Act, 1994 in respect of the joint development agreement (“Agreement”) with GE Shipping Company Limited during the period between October 01, 2005 to March 31, 2010. MLDL submitted reply dated October 28, 2011 disputing the SCN and contending, amongst others, that the sale proceeds were not received as consideration for the Agreement and service tax could not be levied on the same. The matter is currently pending.

2. The Assistant Commissioner (CT), Annasalai-II Assessment Circle, Chennai issued notice dated October 24, 2011 rejecting the assessments made by MLDL and alleging that purchases made by MLDL were taxable at a higher rate and seeking to levy value added tax amounting to ` 183.10 Lacs for the period between financial years 2006-2007 to 2009-2010. The matter is currently pending.

3. There are four income tax related matters pending against MLDL at various levels of adjudication with an aggregate monetary value of ` 3,494.51 Lacs wherein demand of income tax has been made on account of reasons such as reclassification of business income as income from house property and disallowance of certain deductions by the income tax authorities.


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Cases filed by MLDL Criminal cases

1. Criminal complaint bearing number 6/PW/05, (“Complaint”) was filed by MLDL against Dhanush Constructions Private Limited (“Defendant”) before the Additional Chief Metropolitan Magistrate, 37th Court, Esplande, Mumbai (“Metropolitan Magistrate”) for recovery of a sum of approximately ` 113.50 Lacs which had been allegedly misappropriated by the Defendant and interest thereon amounting to ` 32.50 Lacs. The aggregate amount involved is ` 146.00 Lacs. The matter is currently pending.

Civil cases

1. MLDL filed appeal bearing number 406/ 2009 dated June 05, 2009 (“Appeal”) before the High Court of

Judicature at Bombay (“High Court”) against arbitration award dated February 20, 2009 (“Award”) passed by Justice (retired) R J Kochar (“Arbitrator”). Bi-Creat Projects Private Limited (“Bi-Creat”) initiated arbitration proceedings against MLDL alleging non-payment ` 55.00 Lacs for services performed as a building contractor. The Arbitrator upheld the claims of Bi-Creat vide the said Award. Aggrieved, MLDL filed the Appeal. The matter is currently pending.

2. MLDL filed appeal bearing number 1183/2010 dated March 06, 2010 (“Appeal”) before the High Court of Judicature at Bombay (“High Court”) against arbitral award dated September 30, 2009 (“Award”) passed by Justice (retired) S.P. Bharucha (“Arbitrator”) and subsequently amended on December 08, 2009 in the matter of dispute between MLDL and Mr. P. G. Vora (“Defendant”) for development of residential property at Pune. The Arbitrator vide the said Award upheld the claims of the Defendant and directed MLDL to pay a sum of ` 622.45 Lacs to the Defendant. Subsequently MLDL filed the Appeal praying for the setting aside of the Award and granting of ` 246.25 Lacs. The matter is currently pending.

3. MLDL filed suit bearing number 1801/2007 in the High Court of Judicature at Bombay (“High Court”) seeking an order against the workers of GKW Limited and others to not obstruct construction activity at one of MLDL’s projects. An interim order dated July 07, 2007 was passed by the High Court granting interim relief to MLDL. The matter is currently pending.

4. Application dated May 23, 2006 was filed by MLDL before the Appellate Authority for Industrial and Financial Reconstruction (“AAIFR”) under section 13(2) read with section 18(5) of the Sick Industrial Companies Act, 1985 (“SICA”) for impleading MLDL as a necessary party in case bearing number 58/90 filed by New Great Eastern Spinning and Weaving Company Limited (“Applicant”) for rehabilitation of its textile mill and to modify the sanctioned scheme dated March 06, 1996 in terms of the consent order dated December 18, 2002 passed by the High Court of Judicature at Bombay. The matter is currently pending before AAIFR.

5. MLDL filed writ petition bearing number 1319/2004 (“Writ Petition”) before the High Court of Judicature at Bombay (“High Court”) seeking dismissal of the demand made vide Government resolution dated November 23, 2001 by the Collector of Bombay (“Collector”) for transfer charges amounting to ` 123.99 Lacs in relation to the transfer of certain premises to MLDL and also permission to transfer the said premises. The High Court, vide its interim order dated July 14, 2004 has directed the Collector to not seal the premises in respect of which the demand has been levied till the final disposal of the Writ Petition. Transfer charges amounting to ` 123.99 Lacs was deposited with Collector vide pay order dated March 12, 2008. The matter is currently pending.

Consumer cases

1. Two revision petitions were filed by MLDL before the National Consumer Disputes Redressal Commission, Delhi (“National Commission”) against order dated November 22, 2010 (“Order”) passed by the Delhi Consumer Disputes Redressal Commission (“State Commission”) whereby the application for deletion of MLDL’s name from the array of respondents on the grounds that it was not a party to the dispute between the complainants and Gulab Farms Private Limited as it had acted in the capacity of an agent of Gulab Farms Private Limited was dismissed. The matter is currently pending.



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1. Arbitration application dated August 14, 2009 (“Application”) was filed by MLDL before Justice (retired) S.P.

Bharucha (“Arbitrator”) praying for specific performance of an agreement between MLDL and New Great Eastern Spinning and Weaving Company Limited for commercial development of land and in the alternative, damages, the amount of which is unascertainable. The matter is currently pending.

2. MLDL initiated arbitration proceedings on April 23, 2008 against Aeren R. Entertainment Private Limited (“Defendants”) for the termination of lease deed before Mr. Justice V.N.Khare (“Arbitrator”) seeking an award declaring that the lease agreement dated January 25, 2005 stood terminated with effect from February 28, 2008 and directing the Defendants to vacate the premises and pay a sum of ` 110.77 Lacs as compensation for failure to hand over possession of the leased premises. The matter is currently pending.

Electricity cases

1. MLDL filed appeal bearing number 183/2010, dated April 03, 2010 (“Appeal”) before the Appellate Authority (“Appellate Authority”) against notice dated April 11, 2009 (“Order”) issued by the Assessing Officer of Maharashtra State Electricity Distribution Company Limited (“Assessing Officer”) whereby a demand of ` 2,164 Lacs had been levied on MLDL as unpaid electricity dues. The Appellate Authority vide its interim order dated May 07, 2010 restrained the Maharashtra State Electricity Distribution Company Limited (MSEDCL) from discontinuing the power supply. The matter is currently pending.

Tech Mahindra Limited (“TML”) We have individually summarized the significant legal proceedings involving TML in relation to civil cases, arbitration proceedings, public interest litigation, tax related proceedings, proceedings relating to dishonour of cheques under sections 138 and 141 of the Negotiable Instruments Act, 1881 and with respect of all other proceedings involving TML for claims exceeding a monetary value of ` 3,384 Lacs i.e. 1% of net worth of TML. For other cases, we have disclosed all the legal proceedings pending by and against TML in an aggregated manner. Litigation against TML Civil cases:

1. There are 5 civil proceedings pending for actions such as recovery proceedings, declaration suits and suits for compensation including proceedings relating to labour disputes against TML and the aggregate monetary value of these proceedings is approximately ` 545.59 Lacs.

2. Two proceedings relating to property are pending before various courts at various stages of adjudication in respect of disputes regarding stamp duty payable and allotment of land. The amount claimed through these proceedings is approximately ` 68 Lacs.

3. S Tel Private Limited (“Claimant”) has sent legal notice dated September 01, 2011 to TML claiming wrongful cessation of services and claiming damages amounting to approximately ` 12,508.32 Lacs in respect of certain services contracts (“Agreements”) between TML and the Claimant. The Claimant has also sent a notice dated October 10, 2011 to TML invoking arbitration in respect of the Agreements. TML has made a counter claim of approximately ` 567.13 Lacs vide its letter dated September 15, 2011. TML has also issued a notice for winding up of the Claimiant dated September 26, 2011.

4. Pitney Bowes Software India Private Limited (“Claimant”) has sent legal notice dated September 12, 2011 (“Notice”) to TML alleging that TML is using 112 unlicensed versions of their software for commercial purposes. The Claimant has threatened civil and criminal action for copyright infringement, claiming an amount of approximately ` 134 Lacs vide the Notice. TML has sent a reply dated September 30, 2011 to the Notice refuting the Claimant’s claims and for further information regarding the claims.

Consumer cases:

1. There are 3 consumer cases pending against TML claiming, amongst other things, deficiency in services and recovery of money. The aggregate monetary value of these proceedings is approximately ` 4 Lacs.


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Tax litigation

1. There are 15 Income Tax related cases filed by the Income Tax Authorities pending against TML at various forums. The aggregate amount claimed from TML through these cases is approximately ` 9,289.10 Lacs.

2. There are 3 proceedings relating to value added tax, customs, excise and service tax disputes including demands against TML relating to alleged irregular i) CENVAT credit on inputs, ii) claimed MODVAT credit, iii) payment of service tax and duties against TML and the aggregate monetary value of these proceedings is approximately ` 905.36 Lacs

Litigation by TML

Criminal cases:

1. Axes Technologies (India) Private Limited (an entity merged subsequently merged into TML) has filed criminal complaint number 8788/2004 against before the 7th Metropolitan Magistrate’s Court, Chennai under section 138 of the Negotiable Instruments Act, 1881 in respect of dishonor of a cheque amounting to ` 4 Lacs. The matter is currently pending.

Tax litigation:

1. Appeals bearing number 2145 -2168/09-10 dated March 31, 2010 (“Appeals”) have been filed by TML before

the Joint Commissioner of Commercial Taxes (Appeals), Bangalore (“Joint Commissioner”) against the order dated March 22, 2010 (“Order”) passed by the Deputy Commissioner of Commercial Taxes Bangalore (“DCCT”). Show cause notice dated February 16, 2010 (“SCN”) was issued by the DCCT, whereby the DCCT raised a demand in respect of sales tax payable by TML for the financial years 2006-2007 to 2008-2009. TML filed reply dated February 25, 2010 against the SCN, disputing the demand through the SCN, stating that they were not liable for sales tax as they were service providers. The DCCT, on hearing both parties, confirmed the demand of sales tax as ` 178.00 Lacs vide its Order. TML subsequently filed the Appeal. TML has further filed writ petition number 2014/2011(TRes) (“Writ Petition”) before the High Court of Karnataka at Bangalore (“High Court”) praying for quashing of the Order and for issuance of a writ of mandamus restraining the DCCT from encashing a bank guarantee issued by TML in pursuance of the Order and for expeditious disposal of the Appeals by the DCCT. The High Court, vide its order dated January 13, 2011, allowed the Writ Petition and has directed the DCCT to dispose the Appeals within two months and has restrained the DCCT from encashing the bank guarantee pending such disposal. The matter is currently pending.

Mahindra Holidays and Resorts India Limited (“MHRIL”) We have individually summarized the significant legal proceedings involving MHRIL in relation to civil cases, arbitration proceedings, public interest litigation, tax related proceedings, proceedings relating to dishonour of cheques under sections 138 and 141 of the Negotiable Instruments Act, 1881 and with respect of all other proceedings involving MHRIL for claims exceeding a monetary value of ` 503.30 Lacs i.e. 1% of net worth of MHRIL. For other cases, we have disclosed all the legal proceedings pending by and against MHRIL in an aggregated manner. Litigations against MHRIL Civil cases

1. There are nine civil proceedings pending for actions such as recovery proceedings, declaration suits and suits for compensation against MHRIL and the aggregate monetary value of these proceedings is approximately ` 15.83 Lacs.

2. Eight property related cases are pending before various courts filed by various parties against MHRIL seeking, amongst others, injunction restraining easementry rights of MHRIL and its representatives through their property and for eviction of MHRIL from certain premises. There is no ascertainable monetary claim against MHRIL in respect of these proceedings.

3. Mr. TK Soman (“Applicant”) filed civil suit number 248/2010 before the Court of the Munsiff, Devikulam (“Court”) against MHRIL praying for a declaration that the contract for removal of garbage dated October 01,


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2009 between MHRIL and the Applicant was irrevocable and for an injunction restraining MHRIL from preventing the Applicant from collecting garbage from MHRIL’s premises. Joseph Cherian (“Applicant 2”) filed civil miscellaneous application number 271/2010 (“Miscellaneous Application”) before the Munsiff Court, Kattapanna praying for a permanent prohibitory injunction restraining the Applicant from obstructing the removal of garbage by Applicant 2 in terms of agreement dated September 15, 2010 between the MHRIL and Applicant 2. The Court, vide order dated November 03, 2010, vacated the injunction granted in the Miscellaneous Application, allowed the Applicant to collect garbage from MHRIL’s premises and granted an injunction against MHRIL restraining MHRIL from entering into a contract with any third party for removal of garbage from its premises.

4. Joanita Pereira (“Appellant”) filed appeal number 5/2011 (“Appeal”) before the High Court of Judicature, Bombay at Goa (“Goa Bench”) praying the Goa Bench to set aside order dated September 24, 2010 (“Order”) passed by the Ad-Hoc District Judge (I), Fast Track Court I, South Goa, Margao (“Fast Track Court”) in civil suit number 283/2004/FTC-1 (“Suit”). The Appellant had prayed the Fast Track Court to grant an injunction restraining MHRIL from interfering with the Appellant’s property and for damages amounting to ` 2 Lacs. The Fast Track Court had dismissed the Suit vide the Order, against which the Appeal has been filed. The matter is currently pending.

Consumer cases

1. There are 128 consumer cases pending against MHRIL at various levels of adjudication alleging, amongst other things, deficiency in services and negligence. The aggregate monetary value of these proceedings is approximately ` 238.00 Lacs.


1. Arun Excello Urban Infrastructure Private Limited (“Applicant”) filed original application number OA594/2011 (“Application”) under section 9 of the Arbitration and Conciliation Act, 1996 against MHRIL before the High Court of Judicature at Madras (“High Court”) praying the High Court to grant an injunction restraining MHRIL from encashing a bank guarantee of ` 300.00 Lacs which was issued to MHRIL in respect of a work order. The High Court, vide its order dated December 08, 2011 (“Order”), granted an interim injunction restraining MHRIL from encashing the bank guarantee till December 31, 2011. The Applicant has also filed application dated December 14, 2011 before Justice (retired) KP Shivasubramaniam, the sole arbitrator (“Arbitrator”), demanding a total claim of ` 1,256.15 Lacs in respect of the work order. MHRIL filed appeal number 450/2011 before the High Court challenging the Order. The matter is currently pending.

Litigations by MHRIL Intellectual property cases

1. MHRIL filed suit bearing number 708/2009 (“Suit”) against Encore Hotels Private Limited (“Defendant”) before the High Court of Judicature at Madras (“High Court”) regarding infringement of the trade mark ‘ZEST’ (“Trademark”). MHRIL has prayed the Court to grant a permanent injunction restraining the Defendant from using the Trademark. The High Court vide order dated August 18, 2009 granted interim injunction on the use of the Trademark by the Defendant. The matter is currently pending.

Taxation litigation

1. The Assistant Commissioner of Income Tax, Large Taxpayers Unit, Chennai (“ACIT LTU”) issued assessment orders to MHRIL demanding income tax amounting to ` 58,461.38 Lacs under section 143(3) of the Income Tax Act, 1961. Aggrieved, MHRIL filed appeals dated January 14, 2008 and January 29, 2009 before the Commissioner of Income Tax (Appeals), Large Taxpayers Unit (“CIT(A)”). The CIT(A), vide order bearing numbers 59/10-11/LTU(A), 458/10-11/LTU(A), 476/10-11/LTU(A), 216/10-11/LTU(A) dated August 25, 2011, upheld the said assessment orders. Subsequently MHRIL filed appeal bearing numbers 1613/CHNY-2011, 1614/CHNY-2011, 1615/CHNY-2011, 1616/CHNY-2011, dated October 04, 2011 before the Income Tax Appellate Tribunal (Chennai). The matter is currently pending.

2. The Deputy Commissioner of Income Tax, Large Taxpayers Unit (“DCIT LTU”) issued assessment orders to

MHRIL demanding an aggregate amount of ` 1,439.77 Lacs under section 115WE(3) of the Income Tax Act,


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1961. Aggrieved, MHRIL filed appeal dated January 29, 2010 before the Commissioner of Income Tax (Appeals) (“CIT(A)”). The CIT (A) vide order bearing number 2/10-11/LTU(A), dated December 14, 2010 upheld the said Order. Subsequently MHRIL filed appeal bearing number 1617/CHNY-2011, dated October 04, 2011 before the Income Tax Appellate Tribunal (Chennai). The matter is currently pending.

3. The Additional Director General, Directorate General of Central Excise Intelligence (“DCIT LTU”) issued show cause notice bearing number Va/04/2010-11/BZU/1190 dated September 01, 2010 (“SCN”) to MHRIL demanding service tax in respect of room rental, interest, securitization, exchange fees and telephone income earned by MHRIL for the period from April, 2005 to March, 2010 and seeking to levy penalty. The DCIT LTU has claimed a total of approximately ` 2,224.69 Lacs vide the SCN. The DCIT LTU passed order bearing number LTUC/161/2011/(C) dated May 18, 2011 (“Order”) confirming the demand and levying penalty of ` 2,224.69 Lacs. The aggregate amount involved is ` 4,449.38. MHRIL has filed appeal dated August 08, 2011 before the Customs, Excise and Service Tax Appellate Tribunal, Chennai, challenging the demand raised through the Order. The matter is currently pending.

4. Three matters are pending against MHRIL at various levels of adjudication alleging inter alia non payment of service tax and luxury tax. The aggregate amount involved is ` 293.85 Lacs.

5. The Intelligence Officer, Commercial taxes, Squad No. III, Idukki, Evikulam, issued show cause notice bearing number OR 470/2010-11 dated February 17, 2011 for the assessment years from 2008 to 2011 against MHRIL seeking to levy an amount of ` 659.28 Lacs as luxury tax and penalty alleging that MHRIL has failed to pay luxury tax under section 4(2A) of the Kerala Tax on Luxuries Act 1976 and demanding double amount calculated at the rate of ` 100 per membership under the Kerala Tax on Luxuries Act, 1976. MHRIL filed reply dated March 25, 2011 disputing the levy. The matter is currently pending.

Ssangyong Motor Company (“SYMC”) We have individually summarized the significant legal proceedings involving SYMC in relation to civil cases, arbitration proceedings, tax related proceedings, labour proceedings and with respect of all other proceedings involving SYMC for claims exceeding a monetary value of ` 1,424.84 Lacs i.e. 1% of net worth of SYMC. For other cases, we have disclosed all the legal proceedings pending by and against SYMC in an aggregated manner. Litigation against SYMC: Labour cases

1. There are seven labour proceedings against SYMC pending before various courts in South Korea demanding wages in respect of dismissal of workers and in respect of leave with respect to illegal strikes. The total amount involved in these proceedings is approximately ` 1,669.8 Lacs.

2. SJ Noh and 155 others (“Applicants”) filed civil suit number 10Gahap23204 (“Suit”) before the Seoul South District Court demanding nullity of their dismissals in the course of restructuring of SYMC in 2009 and demanding a portion of their wages during dismissal period. The Applicants have claimed an aggregate amount of approximately ` 1,430 Lacs vide the Suit. The matter is currently pending.

Civil cases

1. Various parties have instituted 13 civil proceedings against SYMC before various courts in South Korea claiming damages amounting to approximately ` 1,670.6 Lacs. These matters are currently pending.

Litigation by SYMC:

Labour cases

1. SYMC has instituted three labour proceedings before the Seoul High Court against National Labour Relations

Commission (“NLRC”) to to cancel the NLRC’s ruling (unfair dismissal) on the disciplinary dismissals of SYMC’s workmen in respect of an illegal strike called in 2009. The matters are currently pending.


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2. SYMC filed civil suit number 09Gahap2325 (“Suit”) before the Pyeongtaek Branch Court claiming damages against the ex-labor union, ex-workers and outside participants in respect of an illegal strike called in 2009. SYMC has claimed an amount of approximately ` 2,280 Lacs vide the Suit. The matter is currently pending.

3. SYMC filed civil suit number 10Gahap5252 (“Suit”) before the Pyeongtaek Branch Court claiming damages against the National Metal Workers’ Union (“NMWU”) in respect of an illegal strike called in 2009. SYMC has alleged that NMWU was the higher union of the ex-labor union in SYMC and had led the illegal strike in 2009. SYMC has claimed an amount of approximately ` 4,750 Lacs vide the Suit. The matter is currently pending.

Civil cases

SYMC has initiated two civil proceedings before the Pyeongtaek Branch Court against various parties claiming damages amounting to approximately ` 96 Lacs. These matters are currently pending.

Material Developments

There are no material developments after the date of the last audited balance sheet, ie, September 30, 2011.


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GOVERNMENT AND OTHER APPROVALS

Except as stated below, we have received the necessary consents, licenses, permissions and approvals from the Government of India and various other agencies required for our present business and to undertake the Issue and no further material approvals are required for carrying on our present activities. In addition, except as mentioned in this chapter “Government and Other Approvals”, as on the date of the Draft Letter of Offer, there are no pending regulatory and government approvals and no pending material renewals of licenses or approvals in relation to the activities we have undertaken or in relation to the Issue. I. Approvals for the Issue: 1. Board resolution dated November 12, 2011 approving the Issue.

2. In-principle approval from the BSE dated [●]. II. General:

1. Permanent Account Number: AAACE2659J

2. Tax Deduction Account Number: NSKE00507D

3. Importer – Exporter Code: 0388082836

III. Approvals in relation to our business We require various approvals and/ or licenses under various rules and regulations to conduct our business. We have one manufacturing unit in Maharashtra and conduct our business through 11 branch offices in the states of Tamil Nadu, Karnataka, Andhra Pradesh, Gujarat, Madhya Pradesh, Rajasthan, Uttar Pradesh and Punjab. In all, we conduct our business in total of 17 states, namely Odisha, Jharkhand, Haryana, Himachal Pradesh, Chhattisgarh, Bihar, Kerala and Jammu and Kashmir over and above the states where we have our branch offices. 1. Certificate of acknowledgement (no. 1570/SIA/IMO/2011) dated May 16, 2011 from the Under Secretary,

Secretariat of Industrial Assistance for the manufacture of on line drip systems, main and submain HDPE drips, sprinkler systems, in line drip systems and tubes, pipes hoses and fittings made of plastic.

2. EPCG registration (no. P/CG/210699) dated August 27, 1992 under the Imports and Exports (Control) Act, 1947 from the Controller of Imports and Exports. The deadline to meet our export obligations under this license has been extended to March 31, 2015 vide letter dated January 12, 2011 issued by the Foreign Trade Development Officer.

3. Central excise registration certificate (no. AAACE2659JXM001) dated December 05, 2001 under the Central Excise Rules, 2001 from the Superintendant of Central Excise and Customs, Nashik.

4. Service tax registration certificate (no. AAACE2659JST001) dated July 26, 2006 under the Service Tax Rules, 1994

from the Assistant Commissioner of Central Excise and Customs, Nashik.

5. Certificate of Enrolment (no. 99671747059P) dated March 30, 2010 under the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.

6. Certificate of Enrolment (no. 29110276935) dated April 1, 2005 under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976.

7. Certificate of Enrolment (no. 79634000624) dated March 17, 2011 under the Madhya Pradesh Professional Tax Act, 1995.

8. Certificate of Enrolment (no. 28826376014) dated March 20, 2009 under the Andhra Pradesh Profession Act, 1987.


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9. Certificate of Enrolment (no. PEC021300375) dated March 11, 2011 under the Gujarat State Tax on Professions,

Trades, Callings, and. Employments Act, 1976.

10. We have the following value added tax registrations:

Sr. No.

Registration number

Provision Location Date of issue

1. 21124400386 Orissa Value Added Tax Act, 2004 Bargarh May 23, 2011

2. 24190305112 Gujarat Value Added Tax Act, 2004 Vadodra April 17, 2009

3. 23864002828 Madhya Pradesh Value Added Tax Rules, 2002 Bhopal December 8, 2010

4. 10111591008 Bihar Value Added Tax Act, 2005 Gandhi Maidan September 15, 2011

5. 33511802265 Tamil Nadu Value Added Tax Act, 2006 Coimbatore November 26, 2008

6. 28020196166 Andhra Pradesh Value Added Tax Act, 2005 Hyderabad November 11, 2010

7. 08772101052 Rajasthan Value Added Tax Act, 2003 Jaipur July 31, 1995

8. 09232802956 Uttar Pradesh Value Added Tax Act, 2007 Orai September 2, 2009

9. 27120000755V Maharashtra Value Added Tax Act, 2002 Nashik April 01, 2006

10. 22731100482 Chhattisgarh Value Added Sales Tax Act, 2003 Raipur October 06, 2003

11. 29110276935 Karnataka Value Added Tax Act, 2003 Hubli and C & F Agent, Karnataka

March 16, 2011

12. 32080251104 Kerala Value Added Tax Rules, 2005 Thrissur June 28, 2007

11. We have the following sales tax registrations under the Central Sales Tax (Registration and Turnover Rules), 1957:

Sr. No.

Registration number

Location Date of issue

1. C/TIN/3490 Tinsukia March 16, 2004

2. 24690305112 Vadodra April 17, 2009

3. 29110276935 Hubli and C & F Agent, Karnataka March 16, 2011

4. 28020196166 Hyderabad November 11, 2010

5. 08772101052 Jaipur July 31, 1995

6. 23864002828 Bhopal November 4, 1991

7. 970433 Coimbatore November 28, 2011

8. 21124400386 Bargarh May 23, 2011

9. 09232802958 Badanpura September 02, 2009

10. 27120000755C Nashik April 01, 2006

11. 22731100482 Raipur October 06, 2003

12. 25016017 Thrissur November 26, 1997

13. 10111256116 Patna September 12, 2011

12. We have the following state specific sales tax registrations:

Sr. No.

Registration number Provision Location Date of issue

1. GST/18810009933 Assam General Sales Tax Rules, 1993 Tinsukia March 16, 2004

13. Employees’ Provident Fund registration certificate (no. MH/Co-ord-I/Allotment/00/98/76) dated June 3, 1998


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allocating us the code MH/37517 under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 from the Regional Provident Fund Commissioner (II), Maharashtra and Goa.

14. Certificate of registration (no. 24749/90) dated July 24, 1990 under the Employees’ State Insurance Act, 1948 from

the Assistant Regional Director in respect of our manufacturing unit at MIDC Ambad.

15. License to operate a factory (no. NASHIK/313/16-A) dated October 19, 1995 under the Factories Act, 1948 from the Director of Industrial Health and Safety, Maharashtra in respect of our manufacturing unit at MIDC Ambad. The license is currently valid till December 31, 2012.

16. Consent to operate a factory (no. RON/NASHIK/5787) dated December 30, 2008 under the Air (Prevention and

Control of Pollution) Act, 1981, Water (Prevention and Control of Pollution) Act, 1976 and Hazardous Wastes (Management and Handling) Rules, 1989 from the Sub-Regional Officer, Maharashtra Pollution Control Board in respect of our manufacturing unit at MIDC Ambad. The license is currently valid till October 31, 2014.

17. We have the following Shops and Establishments licenses:

Sr. No.

License number

Provision Location Date of issue Expiry Date

1. II/685 MN/84 Bombay Shops and Establishments Rules, 1948

Sangli August 05, 2004 December 31, 2014

2. SH/507/R-QIV/P 84/1994

Rajasthan Shops and Establishments Rules, 1958

Jaipur May 17, 1994 Until Cancelled

3. SH/ORAI/8094 Uttar Pradesh Shops and Establishments Act, 1962

Orai February 25, 2011 March 31, 2015

4. 32/CE/659 Karnataka Shops and Commercial Establishments Act, 1961

Hubli November 30, 2006 December 31, 2016

5. 31845/RPR/S/2010

Chhattisgarh Shops and Establishments Rules, 1958

Raipur July 15, 2010 December 31, 2014

6. 16704/BPS/CE/98

Madhya Pradesh Shops and Establishments Rules, 1958

Bhopal October 29, 1998 December 31, 2012

18. We have the following intellectual property registrations:

Sr. No.

Registration number

Description Class Date of registration Expiry Date

1. 878816 Shaktiman Sprinkler Pranali (Trademark) 7 September 28, 1999 September 27, 2019

2. 876745 Balwan (Trademark) 16 September 16, 1999 September 15, 2016

3. 706965 EPC (Trademark) 1 June 03, 1996 June 03, 2016

4. 187281 A locking means for a coupling device for attaching and detaching pipes or the like (Patent)

Patent April 09, 1996 April 09, 2016

19. Water supply agreement dated February 09, 2009 with the Maharashtra Industrial Development Corporation for

supply of water to our manufacturing unit at MIDC Ambad.

20. Letter granting electricity connection (no. SE/NUC/T-II/368/NU-373/05021) dated September 15, 2009 with the Maharashtra State Electricity Distribution Company Limited for supply of high tension electricity connection to our manufacturing unit at MIDC Ambad. A total of 2,250 kilo watts of electricity has been sanctioned to our manufacturing unit at MIDC Ambad.

21. We have the following registrations under various subsidy schemes offered by the states in which we operate:


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Sr. No.

Notification/Registration Number State Date of notification/grant of

registration

Nature

1. JKCRS-17-10-11/Thibak Nordani/Falo-6/369

Maharashtra July 23, 2010 Recognition to Manufacturer

2. I/398/SHDPE/Pipes/Set/10-11 Uttar Pradesh November 28, 2010 Manufacturing Company 3. SNMMI(DS)1/2010-7/396 Odisha October 01, 2010 Approved system manufacturers 4. 85/NMMI Jharkahand June 06, 2011 Registered System Manufacturers 5. 10912-29/Hort-APO/MI-4/VI Haryana September 21, 2011 Registration of Manufacturers 6. Udyan/Micro/9/09-10/873 Madhya Pradesh May 20, 2010 Manufacturing Company/

Registered Manufacturing Company 7. Agr.H(Project Cell)F(3)Polyhouse-

1/2010 – Vol-III Himachal Pradesh

July 26, 2011 Service Provider

8. 19905-924/DB Punjab May 03, 2011 Approved Manufacturer 9. Mukhya/RCO-29/2009-10/2475 Chhattisgarh July 28, 2009 Approved Supplier 10. 1 and 2 Karnataka August 16, 2011 and

October 18, 2011 respectively

Registration as Provider

11. 19/MIS(BHDS)265/2011-1186-Hort. Bihar October 22, 2011 Registration as Provider 12. Agreement dated November 01,

2003. Andhra Pradesh November 01, 2003 Project Sale. Extended vide letter

bearing number APMIP/336/2009 dated May 15, 2010 until the new renewal is issued.

13. Government of Gujarat notification Gujarat February 28, 2005 Approved Supplier. Extended vide letter dated February 19, 2011

14. TGII(1)9960/2010 Kerala October 30, 2010 Gazette notification providing subsidy in respect of purchase of MIS equipment

15. Pur/475/13970-88 Jammu and Kashmir

October 24, 2011 Service Provider/Registered Company

16. (1)NU/KPY/MIS/GL/2011-1265-275 Rajasthan April 25, 2011 Gazette notification providing subsidy in respect of purchase of MIS equipment

17. Extended vide letter bearing number MIS2/1716/2010

Tamil Nadu April 27, 2011 Project Sale

22. We have the following eligibility certificates for sales tax deferrals:*

Sr. No.

Registration Number Date of grant Validity Nature

1. JDIINSK-1988/DEFERRAL/EC-009

September 01, 2005 August 31, 2006 Under the 1988 Package Scheme of Incentives notified by the Government of Maharashtra

2. FINC(I)/1988/DEFERRAL/EC-2339

November 01, 1991 October 31, 1996 Under the 1988 Package Scheme of Incentives notified by the Government of Maharashtra


June 01, 1995 May 31, 1999 Under the 1988 Package Scheme of Incentives notified by the Government of Maharashtra


February 01, 1998 January 31, 2003 Under the 1993 Package Scheme of Incentives notified by the Government of Maharashtra

* We have availed deferral of sales tax for the period for which these eligibility certificates were valid under the applicable scheme. We are currently in the process of payment of this deferred sales tax. IV. List of Awards and Certifications

Sr. No.

Certificate number

Description Quality standard Date of grant Expiry date

1. 32634-2008-AQ-IND-RvA Rev.03

Design, development, manufacture, and supply of plastic pipe fittings and components for irrigation, infrastructure, and industrial applications

ISO 9001:2008 July 1, 1999 June 30, 2014

2. NA Phase 1 and Phase 2 approval for pipes of diameter 20 mm to 250 mm manufactured in Rigidex PC

Transco Technical Specification PL2: Part 1 pipes for use at pressures up to 5.5 bar. Provided

July 31, 2002 NA


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Sr. No.

Certificate number

Description Quality standard Date of grant Expiry date

2040 by Advantica Technology

3. NA Phase 1 and Phase 2 approval for pipes of diameter 20 mm to 125 mm manufactured in Finathene 3802 YCF

Transco Technical Specification PL2: Part 1 pipes for use at pressures up to 5.5 bar. Provided by Advantica Technology

July 31, 2002 NA

4. NA Phase 1 and Phase 2 approval for pipes of diameter 20 mm to 125 mm manufactured in Rigidex PC 2040

British Transco Technical Specification PL2: Part 1 pipes for use at pressures up to 5.5 bar (1995)

February 15, 1999

NA

5. NA Phase 1 and Phase 2 approval for pipes of diameter 20 mm to 125 mm manufactured in Finathene 3802 YCF

British Transco Technical Specification PL2: Part 1 pipes for use at pressures up to 5.5 bar (1995)

February 15, 1999

NA

6. 7058167 Irrigation equipment – emitters IS 13487:1992 September 16, 2011

November 30, 2013

7. 7030145 Irrigation equipment – strainer type filters

IS 12785:1994 December 1, 2011

November 30, 2013

8. 7112652 Irrigation equipment – sprinkler – part 1 : polyethylene pipes

IS 14151:Part1:1999 August 01, 2011 July 31, 2013

9. 7147671 Irrigation equipment – sprinkler pipes – part 2 : quick coupled polyethylene pipes

IS 14151:Part2:2008 (previously, this standard was the IS 14151:Part2:1999)

September 01, 2011

August 31, 2013

10. 7838803 High density polyethylene pipe for sewerage

IS 14333:1996 May 01, 2011 April 30, 2013

11. 2222937 High density polyethylene pipes for potable water supplies

IS 4984:1995 April 01, 2011 March 31, 2013

12. 7131050 Irrigation equipment – rotating sprinkler: part 1 design and operational requirements

IS 12232:Part1:1996 March 01, 2011 February 28, 2013

13. 2199665 Irrigation equipment – polyethylene pipes for irrigation laterals

IS 12786:1989 March 01, 2011 February 28, 2013

14. 7135058 Emitting pipes system IS 13488:2008 April 16, 2011 April 15, 2013

15. 7546685 Irrigation equipment – media filter

IS 14606:1998 March 31, 2011 March 30, 2013

16. 7546584 Irrigation equipment – hydrocyclone filters

IS 14743:1999 March 31, 2011 March 30, 2013

17. 7546583 Polyethylene pipes for the supply of gaseous fuels

IS 14885:2001 September 29, 2011

September 28, 2013

18. 7317872 Irrigation equipment – polyethylene micro tubes for drip irrigation

IS 14482:1997 April 24, 2011 April 23, 2013

V. List of pending approvals and registrations 1. We have made applications to register our intellectual property. The following are applications pending registration:

Sr. No.

Acknowledgment number

Description Class Date of application

1. 876744 Shaktiman (Trademark) 7 September 16, 1999

2. 876746 Shaktiman (Trademark) 16 September 16, 1999

3. 445142 EPC – Logo (Trademark) 7 January 09, 2001

4. 2056788 EPC – Logo (Trademark) 17 November 22, 2010



7. 185757 Piper Coupler for use of flowing fluid in the irrigation system (Design)

Design November 10, 2011


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2. We have made an application dated November 30, 2011 to renew our shops and establishments registration (no. ACL/RR/390/2006) under the Andhra Pradesh Shops and Establishments Act, 1988 in respect of our Secunderabad establishment. The license expired on December 31, 2011.

3. We have made an application dated December 13, 2011 to renew our shops and establishments registration (no. 14716/2011) under the Bombay Shops and Establishments Rules, in respect of our Akola establishment. The license expired on December 31, 2011.

4. We have made an application dated October 20, 2011 to renew our certificate of registration (no. 19/1991) issued to

us under the Contract Labour (Regulation and Abolition) Act, 1970 from the Registering Officer, Nashik in respect of our manufacturing unit at MIDC Ambad. The registration expired on December 31, 2011.


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OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue This Issue of Rights Issue Equity Shares to the Equity Shareholders as on the Record Date is being made in accordance the resolution passed by our Board of Directors under Section 81(1) of the Companies Act, at its meeting held on November 12, 2011. Prohibition by SEBI We, our Promoter, natural persons behind our Promoter, our Promoter Group, Directors or the companies with which the Directors are associated as directors or promoters, Group Companies have not been prohibited or debarred from accessing or operating in the capital market under any order or direction passed by SEBI. Further, neither us, our Promoter, our Promoter Group or our Group Companies have been declared willful defaulters by the RBI or any Government authority and no violations of securities laws have been committed by them in the past and no proceedings in relation to such violations are currently pending against them. None of our Directors are associated with any entity which is engaged in securities market related business in any manner. None of our Directors hold current or have held directorship(s) in the last five years in a listed company whose shares have been or were suspended from trading on BSE or the NSE or in a listed company which has been / was delisted from any stock exchange. Compliance with part A of schedule VIII of SEBI Regulations Pursuant to clause (3) of part E of Schedule VIII of the SEBI Regulations, we are eligible to offer this Issue in terms of Chapter IV of the SEBI Regulations with disclosures as per Part A of Schedule VIII. DISCLAIMER CLAUSE OF SEBI AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THIS DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED / CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF 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 THIS DRAFT LETTER OF OFFER. THE LEAD MANAGER, KOTAK MAHINDRA CAPITAL COMPANY LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH 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 IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD MANAGER, KOTAK MAHINDRA CAPITAL COMPANY LIMITED HAVE FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED JANUARY 13, 2012 WHICH READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATIONS LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, ITS


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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 OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:

a) THE DRAFT LETTER OF OFFER FILED WITH THE BOARD IS IN CONFORMITY WITH

THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

b) ALL THE LEGAL REQUIREMENTS 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 LETTER OF OFFER 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 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 LETTER OF OFFER 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 – NOT APPLICABLE.

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 LETTER OF OFFER WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT LETTER OF OFFER. – NOT APPLICABLE.

6. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF

INDIA (ISSUES 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 LETTER OF OFFER – NOT APPLICABLE.

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


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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 MONIES 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 MONIES SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FORM ALL THE STOCK EXCHANGES MENTIONED IN THE LETTER OF OFFER. WE FURHTER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION.

10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF OFFER

THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE.

11. WE CERTIFY THAT ALL APPLICABLE DISCLOSURES MANDATED IN SECURITIES AND

EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN THE 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

LETTER OF OFFER:

a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE DENOMINATION FOR THE 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 THE

ADVERTISMENT IN TERMS OF 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 OF 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 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 LETTER OF OFFER WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.

16. WE ENCLOSE A STATEMENT ON “PRICE INFORMATION OF PAST ISSUES HANDLED BY THE LEAD MANAGER, AS PER THE FORMAT SPECIFIED BY THE BOARD THROUGH THE CIRCULAR DATED SEPTEMBER 27, 2011.

THE FILING OF THIS DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCE 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 MANAGER ANY IRREGULARITIES OR LAPSES IN THIS DRAFT LETTER OF OFFER.


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Disclaimer clauses from us and the Lead Manager We and the Lead Manager accept no responsibility for statements made otherwise than in this Draft Letter of Offer or in any advertisement or other material issued by us or by any other persons at our instance and anyone placing reliance on any other source of information would be doing so at his own risk. The Lead Manager and we shall make all information available to the Equity Shareholders and no selective or additional information would be available for a section of the Equity Shareholders in any manner whatsoever including at presentations, in research or sales reports etc. after filing of this Draft Letter of Offer with SEBI. Investors who invest in the Issue will be deemed to have represented to us and Lead Manager and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Rights Issue Equity Shares, and are relying on independent advice / evaluation as to their ability and quantum of investment in this Issue. Caution Investors that bid in this Issue will be required to confirm and will be deemed to have represented to us and the Lead Manager and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Rights Issue Equity Shares and will not offer, sell, pledge or transfer the Rights Issue Equity Shares to any person who is not eligible under applicable laws, rules, regulations, guidelines and approvals to acquire Rights Issue Equity Shares. We, the Lead Manager and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Rights Issue Equity Shares. Disclaimer with respect to jurisdiction This Draft Letter of Offer has been prepared under the provisions of Indian laws and the applicable rules and regulations thereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Maharashtra, India only. Designated Stock Exchange The Designated Stock Exchange for the purpose of the Issue will be Bombay Stock Exchange. Disclaimer Clause of BSE As required, a copy of this Draft Letter of Offer has been submitted to the BSE. The Disclaimer Clause as intimated by the BSE to us, post scrutiny of this Draft Letter of Offer, shall be included in the Letter of Offer prior to filing with the Stock Exchange. Selling Restrictions The distribution of this Draft Letter of Offer and the issue of Rights Issue Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this Draft Letter of Offer may come are required to inform themselves about and observe such restrictions. We are making this Issue of Shares on a rights basis to the Equity Shareholders and will dispatch the Letter of Offer/Abridged Letter of Offer and CAFs to those Equity Shareholders who a registered Indian address. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer has been filed with SEBI. Accordingly, the Rights Issue Equity Shares may not be offered or sold, directly or indirectly, and this Draft Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Draft Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, those circumstances, this Draft Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy of this Draft Letter of Offer should not, in connection with the issue of the Rights Issue Equity Shares, distribute or send the same in or into the United States or any other jurisdiction where to do so would or might contravene local securities laws or regulations. If this Draft Letter of Offer is received by any person in any such


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territory, or by their agent or nominee, they must not seek to subscribe to the Rights Issue Equity Shares. Neither the delivery of this Draft Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in our affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date. For further details, please see “Notice to Overseas Shareholders” on page VI. Filing This Draft Letter of Offer has been filed with the Corporation Finance Department of the SEBI, located at SEBI Head Office, SEBI Bhavan, Plot No. C4-A, “G” Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051, Maharashtra, India for its observations. After SEBI gives its observations, the final Letter of Offer will be filed with the Designated Stock Exchange as per the provisions of the Companies Act. Listing The existing Equity Shares are listed on BSE. We have made application to BSE for permission to deal in and for an official quotation in respect of the Rights Issue Equity Shares being offered in terms of this Draft Letter of Offer. We have received in-principle approval from BSE by letter dated [●]. We will apply to BSE for listing of the Rights Issue Equity Shares to be issued pursuant to this Issue. If the permission to deal in and for an official quotation of the securities is not granted by the Stock Exchange mentioned above, we shall forthwith repay, without interest, all monies received from applicants in pursuance of this Draft Letter of Offer. If such money is not paid within 8 days after we becomes liable to repay it, then we and every Director who is an officer in default shall, on and from expiry of 8 days, be jointly and severally liable to repay the money with interest as prescribed under the Section 73 of the Act. Consents Consents in writing of the Directors, the Auditors, the Lead Manager, the Legal Counsel, the Registrar to the Issue and the Bankers to the Issue and expert to act in their respective capacities have been obtained and such consents have not been withdrawn up to the date of the Draft Letter of Offer. M/s. Deloitte Haskins & Sells, the Auditors, have given their written consent for the inclusion of their report in the form and content appearing in this Draft Letter of Offer and such consent and report have not been withdrawn up to the date of this Draft Letter of Offer. Expert Opinion Except for (i) the reports of the Auditor on the restated financial information and (ii) the statement of tax benefits included in the Draft Letter of Offer, we have not obtained any expert opinions. Issue Expenses

The Issue related expenses include, among others, fees payable to intermediaries including Lead Manager, printing and distribution expenses, advertisement and marketing expenses and registrar, legal and depository fees among others and are estimated at ` [●] Lacs (approximately [●] per cent of the total Issue size) and will be met out of the proceeds of the Issue.

Activity Expense (in ` Lacs)*

Expense (% of total expenses)*

Expense (% of Issue Size)*

Fees of bankers to the Issue, legal advisor, for other professional services and statutory fees

[●] [●] [●]

Fees of the Lead Manager [●] [●] [●]Fees of Registrar to the Issue [●] [●] [●]Commission of SCSBs [●] [●] [●]Advertising expenses [●] [●] [●]Listing fees [●] [●] [●]Printing and stationery expenses [●] [●] [●]

Total estimated Issue expenses

[●] [●] [●]


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Previous Issues by us We have not undertaken any public or rights issue during the last ten years. Outstanding Debentures/Bonds and Preference Shares For details pertaining to outstanding Optionally Convertible Cumulative Debentures and Preference Shares, please see “Financial Indebtedness” and “Capital Structure” on pages 176 and 15 respectively. Previous Public Issues by Group Companies For details pertaining to previous public issues by Group Companies, please see “Promoter and Group Companies” on page 67. Previous issue of Equity Shares for consideration other than cash Other than as disclosed in the chapter “Capital Structure” on page 15 we have not made any issue of Equity Shares for consideration other than cash. Investor Grievances and Redressal System We have adequate arrangements for redressal of Investor complaints as well as a well-arranged correspondence system developed for letters of routine nature. The share transfer and dematerialization for us is being handled by the Registrar and Share Transfer Agent, Sharepro Services (India) Private Limited. Letters are filed category wise after being attended to. The redressal norm for response time for all correspondence including shareholders complaints is within 15 days. The Shareholders / Investors Grievances Committee consists of Mr. Vinayak Patil as Chairman, Mr. Ashok Sharma and Mr. Nikhilesh Panchal as members of the said committee. All investor grievances received by us have been handled by the Registrar and Share Transfer agent in consultation with the compliance officer. The contact details of the Registrar and Share Transfer agent are as follows: Sharepro Services (India) Private Limited 13 AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone Exchange Lane, Off Andheri-Kurla Road, Sakinaka, Andheri (East), Mumbai – 400 072, Maharashtra, India. Tel: +91 22 6772 0300/403 Fax: +91 22 6772 0416 Website: www.shareproservices.com Email: [email protected] Contact Person: Mr. Satheesh H K SEBI Registration No: INR000001476 Investor grievances arising out of this Issue Investor grievances arising out of the Issue will be handled by Sharepro Services (India) Private Limited, who is the Registrar to the Issue. The Registrar will have a separate team of personnel handling only post-Issue correspondence. The agreement between us and the Registrar provides for the period for which records shall be retained by the Registrar in order to enable the Registrar to redress grievances of Investors. All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details such as folio no., name and address, contact telephone / cell numbers, email id of the first applicant, number and type of shares applied for, Application Form serial number, amount paid on application and the name of the bank and the branch where the application was deposited, along with a photocopy of the acknowledgement slip. In case of renunciation, the same details


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of the Renouncee should be furnished. The average time taken by the Registrar for attending to routine grievances will be 15 days from the date of receipt of complaints. In case of non-routine grievances where verification at other agencies is involved, it would be the endeavour of the Registrar to attend to them as expeditiously as possible. We undertake to resolve the Investor grievances in a time bound manner. Investors may contact the Compliance Officer at the below mentioned address and/ or Registrar to the Issue at the above mentioned address in case of any pre-Issue/ post -Issue related problems such as non-receipt of allotment advice/share certificates/ demat credit/refund orders etc. Mr. Ratnakar Nawghare Company Secretary and Compliance Officer EPC Industrié Limited H-109, MIDC Ambad, Nashik – 422 010, Maharashtra, India. Tel: +91 253 238 1081 Fax: +91 253 238 2975 E-mail: [email protected] Website: www.epcind.com Status of Complaints

a. Total number of complaints received during Fiscal 2009: 4 (four)

b. Total number of complaints received during Fiscal 2010: 3 (three)

c. Total number of complaints received during Fiscal 2011: 0 (nil)

d. Total number of complaints received during quarter ended September 30, 2011: 1 (one)

e. Time normally taken for disposal of various types of investor complaints: 15 days Status of outstanding investor complaints As on September 30, 2011, there were no outstanding investor complaints. Number of investor complaints outstanding with respect to listed Group Companies For details pertaining to number of investor complaints outstanding with respect to listed Group Companies, please see “Promoter and Group Companies” on page 67. Changes in Auditors during the last three years Sr. No.

Nature of change Date of change Reason for change

1. Resignation of M/s. Desai Associates, Chartered Accountants


2. Appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants

September 29, 2011 Appointment on resignation of the previous statutory auditor

Capitalization of Reserves or Profits / Issuance of Equity Shares for consideration other than cash Other than as disclosed in the chapter “Capital Structure” on page 15, we have not capitalized any of its reserves or profits / issued shares for consideration other than cash.


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Revaluation of Fixed Assets There has been no revaluation of our fixed assets in the last five years. Performance vis-à-vis Objects During the period of ten years immediately preceding the date of filing this Draft Letter of Offer, we have not made any public/rights issue. Performance vis-à-vis Objects – Last One Issue of group companies For details pertaining to performance vis-à-vis objects of Group Companies, please see “Promoter and Group Companies” on page 67. Stock market data for Equity Shares For stock market data, please see “Market Price Information” on page 175.


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SECTION VIII – OFFERING INFORMATION

TERMS OF THE ISSUE The Rights Issue Equity Shares proposed to be issued are subject to the terms and conditions contained in the Draft Letter of Offer, the Letter of Offer, the Abridged Letter of Offer and the CAF, the Memorandum of Association and Articles of Association, the provisions of the Companies Act, the terms and conditions as may be incorporated in the FEMA, as amended, applicable guidelines and regulations issued by SEBI, or other statutory authorities and bodies from time to time, the Listing Agreement entered into by us, terms and conditions as stipulated in the allotment advice or security certificate and rules as may be applicable and introduced from time to time. All rights/obligations of Rights Issue Equity Shareholders in relation to application and refunds pertaining to this Issue shall apply to the Renouncee(s) as well. Basis for the Issue The Rights Issue Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the Depositories for the purpose of this Rights Issue in respect of the Equity Shares held in the electronic form and on the register of members in respect of the Equity Shares held in physical form at the close of business hours on the Record Date, fixed in consultation with the Designated Stock Exchange. Rights Entitlement As your name appears as a beneficial owner in respect of the Equity Shares held in the electronic form or appears in the register of members as an Equity Shareholder as on the Record Date, i.e., [●], you are entitled to the number of Rights Issue Equity Shares as set out in Part A of the enclosed CAFs. The distribution of the Letter of Offer and the issue of the Rights Issue Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. We are making the issue of the Rights Issue Equity Shares on a rights basis to the Equity Shareholders and the Letter of Offer, Abridged Letter of Offer and the CAFs will be dispatched only to those Equity Shareholders who have a registered address in India. Any person who acquires Rights Entitlements or the Rights Issue Equity Shares will be deemed to have declared, warranted and agreed, by accepting the delivery of the Letter of Offer, that it is not and that at the time of subscribing for the Rights Issue Equity Shares or the Rights Entitlements, it will not be, in the United States and in other restricted jurisdictions. PRINCIPAL TERMS OF THE EQUITY SHARES ISSUED UNDER THIS ISSUE Face Value Each Rights Issue Equity Share will have the face value of ` 10. Issue Price Each Rights Issue Equity Share shall be offered at an Issue Price of ` [●] for cash at a premium of `[●] per Rights Issue Equity Share. The Issue Price has been arrived at by us in consultation with the Lead Manager and the Stock Exchange prior to determination of the Record Date. Entitlement Ratio The Rights Issue Equity Shares are being offered on a rights basis to the Equity Shareholders in the ratio of [●] Rights Issue Equity Shares for every [●] Equity Shares held on the Record Date. Terms of Payment The full amount of ` [●] per Rights Issue Equity Share is payable on application. Fractional Entitlements The Rights Issue Equity Shares are being offered on a rights basis to the existing Equity Shareholders in the ratio of [●]


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Rights Issue Equity Shares for every [●] Equity Shares held as on the Record Date. If the shareholding of any of the Equity Shareholders is equal to or less than [●] Equity Shares or is not in multiple of [●], the fractional entitlement of such Equity Shareholders shall be ignored for computation of the Rights Entitlement. However, Equity Shareholders whose fractional entitlements are being ignored earlier will be given preference in the allotment of one additional Rights Issue Equity Share each, if such Equity Shareholders have applied for additional Rights Issue Equity Shares. Those Equity Shareholders holding less than [●] Equity Shares and therefore entitled to zero Rights Issue Equity Shares under this Issue shall be dispatched a CAF with zero entitlement. Such Equity Shareholders are entitled to apply for additional Rights Issue Equity Shares. However, they cannot renounce the same in favour of any third parties. CAF with zero entitlement will be non-negotiable /non-renunciable. Ranking The Rights Issue Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and Articles of Association. The Rights Issue Equity Shares issued under this Issue shall rank pari passu, in all respects including dividend, with our existing Equity Shares. Mode of payment of dividend In the event of declaration of dividend, we shall pay dividend to Equity Shareholders as per the provisions of the Companies Act and the provisions of our Articles of Association. For further details regarding our dividend policy, please see “Dividend Policy” on page 131. Listing and trading of Rights Issue Equity Shares Our existing Equity Shares are currently listed and traded on BSE (Scrip Code: 523754 under the ISIN - INE215D01010). The listing and trading of the Rights Issue Equity Shares shall be based on the current regulatory framework applicable thereto. Accordingly, any change in the regulatory regime would affect the schedule. Upon Allotment the Rights Issue Equity Shares shall be traded on Stock Exchange in demat segment only. We have made an application for “in-principle” approval for listing of the Rights Issue Equity Shares to BSE and have received such approval from BSE pursuant to the letter no. [●], dated [●]. We will apply to the BSE for final approval for the listing and trading of the Rights Issue Equity Shares. All steps for the completion of the necessary formalities for listing and commencement of trading of the Rights Issue Equity Shares to be allotted pursuant to the Issue shall be taken within 15 days from the Issue Closing date. The fully paid up Rights Issue Equity Shares shall be listed and admitted for trading on the BSE under the existing ISIN for fully paid up Equity Shares. Rights of the Equity Shareholder Subject to applicable laws, the Equity Shareholders shall have the following rights:

Right to receive dividend, if declared;

Right to attend general meetings and exercise voting powers, unless prohibited by law;

Right to vote in person or by proxy;

Right to receive offers for rights shares and be allotted bonus shares, if announced;

Right to receive surplus on liquidation;

Right to free transferability of Rights Issue Equity Shares; and

Such other rights as may be available to a shareholder of a listed public company under the Companies Act and Memorandum of Association and Articles of Association.

General Terms of the Issue Market Lot The market lot for the Rights Issue Equity Shares in dematerialised mode is one Equity Share. In case an Equity


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Shareholder holds Equity Shares in physical form, we would issue to the allottees one certificate for the Rights Issue Equity Shares allotted to each folio (“Consolidated Certificate”). In respect of Consolidated Certificates, we will upon receipt of a request from the respective holder of Equity Shares, split such Consolidated Certificates into smaller denominations within one week’s time from the receipt of the request in respect thereof. We shall not charge a fee for splitting any of the Share Certificates. Joint Holders Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint holders with the benefit of survivorship subject to the provisions contained in the Articles of Association. Nomination In terms of Section 109A of the Companies Act, nomination facility is available in respect of the Equity Shares. An Investor can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. In case of Equity Shareholders who are individuals, a sole Equity Shareholder or the first named Equity Shareholder, along with other joint Equity Shareholders, if any, may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Rights Issue Equity Shares. A person, being a nominee, becoming entitled to the Rights Issue Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Rights Issue Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Shares by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. Fresh nominations can be made only in the prescribed form available on request at our Registered Office or such other person at such addresses as may be notified by us. The Investor can make the nomination by filling in the relevant portion of the CAF. In terms of Section 109B of the Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, 1956, shall upon the production of such evidence as may be required by the Board, elect either:

to register himself or herself as the holder of the Equity Shares; or

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 ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registered the nomination with us, no further nomination needs to be made for Rights Issue Equity Shares under the same folio. In case the Equity Shares are held in dematerialised form, there is no need to make a separate nomination for the Rights Issue Equity Shares. Nominations registered with respective Depositary Participant (“DP”) of the investor would prevail. Any investor desirous of changing the existing nomination is requested to inform their respective DP. Notices All notices to the Equity Shareholder(s) required to be given by us shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper with wide circulation in the state within which our Registered Office is located or, will be sent by ordinary post / registered post / speed post to the registered holders of the Equity Shares from time to time. Additional Subscription by the Promoter Under the provisions of regulation 3 read with regulation 10 of the Takeover Regulations a shareholder is exempt from the obligation of making an open offer for acquiring Rights Issue Equity Shares (including Rights Issue Equity Shares acquired beyond Rights Entitlement), upon fulfillment of conditions stated therein. In the event, the acquisition of Rights


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Issue Equity Shares beyond Rights Entitlement results in acquisition of control of the Company by the acquirer, the Takeover Regulations does not provide for an exemption from making an open offer. The Promoter and Promoter Group have confirmed that they intend to subscribe to the full extent of their Rights Entitlement in the Issue. Subject to compliance with the Takeover Regulations, the Promoter and Promoter Group reserve their right to subscribe for Rights Issue Equity Shares by subscribing to Rights Issue Equity Shares beyond Rights Entitlement. The Promoter and Promoter Group have provided an undertaking dated December 20, 2011 to us to apply for additional Rights Issue Equity Shares, to the extent of the unsubscribed portion of the Issue. As a result of this subscription and consequent Allotment, the Promoter and Promoter Group may acquire Rights Issue Equity Shares beyond their Rights Entitlement, which may result in an increase of their shareholding being above their current shareholding with the Rights Entitlement. Such subscription and acquisition of Equity Shares beyond Rights Entitlement by the Promoter and the Promoter Group through this Issue, if any, will not result in change of control of our management. We hereby certify that such subscription to any unsubscribed portion of the Issue by the Promoter and/or the Promoter Group, in the manner contemplated above, shall be subject to compliance with the provisions of Rule 19(2)(b) of the SCRR and clause 40A of the Listing Agreement with respect to the requirement of minimum public shareholding of 25% of the post-Issue paid-up capital of our Company. For details, please see “Terms of the Issue - Basis of Allotment” on page 223. Procedure for Application The CAF for Rights Issue Equity Shares would be printed for all Equity Shareholders. In case the original CAFs are not received by the Investor or is misplaced by the Investor, the Investor may request the Registrars to the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. In case the signature of the Equity Shareholder(s) does not match with the specimen registered with us, the application is liable to be rejected. The CAF consists of four parts:

Part A: Form for accepting the Rights Issue Equity Shares and for applying for additional Rights Equity Shares; Part B: Form for renunciation of Rights Issue Equity Shares; Part C: Form for application for renunciation of Rights Issue Equity Shares by Renouncee(s); Part D: Form for request for split Application forms.

Acceptance of the Issue You may accept the offer to participate and apply for the Rights Issue Equity Shares offered, either in full or in part and without renouncing the balance, by filling Part A of the enclosed CAFs and submit the same along with the application money payable to the collection branches of the Bankers to the Issue as mentioned on the reverse of the CAFs before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors in this regard. Investors at centres not covered by the branches of collecting banks can send their CAFs together with the cheque drawn at par on a local bank at Mumbai/demand draft payable at Mumbai to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. For further details on the mode of payment, please see “Mode of Payment for Resident Equity Shareholders / Investors” and “Mode of Payment for Non-Resident Equity Shareholders/Investors” on page 236. Option available to the Equity Shareholders The CAFs will clearly indicate the number of Rights Issue Equity Shares that the Shareholder is entitled to. If the Equity Shareholder applies for an investment in Rights Issue Equity Shares, then he can:

Apply for his Rights Entitlement of Rights Issue Equity Shares in full; Apply for his Rights Entitlement of Rights Issue Equity Shares in part; Apply for his Rights Entitlement of Rights Issue Equity Shares in part and renounce the other part of Rights Issue

Equity Shares; Apply for his Rights Entitlement in full and apply for additional Rights Issue Equity Shares; Renounce his Rights Entitlement in full.


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Additional Rights Issue Equity Shares You are eligible to apply for additional Rights Issue Equity Shares over and above your Rights Entitlement, provided that you are eligible to apply under applicable law and have applied for all the Rights Issue Equity Shares without renouncing them in whole or in part in favour of any other person(s). Applications for additional Rights Issue Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, subject to sectoral caps and in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under “Terms of the Issue - Basis of Allotment” on page 223. If you desire to apply for additional Rights Issue Equity Shares, please indicate your requirement in the place provided for additional Rights Issue Equity Shares in Part A of the CAF. Where the number of additional Rights Issue Equity Shares applied for exceeds the number available for Allotment, the Allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange. Renunciation This Issue includes a right exercisable by you to renounce the Rights Issue Equity Shares offered to you either in full or in part in favour of any other person or persons. Your attention is drawn to the fact that we shall not Allot and / or register and Rights Issue Equity Shares in favour of more than three persons (including joint holders), partnership firm(s) or their nominee(s), minors, HUF, any trust or society (unless the same is registered under the Societies Registration Act, 1860 or the Indian Trust Act, 1882 or any other applicable law relating to societies or trusts and is authorized under its constitution or bye-laws to hold equity shares, as the case may be). Additionally, existing Equity Shareholders may not renounce in favour of persons or entities in the United States or who would otherwise be prohibited from being offered or subscribing for Rights Issue Equity Shares or Rights Entitlement under applicable securities laws. By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders who do not wish to subscribe to the Rights Issue Equity Shares but wish to renounce the same in favour of Renouncee shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). The RBI has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated non-resident entities in terms of Regulation 5(1) of RBI Notification No.20/2000-RB dated May 3, 2000 under FDI Scheme with the prior approval of Government if the investment is through Government Route and with the prior approval of RBI if the investment is through Automatic Route on case by case basis. Equity Shareholders renouncing their rights in favour of OCBs may do so provided such Renouncee obtains a prior approval from the RBI. On submission of such approval to us at our Registered Office, the OCB shall receive the Abridged Letter of Offer and the CAF. Part ‘A’ of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collecting branches specified on the reverse of the CAF with the form of renunciation (Part ‘B’ of the CAF) duly filled in shall be conclusive evidence for us of the person(s) applying for Rights Issue Equity Shares in Part ‘C’ of the CAF to receive Allotment of such Rights Issue Equity Shares. Part ‘A’ of the CAF must not be used by the Renouncee(s) as this will render the application invalid. Renouncee(s) will have no further right to renounce any Rights Issue Equity Shares in favour of any other person. Procedure for renunciation To renounce all the Rights Issue Equity Shares to an Equity Shareholder in favour of one Renouncee If you wish to renounce the offer indicated in Part ‘A’, in whole, please complete Part ‘B’ of the CAF. In case of joint holding, all joint holders must sign Part ‘B’ of the CAF. The person in whose favour renunciation has been made should complete and sign Part ‘C’ of the CAF. In case of joint Renouncees, all joint Renouncees must sign Part ‘C’ of the CAF. To renounce in part / or renounce the whole to more than one person(s)


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If you wish to either accept this offer in part and renounce the balance or renounce the entire offer under this Issue in favour of two or more Renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of SAFs in the space provided for this purpose in Part ‘D’ of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for SAFs. On receipt of the required number of SAFs from the Registrar, the procedure as mentioned in paragraph above shall have to be followed. In case the signature of the Equity Shareholder(s), who has renounced the Rights Issue Equity Shares, does not match with the specimen registered with us, the application is liable to be rejected. Renouncee(s) The person(s) in whose favour the Rights Issue Equity Shares are renounced should fill in and sign Part ‘C’ of the CAF and submit the entire CAF to the Bankers to the Issue on or before the Issue Closing Date along with the application money in full. The Renouncee cannot further renounce. Change and/or introduction of additional holders If you wish to apply for Rights Issue Equity Shares jointly with any other person(s), not more than three, who is / are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed. However, this right of renunciation is subject to the express condition that the Board of Directors shall be entitled in its absolute discretion to reject the request for Allotment from the Renouncee(s) without assigning any reason thereof. Instructions for Options The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Rights Issue Equity Shares, using the enclosed CAF:

Option Available

Action Required

1. Accept whole or part of your Rights Entitlement without renouncing the balance.

Fill in and sign Part A (All joint holders must sign)

2. Accept your Rights Entitlement in full and apply for additional Rights Issue Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Rights Issue Equity Shares (All joint holders must sign)

3. Accept a part of your Rights Entitlement and renounce the balance to one or more Renouncee(s)

OR

Renounce your Rights Entitlement of all the Rights Issue Equity Shares offered to you to more than one Renouncee

Fill in and sign Part D (all joint holders must sign) requesting for SAFs. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for SAFs. Splitting will be permitted only once. On receipt of the SAF take action as indicated below. For the Rights Issue Equity Shares you wish to accept, if any, fill in and sign Part A. For the Rights Issue Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Rights Issue Equity Shares renounced and hand it over to the Renouncee. Each of the Renouncee should fill in and sign Part C for the Rights Issue Equity Shares accepted by them.

4. Renounce your Rights Entitlement in full to one person (Joint Renouncees are considered as one).

Fill in and sign Part B (all joint holders must sign) indicating the number of Rights Issue Equity Shares renounced and hand it over to the Renouncee. The Renouncee must fill in and sign Part C (All joint Renouncees must sign)


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Option Available

Action Required

5. Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the Renouncee must fill in and sign Part C.

Please note that:

Part ‘A’ of the CAF must not be used by any person(s) other than the Equity Shareholder to whom this Draft Letter of Offer has been addressed. If used, this will render the application invalid.

Request for Split Application Forms / SAF should be made for a minimum of one Rights Issue Equity Share or, in either case, in multiples thereof and one SAF for the balance Rights Issue Equity Shares, if any.

Request by the Investor for the SAFs should reach the Registrar on or before [●]. Only the Equity Shareholder to whom this Draft Letter of Offer has been addressed shall be entitled to renounce

and to apply for SAFs. Forms once split cannot be split further. SAFs will be sent to the Investor (s) by post at the applicant’s risk. Equity Shareholders may not renounce in favour of persons or entities in the United States or who would otherwise

be prohibited from being offered or subscribing for Rights Issue Equity Shares or Rights Entitlement under applicable securities laws.

Availability of duplicate CAF In case the original CAF is not received, or is misplaced by the Investor, the Registrar to the Issue will issue a duplicate CAF on the request of the Investor who should furnish the registered folio number / DP and Client ID number and his / her full name and address to the Registrar to the Issue. Please note that the request for duplicate CAF should reach the Registrar to the Issue within [●] days from the Issue Opening Date. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the Investor violates such requirements, he / she shall face the risk of rejection of both the applications. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with demand draft (after deducting banking and postal charges) payable at Mumbai which should be drawn in favour of “EPC Industrié Limited – Rights Issue - R” in case of resident shareholders and non-resident shareholders applying on non-repatriable basis and in favour of “EPC Industrié Limited – Rights Issue – NR” in case of non-resident shareholders applying on repatriable basis and send the same by registered post directly to the Registrar to the Issue so as to reach Registrar to the Issue on or before the Issue Closing Date. The envelope should be superscribed “EPC Industrié Limited – Rights Issue - R” in case of resident shareholders and Non-resident shareholders applying on non-repatriable basis, and “EPC Industrié Limited – Rights Issue – NR” in case of non-resident shareholders applying on repatriable basis. The application on plain paper, duly signed by the applicant(s) including joint holders, in the same order as per specimen recorded with us, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars:

Name of Issuer, being EPC Industrié Limited; Name and address of the Equity Shareholder including joint holders; Registered Folio Number/ DP and Client ID no.; Number of Equity Shares held as on Record Date; Number of Rights Issue Equity Shares entitled to; Number of Rights Issue Equity Shares applied for; Number of additional Rights Issue Equity Shares applied for, if any; Total number of Rights Issue Equity Shares applied for; Total amount paid at the rate of `[●] per Rights Issue Equity Share; Particulars of cheque/demand draft/pay order; Savings/Current Account Number and name and address of the bank where the Equity Shareholder will be

depositing the refund order. In case of Rights Issue Equity Shares allotted in demat form, the bank account details will be obtained from the information available with the Depositories;

Except for applications on behalf of the Central or State Government, the residents of Sikkim and the officials


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appointed by the courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Rights Issue Equity Shares applied for;

Signature of the Equity Shareholders to appear in the same sequence and order as they appear in the our records; and

Additionally, all such applicants are deemed to have accepted the following: “I/We understand that neither the Rights Entitlement nor the Rights Issue Equity Shares have been, and will be, registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) or any United States state securities laws, and may not be offered, sold, resold or otherwise transferred within the United States or to the territories or possessions thereof (the “United States”). I/we understand the Rights Issue Equity Shares referred to in this application are being offered in India but not in the United States. I/we understand the offering to which this application relates is not, and under no circumstances is to be construed as, an offering of any Rights Issue Equity Shares or Rights Entitlement for sale in the United States, or as a solicitation therein of an offer to buy any of the said Rights Issue Equity Shares or Rights Entitlement in the United States. Accordingly, I/we understand this application should not be forwarded to or transmitted in or to the United States at any time. I/we understand that neither us, nor the Registrar, the Lead Manager or any other person acting on behalf of us will accept subscriptions from any person, or the agent of any person, who appears to be, or who we, the Registrar, the Lead Manager or any other person acting on behalf of us has reason to believe is, a resident of the United States or is ineligible to participate in the Issue under the securities laws of their jurisdiction. I/We will not offer, sell or otherwise transfer any of the Rights Issue Equity Shares which may be acquired by us in any jurisdiction or under any circumstances in which such offer or sale is not authorized or to any person to whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our residence. I/We understand and agree that the Rights Entitlement and Rights Issue Equity Shares may not be reoffered, resold, pledged or otherwise transferred except in an offshore transaction in compliance with Regulation S, or otherwise pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlement and/or the Rights Issue Equity Shares is/are, outside the United States, and (ii) is/are acquiring the Rights Entitlement and/or the Rights Issue Equity Shares in an offshore transaction meeting the requirements of Regulation S. I/We acknowledge that the Company, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of the foregoing representations and agreements.” Please note that those who are making the application otherwise than on original CAF shall not be entitled to renounce their rights and should not utilize the original CAF for any purpose including renunciation even if it is received subsequently. If the Investor violates such requirements, he/she shall face the risk of rejection of both the applications. We shall refund such application amount to the Investor without any interest thereon. Last date for Application The last date for submission of the duly filled in CAF is [●]. If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors, the invitation to offer contained in the Letter of Offer shall be deemed to have been declined and the Board/ Committee of Directors shall be at liberty to dispose off the Rights Issue Equity Shares, as provided under the chapter “Terms of the Issue – Basis of Allotment” on page 223. Basis of Allotment Subject to the provisions contained in the Letter of Offer, the Articles of Association and the approval of the Designated Stock Exchange, the Board will proceed to Allot the Rights Issue Equity Shares in the following order of priority: (a) Full Allotment to those Equity Shareholders who have applied for their Rights Entitlement either in full or in part

and also to the Renouncee(s) who has/ have applifed for Rights Issue Equity Shares renounced in their favour, in


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full or in part. (b) Allotment pertaining to fractional entitlements in case of any shareholding other than in multiples of [●]. (c) Allotment to the Equity Shareholders who having applied for all the Rights Issue Equity Shares offered to them as

part of the Issue and have also applied for additional Rights Issue Equity Shares. The Allotment of such additional Rights Issue Equity Shares will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by them on the Record Date, provided there is an under-subscribed portion after making full Allotment in (a) and (b) above. The Allotment of such Rights Issue Equity Shares will be at the sole discretion of the Board / Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and will not be a preferential Allotment.

(d) Allotment to Renouncees who having applied for all the Rights Issue Equity Shares renounced in their favour, have applied for additional Rights Equity Shares provided there is surplus available after making full Allotment under (a), (b) and (c) above. The Allotment of such Rights Issue Equity Shares will be at the sole discretion of the Board/Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and not preferential Allotment.

(e) Allotment to any other person that the Board of Directors in their absolute discretion, decide. Under the provisions of regulation 3 read with regulation 10 of the Takeover Regulations a shareholder is exempt from the obligation of making an open offer for acquiring Rights Issue Equity Share(s) (including Rights Issue Equity Shares acquired beyond Rights Entitlement), upon fulfillment of conditions stated therein. In the event, the acquisition of Rights Issue Equity Shares beyond Rights Entitlement results in acquisition of control of the Company by the acquirer, the Takeover Regulations does not provide for an exemption from making an open offer. The Promoter and Promoter Group have confirmed that they intend to subscribe to the full extent of their Rights Entitlement in the Issue. Subject to compliance with the Takeover Regulations, the Promoter and Promoter Group reserve their right to subscribe for Rights Issue Equity Shares in this Issue by subscribing to Equity Shares beyond Rights Entitlement. The Promoter and Promoter Group have provided an undertaking dated December 20, 2011 to us to apply for additional Rights Issue Equity Shares, to the extent of the unsubscribed portion of the Issue. As a result of this subscription and consequent Allotment, the Promoter and Promoter Group may acquire Rights Issue Equity Shares beyond their Rights Entitlement, which may result in an increase of their shareholding being above their current shareholding with the Rights Entitlement. Such subscription and acquisition of Rights Issue Equity Shares beyond Rights Entitlement by the Promoter and the Promoter Group through this Issue, if any, will not result in change of control of our management. We hereby certify that such subscription to any unsubscribed portion of the Issue by the Promoter and the Promoter Group, in the manner contemplated above, shall be subject to compliance with the provisions of Rule 19(2)(b) of the SCRR and clause 40A of the Listing Agreement with respect to the requirement of minimum public shareholding of 25% of the post-Issue paid-up capital of our Company. Underwriting The Issue shall not be underwritten. PROCEDURE FOR APPLICATION THROUGH THE APPLICATIONS SUPPORTED BY BLOCKED AMOUNT (“ASBA”) PROCESS This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the ASBA Process. We and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date hereof. Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and to ensure that the CAF is correctly filled up, specifying the number of the bank account maintained with the Self Certified Syndicate Bank (“SCSB”) in which the Application Money will be blocked by the SCSB. The Lead Manager, our Company, its directors, affiliates, associates and their respective directors and officers and the Registrar to the Issue shall not take any responsibility for acts, mistakes, errors, omissions and commissions etc. in relation to applications accepted by SCSBs, Applications uploaded by SCSBs, applications accepted but not uploaded by SCSBs or applications accepted and uploaded without blocking funds in the ASBA Accounts. It shall be presumed that for applications uploaded by SCSBs, the amount payable on application has


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been blocked in the relevant ASBA Account. The list of banks which have been notified by SEBI to act as SCSBs for the ASBA Process is provided on http://www.sebi.gov.in/pmd/scsb.pdf. For details on Designated Branches of SCSBs collecting the CAF, please refer the above mentioned SEBI link. Equity Shareholders who are eligible to apply under the ASBA Process The option of applying for Rights Issue Equity Shares through the ASBA Process is available only to the Equity Shareholders on the Record Date. All QIBs and Non – Institutional Investors must and all Retail Individual Investors may apply through the ASBA process subject to satisfaction of the following parameters: To qualify as ASBA Applicants, eligible Equity Shareholders:

are required to hold Equity Shares in dematerialized form as on the Record Date and apply for (i) their Rights Entitlement or (ii) their Rights Entitlement and Rights Issue Equity Shares in addition to their Rights Entitlement in dematerialized form;

should not have renounced their Right Entitlement in full or in part; should not be Renouncees; and should apply through blocking of funds in bank accounts maintained with SCSBs.

CAF The Registrar will dispatch the CAF to all Equity Shareholders as per their Rights Entitlement on the Record Date for the Issue. Those Equity Shareholders who must apply or who wish to apply through the ASBA payment mechanism will have to select for this mechanism in Part A of the CAF and provide necessary details. Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in Part A of the CAF. Application in electronic mode will only be available with such SCSBs who provide such facility. The Equity Shareholder shall submit the CAF to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. Acceptance of the Issue You may accept the Issue and apply for the Rights Issue Equity Shares either in full or in part, by filling Part A of the respective CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors in this regard. Mode of payment An Equity Shareholder, complying with the conditions of an eligible ASBA Investor, applying under the ASBA Process agrees to block the entire amount payable on application with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB. After verifying that sufficient funds are available in the bank account details of which are provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per the Registrar’s instruction from the bank account maintained with the SCSB, as mentioned by the Equity Shareholder in the CAF. This amount will be transferred in terms of the SEBI Regulations, into the separate bank account. The balance amount remaining after the finalisation of the basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Manager to the respective SCSB. The Equity Shareholders applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the submission of the CAF. The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided by the Equity Shareholder in the CAF does not have sufficient funds equivalent to the amount


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payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, we would have a right to reject the application only on technical grounds. Options available to the Equity Shareholders applying under the ASBA Process The summary of options available to the Equity Shareholders are presented below. You may exercise any of the following options with regard to the Rights Issue Equity Shares, using the respective CAFs received from Registrar:

Option Available

Action Required

1. Accept whole or part of your Rights Entitlement without renouncing the balance.

Fill in and sign Part A of the CAF (All joint holders must sign)

2. Accept your Rights Entitlement in full and apply for additional Equity Shares

Fill in and sign Part A of the CAF including Block III relating to the acceptance of entitlement and Block IV relating to additional Rights Issue Equity Shares (All joint holders must sign)

The Equity Shareholders applying under the ASBA Process will need to select the ASBA process option in the CAF and provide required necessary details. However, in cases where this option is not selected, but the CAF is tendered to the SCSBs with the relevant details required under the ASBA process option and the SCSBs block the requisite amount, then that CAF would be treated as if the Equity Shareholder has selected to apply through the ASBA process option. Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs, Non Institutional Investors or are applying for Rights Issue Equity Shares for an amount exceeding ` 2,00,000 and who comply with the conditions of an eligible ASBA Investor shall mandatorily make use of ASBA facility. Additional Rights Issue Equity Shares You are eligible to apply for additional Rights Issue Equity Shares over and above the number of Rights Issue Equity Shares that you are entitled to, provided that you are eligible to apply for Rights Issue Equity Shares under applicable law and you have applied for all the Rights Issue Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Rights Issue Equity Shares shall be considered and Allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under “Terms of the Issue - Basis of Allotment” on page 223. If you desire to apply for additional Rights Issue Equity Shares please indicate your requirement in the place provided for additional Rights Issue Equity Shares in Part A of the CAF. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is applying under the ASBA Process may make an application to subscribe to the Issue on plain paper. The envelope should be superscribed “EPC Industrié Limited – Rights Issue”. The application on plain paper, duly signed by the Investors including joint holders, in the same order as per the specimen recorded with us, must reach the SCSBs before the Issue Closing Date and should contain the following particulars:

Name of Issuer, being EPC Industrié Limited; Name and address of the Equity Shareholder including joint holders; Registered Folio Number/ DP and Client ID no.; Number of Equity Shares held as on Record Date; Number of Rights Issue Equity Shares entitled to; Number of Rights Issue Equity Shares applied for; Number of additional Rights Issue Equity Shares applied for, if any; Total number of Rights Issue Equity Shares applied for; Total amount to be blocked at the rate of ` [●] per Rights Issue Equity Share; Except for applications on behalf of the Central or State Government and the officials appointed by the courts,

PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the


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Rights Issue Equity Shares applied for; and Signature of the Equity Shareholders to appear in the same sequence and order as they appear in our records. Additionally, all such applicants are deemed to have accepted the following:

“I/We understand that neither the Rights Entitlement nor the Rights Issue Equity Shares have been, and will be, registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) or any United States state securities laws, and may not be offered, sold, resold or otherwise transferred within the United States or to the territories or possessions thereof (the “United States”). I/we understand the Rights Issue Equity Shares referred to in this application are being offered in India but not in the United States. I/we understand the offering to which this application relates is not, and under no circumstances is to be construed as, an offering of any Rights Issue Equity Shares or Rights Entitlement for sale in the United States, or as a solicitation therein of an offer to buy any of the said Rights Issue Equity Shares or Rights Entitlement in the United States. Accordingly, I/we understand this application should not be forwarded to or transmitted in or to the United States at any time. I/we understand that none of we, the Registrar, the Lead Manager or any other person acting on behalf of us will accept subscriptions from any person, or the agent of any person, who appears to be, or who, we, the Registrar, the Lead Manager or any other person acting on behalf of we have reason to believe is, a resident of the United States or is ineligible to participate in the Issue under the securities laws of their jurisdiction. I/We will not offer, sell or otherwise transfer any of the Rights Issue Equity Shares which may be acquired by us in any jurisdiction or under any circumstances in which such offer or sale is not authorized or to any person to whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our residence. I/We understand and agree that the Rights Entitlement and Rights Issue Equity Shares may not be reoffered, resold, pledged or otherwise transferred except in an offshore transaction in compliance with Regulation S, or otherwise pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlement and/or the Rights Issue Equity Shares is/are, outside the United States, and (ii) is/are acquiring the Rights Entitlement and/or the Rights Issue Equity Shares in an offshore transaction meeting the requirements of Regulation S. I/We acknowledge that the Company, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of the foregoing representations and agreements.” Option to receive Rights Issue Equity Shares in Dematerialized Form EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES UNDER THE ASBA PROCESS CAN BE ALLOTTED ONLY IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE HELD BY SUCH ASBA APPLICANT ON THE RECORD DATE. General instructions for Equity Shareholders applying under the ASBA Process

(a) Please read the instructions printed on the CAF carefully. (b) Application should be made on the printed CAF only and should be completed in all respects. The CAF found

incomplete with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of the Letter of Offer, Abridged Letter of Offer are liable to be rejected. The CAF must be filled in English.

(c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bank

account details are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to us or Registrar or Lead Manager to the Issue.

(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her

PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. Except for applications on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the courts, CAFs without PAN will be considered incomplete and are liable to be rejected. With effect


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from August 16, 2010, the demat accounts for Investors for which PAN details have not been verified shall be “suspended for credit” and no allotment and credit of Rights Issue Equity Shares shall be made into the accounts of such Investors.

(e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash

payment or payment by cheque / demand draft / pay order is not acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon.

(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the

Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with us and/or Depositories.

(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the

specimen signature(s) recorded with the depository / us. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(h) All communication in connection with application for the Rights Issue Equity Shares, including any change in

address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of Allotment in this Issue quoting the name of the first/sole applicant Equity Shareholder, folio numbers and CAF number.

(i) Only the person or persons to whom the Rights Issue Equity Shares have been offered shall be eligible to

participate under the ASBA Process. (j) Only persons outside restricted jurisdictions and who are eligible to subscribe for Rights Entitlement and Rights

Issue Equity Shares under applicable securities laws are eligible to participate. (k) Only the Equity Shareholders holding shares in demat are eligible to participate through ASBA process. (l) Equity shareholders who have renounced their entitlement in part/ full are not entitled to apply using ASBA

process. (m) Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing

number CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs, Non Institutional Investors or are applying in this Issue for Rights Issue Equity Shares for an amount exceeding ` 2,00,000 and and who comply with the conditions of an eligible ASBA Investor shall mandatorily make use of ASBA facility.

Do’s:

(a) Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in. (b) Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary

account is activated as Rights Issue Equity Shares will be allotted in the dematerialized form only. (c) Ensure that the CAFs are submitted with the Designated Branch of the SCSBs and details of the correct bank

account have been provided in the CAF. (d) Ensure that there are sufficient funds (equal to {number of Rights Issue Equity Shares as the case may be

applied for} X {Issue Price of Rights Issue Equity Shares, as the case may be}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB.

(e) Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on

application mentioned in the CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.


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(f) Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form. (g) Except for CAFs submitted on behalf of the Central or State Government, the residents of Sikkim and the

officials appointed by the courts, each applicant should mention their PAN allotted under the I T Act. (h) Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is

held with the Depository Participant. In case the CAF 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 CAF.

(i) Ensure that the Demographic Details are updated, true and correct, in all respects. (j) Ensure that the account holder in whose bank account the funds are to be blocked has signed authorising such

funds to be blocked. (k) Apply under the ASBA process only if you comply with the definition of an ASBA investor.

Don’ts:

(a) Do not apply if your are in the United States of America or are not eligible to participate in the Issue under the securities laws applicable to your jurisdiction.

(b) Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB. (c) Do not pay the amount payable on application in cash, by money order or by postal order. (d) Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assuming that

such Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only.

(e) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. (f) Do not apply if the ASBA account has been used for five applicants.

Grounds for Technical Rejection under the ASBA Process In addition to the grounds listed under “Grounds for Technical Rejection for non-ASBA Investors” on page 235, applications under the ABSA Process are liable to be rejected on the following grounds:

(a) Application on a SAF. (b) Application for allotment of Rights Entitlements or additional shares which are in physical form. (c) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with the

Registrar. (d) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not a

SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company. (e) Insufficient funds are available with the SCSB for blocking the amount. (f) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen pursuant

to regulatory orders. (g) Account holder not signing the CAF or declaration mentioned therein. (h) CAFs that do not include the certification set out in the CAF to the effect that the subscriber does not have a

registered address (and is not otherwise located) in restricted jurisdictions and is authorized to acquire the rights and the securities in compliance with all applicable laws and regulations.


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(i) CAFs which have evidence of being executed in/dispatched from restricted jurisdiction. (j) An Equity Shareholder, who is not complying with any or all of the conditions for being an ASBA Investor,

applies under the ASBA process. (k) QIBs and Non – Institutional Investors who holds Equity Shares in dematerialised form and is not a Renouncee

not applying through the ASBA process. (l) The application by an Equity Shareholder whose cumulative value of Equity Shares applied for is more than `

2,00,000 but has applied separately through split CAFs of less than ` 2,00,000 and has not done so through the ASBA process.

Depository account and bank details for Equity Shareholders applying under the ASBA Process IT IS MANDATORY FOR ALL THE EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF 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 CAF. Equity Shareholders applying under the ASBA Process should note that on the basis of name of these Equity Shareholders, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the Depository demographic details of these Equity Shareholders such as address, bank account details and occupation (“Demographic Details”). Hence, Equity Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF. These Demographic Details would be used for all correspondence with such Equity Shareholders including mailing of the letters intimating Allotment and unblocking of bank account of the respective Equity Shareholder. The Demographic Details given by the Equity Shareholders in the CAF would not be used for any other purposes by the Registrar. Hence, Equity Shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAFs, the Equity Shareholders applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. Letters intimating Allotment and unblocking the funds would be mailed at the address of the Equity Shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. The Registrar to the Issue will give instrucuctions to the SCSBs for unblocking funds in the bank account utilised under the ASBA process to the extent equity shares are not allotted to such shareholders. Equity Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of the funds 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 Equity Shareholder in the CAF would be used only to ensure dispatch of letters intimating unblocking of the funds. Note that any such delay shall be at the sole risk of the Equity Shareholders applying under the ASBA Process and none of us, the SCSBs or the Lead Manager shall be liable to compensate the Equity Shareholder applying under the ASBA Process for any losses caused due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories that matches three parameters, (a) names of the Equity Shareholders (including the order of names of joint holders), (b) the DP ID and (c) the beneficiary account number, then such applications are liable to be rejected. Issue Schedule


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Issue Opening Date: [●] Last date for receiving requests for SAFs: [●] Issue Closing Date: [●]

The Board may however decide to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date. Allotment Advices / Refund Orders We will issue and dispatch Allotment advice/ share certificates/demat credit and/or letters of regret along with refund order or credit the Allotted Rights Issue Equity Shares to the respective beneficiary accounts, if any, within a period of 9 days from the Issue Closing Date. If such money is not repaid within eight days from the day we become liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is earlier) we and every Director who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed under the Companies Act. Investors residing at centers where clearing houses are managed by the RBI will get refunds through National Electronic Clearing Service (“NECS”) except where Investors have not provided the details required to send electronic refunds. In case of those Investors who have opted to receive their Rights Entitlement in dematerialized form using electronic credit under the depository system, advice regarding their credit of the Rights Issue Equity Shares shall be given separately. Investors to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within 15 days of the Issue Closing Date. In case of those Investors who have opted to receive their Rights Entitlement in physical form and we issue letter of allotment, the corresponding share certificates will be kept ready within three months from the date of Allotment thereof or such extended time as may be approved by the Company Law Board under Section 113 of the Companies Act or other applicable provisions, if any. Investors are requested to preserve such letters of allotment, which would be exchanged later for the share certificates. For more information, please see “Terms of the Issue” on page 216. The letter of allotment / refund order would be sent by registered post/speed post to the sole/first Investor’s registered address. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole/first Investor. Adequate funds would be made available to the Registrar to the Issue for this purpose. Payment of Refund Mode of making refunds The payment of refund, if any, would be done through any of the following modes: 1. NECS – Payment of refund would be done through NECS for Investors having an account at any of the 68 centres

where such facility has been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories/the records of the Registrar. The payment of refunds is mandatory for Investors having a bank account at any centre where NECS facility has been made available (subject to availability of all information for crediting the refund through NECS).

2. NEFT – Payment of refund shall be undertaken through NEFT wherever the Investors’ bank has been assigned the

Indian Financial System Code (IFSC), which can be linked to a MICR, allotted to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the Investors have registered their nine digit MICR number and their bank account number with the registrar or with the depository participant 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 Investors through this method.

3. Direct Credit – Investors having bank accounts with the Bankers to the Issue shall be eligible to receive refunds

through direct credit. Charges, if any, levied by the relevant bank(s) for the same would be borne by us.


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4. For all other Investors the refund orders will be despatched through Speed Post/ Registered Post. Such refunds will

be made by cheques, pay orders or demand drafts drawn in favour of the sole/first Investor and payable at par. 5. Credit of refunds to Investors in any other electronic manner permissible under the banking laws, which are in force,

and is permitted by the SEBI from time to time. Printing of Bank Particulars on Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the Investor’s bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars, where available, will be printed on the refund orders/refund warrants which can then be deposited only in the account specified. We will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Allotment advice / Share Certificates/ Demat Credit Allotment advice/ share certificates/ demat credit or letters of regret will be dispatched to the registered address of the first named Investor or respective beneficiary accounts will be credited within 15 days, from the Issue Closing Date. Allottees are requested to preserve such allotment advice (if any) to be exchanged later for share certificates. Option to receive Rights Issue Equity Shares in Dematerialized Form Investors shall be allotted the Rights Issue Equity Shares in dematerialized (electronic) form at the option of the Investor. we have signed a tripartite agreement with NSDL on January 11, 2005 which enables the Investors to hold and trade in Rights Issue Equity Shares in a dematerialized form, instead of holding the Rights Issue Equity Shares in the form of physical certificates. We have also signed a tripartite agreement with CDSL on October 18, 2004 which enables the Investors to hold and trade in Rights Issue Equity Shares in a dematerialized form, instead of holding the Rights Issue Equity Shares in the form of physical certificates. If such applications are made, an application for physical Rights Issue Equity Shares shall be treated as multiple applications and is liable to be rejected. In this Issue, the Allottees who have opted for receipt of Rights Issue Equity Shares in dematerialized form will receive their Rights Issue Equity Shares in the form of an electronic credit to their beneficiary account as given in the CAF, after verification with a depository participant. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Allotment advice, refund order (if any) would be sent directly to the Investor by the Registrar to the Issue but the Investor’s depository participant will provide to him the confirmation of the credit of such Rights Issue Equity Shares to the Investor’s depository account. CAFs, which do not accurately contain this information, will be given the Rights Issue Equity Shares in physical form. No separate CAFs for Rights Issue Equity Shares in physical and/or dematerialized form should be made. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES CAN BE TRADED ON THE STOCK EXCHANGE ONLY IN DEMATERIALIZED FORM. The procedure for availing the facility for Allotment of Rights Issue Equity Shares in the electronic form is as under:

Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should carry the name of the holder in the same manner as is registered in our records. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as registered in our records). In case of Investors having various folios with different joint holders, the Investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such beneficiary account(s) need not adhere to this step.

For Equity Shareholders already holding Equity Shares in dematerialized form as on the Record Date, the

beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Rights Issue Equity Shares by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the Allotment of Rights Issue Equity Shares may be made in dematerialized form even if the original Equity Shares are not dematerialized. Nonetheless, it should be ensured that the depository account is in the name(s) of the Equity Shareholders and the names are in the same order as in our records.


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The responsibility for correctness of information (including Investor’s age and other details) filled in the CAF vis-à-vis such information with the Investor’s depository participant, would rest with the Investor. Investors should ensure that the names of the Investors and the order in which they appear in CAF should be the same as registered with the Investor’s depository participant. If incomplete / incorrect beneficiary account details are given in the CAF, the Investor will get Rights Issue Equity Shares in physical form. The Rights Issue Equity Shares Allotted to applicants opting for issue in dematerialized form, would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to the applicant the confirmation of the credit of such Rights Issue Equity Shares to the applicant’s depository account. Renouncees will also have to provide the necessary details about their beneficiary account for Allotment of Rights Issue Equity Shares. In case these details are incomplete or incorrect, the application is liable to be rejected. General instructions for non-ASBA Investors (a) Please read the instructions printed on the enclosed CAF carefully. (b) Application should be made on the printed CAF, provided by us except as mentioned under the head “Application

on Plain Paper” on page 222 and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of the Letter of Offer or Abrigded Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the Investors, details of occupation, address, father’s / husband’s name must be filled in block letters.

The CAF together with the cheque/demand draft should be sent to the Bankers to the Issue/Collecting Bank or to the Registrar to the Issue and not to us or Lead Manager to the Issue. Investors residing at places other than cities where the branches of the Bankers to the Issue have been authorised by us for collecting applications, will have to make payment by demand draft payable at Mumbai of an amount net of bank and postal charges and send their CAFs to the Registrar to the Issue by registered post. If any portion of the CAF is/are detached or separated, such application is liable to be rejected.

Applications where separate cheques/demand drafts are not attached for amounts to be paid for Equity Shares are liable to be rejected. (c) Except for applications on behalf of the Central and State Government, the residents of Sikkim and the officials

appointed by the courts, all Investors, and in the case of application in joint names, each of the joint Investors, should mention his/her PAN number allotted under the I.T. Act, 1961, irrespective of the amount of the application. CAFs without PAN will be considered incomplete and are liable to be rejected.

(d) Investors, holding Equity Shares in physical format, are advised that it is mandatory to provide information as to

their savings/current account number and the name of the bank with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Application not containing such details is liable to be rejected.

(e) All payment should be made by cheque/demand draft only. Application through the ASBA process as mentioned

above is acceptable. Cash payment is not acceptable. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon.

(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the

Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with us.


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(g) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Issue and to sign the application and certified true a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above referred documents are already registered with us, the same need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue.

(h) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the

specimen signature(s) recorded with us. Further, in case of joint Investors who are Renouncees, the number of Investors should not exceed three. In case of joint Investors, reference, if any, will be made in the first Investor’s name and all communication will be addressed to the first Investor.

(i) Application(s) received from NRs/NRIs, or persons of Indian origin residing abroad for Allotment of Rights Issue

Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, Allotment of Rights Issue Equity Shares, subsequent issue and Allotment of Rights Issue Equity Shares, interest, export of share certificates, etc. In case a NR or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF. Additionally, applications will not be accepted from NRs/NRIs in the United States or its territories and possessions, or any other jurisdiction where the offer or sale of the Rights Entitlements and Rights Issue Equity Shares may be restricted by applicable securities laws.

(j) All communication in connection with application for the Rights Issue Equity Shares, including any change in

address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of Allotment in this Issue quoting the name of the first/sole Investor, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of Allotment, should be sent to our Registrar and Transfer Agents, in the case of Equity Shares held in physical form and to the respective depository participant, in case of Equity Shares held in dematerialized form.

(k) SAFs cannot be re-split. (l) Only the person or persons to whom Rights Issue Equity Shares have been offered and not Renouncee(s) shall be

entitled to obtain SAFs. (m) Investors must write their CAF number at the back of the cheque /demand draft. (n) Only one mode of payment per application should be used. The payment must be by cheque / demand draft drawn

on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted.

(o) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated cheques

and postal / money orders will not be accepted and applications accompanied by such outstation cheques / outstation demand drafts / money orders or postal orders will be rejected.

(p) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar

will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.

(q) The distribution of the Draft Letter of Offer and issue of Rights Issue Equity Shares and Rights Entitlements to

persons in certain jurisdictions outside India may be restricted by legal requirements in those jurisdictions. Persons in the United States and such other jurisdictions are instructed to disregard the Draft Letter of Offer and not to attempt to subscribe for Rights Issue Equity Shares.

Do’s for non-ASBA Investors: (a) Check if you are eligible to apply i.e. you are an Equity Shareholder on the Record Date;


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(b) Read all the instructions carefully and ensure that the cheque/ draft option is selected in part A of the CAF and necessary details are filled in;

(c) In the event you hold Equity Shares in dematerialised form, ensure that the details about your Depository

Participant and beneficiary account are correct and the beneficiary account is activated as the Rights Issue Equity Shares will be Allotted in the dematerialized form only;

(d) Ensure that your Indian address is available to us and the Registrar, in case you hold Equity Shares in physical

form or the depository participant, in case you hold Equity Shares in dematerialised form; (e) Ensure that the CAFs are submitted at the collection centres of the syndicate only on forms bearing the stamp of

the Lead Manager; (f) Ensure that the value of the cheque/ draft submitted by you is equal to the (number of Rights Issue Equity Shares

applied for) X (Issue Price of Rights Issue Equity Shares, as the case may be) before submission of the CAF; (g) Ensure that you receive an acknowledgement from the collection centers of the collection bank for your

submission of the CAF in physical form; (h) Ensure that you mention your PAN allotted under the I.T. Act with the CAF, except for Applications on behalf of

the Central and State Governments, residents of the state of Sikkim and officials appointed by the courts; (i) Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is

held with the Depository Participant. In case the CAF 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 CAF;

(j) Ensure that the demographic details are updated, true and correct, in all respects. Don’ts for non-ASBA Investors: (a) Do not apply if you are in the United States of America or are not eligible to participate in the Issue the securities

laws applicable to your jurisdiction; (b) Do not apply on duplicate CAF after you have submitted a CAF to a collection center of the collection bank; (c) Do not pay the amount payable on application in cash, by money order or by postal order; (d) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground; (e) Do not submit Application accompanied with Stock invest; Grounds for Technical Rejections for non-ASBA Investors. Investors are advised to note that applications are liable to be rejected on technical grounds, including the following:

Amount paid does not tally with the amount payable; Bank account details (for refund) are not given and the same are not available with the DP (in the case of

dematerialized holdings) or the Registrar (in the case of physical holdings); Age of Investor(s) not given (in case of Renouncees); Except for CAFs on behalf of the Central or State Government, the residents of Sikkim and the officials appointed

by the courts, PAN number not given for application of any value; In case of CAF under power of attorney or by limited companies, corporate, trust, relevant documents are not

submitted; If the signature of the Equity Shareholder does not match with the one given on the CAF and for renounce(s) if the

signature does not match with the records available with their depositories; CAFs are not submitted by the Investors within the time prescribed as per the CAF and the Letter of Offer; CAFs not duly signed by the sole/joint Investors; CAFs by OCBs without specific RBI approval;


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CAFs accompanied by Stockinvest / outstation cheques / post-dated cheques / money order / postal order / outstation demand draft;

In case no corresponding record is available with the depositories that matches three parameters, namely, names of the Investors (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s identity;

CAFs that do not include the certifications set out in the CAF to the effect that, among other thing, the subscriber is not located in restricted jurisdictions and is authorized to acquire the Rights Entitlements and Rights Issue Equity Shares in compliance with all applicable laws and regulations;

CAFs which have evidence of being executed in/dispatched from restricted jurisdictions; CAFs by ineligible non-residents (including on account of restriction or prohibition under applicable local laws); CAFs where we believe that CAF is incomplete or acceptance of such CAF may infringe applicable legal or

regulatory requirements; In case the GIR number is submitted instead of the PAN; Applications by Renouncees who are persons not competent to contract under the Indian Contract Act, 1872,

including minors; and Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application. Applications from QIBs or from Non Institutional Investors or Investrors applying in this Issue for Rights Issue

Equity Shares for an amount exceeding ` 2,00,000, which are not in ASBA process. Please read the Letter of Offer or Abridged Letter of Offer and the instructions contained therein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are an integral part of the Letter of Offer and must be carefully followed. The CAF is liable to be rejected for any non-compliance of the provisions contained in the Letter of Offer or the CAF. Mode of payment for Resident Equity Shareholders/ Investors

All cheques / drafts accompanying the CAF should be drawn in favour of the Collecting Bank (specified on the reverse of the CAF), crossed ‘A/c Payee only’ and marked “EPC Industrié Limited – Rights Issue”;

Investors residing at places other than places where the bank collection centres have been opened by us for collecting applications, are requested to send their CAFs together with Demand Draft for the full application amount, net of bank and postal charges favouring the Bankers to the Issue, crossed ‘A/c Payee only’ and marked “EPC Industrié Limited – Rights Issue” payable at Mumbai directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. We or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Investment by FIIs In accordance with the current regulations, the following restrictions are applicable for investment by FIIs: No single FII can hold more that 10% of our post-Issue paid-up share capital. In respect of an FII investing in the Issues on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 5% of the total paid-up share capital of our Company, in case such sub-account is a foreign corporate or an individual. Applications will not be accepted from FIIs in restricted jurisdictions. Investment by NRIs Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3)(i) of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. Applications will not be accepted from FIIs in restricted jurisdictions. Procedure for Applications by Mutual Funds A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the application is being made.


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Mode of payment for Non-Resident Equity Shareholders/ Investors As regards the application by non-resident Equity Shareholders, the following conditions shall apply:

Individual non-resident Indian applicants who are permitted to subscribe for Rights Issue Equity Shares by applicable local securities laws can obtain application forms from the following address:

Sharepro Services (India) Private Limited 13 AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone Exchange Lane, Off Andheri-Kurla Road, Sakinaka, Andheri (East), Mumbai – 400 072, Maharashtra, India. Tel: +91 22 6772 0300/403 Fax: +91 22 6772 0416 Website: www.shareproservices.com Email: [email protected] Contact Person: Mr. Satheesh H K SEBI Registration No: INR000001476

Payment by non-residents must be made by demand draft payable at Mumbai/cheque payable drawn on a bank

account maintained at Mumbai or funds remitted from abroad in any of the following ways: Application with repatriation benefits

i. By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad (submitted along with Foreign Inward Remittance Certificate); or

ii. By cheque/draft on a Non-Resident External Account (NRE) or FCNR Account maintained in India; or

iii. By Rupee draft purchased by debit to NRE/FCNR Account maintained elsewhere in India and payable in

Mumbai; or FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

iv. Non-resident investors applying with repatriation benefits should draw cheques/drafts in favour of ‘EPC Industrié Limited – Rights Issue - NR’ and must be crossed ‘account payee only’ for the full application amount.

v. Non-resident Indian applicants may please note that only such applications as are accompanied by payment in free foreign exchange shall be considered for allotment under the reserved category. The non-resident Indians who intend to make payment through NRO accounts shall use the form meant for Resident Indians and shall not use the forms meant for reserved category.

Application without repatriation benefits

i. As far as non-residents holding Equity Shares on non-repatriation basis are concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in India or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the Allotment of Rights Issue Equity Shares will be on non-repatriation basis.

ii. All cheques/drafts submitted by non-residents applying on a non-repatriation basis should be drawn in favour of

‘EPC Industrié Limited – Rights Issue – NR’ and must be crossed ‘account payee only’ for the full application amount. The CAFs duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

iii. Investors may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts as the

case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the application


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shall be considered incomplete and is liable to be rejected.

iv. New demat account shall be opened for holders who have had a change in status from resident Indian to NRI. Notes:

In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in Rights Issue Equity Shares can be remitted outside India, subject to tax, as applicable according to the IT Act.

In case Rights Issue Equity Shares are allotted on a non-repatriation basis, the dividend and sale proceeds of the

Rights Issue Equity Shares cannot be remitted outside India.

The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

In case of an application received from non-residents, Allotment, refunds and other distribution, if any, will be

made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such Allotment, remittance and subject to necessary approvals.

Impersonation As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions of sub-section (1) of section 68A of the Companies Act which is reproduced below: “Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares therein, or 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”. Payment by Stockinvest In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the Stockinvest Scheme has been withdrawn. Hence, payment through Stockinvest would not be accepted in this Issue. Disposal of application and application money No acknowledgment will be issued for the application moneys received by us. However, the Bankers to the Issue / Registrar to the Issue / SCSBs receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without assigning any reason thereto. In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Rights Issue Equity Shares allotted, will be refunded to the Investor within a period of 15 days from the Issue Closing Date. If such money is not repaid within Eight days from the day we become liable to repay it, we and every Director who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under the Companies Act. For further instructions, please read the CAF carefully. Utilisation of Issue Proceeds The Board of Directors declares that: (i) All monies received out of this Issue shall be transferred to a separate bank; (ii) Details of all monies utilized out of the Issue shall be disclosed under an appropriate separate head in our balance


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sheet indicating the purpose for which such monies have been utilised; (iii) Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate head in

our balance sheet indicating the form in which such unutilized monies have been invested; and (iv) We may utilize the funds collected in the Issue only after listing and trading permission is received from the Stock

Exchange in respect of this Issue. Undertakings by our Company We undertake the following:

1. The complaints received in respect of the Issue shall be attended to by us expeditiously and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock Exchange where the Rights Issue Equity Shares are to be listed will be taken within 15 days of the Issue Closing Date

3. The funds required for making refunds to unsuccessful applicants as per the modes disclosed shall be made

available to the Registrar to the Issue by us.

4. We undertake that where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the Investor within 15 days of the Issue Closing Date, giving details of the banks where refunds shall be credited along with amount and expected date of electronic credit of refund.

5. Adequate arrangements shall be made to collect all ASBA applications and to consider them similar to non-

ASBA applications while finalising the basis of Allotment.

6. The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the specified time.

7. No further issue of securities affecting equity capital of our Company shall be made till the securities issued/offered through the Letter of Offer Issue are listed or till the application money are refunded on account of non-listing, under-subscription etc.

8. At any given time there shall be only one denomination of equity shares of our Company.

9. We accept full responsibility for the accuracy of information given in this Draft Letter of Offer and confirms

that to the best of its knowledge and belief, there are no other facts the omission of which makes any statement made in this Draft Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

10. All information shall be made available by the Lead Manager and the Issuer to the 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 shows, presentations, in research or sales reports etc.

11. We shall comply with such disclosure and accounting norms specified by SEBI from time to time. Minimum Subscription If we do not receive minimum subscription of 90% of the Issue including participation by the Promoter and Promoter Group of the unsubscribed portion of the Issue, the entire subscription shall be refunded to the Applicants within 15 days from the Issue Closing Date. If there is delay in the refund of subscription by more than Eight days after we become liable to pay the subscription amount (i.e., 15 days after the Issue Closing Date), we will pay interest for the delayed period, at prescribed rates in sub-sections (2) and (2A) of Section 73 of the Companies Act. Important

Please read this Draft Letter of Offer carefully before taking any action. The instructions contained in the


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accompanying CAF are an integral part of the conditions and must be carefully followed; otherwise the application is liable to be rejected.

All enquiries in connection with this Draft Letter of Offer or accompanying CAF and requests for SAFs must be

addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and super scribed ‘EPC Industrié Limited-Rights Issue’ on the envelope and postmarked in India) to the Registrar to the Issue at the following address:

Sharepro Services (India) Private Limited Samhita Warehousing Complex, Bldg. No.13A B, Gala No.52 to 56, Near Sakinaka Telephone Exchange, Andheri - Kurla Road, Sakinaka, Mumbai - 400 072, Maharashtra, India Tel: +91 22 6772 0300/403 Fax: +91 22 6772 0416 Website: www.shareproservices.com Email: [email protected] Contact Person: Mr. Satheesh H K SEBI Registration No: INR000001476

It is to be specifically noted that this Issue of Rights Issue Equity Shares is subject to the risks mentioned in “Risk

Factors” on page IX. The Issue will remain open for a minimum 15 days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.


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TERMS OF THE ARTICLES OF ASSOCIATION Set forth below is certain information relating to our share capital and the important terms of Articles of our Company. 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. Pursuant to Schedule II of the Companies Act and the SEBI Regulations, the main provisions of the Articles of Association relating to capital, voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. INTERPRETATION 2. In the interpretation of these Articles, unless repugnant to the subject or context:

“The Company” or “This Company” means EPC INDUSTRIÉ LIMITED. “Act” means “The Companies Act, 1956” and any amendment thereto or any other succeeding enactment for the time being in force.

“Affiliate”, in relation to any Party, (i) being a corporate entity, shall mean any entity, which controls, is controlled by, or is under the common

control of that Party. The term “control” shall mean the beneficial ownership, directly or indirectly, of more than 50% (Fifty percent) of the voting securities of such entity or control of the majority of the composition of the board of such entity or power to direct the management or policies of such entity by Contract or otherwise, or

(ii) being an individual, means a Relative or any entity which is controlled by such Party. The term 'control' shall

have the meaning as stated in sub-clause (i) above, and (iii) provided that a Competitor shall not, for the purposes of these Articles, be considered to be an Affiliate of a

Party.

“Agreement” shall mean the Shareholders’ Agreement amongst Investor, Promoters, Company, KLK, and Kimplas Piping Systems Ltd (Kimplas) dated 27 June 2011 together with the Recitals, the Schedules and Annexures attached thereto. “Annual General Meeting” means a general meeting of the Members held in accordance with the provisions of Section 166 of the Act and any adjournment thereof. “Alternate Director” shall have the meaning ascribed to it under Article 116 below. “Articles” shall mean these Articles of Association of the Company.

“Auditors” means and includes those persons appointed as such for the time being by the company. “Beneficial Owner” means a person whose name is recorded as such with a depository. “Bye-laws” means bye-laws made by a depository under Section 26 of the Depositories Act, 1996. “Board” means board of directors of the Company. “Business” means the business of manufacture and sale of micro irrigation system and components and manufacture and sale of PE industrial pipes. “Business Day” means a day on which the principal commercial banks located in Mumbai in India, are open for business during normal banking hours, but excluding a Saturday or a Sunday. “Company” means EPC Industrie Limited, a company incorporated under the Companies Act, 1956, having its registered office at H – 109, MIDC, Ambad, Nashik – 422010.


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“Capital” means the share capital for the time being raised or authorized to be raised, for the purpose of the Company. “Chairman” shall mean such Investor Director as is nominated by the Board from time to time to be the chairman of the Board. “Competitor” shall mean:

a) any Investor Competitor, b) any Person who is, directly or indirectly, engaged in or carries on any business which is the same as or

similar to the Business, c) any Affiliate of such Person, d) any promoter of such Person, and/or e) any Relative of a promoter of such Person;

“Depository” means a company formed and registered under the Companies Act, 1956 and which has been granted a certificate of registration under subsection (1A) of Section 12 of the Securities and Exchange Board of India Act, 1992. “Depositories Act” means the Depositories Act, 1996, including any statutory modifications or re-enactment thereof for the time being in force. “Directors” shall mean a director of the Company and any alternate of such director appointed in accordance with the Agreement and with these Articles. “Dividend” includes bonus. “Encumbrance” shall mean any third party right including but not limited to (i) any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, deed of trust, security interest or other encumbrance of any kind securing, or conferring any priority of payment in respect of, any obligation of any Person, including without limitation any right granted by a transaction which, in legal terms, is not the granting of security but which has an economic or financial effect similar to the granting of security under Law, (ii) any voting agreement, interest, option, right of first offer, refusal or transfer restriction in favour of any Person and (iii) any adverse claim as to title, possession or use; “Equity Share” shall mean one equity share of face value of ` 10 (Rupees Ten) of the Company. “Execution Date” means the date of execution of the Agreement. “Extra-ordinary General Meeting” means an extraordinary general meeting of the Members duly called and constituted and any adjournment thereof. “Government” shall include the President of India, the Government of India, the Governor and the government of any state or any other political subdivision in India, any ministry or department of the same and any local or other authority exercising powers conferred by Law and shall include, without limitation, the Securities and Exchange Board of India, any recognised stock exchange, the Reserve Bank of India and the Foreign Investment Promotion Board and the term “Governmental Authority” shall be construed accordingly. “Investor” means Mahindra and Mahindra Limited, a company incorporated under the Indian Companies Act VII of 1913 and having its registered office at Gateway Building, Apollo Bunder, Mumbai 400 001. “Investor Competitor” shall mean any Person engaged in any of the following industries: (a) automotive industry (multi utility vehicles, sports utility vehicles, trucks, construction equipment, three

wheelers and two wheelers); (b) farm equipment industry and agriculture extension services (tractor, tractor applications, other farm

equipments); (c) fruits and vegetables industry; (d) crop care industry;


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(e) seeds industry; and (f) engine and engine application industry – (diesel power generation sets and home uninterrupted power

supply units). “KLK” means Krishen Lal Khanna, son of Dewan Ramnath Khanna, Indian Inhabitant, residing at Tulika, Kadambvan, Satpur-Ambad Link Road, Satpur, Nashik - 422007. “Kimplas” means Kimplas Piping Systems Limited, a company incorporated under the Companies Act, 1956, having its registered office at B – 20, MIDC, Ambad, Nashik – 422 010. “Law” includes all statutes, enactments, acts of legislature or parliament, laws, ordinances, rules, bye-laws, regulations, notifications, guidelines, policies, directions, directives and orders of the Government (or any sub-division thereof), statutory authority, tribunal, board, court or recognised stock exchange and if applicable, international treaties and regulations. “Litigation” includes any action, suit, proceeding, summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or so far as the Promoters and/or Company are aware threatened, by or before any court, tribunal, arbitrator or other Governmental Authority. “Managing Director” shall mean the managing director of the Company appointed by the Board. “Member” means the duly registered holder from time to time of the Shares of the Company and includes the subscribers to the Memorandum and Articles of Association of the Company and person(s) whose name(s) is/are entered as Beneficial Owners in the records of the Depository. “Meeting” or “General Meeting” means either an Annual General Meeting or an Extra Ordinary Meeting as the context requires. “Month” means a calendar month. “Office” means the Registered Office for the time being of the Company. “Options” shall mean issuance by the Company of Equity Shares not exceeding 5% of the paid up equity share capital of the Company (a) under a stock option plan to employees including to persons belonging to the Promoters' group who are employees and/or members of the Board, which options shall vest upon the achievement of performance based benchmarks approved by the Board; and (b) any Equity Shares that may be issued to the Managing Director for achievement of performance linked benchmarks set out under the Annual Business Plans. “Ordinary Resolution” and “Special Resolution” shall have the meaning assigned thereto by Section 189 of the Act. “PE” means Poly Ethylene. “Party” shall mean the Investor, the Company and the Promoters, individually and “Parties” shall mean the Investor, the Company and the Promoters, collectively. “Participant” means a person registered as such under sub-section (1A) of Section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).

“Patkaai” means Patkaai Plastics Private Limited, a company registered under the Companies Act, 1956 having its registered office at A.T Road, Pujaghat, Dibrugarh, Assam. “Person” shall include an individual, an association, a corporation, a partnership, a joint venture, a trust, an unincorporated organisation, a joint stock company or other entity or organisation, including a Government. “Permitted Entities” means Patkaai and Kimplas, collectively. “Preference Share” means one redeemable preference share of the Company of the face value of ` 100 each. “Promoters” means the Persons Listed in Schedule 1 of these Articles and include their respective successors and


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permitted assigns and in case where such Persons are a natural person, their respective heirs, executors, and administrators). “Public Offer” means the open offer for a certain number of equity shares in the Company held by public Shareholders which is required to be made by the Investor under the Takeover Code. “Rs”, “INR”, “Rupee”, or “Rupees” shall mean the lawful currency of Republic of India. “Record” includes the records maintained in the form of books or stored in a computer or in such other form as may be determined by applicable regulations. “Register of Members” means the register of members to be kept pursuant to the Act. “The Registrar” means the Registrar of Companies of the State in which the Registered Office of the Company is for the time being situated. “Relatives” shall have the meaning ascribed to it under Section 6 of the Act. “Resolution” means either an Ordinary Resolution or a Special Resolution as the context requires. “Secretary” means a Company Secretary within the meaning of Clause (c) of sub-section (1) of Section 2 of the Company Secretaries Act, 1980 (56 of 1980) and includes any other individual possessing the prescribed qualifications and appointed to perform the duties, which may be performed by a Secretary under the Act, and any other ministerial or administrative duties. “Seal” means the common seal for the time being of the Company. “SEBI” means the Securities and Exchange Board of India, established under the Securities and Exchange Board of India Act, 1992. “Securities” shall have the meaning ascribed to it under Section 2(h) of the Securities Contracts (Regulation) Act, 1956. “Shares” means the Equity Shares and Preference Shares and any other form of security of the Company convertible into Equity share or preference share of the Company. “Shareholder” or “Shareholders” shall mean any Person who holds Shares. “Share Subscription Agreement” means the share subscription agreement dated 27 June 2011 entered into between the Investor, the Promoters, the Company and KLK. “Subscription Shares” shall mean 65,58,065 (sixty five lakh fifty eight thousand sixty five) Equity Shares issued and allotted by the Company to the Investor on a preferential basis, governed by the terms ofthe Share Subscription Agreement. “Termination Price” means the lower of:

(a) average of the weekly high and low of the closing prices of the Equity Shares quoted on the recognised stock exchange during the six months preceding the date of issue of the Default Notice; or

(b) the average of the weekly high and low of the closing prices of the Equity Shares quoted on a recognised

stock exchange during the two weeks preceding the date of issue of the Default Notice. “Takeover Code” means the Securities and Exchange Board of India (Substantial Acquisitions of Shares and Takeovers) Regulations, 1997, including any amendments, modifications, deletions, exemptions or clarifications thereto from time to time, made by the SEBI or any other appropriate authority. “Transfer” shall mean the sale, gift, exchange, assignment, transfer, transfer in trust, alienation, Encumbrance or disposition of any Shares, or any rights therein or afforded thereby, in any manner whatsoever, or entering into any contract or agreement to do any of the foregoing, voluntarily or involuntarily, including, without limitation,


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any transfer by operation of law or otherwise. “Transaction Documents” means the Agreement, the Share Subscription Agreement, and all agreements contemplated under the Agreement entered into, inter alia, by the Investor, Company and the Promoters. “Year” means the calendar year. “In writing” and “written” include printing lithography and other modes of representing or reproducing words in a visible form. Words importing the masculine gender also include the feminine gender. Words importing the singular number include, where the context admits or requires, the plural number and vice versa. All references in these Articles to statutory provisions shall be construed as meaning and including references to: (i) Any statutory modification, consolidation or re-enactment for the time being in force; and (ii) All statutory instruments or orders made pursuant to a statutory provision. The words “include” and “including” are to be construed without limitation. Save as aforesaid, any words or expressions defined in the Act, shall, if not inconsistent with the subject and context, bear the same meaning in these Articles

CAPITAL AND INCREASE AND REDUCTION OF CAPITAL 3. The Authorized Share Capital of the Company is ` 50,00,00,000 (Rupees Fifty crores) divided into 3,20,00,000

(Three Crores Twenty Lacs) Equity shares of ` 10 (Rupees Ten) each and 18,00,000 (Eighteen Lacs) preference shares of ` 100 (Rupees 100) each.

4. Subject to the provisions of these Articles, the Company in general meeting may, from time to time, increase the

capital by the creation of new shares, such increase to be of such aggregate amount to be divided into shares of such respective amounts as the resolution shall prescribe, subject to the provisions of the Act, any shares of the original or increased capital shall be issued upon such terms and conditions, and with such rights and privileges annexed thereto, as the general meeting upon the creation thereof, shall direct and if no direction be 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 right of voting at general meetings of the Company in conformity with Section 87 and 88 of the Act. Whenever the capital of the Company has been increased under the provisions of this article, the directors shall comply with the provisions of section 97 of the Act.

5. Except so far as otherwise provided by the conditions of issue or by these presents, any capital raised by the creation

of new Shares shall be considered as part of existing Capital, and shall be subject to the provisions herein contained, with reference to the payment of calls and installments, forfeiture, lien, surrender, transfer and transmission, voting and otherwise.

6. Subject to the provision of these Articles and subject to the provisions of Section 80 of the Act, the Company shall

have the power to issue Preference Shares which are, or at option of the Company are to be liable, to be redeemed on or within the expiry of period of ten years from the date of issue and the Resolution authorizing such issue shall prescribe the manner, terms and conditions of redemption.

7. On the issue of Preference Shares under the provision of Article 6 hereof the following provisions shall take effect:

(a) no such shares shall be redeemed except out of the profits of the Company which would otherwise be available for dividend or out of the proceeds of a fresh issue of Shares made for the redemption.

(b) no such shares shall be redeemed unless they are fully paid.

(c) the premium, if any, payable on redemption must have been provided for out of the profits of the Company or


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the Company's Share Premium Account before the Preference Shares are redeemed.

(d) Where any such Preference Shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall, out of the profits which would otherwise have been available for dividend, be transferred to a reserve fund to be called the “Capital Redemption Reserve Account” a sum equal to the nominal amount of the Preference Shares redeemed and the provisions of the Act relating to the reduction, of the Share Capital of the Company shall, except as provided in Section 80 of the Act, apply as if the Capital Redemption Reserve Account were paid-up Share Capital of the Company.

8. Subject to the provision of these articles, the Company may (subject to the provisions of Sections 78, 80, and 100 to

104 of the Act) from time to time by special resolution reduce its capital and any capital redemption reserve account or share premium account in any manner for the time being authorized by law, and in particular capital may be paid off on footing that it may be called up again or otherwise.

9. Subject to the provision of these articles and subject to the provisions of Section 94 of the Act, the Company in a

general meeting, may, from time to time, sub-divide or consolidate its shares, or any of them and the resolution whereby any share is sub-divided, may determine that, as between the holders of the shares resulting from such sub division one or more of such shares shall have some preference or capital advantage as regards dividend, capital or otherwise over or as compared with the others or other. Subject as aforesaid, the Company in a general meeting may also cancel shares which have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.

(9A) The Company shall be entitled to treat the Person whose name appears on the Register of Members as the holder of

any Shares or other securities and whose name appear as the beneficial owner of shares or other Securities in the records of Depository, as the absolute owner thereof.

10. Whenever the capital, by reason of the issue of Preference Shares or otherwise, is divided into different classes of

shares, all or any of the rights and privileges attached to each class may subject to the provisions of section 106 and 107 of the Act be modified, commuted, effected or abrogated, or dealt with by agreement between the Company and any person purporting to contract on behalf of that class, provided such agreement is ratified in writing by the holders of at least three-fourths in nominal value of the issued shares of the class or is confirmed by a special resolution passed at a separate general meeting of the holders of shares of that class.

CAPITAL RAISING 11. Subject to the provisions of these Articles, the parties agree that there is a requirement to infuse further capital in the

Company, which shall be undertaken by such measures as may be directed by the investor (Mahindra & Mahindra Limited) from time to time including but not limited to rights issue, preferential allotment or any other form of future capital raising by way of debt or equity.

12. The Promoters shall for a period of upto 360 (three hundred and sixty) days from 9 February 2011 or for such

extended period as may be mutually agreed between the Parties, not object or take any action that may restrain and/ or restrict

(i) the ability of the Investor (Mahindra and Mahindra Limited) to reach at least: (a) 51% of the total paid up

equity share capital of the Company; or (b) 52% of the total paid up equity share capital of the Company (if upon acquisition of the Subscription Shares and the closure of the Public Offer, the Investor’s shareholding is greater than 51% of the total paid up equity share capital of the Company); or

(ii) organic and/ or inorganic growth of the Company.

13. Subject to Article 12, the Company will require funds to finance capex and/or working capital requirements for which it may require to raise funds through debt and/ or equity issuance from time to time. Each of the Promoters agree and unconditionally undertake that they shall not and shall cause their Affiliates, directors, officers, managers, partners, members, agents and employees not to, directly or indirectly:

(a) subscribe to any future equity/ convertible securities issuances by the Company; (b) acquire any additional voting rights in the Company either through primary issuance of Shares by the Company,


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if any, or through secondary markets (other than as contemplated under Article 70); or (c) assign / transfer any rights, entitlements or accretions with respect to or in connection with its

Shares/convertible securities to any Person except the Investor, as and when required by the Investor.

SHARES AND CERTIFICATES 14. The Company shall cause to be kept a Register and Index of Members in accordance with Sections 150 and 151 of

the Act. The Company shall be entitled to keep in any state or country outside India a branch Register of Members resident in that state or country.

15. The Shares in the Capital shall be numbered progressively according to their several denominations, and except in the

manner hereinbefore mentioned no Share shall be sub-divided. Every forfeited or surrendered Share shall continue to bear the number by which the same was originally distinguished.

16.

(a) Subject to the provisions of these Articles, the Company may:- (i) by a Special Resolution; or (ii) Where no such Special Resolution is passed, if the votes cast (whether on a show of hands, or on a poll, as

the case may be) in favour of the proposals contained in the Resolution moved in that general meeting (including the casting vote if any, of the Chairman) be members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any cast, against the proposal by members so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf, that the proposal is most beneficial to the Company, offer further Shares to any person or persons, and such person or persons may or may not include the persons who at the date of the offer, are the holder of the Equity Shares of the Company.

(b) Subject however, to Section 81(3) of the Act and the other Articles, the Company may increase its subscribed Capital on exercise of an option attached to the debentures issued or loans raised by the Company to convert such debentures or loans into Shares, or to subscribe for Shares in the Company.

17. Subject to the provisions of these Articles and of the Act, the Shares shall be under the control of the Board, who

may allot or otherwise dispose of the same to such persons on such terms and conditions and at such times as the Board think fit with full power, subject to the sanction of the Company in general Meeting, to give any persons the option to call for or be allotted Shares of any class of the Company either (subject to the provisions of Section 78 and 79 of the Act) at a premium or at a discount and such option being exercisable for such time and for such consideration as the Directors think fit. The Board shall cause to be filed the returns as to allotment provided for in Section 75 of the Act.

18. In addition to and without derogating from the powers for that purpose conferred on the Board under Articles 16 and

17, the Company in General Meeting may, subject to the provision of Section 81 of the Act and the other provisions of these Articles, determine that any Shares (whether forming part of the original Capital or of any increased Capital of the Company) shall be offered to such persons (whether Members or not) in such proportion and on such terms and conditions and either (subject to compliance with provisions of Section 78 and 79 of the Act) and at premium or at par or at a discount, as such General Meeting shall determine and with full power to give any person (whether a Member or not) the option to call for or be allotted Shares of any class of the Company either (subject to compliance with the provisions of Section 78 and 79 of the Act) at a premium or at par or at discount, such option being exercisable at such times and for such consideration as may be directed by such General Meeting or the Company in General Meeting may subject to the other provisions of these Articles make any other provision whatsoever for the issue, allotment or disposal of any Shares.

18A. Subject to the other provisions of these Articles, the Company may issue warrants, options or other documents

entitling the holders thereof to subscribe to and be allotted Equity Shares, debentures and/or other Securities of the Company at such price and on such terms and conditions as may be determined by the Board from time to time.

19. Any application signed by or on behalf of an applicant for Shares in the Company, followed by an allotment of any

Share therein, shall be an acceptance of Shares within the meaning of these Articles, and every person who thus or otherwise accept any Shares and whose name is on the Register shall, for the purpose of these Articles, be a


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Member. 20. The money (if any) which the Board shall, on the allotment of any Shares being made by them, require or direct to be

paid by way of deposit, call or otherwise, in respect of any Shares allotted by them, shall immediately on the inscription of the name of the allottee in the Register of Members as the name of the holder of such Shares, become a debt due to and recoverable by the Company from the allottee thereof, and shall be paid by him accordingly.

21. Every Member or his heirs, executors or administrators shall pay to the Company the portion of the Capital

represented by his Shares which may, for the time being remain unpaid thereon, in such amounts, at such time or times, and in such manner as the Board shall, from time to time in accordance with the Company's regulations, require or fix for the payment thereof.

22.

(a) Every Member or allottee of Shares shall be entitled without payment, to receive one certificate specifying the name of the person in whose favour it is issued, the Shares to which it relates and the amount paid-up thereon. Such certificates shall be issued only in pursuance of a resolution passed by the Board or a committee thereof and on surrender to the Company of its letter of allotment or its fractional coupons of requisite value, save in cases of issues against letters of acceptance or of renunciation in cases of issue of bonus Shares. Every such certificate shall be issued under the seal of the Company, which shall be affixed in the presence of two Directors or persons acting on behalf of the Directors under a duly registered power of attorney and the Secretary or some other person appointed by the Board for the purpose, and two Directors or their attorneys and the Secretary or other person shall sign the Share certificate, provided that if the composition of the Board permits of it, at least one of the aforesaid two Directors shall be a person other than a Managing or a whole-time Director. Particulars on every Share certificate issued shall be entered in the register of Members against the name of the person to whom it has been issued, including the date of issue.

(b) Any two or more joint allottees of a Share shall for the Purpose of this Article, be treated as a single member,

and the certificate of any Share, which may be subject of joint ownership, may be delivered to any one of such joint owners on behalf of them. For any further Certificate the Board shall be entitled, but shall not be bound, to prescribe a charge not exceeding Rupee one. The Company shall comply with the provisions of Section 113 of the Act.

(c) A Director may sign a Share certificate by affixing his signature thereon by means of any machines, equipment

or other mechanical means, such as engraving in metal or lithography, but not by means of a rubber stamp, provided that the Director shall be responsible for the safe custody of such machine, equipment or other material used for the purpose.

(d) The Company shall be entitled to charge such sum as the Board may decide for issuing certificates of Shares in

numbers other than the marketable lot.

23.

(a) No certificate of any Shares shall be issued either in exchange for those which are subdivided or consolidated or in replacement of those which are defaced, torn or old, decrepit, worn out or where the cases on the reverse for recording transfers have been duly utilized, unless the certificate in lieu of which it is issued is surrendered to the Company. The Company shall be entitled to charge such fee not exceeding Rupees Two per certificate, issued on splitting or consolidation of Share certificates or any replacement of Share certificates that are torn or defaced, as the Board think fit.

(b) When a new Share certificate has been issued in pursuance of clause (a) of this Article, it shall state on the face

of it and against the stub or counterfoil to the effect that it is “it issued in lieu of Share Certificate No. Subdivided/replaced/on consolidation of Shares”.

(c) If a Share certificate is lost or destroyed, a new Certificate in lieu thereof shall be issued only with the prior consent of the Board and on payment of such fee, not exceeding Rupees two as the Board may from time to


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time fix, and on such terms, if any, as to evidence and indemnity as to the payment of out-of-pocket expenses incurred by the Company in investigating evidence, as the Board thinks fit.

(d) When a new Share certificate has been issued in pursuance of clause (c) of this Article, it shall state on the face of it and against the stub or counterfoil to the effect that it is “Duplicate issued in lieu of Share Certificate No. “The word “Duplicate” shall be stamped or punched in bold letters across the face of the Share certificate.

(e) Where a new Share certificate has been issued in pursuance of clause (a) or clause (c) of this Article, particulars

of every such share certificate shall be entered in a Register of Renewed and Duplicate Certificates indicating against the names of the persons to whom the certificate is issued. The number and date of issue of the Share certificate in lieu of which the new certificate is issued, and the necessary charges indicated in the Register of Members by suitable cross reference in the “Remarks” column.

(f) All blank forms to be issued for issue of Share certificate shall be printed and the printing shall be done only on

the authority of a resolution of the Board. The blank forms shall be consecutively machine numbered and the forms and the blocks, engravings, facsimiles and hues relating to the printing of such forms shall be kept in the custody of the Secretary or of such other person as the Board may appoint for the purpose.

(g) The Managing Director of the Company for the time being, or, if the Company has no Managing Director, every

Director of the Company shall be responsible for maintenance, preservation and safe custody of all books and documents relating to the issue of Share certificates except the blank forms of Share certificates referred to in sub- Article (f).

(h) All books referred to in sub-Article (g) shall be preserved in good order permanently.

23 (A)

(a) Notwithstanding anything contained in these Articles, the Company shall be entitled to dematerialize its Securities and to offer Securities in a dematerialized form pursuant to Depositories Act and the rules framed thereunder.

(b) All Securities held by a Depository shall be dematerialized and shall be in fungible form. (c) Nothing contained in Sections 153,153 A, 153B, 187B and 187C of the Act shall apply to a Depository in

respect of the Securities held by it on behalf of the Beneficial Owners. (d) Section 83 of the Act shall not to apply to Securities held with a Depository. (e) Nothing contained in the Act or these Articles regarding the necessity of having distinctive number for Securities

issued by the Company shall apply to Securities held in a depository. (f) Every person subscribing to Securities offered by the Company shall have the option to receive the Security

certificates or hold Securities held with a Depository. (g) Where a person opts to hold a Security with a Depository, the Company shall intimate such depository the

details of allotment of the Security, and on receipt of such information the depository shall enter in its record the name of the allottee as the Beneficial Owner of that Security.

(h) Notwithstanding anything to the contrary contained in these Articles, a Depository shall be deemed to be

registered owner for the purposes of effecting transfer of ownership of Security on behalf of a Beneficial Owner.

(i) Save as otherwise provided in the Article above, the Depository as registered owner shall not have any voting

rights or any other rights in respect of Securities held by it.


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(j) Every person holding Securities of the Company and whose name is entered as Beneficial Owner in the records of the Depository shall be deemed to be a Member of the Company. The Beneficial Owner shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of his Securities held by a Depository.

(k) Every Depository shall furnish to the Company information about the transfer of Securities in the name of the

Beneficial Owners at such intervals and in such manner as may be specified by the bye-laws and the Company in that behalf.

(l) Notwithstanding anything to the contrary contained in the Articles, where Securities are held in a Depository,

the records of beneficial ownership may be served by such Depository on the Company by means of electronic mode or by delivery of floppies or discs.

(m) If a Beneficial Owner seeks to opt out of a Depository in respect of any Security, he shall inform the

Depository accordingly. The Depository shall on receipt of such intimation make appropriate entries in its records and shall inform the Company. The Company shall, within (30) days of the receipt of intimation from a Depository and on fulfillment of such conditions and on payment of such fees as may be specified by the Regulations, issue the certificates of Securities to the Beneficial Owner or the transferee as the case may be.

24

(a) If any Share stands in the names of two or more persons, the persons first named in the Register of Members shall as regards receipts of dividends or bonus or service of notices and all or any other matter connected with the Company, except voting at meeting, and the transfer of the Shares, be deemed the sole holder thereof but the joint-holders of a Share shall be severally as well as jointly liable for the payment of all installments and calls due in respect of such Share and for all incidents thereof according to the Company's regulations.

(b) The Company shall be entitled to decline to register more than four persons the holders of any Share.

25. Except as ordered by a Court of competent jurisdiction or as by law required, the Company shall not be bound to

recognize any equitable contingent, future or partial interest in any Share of (except only as is by these Articles otherwise expressly provided) any right in respect of a Share other than an absolute right thereto, in accordance with these Articles, in the person from time to time registered as the holder thereof, but the Board shall be at liberty at their sole discretion to register any Share in the joint names of any two or more persons or the survivor or survivors of them.

26A.Nothing contained in Section 108 of the Act, shall apply to transfer of securities effected by the transferor and the

transferee both of whom are entered as Beneficial Owner in the record of the Company. 26B.

(a) Every shareholder of the Company, may at any time nominate, in the prescribed manner, a person to whom his shares in the Company, shall vest in the event of his death.

(b) Where the shares in the Company are held by more than one person jointly, the joint holders may together

nominate, in the prescribed manner, a person to whom all the rights in the shares in the Company, shall vest in the event of death of all the joint holders.

(c) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether

testamentary or otherwise, in respect of such shares in the Company, where a nomination made in the prescribed manner purports to confer on any person the right to vest the shares in the Company, the nominee shall, on the death of the shareholder or as the case may be, on the death of the joint holders become entitled to all the rights in such shares, to the exclusion of all other persons unless the nomination is varied or cancelled in the prescribed manner.

(d) Where the nominee is a minor, it shall be lawful for the holder of the shares, to make the nomination to


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appoint, in the prescribed manner, any person to become entitled to shares in the Company, in the event of his death, during the minority.

(e) A nominee may upon production of such evidence as may be required by the Board and the subject as

hereinafter provided, elect, either to be registered himself as holder of the share; or to make such transfer of the share as the deceased shareholder, could have made.

(f) If the nominee elects to be registered as holder of the share himself, he shall deliver or send to the Company, a

notice in writing signed by him stating that he so elects and such notice shall be accompanied with the death certificate of the deceased shareholder.

(g) A nominee shall be entitled to the same dividends and other advantages to which he would be entitled to, if he

were the registered holder of the share except that he shall not, before being registered as a member in respect of his share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company/Provided further that the Board may, at any time, give notice requiring any such person to elect either to be registered himself or to transfer the share and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable or rights accruing in respect of the share, until the requirements of the notice have been complied with.

CALLS

29. The Board may, from time to time, subject to the terms on which any Shares may have been issued and subject to the

conditions of allotment, by a Resolution passed at a Meeting of the Board (and not by circular resolution) make such calls as it thinks fit upon the Members in respect of all moneys unpaid on the Shares held by them respectively and each member shall pay the amount of every call so made on him to the person or persons and at the times and places appointed by the Board. A call may be made payable by installments.

30. Not less than fifteen days' notice in writing of any call shall be given by the Company specifying the time and place

of payment and the person or persons to whom such call shall be paid. 31. A call shall be deemed to have been made at the time when the resolution authorizing such call was passed at a

meeting of the Board. 32. A call may be revoked or postponed at the discretion of the Board. 33. The joint-holders of a Share shall be jointly and severally liable to pay all calls in respect thereof. 34. The Board may, from time to time at its discretion, extend the time fixed for the payment of any call and may extend

such time as to all or any of the Members the Board may deem fairly entitled to such extension but no Member shall be entitled to such extension save as a matter of grace and favour.

35. If any Member fails to pay any call due from him on the day appointed for payment thereof, or any such extension

thereof as aforesaid, he shall be liable to pay interest on the same from the day appointed for the payment thereof to the time of actual payment at such rate as shall from time to time be fixed by the Board but nothing in this Article shall render it obligatory for the Board to demand or recover any interest from such Member.

36. Any sum, which by the terms of issue of a Share and/or partly or fully convertible bond or debenture becomes

payable on allotment or at any fixed date, whether on account of the nominal value of the Share, bond or debenture or by way of premium, shall for the purposes of these Articles be deemed to be call duly made and payable on the date on which by the terms of issue the same becomes payable, and in case of non-payment all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

37. On the trial or hearing of any action or suit brought by the Company against any Member or his representatives for

the recovery of any money claimed to be due to the Company in respect of his Shares, bonds, debentures, it shall be sufficient to prove that the name of the Member in respect of whose shares, bonds or debentures the money is sought


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to be recovered appears entered on the Register of Members or debenture-holders, as the holder, at or subsequently to the date at which the money sought to be recovered is alleged to have become due on the shares, bonds or debentures in respect of which such money is sought to be recovered that the Resolution making the calls is duly recorded in the Minute Book and that notice of such call was duly given to the Member or his representatives sued in pursuance of these Articles and that it shall not be necessary to prove the appointment of the Directors who made such call nor that a quorum of Directors was present at the Board at which a call was made nor that the meeting at which any call was made, was duly convened or constituted nor any other matters whatsoever, but the proof of the matter aforesaid shall be conclusive of the debt.

38. Neither the receipt by the Company of portion of any money which shall from time to time be due from any other

Member to the Company in respect of his Shares, bonds or debentures, either by way of principal or interest, nor any indulgence granted by the Company in respect of the payment of any such money, shall preclude the Company from thereafter proceeding to enforce a forfeiture of such Shares, bonds or debentures as here in after provided.

39. 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 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 any 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 shall not confer a right to dividend or to participate in profits.

LIEN 40. 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) and upon the proceeds of sale thereof, for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such Shares/debentures, and no equitable interest in any Share/debenture shall be created except upon the footing and upon the condition that Article 23 hereof is to have full effect. Any such lien shall extend to all dividends and bonuses from time to time declared in respect of such Shares/debentures. Unless otherwise agreed, the registration of a transfer of Shares shall operate as a waiver of the Company's lien, if any, on such Shares.

41. For the purpose of enforcing such lien, the Board may sell the Shares subject thereto in such manner as they shall

think fit, and for that purpose may cause to be issued a duplicate Certificate in respect of such Shares/debentures and may authorize one of their member to execute a transfer thereof on behalf of and in the name of such member. No sale shall be made until such period as aforesaid shall have arrived, and until notice in writing of the intention to sell shall have arrived, and until notice in writing of the intention to sell shall have been served on such Member or his representatives and default shall have been made by him or them in payment, fulfillment, or discharge of such debts, liabilities or engagements for fourteen days after such notice.

42. The net proceeds of any such sale shall be received by the Company and applied in or towards payment of such part

of the amount in respect of which the lien exists as is presently payable and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the Shares/debentures before the sale) be paid to the persons entitled to the Shares/debentures at the date of sale.

FORFEITURE OF SHARES 43. If any member fails to pay any call or installment of a call on of before the day appointed for the payment of the same

or any such extension thereof as aforesaid, the Board may at any time thereafter, during such times as the call or installment remains unpaid, give notice to him to pay the same together with any interest that have been accrued and all expenses that may have been incurred by the Company by reason of non-payment.

44. The notice shall name a day (not being less than fourteen days from the date of the notice) and a place or places on

and which such call or installment and such interest thereon at such rate not exceeding 18 percent per annum as the Board shall determine from the day on which such call or installment ought to have been paid and expenses as aforesaid are to be paid. The notice shall also state that, in the event of the non-payment at or before the time and at the place appointed the Shares in respect of which the call was made or installment is payable, will be liable to be forfeited.


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45. If the requirements of any such notice as aforesaid shall not be complied with, every or any Share in respect or which such notice has been given, may at any time thereafter before payment of all calls or installments, interest, thereof, be forfeited by a Resolution of the Board to that effect. Such forfeiture shall include all dividends declared or any other moneys payable in respect of the forfeited Shares and not actually paid before the forfeiture.

46. When any Share shall have been so forfeited notice of the forfeiture shall be given to the member in whose name it

stood immediately prior to the forfeiture, and an entry of the forfeiture, with the date thereof, shall forthwith be made in the Register of Members, but no forfeiture shall be in any manner invalidated by any commission or neglect to give such notice or to make any such entry as aforesaid.

47. Any Share so forfeited shall be deemed to be the property of the Company, and may be sold, re- allotted, or otherwise

disposed off, either to the original holder thereof or to any other person upon such terms and in such manner as the Board shall think fit.

48. Any Member whose Shares have been forfeited shall notwithstanding the forfeiture, be liable to pay and shall

forthwith pay to the Company, on demand all calls, installments, interest and expenses owing upon or in respect of such Shares at the time of the forfeiture, together with interest thereon from the time of the forfeiture until payment, at such rate not exceeding 18 per cent per annum as the Board may determine and the Board may enforce the payment thereof if it thinks fit.

49. The forfeiture of a Share shall involve extinction, at the time of the forfeiture, of all interest in and all claims and

demands against the Company, in respect of the Share and all other rights incidental to the Shares, except only such of these Articles are expressly saved.

50. A declaration in writing that the declarer is a Director or Secretary of the Company and that a Share in the Company

has been duly forfeited in accordance with these Articles on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the Shares.

51. Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers herein before given, the

Board may appoint some person to execute an instrument of transfer of the Shares sold and cause the purchaser's name to be entered in the Register in respect of the Shares sold, and the purchaser shall not be bound to see to the regularity of the proceedings or to the application of the purchase money, and after his name has been entered in the Register in respect of such shares, the validity of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

52. Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate or

certificates originally issued in respect of the relevant shares shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting member) stand cancelled and become null and void and of no effect, and the directors shall be entitled to issue a new certificate or certificates in respect of the said Shares to the person or persons entitled thereto. The Board may at any time before any Share so forfeited shall have been sold, re-allotted or otherwise disposed off, annul the forfeiture thereof upon such conditions as it thinks fit.

TRANSFER AND TRANSMISSION OF SHARES 53. The Company shall keep a “Register of transfers, and therein shall be fairly and distinctly entered particulars of every

transfer or transaction of any nature. 54. Shares in the Company may be transferred by an instrument in writing in the form prescribed by the Act and shall be

duly stamped and delivered to the Company within the prescribed period. 55. The instrument of transfer duly stamped and executed by the transferor and the transferee shall be delivered to the

Company in accordance with the provisions of the Act. 56. The instrument of Transfer shall be accompanied by such evidence as the Board may require to prove the title of

transfer and his right to transfer the Shares and every registered instrument of Transfer shall remain in the custody of the Company until destroyed by the order of the Board in accordance with the law. The transferor shall be deemed to be the holder of such Shares until the name of the transferee shall have been entered in the Register of Members in respect thereof. Before the registration of a transfer, the certificate or certificates of Shares must be delivered to the Company.


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57. The Board shall have power on not giving less than seven day's previous notice by advertisement in some newspapers circulating in the district in which the office of the Company is situate to close the Transfer Books, the Register of Members or Register of Debenture-holders at such time or times and for such period or periods, not exceeding thirty days at a time and not exceeding in the aggregate forty-five days in each year.

58. Subject to the provisions of Section 111 of the Act and Section 22A of the Securities Contract (Regulations) Act,

1956, the Board may in their own absolute and uncontrolled discretion and without assigning any reasons or grounds decline or register or acknowledge any transfer of Shares or debentures or any other scrip or Security whether fully paid or not, (notwithstanding that the proposed transferee be already a Member) but in such cases, the Directors shall, within one month from the date on which the instrument of Transfer was lodged with the Company, send to the transferee and the transferor notice of the refusal to register such Transfer provided that the registration of a Transfer shall not be refused on the ground that the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except a lien on Shares.

59. Where, in the case of partly-paid Shares, an application for registration is made by the transferor, the Company shall

give notice of the application to the transferee in accordance with the provisions of Section 110 of the Act. 60. In the case of the death of any one or more of the persons named in the Register of Members as the joint-holders of

any Share, the survivor or survivors shall be the only persons recognized by the Company as having any title or interest in such Share, but nothing herein contained shall be taken to release the estate of a deceased joint- holder from any liability on Shares held by him jointly with any other person. The executors or administrators or holders of a succession certificate or the legal representatives of a deceased member (not being one or two or more joint-holders) shall be the only person recognized by the Company as having any title to the Shares registered in the name of such members, and the Company shall not be bound to recognize such executors or administrators or holders of a succession certificate or the legal representatives unless such executors or administrators or legal representatives shall have first obtained probate or letters of administration or succession certificate, as the case may be from a duly constituted Court in the Union of India; provided that in any case where in its absolute discretion thinks fit, the Board may dispense with the production of probate or letters of administration or succession certificate, upon such terms as to indemnity or otherwise as the Board in its absolute discretion may think necessary and under Article 64 register the name of any person who claims to be absolutely entitled to the Shares standing in the name of a deceased Member as a Member.

61. No Share shall in any circumstances be transferred to any minor, insolvent or person of unsound mind. 62. If any Member of the Company dies, and the Company through any of its Principal Officers within the meaning of

the Estate Duty Act, 1953, has knowledge of the death, it shall not be lawful for the Company to register the transfer of any Shares standing in the name of the deceased member unless the Company is satisfied that the transferee has acquired such Shares for valuable consideration or there is produced to it a Certificate from the Controller, Deputy Controller, or Assistant Controller of Estate Duty that either the Estate Duty in respect thereof has been paid or will be paid or none is due as the case may be. Where the Company has come to know through any of its Principal Officers of the death of any member, the Company shall, within three months of the receipt of such knowledge, furnish to the Assistant Controller or the Deputy Controller of Estate Duty who is exercising the functions of the Income-tax Officer under the Income-tax Act in relation to the Company, such particulars as may be prescribed by the Estate Duty Rules, 1953.

63. Subject to the provisions of these Articles, any person becoming entitled to Shares in consequence of the death,

lunacy, bankruptcy or insolvency of any Member, or by any lawful means other than by a transfer in accordance with these Articles, may, with the consent of the Board (which it shall not be under any obligation to give), and subject to the other provisions of these Articles, upon producing such evidence that he sustain the character in respect of which he proposes to act under this Article or of such title as the Board thinks sufficient, either he registered himself as the holder of the Shares or elect to have some person nominated by him and approved by the Board registered as such holder, provided nevertheless, that if such person shall elect to have his nominee registered he shall testify the election by executing in favour of his nominee in instrument of transfer in accordance with the provisions herein contained and until he does so, he shall not be freed from any liability in respect of the Share.

64. Subject to the provisions of these Articles, a person entitled to a Share by transmission shall, subject to the right of

the Directors to retain such dividends or money as hereinafter provided be entitled to receive and may give a discharge for any dividends as other money payable in respect of the Share.


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65. There shall be paid to the Company in respect of the transfer or transmission of any number of Shares to the same party, such fee, if any, as the Directors may require.

66. The Company shall incur no liability or responsibility whatsoever in accordance of its registering or giving effect to

any transfer of Shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the Register of Members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the said Shares, notwithstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer and may have entered such notice or referred thereto in any book of the Company, and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right, title or interest, or be under any liability whatsoever for refusing or neglecting so to do, though it may have been entered or referred to in some book of the Company, but the Company shall nevertheless be at liberty to regard and attend any such notice and give effect thereto if the Board shall so think fit

68. For a period of 42 months commencing from 9 February 2011, the Promoters shall not, directly or indirectly, Transfer

the Shares held by it (including by way of tendering any of their Shares in the open offer triggered by the Investor on account of the execution of the Transaction Documents) save and except for the following:

(a) the Promoters can Transfer upto 50% of the Equity Shares held by it on the Execution Date upon expiry of 18

months from 9 February 2011; (b) the Promoters can Transfer upto 75% of the Equity Shares held by it on the Execution Date upon expiry of 30

months from 9 February 2011; and (c) the Promoters can Transfer 100% of the Equity Shares held by it on the Execution Date upon expiry of 42

months from 9 February 2011. 69. Notwithstanding anything to the contrary contained in these Articles, the Investor shall be entitled at all times to

freely Transfer any or all of the Shares held by it to any Person, including an Affiliate of the Investor or a Competitor. In the event the Investor Transfers any Shares held by it, the Investor shall have the right to assign in full or in part all rights attached to those Shares (as are available to the Investor) under these Articles to the proposed transferee. During the restricted period of Transfer under Article 68 above, it is further agreed between the Parties that the Promoters shall be entitled to effect an inter se Transfer of Shares held by them subject to a prior written approval from the Investor.

NO SALE PERIOD 70. In case of any inadvertent breach of Article 68 hereof by the Promoters (to the extent of Transfer of 50,000 Equity

Shares of the Company) (the Promoters in breach, are hereinafter referred to as a “Defaulting Party”), the Defaulting Party shall have a period of 10 (Ten) Business Days to effect a purchase of number of shares as were transferred inadvertently, failing which the Investor shall have the option to require the Defaulting Party committing the act/ omission causing termination, by giving notice in writing (such notice, hereinafter, “Default Notice”), to sell to the Investor or any Person nominated by it, such number of Equity Shares held by the Defaulting Party and its Affiliates equivalent to the number of Equity Shares that have been Transferred by it or its Affiliates in breach of their respective obligations (hereinafter referred to as “Sale Shares”) at a discount of 20% to the lowest prevailing market price in respect of the Company’s Equity Shares on the date on which such Sale Shares were Transferred. In such an event, the Defaulting Party shall be obliged and hereby unconditionally agrees to sell and cause its Affiliates to sell all the Sale Shares held by it, its Affiliates and nominees at the aforesaid price to the Investor or any Person nominated by the Investor within 3 (Three) Business Days from the date of receipt of Default Notice. It is hereby clarified that this Article shall be applicable to an inadvertent sale of 50,000 Equity Shares by the Promoters, on a cumulative basis.

71. Subject to Article 70 above, in case of any breach of Article 68 hereof by the Promoters (the Promoters in breach of

Article 68, are hereinafter referred to as a “Defaulting Party”), without prejudice to any other rights and remedies available to the Investor under Law or equity or any other Transaction Documents, Investor shall have the option to require the Defaulting Party committing the act/ omission causing termination, by giving notice in writing (such notice, hereinafter, “Default Notice”), to sell to the Investor or any Person nominated by it, any or all the Shares held by the Defaulting Party and its Affiliates (such any or all Shares, as specified in the Default Notice, are hereinafter


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referred to as “Default Sale Shares”) at a discount of 20% to the Termination Price (such discounted Termination Price, hereinafter, “Discounted Termination Price”). In such an event, the Defaulting Party shall be obliged and hereby unconditionally agrees to sell and cause its Affiliates to sell all the Default Sale Shares held by it, its Affiliates and nominees at a price of Discounted Termination Price per Share to the Investor or any Person nominated by the Investor within 3 (three) Business Days from the date of receipt of Default notice.

72. Pre-emption Right

(a) After any action taken under Article 12 and subject to the provisions of (i) Article 68 and (iii) Article 72(f), if the Promoters (including their Affiliates; who shall be deemed to constitute one group for the purposes of this Article) (“Offeror”) propose to make a Transfer of Shares, the Offeror shall send a written notice (“Option Notice”) informing the Investor (“Offeree”), of all the terms and conditions of such Transfer of Shares, including the number of Shares proposed to be Transferred (“Option Equity Securities”) and the price per Option Equity Securities at which they are proposed to be sold, which price shall not be higher than prevailing market price of the Shares of the Company on the Bombay Stock Exchange on the date of the Option Notice. Subject to the terms of this Article, the Option Notice once made shall be irrevocable. (b) Election Notice. Within 3 (Three) Business Days from the date of receipt of the Option Notice (“Offeree Election Period”), the Offeree shall, if it desires to purchase the Option Equity Securities, provide written notice to the Offeror (“Offeree Election Notice”), to purchase the Option Equity Securities on the terms and conditions contained in the Option Notice. In the event that the Offeree fails to provide an Offeree Election Notice to the Offeror within the Offeree Election Period or provides a negative Offeree Election Notice rejecting the Option Equity Securities, the provisions of this Article shall be deemed waived by the Offeree and the Offeror may sell the Option Equity Securities to any third party (“Transferee”) on such terms that are no less favourable than those contained in the Option Notice. Such sale to the Transferee shall be on the stock exchange on an on market transaction basis within a period of 1 (One) Business Day from the earlier of (i) expiry of the Offeree Election Period, or (ii) upon a negative Offeree Election Notice being issued (“Free Transfer Period”). (c) Sale and Transfer to the Offeree. Upon the issuance of a positive Offeree Election Notice by the Offeree agreeing to purchase the Option Equity Securities, the Offeree shall be under an obligation to purchase the Option Equity Securities from the Offeror at such price and on the other terms and conditions as stated in the Option Notice and the Offeror shall be under an obligation to sell the Option Equity Securities to the Offeree. Such sale and transfer shall be completed within a period of 1 (One) Business Day from the date of the positive Offeree Election Notice. (d) Closing. At the closing of any purchase of Option Equity Securities by the Offeree instructing its depository participant to Transfer the Option Equity Securities in favour of the Offeree. Such Option Equity Securities shall be free and clear of any Encumbrance (other than those under these Articles, if any), and the Offeror shall so represent and warrant that it is the beneficial and legal owner of the Option Equity Securities. The Offeror shall not be required to make any other representations or warranties. Any Offeree purchasing the Option Equity Securities shall, simultaneously, deliver at such closing, payment in full of the consideration in accordance with the terms set forth in the Option Notice or the Offeree Election Notice, as the case may be, and any requisite transfer taxes. At such closing, all of the parties to the transaction shall execute such additional documents as may be necessary or appropriate to effect the sale of the Option Equity Securities to the Offeree. (e) Time Period. If the sale of the Option Equity Securities to a Transferee is not completed within the Free Transfer Period, as the case may be, then the provisions of this Article shall apply de novo to any sale of Equity Securities by an Offeror. (f) The provisions of this Article 72 shall cease to apply upon Investor’s shareholding in the Company being more than 51% of the total paid up equity share capital of the Company. For the purposes of this Article 72, “51% of the total paid up equity share capital of the Company” shall include Shares offered by the Promoters


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and rejected by the Investor whether by way of expiry of the Offeree Election Period, or upon a negative Offeree Election Notice being issued by the Investor.

73. The Transfers under Articles 67 to 74 shall be consummated on a spot delivery basis. 74. Notwithstanding anything to contrary contained herein, the Parties hereby agree that the Promoters shall not,

(a) knowingly Transfer any Shares held by them to a third party which is a Competitor when such transaction is conducted on a stock exchange, or

(b) Transfer any Shares held by them to a third party which is a Competitor in case of an off market transactions,

and if such Transfer is purported to be made, it shall be void and the Company shall not register any such Transfer of the Shares.

CONVERSION OF SHARES INTO STOCK AND RECONVERSION 81. The Company in General Meeting may convert any paid-up Shares into stock and when any Shares shall have been

converted into stock, the several holders of such stock may henceforth transfer their respective interest therein, or any part of such interest, in the manner and subject to the same regulation under which Shares from which the stock arise might have been transferred, if no such conversion had taken place, or as near thereto as circumstances will admit. The Company may at any time reconvert any stock into paid-up Shares of any denomination.

82. The holders of stock shall, according to the amount of stock held by them have the same rights, privileges and

advantages as regards dividends, voting at meetings of the Company, and other matters, as if they held the Shares from which the stock arose; but no such privilege or advantage (except participation in the dividends and profits of the Company and in the assets on winding-up) shall be conferred by an amount of stock which would not, if existing in Shares have conferred that privilege or advantage.

DIVIDENDS 156.The profits of the Company, subject to any special rights relating thereto created or authorized to be created by these

Articles and subject to the provisions of the Act and of these Articles, shall be divisible among the members in proportion to the amount of Capital paid-up or credited as paid- up on the Shares held by them respectively.

157. Company in General Meeting may declare dividends to be paid to members according to their respective rights but

no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

158. (1) 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 provision 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 these provisions and remaining undistributed or out of both provided that:

a) 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 the financial year, or out of the profits of any other previous financial year or years.

b) 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 case after providing for depreciation in accordance with the provisions of sub-section (2) of Section 205 of the Act or against both.


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c) Notwithstanding anything contained in sub-article (1) hereof no dividend shall be declared or paid by the Company for any financial year out of the profits of the Company for that year arrived at after providing for depreciation in accordance with the provisions of Section 205 of the Act, expect after the transfer to the reserves of the Company of such percentage of the profits for the year, not exceeding ten per cent, as may be prescribed for the time being by any rules made under the Act.

d) Nothing in sub-article (2) hereof shall be deemed to prohibit the voluntary transfer by the Company of a

higher percentage of its profits to the reserves in accordance with the Rules, any, made by the Central Government in this behalf under the Act.

159.No unclaimed or unpaid dividend shall be forfeited by the Board where a dividend has been declared by the

Company but has not been paid or claimed within 42 days from the date of the declaration to any Member entitled to the payment of the dividend, the Company shall, within 7 days from the date of expiry of the said period of 42 days, transfer the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted within the said period of 42 days, to a special account to be opened by the Company in that behalf in any Scheduled Bank, to be called “Unpaid Dividend Account of EPC INDUSTRIÉ LIMITED”.

160. In this Article, the expression “dividend which remains unpaid” shall mean any dividend, the warrant in respect

thereof has not been encashed or which has otherwise not been paid or claimed. 161. The Board may, from time to time, pay to the Members such interim dividend as in their judgement the position of

the Company justifies. 162. Where Capital is paid in advance of calls, such Capital may carry interest but shall not in respect thereof confer a

right in dividend or participate in profits. 163. 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 Share is issued on terms providing that it shall rank for dividend as from a particular date such Share shall rank for dividend accordingly.

164. Subject to the provisions of the Act, the Board may retain the dividends payable upon Shares in respect of which

any person is, under Article 64 entitled to become a Member, until such person shall become, in respect of such Shares or shall duly transfer the same.

165. Any one of the 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 other moneys payable in respect of Shares. 166. No member shall be entitled to receive payment of any interest or dividend in respect of his Share or Shares, whilst

any money may be due or owing from him to the Company in respect of such Share or Shares or otherwise howsoever, either alone or jointly with any other person or persons; and the Board may deduct from the interest or dividend payable to any Members all sums of money so due from him to the Company.

167. A transfer of Shares shall not pass the right of any dividend declared thereon before the registration of the transfer. 168. Unless otherwise directed any dividend may be paid by cheque or warrant or by payslip having the force of a cheque

or warrant sent through the post 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 in respect of the joint-holdings. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. The Company shall not be liable or responsible for any cheque or warrant or payslip lost in transmission, or for any dividend lost to the member or person entitled thereto by the forged endorsement of any cheque or warrant or the forged signature of any payslip or the fraudulent recovery of the dividend by any other means.

169. Any General Meeting declaring a dividend may on the recommendation of the Directors make a call on call on the

Members of such amounts as the meeting fixes, but so that the call on each Member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may, if so arranged between the Company and the Member, be set off against the calls.

170.


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(1) Subject to the provisions of these Articles, the Company in General Meeting may resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of the Reserve Fund, or any Capital Redemption Reserve Account or in the hands of the Company and available for dividend (or representing premiums received on the issue of Shares and standing to the credit of the Share Premium Account) be capitalised and distributed amongst such of the Shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportions on the footing that they become entitled thereto as Capital and that all or any part of such capitalised fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the Resolution may provide, any unissued Shares or debentures or debenture-stock of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued Shares or debentures or debenture-stock and that such distribution or payment shall be accepted by such share holders in full satisfaction of, their interest in the said capitalised sum be applied in the paying up of un-issued Shares to be issued to members of the Company as fully paid bonus Shares.

(2) Subject to the provisions of these Articles, a General Meeting may resolve that any surplus moneys arising from

the realisation of any Capital assets of the Company or any investments representing the same, or any other undistributed profits of the Company not subject to charge for income-tax be distributed among the Members on; the footing that they receive the same as Capital.

(3) For the purpose of giving effect to any Resolution under the preceding paragraphs of this Article the Board may

subject to the other provision of these Articles, settle any difficulty which may arise in regard to the distribution as it thinks expedient and in Particular may issue fractional Certificates, and may fix the value for distribution of any specific assets, and may determine that such cash payments shall be made to any members upon the footing of the value so fixed or that fraction of less value than ` 10/- may be disregarded in order to adjust the rights of all parties, and may vest any such cash or specific assets in trustees upon such trusts for the person entitled to the dividend or capitalised fund as may seem expedient to the Board, where requisite, a proper contract shall be delivered to the Registrar for registration in accordance with Section 75 of the Companies Act, 1956 and the Board may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalised fund, and such appointment shall be effective.


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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The contracts referred to in para (A) below (not being contracts entered into in the ordinary course of business carried on by us) which are or may be deemed material have been entered into by us. The contracts together with the documents referred to in para (B) below may be inspected at the Registered Office between 11.00 a.m. to 2.00 p.m. on any working day from the date of this Draft Letter of Offer until the closure of the subscription list. (A) MATERIAL CONTRACTS 1. Engagement letter dated December 20, 2011 between us and Kotak Mahindra Capital Company Limited, Lead

Manager to the issue.

2. Issue Agreement dated January 11, 2012 between us and Kotak Mahindra Capital Company Limited, Lead Manager to the issue.

3. Agreement dated January 11, 2012 between us and Sharepro Services (India) Private Limited, Registrar to the Issue.

4. Tripartite Agreement dated January 11, 2005 between the Company, National Securities Depository Limited

(NSDL) and Sharepro Services (India) Private Limited.

5. Tripartite Agreement dated October 18, 2004 between the Company, Central Depository Services (India) Limited (CDSL) and Sharepro Services (India) Private Limited.

(B) DOCUMENTS FOR INSPECTION 1. Memorandum and Articles of Association; 2. Certificate of incorporation dated November 28, 1981 and subsequent fresh certificates of incorporation dated

December 8, 1987, August 24, 1992, September 11, 1992 and October 13, 1997; 3. Resolution of the Board of Directors under section 81(1) of Companies Act, 1956 passed in its meeting dated

November 12, 2011 authorising the Issue;

4. Prospectus issued by the Company dated October 30, 1992.

5. Certificate pertaining to Equity Shares allotted under Employees Stock Option Scheme 2010 and other matters dated January 3, 2012.

6. Consents of the Directors, Company Secretary and Compliance Officer, Statutory Auditors, Lead Manager to the

Issue, Legal Advisor to the Issue, Bankers to the Company and Registrar to the Issue to include their names in the Draft Letter of Offer to act in their respective capacities;

7. Annual reports for the year ended March 31, 2007, March 31, 2008, March 31, 2009 March 31, 2010 and March 31, 2011;

8. The Report of the Auditors being, M/s. Deloitte Haskins & Sells, as set out herein dated January 11, 2012 relation to

our audited financial information.

9. Statement of Tax Benefits dated January 4, 2012 by M/s Desai & Associates, Chartered Accountants. 10. Due Diligence Certificate dated January 13, 2012 by Kotak Mahindra Capital Company Limited, Lead Manager to

the Issue; 11. In-principle listing approval dated [•] from BSE; 12. Observation letter no. [•] dated [•] received from SEBI;


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Any of the contracts or documents mentioned in the Draft Letter of Offer may be amended or modified at any time if so required in our interest or if required by the other parties, without reference to the Equity Shareholders, subject to compliance with applicable law.


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DECLARATION We hereby certify that no statement made in the Draft Letter of Offer contravenes any of the provisions of the Companies Act and the rules made thereunder. We further certify that all the legal requirements connected with the Issue as also the guidelines, instructions, etc., issued by SEBI, the Government and any other competent authority in this behalf, have been duly complied with. We further certify that all disclosures made in the Draft Letter of Offer are true and correct. Ashok Sharma Executive Director and Chief Executive Officer

S. Durgashankar Non-executive Director

Nikhilesh Panchal Independent Director

Anand Daga Independent Director

Vinayak Patil Independent Director

Place: Mumbai Anant Kshirsagar Date: January 13, 2012 Head – Finance, Accounts and

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