Draft Letter of Offer November 27 2006 For Equity Shareholders of the Company only

Automobile Corporation of Goa Limited

Registered Office: Honda, Sattari, Goa - 403530. We were incorporated on September 1, 1980 under the provisions of the Companies Act,

1956. (For further details see “History of the Company and Other Corporate Matters” on page 52 of this Draft Letter of Offer.) Tel: 0832-2370227, 2370224, Fax: 0832-2370262

Contact Person: Mr. Ananth Prabhu E-mail: rightsissue@acglgoa.com Website: www.acglgoa.com

For private circulation to the Equity Shareholders of the Company only

DRAFT LETTER OF OFFER ISSUE OF [●] FULLY PAID EQUITY SHARES WITH A FACE VALUE OF Rs. 10 EACH AT A PREMIUM OF Rs. [●] PER EQUITY SHARE AGGREGATING FOR AN AMOUNT NOT MORE THAN Rs. 7,500 LAKHS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF [●] FULLY PAID EQUITY SHARE FOR EVERY [●] EXISTING EQUITY SHARES HELD BY THE SHAREHOLDERS ON THE RECORD DATE, i.e., [●] (“ISSUE”). THE ISSUE PRICE IS [●] TIMES OF THE FACE VALUE OF THE EQUITY SHARES. FOR MORE DETAILS, SEE “TERMS AND PROCEDURE OF THE ISSUE” ON PAGE 166 OF THIS DRAFT LETTER OF OFFER.

GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and the Issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to “Risk Factors” on page vii of this Draft Letter of Offer before making an investment in this Issue.

ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Draft Letter of Offer is true and correct in all material respects 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 makes this Draft Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING The existing Equity Shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai (“BSE”) (“Designated Stock Exchange”). The Company has received “in-principle” approval from BSE for listing the Equity Shares arising from this Issue vide letter dated [●].

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

DSP Merrill Lynch Limited Mafatlal Centre, 10th Floor Nariman Point Mumbai 400 021, India Tel: (91 22) 6632 8000 Fax: (91 22) 2204 8518 Email: acgl_rights@ml.com Website: www.dspml.com Contact Person: Mr. Ateet Sanghavi

Intime Spectrum Registry Limited C-13, Pannalal Silk Mills Compound LBS Marg, Bhandup (W), Mumbai – 400 078 Tel: 022 - 25963838 Fax: 022- 25946969 Email : isrl@intimespectrum.com Website: www.intimespectrum.com Contact Person: Mr. Vishwas Attavar

ISSUE PROGRAMME ISSUE OPENS ON LAST DATE FOR REQUEST FOR

SPLIT APPLICATION FORMS ISSUE CLOSES ON

[●] [●] [●]

Draft Letter of Offer November 27 2006 For Equity Shareholders of the Company only

TABLE OF CONTENTS

NO OFFER IN UNITED STATES ...................................................................................................................... i PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA ............................ ii FORWARD – LOOKING STATEMENTS ......................................................................................................iii ABBREVIATIONS & TECHNICAL TERMS ................................................................................................. iv RISK FACTORS ................................................................................................................................................vii SUMMARY........................................................................................................................................................... 1 THE ISSUE ........................................................................................................................................................... 5 SELECTED FINANCIAL INFORMATION..................................................................................................... 6 GENERAL INFORMATION............................................................................................................................ 10 CAPITAL STRUCTURE................................................................................................................................... 14 OBJECTS OF THE ISSUE................................................................................................................................ 20 BASIS FOR ISSUE PRICE ............................................................................................................................... 29 STATEMENT OF TAX BENEFITS................................................................................................................. 32 INDUSTRY OVERVIEW.................................................................................................................................. 36 OUR BUSINESS................................................................................................................................................. 41 OUR STRATEGY .............................................................................................................................................. 43 DESCRIPTION OF OUR BUSINESS.............................................................................................................. 44 REGULATIONS AND POLICIES ................................................................................................................... 49 HISTORY OF THE COMPANY AND OTHER CORPORATE MATTERS .............................................. 52 DIVIDENDS........................................................................................................................................................ 54 MANAGEMENT................................................................................................................................................ 55 PROMOTERS .................................................................................................................................................... 65 GROUP COMPANIES ...................................................................................................................................... 73 RELATED PARTY TRANSACTIONS.......................................................................................................... 115 AUDITORS REPORT ..................................................................................................................................... 116 STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY .............................................. 129 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL..................................................... 130 CONDITION AND RESULTS OF OPERATIONS ...................................................................................... 130 INFRASTRUCTURE....................................................................................................................................... 136 OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS .................................................. 137 GOVERNMENT APPROVALS ..................................................................................................................... 156 STATUTORY AND OTHER INFORMATION............................................................................................ 159 TERMS AND PROCEDURE OF THE ISSUE.............................................................................................. 165 MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION............................................................... 183 OF THE COMPANY ....................................................................................................................................... 183 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION..................................................... 192 DECLARATION .............................................................................................................................................. 193

i

NO OFFER IN UNITED STATES

The shares of the Company are not registered under the United States Securities Act of 1933, as amended. The rights referred to in this Draft Letter of Offer are being offered in India but not in the United States of America. The offering to which this Draft Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any shares or rights for sale in the United States of America, or the territories or possessions thereof, or as a solicitation therein of an offer to buy any of the said shares or rights. Accordingly, this Draft Letter of Offer should not be forwarded to or transmitted in or into the United States of America at any time. The Company will not accept subscriptions from any person, or his agent, who appears to be, or who the Company has reason to believe is, a resident of the United States of America and to whom an offer, if made, would result in requiring registration of this Draft Letter of Offer with the United States Securities and Exchange Commission. The Company is informed that there is no objection to a United States shareholder selling its rights in India.

ii

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

Unless stated otherwise, the financial information used in this Draft Letter of Offer is derived from the Company’s restated financial statements as of fiscal 2006, 2005, 2004, 2003 and 2002 prepared in accordance with Indian GAAP and the Companies Act, 1956 and restated in accordance with applicable SEBI Guidelines, as stated in the report of our statutory Auditors M/s. C. C. Chokshi & Co., included in this Draft Letter of Offer. Unless stated otherwise, throughout this Draft Letter of Offer, all figures have been expressed in Lakhs, except in the section titled “Management” on page 55 of this Draft Letter of Offer, and section titled “Group Companies” on page 73 of this Draft Letter of Offer where certain figures have been expressed in absolute numbers or in thousands. All numbers presented in this Draft Letter of Offer have been rounded off to two decimal place. Our fiscal year commences on April 1 and ends on March 31 of the next year. Unless stated otherwise, reference herein to a fiscal year (eg. fiscal 2006), is to the fiscal year ended March 31 of a particular year. All references to “Rupees” or “Rs.” are to Indian Rupees, the official currency of the Republic of India. All references to Z$ is to Zimbabwean dollar, the official currency of Republic of Zimbabwe. All references to ZAR refers to Rand the official currency of Republic of South Africa. All references to meticais refers to Metical, the official currency of Republic of Mozambique. All references to Ushs refers to Ugandan Shilling, the official currency of Republic of Uganda. All reference to N$ refers to Namibian dollar, the official currency of Republic of Namibia. All refernces to T Shillings refers to Tanzanian Shilling, the official currency of United Republic of Tanzania. All references to Kwacha refers to Zambia Kwacha, the official currency of Republic of Zambia. All references to Ghanian Cedis refers to Cedis, the official currency of Republic of Ghana. All references to Au$ refers to Australian dollar, the official currency of Commonwealth of Australia. All references to AED refers to Dirham, the official currency of United Arab Emirates. All references to Tk refers to Taka, the official currency of People’s Republic of Bangladesh. All references to Korean Won refers to Korean Won, the official currency of the In this Draft Letter of Offer, any discrepancies in any table between the total and the sum of the amounts listed may be due to rounding off. Market and industry data used in this Draft Letter of Offer, has been obtained from industry publications and governmental sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable and that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe market data used in this Draft Letter of Offer is reliable, it has not been independently verified.

iii

FORWARD – LOOKING STATEMENTS

We have included statements in this Draft Letter of Offer which contain words or phrases such as “will”, “aim”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “seek to”, “future”, “objective”, “goal”, “project”, “should” 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: • General economic and business conditions in the markets in which we operate and in the local, regional

and national economies; • Increasing competition in or other factors affecting the industry segments in which our Company

operates; • Changes in laws and regulations relating to the industries in which we operate; • Our ability to meet our capital expenditure requirements and/or increase in capital expenditure; • Fluctuations in operating costs and impact on the financial results; • Our ability to attract and retain qualified personnel; • Changes in technology in future; • Changes in political and social conditions in India or in countries that we may enter, the monetary

policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

• The performance of the financial markets in India and globally; and • Any adverse outcome in the legal proceedings in which we are involved. For a further discussion of factors that could cause our actual results to differ, please refer to the sections titled “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Draft Letter of Offer. 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 the Company nor the Lead Manager nor any of their respective affiliates 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 / Stock Exchanges requirements, the Company and Lead Manager will ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchanges.

iv

ABBREVIATIONS & TECHNICAL TERMS AGM Annual General Meeting. AoA Articles of Association of the Company. AS Accounting Standard as issued by The Institute of Chartered Accountants

of India. Asst. Assessment. Act The Companies Act, 1956 as amended from time to time. Auditor C. C. Choksi & Co. BBD Bus Body Building Division. BSE/Designated Stock Exchange The Bombay Stock Exchange Limited. Board The Board of Directors of the Company or the Committee authorized to

act on their behalf. Bankers to the Issue HDFC Bank Limited. BIFR Board of Industrial and Financial Restructuring. CAF Composite Application Form. CAGR Compounded Annual Growth Rate. CDSL Central Depository Services (India) Limited. Company/Issuer/ACGL Automobile Corporation of Goa Limited. Compliance Officer Mr. Ananth Prabhu. CNG Compressed Natural Gas. CV Commercial Vehicle. DP Depository Participant. Depository A depository registered with SEBI under the SEBI (Depository and

Participant) Regulations, 1996, as amended from time to time. Draft Letter of Offer Draft Letter of Offer of the Company for the Rights Issue of [●] Equity

Shares of Rs. 10 each at a premium of Rs. [●] per share. EBIDTA Earnings before Interest Depreciation, Tax and Amortization. EGM Extra-Ordinary General Meeting. EPS Earnings Per Share. Equity Shareholders Means a holder/beneficial owner of equity shares of the Company as on

the Record Date i.e. [•]. Equity Shares The equity shares of the Company having a face value of Rs. 10 unless

otherwise specified in the context thereof. FCNR Foreign Currency (Non-Resident) Account Scheme. FEA Finite Element Analysis, which is a computer simulation technique used

in engineering analysis. FEMA Foreign Exchange Management Act 1999, and the subsequent

amendments thereto. FICCI Federation of Indian Chambers of Commerce and Industry. FII Foreign Institutional Investor as defined Under SEBI (Foreign

Institutional Investors) Regulations, 1995 registered with SEBI and as defined under FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 and under other applicable laws in India.

FY/ fiscal Financial Year or year ended March 31. GDP Gross Domestic Product. GIR No. General Index Reference Number. IT Income Tax Act, 1961, as amended from time to time. Lakh(s); lac(s); lakh(s) One hundred thousand. LCV Light Commercial Vehicles. Lead Manager DSP Merrill Lynch Limited. Memorandum or MOA Memorandum of Association of the Company. MCV Medium Commercial Vehicle. NCD Non Convertible Debenture.

v

NI Act Negotiable Instrument Act, 1881 as amended from time to time. NRE Non- Resident (External) Rupee Account Scheme. NRO Non-Resident Ordinary Rupee Account Scheme. NSDL National Securities Depository Limited. NSE National Stock Exchange of India Limited. OCB(s) Overseas Corporate Body(ies). OEM Original Equipment Manufacturer. PAN Income Tax Permanent Account Number. PAT Profit after Tax. Promoter EDC Ltd., Tata Motors Ltd., Tata International Ltd. PLR Prime Lending Rate. Promoter Group Concorde Motors (India) Ltd, HV Axles Ltd, HV Transmissions Ltd,

Sheba Properties Ltd, TAL Manufacturing Solutions Ltd, Tata Daewoo Commercial Vehicle Co. Ltd, Tata Motors European Technical Centre PLC, Tata Motors Insurance Services Ltd, TML Financial Services Limited, Tata Technologies Ltd, Telco Construction Equipment Co Ltd, Tata Technologies Pte Limited, Tata Technologies Investments Pte Limited, Singapore, Tata Technologies Sdn Bhd, Malaysia, Tata Technologies (Thailand) Limited, Incat International Plc Ltd., INCAT Limited, INCAT Systems Inc, INCAT Solutions of Canada Inc, Integrated Systems de Mexico, S.A. de C.V., iKnowledge Solutions Inc, CADPO Asia Ltd, INCAT GmbH, INCAT SAS, INCAT KK, INCAT Holdings BV, INCAT Holdings Inc, INCAT Engineering Solution BV, Cedis Mechanical Engineering GmbH, Tata Technologies, US, INCAT Financial Services Inc, Tata Cummins Ltd, Tata AutoComp Systems Ltd Tata Precision Industries Pte. Ltd, Nita Co Ltd, Tata Securities Private Ltd, TSR Darashaw Ltd, Hispano Carrocera S.A., Tata International Ltd Tata Services Ltd, Tata Holset Ltd, Kulkarni Engg. Assos. Ltd, TataIndustries Ltd. Tata Africa Holdings (SA) (Proprietary) Limited, TataZambia Limited, Zambia, Pamodzi Hotel PLC, Zambia, (subsidiary of TataZambia Limited), Tata (Zimbabwe) Private Limited, Zimbabwe, TataNamibia (Proprietary) Limited, Namibia, Tata Ghana Limited, Ghana, TataAutomobile Corporation (SA) (Proprietary) Limited, South Africa, TataHoldings (Tanzania) Limited, Tanzania, Light Source ManufacturersLimited, Tanzania (subsidiary of Tata Holdings (Tanzania) Limited, TataMocambique Limitada, Mocambique, Tata De Mocambique Limitada,Mocambique, (subsidiary of Tata Mocambique Limitada), Cometal,S.A.R.L., Mocambique, (subsidiary of Tata Mocambique Limitada), TataUganda Limited, Tata Steel (KZN) Proprietary Limited, Tata South EastAsia Limited, Tata West Asia FZE, Tata International (Australia) PtyLimitedTata Precision Industries Limited, Graziella Shoes Limited, SitelIndia Limited, Tata Holset Limited, Tata International DLT PrivateLimited, Pran Agro Services Private Limited

RBI Reserve Bank of India. Record Date [ ] Registrars/ Registrars To The Issue/

Intime Spectrum Registry Limited.

Registrar and Share Transfer Agent/ R&T Agents

TSR Darashaw Limited.

Rights Issue/Issue Present Issue of [ ] Equity Shares of Rs. 10 each at a premium of Rs. [ ] per share.

SBI State Bank of India. SEBI Securities and Exchange Board of India. SEBI Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by

SEBI on January 19, 2000 read with amendments issued subsequent to that date.

SIAM Society of Indian Automobile Manufacturers.

vi

SMD Sheet Metal Division. Takeover Code Securities and Exchange Board of India (Substantial Acquisition of

Shares and Takeover) Regulations, 1997. TIL Tata International Limited. TML Tata Motors Limited. UIN Unique Identification Number.

vii

RISK FACTORS

Any investment in Equity Shares involves a high degree of risk and so you should carefully consider the risks described below before you make an investment decision. Risks have been quantified, wherever possible. If any of the following risks actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline and you may lose all or part of your investment. In this section, any reference to “we”, “us” or “our” refers only to Automobile Corporation of Goa Limited. Internal Risk Factors We are involved in certain legal proceedings incidental to the business and operations which, if determined against us, could have an adverse impact on the results of operations and financial condition of the Company. There are outstanding litigation against us and we are defendants in legal proceedings incidental to our business and operations. Such legal proceedings are pending at different levels of adjudication before various courts and tribunals. Should any new developments arise in respect of such litigation, such as a change in Indian law or rulings against us by appellate courts or tribunals, we may face losses and may need to make provisions in our financial statements in respect of such litigation, which could adversely impact our business results. Further, if significant claims are determined against us and we are required to pay all or a portion of the disputed amounts, it could have a material adverse effect on our business and profitability. The pending litigation against us consists of (excluding claims for interest and expenses):

Sr. No. Type of Case Number of cases Aggregate Amount of Claims

(in Rs.Lakhs)

1. Civil Suits 2 75.34 2. Labour litigations 9 Nil 3. Regulatory* 1 1.75 4. Tax Litigations 6 392.70 Total 18 469.79

*SEBI issued a show cause notice to the Company vide its letter dated July 21, 2004 alleging violation of Regulation 6(2) and 6(4) of the Takeover Code for the year 1997 and violation of Regulation 8(3) of the Takeover Code for the years 1998, 1999, 2000 and 2001. SEBI allowed for a consent order for a payment of Rs. 175,000 as penalty for the violations. The Company agreed to a settlement through consent order but has requested a personal hearing by the Adjudication Officer. The matter is pending before the Adjudication Officer. For further details of litigations pending against the company, please refer to the section on “Outstanding Litigation and Material Developments” on page 137 of this Draft Letter of Offer. Litigations against the Directors, Promoters & Promoter Group: For details of litigations pending against the directors, promoter & promoter group please refer to the section on “Outstanding Litigation and Material Developments” on page 137 of this Draft Letter of Offer. We are dependent on vendors for supply of raw materials, components and consumables used in the manufacture of our products. We depend on external suppliers for the supply of raw materials, components and other parts for our products. Although, we currently have an aggregate of approximately 380 vendors in India, historically we have been sourcing our basic raw material such as steel, aluminum, glass etc. from limited number of vendors on account of various economical and logistical considerations. We work in close association with our vendors in order to secure a reliable supply of raw material, components and other parts that meet our requirements. Various vendors such as Tata Steel Limited, Hindalco Industries Limited, etc. supply a major portion of our raw material requirements. In the event such vendors increase the prices of raw material and other inputs which we

viii

are unable to pass on to the customers, our profitability will be impacted. Historically, as is the case for the automobile industry, our ability to pass on such input cost increases to our customers has been limited. As on fiscal 2005 and fiscal 2006, consumption of raw materials and components formed approximately 86.96% and 90.12%, respectively, of our manufacturing and other expenses excluding capitalized expenditures. Further in the event such vendors discontinue supply or fail to adhere to our technical specifications, quality requirements and delivery schedules for any reason whatsoever, we may have temporary stoppages of production till alternate arrangements are made. Such temporary stoppages may affect our business and profitability. There can be no assurance that we will be in a position to develop an alternate supplier in a timely or cost efficient manner. Customer concentration Tata Motors Limited, one of our promoters is our single largest customer which contributes 74.10% of our sales of SMD and 94.23% of our sales of BBD for the fiscal 2006. We believe that this trend is expected to continue and we will continue to be dependent on TML for substantial part of our sales. We do not have any long term contracts with TML. In the event, if TML decides to procure their requirements from other suppliers, our revenues and profitability may be adversely affected. Interest of the company’s promoters may not be the same as those of the other shareholders. There can be no assurance that the promoters of the company will not have interests which are adverse to the interest of other shareholders or take positions which the other shareholders may not agree. Our industry is competitive and increased competitive pressure may adversely affect the results of our operations. The market for automotive component manufacturers is highly competitive, and we expect competition to intensify and increase from a number of sources. We believe that the principal competitive factors in our markets are price, service quality, sales and marketing skills, the ability to manufacture customized products and technological and industry expertise. We face significant competition from several entities located in India and several other countries. We cater to OEM market and replacement markets for the sheet metal & bus body building industry. In this industry several existing players are present and there are no entry barriers. The market is very price sensitive and we face stiff competition from the unorganized sector that is able to compete at lower prices. We may not be able to match the price provided by the unorganized sector which would limit the growth potential. Our industry is dependent on demand for buses as means of public transport. Factors which could affect such demand include alternate means of public transport such as trains, increasing affordability of private vehicles and lower quality of public transport. Any decrease in demand for buses may affect the profitability of our Company. Some of the existing and future competitors may have greater financial, personnel and other resources, longer operating histories, a broader range of product offerings, greater technological expertise, more recognizable brand names and more established relationships in industries that we currently serve or may serve in the future. In addition, some of our competitors may enter into strategic or commercial relationships among themselves or with larger, more established companies in order to increase their ability to address client needs, or enter into similar arrangements with potential clients. Most of our buses sold to TML are in turn exported to various countries, especially in the Arabian Gulf and African regions. Increased competition in the international market could impact demand for our buses. Increased competition, our inability to compete successfully against competitors, pricing pressures or loss of market share could have a material adverse effect on our business, results of operations, financial condition and cash flows. We are subject to risks associated with product warranty, which could adversely affect our business, results of operations and financial condition.

ix

Defects, if any, in our products could require us to undertake service actions. These actions could require us to expend considerable resources in correcting these problems and could adversely affect demand for our products. Further, if a vendor fails to meet quality standards, it could expose us to warranty claims. In defending these claims, we could incur substantial costs and receive adverse publicity. As a result, our business, results of operations and financial condition could suffer. Potential delays in the launch of new models in the market and lower than anticipated market acceptance of new or existing models can cause us to lose market share and adversely affect our results of operations. In a highly competitive environment particularly from the unorganized sector, competitors can gain a significant advantage by introducing new model variants before we do. The capital investments in plant and machinery, in addition to product development costs, associated with the launch of a new model may result in higher levels of depreciation and amortization. In addition, the launch of a new model for us requires substantial capital investment and product development expenditure. Therefore, if market acceptance of any of our new models is lower than anticipated, we may be unable to gain from the intended economic benefits of our investments and results of operations may be adversely affected. Also, if we are not able to execute our expansion plan as envisaged, there could be time and cost overruns affecting the performance of our company. If we are unable to implement or manage our growth strategies in a timely manner, our business and results of operations could be adversely affected. Our revenues have grown at a CAGR of 48.97% from Rs. 11,502.29 Lakhs in Fiscal 2004 to Rs. 25,525.84 Lakhs in Fiscal 2006. Continued expansion increases the challenges involved in recruiting, training and retaining skilled technical and managerial personnel; adhering to our quality and process standards; and maintaining high levels of customer satisfaction. We have adopted certain growth strategies, including the expansion of our BBD, the shifting of the presses and related equipments at our SMD and introduction of new products. All these new projects involve risks and accordingly, there can be no assurance that we will be able to complete our plans on schedule or within budget. If due to changes in market conditions, our operations cannot generate sufficient funds or for any other reason we decide to delay, modify or forego some aspects of our growth strategies, our future results of operations may be adversely affected. We are in the process of recruiting skilled manpower required for the proposed project. The appointment of the key personnel for the new project is critical to the timely and successful implementation of our project. Any delay in the appointment of the required skilled man power may impact our profitability.

We have not commissioned an independent appraisal for the use of proceeds to be raised through this Issue.

The use of proceeds of the Issue has been determined based on internal estimates of our management and has not been appraised by an independent agency. The utilization of issue proceeds will be completely at the discretion of our management and no independent monitoring agency has been appointed. We are in the process of acquiring the land required for moving our Presses to Pune. We are yet to apply for and/or receive regulatory approvals that may be required for our proposed projects. In case of non receipt or delayed receipt of the same, we may not be able to implement our proposed expansion plan as scheduled, which may lead to cost overruns and have an adverse impact on our growth and financial condition. Orders for some of the machineries have not been placed The total cost of setting up new projects including modernization and expansion is approximately Rs. 7,500.00 Lakhs. We have not yet ordered or procured any assets for any of the new projects and are yet to receive quotations for some of the plant and machinery and other equipment required. Any delay in placing orders may delay our project and affect our profitability. We depend on the talent and expertise of our senior and key managerial personnel. We are dependent on the expertise, experience and continued efforts of our senior and key personnel. The loss of one or more members of our key personnel could impact our operations till alternate arrangements are made. We may be unable to identify, hire or retain the right personnel who meet our criteria, or we may have trouble maintaining the current values and culture as we grow to become a larger company.

x

Work stoppages and other labour related problems could adversely affect our business. Wage costs in India have historically been significantly lower than wage costs in other western countries, which has been one of our competitive advantages. However, by and large, wages in India are increasing at a faster rate than in the developed countries, which may reduce our competitive advantage in relation to pricing. We may need to increase the levels of employee compensation more rapidly than in the past to remain competitive and to attract necessary talent. If we are unable to negotiate with the workmen or the contractors, it could result in work stoppages or increased operating costs as a result of higher than anticipated wages or benefits. Further, we have labour unions at all our manufacturing units. If there is any dispute between the unions and the management it might affect the operations and profitability. We appoint contractors for carrying out low skill operations. In order to retain flexibility and keep our fixed overhead to the minimum, in line with industry practice, we appoint contractors who in turn engage on-site contract labour for performance of our low skill operations. From a regulatory perspective, we face the risk that on an application made by the contract labourers, the appropriate court / tribunal may direct us that the contract labourers are required to be regularized or absorbed, and / or that we pay certain contributions in this regard. Any inability to support our growth with the required skilled labourers may impact our operations and profitability. We had incurred losses in the financial years 1999-2002. We had incurred losses in financial years 1999-2002 on account of contraction of demand with escalating input costs and reduction in prices, resulting in the erosion of our net worth. As required under Section 23 & Section 3 of the Sick Industrial Companies (Special Provisions) Act 1985, we reported the same to the BIFR. In view of the restructuring plan worked out with in consultations with ICICI and the Promoters, we did not seek any relief from BIFR. We do not have any registered patents or trademarks. None of the products manufactured by us has been registered as patent or trademark. Therefore, any other company can use our brand and market their products. This might harm the image of our brands. Products are made as per specification of customers. Hence, no patent/trademark is required.

We have not registered our logo or the trademark “Automobile Corporation of Goa Limited” or ACGL with the Trade Mark Registry. We can provide no assurance that third parties will not infringe upon our trademark and/or trade name causing damage to our business prospects, reputation and goodwill.

Our insurance coverage may not adequately protect us against certain operating hazards and this may have a material adverse affect on our business. We maintain insurance policies in respect of our principal places of business. The assets covered include all parts of buildings, all plant and machinery, utilities, office equipments, stocks, finished & semi-finished goods and stores & spares at Honda and Sattari in Goa and Jejuri in Pune. While we believe that the insurance coverage which we maintain is reasonably adequate to cover all normal risks associated with the operation of our business, there can be no assurance that any claim under the insurance policies maintained by us will be honoured on time fully or in part. To the extent that we may suffer loss or damage that is not covered by insurance or exceeds our insurance coverage, our results of operations and cash flow may be adversely affected. Your holdings may be diluted by additional issuances of equity. Further, any sales by our Promoters may adversely affect the market price of our equity shares.

Any future issuance of our equity shares may dilute the holdings of existing investors in our equity shares. Additionally, sales of a large number of our equity shares by our Promoters could adversely affect the market

xi

price of our equity shares. The perception that any such primary or secondary sale may occur also could adversely affect the market price of our equity shares.

Our contingent liabilities could adversely affect our financial condition.

Our contingent liabilities are as follows:

(Rs. In Lakhs)

Particulars of As on June 30, 2006

Estimated amount of contracts remaining to be executed on capital account 82.45 Claims against the company not acknowledged as debts 67.09 Disputed Tax demands 392.70 Guest house civil suit 10.00 Total 552.24

One of our Promoters and certain ventures promoted by our Promoters have incurred losses in recent fiscal years One of our Promoters and certain ventures promoted by our Promoters have incurred losses in recent fiscal years, as set forth in the table below:

(Rs. in Lakhs)

Name of Company Fiscal 2006 Fiscal 2005 Fiscal 2004

Promoter EDC Limited 1,332.80 (825.4) (4,864.8) Group Companies Hispano Carrocera S.A (Euro Lakhs) N/A (2,155.44)

(For year ended December 31,

2005)

N/A

Nita Co Limited (84.93) 44.73 81.81 TAL Manufacturing Solutions Limited 466.03 238.39 (3,318.65) Tata Precision Industries (India) Limited (10.76) (96.44) (68.79) Tata Motors European Technical Centre PLC (44.24) - - Tata Precision Industries Pte. Limited (ZAR) (459.52)

(For year ended December 31,

2005)

(1,203.34) (For year ended December 31,

2004)

(827.96) (For year ended December 31,

2003) Tata Steel (KZN) (Proprietary) Limited (In ZAR)

(73) (885) N/A

Cometal S.A.R.L (In Meticais ´000) (5,311,001) (1,851,040) (1,316,644) Pamodzi Hotels Plc (in Zambian Kwacha million)

8,976 (1,103) 989

SITEL India Limited 496 375 175

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You will not receive the Equity Shares you purchase in this Issue until several weeks after you pay for them, which will subject you to market risk. The Equity Shares you purchase in this Rights Issue will not be credited to your demat account with depository participants until approximately 42 working days from the Issue Closing Date. You can start trading your equity shares only after receipt of listing and trading approvals in respect of these shares which will require additional time after the credit of Shares into your demat account. Since the Company’s Equity Shares are already listed on the stock exchange, you will be subject to market risk from the date you pay for the Equity Shares to the date they are listed.

EXTERNAL RISK FACTORS Our business is substantially affected by prevailing global and Indian economic conditions. We perform all of our manufacturing activities in India, all of our projects are located in India, and the predominant portion of our customers are Indian companies or Indian nationals who indirectly exports most of our buses to various other countries. As a result, we are highly dependent on prevailing economic conditions in India as well as other countries and our results of operation are significantly affected by factors influencing their economy. Factors that may adversely affect the economy, and hence our results of operations, may include:

any increase in interest rates or inflation;

any scarcity of credit or other financing, resulting in an adverse impact on economic conditions and lead to scarcity of purchase products by our customers;

relative increases or decreases in activity in or profitability key sectors of the economy

prevailing income conditions among consumers and corporations;

volatility in, and actual or perceived trends in trading activity on, principal stock exchange;

changes in present tax, trade, fiscal or monetary policies;

political instability, terrorism or military conflict in India or in countries in the region or globally, including in India’s various neighboring countries;

prevailing regional or global economic conditions, including in India’s principal export markets; and

other significant regulatory or economic developments in or affecting India or its real estate development sector.

Any slowdown or perceived slowdown in the Indian or global economy, or in specific sectors of the Indian and global economy, could adversely impact our business and financial performance and the price of our equity shares. Further, the Indian automotive & auto ancillary industry is substantially affected by general economic conditions in India. In fiscal 2003, these industries witnessed a recovery in demand after declining trends for three years. Though there has been a significant increase in demand since early fiscal 2002, primarily due to significant growth of the gross domestic product, or GDP, the construction of improved roadways in India, and substantial lowering of interest rates, there can be no assurance that the Indian economy will not experience a downturn which may, in turn, significantly adversely affect our sales and results of operations. Further, Political instability or changes in the Government in India could delay the further liberalization of the Indian economy and adversely affect economic conditions in India generally and our business in particular. Political instability or a change in economic liberalization and deregulation policies could seriously harm business and economic conditions in India generally and our business in particular. In recent years, the government of India has pursued policies of economic liberalization, including significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has remained significant. The current ruling coalition, elected in May 2004, has announced policies and taken initiatives that support the continued economic liberalization policies that have been pursued by the previous governments. We cannot predict the government of India’s liberalization policies and we cannot assure you that they will continue in the future.

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The market value of your investment may fluctuate due to the volatility of the Indian securities market. The Indian stock exchanges have, in the past, experienced substantial fluctuations in the prices of their listed securities. The Indian stock exchanges, including the BSE, have experienced problems that, if they continue or recur, could affect the market price and liquidity of the securities of Indian companies, including our shares. These problems have included temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. Furthermore, from time to time disputes have occurred between listed companies, and stock exchanges and other regulatory bodies, which in some cases may have had a negative effect on market sentiment. There is a lower level of regulation and monitoring of the Indian securities markets and the activities of investors, brokers and other participants than in some other countries. The Securities and Exchange Board of India, or SEBI, received statutory powers in 1992 to assist it in carrying out its responsibility for improving disclosure and other regulatory standards for the Indian securities markets. Subsequently, SEBI has prescribed regulations and guidelines in relation to disclosure requirements, insider dealing and other matters relevant to the Indian securities market. Taxes and other levies imposed by the central or state governments in India on the acquisition and ownership of automotive vehicles, or regulations applying to us may have a material adverse effect on the demand for our products. Taxes and other levies imposed by the central or state governments in India that affect our industry include customs duties on imports of capital goods, raw materials and components, excise duty on the manufacture of automotive vehicles, service tax, central and state sales tax, octroi duties, value added tax, road and registration tax. These taxes and levies affect the cost of production and prices of our products and therefore the demand for our products. In addition, restrictions or levies imposed by the government on the use of automotive vehicles, such as a congestion charge or other traffic control measures, or on diesel vehicles in particular, could affect the demand for our businesses in the future. An increase in any of these taxes or levies, or the imposition of new taxes or levies in the future, may have a material adverse impact on our business, results of operations and financial condition. Natural disasters, accidents or loss of or shutdown of operations at any of our manufacturing facilities could disrupt our operations and result in loss of revenues and increased costs. Our plants are susceptible to natural disasters and accidents such as explosions, fire, earthquakes, storms, floods as well as acts of violence from terrorists and war. The occurrence of any of the above events could disturb the operations of our plants and we may have to shut down our plant for carrying out repairs that will result in loss of revenues and increased costs. Further, our facilities are subject to operational risks, such as the breakdown or failure of equipment, power supply or processes, performance below expected levels of output or efficiency, obsolescence, labour disputes, natural disasters, industrial accidents and the need to comply with the directives of relevant government authorities. The occurrence of any of these risks could significantly affect our operating results. We are required to carry out planned shutdowns of our plants for maintenance, statutory inspections and testing. We also shut down plants for capacity expansion and equipment upgrades. Although we take precautions to minimize the risk of any significant operational problems at our facilities, our business, financial condition and results of operations may be adversely affected by any disruption of operations at our facilities, including due to any of the factors mentioned above. Compliance with, and changes in, safety, health and environmental laws and regulations may adversely affect our results of operations and our financial condition. We are subject to a broad range of safety, health and environmental laws and regulations in the areas in which we operate. Our manufacturing facilities are subject to Indian laws and government regulations on safety, health and environmental protection. We have incurred, and expect to continue to incur, operating costs to comply with such laws and regulations. In addition, we have made and expect to continue to make capital expenditures on an ongoing basis to comply with safety, health and environmental laws and regulations. While we believe we are in compliance to all material respects with all applicable safety, health and environmental laws and regulations the discharge of hazardous substances or other pollutants.

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In addition, we may be required to incur costs to remedy the damage caused by such discharges or pay fines or other penalties for non-compliance. Further, the adoption of new safety, health and environmental laws and regulations, new interpretations of existing laws, increased governmental enforcement of environmental laws or other developments in the future may require that we make additional capital expenditures or incur additional operating expenses in order to maintain our current operations, curtail our production activities or take other actions that could have a material adverse effect on our financial condition, results of operations and cash flow. The costs of complying with these requirements could be significant. The measures we implement in order to comply with these new laws and regulations may not be deemed sufficient by governmental authorities and our compliance costs may significantly exceed current estimates. If we fail to meet environmental requirements, we may also be subject to administrative, civil and criminal proceedings by governmental authorities, as well as civil proceedings by environmental groups and other individuals, which could result in substantial fines and penalties against us as well as orders that could limit or halt our operations. There can be no assurance that we will not become involved in future litigation or other proceedings or be held responsible in any such future litigation or proceedings relating to safety, health and environmental matters in the future, the costs of which could be material. Clean-up and remediation costs of our sites and related litigation could adversely affect our cash flow, results of operations and financial condition. Significant shortages in the supply of crude oil or natural gas could adversely affect the Indian economy, thus increasing transportation cost and escalation there of which could adversely affect us.

India imports majority of its requirements of crude oil. Crude oil prices are volatile and are subject to a number of factors such as the level of global production and political factors such as war and other conflicts, particularly in the Middle East, where a substantial proportion of the world’s oil and natural gas reserves are located. Global crude oil prices have risen significantly in 2005 and 2006, driven in part by the strong demand for imported oil in India and China. Any significant increase in oil prices could affect the Indian economy, including the real estate sector. This could adversely affect our business including our ability to grow, our financial performance, our ability to implement our strategy and the price of our Equity Shares.

This increase directly results in an increase in our transportation costs. This increase in transportation costs has adversely affected our margins. If the same trend of increase in oil prices continues globally in the future, it may result in a further rise in domestic fuel prices. Such a rise may have an adverse impact on the demand for the buses manufactured by us and in turn on our profitability

Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely affect the financial markets and our business.

Terrorist attacks and other acts of violence or war may negatively affect the Indian markets on which our Equity Shares trade and also adversely affect the worldwide financial markets. These acts may also result in a loss of business confidence, make travel and other services more difficult and ultimately adversely affect our business. In addition, any deterioration in relations between India and our neighbouring countries might result in investor concern about stability in the region, which could adversely affect the price of our Equity Shares.

India has also witnessed civil disturbances in recent years and it is possible that future civil unrest as well as other adverse social, economic and political events in India could have a negative impact on us. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse impact on our business and the price of our Equity Shares.

Notes to risk factors: 1. Net worth of the Company as on fiscal 2006 is Rs. 2,331.97 Lakhs. The Issue is of an amount not

exceeding Rs. 7,500 Lakhs. The net asset value per share as on fiscal 2006 is Rs. 47.21. 2. This Issue is of [•] Equity Shares of Rs. 10 each for cash at a premium of Rs. [•] per Equity Share on

rights basis to the existing Equity Shareholders of the Company in the ratio of [•] Equity Share for every [•] Equity Shares held on the Record Date i.e. [•] in terms of this Draft Letter of Offer.

3. We had entered into certain related party transactions as disclosed in the section titled “Related Party

Transaction” on page 115 of this Draft Letter of Offer. 4. Before making an investment decision in respect of this Issue, you are advised to refer to the section

entitled ‘Basis for Issue Price’ on page 29 of this Draft Letter of Offer.

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5. Please refer to the sub section entitled ‘Basis of Allotment’ on page 175 of this Draft Letter of Offer for

details on basis of allotment. 6. We and the Lead Manager are obliged to keep this Draft Letter of Offer updated and inform the public

of any material change/development. 7. You may contact the Lead Manager for any complaints pertaining to the Issue including any

clarification or information relating to the Issue. The Lead Manager is obliged to provide the same to you.

1

SUMMARY Industry Overview

India, the world’s largest democracy in terms of population (1,107 million people) had a GDP at current market price of approximately Rs. 35,315 billion in 2006. (Source: CMIE Monthly Review, July 2006). As per the CIA World Fact book, India is the fourth largest economy in the world after the United States of America, China and Japan.

Bus Industry in India

The Indian auto industry is one of the largest industrial sectors in India, with a turnover that contributes roughly 4% of India’s GDP. It directly employs over two million people and provides indirect employment to another ten million. The auto industry is important for national policy in that it contributes 19% of indirect taxes.

Buses account for around 14.92 % of overall CV sales. In Fiscal 2001 – Fiscal 2006 CV industry has grown at a CAGR of 25.34%. (Source: SIAM)

The following chart represents the Total domestic and Exports Bus sales in terms of units along with their growth rate:

5,3496,120

7,831

50,55738,387 43,448 45,620

3,828

32.80%

15.59% 12.85%

6.03%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2002-03 2003-04 2004-05 2005-060%

5%

10%

15%

20%

25%

30%

35%

Domestic Sales (units) Export Sales (units) Y-O-Y

Total BUS Sales (units)

Source: SIAM

SWOT analysis of Indian Bus Industry

2

Bus Body Industry

Most of the vehicles sold by CV manufacturers today are sold in the chassis form only while smaller players typically fit body to chassis. Bus body companies source body parts from suppliers within the vicinity, as transportation cost is high. Some OEMs have captive manufacture of body parts.

The continuing infrastructure development, initiatives of various governments to phase out old vehicles and general improvement in the economy have aided the bus body building industry to enter an era of growth. With the expectations of further steps by the new government to reduce the anomalies in the Excise duty levy on bus bodies and provide the organized sector with a level playing field for bus body building, it is hoped that more and more vehicle manufacturers will convert their chassis sales into fully built vehicles sales thus giving a fillip to organized body builders.

Sheet Metal Industry

Approximately 90% of the industry sales are derived from the OEMs in the sheet metal segment. While body parts, which form the bulk of the output, goes to the OEMs, the demand from the replacement market are for parts such as mufflers, exhaust systems etc, which have limited life. As most products are bulky, exports are neglible in this segment. Significant raw material intensity also keeps the employee cost arbitrage low. Small components such as exhaust parts, mufflers are exported but the value of these products is very low.

OEMS source body parts from suppliers within the vicinity, as transportation cost is high. Some OEMs have captive manufacture of body parts. Also, as these are proprietary components, even outsourcing is done only through joint ventures.

Depending on OEM policy, tooling costs is either borne by the OEMs or suppliers. As value addititon of products also relates more to tooling, the manufacturers have very low pricing flexibility with the OEMs.

Company Overview We believe we are one of the leading players in bus body building Industry in India. We are also engaged in the business of manufacturing of pressed parts, components, sub-assemblies and assemblies for various ranges of automobiles. Our promoters are Tata Motors Limited, Tata International Limited and EDC Limited..

• Low – cost , skilled engineering manpower, leading to superior cost structure across processes, particularly those requiring significant design and engineering inputs

• Low – cost product development capabilities • Low capital cost, attributable to ability to develop

machine tools, robotics, and tools and fixtures at competitive cost in house

• The Presence of strong local component industry and relatively high levels of integration

• In sum, a competitive cost structure , despite constraints in terms of high taxes and high infrastructure costs

Strengths • Inadequate and expensive infrastructure • In early stage of evolution and thus behind multinational

peers in terms of economies of scale and capital employed

• Exposed to Local cyclicality and a narrow market base, as exports still in nascent stage

Weaknesses

• Sizeable local market potential, mainly at the utilitarian end with specific local requirement, offers Indian companies an opportunity to build scale and upgrade gradually with the market

• Global markets – both through direct exports and outsourcing opportunities

Opportunities • Global majors resorting to predatory pricing in order to

penetrate the Indian market • Any paradigm shifts in technology could increase

technology gap considerably

Threats

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History We were incorporated on September 1, 1980 as a public limited company under the Indian Companies Act, 1956. We were jointly promoted by EDC Limited and TML with a primary objective to aid the economic development of backward area of Sattari, Goa through the establishment of an industrial unit. While EDC on its part agreed to provide Finance, Infrastructure, etc. TML agreed to provide technical and managerial assistance to the joint venture. In 1988 we identified Bus Body Building as an activity with considerable export potential and in technical collaboration with Fuji Heavy Industries Ltd (FHIL); a renowned bus coach manufacturer in Japan, established a Bus Body Building Project within the vicinity of Sheet Metal Divisions (SMD) factory in Sattari, Goa. The collaboration agreement covered various models of chassis mounted bus bodies and the factory went into production in 1990. Description of Our Business We have two main business segments viz. the Bus Body Building Division (BBD) and Sheet Metal Divisions (SMD). In our BBD we are engaged in the business of manufacturing bus bodies on the chassis provided by the customers. In our SMD we are engaged in the business of manufacturing pressed sheet metal components, sub-assemblies and assemblies for automobiles. Our manufacturing facilities for the BBD are located at Bhuimpal (Sattari, Goa), and for SMD are located at Honda, (Sattari, Goa), Bhuimpal (Sattari, Goa), Jejuri (Purandar Dist. Pune) and Bhosari (Bhosari, Pune). All our manufacturing units (except the Bhosari unit which has been set up recently) are certified under ISO/QS 9000-2002. Our SMD plant at Honda, Goa is certified under QS9000 / TS16949 -2002. Bus Body Division The BBD fabricates bus bodies on the entire range of commercial vehicles from the LCVs to the MCVs. There are two types of buses made – viz chassis mounted buses and the monocoque (integral) buses. In the chassis mounted buses, the bus shells fabricated independent of the chassis are painted and then aggregated with the chassis by welding the body cross members with the long members of the chassis. The bus shell is then trimmed with all the fitments such as windows, electricals, windshields, seats and other trimmings. In the monocoque bus, the bus is made in a complete vehicle form with the chassis aggregates such as the engine, gear box, transmission etc. integrated in the full bus shell built in-house without the need for a chassis. As of now, we manufacture these buses on the front and rear chassis modules supplied by TML. In both the chassis built and the integral buses, a large variety of buses in terms of both size and fitments are done depending on customer choice. The basic difference consists of type of chassis, door and window configurations and a wide variety of fitments from the standard bus to high end luxury coach. The key features which differentiate our buses consist of the design and technology which we have acquired from our Japanese collaborators. The design aims at optimizing weight without compromising on the strength by Finite Element Analysis (FEA). The manufacturing technology for chassis built buses aims at building a semi-integral bus body independent of the chassis and then integrating it with the chassis by aggregating the body shell with chassis by welding. Special techniques of web-welding are used to weld on the chassis neutral axis so that the road shocks do not get transferred directly to the body. Sheet Metal Divisions The Sheet Metal Divisions is involved in the production and sale of pressed sheet metal parts, sub-assemblies and assemblies for a broad range of automobiles. Over the past five years, the SMD has taken a series of steps such as refurbishing of plant and equipment, installation of higher quality systems and most importantly, vigorous steps involving and training the human resource, which has resulted in a vastly superior operational performance. Notwithstanding the steep logistics

4

cost and stiff competition from units located close to the OEMs, we have demonstrated our ability to overcome many hurdles. The restructuring of the component business over the last four years has resulted in improvements in quality and productivity and steps are being taken to further improve operational efficiencies by implementation of TS 16949 in FY 2006. The division has also bagged a prestigious and long term order from Komatsu Cummins Engine Co. Ltd. Japan for supply of an engine component. We are drawing up plans to move closer to our main customer (Tata Motors Limited) by shifting pressings operations from Goa to Pune. The principal products are Pressings, Sub-assemblies and Assemblies for Commercial Vehicles. Pressings include in both the Cold Rolled (CR) and Hot Rolled (HR) Steel such as Instrument Panels, Mud Guards, Bonnets, Covers etc., as also Engine Cross Members, Brackets etc. Sub Assemblies and Assemblies are Pressings using higher end assembly operations such as welding, plating, painting and fitment of other pressings or bought-out parts.

5

THE ISSUE

Equity Shares proposed to be issued by the Company [●] Equity Shares

Rights Entitlement [●] Equity shares for every [●] Equity Shares held on the Record Date.

Issue Price per Equity Share Rs. [●]

Equity Shares outstanding prior to the issue

49,39,709 Equity Shares of Rs. 10/- each

Equity Shares outstanding after the Issue

[●] fully paid up Equity Shares

Issue Size Not More than 7,500 Lakhs

For more information see “Terms and Procedure of the Issue” on page 165 of this Draft Letter of Offer.

6

SELECTED FINANCIAL INFORMATION

The following table sets forth our selected financial information derived from our restated financial statements as of and for the fiscal, 2002, 2003, 2004, 2005 and 2006. These financial statements have been prepared in accordance with Indian GAAP and the Companies Act and the annual financial statements have been restated as described in the auditors’ report included therewith, in the section titled “Auditors Report” beginning on page 116 of this Draft Letter of Offer. The selected financial information presented below should be read in conjunction with our financial statements, the notes thereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 130 of this Draft Letter of Offer.

Automobile Corporation of Goa Limited

SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED

(Rupees in Lakhs)

For the Qtr

ended For the year ended 31 March

30th June 06 2006 2005 2004 2003 2002

A. Fixed Assets : Gross Block 5,506.37 5,473.06 5,175.72 5,194.66 5,288.22 5,228.58 Less : Depreciation 3,765.64 3,718.31 3,585.19 3,519.94 3,532.34 3,316.65 Net Block 1,740.73 1,754.75 1,590.53 1,674.72 1,755.88 1,911.93 Capital Work in Progress 79.65 14.56 19.53 1.61 3.72 1.82 1,820.38 1,769.31 1,610.06 1,676.33 1,759.60 1,913.75 B. Investments - Unquoted - - - - 0.37 1.12 C. Current Assets, Loans and Advances: Inventories 2,406.27 2,029.07 2,079.71 1,272.04 1,028.32 765.03 Sundry Debtors 2,127.12 3,384.43 1,727.80 1,062.74 1,012.53 840.51 Cash and Bank Balances 42.24 29.13 37.75 21.72 43.05 38.14 Loans and Advances 2,427.23 1,477.18 446.12 161.82 101.89 163.92 7,002.86 6,919.81 4,291.38 2,518.32 2,185.79 1,807.60 D. Liabilities and Provisions : Secured Loans 374.93 901.04 611.83 470.71 1,419.28 1,808.66 Unsecured Loans 484.28 484.28 359.26 847.81 450.21 763.93 Current Liabilities and Provisions 5,088.13 4,850.70 2,536.74 1,539.15 1,536.46 1,344.70 Deferred tax liability 79.85 121.13 131.70 - - - 6,027.19 6,357.15 3,639.53 2,857.67 3,405.95 3,917.29 E. Net Worth (A+B+C-D) 2,796.05 2,331.97 2,261.91 1,336.98 539.81 (194.82) Represented by : Shareholders' Funds : Share Capital 493.97 493.97 1,414.03 1,414.03 1,414.03 493.97 Reserves 2,302.08 1,838.00 847.88 59.37 438.46 738.46 Less: Profit and Loss Account

Debit Balance (as restated) - - - (136.42) (899.04) (1,237.14)

Less: Miscellaneous Expenditure - - - - (413.64) (190.11) 2,796.05 2,331.97 2,261.91 1,336.98 539.81 (194.82)

7

SUMMARY STATEMENT OF PROFITS AND LOSSES, AS RESTATED

(Rupees in Lakhs)

For the Qtr

ended For the year ended 31 March

30th June 06 2006 2005 2004 2003 2002

INCOME Turnover 7,002.74 25,403.04 15,662.04 11,268.34 7,595.86 4,839.91 Other Income 159.00 122.80 200.87 233.95 50.33 17.44 Total Income 7,161.74 25,525.84 15,862.91 11,502.29 7,646.19 4,857.35 EXPENDITURE Manufacturing and Other Expenses: Direct Material 5,714.97 20,707.35 12,113.78 8,506.01 5,660.29 3,547.20 Payments to and Provisions for Employees 358.16 1,245.17 1,105.58 976.92 878.45 781.64 Administration and Other Expenses 256.43 1,026.26 711.61 687.51 548.30 537.25 Finance and Treasury Charges (Net) 2.77 45.33 49.49 165.13 261.25 379.52 Depreciation 53.20 192.97 175.07 176.51 223.17 269.58 Total Expenditure 6,385.53 23,217.08 14,155.53 10,512.08 7,571.46 5,515.19 Net Profit / (Loss) before Extraordinary Item and Tax

776.21 2,308.76 1,707.38 990.21 74.73 (657.84)

Extraordinary Items: Deferred revenue expenditure in respect ofVoluntary retirement scheme written off

- - - (29.15) (87.48) (50.09)

Write back of Interest no longer payable - - - - 34.29 - Net Profit / (Loss) Before tax 776.21 2,308.76 1,707.38 961.06 21.54 (707.93) Provision for tax : Current tax (302.63) (774.10) (135.00) (49.00) - - Deferred tax 41.29 10.56 (131.70) - - - Fringe Benefit tax (1.09) (17.64) - - - - (262.43) (781.18) (266.70) (49.00) - - Net Profit / (Loss) after tax 513.78 1,527.58 1,440.68 912.06 21.54 (707.93) Impact on account of adjustments required byparagraph 6.10.2.7(b) of Chapter VI of theGuidelines [Refer note 8 of Annexure III]

(49.70) (24.13) 55.84 43.54 14.38 60.92

Adjusted Profit / (Loss) for the year 464.08 1,503.45 1,496.52 955.60 35.92 (647.01) Short provision for tax in respect of earlier years

- - (0.63) - 2.18 -

Accumulated Profit / (Loss ) 561.67 644.41 (136.42) (899.04) (1,237.14) (590.13) Amount available for appropriation 1,025.75 2,147.86 1,359.47 56.56 (1,199.04) (1,237.14) Preference Dividend - 55.01 105.56 171.06 - - Proposed Dividend - 395.18 395.18 21.92 - - Corporate Dividend tax - 63.14 70.22 - - - Transfer to General reserve - 152.80 144.10 - - - Transfer to Capital redemption reserve account - 920.06 - - - - Transfer from Debenture Redemption Reserve - - - - 300.00 - Balance carried to Summary Statement ofAssets and Liabilities, as restated

1,025.75 561.67 644.41 (136.42) (899.04) (1,237.14)

8

CONDENSED BALANCE SHEET AS AT 30TH SEPTEMBER 2006

As at 30th September, 2006 As at 31st March, 2006

Rupees Rupees

I. Sources of Funds 1. Capital 49,397,090 49,397,090 2. Reserve and surplus 248,285,196 176,972,384 297,682,286 226,369,474 3. Loan funds: (a) Secured loans 63,878,020 90,103,946 (b) Unsecured loans 48,428,000 48,428,000 112,306,020 138,531,946 4. Deferred tax liability ( net) 3,400,900 12,113,400 Total 413,389,206 377,014,820 II. Application of Funds 1. Fixed assets Gross Block ( Tangible fixed assets) 608,104,806 598,033,084 Less Depreciation 432,814,390 422,557,721 Net Block 175,290,416 175,475,363 Capital work -in- progress 11,093,333 1,455,515 186,383,749 176,930,878 2. Investments - - 3. Current assets, loans and advances (a) Inventories 263,177,745 202,906,884 (b) Sundry debtors 199,293,381 327,709,695 (c) Cash and bank balances 2,791,522 2,912,846 (d) Loans and advances 288,997,499 147,717,656 Total 754,260,147 681,247,081 Less: Current liabilities and provisions (a) Liabilities 317,937,489 329,705,003 (b) Provisions 209,317,201 151,458,136 Total 527,254,690 481,163,139 Net Current assets 227,005,457 200,083,942 Total 413,389,206 377,014,820

9

CONDENSED PROFIT AND LOSS ACCOUNT FOR THE PERIOD FROM 1ST APRIL 2006 TO 30TH

SEPTMEBER, 2006

Three months period from 1st July 2006 to

30th Sept., 2006

Three months period from 1st July 2005 to

30th Sept., 2005

Rupees Rupees

1 Turnover 658,957,879 587,937,904 2 Other Income 7,281,472 3,499,972 Total 666,239,351 591,437,876 3 Changes in inventories of finished goods , work-in-

process and scrap (3,659,838) 43,444,550

4 Cost of raw materials and consumables used 567,298,382 448,495,144 5 Excise duty (973,008) 491,602 6 Salaries, wages and other staff costs 38,609,940 30,230,355 7 Other expenses 28,776,536 20,532,321 8 Interest 369,035 778,501 9 Depreciation and amortisations 5,523,567 3,319,343 Total 635,944,614 547,291,816 10 Profit before tax 30,294,737 44,146,060 11 Tax expense (10,360,396) (14,578,030) 12 Profit after tax 19,934,341 29,568,030 Earnings Per Share: Basic and Diluted 4.04 5.47

10

GENERAL INFORMATION Dear Shareholder(s), Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on July 26, 2006 it has been decided to make the following offer to the Equity Shareholders of the Company, with a right to renounce: ISSUE OF [•] FULLY PAID EQUITY SHARES WITH A FACE VALUE OF Rs. 10 EACH AT A PREMIUM OF Rs. [●] PER EQUITY SHARE AGGREGATING FOR AN AMOUNT NOT MORE THAN Rs. 7,500 LAKHS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF [●] FULLY PAID EQUITY SHARE FOR EVERY [•] EXISTING EQUITY SHARES HELD BY THE SHAREHOLDERS ON THE RECORD DATE, i.e., [●] (“ISSUE”). THE ISSUE PRICE IS [●] TIMES OF THE FACE VALUE OF THE EQUITY SHARES. FOR MORE DETAILS, SEE “TERMS AND PROCEDURE OF THE ISSUE” ON PAGE 165 OF THIS DRAFT LETTER OF OFFER. Registered and corporate office of the Company: Honda, Sattari, Goa – 403530 Registration No.: 400/G of 1980 Corporate Identification Number: L35911GA1980PLC000400 The Registrar of Companies Company Law Bhawan Plot No.21, EDC Complex, Patto Plaza, .1.1.1.1 Panaji, .1.1.1.2 Goa – 403 001 The Equity Shares of the Company are listed on the BSE. Board of Directors

Sr.No Name, Designation Age (years) Residential Address

1. S. V. Salgaocar, Chairman Independent director

52 Hira Vihar, Airport Road, Chicalim VASCO-DA-GAMA, Goa-403 802

2. Mr. D. N. Naik, Independent director

72 Saket Monte Margao, Goa-403 601

3. Mr. P F X D’Lima Independent Director

64 64, Machdo’s Cave, Dona Paula, Goa – 403 004

4. Mr. P. M. Telang Promoter Director

59 Paradise Towers, Flat No. 211/212, Opp. Baner Telephone Exchange, Baner, Pune – 411 045

11

Sr.No Name, Designation Age (years) Residential Address

5 Mr. R. S. Thakur Promoter Director

58 Flat N 205, Burlington, Hiranandani Estate, Patlipada, Ghodbunder Road, Thane (w) – 400 607

6. Mr. S. M Kuvelker Independent Director

71 111-B, Paradise Apartments, 44, Nepean Sea Road, Mumbai – 400 036

7. Mr. N. R. Menon Managing Director

60 15, Palm Grove, Tonca Bhat, Caranzalem, Goa-403 002

8. Mr. Ananth Prabhu Executive Director

58 Plot No. 18, Tarkar Colony, Behind Hotel Goa International, Miramar, Caranzalem, Goa – 403002

For more details regarding the Company’s Directors please refer to “Management” on page 55 of this Draft Letter of Offer. Company Secretary and Compliance Officer Mr. Ananth Prabhu Automobile Corporation of Goa Limited Honda, Sattari, Goa – 403530 Tel : (91 832) 237 0227 Fax : (91 832) 237 0262 Email: rightsissue@acglgoa.com Lead Manager to the Issue DSP Merrill Lynch Limited Mafatlal Centre, 10th Floor Nariman Point Mumbai – 400 021 Tel: (91 22) 6632 8000 Fax: (91 22) 2204 8518 Email: acgl_rights@ml.com Contact Person: Mr. Ateet Sanghavi Legal Advisor to the Issue AZB & Partners Express Towers, 23rd Floor Nariman Point Mumbai – 400 021 Tel : (91 22) 6639 6880 Fax : (91 22) 6639 6888 E-mail : mumbai@azbpartners.com

12

Auditors of the Company C. C. Chokshi & Co. Chartered Accountants, 12, Dr. Annie Besant Road, Opp. Shiv Sagar Estate, Worli, Mumbai – 400 018. Tel: (91 22) 6667 9000 Fax: (91 22) 6667 9025 Independent tax advisor S S Dalvi & Company Chartered Accountants T-5, Souza Towers Domingo Roque Souza Road Near Municipal garden Panaji, Goa 403 001 Tel: (91 832) 222 3187 Fax: (91 832) 222 3187 Bankers/ Lenders of the Company State Bank of India Commercial branch State Bank Staff Training Centre Building Patto Plaza, Panaji – Goa – 403 001 Tel: (91 832) 243 8604/610 Fax: (91 832) 243 8612 Email: sbi4212@sancharnet.in HDFC Bank Limited 2nd Floor, Process House Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013. Tel (91 22) 2498 8484/2496/1616 Fax : (91 22) 2496 3994 Email : devangshah@hdfcbank.com Bankers to the Issue HDFC Bank Limited 2nd Floor, Process House Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013. Tel : (91 22) 2496 1616 Fax : (91 22) 2496 3994 Email : viral.kothari@hdfcbank.com Contact Person: Mr. Viral Kothari Website: www.hdfcbank.com Registrar to the Issue Intime Spectrum Registry Ltd.

13

C-13, Pannalal Silk Mills Compound LBS Marg, Bhandup (W), Mumbai – 400 078 Tel: (91 22) 2596 3838 Fax: (91 22) 2594 6969 Email: isrl@intimespectrum.com Website: www.intimespectrum.com Contact Person: Mr. Vishwas Attavar SEBI REG.No. INR 000003761 Credit Rating This being an issue of equity shares, no credit rating is required. Trustees This being a Rights Issue of Equity Shares, appointment of Trustees is not required. No Offer in the United States The rights and shares of the Company are not registered under the United States Securities Act, 1933, as amended, and the Issue is not, and under no circumstances is to be constructed as an offering of any shares or rights for sale in the United States of America or the territories or possessions thereof. For further details please see “Terms and Procedure of the Issue” on page 165 of this Draft Letter of Offer. Impersonation As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection (1) of Section 68A of the 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” Minimum Subscription If the Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), the company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. The issue will become undersubscribed after considering the number of shares applied as per entitlement plus additional shares. The undersubscribed portion shall be applied for only after the close of the Issue. If any person presently in control of the Company desires to subscribe to such undersubscribed portion and if disclosure is made pursuant to the Takeover Code, such allotment of the undersubscribed portion will be governed by the provisions of the Takeover Code. Allotment to Promoters of any unsubscribed portion, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement. For further details please refer to “Basis of Allotment” on page 175 of this Draft Letter of Offer. Note: Investors are advised to contact the Registrar to the Issue/ Compliance Officer in case of any pre-issue/post-issue related problems such as non-receipt of Draft Letter of Offer/ letter of allotment/ share certificate(s)/ refund orders.

14

CAPITAL STRUCTURE Capital Structure of the Company The Authorized share Capital of the Company is Rs. 25,00,00,000/- divided into 1,00,00,000 equity shares of Rs. 10/- each and 15,00,000 preference shares of Rs.100/- each.

Aggregate nominal value

(In Rs. Lakhs)

Aggregate Value at Issue Price

(In Rs. Lakhs)

Authorized share capital 1,00,00,000 Equity Shares of Re. 10 each 1,000 15,00,000 Preference Shares of Rs. 100/- each. 1,500 Total 2,500 Issued, subscribed and paid-up capital 49,39,709 Equity Shares of Re. 10 each fully

paid-up 493.97

Present Issue being offered to the Equity Shareholders through the Draft Letter of Offer

Equity Shares of Re. 10 each at a premium of Rs.[●] i.e. at a price of Rs. [●]

[●]

Paid up capital after the Issue Equity Shares of Re. 10 Share premium account Existing share premium account 9.37 Share premium account after the

Issue

Notes to capital structure: 1a. Build up of Equity Share Capital Build up of Equity Share capital of the Company

Date of allotment No. of Equity

Shares Allotted

Face Value (Rs.)

Issue Price (Rs.)

Cumulative paid-up capital (Rs.)

Consideration Remarks

November 24, 1980 7 10 10 70 Cash Subscribers to MOA March 18, 1981 3,99,993 10 10 40,00,000 Cash Promoters’ Contribution April 21, 1982 8,00,000 10 10 1,20,00,000 Cash Promoters’ Contribution April 21, 1982 11,50,000 *

10 10 2,35,00,000* Cash Public issue

September 20, 1988 15,93,450 10 25 3,94,34,500 Cash Right issue at the ratio of

3 Equity shares for every 5 equity shares held with provision for allotment in an equitable basis in case of over subscription.

May 22, 1989

1,65,275 10 25 4,10,87,250 Cash Firm Offer to EDC & UTI

15

Date of allotment No. of Equity

Shares Allotted

Face Value (Rs.)

Issue Price (Rs.)

Cumulative paid-up capital (Rs.)

Consideration Remarks

June 17, 1989 23,080 10 25 4,13,18,050 Cash Firm Offer to TML Dec.15, 1992 8,07,904 10 25 4,93,97,090 Cash Conversion of partly

convertible debentures.**

*Note: Calls in arrears were received in subsequent years. For the purposes of presentation it has been

assumed that the entire amount payable was received on April 21, 1982.

** Company issued partly convertible debentures on a rights basis to the existing shareholders in the ratio of 8 debentures for every 50 equity shares held as on August 25, 1992 along with reservation for employees of the Company, Mutual Funds, Banks, Financial Institutions/ Investment Institutions, EDC and TELCO. The debenture had a face value of Rs. 100. Immediately upon the issue, a part of the debenture with face value of Rs. 25 was converted into one equity share of face value Rs. 10 at a premium of Rs. 15 per share.

1b. Details of Equity Shares Bought Back

The Company has not bought back any shares since inception. 2. Cumulative Redeemable Preference Shares

The Company allotted ,20,060 11.5% (or the average State Bank of India Long Term PLR prevailing as at April and October 1 of each financial year whichever is lower) Cumulative Redeemable Non Convertible “A” Series Prefernce Shares of Rs. 100 each to EDC Limited on June 28, 2002. The Company allotted 3,00,000 11.5% Cumulative Redeemable Non Convertible “B” Series Prefernce Shares of Rs. 100 each to EDC Limited on August 20, 2002.All the preference shares issued to EDC Limited have been redeemed and there are no outstanding preference shares to EDC Limited as on date.

The Company allotted 600,000 11.5% Cumulative Non Convertible “B” Series Redeemable Preference Shares of Rs. 100 each to Tata Motors Limited on August 20, 2002. All the preference shares issued to Tata Motors Limited have been redeemed and there are no outstanding preference shares to Tata Motors Limited as on date.

3. Current shareholding pattern of the Company as on September 30, 2006

Shareholders

No. of Equity Shares held

pre-Issue % of pre-Issue

capital No. of Equity Shares

post Issue

% of post Issue capital assuming allotment of

all Equity Shares offered

I. PROMOTERS Promoters Tata Motors Limited 4,93,970 10.00 [●] [●] Tata International Limited

10,59,768 21.45 [●] [●]

EDC Limited 4,05,288 8.20 [●] [●] Total 19,59,026 39.65 [●] [●] II. NON PROMOTER HOLDING

1. Institutional Investors

a) Mutual Funds and 4,67,368 9.46 [●] [●]

16

Shareholders

No. of Equity Shares held

pre-Issue % of pre-Issue

capital No. of Equity Shares

post Issue

% of post Issue capital assuming allotment of

all Equity Shares offered

UTI b) Banks, Financial

Institutions/ Insurance Companies

150 0.0 [●] [●]

c) FIIs 1,400 0.03 [●] [●] 2. Others a) Private Corporate Bodies

3,95,484 8.01 [●] [●]

b) Indian Public 21,02,330 42.56 [●] [●] c) NRIs 13,951 0.28 [●] [●] TOTAL 49,39,709 100.00 [●] [●]

4. Details of Share Premium Account

Financial Year Particulars No. of Equity

Shares Premium per share

Amount (In Rs. Lakh)

Cumulative Amount

(In Rs. Lac)

1988-89 Rights issue 15,93,450 15 239.02 239.02 1989-90 Firm Offer 1,88,355 15 28.25 267.27 1992-93 Rights issue 8,07,904 15 121.19 388.46 2003-2004 Adjusting the balance

outstanding in the Deferred Revenue Expenditure Account by way of Voluntary Retirement Scheme expenditure and payment towards technical fees pursuant to an order of the High Court of Bombay dated January 23, 2004

N.A N.A. (379.09) 9.37

5. Details of the shareholding of the Promoters, Promoter Group, directors of the promoter in the

Company as on October 15, 2006

Name of entities Percentage of shareholding No. of Shares

Promoters Tata Motors Limited 10.00 493,970 Tata International Limited 21.45 1,059,768 EDC Limited 8.20 405,288 Total Promoter and Promoter Group shareholding 39.65 1,959,026

17

6. Details of acquisition by our Promoters

Name of Promoter

Date of Investment / Disinvestment No. of shares Remarks

Cumulative holding % holding

Tata Motors Limited

March 18, 1981 2,00,000 Subscribed 2,00,000 50

April 21, 1982 35,000 Subscribed 2,35,000 10 September 20, 1988 1,55,100 Subscribed 3,90,100 June 17, 1989 23,080 Subscribed to

firm offer 4,13,180 10

December 15, 1992 80,790 Subscribed 4,93,970 10 Tata Exports Limited

June 7, 1993 1,22,000 ** Purchase 1,22,000 2.47

June 16, 1994 9,37,768 ** Purchase 10,59,768 21.45 September 22, 1995 (1,99,900) *** Sale 8,59,868 17.41 May 15, 1996 (7,65,000) ***

Sale 94,868 1.92

Tata International Limited ****

1999 94,868 1.92

3rd May, 2005 9,64,900 Merger with Cameo Investment & Finance Ltd.*****

1,059,768 21.45

EDC Limited March 18, 1981 1,99,993 Subscribed 1,99,993 50 April 21, 1982 7,65,000 Subscribed 9,64,993 32.55 September 20, 1988 6,36,896 Subscribed as

per rights entitlement.

16,01,889 38.77

May 22, 1989 94,775 Subscribed as part of firm offer

16,96,664 41.06

December 15, 1992 3,31,749 Subscribed and converted partly convertible debentures.

20,28,413 41.06

June 7, 1993 (1,22,000) Sale 19,06,413 38.59 May 3, 1994 (2,28,596) Sale 16,77,817 33.97 June 1, 1994 (2,71,466) Sale 14,06,351 28.47 June 16, 1994 (9,37,768)* Sale 4,68,583 9.49 October, 2003 (30,934) Sale 4,37,649 8.86 December, 2003 (25,000) Sale 4,12,649 8.35 August, 2005 (6,361) Sale 4,06,288 8.22 January, 2006 (1,000) Sale 4,05,288 8.20

* Sale of shares by EDC Limited to Tata Exports Ltd. ** Purchased 1,22,000 shares from Goa Financial and Leasing Services Ltd., & 9,37,768 shares from EDC Limited *** Sale to Cameo Investment & Finance Limited **** Tata Exports Limited name changed to Tata International Limited by virtue of Order dated 11.2.2005 by Hon’ble

High Court 7. Details of the transactions in Equity Shares by the Promoters, directors of Promoters and the

promoter group during the last six months There was no transaction reported during the last six months from the date of Draft Letter of Offer.

8. The list of our top 10 shareholders of our Company and the number of Equity Shares held by

them is as under:

a) On the date of filing of Draft Letter of Offer with SEBI is as follows:

18

S.NO NAME OF SHAREHOLDER HOLDING

% TO CAPITAL

1 Tata International Ltd. 10,59,768 21.45 2 Tata Motors Limited 4,93,970 10.00 3 EDC Limited 4,05,288 8.20 4 Prudential ICICI Trust Limited Prudential 1,59,000 3.22 ICICI Service Industries Fund 5 Birla Sun Life Trustee Company Private 1,44,874 2.93 Limited A/C Birla Midcap Fund 6 Himgiri Castings Pvt Ltd 1,22,647 2.48 7 Birla Sun Life Trustee Company Private 95,800 1.94 Limited A/C Birla Equity Plan 8 Diana Dhun Ratnagar 70,000 1.42 9 Gaurav Sanghvi 50,000 1.01 10 Neepa Shah 45,863 0.93 TOTAL 2,647,210 53.59

b) Ten days prior to filing of Draft Letter of Offer with SEBI is as follows:

Sr. No. Name No. of shares % of Capital

1 Tata International Limited 10,59,768 21.45 2 Tata Motors Limited 4,93,970 10.00 3. EDC Limited 4,05,288 8.20 4 Birla Sun Life Trustee Company Pvt ltd A/c Birla

Midcap Fund 1,61,597 3.27

5 Prudential ICICI Trust Ltd –Prudential ICICI Service Industries Fund

1,59,000 3.22

6 Himgiri Castings 1,22,647 2.48 7 Birla Sun Life Trustee Company Pvt Limited A/c Birla

Equity Plan 97,897 1.98

8 Diana Dhun Ratnagar 70,000 1.42 9 Guarav Sanghvi 47,500 0.96 10 Optimum Financial Consultants Private Limited 45,000 0.91

c) Two years prior to filing of Draft Letter of Offer with SEBI is as follows:

Sr. No. Name No. of Shares % of capital

1 Cameo Investment and Finance Limited 9,64,900 19.53 2 Tata Motors Limited 4,93,970 10.00 3 EDC Limited 4,12,649 8.35 4 India Capital Fund Limited 3,14,314 6.36 5 Gandhi Securities and Investment Pvt. Ltd. 98,670 2.00 6 Tata International Limited 94,868 1.92

19

Sr. No. Name No. of Shares % of capital

7 Optimum Financial Consultants Private Limited 45,000 0.91 8 Dhanesh Sumantilal 45,000 0.91 9 Rachana Credit Capital Private Limited 45,000 0.91 10 Optimum Stock Trading Co. Private Limited 45,000 0.91

9. The total number of members of the Company as on September 30, 2006 was 13,002. 10. The present Issue being a rights Issue, as per extant SEBI guidelines, the requirement of promoters’

contribution and lock-in are not applicable. 11. The Company has not availed of “bridge loans” to be repaid from the proceeds of the Issue for

incurring expenditure on the Objects of the Issue. 12. The Promoters and Directors of the Company and Lead Manager of the Issue have not entered into any

buy-back, standby or similar arrangements for any of the securities being issued through this Draft Letter of Offer.

13. The terms of issue to Non-Resident Equity Shareholders/Applicants have been presented under the

section “Terms and Procedure of the Issue” on page 165 of this Draft Letter of Offer. 14. At any given time, there shall be only one denomination of the Equity Shares of the Company and the

Company shall comply with such disclosure and accounting norms specified by SEBI from time to time. The Equity Shareholders of the Company do not hold any warrant, option or convertible loan or debenture, which would entitle them to acquire further shares in the Company.

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 the Company, shall be made during the period commencing from the filing of the Draft Letter of Offer with the SEBI and the date on which the Equity Shares issued under the Draft Letter of Offer are listed or application moneys are refunded on account of the failure of the Issue. Further, presently the Company does not have any intention to alter the equity capital structure by way of split/ consolidation of the denomination of the shares on a preferential basis or issue of bonus or rights or public issue of shares or any other securities within a period of six months from the date of opening of the Issue.

16. The Issue will remain open for 30 days. However, the Board will have the right to extend the Issue

period as it may determine from time to time but not exceeding 60 days from the Issue Opening Date. 17. The Promoters have confirmed that along with the companies controlled by the Promoters (together

hereinafter referred to as “Promoter” in this clause) intend to subscribe to the full extent of their entitlement in the Issue. The Promoter reserves the right to subscribe to their entitlement in the Issue either by themselves, their relatives or a combination of entities controlled by them, including by subscribing for renunciation if any made within the promoter group to another person forming part of the promoter group. The Promoter also intend to apply for additional Equity Shares in the Issue, such that 100% of the Issue is subscribed. As a result of this subscription and consequent allotment, the Promoter may acquire shares over and above their entitlement in the Issue, which may result in an increase of the shareholding being above the current shareholding with the entitlement of Equity Shares under the Issue. This subscription and acquisition of additional Equity Shares by the Promoter, if any, will not result in change of control of the management of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the section on “Objects of the Issue” on page 20 of this Draft Letter of Offer), there is no other intention/purpose for this Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoter, in this Issue, the Promoter shareholding in the Company exceeds their current shareholding. Allotment to the Promoter of any unsubscribed portion, over and above their entitlement shall be done in compliance with the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements.

20

OBJECTS OF THE ISSUE

We intend to expand our manufacturing facility in the bus body business from 2,500 buses at present to 10,000 buses in the next three years. We plan to finance the objects through the net proceeds of this rights issue. The main objects clause and objects incidental or ancillary to the main objects clause of the Memorandum of Association of our Company enables us to undertake our existing activities and the activities for which the funds are being raised by us, through the present Issue. The objectives of the Rights Offering are to finance following projects:

1. Enhance the capacity of the BBD from 2,500 buses at present to 5,000 buses 2. Creation of New capacity of 5,000 buses at SMD main plant at Honda, Sattari, Goa ; and 3. Shifting of presses and related equipments from SMD located at Honda, Goa to in and around Pune 4. Up gradation and modernization of existing bus body building facilities

The details of the proceeds of the Issue are summarized below:

In Rs Lakhs

Gross proceeds of the Issue [●] Issue related expenses [●] Net proceeds of the Issue [●]

Schedule of utilization of Funds The year wise schedule of utilization of funds is as follows:

Rs. In Lakhs Fiscal 2007 Fiscal 2008 Total

Enhance capacity of bus body business 752.60 1,034.75 1,787.35 New capacity in the bus body business 1,227.29 2,241.36 3,468.65 Shifting of presses and related equipments 300.00 525.00 825.00 Up gradation and modernization of existing facility - 1,251.00 1,251.00 Total* 2,279.89 5,052.11 7,332.00

*The excess of fund received would be utilized for issue expenses and general corporate purposes including further expansions. Shortfalls if any will be made through internal accruals. The above fund requirement is based on our current business plan and projects that are planned. We may have to revise our business plan from time to time and consequently its funds requirement may also change. This may include rescheduling of capital expenditure programs, starting non-planned new projects, more actively develop projects that may currently be at a nascent stage, terminating projects currently planned and increase or decrease in the capital expenditure for a particular business unit vis-à-vis current plans at the discretion of the Management. Please refer to section on “Risk Factors” Please refer to the section on “Business- Our Expansion Plans” for further details of currently planned and proposed expansion projects. Enhance the capacity of the bus body business

21

Our current facility of bus body building is located at Bhuimpal, Sattari, Goa. We have a capacity to make 2,500 buses at this plant which we intend to enhance to 5,000 buses by fiscal 2008. The details of the various heads of expenditure required are as follows:

Rs. In Lakhs

Fiscal 2007 Fiscal 2008 Total

Civil construction expenditure 334.00 601.60 935.60 Plant & Machinery 307.10 348.00 655.10 Other Equipments 111.50 0.00 111.50 Contingencies 0.00 85.15 85.15 Total 752.60 1,034.75 1,787.35

Civil Construction Expenditure The civil work consists of additional built up areas for the plant and paint shop, stores and miscellaneous construction work for ETP etc. The estimates are based on the current construction costs for both structural and civil constructions as per our Architects/Civil Consultants. The expected date of completion is by November 2007. The details of the Civil Constructions started are as follows:

Description Estimated Price Name of the Contractor

Land Development 150.00 Supercons Shop for Design Painting 11.00 Supercons Shed for Main Plant 19.85 Supercons Shop for Rear Face 28.66 Supercons Main Shop Bay 3 384.00 Supercons Chassis Yard Stores 8.15 Supercons Septic Tanks 2.50 Shaikh Abdul Ohab Administration office Renovation 109.44 Design Minds Shop for roof,side manufacturing 184.00 Supercons Floor Painting-Trim and Shell line 38.00 Inter Trade Total 935.60

Plant & Machinery The plant and machinery consist of machinery such as Shearing and Press brakes, Compressors, fixtures and other items of machinery used for the manufacture of components and fabrication works. The expected date of supply of these plant & machinery is within 6 months from the date of placement of orders. The details of the plant and machinery required are as follows:

Description Quantity required

Estimated Price per unit

Total Amount (In Rs. Lakhs)

Name of the supplier/ expected supplier

Baking Oven 1 28.00 28.00 Ace India Shearing Machine 2 8.00 16.00 Godrej Press Brake 2 5.50 11.00 Godrej CNC Tpp And Cnc Press Brake 2 63.32 126.66 Amada India

22

Description Quantity required

Estimated Price per unit

Total Amount (In Rs. Lakhs)

Name of the supplier/ expected supplier

Pneumatic Hand Tools 21.94 Iec/Wadaco/Chicago Pneumatic Dg Set 1 46.20 46.20 Rai Incinerator 1 44.00 44.00 Parth Baroda Compressor 1 14.30 14.30 Ingersol Rand AVR 1 12.00 12.00 Prabhu Electricals Air Dryer 3 5.00 15.00 Sheetal Enterprises CNC Tube Bending 1 25 25.00 Electro Pneumatics Stretch Leveler 2 25 50.00 Hollow Block Fume Collectors 1set 50 50.00 Nederman/Esab Reconditioning of Machines 25.00 Raysom Reconditioning of Fixtures 10.00 Raysom PPTI Improvements 100.00 Sqaure Tube Profile Cutter 10.00 Hollow Block Testing and Validation 50.00 ARAI Total 655.10

Other equipments These are welding machines, plasma cutting machines, pneumatic tools, forklifts etc. The expected date of supply of the other equipment is within 5 months from the date of placement of orders The details of other equipment are as follows:

Description Quantity required

Estimated Price per unit

Total Amount

Name of the supplier/ expected supplier

Cnc Plasma 1 36.50 36.50 L & T Welding Machine 250 Amps

60 0.70 42.00 Adore Weilding

Welding Machine 400 Amps

10 1.70 17.00 Adore Weilding

Forklift 3 T 2 8.00 16.00 Voltas India Total 111.50

All the cost estimates are based on quotations received from current suppliers of machinery in the country. Contingencies Our total project cost for enhancing our capacity at our BBD is Rs, 1702.20 Lakhs. We propose to keep aside approximately 5% of the above towards contingencies. New capacity in the bus body business We have presses at our main Sheet Metal Divisions plant at Honda, Sattari, Goa which we propose to move to a new facility to be established, in or around Pune. We propose to add new capacity of 5,000 buses at this plant. The details of the various heads of expenditure required are as follows:

23

Rs. In Lakhs Fiscal 2007 Fiscal 2008 Total

Civil construction expenditure 349.30 383.00 732.30 Plant & Machinery 584.97 1,422.77 2,007.74 Other Equipments 293.02 266.85 559.87 Contingencies 0.00 168.75 168.75 Total 1,227.29 2,241.36 3,468.65

Civil Construction Expenditure The civil construction expenditure involved consists of a full fledged Pre-treatment and painting Shop, Stores, Chassis Yard and Administrative Block and miscellaneous structures such as under body and Shower testing facilities etc. The estimates are based on the current construction costs for both structural and civil constructions as per our Architects/Civil Consultants. The expected date of completion is by December 2008 The details of the Civil Constructions started are as follows:

Description Estimated Price Name of the Contractor

Paint Shop 218.00 Supercons Component Painting Shop 15.32 Supercons Pretreatment and Painting Shed 121.00 Supercons Chassis Yard Office 8.38 Supercons Module Storage Shade 72.80 Supercons Stores 74.30 Supercons Land Development 100.00 Supecons PDI Pit 6.00 Supercons U/B Pit and Shower Testing Pit 4.00 Supercons Floor Painting Trim and Paint Line 47.50 Inter Trade Roads 15.00 Civil Works at Ancillaries 50.00 Total 732.30

Plant & Machinery The plant and machinery consist of machinery such as Shearing and Press brakes, Compressors, fixtures and other items of machinery used for the manufacture of components and fabrication works. The expected date of supply of these plant & machinery is within 12 months from the date of placement of orders The details of the plant and machinery required are as follows:

Description Quantity required

Estimated Price per

unit Total

Amount Name of the supplier/

expected supplier

Fixtures-High Deck Bus 1 213.00 213.00 Pma Automotive Ltd Fixtures-Ulf And Reslf Bus 1 40.00 40.00 Pari/Yash/Raysam Chamber And Oven 1 34.00 34.00 Dynasole Industries Spray Booth And Oven 1 72.00 72.00 Ace India Boilers

2 10.75 21.50 Unitherm Engineering

Tow Truck (battery) 3 6.80 20.40 Durga Enterprise

24

Description Quantity required

Estimated Price per

unit Total

Amount Name of the supplier/

expected supplier

Centralized Vaccume System

1 42.50 42.50 Nederman

Finish Paint Shop Equipments

1 16.01 16.01 Alfagam

Primer Paint Shop Equipments

1 5.09 5.09 Alfagam

Winches

6 5.00 30.00 Hark Engineers

Component Painting Paint Shop 1 20.00 20.00 Tru Tech Systems Vaccume Dust Collectors

20 1.15 23.10 Power Resources

Pneumatic Hand Tools 1 40.33 40.33 Iec/Wadaco/Chicago Pneumatic

Shower Testing Chamber

1 10.20 10.20 Ace India

Compressor 830 Cfm

1 14.30 14.30 Ingersoll Rand

Dg Set 500kva

1 46.20 46.20 Rai

Air Dryer

3 5.00 15.00 Sheetal Enterprises

Cnc Tpp And Bending Machine

2 63.33 126.66 Amada India

Module Combination Tools/Fixtures/Platforms

19.95

Roof Dropping Stand 5.60 Combination Fixture Line 53.30 Sound Proof Structure straightening Chamber

20.13

Under Body Coat Chamber 9.70 Platforms 20.00 Pretreatment/Phosphating/Component Painting

225.00 Clorochem/Leo

ETP Set up 50.50 Material Handling and Storage 50.27 Painting Exhaust,Circulation Tank 16.00 Optical Module Aligner 10.00 Square Tube Cutting Machine 2 10.00 20.00 Hollow Block Stretch Panel Heating Torch 4 0.25 1.00 Advani Paint Shop Down Draft arrangement 1 75.00 75.00 Nederman Angle Cutter 8 0.50 4.00 Hollow Block Belt Sander 8 0.50 4.00 Vijay Machine Tools Wood Cutter 2 1.50 3.00 Vijay Machine Tools Thermocol Cutter 2 1.50 3.00 Vijay Machine Tools Speb Spray Set up 1 10.00 10.00 Pidilite Vinyle Weilding 4 0.50 2.00 LG Tube Bending Machine Mechanical 1 5.00 5.00 Electro Mech Presses for small components 4 5.00 20.00 HMT/Amiteep Low Cost Automation

1 50.00 50.00 Conex

Hydro Electric Lift Equipments

12 10.00 120.00 Conex

25

Description Quantity required

Estimated Price per

unit Total

Amount Name of the supplier/

expected supplier

Stretch Leveler

6 35.00 210.00 Hollow Block

Planisher

2 15.00 30.00 Electro Pneumatics

Tube Bending Machine Cnc

2 15.00 30.00 Electro Pneumatics

Fume Collectors

2 60.00 120.00 Nederman

QA Lab Set up 1 10.00 10.00 Komal Instruments Vehicle Engineering Support 1 20.00 20.00 TVS Equipment Total

2,007.74

These are welding machines, plasma cutting machines, pneumatic tools, forklifts etc. The expected date of supply of the other equipment is within 6 months from the date of placement of orders The details of Other Equipments required are as follows:

Description Quantity required

Estimated Price per unit

Total Amoun

t Name of the supplier/

expected supplier

Cnc Plasma

1 36.50 36.50 L & T

Nc Press Brake

4 14.88 59.50 Hindustan Hydraulics

Nc Shearing Machine

4 13.12 52.50 Hindustan Hydraulics

Welding Machine 250 Amps

150 0.70 105.00 Adore Welding

Welding Machine 400 Amps

25 0.85 21.25 Adore Welding

Dinitrol Spray Machine

2 1.81 3.62 Apulent Auto

Manual Stretch Fixture

2 9.00 18.00 Essdi Industries

Plasma Cutting Machine

2 1.40 2.80 Warpp Engineers

Tig Welding Machine

2 2.35 4.70 Colton Industries

Fork Lift / Diesel Tractor

3 8.00 24.00 Voltas India

3t Crane At Module Storage Shade

2 8.00 16.00 Consolidated Hoists

Gun Cleaning Equipment

2 2.00 4.00 Rhino Marketing

Roll Forming Mill

1 86.00 86.00 Valson Fabricators

Roll Forming Toolings

126.00 Valson Fabricators

Total 559.87 All the costs are based on quotations received from current suppliers of machinery in the country.

26

Contingencies Our total project cost for enhancing our capacity at our SMD is Rs. 3,300 Lakhs. We propose to keep aside approximately 5% of the above towards contingencies. Shifting of Presses We propose to shift our presses and related equipment presently housed at our plant in Honda, Sattari, Goa to a new facility to be established, in or around Pune. This will help us save on the logistic cost as the OEM to whom we supply our final products is located in Pune. Our total land requirement for the above purpose will be around 2 acres. We have an option of shifting these presses to our existing plant located at Jejuri, near Pune. This does not however meet our strategy of establishing our plant very close to our customer since Jejuri is around 70 Kms. Away from the location of our Customer. We have given our projections based on the assumption that we will be in a position to acquire the required land within the vicinity of our major customer viz. Tata Motors Limited.

Rs. In Lakhs

Fiscal 2007 Fiscal 2008 Total

Land and Site development cost 150.00 50.00 200.00 Civil construction expenditure 100.00 175.00 275.00 Relocation of existing presses and related equipments

50.00 100.00 150.00

Plant & Machinery 0.00 150.00 150.00 Other Equipments 0.00 10.00 10.00 Contingencies 0.00 40.00 40.00 Total 300 525 825.00 Land and Site development cost A plot of land admeasuring around 1.5 to 2 acres is being scouted for in and around Pimpri, Pune so as to be able to establish a new plant for shifting of the presses and associated machinery from Goa. The estimated cost is based on the enquiries made for land prices around the area. Civil Construction Expenditure The civil work consists of built up areas for the plant, stores Administration Block and miscellaneous construction work. The estimates are based on the current construction costs for both structural and civil constructions as per our Architects/Civil Consultants. This also includes Machine Foundation costs. Relocation of existing presses and related equipments This involves dismantling of Presses and associated Machinery, loading and unloading on to trucks and trailers, transportation costs and re-erection at the new plant. Plant & Machinery Specific machinery such as Compressors, Cranes and D G Set etc. will be required to be installed at the new site. The expected date of supply of these plant & machinery is within 6 months from the date of placement of orders

27

The details of the plant and machinery required are as follows:

Description Quantity required

Estimated Price per unit

Total Amount

Name of the supplier/ expected

supplier

Pre-treatment Set-up 18.00 18.00 Estimates 10 T Crane 1 20.00 20.00 Consolidated Hoists Compressor 830 cfm 1 14.30 14.30 I R D G Set 500 KVA 1 46.20 46.20 RAI Re-conditioning of Presses 51.50 51.50 Maheshwari Engg. Total 150.00

All the costs are based on quotations received from current suppliers of machinery in the country except the pre-treatment set up which is based on our own estimates. Other Equipments The other equipments shown at Rs. 10.00 Lakhs are for minor tools such as drills, sanders etc. as also hand tools. Contingencies Our total project cost for establishing this plant is Rs, 785 Lakhs. We propose to keep aside approximately 5% of the above towards contingencies. Upgradation and modernization of existing facility We intend to upgrade our existing bus building and other general facilities. This will enable us to scale up our product offering to those offered by contemporary international bus and coach builders who have plans to enter in Indian markets. The major head of expenditure proposed are as follows:

Rs. In Lakhs

Amount Name of the supplier/

expected supplier

Acquisition of Technology 500.00 Hardware and software for Design department 65.00 Development of new models 121.00 TechForce ERP 265.00 SAP Employee Training 50.00 Interior Styling/Fits and Finish improvements 250.00 Total 1,251.00

Acquisition of Technology To retain our leadership role in the domestic market as also to remain competitive in Global market, we propose to acquire contemporary design and manufacturing technology from global industry leaders. Hardware and software for Design department We intend to increase and upgrade our internal hardware systems by acquiring some new computers, hubs, notebooks, plotters, printers etc. We also intend to upgrade our design software with the latest offerings in the market. Interior Styling/Fits and Finish improvements

28

To sustain the existing business we propose to upgrade the existing bus body building technology for which we propose to invest in up gradation of interior/exterior styling; improvement in fits and finish and new items developments (like Hatracks, locks, electricals, roof hatches, ventilators etc.) ERP For efficient utilization of resources and better internal controls, we propose to install Enterprise Resource Planning package such as SAP. Employee Training Acquisition and transfer of technology will require training to our employees both at the technology providers’ location and in our plants. Issue Expenses The total expenses of the issue are estimated to be approximately Rs. [●] Lakhs. The expenses of this issue inter alia includes fees and expenses payable to the lead manager, Registrar to the issue, Legal counsel to the issue, Auditors, stamp duty, printing and stationary expenses and other expenses. All expenses with respect to the issue would be borne by the company from the proceeds of the issue.

Sr. No Expenses Amount (Rs. Lakhs)

Lead Manager Fees [●] Marketing Expenses and Issue advertisements [●] Printing and dispatch [●] Stamp Duty, Auditors, Listing, filing , Registrar and Legal Fees [●] Misc. Expenses [●] Total [●]

Interim Use of Proceeds Pending utilization of issue proceeds, the management, in accordance with the policies set up by the Board, will have the flexibility in deploying the proceeds received from the present Issue and during this period we intend to temporarily invest the funds in interest/dividend bearing liquid instruments including money market mutual funds, deposits with banks for the necessary duration. Such investments would be in accordance with investment policies approved by the Board from time to time.

29

BASIS FOR ISSUE PRICE

Investors should also refer to the section “Risk Factors” and “Auditors’ Report” to get a more informed view before making the investment decision. In this section, any reference to “we”, “us” or “our” refers only to Automobile Corporation of Goa Limited. Qualitative Factors

We believe we are one of the leading players in bus body building Industry in India. Our turnover comprises of sales in the BBD and SMD. In the BBD we primarily manufacture bus bodies and mount them on chassis supplied by our customers. Our manufacturing activities at the BBD involve basic body component manufacture, combination of body aggregates, painting of bus shell, dropping and integrating the shell with the chassis and providing interiors and other fitments. At the SMD, we procure sheet steel both in Hot Rolled and Cold Rolled versions, and perform a series of pressing operations such as blanking, forming, piercing, etc to manufacture basic auto components using the tooling provided by the OEMs. Further value addition on such components by welding other components, adding bought – out parts, painting etc. is done to manufacture sub assemblies and assemblies. Our revenues from BBD increased by 166.12% to Rs.17,351.42 Lakhs for fiscal 2006 from Rs.6,520.12 Lakhs in fiscal 2004. For the three months ended June 30, 2006 it stood at Rs.5,009.45 Lakhs. Strong technology focus We believe in offering a strong technology based value proposition to our customers. Over the years, we have developed capabilities to customize and improve our product designs by absorbing, adapting and improving the acquired technology. We believe that this has enabled us to offer product variants as per customer demand as also introduce new products from time to time to keep ourselves competitive in the market. We continue to maintain our focus through a strong commitment towards research and development. Some of the low floor / semi low floor buses manufactured by us have evicted good demand for inter city transport. Similarly the Tarmac coaches manufactured by us are being supplied to major airlines. Strong relationship with Tata Motors Limited (TML) Tata Motors is one of the largest companies in Indian in the automobile sector and is the fifth largest medium and heavy commercial vehicle manufacturer in the world. TML is a fully integrated automobile manufacturer with a portfolio that spans trucks, buses, utility vehicles and passenger cars. We are the largest supplier of bus bodies to Tata Motors Limited, a majority of which is exported. We are also a Tier I supplier of pressed sheet metal components and assemblies to TML’s CVBU plant at Pune. TML is also one of our promoters. Tata Motors share in our Revenue (Rs. in Lakhs)

Description Quarter ended For the year ended 31st March

June 2006 2006 2005 2004

Total Revenue (Rs. Lakhs) 7,161.74 25,525.84 15,862.90 11,502.29 Revenue from Tata Motors Limited(Rs. Lakhs)

6,315.29

22,774.88 13,550.47 9,990.04

Revenue from Tata Motors Limited (%) 88.18% 89.22% 85.42% 86.85% Design and manufacturing process The bus body business in India is largely in the unorganized sector. The key feature which differentiates our buses consists of the design and technology which we have acquired from our Japanese collaborators. The design aims to optimize weight without compromising on the strength by Finite Element Analysis (FEA). The technology that we have acquired contains inherent design features which results in a strong but comparatively light weight vehicle leading to high safety and at the same time improved fuel efficiency and tyre wear. The

30

manufacturing process relies heavily on pre fabricated aggregates which are combined on giant fixtures to an off chassis semi integral bus shell resulting in much shorter lead time for supply of buses from the date of chassis receipt. Our manufacturing technology also facilitates volume production due to use of fixtures some of which are automated. Unlike conventional buses built in the unorganized sector, the bus shell made independent of the chassis is painted in auto mobile standard paint booth and force dried in ovens resulting in a superior paint finish. As a company certified under ISO/ 9000 quality management system, the manufacturing process goes through established processes. The process also uses superior customized inputs such as roll-formed structural parts, special aluminium extrusions, special anti-rust coats, oven baked auto-finish paint systems and special sealants etc. The shower testing and other testing facilities ensure that the end product is vastly superior to the conventional buses being fabricated by the un-organised sector in India. Our ability to introduce new models of buses in short time Over the last several years we have developed a number of new models such as 6HD bus, low floor and semi low floor buses, Starbus and various customer specific variants to meet the municipal, schools, police and defence force requirements both for the ultimate domestic and international customers. Our ability to design and build prototypes at short notice has endeared us to our customers as a reliable source for development, prototyping and testing of new products.

Quantitative Factors

Information presented in this section is derived from our audited restated financial statements prepared in accordance with Indian GAAP.

1. Weighted average earnings per share (EPS)* Period EPS(Rs.) Weight

Year ended March 31, 2004 16.34 1 Year ended March 31, 2005 27.84 2 Year ended March 31, 2006 29.16 3 Weighted Average 26.58

*The weighted average number of Equity Shares has been considered for calculation of EPS. 2. Price/Earning (P/E) ratio in relation to Issue Price of Rs. [ ]

a. Based on twelve months ended fiscal 2005 is [ ] b. Industry P/E(1)

As there are no direct comparable for our company we have taken into consideration the comparable for the category titled “Auto Ancillaries”

i) Highest: 87.4 ii) Lowest: 8.2 iii) Average (composite): 21.9

(1) Source: “Capital Market” VolumeXXI/17 dated October 23, 2006 to November 05, 2006 for the Category titled ‘Auto Ancillaries’.

3. Weighted average return on average net worth (2)

Period Return on Net Worth (%) Weight

Year ended March 31, 2004 71.47 1 Year ended March 31, 2005 66.16 2 Year ended March 31, 2006 64.47 3 Weighted Average 66.20

31

(2) Net worth has been computed by aggregating share capital, reserves and surplus and adjusting for revaluation reserves, intangible assets and deferred tax assets as per our audited restated financial statements.

4. Minimum Return on Increased Net Worth Required to maintain pre-Issue EPS.

The minimum return on increased net worth required to maintain pre-Issue EPS is [•]% to [•]%.

5. Net Asset Value (NAV)

NAV per Equity Share at March 31, 2006 is Rs.47.21 per share. NAV per Equity Share after the Issue is Rs. [•] Issue Price per Equity Share: Rs. [•] NAV per equity Share for the fiscal 2004,2005 and 2006 is as

Period Net Asset value per equity

Share (Rs. ) Weight

Year ended March 31, 2004 27.06 1 Year ended March 31, 2005 45.79 2 Year ended March 31, 2006 47.21 3 Weighted Average 43.38

6. Comparison with other listed companies

As there are no direct comparable for our company we have taken into consideration the some of the companies comparable for the category titled “Auto Ancillaries”

Source: (1) Our EPS, Return on Average Net Worth and Book Value per Share have been calculated from our audited restated

financial statements. (2) Source for other information is “Capital Market” VolumeXXI/17 dated October 23, 2006 to November 05, 2006 for

the Category titled ‘Auto Ancillaries’ (3) Price of ACGL for the calculation of the P/E is as on 16th October 2006 i.e. Rs. 534.45

The Lead Manager believes that the Issue Price of Rs. [ ] is justified in view of the above qualitative and quantitative parameters. See the section titled “Risk Factors” on page vii of this Draft Letter of Offer and the financials of the Company including important profitability and return ratios, as set out in the Auditors Report on page 116 of this Draft Letter of Offer to have a more informed view.

EPS (Rs.) P/E

Return On Net Worth

(%) Book Value Per

Share (Rs.)

ACGL(1) 29.16 18.33(3) 71.47 27.06 Peer Group (2) Amtek Auto 13.1 24.3 20.3 109.3 Bosch Chassis 39.1 21.9 36.9 131.2 Exide Inds 1.3 24.9 21.6 6.7 Omax Autos 8.7 11.0 18.9 52.8 Rico Auto Inds 2.7 29.5 21.7 18.0 Sona Koyo Steer 1.8 32.7 20.7 9.6 Sundaram Clyaton 35.4 32.7 28.1 152.6 Peer Group (Simple) Average

32

STATEMENT OF TAX BENEFITS The tax benefits listed below are the possible benefits available under the current tax laws in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives it faces in the future, it may not choose to fulfill. The following tax benefits shall be available to the Company and the prospective shareholders under Direct Tax Laws. 1. To the Company - Under the Income-tax Act, 1961 (the Act) 1.1 There is no additional benefit arising to the Company under The Income Tax Act, 1961, by proposed

Right Offer of Equity Shares. 2. To the Members of the Company – Under the Income Tax Act 2.1 Resident Members

a) Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to in Section 115-O of the Act is exempt from income-tax in the hands of the shareholders.

b) Under Section 10(38) of the Act, long term capital gain arising to the shareholder from

transfer of a long term capital asset being an equity share in the company (i.e. capital asset held for the period of twelve months or more) entered into in a recognized stock exchange in India and is chargeable to Securities Transaction Tax, shall be exempt from tax.

c) In terms of Section 88 E of the Act, the securities transaction tax paid by the shareholder in

respect of the taxable securities transactions entered into in the course of the business would be eligible for rebate from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under Business or Profession’ arising from taxable securities transactions.

d) As per the provisions of Section 10(23D) of the Act, all mutual funds set up by public sector

banks, public financial institutions or mutual funds registered under the Securities and Exchange Board of India (SEBI) or authorized by the Reserve Bank of India are eligible for exemption from income-tax, subject to the conditions specified therein, on their entire income including income from investment in the shares of the company.

e) Under Section 54EC of the Act, capital gain arising from transfer of long term capital assets

[other than those exempt u/s 10(38)] shall be exempt from tax, subject to the conditions and to the extent specified therein, if the capital gain are invested within a period of six months from the date of transfer in the Long Term specified asset being any bonds redeemable after three years issued by the National Highways Authority of India and Rural Electrification Corporation Limited as may be notified by the Central Government.

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced.

However, the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred or converted into money within three years from the date of their acquisition.

f) Under Section 54F of the Act, where in the case of an individual or HUF capital gain arise from transfer of long term assets [other than a residential house and those exempt u/s 10(38)] then such capital gain, subject to the conditions and to the extent specified therein, will be exempt if the net sales consideration from such transfer is utilized for purchase of residential house property within a period of one year before or two year after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.

33

g) Under Section 111A of the Act, capital gains arising from transfer of short term capital assets,

being an equity share in a company, which is subject to securities transaction tax will be taxable under the Act @ 10% (plus applicable surcharge and educational cess).

h) Under Section 112 of the Act and other relevant provisions of the Act, long term capital gains

[not covered under Section 10(38) of the Act] arising on transfer of shares in the Company, if shares are held for a period exceeding 12 months, shall be taxed at a rate of 20% (plus applicable surcharge and educational cess on income-tax) after indexation as provided in the second proviso to Section 48 or at 10% (plus applicable surcharge and educational cess on income-tax) (without indexation), at the option of the Shareholders.

2.2 Non- Resident member:

Return of Income not to be filed in certain cases

Under provisions of Section 115-G of the Act, it shall not be necessary for a non-resident Indian to furnish his return of income if his only source of income is investment income or long term capital gains or both arising out of assets acquired, purchased or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from.

Other Provisions of the Act

a) Under Section 115-I of the Act, a non resident Indian may elect not to be governed by the

provisions of Chapter XII-A of the Act for any assessment year by furnishing his return of income under section 139 of the Act declaring therein that the provisions of the Chapter shall not apply to him for that assessment year and if he does so the provisions of this Chapter shall not apply to him. In such a case the tax on investment income and long term capital gains would compute as per normal provisions of the Act.

b) Under the first proviso to section 48 of the Act, in case of a non resident, in computing the

capital gains arising from transfer of shares of the company acquired in convertible foreign exchange (as per exchange control regulations), protection is provided from fluctuations in the value of rupee in terms of foreign currency in which the original investment was made. Cost indexation benefits will not be available in such a case.

c) Under Section 54EC of the Act, capital gain arising from transfer of long term capital assets

[other than those exempt u/s 10(38)] shall be exempt from tax, subject to the conditions and to the extent specified therein, if the capital gain are invested within a period of six months from the date of transfer in the Long Term specified asset being any bonds redeemable after three years issued by the National Highways Authority of India and Rural Electrification Corporation Limited as may be notified by the Central Government

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However, the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred or converted into money within three years from the date of their acquisition.

d) Under Section 54F of the Act, where in the case of an individual or HUF capital gain arise

from transfer of long term assets [other than a residential house and those exempt u/s 10(38)] then such capital gain, subject to the conditions and to the extent specified therein, will be exempt if the net sales consideration from such transfer is utilized for purchase of residential house property within a period of one year before or two year after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.

e) Under Section 111A of the Act, capital gains arising from transfer of short term capital assets,

being an equity share in a company, which is subject to securities transaction tax will be taxable under the Act @ 10% (plus applicable surcharge and educational cess).

34

f) Under Section 112 of the Act and other relevant provisions of the Act, long term capital gains [not covered under Section 10(38) of the Act] arising on transfer of shares in the Company, if shares are held for a period exceeding 12 months, shall be taxed at a rate of 20% (plus applicable surcharge and educational cess on income-tax) after indexation as provided in the second proviso to Section 48 or at 10% (plus applicable surcharge and educational cess on income-tax) (without indexation), at the option of the Shareholders.

2.3 Foreign Institutional Investors (FIIs)

a) By virtue of Section 10(34) of the Act, income earned by way of dividend income from another domestic company referred to in Section 115-O of the Act, are exempt from tax in the hands of the institutional investor.

b) Under section 115AD capital gain arising on transfer of short capital assets, being shares and

debentures in a company, are taxed as follows:

(i) Short term capital gain on transfer of shares/debentures entered in a recognized stock exchange which is subject to securities transaction tax shall be taxed @ 10% (plus applicable surcharge and educational cess); and

(ii) Short term capital gains on transfer of shares/debentures other than those mentioned

above would be taxable @ 30% (plus applicable surcharge and educational cess).

c) Under section 115AD capital gain arising on transfer of long term capital assets, being shares

and debentures in a company, are taxed @ 10% (plus applicable surcharge and educational cess). Such capital gains would be computed without giving effect to the first and second proviso to section 48. In other words, the benefit of indexation, direct or indirect, as mentioned under the two provisos would not be allowed while computing the capital gains.

d) Under Section 54EC of the Act, capital gain arising from transfer of long term capital assets

[other than those exempt u/s 10(38)] shall be exempt from tax, subject to the conditions and to the extent specified therein, if the capital gain are invested within a period of six months from the date of transfer in the Long Term specified asset being any bonds redeemable after three years issued by the National Highways Authority of India and Rural Electrification Corporation Limited as may be notified by the Central Government

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However, the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred or converted into money within three years from the date of their acquisition.

2.4 Venture Capital Companies/ Funds

As per the provisions of section 10(23FB) of the Act, income of

● Venture Capital Company which has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992 and notified as such in the Official Gazette; and

● Venture Capital Fund, operating under a registered trust deed or a venture capital scheme

made by Unit Trust of India, which has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992 and notified as such in the Official Gazette set up for raising funds for investment in a Venture Capital Undertaking is exempt from income tax.

2.5 Infrastructure Capital Companies/ Funds or Co-operative Bank

As per the provisions of section 10(23G) of the Act, income by way of dividends, interest or long term capital gains of

35

● Infrastructure Capital Company; ● Infrastructure Capital Fund; and ● Co-operative Bank

from investment made in share or long term finance in undertakings specified therein shall be exempt from tax.

However, such income earned by an Infrastructure Capital Company shall not be exempt for the purpose of computing tax on book profits u/s 115JB of the Act.

3. Wealth Tax Act, 1957

Shares in a company held by a shareholder will not be treated as an asset within the meaning of Section 2(ea) of Wealth Tax Act, 1957; hence, wealth tax is not leviable on shares held in a company.

4. The Gift Tax Act, 1957

Gift of shares of the company made on or after October 1, 1998 are not liable to gift tax. Notes: a) All the above benefits are as per the current tax law and will be available only to the sole/ first named

holder in case the shares are held by joint holders. b) In respect of non-residents, taxability of capital gains mentioned above shall be further subject to any

benefits available under the Double Taxation Avoidance Agreement, if any between India and the country in which the non-resident has fiscal domicile.

c) In view of the individual nature of tax consequence, each investor is advised to consult his/ her own tax

adviser with respect to specific tax consequences of his/ her participation in the scheme.

36

INDUSTRY OVERVIEW

The information presented in this section has been extracted from publicly available documents, including market research reports and industry publications that have not been prepared or independently verified by us, the Lead manager or any of our or its respective affiliates or advisors. The Indian Economy

India, the world’s largest democracy in terms of population (1,107 million people) had a GDP at current market price of approximately Rs. 35,315 billion in 2006. (Source: CMIE Monthly Review, July 2006). As per the CIA World Fact book, India is the fourth largest economy in the world after the United States of America, China and Japan.

In 1991, the Government of India initiated a series of comprehensive macroeconomic and structural reforms to promote economic stability and growth. The key policy reforms that were initiated by the Government were focused on implementing fundamental economic reforms, deregulation of industry, accelerating foreign investment and pushing forward a privatisation program in public sector units. Consequent to the reform’s program, India’s economy registered robust growth with an average real GDP growth of 6.3% over the period fiscal 2000 to fiscal 2006.

For the fiscal year of 2005-06, India had a real GDP growth rate of 8.4%. CMIE projects a real GDP growth rate of 7.9% for fiscal 2007.

Bus Industry in India

The Indian auto industry is one of the largest industrial sectors in India, with a turnover that contributes roughly 4% of India’s GDP. It directly employs over two million people and provides indirect employment to another ten million. The auto industry is important for national policy in that it contributes 19% of indirect taxes.

Buses account for around 14.92 % of overall CV sales. From Fiscal 2001to Fiscal 2006 CV industry has grown at a CAGR of 25.34%. (Source: SIAM)

Bus Industry Market Share (2006)

Total CV Sales (Excluding Bus

Sales & Including Exports) (85.08%)

Total Bus Sales (Including Exports) (14.92%)

332,867

58,388

37

The following chart represents the Total domestic and Exports Bus sales in terms of units along with their growth rate.

5,3496,120

7,831

50,55738,387 43,448 45,620

3,828

32.80%

15.59% 12.85%

6.03%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2002-03 2003-04 2004-05 2005-060%

5%

10%

15%

20%

25%

30%

35%

Domestic Sales (units) Export Sales (units) Y-O-Y

Total BUS Sales (units)

Source: SIAM

Market Share for 2006:

The following chart represents player wise market share of the total Bus Sales in Volume for fiscal 2006 (SIAM)

Ashok Leyland Ltd28.20%

Tata Motors Ltd48.00%

Hindustan Motors Ltd0.52%

Force Motors Ltd7.52%

Mahindra & Mahindra Ltd

4.91%

Sw araj Mazda Ltd5.72%

Eicher Motors Ltd4.53%

Volvo India Pvt Ltd0.60%

Source: SIAM

SWOT analysis of Indian Bus Industry

38

Key Drivers for the increase in Bus Demand:

Growth in inter – city traffic & urban travel traffic:

Increasing population and urbanization, coupled with increase in per capita GDP and large investment in road infrastructure, has resulted in the growth in the inter-city travel by buses and increase in the urban travel. However, increasing competition from personal modes of transport will keep the growth for intra-city passenger traffic by buses under check.

Over the years, there has been a phenomenal increase in urban travel. This has been driven largely by the following three factors:

Population growth: Population of an urban area doubles in about 2 decades.

Mobility rate: This is defined as the average trips made by per person, per day. The mobility rate in urban India has been on the upswing.

Trip length: Trip length has increased due to the physical expansion of the city.

Increase in demand by private Operators

The demand for buses is largely driven by the private operators, as the state transport undertakings (STUs) are constrained with problems such as limited revenue earning capability, financial crisis, and service quality issues. Recently, the demand growth for buses from STUs has reduced and on the other hand, the demand from private operators has grown owing to the growing demand from niche segments such as the fast-growing BPO industry, school buses and additionally, increase in inter-city travel on luxury coaches has also helped boost demand from private operators

Bus majors increasingly focusing on the export market potential

Bus majors in order to de-risk their business revenue and overcome the cyclicality of the Indian market, have started to focus on exports and develop a strategy to make their presence felt in the international Bus Industry. The export volume has grown at a CAGR of around 52.26% during fiscal 2001-2006, indicating its growing importance to the industry players. (Source: SIAM)

Exclusive bus lane; “Bus Rapid Transit System”

Bus Rapid Transit System (BRTS) are the exclusive bus lanes that are specially designed for buses. Such exclusive bus lanes have been successfully introduced in cities like Sydney (Australia) and Edinburgh (UK). BRTS may help in:

• Low – cost , skilled engineering manpower, leading to superior cost structure across processes, particularly those requiring significant design and engineering inputs

• Low – cost product development capabilities • Low capital cost, attributable to ability to develop

machine tools, robotics, and tools and fixtures at competitive cost in house

• The Presence of strong local component industry and relatively high levels of integration

• In sum, a competitive cost structure , despite constraints in terms of high taxes and high infrastructure costs

Strengths • Inadequate and expensive infrastructure • In early stage of evolution and thus behind

multinational peers in terms of economies of scale and capital employed

• Exposed to Local cyclicality and a narrow market base, as exports still in nascent stage

Weaknesses

• Sizeable local market potential, mainly at the utilitarian end with specific local requirement, offers Indian companies an opportunity to build scale and upgrade gradually with the market

• Global markets – both through direct exports and outsourcing opportunities

Opportunities • Global majors resorting to predatory pricing in order to

penetrate the Indian market • Any paradigm shifts in technology could increase

technology gap considerably

Threats

39

Increase in speed of buses, which would trigger superior fuel efficiency and savings in time and costs.

Reduced congestion due to exclusive bus lanes.

Reduction in travel time and increased safety for passengers in the form of less accidents and fatalities.

Increase in demand for short-distance bus travel.

OEMs eyeing luxury bus segment

Volvo India was the first manufacturer to launch a bus in the luxury segment. Despite its steep price and the small size of the segment, the company managed to make its mark. These buses are primarily used on inter-city routes; however, the same are also likely to be promoted for intra-city use. STUs in Maharashtra, Karnataka and Andhra Pradesh have also endorsed these buses. Recently, Tata Motors and Marcopolo, the Brazil-based global leader in bodybuilding for buses and coaches, announced a 51:49 joint venture company in India. Ashok Leyland has also announced plans to launch ‘InterCentury Luxura’ in the luxury bus segment. With the advent of more players in the luxury segment, it is likely to witness higher growth over the next few years.

Progress of Golden Quadrilateral

Golden Quadrilateral (GQ), which is a part of the road development programme in India, has resulted in 80% completion during fiscal 2005 and 92% completion as of July 31st 2006. In addition to Phases I, II and III of the National Highway Development Programme (NHDP), the incumbent government has announced Phase IV of NHDP, which includes two-laning of 41,000 kilometers of highways not covered under the first three plans. This rapid expansion and improvement in road network, connecting cities and rural areas, is expected to substantially help the Bus industry to grow.

Key Risks and Concerns for the Bus Industry

Buses losing steam in passenger transport by road

Over the last 30 years, while passenger transport by roads has overtaken the railways, the share of buses in road transport has gradually declined, due to a modal shift toward personal modes of transport and bus supply constraints. The major reasons for the decline in the share of buses in passenger transport has been the inability of public transport operators (STUs) to keep pace with growing travel demand and the deterioration in service quality arising out of continued losses. This resulted in inadequate resources for fleet replacement, thus affecting demand for buses considerably. Among other reasons, regulatory constraints disallowing private operators to ply on STU routes have also affected the sale of buses.

Regulatory changes that could spur bus demand include financial restructuring or privatisation of state transport undertakings, or the easing of restrictions on private participation in public transport. However, these measures are not expected soon. The regulatory measure like privatization of STUs’ or increasing public and private partnerships can create a significant impact on demand for buses, but the certainty of these changes is largely unknown.

Low quality of Public transport

One of the core problems of public transport is punctuality, reliability and overall quality of public transportation. Public buses provide a low level of service, with many passengers often traveling on footboards. Absence of well-trained drivers, timing schedules, well-maintained buses are some of the other factors degrading the service quality of public transport buses. In addition, road congestion is degrading the quality of bus services. According to a survey presented in the Indian Journal of Transport Management, 38.9 per cent of those surveyed said that the Delhi Transport Corporation (DTC) had poor punctuality, 41.7 per cent said that the DTC had poor dependability and 41.7 per cent complained of poor cleanliness. The DTC was ranked as poor by 48.4 per cent for overall service.

Alternate modes of transport posing rigid competition

For much of the Indian middle class, a motorcycle offers far more flexible and affordable mode of transport than public transport. In addition, Bus industry is also affected by uncontrolled competition from taxi operators. For instance, a Taxi may be found picking up passengers from stage to stage ahead of a bus stop that runs on a given

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route as per the time schedule. Thus, while the taxi gets full occupancy, the bus that comes after the taxi along the route has to be operated at a far lower occupancy ratio, resulting in financial loss for the bus. Other modes of transport that compete with public transport are auto rickshaws (intra-city) and private cars and trains (intra and inter-city)

Bus Body Industry

Most of the vehicles sold by CV manufacturers today are sold in the chassis form only while smaller players typically fit body to chassis. Bus Body companies source body parts from suppliers within the vicinity, as transportation cost is high. Some OEMs have captive manufacture of body parts.

The continuing infrastructure development, initiatives of various governments to phase out old vehicles and general improvement in the economy have aided the Bus Body building industry to enter an era of growth. With the expectations of further steps by the new government to reduce the anomalies in the Excise duty levy on Bus bodies and provide the organized sector with a level playing field for bus body building, it is hoped that more and more vehicle manufacturers will convert their chassis sales into fully built vehicles sales thus giving a fillip to organized body builders.

Sheet Metal Industry

Approximately 90% of the industry sales are derived from the OEMs in the sheet metal segment. While body parts, which form the bulk of the output, goes to the OEMs, the demand from the replacement market are for parts such as mufflers, exhaust systems etc, which have limited life. As most products are bulky, exports are negligible in this segment. Significant raw material intensity also keeps the employee cost arbitrage low. Small components such as exhaust parts, mufflers are exported but the value of these products is very low.

OEMS source body parts from suppliers within the vicinity, as transportation cost is high. Some OEMs have captive manufacture of body parts. Also, as these are proprietary components, even outsourcing is done only through JVs.

Depending on OEM policy, tooling costs is either borne by the OEMs or suppliers. As value addition of products also relates more to tooling, the manufacturers have very low pricing flexibility with the OEMs.

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OUR BUSINESS

Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the 12-month period ended March 31 of that year. The following discussion should be read in conjunction with our audited financial statements and the notes to such financial statements and other information included elsewhere in this Draft Letter of Offer. In this section, any reference to “we”, “us” or “our” refers only to Automobile Corporation of Goa Limited. History of the Company We were incorporated on September 1, 1980 as a public limited company under the Indian Companies Act, 1956. We were jointly promoted by EDC Limited (a Government of Goa Industrial Finance Company), formerly known as Economic Development Corporation of Goa, Daman & Diu Ltd, and Tata Motors Limited. The primary objective of the Government of Goa in entering into an agreement through EDC with Tata Motors Limited was to aid the economic development of backward area of Sattari, Goa through the establishment of an industrial unit. While EDC on its part agreed to provide Finance, Infrastructure, etc. Tata Motors agreed to provide technical and managerial assistance to the joint venture. We commenced our operations in 1982 with a factory at Honda, Sattari; Goa, to manufacture sheet metal components, sub-assemblies and assemblies for automobiles in India. Our company went public in 1982. Post this issue EDC held 41.06%, Tata Motors held 10.00% and the balance 48.94% was held by public and the shares of the company were listed on the Bombay & Delhi Stock Exchanges. We offered our first Rights Issue of equity shares in 1988 and also Issued Partly Convertible Debentures in 1992. In fiscal 1994, EDC divested 21.45% of its holding in the Company which was purchased by Tata International Limited. EDC sold a further 10.12% of its holding to Unit Trust of India and has since divested smaller lots and as on September 30, 2006 held 8.20% of our equity shares capital. In 1988 we identified Bus Body Building as an activity with considerable export potential and in technical collaboration with Fuji Heavy Industries Ltd (FHIL); a renowned bus coach manufacturer in Japan, established a Bus Body Building Project within the vicinity of Sheet Metal Divisions (SMD) factory in Sattari, Goa. The collaboration agreement covered various models of chassis mounted bus bodies and the factory went into production in 1990. A further collaboration agreement was signed with FHIL for Monocoque (Integral) buses in 1997. In 1997 and 1998, two pressing units located at Bhuimpal, Goa and Jejuri, near Pune were established by installing imported high tonnage presses as a result of which the combined installed capacity increased from 12,908 to 19,173 metric tones. On account of lack of demand and downturn in the automobile industry, our profitability was impacted and we had accumulated losses of Rs. 1,237.14 Lakhs for fiscal 2002. We embarked on a restructuring plan in fiscal 2002. The restructuring plans which were drawn in consultation with ICICI and Tata Motors Limited included enhancing capacity utilization in both the divisions and reduction in costs, inter alia, through an Employee Separation Scheme, re-structuring of capital by issue of Preference Shares, disposal of unwanted fixed assets etc. As per these plans, an Employee Separation Scheme was announced in fiscal 2003 with 143 employees opting for the scheme. The Promoters subscribed to Rs. 9.20 crores worth preference shares. The business development plans and other cost cutting exercises coupled with quality improvement, installation of quality systems and various HRD initiatives resulted in significant improvement in the business and profitability. As a result of the above initiatives, we achieved a profit of Rs. 35.92 Lakhs for fiscal 2003 as against a loss of Rs. 647.01 Lakhs for fiscal 2002. Competitive strengths We believe that we have several competitive strengths that provide significant opportunities to grow our businesses. Our principal competitive strengths are as follows:

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Strong technology focus We believe in offering a strong technology based value proposition to our customers. Over the years, we have developed capabilities to customize and improve our product designs by absorbing, adapting and improving the acquired technology. We believe that this has enabled us to offer product variants as per customer demand as also introduce new products from time to time to keep ourselves competitive in the market. We continue to maintain our focus through a strong commitment towards research and development. Some of the low floor / semi low floor buses manufactured by us have evinced good demand for inter city transport. Similarly the Tarmac coaches manufactured by us are being supplied to major airlines. Strong relationship with Tata Motors Limited (TML) Tata Motors is one of the largest companies in India- in the automobile sector and is the fifth largest medium and heavy commercial vehicle manufacturer in the world. TML is a fully integrated automobile manufacturer with a portfolio that spans trucks, buses, utility vehicles and passenger cars. We are the largest supplier of bus bodies to Tata Motors Limited, a majority of which is exported. We are also a Tier I supplier of pressed sheet metal components and assemblies to TML’s CVBU plant at Pune. TML is also one of our promoters. Tata Motors share in our Revenue

Description Qtr ended For the year ended 31st March

June 2006 2006 2005 2004

Total Revenue (Rs. Lakhs) 7,161.74 25,525.84 15,862.90 11,502.29 Revenue from Tata Motors Limited(Rs. Lakhs)

6,315.29

22,774.88 13,550.47 9,990.04

Revenue from Tata Motors Limited (%) 88.18% 89.22% 85.42% 86.85% Design and manufacturing process The bus body business in India is largely in the unorganized sector. The key feature which differentiates our buses consists of the design and technology which we have acquired from our Japanese collaborators. The design aims to optimize weight without compromising on the strength by Finite Element Analysis (FEA). The technology that we have acquired contains inherent design features which results in a strong but comparatively light weight vehicle leading to high safety and at the same time improved fuel efficiency and tyre wear. The manufacturing process relies heavily on pre fabricated aggregates which are combined on giant fixtures to an off chassis semi integral bus shell resulting in much shorter lead time for supply of buses from the date of chassis receipt. Our manufacturing technology also facilitates volume production due to use of fixtures some of which are automated. Unlike conventional buses built in the unorganized sector, the bus shell made independent of the chassis is painted in auto mobile standard paint booth and force dried in ovens resulting in a superior paint finish. As a company certified under ISO/ 9000 quality management system, the manufacturing process goes through established processes. The process also uses superior customized inputs such as roll-formed structural parts, special aluminium extrusions, special anti-rust coats, oven baked auto-finish paint systems and special sealants etc. The shower testing and other testing facilities ensure that the end product is vastly superior to the conventional buses being fabricated by the un-organised sector in India. Our ability to introduce new models of buses in short time Over the last several years we have developed a number of new models such as 6HD bus, low floor and semi low floor buses, Starbus and various customer specific variants to meet the municipal, schools, police and defence force requirements both for the ultimate domestic and international customers. Our ability to design and build prototypes at short notice has endeared us to our customers as a reliable source for development, prototyping and testing of new products.

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OUR STRATEGY Our long term strategy is to strengthen and maintain our position in the bus body building industry. We intend to achieve this objective by leveraging our existing strengths and developing expertise to improve our performance and quality levels in bus body building business. With Tata Motors Limited, our major customer projecting a significant increase in market demand for buses and other commercial vehicles over the next five years, we are gearing up to meet this increasing demand. The key elements of our strategy are as follows: Increasing the Scale of Our Operations: We intend to further strengthen our competitive advantage, build up economies of scale. Increasing bus sales volumes substantially will be the key to this strategy. Currently a majority of the buses manufactured by us are meant for the export market. We aim to increase our domestic market share through continuous upgradation, introduction of new models and supplement this with initiatives in the international markets. Our proposed capacity expansion plans envisage enhancing our current capacity to 10,000 buses in the next three years. We believe that the scale of our operations, coupled with the ability to scale up production in line with customers’ demands has enabled us to become a preferred supplier to our customers. Reducing Costs and Breakeven Points We have initiated a cost reduction programme in fiscal 2006 which is expected to be completed over a period of three years and includes a focus on cost reductions through improved raw material and other inputs through a combination of factors such as improvement in process, better utilization, development of new sources etc. We continue to place emphasis on reduction of production costs, overhead and other general costs, by means of value engineering, cycle time reduction and stringent working capital controls. We also continue to adopt international and local operational and management best practices to achieve continued cost reductions and management efficiencies. We believe that productivity improvements and operational efficiencies will help lower our break-even levels and thus improve our results of operations. Continuing Focus on High Quality and Enhancing Customer Orientation Our commitment to quality and customer service has been a significant competitive strength, and one of our principal goal is to achieve international quality standards for our entire line of products. In an effort toward further improving our responsiveness to market and customer needs, we have recently undertaken an initiative to better understand and service our customer requirements. We have also recently conducted a Quality Function Deployment (QFD) survey aimed at facilitating increased channels of customer feedback to build in customer preferences in our products. Continuing to Invest in Technology and Technical Skills We believe we are one of the most technologically advanced indigenous bus body builders in India. Over the years, we have enhanced our technological strengths through internal research and development activities. These technical skills have given us a competitive advantage in product design, manufacturing and quality control. We consider technological leadership to be a significant factor in continued success, and therefore intend to continue to devote resources to upgrade our technology base. Shifting of SMD and related equipments to Pune The SMD has been witnessing stiff competition making the operations out of the main plant at Goa uncompetitive vis-a vis vendors situated around the OEMs primarily in Pune. We therefore propose to shift all the presses and related equipments of the SMD main plant at Honda, Goa to a new facility to be established in or around Pune. We expect this will provide us an opportunity to increase our sales and reduce our logistic cost.

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DESCRIPTION OF OUR BUSINESS

We have two main business segments viz. the Bus Body Building Division (BBD) and Sheet Metal Divisions (SMD). In our BBD we are engaged in the business of manufacturing bus bodies on the chassis provided by the customers. In our SMD we are engaged in the business of manufacturing pressed sheet metal components, sub-assemblies and assemblies for automobiles. Bus Body Division: The BBD was established in 1987. We identified Bus Body Building as an activity with considerable export potential. The Bus Body project was set up in technical collaboration with Fuji Heavy Industries, who were renowned manufacturers of buses in Japan. The project with a capacity of 1200 buses was established at Bhuimpal, Sattari, Goa. We in close association with the fully built Vehicles division of TML, introduce several new models and also improve the existing models. We have also obtained an ISO 9001/2000 certification during FY 2003. We leverage our capabilities in design and development of bus bodies by successfully executing turnkey assignments for design, tooling and proto – type development of bus bodies for some of the major automobile manufacturers. We have made investments in acquiring sophisticated design software and hardware with a view to consolidate our competency for the design and development of our buses. For fiscal 2006, our BBD has a capacity of 2,500 buses a year, an increase of 500 buses from the previous year. In fiscal 2006, we sold 3,004 buses. As on June 30, 2006, fiscal 2006 and fiscal 2005 we have sold 823, 3,004, 1,651 number of buses. Our total revenue generated by BBD as of the three month period ended June 30, 2006, fiscal 2006 and fiscal 2005 were Rs. 5,009.45 Lakhs, Rs. 17,351.42Lakhs and Rs. 8,923.74 Lakhs respectively comprising of 69.95%, 67.98% & 56.26% of the total revenue for the respective period. Tata Motors Limited is the largest customer with a share of 96.82% of our Bus body revenue as on fiscal 2006. The BBD fabricates bus bodies on the entire range of commercial vehicles from the LCVs to the MCVs. There are two types of buses made – viz chassis mounted buses and the monocoque (integral) buses. In the chassis mounted buses, the bus shells fabricated independent of the chassis are painted and then aggregated with the chassis by welding the body cross members with the long members of the chassis. The bus shell is then trimmed with all the fitments such as windows, electricals, windshields, seats and other trimmings. In the monocoque bus, the bus is made in a complete vehicle form with the chassis aggregates such as the engine, gear box, transmission etc. integrated in the full bus shell built in-house without the need for a chassis. In both the chassis built and the integral buses, a large variety of buses in terms of both size and fitments are done depending on customer choice. The basic difference consists of type of chassis, door and window configurations and a wide variety of fitments from the standard bus to high end luxury coach. Features of Our Buses The key features which differentiate our buses consist of the design and technology which we have acquired from our Japanese collaborators. The design aims at optimizing weight without compromising on the strength by Finite Element Analysis (FEA). The manufacturing technology for chassis built buses aims at building a semi-integral bus body independent of the chassis and then integrating it with the chassis by aggregating the body shell with chassis by welding. Special techniques of web-welding are used to weld on the chassis neutral axis so that the road shocks do not get transferred directly to the body. The process also uses superior customized inputs such as roll-formed structural parts, special aluminium extrusions, special anti-rust coats, oven baked auto-finish paint systems and special sealants etc. The shower testing and other testing facilities ensure that the end product is vastly superior to the conventional buses being fabricated by the un-organised sector in India. The Monocoque (Integral) buses use the same processes except that they do not use the chassis.

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Our buses are lighter and hence more fuel efficient, light and yet safer due to their design and technology features. They provide a better tyre mileage and overall far more comfortable and durable than the competing products available in the country. Our key clients are TML. We also cater to other clients such as fleet operators, airlines, luxury hotels as also hospitals for ambulances. Flow chart for the Process

When an inquiry is received from a customer, an offer drawing and specification sheet is discussed and finalized freezing all the customer requirements. This specification sheet forms the basis for finalization of the quotation and, when accepted by the customer becomes a basic document called sales order confirmation for detailed drawings and release of bill of materials by the planning department. The bill of material is used by the procurement sections for fabrication of aggregates through ancillaries and purchase of all other items through vendors. The planning and production control department lines up production of the bus through the various stages and hands over the finished product back to the sales department for invoicing and delivery. Sheet Metal Divisions: The Sheet Metal Divisions is involved in the production and sale of pressed sheet metal parts, sub-assemblies and assemblies for a broad range of automobiles. Over the past five years, the SMD has taken a series of steps such as refurbishing of plant and equipment, installation of higher quality systems and most importantly, vigorous steps involving and training the human resource, which has resulted in a vastly superior operational performance. Notwithstanding the steep logistics cost and stiff competition from units located close to the OEMs, we have demonstrated our ability to overcome many hurdles. The strong demand throughout the last few years has helped us to reap benefits of economies of scale in spite of escalating input prices, particularly of steel. The sales in the SMD have jumped by over 23.97% CAGR from Rs. 4,982.17 Lakhs as on fiscal 2004 to Rs. 8,174.42 Lakhs as on fiscal 2006. We have over the years retained our competitiveness by climbing up the value chain by manufacturing sub- assemblies and assemblies.

CUSTOMER

OFFER DRAWING AND SPECIFICATION SHEET

FINALISATION

COSTING, PRICING, QUOTATION & SALE

ORDER CONFIRMATION

DESIGN AND BOM RELEASE OF DETAILED

DRAWINGS

ADD FOR AGGREGATES PLANNING AND

PRODUCTION CONTROL

COMBINATION TO

CHASSIS AGGREGATE AND TRIM OUT SHELL TO PAINT SHOP

MATERIAL FOR PROCUREMENT

SALES INVOICE AND DELIVERY TESTING AND UNDER

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The restructuring of the component business over the last four years has resulted in improvements in quality and productivity and steps are being taken to further improve operational efficiencies by implementation of TS 16,949 in FY 2006. The division has also bagged a prestigious and long term order from Komatsu Cummins Engine Co. Ltd. Japan for supply of an engine component. We are drawing up plans to move closer to our main customer (Tata Motors Limited) by shifting pressings operations from Goa to Pune. The total revenue generated by sheet metal d.ivisions as of the three month period ended June 30, 2006, fiscal 2006 and fiscal 2005 were Rs.2,152.29 Lakhs, Rs 8,174.42 Lakhs and Rs.6,939.16 Lakhs respectively. Tata Motors Limited is one of the largest customers for us with a share of 73.11% of our SMD revenue as on fiscal 2006 The principal products are Pressings, Sub-assemblies and Assemblies for Commercial Vehicles. Pressings include in both the Cold Rolled (CR) and Hot Rolled (HR) Steel such as Instrument Panels, Mud Guards, Bonnets, Covers etc., as also Engine Cross Members, Brackets etc. Sub Assemblies and Assemblies are Pressings using higher end assembly operations such as welding, plating, painting and fitment of other pressings or bought-out parts. Process We procure both hot rolled and cold rolled sheet from steel suppliers and on receipt of material shear it to the required component size. The sheared to size sheets are then subjected to various pressing operations such as blanking piercing, forming, flanging etc. The resultants components then go through further stages of assembly and sub assembly or supplied as such as components. As per customer requirements the components and sub assemblies may also be pre treated and painted / plated/ powder coated. Assembly operations are generally through welding – both through spot welding and arc / Co2 welding. The assembly may also involve adding other vendor supplied items such as fasteners, brackets, springs etc. by riveting assembly operations. Flow chart for the Process

Indicates Inspection

Receipt of raw material

Shearing

Blanking / Pierce

Draw form restrict/ Trim pierce flange part off etc

Pressing

Pretreatment

Painting

Riveting Assy

Despatch

Welding assemblies

Phosphating

Power coating

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Management Information System Our resources, personnel, equipment and financial, are efficiently and optimally utilized through the use of computerized management information systems and tools developed inhouse. This information system coordinates the functioning of the various business units and synchronizes the flow of data for decision making. Management information system reports provide updates on progress, billing and costing of products for seamless flow of data towards achieving optimal utilization of resources. We use software developed in house for material accounting, inventory, payroll and financial databases for effective internal controls. We also use various engineering software packages for design and development of our products. We intend to upgrade our existing management information systems by implementing presently available state-of-the-art ERP systems.

Human resources & Training

We believe that our employees are key contributors to our business success. To achieve this, we focus on hiring and retaining the best talent available. As on June 30, 2006 we have 660 employees on our rolls. We pay performance linked payments to our employees.

Regular training sessions are to achieve improvement in the overall productivity through emphasis on process and quality. We also impart training to our employees on softer skill sets such as inter-personal relations, effective communication, supervisory development etc. in addition to vocational training in specific skills. Such training sessions are conducted by both internal and external faculty. Sessions on management principles such as Empowerment, Total Productivity Management and Total Quality Management etc., are also conducted to train the employees to face the increasingly competitive business environment. Material and Purchase Our buses are manufactured almost entirely from components made in India, a large proportion of which are sourced from a well-established network of suppliers, many of whom provide advanced component technologies. The principal raw materials and components required by us for use in our products are steel sheets and plates, aluminium sheets and extrusions, wind shield and window glasses, driver and passenger seats, electrical items and rubber and plastic parts.

As part of our strategy to improve our margins, we have undertaken various initiatives to reduce our material costs through negotiation, process improvement, development of alternate source, value engineering etc. We have established a procedure for ensuring quality control of outsourced components. Preference is given to vendors who are on the list of TML approved suppliers. We also maintain a stringent quality assurance programs that include random testing of samples.

Sales and Marketing

Our target customers are primarily OEMs. We also sell directly in the domestic market to fleet owners etc. We have a dedicated sales and marketing team.

Corporate Social Responsibilities

We are aware of our corporate social responsibilities and have made significant efforts to preserve the environment in and around our plants. As a socially responsible company, we believe that great emphasis should be placed on social and community service. This attitude has allowed us to engage in numerous social activities with the wholehearted support of our employees. Following are some of the activities:

• Interaction with the local community around the plants on a regular basis

• Assistance in medical, educational and community development fields to the local areas

• Sponsorship of events in local schools/Colleges/ITI.

Research & development

We believe we have one of the most technologically advanced bus body building facility in India and the quality of our products and processes are integral to our ability to retain and attract customers. Our research and development efforts are aimed at reducing costs, making improvements in products and process, developing new product development capabilities, achieving higher value addition, enhancing quality, safety bench-marks and achieving higher levels of productivity.

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Some of the on-going research and development projects include:

• Design and Development of new models of buses, fitments and processes

• Widening of product portfolio and resultant expansion of market

• Modular designs to compress cycle times, use of new material, design and development of new models and tie-ups for technology

Insurance

We maintain insurance policies with leading Indian insurers. All our principle places of business, including our plants / units are covered by industrial risk and fire. Our electronic goods are also insured against theft. All our Company vehicles have comprehensive coverage.

Our Office Properties

Our Registered Office is located at Honda, Sattari, Goa 403 530 over which we have renewable leasehold rights until 2016.

Additionally, we conduct our business from several premises which we own or in respect of which we have entered into appropriate arrangements with the owners. Set forth below are the details of our properties in which our offices are located:

Plant Location Rang of Products

Sheet Metal Division Honda, Sattari, Goa – 403 530

Pressed Sheet metal parts/ components/ Sub assemblies and assemblies there from for various aggregates of automobiles

Bus Body Division Bhuimpal, Sattari, Goa – 403 530

Bus Bodies and component parts thereof

Bhuimpal Pressing Unit Bhuimpal, Sattari, Goa – 403 530

Pressed Sheet metal parts/ components/ Sub assemblies and assemblies there from for various aggregates of automobiles

Jejuri Pressing Unit Plot No. F –2, MIDC, Jejuri, Taluka Purandar, Dist. Pune

Pressed Sheet metal parts/ components/ Sub assemblies and assemblies there from for various aggregates of automobiles

Bhosari Unit Block No. W-222, D5 MIDC, Bhosari Pune

Sub assemblies and assemblies of automobiles

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REGULATIONS AND POLICIES

There are no specific regulations in India governing the automobile manufacturing industry. Set forth below are certain significant legislations and regulations that generally govern this industry in India: General The Company is engaged in the business of providing manufacturing and assembling buses. For the purpose of executing the work undertaken by the Company, we may be required to obtain licenses and approvals depending upon the prevailing laws and regulations applicable in the relevant state. For details of such approvals please see “Government Approvals” on page 156 of this Draft Letter of Offer. Environmental and Labor Regulations Depending upon the nature of the projects undertaken by the Company, applicable environmental and labor laws and regulations include the following: Labor Regulations Contract Labor (Regulation and Abolition) Act, 1970 Companies use the services of contractors who in turn employ contract labour whose number exceeds twenty in respect of some of the sites. Accordingly, such Companies are regulated by the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 which requires the Company to be registered as a principal employer and prescribes certain obligations with respect to welfare and health of contract labour. Factories Act, 1948 The Factories Act, 1948 (the “Factories Act”) defines a ‘factory’ to cover any premises which employs ten or more workers and in which manufacturing process is carried on with the aid of power and any premises where there are at least twenty workers even though there is or no electrically aided manufacturing process being carried on. Each State Government has rules in respect of the prior submission of plans and their approval for the establishment of factories and registration and licensing of factories. The Factories Act provides that an occupier of a factory i.e. the person who has ultimate control over the affairs of the factory and in the case of a company, any one of the directors, must ensure the health, safety and welfare of all workers. There is a prohibition on employing children below the age of fourteen years in a factory. The occupier and the manager of a factory may be punished with imprisonment for a term up to two years or with a fine up to one Lakh rupees or with both in case of contravention of any provisions of the Factories Act or rules framed there under and in case of a contravention continuing after conviction, with a fine of up to one thousand rupees per day of contravention. Maternity Benefit Act, 1961 The Maternity Benefit Act, 1961 provides that a woman who has worked for at least eighty days in the twelve months preceding her expected date of delivery is eligible for maternity benefits. Under the Maternity Benefit Act, a woman working in a factory may take leave for six weeks immediately preceding her scheduled date of delivery and for this period of absence she must be paid maternity benefit at the rate of the average daily wage. The maximum period during which a woman shall be paid maternity benefit is twelve weeks. Women entitled to maternity benefit are also entitled to medical bonus of two hundred and fifty rupees. Contravention of the Act is punishable by imprisonment up to one year or a fine up to five thousand rupees or both. Payment of Wages Act, 1936. Payment of Wages Act, 1936 regulates the mode and method of wage payment and provides means of recovery of unpaid wages.

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Payment of Bonus Act, 1965 An employee in a factory who has worked for at least 30 working days in a year is eligible to be paid bonus. ‘Allocable surplus’ is defined as 67% of the available surplus in the financial year, before making arrangements for the payment of dividend out of profit. The minimum bonus fixed by the statue must be paid irrespective of the existence of any allocable surplus. If allocable surplus exceeds minimum bonus payable, then the employer must pay bonus proportionate to the salary or wage earned during that period, subject to a maximum of twenty per cent of such salary or wage. Contravention of the provisions of the act is punishable by imprisonment up to six months or a fine up to one thousand rupees or both Employees’ State Insurance Act, 1948. The object of the ESI Act is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments and dependant’ benefits to the dependants of such employees. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Employees Provident Funds and Miscellaneous Provisions Act, 1952 (the “PF Act”) ensures compulsory provident fund, family pension fund and deposit linked insurance in factories and other establishments for the benefits of the employees. The rate of contribution has been fixed at 12%. Presently an employee at the time of joining the employment and getting wages up to Rs.6500/- is required to become a member of the employees’ provident fund organization (the “EPFO”), established in accordance with the provisions of the PF Act. Now an employee is eligible for membership of fund from the very first date of joining a covered establishment. The Act inter alia provides for: • grant of exemption from the operation of the scheme/s framed under the Act to an establishment, to a

class of employees and to an individual employee, on certain conditions. • appointment of inspector to secure compliance under the Act and the Schemes framed there under. • mode of recovery of money due from employers. The funds established under the PF Act vest in and are administered by the Central Board of Trustees and functions within the overall regulatory control of the Central Government. Payment of Gratuity Act, 1972 Under the Payment of Gratuity Act, 1972 (the “Gratuity Act”), an employee in a factory is deemed to be in ‘continuous service’ for a period notwithstanding that his service has been interrupted during that period by sickness, accident, leave, absence without leave, lay-off, strike, lock-out or cessation of work not due to the fault to of the employee, or the employee has worked at least two hundred and forty days in a period of twelve months or one hundred and twenty days in a period of six months immediately preceding the date of reckoning. An employee who has been in continuous service for a period of five years will eligible for gratuity upon his retirement, superannuation, death or disablement. The maximum amount of gratuity payable must not exceed three Lakh and fifty thousand rupees. Minimum Wages Act, 1948 The State Governments may stipulate the minimum wages applicable to a particular industry. The minimum wages generally consist of a basic rate of wages, cash value of supplies of essential commodities at concession rates and a special allowance, the aggregate of which reflects the cost of living index as notified in the Official Gazette. Workers are to be paid for overtime at overtime rates stipulated by the appropriate Government. Any contravention may result in imprisonment up to six months or a fine up to five hundred rupees. Workmen’s Compensation Act, 1923 If personal injury is caused to a workman by accident during employment, his employer would be liable to pay him compensation. However, no compensation is required to be paid if the injury did not disable the workman for three days or the workman was at the time of injury under the influence of drugs or alcohol, or willfully disobeyed safety rules. Where death results from the injury the workman is liable to be paid the higher of fifty

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per cent of the monthly wages multiplied by the prescribed relevant factor (which bears an inverse ratio to the age of the affected workman, the maximum of which is 228.54 for a worker aged 16 years) or Rupees Eighty Thousand. Where permanent total disablement results from injury the workman is to be paid the higher of sixty per cent of the monthly wages multiplied by the prescribed relevant factor or Rupees Ninety Thousand. The maximum wage which is considered for the purposes of reckoning the compensation is Rupees Four Thousand Environmental Regulations The three major statutes in India which seek to regulate and protect the environment against pollution related activities in India are the Water (Prevention and Control of Pollution) Act 1974, the Air (Prevention and Control of Pollution) Act, 1981 and the Environment Protection Act, 1986. The basic purpose of these statutes is to control, abate and prevent pollution. In order to achieve these objectives, Pollution Control Boards (PCBs), which are vested with diverse powers to deal with water and air pollution, have been set up in each state. The PCBs are responsible for setting the standards for maintenance of clean air and water, directing the installation of pollution control devices in industries and undertaking investigations to ensure that industries are functioning in compliance with the standards prescribed. These authorities also have the power of search, seizure and investigation if the authorities are aware of or suspect pollution. All industries and factories are required to obtain consent orders from the PCBs, which are indicative of the fact that the factory or industry in question is functioning in compliance with the pollution control norms laid down. These are required to be renewed annually. Water (Prevention and Control of Pollution) Act, 1981 The Water (Prevention and Control of Pollution) Act, 1981(Water Act) prohibits the use of any stream or well for disposal of polluting matter, in violation of standards set down by the State Pollution Control Board (SPCB).The Water Act also provides that the consent of the SPCB must be obtained prior to opening of any new outlets or discharges, which is likely to discharge sewage or effluent. In addition, the Water (Prevention and Control of Pollution) Cess Act, 1977 (Water Cess Act) requires a person carrying on any industry to pay a cess in this regard. The person in charge is to affix meters of prescribed standards to measure and record the quantity of water consumed. Furthermore, a monthly return showing the amount of water consumed in the previous month must also be submitted. Air (Prevention and Control of Pollution) Act, 1981 Air (Prevention and Control of Pollution) Act, 1981 (Air Act) under which any individual, industry or institution responsible for emitting smoke or gases by way of use as fuel or chemical reactions must apply in a prescribed form and obtain consent from the state pollution control board prior to commencing any mining activity. The SPCB is required to grant consent within four months of receipt of the application. The consent may contain conditions relating to specifications of pollution control equipment to be installed. Hazardous Wastes (Management and Handling) Rules, 1989 The Hazardous Wastes (Management and Handling) Rules, 1989 (Rules) fix the responsibility of the occupier and the operator of the facility that treats hazardous wastes to properly collect, treat, store or dispose the hazardous wastes without adverse effects on the environment. Moreover, thy must take steps to ensure that persons working on the site are given adequate training and equipment for performing their work. When an accident occurs in a hazardous site or during transportation of hazardous wastes, then the SPCB has to be immediately alerted. If, due to improper handling of hazardous waste, any damage is caused to the environment, the occupier or the operator of the facility will have to pay for the necessary remedial and restoration expenses. The Manufacture, Storage and Import of Hazardous Chemical Rules, 1989 The Manufacture, Storage and Import of Hazardous Chemical Rules, 1989 provide for various safeguards and handling of hazardous chemical in specific industries carrying on certain activities. These rules provide for safety standards to be observed in industries while handling such chemicals.

52

HISTORY OF THE COMPANY AND OTHER CORPORATE MATTERS

The Company was incorporated on September 1, 1980 as a public limited liability company under the (Indian) Companies Act, 1956. The registered office of the Company is at Honda, Sattari, Goa – 403530. The Company was promoted as a joint venture between EDC Limited, a Government of Goa Industrial Development Company, formerly known as Economic Development Corporation of Goa Daman & Diu Ltd in technical & financial association with Tata Motors Limited. ACGL commenced operations in 1982 with primary business objective to manufacture, assemble and pressing of all types of sheet metal components including fabricating, shaping, converting and bending of all types of sheet metal component . EDC Limited initiated this venture to aid the Government in the economic development of backward area of Sattari Taluka in North Goa District. Milestones and achievements of our Company:

Year Event

1988 We entered into a technical collaboration with Fuji Heavy Industries Ltd (FHIL); a renowned bus coach manufacturer in Japan, established a Bus Body Building Project within the vicinity of Sheet Metal Divisions (SMD) factory in Sattari, Goa.

1997 and 1998

Two pressing units located at Bhuimpal, Goa and Jejuri, near Pune were established by installing imported high tonnage presses as a result of which the combined installed capacity increased from 12,908 to 19,173 metric tones.

1998 ISO 9000:1994 awarded to Sheet Metal Divisions by TUV India Ltd. 2002 Certificate of ISO/QS 9000awarded by RWTUV Anlagentechnik GmbH to Sheet Metal Divisions

2003 ISO9001:2000 awarded to Bus Body Division by TUV India 2004 ISO9001:2000 awarded to Bhuimpal Pressing Unit & Jejuri Pressing Unit by International

certification Ltd. 2005 TS 16949:2002 awarded to Sheet Metal Divisions and Bhuimpal Pressing Unit by TUV

Suddeutschland

The main objects of the Company are: (1) To carry on the business of manufacturers, assemblers, buyers, sellers, resellers, exchangers, alterers,

importers, exporters, hirers, distributors or dealers in locomotives, motor-vehicles, trucks, lorries, omnibuses, buses, motor-cycles, cycle cars, scooters, bicycles, tricycles, cycles, tractors, bulldozers, road-rolllers, auto-wheels, three wheelers of every description and kind and all component parts, spare parts, accessories, equipments and apparatus for use in connection therewith.

(2) To carry on business of manufacturing, assembling and pressing of all types of sheet metal components

including fabricating, shaping, converting and bending of all types of steel metal components of all kinds including ferrous and non-ferrous.

(3) To carry on business of engineers, consulting engineers, mechanical engineers, marine engineers, oil

fuel engineers, mining engineers and metallurgical engineers and engineering of every type and description.

(4) To carry on business of manufacturers, exporters, importers, buyers, sellers, re-sellers, manipulators,

fabricators, assemblers and repairers of jigs, fixtures, gauges, tools as well as complete machines and parts of machines and spare components.

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(5) To carry on business of machinists, fitters, wire drawers, tube makers, metallurgists, saddlers, galvanizers, japanners, annealers, electroplates and manufacturers of machinery and electrical engineers.

(6) To organize, establish, conduct, manage and maintain engineering repair shops, workshops, service

centres, testing centres and assembling shop of all kinds. (7) To carry on business of manufacturers, importers and exporters of and dealers in machinery, articles

and goods of all class and kind whatsoever including electrical and engineering materials, goods, machinery and requisites and as electrical, mechanical and general engineers and contractors and as manufacturers and workers in materials of any nature and kind.

(8) To buy, sell, let on hire, repair, alter and deal in machinery, component parts, accessories and fittings of

all kinds for any of the carriages and vehicles of all kinds. (9) To carry on the business of iron founders, iron masters, steel makers, tool makers, non-ferrous

founders, iron and steel converters and metal workers, machinists, millwrights, gas makers, smiths, wood workers, galvanizers, annealers, anodisors, welders, metallurgists, electro and chromium platers, painters, workers and dealers in mineral oils.

54

DIVIDENDS The Company has paid dividend for the year ending March 31, 2006. The following are the dividend payouts for the last five years by the Company:

F. Y. Dividend per Equity Share of Rs. 10 each (Amount in Rs.) Amount (In Rs. Lakhs)(1)

2005-2006 8 395.18 2004-2005 8 395.18 2003-2004* Nil Nil 2002-2003* Nil Nil 2001-2002* Nil Nil

(1) Excluding dividend tax where applicable

* The Company could not pay any dividend for the fiscal 2002, 2003 and 2004 as it incurred losses in

those years.

The amounts paid as dividends in the past are not necessarily indicative of our dividend policy or dividend amounts, if any, in the future.

55

MANAGEMENT In this section, any reference to “we”, “us” or “our” refers only to Automobile Corporation of Goa Limited. Board of Directors The following table sets forth details regarding our Board of Directors as on October 15, 2006:

Sr.No. Name, Designation, Occupation Nationality Age

(years) Other Directorships in Indian companies and

partnerships in Indian partnership firms

1. S. V. Salgaocar, Chairman (Independent Director) Occupation: Industrialist

Indian 52 Angira Finance & Leasing Private Limited

Aero Munidal Private Limited Aero Mundial Amiantit Fibreglass Industries Private

Limited Amona Shipyard Private Limited Bhoominandan Investments Private

Limited Calama Leasing & Finance Private

Limited Carlysle Finance & Leasing Private

Limited Costa Rica Investments Private

Limited Dhareshwar Real Estates Private

Limited Dhanishta Real Estates Private

Limited Dudhsagar Investments Private

Limited Ganaraj Real Estates Private Limited Ganapal Real Estates Private Limited Goa Minerals Private Limited Goa Maritime Private Limited Great Lake Finance Private Limited Greenback Real Estate Private

Limited Grindwell Norton Limited Green Hills Developers & Builders

Limited Katyayani Investments Private

Limited Mahadhan Real Estates Private

Limited Medini Real Estates Private Limited New Island Real Estates Private

Limited Pyramid Softech Private Limited Pyramid Developers Private Limited Pyramid Finance Limited Pyramid Metallics Private Limited Revati Real Estates Private Limited Rochmond Real Estates Private

Limited

56

Sr.No. Name, Designation, Occupation Nationality Age

(years) Other Directorships in Indian companies and

partnerships in Indian partnership firms

Rockmetal Engineers Private Limited Salgaocar Leasing & Credit Co.

Private Limited Salgaocar Marine Private Limited Sandstone Real Estates Private

Limited Srinindhi Real Estates Private

Limited Shivaranjani Investments Private

Limited Sharvani Investments Private Limited Salgaocar Construction Co. Private

Limited Salgaocar Industrial Projects Private

Limited Salgaocar Iron & Steel Co. Private

Limited Shivranjani Securities Co. Private

Limited Salgaocar Industrial Gases Private

Limited Salgaocar Investments Private

Limited Shinzawa Chemicals Private Limited Salgaocar Real Estates & Prop Private

Limited Saroyan Finance & Leasing Private

Limited Tumkur Minerals Private Limited Uttara Real Estates Private Limited Vega Real Estates Private Limited Vasudev Real Estates Private Limited Vasuki Finance & Leasing Private

Limited Windermere Investments Private

Limited V.M. Salgaocar and Brothers Private

Limited V M Salgocar Sales International Vipulam Coke Co. Private Limited

2. Mr. D. N. Naik, (Independent Director) Occupation: Industrialist

Indian 72 Auto Industries Goa Private Limited Super Structures Private Limited Titan Time Products Limited

3. Mr. P F X D’Lima

(Independent Director) Occupation: Professional

Indian 64 Nil

4. Mr. P. M. Telang (Promoter Director)

Indian 59 Tata Holset Limited Tata Cummins Limited TAL Manufacturing Solutions

57

Sr.No. Name, Designation, Occupation Nationality Age

(years) Other Directorships in Indian companies and

partnerships in Indian partnership firms

Occupation: Service Limited Telcon Construction & Equipment

Limited 5. Mr. R. S. Thakur

(Promoter Director) Occupation: Service

Indian 58 Tata Motors Insurance Services Limited

Concorde Motors (India) Limited Tata Precision Industries (India)

Limited TAL manufacturing Solutions

Limited Nita Company Limited, Bangladesh Hispano Carrocera, SAU, Spain

6. Mr. S. M Kuvelker

(Independent Director) Occupation: Professional

Indian 71 Garware Wall – Ropes Limited Garware Capital Market Limited Garware Securities Broking Limited Garware Elastomerics Limited B. D. Garware Research Centre. Vimlabai Garware Research Institute Garware Research Institute R.S.D.V. Investments Private Limited Ceebeecee Investment Company

Limited Consolidated Agricultural & Dairy

Farming Co. Private Limited R.S.D.V. Finance Co. Private Limited Guru Kripa Investments & Trading

Co. Private Limited Moonshine Investments & Trading

Co. Private Limited Starshine Investments & Trading Co.

Private Limited Sanand Investments & Trading Co.

Private Limited Sukukar Holdings Private Limited Manmit Investment & Trading Co.

Private Limited Suramex Exim Private Limited Tulsiani Builders & Textiles Private

Limited Amline Textiles Private Limited Chandumal Sons Private Limited Garware Indus Consulting Ltd. Bestretch Elastomers International

Limited Garware Utzon (Cordage) Limited Gartex Industries Limited Amity Developers

7. Mr. N. R. Menon Managing director

Indian 60 Nil

58

Sr.No. Name, Designation, Occupation Nationality Age

(years) Other Directorships in Indian companies and

partnerships in Indian partnership firms

Occupation: Service

8 Mr. Ananth Prabhu Executive Director Occupation: Service

Indian 58 Nil

Brief Biography of our Directors Mr. S. V. Salgaocar, 52, is BSc. in geology and M.M.S. in finance from Jamnalal Bajaj Insitute of Management, Mumbai. He is Managing Director of Salgaocar Group of companies that has interest in mining, processing and export of iron ore, shipping and real estate. The group has diversified and setup a five star deluxe hotel in Goa which is managed by Marriott International. He is President of Goa football Association, Devi Sharwani Education Society which is engaged in running educational institutions, Treasurer of All India Football Federation and member Governing Boards of Goa Institute of Management, Mineral Foundation of Goa, Sports Authority of Goa and Ship Building Industry Society, Goa. Mr. D. N. Naik, 72, is M Com., L.L.B. He is Managing Partner of M/s Narcinva Damodar Naik – Dealers for Tata Commercial Vehicles and is also the promoter/director of other group companies. He is also the Chairman and Founder of Manovikas Trust (educational public charitable trust), President of Seva Samiti (Charitable Educational Society), President of Managing committee of Shree Laxminarcinva Devasthan. He is also the founder chairman of Chinmaya Mission, Margao Centre and Chairman Matruchaya Trust (orphanage). Mr. P F X D’Lima, 64, is B.E. in Mechanical Engineering. He has over 40 years of experience in the areas of Iron & Steel and Coke making technology, machine and shipbuilding, maintenance and others. Mr. P. M. Telang, 59, is B.E. in mechanical engineering and MBA from IIM Ahmedabad. Mr. P. M. Telang has been with Tata Motors Ltd. for 32 years and is currently President (Light & Small Commercial Vehicles), Tata Motors Limited. Before joining Tata Motors, Mr. Telang was with Larsen & Toubro Ltd., Mumbai for 3 years. Mr. R. S. Thakur, 58, is M.E. in mechanical engineering. He holds a Diploma in Business Management and Graduate - Institute of Chartered Management Accountants (London). Mr. Thakur has been with Tata Motors Limited for 34 years and has shouldered responsibilities of manufacturing, corporate finance and works accounts. Mr. Thakur is currently Vice President (Corporate Finance) Tata Motors Limited. Mr. S. M. Kuvelker, 71, is a Chartered Accountant by profession. He started his practice in 1962 and was an advisor to a number of companies. He is associated with Garware Group of Companies since 1970. He was Executive Director of Garware Wall Ropes Limited. He is presently the Vice Chairman of Garware Wall Ropes Limited. Mr. N. R. Menon, 60, is B.E in metallurgy. Mr. N. R. Menon joined Tata Motors Ltd. as a Graduate Engineer Trainee in 1970 and during the last 34 years has held various responsible positions. Mr. N. R. Menon has undergone training courses in Japan and Germany in connection with selection of machines / processes. Mr. Ananth Prabhu, 58, B.Sc. ACS. He is a member of the Institute of Company Secretaries of India. Mr. Ananth Prabhu Joined the Company in 1982 as Company Secretary and held various assignments as Chief of Materials and Purchase, Chief of Sales and other commercial functions. He was appointed as a whole time Director on March 21, 2001 and was designated Executive Director (Commercial) & Secretary. Compensation to our Directors The following tables sets forth all compensation paid to our Directors for the year ended March 31, 2006. A. Non-Executive Directors

59

Name of Director Commission Sitting Fees Total

Rs. in Million Meetings attended

Amount (Rs.) Amount (Rs.)

S. V. Salgaocar Nil 3 20,000 20,000 D.N. Naik Nil 4 34,000 34,000 P F X D’lima Nil 4 26,000 26,000 P. M. Telang Nil 2 10,000 10,000 R. S. Thakur Nil 3 18,000 18,000 S. M. Kuvelker Nil 3 18,000 18,000

B. Executive Director

Name of Director

All elements of remuneration

package Performance

bonus Total

In Rs. Lakhs In Rs. Lakhs In Rs. Lakhs

Mr. N. R. Menon 23.98 4.89 28.87 Mr. Ananth Prabhu 14.47 3.34 17.81

Mr. Ananth Prabhu was appointed a whole-time director on March 21, 2001 for a period of 5 years and the members of the Company approved his appointment at the Annual General Meeting held on September 28, 2001. By a resolution passed on January 29, 2006, the board of directors of the Company reappointed Mr. Ananth Prabhu as whole-time director designated as “Executive Director and Secretary” for a further period from March 21, 2006 to August 25, 2008 on the same terms as earlier. The Company entered into a Memorandum of Agreement dated October 5, 2001 which provided for his remuneration, commission and perquisites and allowances. Mr. N. R Menon was appointed as the Managing Director with effect from August 1, 2004 for a period of three years and the members of the Company approved his appointment at the Annual General Meeting held on September 11, 2004. The Company entered into a a Memorandum of Agreement dated September 16, 2004 which provided for his remuneration, commission and perquisites and allowances. Note: 1. No director is related to any other Director on the Board. 2. The appointment of Managing/Whole-time Directors is subject to termination by three months notice in

writing on either side. Shareholding of Our Directors in our Company The following table details the shareholding of our Directors in their personal capacity and either as sole or first holder October 13, 2006.

Name of Directors Number of Equity Shares

(Pre-Issue) Number of Equity Shares

(Post-Issue)*

Shivanand V Salgaocar 8,130 Damodar N Naik 100 Peter Francis Xavier D’Lima 600

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*The number of shares for the column entitled Number of Equity Shares (Post-Issue) has been calculated assuming full subscription to rights entitlement in this Issue Changes in Our Board of Directors during the last three years

Name Date of

Appointment Date of Cessation Reason

Mr. J. J Singh August 1, 2001 July 31, 2004 Appointment / Retirement Mr. N R Menon August 1, 2004 Appointment Mr. C V Singh January 24, 2004 July 30, 2004 Appointment / Resignation

Corporate Governance The Company has complied with SEBI guidelines in respect of corporate governance especially with respect to broad basing of Board and constituting the Committees. There are four Board Level Committees in our Company, which have been constituted and function in accordance with the relevant provisions of the Act and the Listing Agreement. These are the (i) Audit Committee, (ii) Investor Grievance Committee (iii) Remuneration Committee and (iv) Rights Issue (2006) Committee. Brief particulars of each Committee, its scope, composition and meetings for the year 2005/06 (i) Audit Committee Members Mr. S. V. Salgaocar (Chairman) Mr. D N Naik Mr. R. S Thakur Mr. S. M Kuvelker Mr. PFX D’Lima The Audit Committee is comprised of 4 independent directors and 1 promoter director. The Audit Committee met 4 times during the course of fiscal 2006. Scope and terms of reference The scope of the Audit Committee in companies is defined under Clause 49 of the Listing Agreement dealing with Corporate Governance and the provisions of the Act. The Audit Committee acts as a link between the management, the statutory, cost and internal auditors and the Board of Directors and oversees the financial reporting process. Powers of the Audit Committee: - • To investigate any activity within its terms of reference. • To seek information from any employee • To obtain outside legal or other professional advice • To secure attendance of outsiders with relevant expertise, if it considers necessary. Role of the Audit Committee: - • Oversight of the company’s financial reporting process and the disclosure of its financial information to

ensure that the financial statement is correct, sufficient and credible. • Recommending to the Board, the appointment, re-appointment and, if required, the replacement or

removal of the statutory auditor and the fixation of audit fees. • Approval of payment to statutory auditors for any other services rendered by the statutory auditors. • Reviewing, with the management, the annual financial statements before submission to the board for

approval, with particular reference to:

61

- Matters required to be included in the Director’s Responsibility Statement to be included in

the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956 - Changes, if any, in accounting policies and practices and reasons for the same - Major accounting entries involving estimates based on the exercise of judgment by

management - Significant adjustments made in the financial statements arising out of audit findings

- Compliance with listing and other legal requirements relating to financial . • Qualifications in the draft audit report.

• Reviewing, with the management, the quarterly financial statements before submission to the board for

approval • Reviewing, with the management, performance of statutory and internal auditors, adequacy of the

internal control systems. • Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit

department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

• Discussion with internal auditors any significant findings and follow up there on. • Reviewing the findings of any internal investigations by the internal auditors into matters where there

is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.

• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

• To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

• To review the functioning of the Whistle Blower mechanism, in case the same is existing. • Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

(ii) Investors Grievances Committee Members Mr. D. N. Naik (Chairman) Mr. N. R. Menon The Investors Grievances Committee is comprised of 1 independent director and 1 executive director. The Investors Grievances Committee met 4 times during the course of fiscal 2006 Scope and Terms of Reference The committee was constituted in terms of the mandatory requirement of Clause 49 of the Listing Agreement to look into the redressal of grievances of investors like non receipt of share certificates, non-receipt of balance sheet, non-receipt of dividend warrants etc. Remuneration Committee Members Mr. S. V. Salgaocar (Chairman) Mr. D. N. Naik Mr. P. M. Telang Mr. P F X D’Lima The Remuneration Committee is comprised of 3 independent directors and 1 promoter director. The Remuneration Committee met once during the course of this fiscal year. Scope and Terms of Reference

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The remuneration of whole-time directors is decided by the Remuneration Committee based on criteria such as the Company’s performance and the performance/track record of the whole-time directors. The Company pays remuneration by way of salary, perquisites & allowances, commission and incentive remuneration to its whole time directors. The Annual increments are decided by the remuneration Committee within the salary scales approved by the members. Rights Issue (2006) Committee Members Mr. S. M. Kuvelker (Chairman) Mr. R. S. Thakur Mr. Ananth Prabhu The Rights Issue committee is comprised of an independent Director, a promoter Director and a Whole-time Director. Scope and Terms of Reference All decisions in respect of the present Rights Issue of shares. Key Managerial Personnel The details of our key managerial personnel are as follows:

Name Age Designation Qualifications Previous

Employment

Total years of

Experience Date of Joining

Gross Salary*(in Rs. Lakhs)

Ashok Suryavanshi 45 Chief (Projects) B.E. Mechanical None 21 October 17, 1985

6.54

D. S Pai 46 Chief (Materials) B.E. Mechanical None 20 December 16, 1986

5.75

Mahesh P. Pawaskar

44 Chief (Manufacturing) SMD

B.E. Mechanical None 21 November 15, 1985

6.15

Mangesh Sripad Nabar

50 Chief (Manufacturing) BBD

B.E. Mechanical Goa Auto Accessories Limited

24 January 2, 2006

1.48

Manish Kambli 36 Chief Finance Officer

B.Com, CA, ICWA

Tata Motors Limited

7 May, 01 2005 6.04

All the abovementioned key managerial personnel are permanent employees of our Company except Mr. Manish Kambli who is on deputation from Tata Motors Ltd.. • Salary paid for part of the year in 2005/06

63

Organizational Structure Chart The organization structure of our Company is given below:

BOARD OF DIRECTORS

EXECUTIVE DIRECTOR

MANAGING DIRECTOR

HR

CFO

CHIEF PROJECT

CHIEF MANUFACTURING SMD

CHIEF MATERIALS

MIS

CHIEF MANUFACTURING BBD

64

Shareholding of key managerial personnel in our Company as on October 15, 2006 Name of Key Managerial Personnel No. of Equity Shares held

(Pre-Issue) Mahesh P Pawaskar 200 Shareholding of persons related to our Director or key managerial personnel in our Company as on October 13, 2006 Name of Director or Key Managerial Personnel

Name of Equity Shareholder related to Director or Key Managerial Personnel

No. of Equity Shares held (Pre-Issue)

Ananth Prabhu Geeta A Prabhu 730 D S Pai Mangala D Pai 148 Shivanand V Salgaocar Vivek S Salgaokar 29 Interest of Promoters, Directors and key managerial personnel Except as stated in “Related Party Transactions” on page 115 of this Draft Letter of Offer, and to the extent of shareholding in our Company, our Promoters and promoter group do not have any other interest in our business. All Directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee. The managing director will be interested to the extent of remuneration paid to him for services rendered by him as officer of the Company. All our directors may also be deemed to be interested to the extent of Equity Shares, if any, already held by them or their relatives in the Company, or that may be subscribed for and allotted to them, out of the present Issue in terms of the Draft Letter of Offer and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. The Directors may also be regarded as interested in the Equity Shares, if any, held by or that may be subscribed by and allotted to the companies, firms and trust, in which they are interested as directors, members, partners and/or trustees. The key managerial personnel of our Company do not have any interest in our Company 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 and to the extent of the Equity Shares held by them in our Company, if any. Details of loans taken by key managerial personnel in the Company The Company has not entered into any contract, agreement or arrangement during the preceding two years from the date of this Draft Letter of Offer in which our Directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements or are proposed to be made to them. Our Directors and our key managerial personnel have not taken any loan from our Company Changes in our key managerial employees during the last three years

Name Designation Date of joining/leaving Reasons

Mr. M. S. Nabar Chief (Manufacturing) January 2, 2006 Appointment

65

PROMOTERS

The promoters of our Company are Tata Motors Limited, Tata International Limited and EDC Limited. TATA MOTORS LIMITED (“TATA MOTORS”) Tata Motors was originally incorporated as Tata Locomotive and Engineering Company Limited on September 1, 1945 as a public limited company, under the provisions of the Indian Companies Act, 1913. On September 24, 1960, the name of the company was changed to Tata Engineering and Locomotive Company Limited. Subsequently on July 29, 2003, the name of the company was again changed to Tata Motors Limited. The registered office of Tata Motors is at Bombay House, 24 Homi Street, Fort, Mumbai 400 001. Tata Motors is engaged in the business of manufacture of automobiles in various categories such as heavy, medium, light commercial vehicles, business utility vehicles and passenger cars. The equity shares of Tata Motors are listed on BSE, NSE, Madhya Pradesh Stock Exchange and the Calcutta Stock Exchange. Board of Directors The directors on the board of Tata Motors as on October 15, 2006 are: Mr. Ratan N Tata, Chairman Mr. N. A. Soonawala Dr. J. J. Irani Mr. J. K. Sethna Mr. V. R. Mehta Mr. R. Gopalakrishnan Mr. N. N. Wadia Mr. S. A. Naik Mr. S. M. Palia Mr. Ravi Kant, Managing Director Mr. P. P. Kadle, Executive Director Shareholding The equity shareholding of Tata Motors as on September 30, 2006 is given below:

Sl. No Name of the Shareholder No of Shares

Percentage (%)

A Promoters’ holding 1 Promoters - Indian Promoters • Principal Promoter – Tata Sons Ltd. 8,41,38,325 21.84 • Promoter Group – Tata Companies

and Trusts 4,46,98,080 11.61

Foreign promoters 0 0 Sub total 12,88,36,405 33.45 B Non-promoter’s holding 2. Institutional investors a. Mutual Funds and UTI 1,72,60,797 4.48 Banks,Financial Institutions,

insurance Companies (Central/ State Government Institutions/ Non-Government Institutions)

5,51,01,007 9.83

c. FIIs 9,11,58,434 23.67

66

Sl. No Name of the Shareholder No of Shares

Percentage (%)

Sub total 14,62,59,441 37.97 Bodies Corporate 49,32,747 1.28 Individual Shareholders 4,22,94,724 10.98 Any Others Trusts 96,441 0.03 Foreign Corporate Bodies 2,81,31,330 7.3 Overseas Corporate Bodies 148 0.00 C. Shares held by custodians and against which Depository

Receipts have been issued 3,46,20,274 8.99

GRAND TOTAL 38,51,71,510 100.00 Financial Performance The audited financial performance of Tata Motors for the last three years is given below:

(Rs. in Lakhs, except per share data)

Particulars Year ended March

31, 2006 Year ended March

31, 2005 Year ended

March 31, 2004

Sales and other income 24,29,323 20,64,866 15,55,242 Profit/(loss) after tax 1,52,888 1,23,695 81,034 Equity capital (per value Rs.10 per share)

38,287 36,179 35,683

Reserves & Surplus 5,15,420 3,74,960 3,23,677 Earning per share (Rs.) 40.57 34.38 24.68 Book value per equity share (Rs.) 145 114 102

The high and low for the equity shares of Tata Motors in the last six months as quoted on the BSE and NSE is provided below.

Month BSE NSE

Share Price Volume of

Shares traded Share Price Volume of Shares

traded

Highest

(Rs.) Lowest

(Rs.) Highest

(Rs.) Lowest

(Rs.)

May 2006 997.00 660.00 14235232 997.80 688.00 4,73,03,892 June 2006 821.00 650.50 15365089 820.80 650.25 4,87,32,035 July 2006 810.00 652.50 13230269 810.60 652.10 4,12,37,927 August 2006 868.75 721.20 8959861 871.00 720.00 3,32,71,129 September 2006 904.75 821.55 8084632 905.80 811.25 2,79,47,107 October 2006 919.90 824.00 6021523 920.60 840.25 1,98,35,920 The share price of Tata Motors on the BSE as on November 1, 2006 was Rs.829.25 and a market capitalisation of Rs. 3,19,392.6 million.

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Investor Redressal Mechanism and Investor Complaints Tata Motors has constituted an Investors’ Grievance Committee comprising of Mr. S. A. Naik, Mr. R. Gopalakrishnan, Mr. Ravi Kant and Mr. Praveen Kadle in accordance with clause 49 of the Listing Agreement with Stock Exchanges. The Committee is empowered to oversee the redressal of investors’ complaints pertaining to shares/debenture transfer, non receipt of annual reports, interest/dividend payments, issue of duplicate share certificate, transmission (with or without legal representation) of shares and debentures and other miscellaneous complaints. Mr. H. K. Sethna, Company Secretary is the Compliance Officer. All investors’ complaints are normally resolved within 15 days of receipt, except for cases pertaining to legal matters and those which require investigation or verification of old records. As on March 31, 2006, there were 3 unresolved complaints relating to fraudulent encashment of dividend/interest warrant. Subsidiaries of Tata Motors engaged in securities related business Sheba Properties Limited (“SPL”) is a subsidiary of Tata Motors which is a registered non banking financial company. SEBI and RBI have not conducted any enquiry or investigation in relation to SPL and SPL has no outstanding dues payable to them. Promise vis-a-vis Performance Tata Motors came out with a simultaneous but unlinked right issue of convertible debentures with warrants and secured redeemable non convertible debentures with warrants in September 2001. The total issue amount was Rs. 970 Crores. The objects of the issue were (1) finance part of the ongoing capital expenditure, product development expenses and investments for strategic alliances for the commercial vehicle business unit, passenger car business unit and engineering research centre over the next three years. and (2) part finance prepayment / repayment of certain high cost borrowings as permissible under loan covenants or terms. We met will all objects of the issue. No financial projections were made in the letter of offer of the said issue. Subsidiaries and Affiliates Concorde Motors (India) Ltd HV Axles Ltd HV Transmissions Ltd Sheba Properties Ltd TAL Manufacturing Solutions Ltd Tata Daewoo Commercial Vehicle Co. Ltd Tata Motors European Technical Centre PLC Tata Motors Insurance Services Ltd TML Financial Services Limited Tata Technologies Ltd Telco Construction Equipment Co Ltd Indirect Subsidiaries Tata Technologies Pte Limited Tata Technologies Investments Pte Limited, Singapore Tata Technologies Sdn Bhd, Malaysia Tata Technologies (Thailand) Limited Incat International Plc Ltd. INCAT Limited INCAT Systems Inc INCAT Solutions of Canada Inc Integrated Systems de Mexico, S.A. de C.V. iKnowledge Solutions Inc CADPO Asia Ltd INCAT GmbH INCAT SAS INCAT KK

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INCAT Holdings BV INCAT Holdings Inc INCAT Engineering Solution BV Cedis Mechanical Engineering GmbH Tata Technologies, US INCAT Financial Services Inc Other affiliates Tata Cummins Ltd Tata AutoComp Systems Ltd Tata Precision Industries Pte. Ltd Nita Co Ltd Tata Securities Private Ltd TSR Darashaw Ltd Hispano Carrocera S.A. Tata International Ltd Tata Services Ltd Tata Holset Ltd Kulkarni Engg. Assos. Ltd Tata Industries Ltd

Companies from which the Promoters have disassociated themselves in the last three years

Tata Technologies, US. Tata Technologies, US, was in incorporated on August 23, 1994 and provides Engineering & Design (E&D) and IT Services to large manufacturing companies in the United States. During the year the company registered a turnover of $15,877,676 as against $9,935,616 in the previous year, a year on year growth of 60%.

The company was merged and liquidated in April 2006.

INCAT Financial Services Inc.

INCAT Financial Services Inc. did not trade during the period. As part of a wider corporate reorganization of Tata Technologies Group, which is the Company’s ultimate parent, on 1st April 2006, the Company was merged into its immediate parent company INCAT Systems Inc and thereafter ceased to exist.

INCAT Holdings Inc. INCAT Holdings Inc incorporated on June 6, 2003 was a non trading holding company for INCAT operations in USA, Canada and Mexico. As part of a wider corporate reorganization of Tata Technologies Group, which is INCAT Holding Inc’s ultimate parent, on March 28, 2006 INCAT Holding Inc. gave dividend in Specie of its shares in iKnowledge Solutions Inc to Tata Technologies Inc., US and on April 1, 2006, the Company was merged into its immediate subsidiary company INCAT Systems Inc and thereafter ceased to exist. TATA INTERNATIONAL LIMITED Established in 1962, Tata International has evolved from an export house into an international marketing company with a global turnover of US$ 1.6 billion in 2005-6. Today its operations are organized into two business lines – Leather and Engineering. Tata International is India’s foremost leather and leather products exporter. As a leading supply chain integrator various components of its value chain are located in the most efficient bases around the world. This value chain encompasses global sourcing, world class manufacturing in India and China, design studios in Europe, strategic alliances, marketing and world renowned brands as clients. Its state-of-the-art manufacturing facility at Dewas (in India) is among the top three worldwide for goat skin. The R&D here has made internationally acknowledged break-through in processing chrome free leather and solid waste. The Engineering business unit is involved in international marketing, global sourcing, distribution and supply chain management in the engineering domain including the sectors of mining, railways, power, steel, aluminum, agriculture and automotive accessories. The Engineering unit has agreements with manufacturers in India, China

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and other countries for marketing and representation in select markets. The Chemicals division supplies chemicals spanning applications in pharmacy, food, paints and textiles to glass and mining. With the worldwide reach provided by a well-integrated network that spans the globe, the company has strengthened its capability to source globally, deliver world class quality, work with global brands, and has developed some key international alliances for sustaining future growth. The company exports to more than 100 countries with its major markets being Europe, ASEAN, West Asia, the Far East, and Africa.

Common Pursuits

Promoter, Tata International Limited is in business of Leather and Engineering. There are no common pursuits between the Company and the promoter. Directors The Directors on the Board of Tata International Limited (as on September 15, 2006) are:

Name Designation

Mr. Syamal Gupta Chairman Mr. R. Dhawan Director Dr. H.S. Vachha Director Mr. Alan Rosling Director Mr. B. Muthuraman Director Mr. P.G. Mankad Director Mr. F. N. Subedar Director Mr. Rajiv Dube Director Mr. A. K. Vora Additional Director

Shareholding Pattern

SR. NO. NAME OF THE SHAREHOLDER(S) NO. OF SHARES

HELD % TO TOTAL

SHARE CAPITAL

1 TATA MOTORS LIMITED 25,000 12.50 2 TATA CHEMICALS LTD. 24,000 12.00 3 MAHARASHTRA STATE TEXTILES

CORPN.LTD. 200 00.10

4 VOLTAS LTD. 5,000 02.50 5 TATA REFRACTORIES LTD. 1,870 00.94 6 TATA SONS LTD. 76,000 38.00 7 TATA INDUSTRIES LTD. 8,561 04.28 8 TRENT LIMITED 1,000 00.50 9 TAYO ROLLS LTD. 2,000 01.00 10 EWART INVESTMENTS LTD. 20,000 10.00 11 TAJ INVESTMENT & FINANCE

COMPAny. LTD. 4,000 02.00

12 TATA STEEL LTD. 3,740 01.87 13 MR. SHAPOOR PALLONJI MISTRY 100 00.05 14 MR. CYRUS PALLONJI MISTRY 100 00.05 15 SHEBA PROPERTIES LTD. 9,675 04.84 16 AF-TAAB INVESTMENT CO.LTD. 12,000 06.00 17 MRS. SIMONE NAVAL TATA 56 00.03 18 KALIMATI INVESTMENT CO.LTD. 6,698 03.35 TOTAL 2,00,000 100.00

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Financial Performance The following are selected audited financials of TATA International Limited for the past three years:

(Rs. in Lakhs) Particulars FY06 FY05 FY04

Sales and Other Income 3,38,622 4,27,433 3,02,589 Profit After Tax 4,369 2,371 2,309 Equity Capital 2,000 2,000 2,000 Reserves and Surplus 16,862 14,817 11,299 Net Worth 18,862 16,817 13,299 Earnings Per Share – Basic (Rs.) (Face Value Rs. 10)

2,185 1,186 1,154

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995. Subsidiaries and Affiliates SUBSIDIARIES

1. Tata Africa Holdings (SA) (Proprietary) Limited and its subsidiaries:

a. Tata Zambia Limited, Zambia b. Pamodzi Hotel PLC, Zambia, (subsidiary of Tata Zambia Limited) c. Tata (Zimbabwe) Private Limited, Zimbabwe d. Tata Namibia (Proprietary) Limited, Namibia e. Tata Ghana Limited, Ghana f. Tata Automobile Corporation (SA) (Proprietary) Limited, South Africa g. Tata Holdings (Tanzania) Limited, Tanzania h. Light Source Manufacturers Limited, Tanzania (subsidiary of Tata Holdings (Tanzania) Limited i. Tata Mocambique Limitada, Mocambique j. Tata De Mocambique Limitada, Mocambique, (subsidiary of Tata Mocambique Limitada) k. Cometal, S.A.R.L., Mocambique, (subsidiary of Tata Mocambique Limitada) l. Tata Uganda Limited m. Tata Steel (KZN) Proprietary Limited

2. Tata South East Asia Limited 3. Tata West Asia FZE 4. Tata International (Australia) Pty Limited

AFFILIATES (Companies promoted by Tata International Limited)

1. Tata Precision Industries Limited 2. Graziella Shoes Limited 3. Sitel India Limited 4. Tata Holset Limited 5. Tata International DLT Private Limited 6. Pran Agro Services Private Limited EDC Limited

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EDC Limited is a State Government Corporation which was incorporated on March 12, 1975 as Economic Development Corporation of Goa, Daman & Diu Limited. The name of the company was changed to EDC Limited in September 1999. The activities of EDC Limited are mainly development banking along with other development activities in the State of Goa, Daman & Diu. Shareholding Pattern

The shareholding pattern of EDC Limited as of June 30, 2006 is as given below:

Name Shareholding (%)

Government of Goa 70.51 IDBI 23.10 Administration of Daman & Diu 6.39 Total 100.00

(Source: EDC Limited) Directors The Directors on the Board of EDC Limited are:

Name Designation

Mr. Ravi Naik Chairman Mr. Nitin Kunolienkar Vice Chairman Mr. S. Shanbhogue Director Mr. Shrinivas Dempo Director Mr. Dattaraj Salgaonkar Director Mr. Salim Kazi Director Mr. Datta D. Naik Director Mr. Shailendra Mahalwar Director Mr. R. B. Narnyankar Director Mr. Ramesh L. Chowgule Director Mr. Mahendra Khandeparkar Director Mr. W.V.Ramana Murthy Managing Director

Financial Performance The following are selected audited financials of EDC Limited for the past three years:

(Rs. in Lakhs) Particulars FY06 FY05 FY04

Sales and Other Income 4,510.70 3,462.4 4,864.8 Profit After Tax 1,332.80 (825.4) (429.8) Equity Capital 4,992.40 4,892.4 4,792.4 Reserves and Surplus 4,180.00 3,419.0 3,198.5 Net Worth (2,160.01) (4,348.1) (3,505.1) Earnings Per Share – Basic (Rs.) (Face Value Rs. 10)

N/A N/A N/A

Subsidiaries and Affiliates EDC Limited has the following subsidiary and associate companies as on June 30, 2006

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1. Goa Electronics Limited 2. Goa Time Movers Limited 3. Goa Antibiotics & Pharmaceuticals Limited 4. Goa Auto Accessories Limited 5. Goa Financial Leasing Services Limited 6. Goa Film Finance & Development Corporation Limited 7. Goa Women’s Development Corporation Limited We confirm that the Permanent Account Numbers, Bank Account Numbers, the Company Registration Numbers and the address of the Registered of Companies where the TIL,TMLand EDC are registered have been submitted to the Stock Exchanges on which securities are proposed to be listed at the time of filing the Draft Letter of Offer with them. Litigation Details Pertaining to Promoters For details on litigations and disputes pending against the Promoter and defaults made by the Promoter please refer to the section titled “Outstanding Litigations and Defaults” on page 137 of this Draft Letter of Offer.

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GROUP COMPANIES

Details of companies promoted by our promoters are as under:

CADPO Asia Limited CADPO Asia Limited was incorporated in Singapore on February 1, 2002 and has its registered office at 5 Shenton Way, #22-08 UIC Bldg, Singapore 068808. The principal activities of the company are those of advertising, marketing and promoting of e-learning services. The company is domiciled in Singapore. Board of Directors of CADPO Asia Limited as on September 10, 2006 Mr T P Lew (Sharon Toh) Mr K Noe Mr W Harris

Shareholding Pattern of CADPO Asia Limited as on September 10, 2006

Name Equity Shareholding (%)

iKnowledge Solutions Inc 100 Total 100

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key Financials of CADPO Asia Limited The financial results of CADPO Asia Limited have been disclosed as part of the consolidated audited financial results of Tata Technologies Limited.

Cedis Mechanical Design Gmbh. (“Cedis”) Cedis Mechanical Design Gmbh was incorporated on February 28, 1992 and has its registered office at Brietwiesenstrasse 19, 70565, Stuttgart, Germany. Cedis, a wholly owned subsidiary of INCAT International PLC, provides services in the field of engineering automation, offering engineering & design services, to its customer base, comprising primarily manufacturers and their suppliers in the international automotive and aerospace markets. Following the acquisition of Cedis by INCAT International PLC, the fiscal year end has been changed from December to March to coincide with the fiscal year of the new parent company. Board of Directors of Cedis as on October 26, 2006 Mr W Zofgen Mr M Schleer

Shareholding Pattern of Cedis as on October 26, 2006

Name Shareholding (%)

Incat International Plc Limited 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key Financials of Cedis The financial results of Cedis have been disclosed as part of the consolidated audited financial results of Tata Technologies Limited.

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Concorde Motors India Limited (“Concorde”) Concorde Motors (India) Limited was incorporated on January 18, 1972 as Mazda Industrial Chemicals Private Limited. Concorde became a wholly owned subsidiary of TML in July 1999. The registered office of Concorde is at Nanavati Mahalaya, 18 Homi Mody Street, Hutatma Chowk, Mumbai-400 001. Post certain restructuring initiative, Concorde is now engaged in the business of dealing in after sales service of passenger cars manufactured by TML. Concorde has dealership outlets in Chennai, Hyderabad and Bangalore. TML operates its car repair shop from Concorde’s premises at Mahalaxmi, Mumbai. Board of Directors of Concorde as on October 14, 2006 Mr Rajiv Dube Mr C Ramakrishnan Mr R S Thakur Mr S Krishnan Shareholding Pattern of Concorde as on June 29, 2006 Share Capital of the company is divided into 24,48,120 equity shares of Rs. 10/- each and 24,35,000 preference shares of Rs. 100/- each.

Name Equity Shareholding (%)

Tata Motors Limited 99.887 Tata Motors Limited J/w Mr P P Kadle 0.018 Tata Motors Limited J/w Mr H K Sethna 0.018 Tata Motors Limited J/w Mr Rajiv Dube 0.018 Tata Motors Limited J/w Mr Ravi Kant 0.018 Tata Motors Limited J/w Mr P C Bandivadekar 0.018 Tata Motors Limited J/w Mr R S Thakur 0.018 Total 100

Name Preferrence Shareholding

(%)

Tata Motors Limited 55.61 Tata Industries Limited 44.39 Total 100%

Key audited Financials of Concorde Motors (India) Limited (Rs. Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 244.81 5.32 5.32 Preference Capital 2,435.00 2,435.00 Nil Reserves and Surplus 1,197.17 1,032.78 228.03 Total Income 46,847.23 35,152.85 86.75 Total Expenditure 45,705.36 34,251.56 5.84 Profit before Tax 1,141.87 901.29 80.90 Profit after Tax 738.06 544.62 45.66 Earnings per share*(Rs.) (Face Value Rs. 10) 22.21 861.26 85.79 Book Value per equity share 58.90 1,950.58 438.46

*Basic

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The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Hispano Carrocera S.A.(“Hispano”) Hispano Carrocera S.A. was incorporated on October 27, 1983 and has its registered office at Carretera de Castellan, Km 2305 Camino del Canal, s/n, E 50720 La Cartuja Baja, Zaragoza (Spain). The company’s corporate purpose is the manufacture and sale of bus bodywork, for both the domestic and overseas market. In the year 2000, Hispano started operations in Morocco by opening a new plant in Casablanca. Board of Directors of Hispano as on October 24, 2006

Mr Ravi Kant Mr Gerardo Mugica Jimenez de la Cuesta Mr Andres Mugica Jiminez de la Cuesta Mr R S Thakur Shareholding Pattern of Hispano as on October 24, 2006

Name Shareholding (%)

Tata Motors Limited. 21.00 Investalia, S.L. 79.00 Total 100%

Key audited financials of Hispano

Particulars Years ended December 31, 2005 *

INR (in Lakhs) Euro (In Lakhs)

Equity Capital 2,252.06 42.07 Preference Capital 0.00 0.00 Reserves and Surplus (5,762.63) (107.65) Total Income 15,978.79 290.97 Total Expenditure 18,129.84 330.14 Profit before Tax (2,151.04) (39.17) Profit after Tax (2,155.44) (39.25) Earnings per share*(Rs.) (Face Value Euro 31.276669) (1,602.28) (29.18) Book Value per equity share (2,609.65) (48.75)

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. * Tata Motors Limited acquired 21% of Hispano only on March 2005

HV Axles Limited HV Axles Limited was incorporated on March 13, 2000 and acquired Tata Motors’ Heavy Axle Division at Jamshedpur on March 30, 2000. HV Axles Limited is a wholly owned subsidiary of Tata Motors and has an equity capital of Rs.45 crores. The registered office of HV Axles Limited is situated at Nanavati Mahalaya, 18 Homi Mody Street, Hutatma Chowk, Mumbai-400 001. HV Axles Limited is engaged in the business of manufacture of Axles for heavy and medium commercial vehicle applications.

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Board of Directors of HV Axles Limited as on October 13, 2006

Mr A P Arya Mr Shyam Mani Mr H K Sethna Mr R T Singh Shareholding Pattern of HV Axles Limited as on May 19, 2006

Name Shareholding (%)

Tata Motors Limited 99.999 Tata Motors Limited jointly with others 0.0001 Total 100%

Key audited financials of HV Axles Limited (Rs. In Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 4,500.00 4,500.00 4,500.00 Preference Capital Nil Nil Nil Reserves and Surplus 10,155.41 7,324.45 4,589.60 Total Income 14,389.66 14,396.69 11,769.69 Total Expenditure 7,460.75 7,900.66 6,973.89 Profit before Tax 6,928.91 6,496.03 4,795.80 Profit after Tax 4,626.85 4,274.19 2,969.39 Earnings per share*(Rs.) (Face Value Rs. 10) 10.28 9.50 6.60 Book Value per equity share 32.57 26.28 20.20

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

HV Transmissions Limited (“HVTL”) HVTL was incorporated on March 13, 2000 and acquired Tata Motors’ Gear Box Division at Jamshedpur on March 30, 2000. The registered office of HVTL is situated at Nanavati Mahalaya,18 Homi Mody Street, Hutatma Chowk,Mumbai-400 001. HVTL is a wholly owned subsidiary of Tata Motors and has an equity capital of Rs. 40 crores. HVTL is engaged in the business of manufacture of gear boxes for heavy and medium commercial vehicle applications and recorded turnover (including other income) of Rs.127.62 crores in 2005-06. HVTL is actively pursuing opportunities to attract international alliances as well as external customers. Board of Directors of HVTL as on October 13, 2006

Mr Ravi Kant Mr A P Arya Mr C Ramakrishnan Mr R K Ghosh Mr M V Rajarao

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Shareholding Pattern of HV Transmissions Limited as on May 19, 2006

Name Shareholding (%)

Tata Motors Limited 99.999 Tata Motors Limited jointly with others 0.001 Total 100%

Key audited financials of HV Transmissions Limited (Rs. Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 4,000.00 4,000.00 4,000.00 Preference Capital Nil Nil Nil Reserves and Surplus 5,560.28 4,149.34 2,815.46 Total Income 12,762.43 12,660.41 10,673.66 Total Expenditure 8,209.25 8,015.70 7,663.05 Profit before Tax 4,553.18 4,644.71 3,010.61 Profit after Tax 3,007.29 2,702.18 1,732.83 Earnings per share*(Rs.) (Face Value Rs. 10) 7.52 6.76 4.33 Book Value per equity share 23.90 20.37 17.04

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

iKnowledge Solutions Inc. iKnowledge Solutions Inc, incorporated on December 1, 1988, was a wholly owned subsidiary of INCAT Holdings Inc, and is in the business of development of proprietary software encompassing remote learning technologies and checking and validation of engineering models. The registered office of the company is at 1490 W 121st Ave Suite 201, Westminster CO80234, USA. Its customer base comprises primarily manufacturers and their suppliers in the international automotive and aerospace markets. Board of Directors of iKnowledge Solutions Inc as on September 10, 2006 Mr U Herter Mr Hutchinson Shareholding Pattern of iKnowledge Solutions Inc as at September 10, 2006

Name Shareholding (%)

Tata Technologies Pte Limited 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of iKnowledge Solutions Inc The financial results of iKnowledge Solutions Inc. have been disclosed as part of the consolidated audited financial results of Tata Technologies Limited.

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INCAT Engineering Solutions BV INCAT Engineering Solutions BV was incorporated on January 7, 2002, and is a wholly owned subsidiary of INCAT Holdings BV. The registered office of INCAT Engineering Solutions BV is situtated at Amsterdamse Vaart 268, Postbus 4315, 2003 EH, Haarlem, The Netherlands. The company provides services in the field of engineering automation, offering engineering & design services, PLM products and related IT services to their respective customer bases, comprising primarily manufacturers and their suppliers in the international automotive and aerospace markets. During the six month period the company registered a turnover of Euro 1,062,406. Board of Directors of INCAT Engineering Solutions BV Mr W Zofgen Mr D Myers

Shareholding Pattern of INCAT Engineering Solutions BV

Name Shareholding (%)

Incat Holdings BV 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of INCAT Engineering Solutions B.V. The financial results of INCAT Engineering Solutions B.V. have been disclosed as part of the consolidated audited financial results of Tata Technologies Limited.

INCAT Gmbh. INCAT GmbH was incorporated on June 3, 1997 and has its registered office at Brietwiesenstrasse 19, 70565 Stuttgart, Germany. Its parent company is INCAT International PLC whose registered offices are located in Bristol UK. Becoming effective on January 1 2006, the parent company INCAT International PLC., Bristol, UK took over CEDIS Mechanical Engineering GmbH, Stuttgart, which is hence also affiliated with TATA Technologies Inc., USA. Because of partly identical divisions, CEDIS was economically included in the Company’s strategic alignment. Board of Directors of INCAT Gmbh as onOctober 26, 2006 Mr. W Zofgen

Shareholding Pattern of INCAT Gmbh as at October 26, 2006

Name Shareholding (%)

Incat International Plc. 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of INCAT Gmbh.

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The financial results of INCAT Gmbh. have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

INCAT Holdings BV. INCAT Holdings B.V, incorporated on May 28, 1999, is a wholly owned subsidiary of INCAT International PLC., acts as a holding company for the Groups operation in the Netherlands. The registered office of the company is situated at Amsterdamse Vaart 268, Postbus 4315, 2003 EH, Haarlem, The Netherlands. During the six month period, the company did not trade. Board of Directors of INCAT Holdings B.V. as on October 26, 2006 Mr D Myers Shareholding Pattern of INCAT Holdings B.V as on Ocrober 26, 2006

Name Shareholding (%)

Incat International Plc Limited 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of INCAT Holdings B.V The financial results of INCAT Holdings BV have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

Incat International Plc Limited Incat International Plc Limited was incorporated on April 28 1989. INCAT International Plc Limited provides services in the field of engineering automotive, offering engineering and design services, PLM products and related IT services to the respective customers bases, comprising primarily manufacturers and their suppliers in the international automotive and aerospace markets. The registered office of the company is situated at Bldg 6, Monarch Court, Emerald Park, Emerson Green, Bristol B5167FH. The acquisition will give the enlarged group greater scale and a leading position in North America as well as strong positions in Europe and Asia. This greater global scale will extend the reach of the enlarged group allowing it to offer a greater range of services to its global customer base. The ultimate parent company and controlling party of the company is Tata Motors Limited, a company registered in India. The immediate parent undertaking of the company is Tata Technologies Pte Ltd, a company registered in Singapore. Board of Directors of Incat International Plc Limited Mr P R McGoldrick Mr P P Kadle Mr U Herter Mr D Myers Shareholding Pattern of Incat International Plc Limited

Name Shareholding (%)

Tata Technologies Pte Limited 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Key financials of Incat International Plc Limited

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The financial results of Incat International Plc Limited have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

INCAT Japan KK (“INCAT KK”). INCAT KK was incorporated on January 8, 2002. The registered office of the company is situated at 21F Marine East, World Business Garden, 2-6 Nakase Mihama-ku, Chiba City, 261-7121 Japan. It is a wholly owned subsidiary of INCAT International PLC, and provides PLM services and products, primarily to international automotive and heavy industry clients. During the six month period the company registered a turnover of Yen 43,686,479. Board of Directors of INCAT KK Mr Y Takebe Mr U Herter Mr W Harris Shareholding Pattern of INCAT KK

Name Shareholding (%)

Incat International Plc Ltd. 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Key financials of INCAT KK The financial results of INCAT KK have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

INCAT Limited. INCAT Limited, incorporated on May 2, 1996, provides solutions to leading manufactures and their suppliers in the automotive, aerospace and general manufacturing industries, to help them realize product superiority through Product Lifecycle Management, Engineering and Design and the provision of IT hardware and software and ongoing support. The registered office of the company is situated at Bldg 6, Monarch Court, Emerald Park, Emerson Green, Bristol B5167FH. The ultimate parent company and controlling party of the Company is Tata Motors Limited, a Company registered in India. Board of Directors of INCAT Limited Mr D Myers Mr L James Shareholding Pattern of INCAT Limited

Name Shareholding (%)

Incat International Plc Limited 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

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Key financials of INCAT Limited The financial results of INCAT Limited have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

INCAT SAS. INCAT SAS was incorporated on May, 31st, 2005. The registered office of the company is situated at 9 Rue Du Parc 67025 Oberhausbergen, Strasborg, France. Board of Directors of INCAT SAS Mr W Zofgen Shareholding Pattern of INCAT SAS

Name Shareholding (%)

Incat International Plc Limited 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of INCAT SAS The financial results of INCAT SAS have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

INCAT Solutions of Canada Inc. INCAT Solutions of Canada Inc was incorporated on October 27, 1998. The registered office of INCAT Solutions of Canada is situated at 4510 Rhodes Drive, Unit 300 Windsor, Ontario, Canada New 5K5. It is a wholly owned subsidiary of INCAT Systems Inc and provides services in the field of engineering automation, offering engineering & design services, PLM products and related IT services to their respective customer bases, comprising primarily manufacturers and their suppliers in the international automotive and aerospace markets. During the six month period the company registered a turnover of US $ 253,166 and a loss after tax of US $ 55,479. Board of Directors of INCAT Solutions of Canada Inc Mr. U Herter Mr G Mazak Shareholding Pattern of INCAT Solutions of Canada Inc

Name Shareholding (%)

Incat Systems Inc 100 Total 100%

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of INCAT Solutions of Canada Inc The financial results of INCAT Solutions of Canada Inc. have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

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INCAT Systems Inc. INCAT Systems Inc was incorporated on December 11, 1997. The registered office of the company is situated at 41370 Bridge Street , Novi, M148375-1302. It is a wholly owned subsidiary of INCAT Holdings Inc and provides services in the field of engineering automation, offering engineering & design services, PLM products and related IT services to their respective customer bases, comprising primarily manufacturers and their suppliers in the international automotive and aerospace markets. During in the six month period the company registered a turnover of US $ 47,708,503.47 and a profit after tax of US $ 1,035,664.68. Board of Directors of INCAT Systems Inc Mr U Herter Mr P R McGoldrick Mr P P Kadle Shareholding Pattern of INCAT Systems Inc

Name Shareholding (%)

Tata Technologies Limited 15.03 Tata Motors Limited 0.79 Tata Technologies Pte Limited 84.18 Total 100

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of INCAT Systems Inc The financial results of INCAT Systems Inc have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited. Integrated Systems Technologies de Mexico SA de CV Integrated Systems Technologies de Mexico SA de CV, incorporated on January 26, 1999, is a subsidiary of INCAT Systems Inc a Michigan company. The registered office of the company is situated at Blvd. Independicia, 1600, Ote Local C-46 CP, 27100 Torrean, Cahuile, Mexico. The company operates in Mexico under the INCAT trade name. INCAT provides services in the field of engineering automation, offering engineering & design services, PLM products and related IT services to their respective customer bases, comprising primarily manufacturers and their suppliers in the international automotive and aerospace markets. During the six month period the company registered a turnover of US$ 1,191,987.76 and a profit after tax of US $110,984.00. Board of Directors of Integrated Systems Technologies de Mexico SA de CV as on September 7, 2006 Mr U Herter Mr F Oviedo Mr H Hutchinson Shareholding Pattern of Integrated Systems Technologies de Mexico SA de CV

Name Shareholding (%)

Incat Systems Inc 100 Total 100

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The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of Integrated Systems Technologies de Mexico SA de CV The financial results of Integrated Systems Technologies de Mexico SA de CV have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

Nita Company Limited Nita Company Limited is a private limited company incorporated on September 29th, 1991 under the Companies Act, 1913 (now (Bangladesh) Companies Act, 1994).The company is formed as per the Joint Venture Agreement with Tata Motors Limited India. The registered office of the company is situated at Nitol Center, 71, Mahakhali C/A, 14th Floor, Dhaka-1212. Nita Company Limited is engaged in the assembling of TATA brand commercial vehicles. Board of Directors of Nita Co. Limited as on October 16, 2006

Mr Abdul Matlub Ahmad Mr A P Arya Mr. A. S. Rangan Mr Abdul Mannan Ahmed Mr Md. Anwar Husain Mrs. Selima Ahmad Mrs. Nazma Ara Husain Mr. R. S. Thakur

Shareholding Pattern of Nita Co. Limited as on October 16, 2006

Name Shareholding (%)

Tata Motors Limited. 40 Others 60 Total 100%

Key audited financials of Nita Co Limited (Rs. in Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 264.32 274.92 307.52 Preference Capital Nil Nil Nil Reserves and Surplus 312.68 411.06 455.36 Total Income 1,781.15 3,891.40 5,122.51 Total Expenditure 1,865.59 3,823.23 5,033.36 Profit before Tax (84.45) 68.17 89.16 Profit after Tax (84.93) 44.73 81.81 Earnings per share*(Rs.) (Face Value Takka 1000)

(212.31) 111.84 204.54

Book Value per equity share 1,442.51 1,714.95 1,907.20 *Basic

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

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Sheba Properties Limited (“Sheba”) Sheba Properties Limited was incorporated on January 24, 1989 and is a wholly owned subsidiary of Tata Motors with an existing capital base of Rs. 75 crores. The registered office of Sheba is situated at Nanavati Mahalaya, 18 Homi Mody Street, Hutatma Chowk, Mumbai-400 001. It is an investment and finance Company registered with the RBI as a Non-Banking Finance Company. It recorded a turnover of Rs.11.44 crores in 2005-06. Directors of Sheba Properties Limited as on October 13, 2006 Mr P P Kadle Mr P D Karkaria Mr S H Rajadhyaksha

Shareholding Pattern of Sheba Properties Limited as on October 13, 2006 Share capital of the company is divided into 75,00,000 Equity Shares of Rs. 100/- each.

Name Shareholding (%)

Tata Motors Limited 99.9999 Tata Motors Limited J/w others 0.0001 Total 100%

Key audited financials of Sheba Properties Limited (Rs. Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 7,500.00 7,500.00 7,500.00 Preference Capital Nil Nil Nil Reserves and Surplus 2,248.26 1,533.77 766.50 Total Income 1,144.14 1,533.30 295.61 Total Expenditure 337.17 677.36 185.52 Profit before Tax 806.97 855.94 110.09 Profit after Tax 714.49 767.26 137.47 Earnings per share*(Rs.) (Face Value Rs. 10) 9.53 10.23 1.83 Book Value per equity share 129.98 120.45 110.22

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata AutoComp Systems Limited (TACO) TACO was incorporated on October 17, 1995. Registered office of TACO is situated at TACO House, Damle Path, off Law College Road, Erandawane, Pune –411 004. TACO is a holding company for promoting domestic and foreign Joint Ventures in auto components and systems and is also engaged in engineering services, supply chain management and after market operations for the auto industry. Board of Directors of TACO as on October 31, 2006

Mr R N Tata Mr D S Gupta Mr K A Chaukar Mr R Gopalakrishanan Mr Satish Pradhan Mr Alan Rosling

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Shareholding Pattern of TACO as on October 31, 2006

Name Shareholding (%)

Tata Motors Limited. 49.99 Tata Industries Limited 34.40 Tata Sons Limited 14.26 Others 1.35 Total 100%

Key audited financials of TACO (Rs. Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 16,773.45 16,773.45 14,800.10 Preference Capital 7,000.00 7,000.00 Nil Reserves and Surplus 6,715.88 3,563.54 709.78 Total Income 26,957.47 25,735.09 5,552.53 Total Expenditure 22,490.50 22,274.17 4,613.83 Profit before Tax 4,466.97 3,460.92 938.70 Profit after Tax 3,711.06 3,067.89 716.12 Earnings per share*(Rs.) (Face Value Rs. 10) 1.88 1.89 0.48 Book Value per equity share 14.00 12.12 10.48

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

TAL Manufacturing Solutions Limited TAL Manufacturing Solutions Limited was incorporated on March 13, 2000 as Telco Automation Limited and acquired Tata Motors Machine Tool and Equipment Building division located in Pune on March 30, 2000. TAL is a wholly owned subsidiary of Tata Motors and has an equity capital of Rs.65 crores. TAL is engaged in the business of providing factory automation solutions and designs and also manufactures a wide range of machine tools and computer equipment. The 2005-06 turnover of TAL was Rs. 98.05 crores. The Registered office of TAL Manufacturing Solutions Limited is situated at Nanavati Mahalaya, 18 Homi Mody Street, Hutatma Chowk, Mumbai-400 001. Board of Directors of TAL Manufacturing Solutions Limited as on October 14, 2006 Mr P M Telang Mr Satish Pradhan Mr V K Deshpande Mr L K Pahwa Mr. R. S. Thakur Mr. Eric Vas

Shareholding Pattern of TAL Manufacturing Solutions Limited as at September 7, 2006

Name Equity Shareholding (%)

Tata Motors Limited 99.99 TML jointly with others 00.0001 Total 100

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Key audited financials of TAL Manufacturing Solutions Limited Rs. in Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 6,500.00 6,500.00 7,500.00 Preference Capital Nil Nil Nil Reserves and Surplus (1,859.22) (2,325.25) (10,379.36) Total Income 9,805.66 7,969.78 6,874.81 Total Expenditure 9,303.60 7,731.39 10,193.46 Profit before Tax 502.06 238.39 (3,318.65) Profit after Tax 466.03 238.39 (3,318.65) Earnings per share*(Rs.) (Face Value Rs. 10) 0.72 0.33** (4.42) Book Value per equity share 7.14 6.42 (4.34)

*Basic ** Weighted average taken The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata Cummins Limited Tata Cummins Limited was incorporated on October 20, 1993. The registered office of the company is situated at Tata Township, Jamshedpur, Jharkand, PIN Code-831004. It is a 50:50 Joint venture between Tata Motors Limited, India’s largest Automobile manufacturer and Cummins Engine Company Inc. of USA, world leaders in design and manufacture of diesel engines. The Rs. 300 crores project with an authorised share capital of Rs. 250 crores has been set up at Jamshedpur for the manufacture of Diesel engines to power Tata Motors Limited’s commercial vehicles. Commercial production of engines from kits commenced in January 1996 and the machining lines for in-house manufacture of components started in March 1997. Board of Directors of Tata Cummins Limited

Mr. Ravi Kant Mr. Anant J. Talaulicar Mr. Praveen Kadle Mr. A. P. Arya Mr. Rajiv Batra Mr. Sean Milloy Mr. Glyn Price Mr. Steve Chapman Mr. P. M. Telang Mr. C. Ramakrishna

Shareholding Pattern of Tata Cummins Limited

Name Shareholding (%)

Tata Motors Limited. 50 Cummins Inc., USA 50 Total 100%

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Key audited financials of Tata Cummins Limited (Rs. in Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 18,000.00 18,000.00 18,000.00 Preference Capital Nil Nil Nil Reserves and Surplus 3,956.34 2,198.33 1,487.04 Total Income 95,796.32 86,046.92 67,515.04 Total Expenditure 86,342.11 79,639.54 62,270.42 Profit before Tax 9,454.21 6,407.38 5,244.62 Profit after Tax 6,291.78 4,374.72 2,947.50 Earnings per share*(Rs.) (Face Value Rs. 10) 3.50 2.43 1.64 Book Value per equity share 12.20 11.22 10.83

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Tata Daewoo Commercial Vehicle Co. Limited The Tata Daewoo Commercial Vehicle Co. Limited was incorporated on November 1, 2002. The registered office of the company is situated at 1589-1 Soryong dong, Gunsan, Jeollabah-Do 573-715, South Korea. The Daewoo Commercial Vehicle Company Limited of South Korea was established in November 2002 under a Corporate Reorganization Plan. It became a wholly owned subsidiary of Tata Motors Limited, with effect from March 30, 2004 with an equity capital of Korean Won 15080 Million and was renamed as Tata Daewoo Commercial Vehicle Company Limited TDCV is engaged in the business of manufacturing heavy vehicles such as cargo trucks, dump trucks, tractor trailers and special purpose vehicles. It is Korea’s second largest truck manufacturer with a segment market share of 26%. Board of Directors of Tata Daewoo Commercial Vehicle Co. Limited

Mr Ravi Kant Mr P P Kadle Mr Kwang Ok Chae Shareholding Pattern of Tata Daewoo Commercial Vehicle Co. Limited

Name Shareholding (%)

Tata Motors Limited 100 Total 100%

Key audited financials of Tata Daewoo Commercial Vehicle Co Limited (Rs in Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 6,804.42 6,433.58 5,735.00 Preference Capital Nil Nil Nil Reserves and Surplus 71,345.61 61,712.34 53,062.00 Total Income 1,64,665.51 1,17,802.00 577.00

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Particulars Years ended March 31,

2006 2005 2004

Total Expenditure 1,56,568.57 1,15,039.00 521.00 Profit before Tax 8,096.94 2,763.00 56.00 Profit after Tax 6,074.74 2,061.00 45.00 Earnings per share*(Rs.) Korean Won 5,000. 201.41 68.33 1.49 Book Value per equity share (Rs.) 2,591.13 2,259.44 1,949.46

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata Holset Limited (“THL”) Tata Holset Limited was incorporated on December 20, 1994 and has its registered office at Industrial Area No.2, Agra Bombay Road, Dewas, Madhya Pradesh – 455 001. THL commenced it business from September 27, 1996. THL supplies turbo charges to major domestic and European OEM’s. Export sales were Rs.607 million during the current year with a registered growth of 230% over the previous year. The total fixed assets of the Company stood at Rs.481.5 million as on March 31, 2006. Board of Directors of Tata Holset Limited

Mr Ravi Kant Mr Praveen Kadle Mr Anant Talaulicar Mr Paul Ibbotson Mr Charles M Kaye Mr A P Arya Mr P M Telang Mr Shyamsunder B Seshadri Mr Rajiv Batra (alternate director to Mr. Paul Ibbotson) Shareholding Pattern of Tata Holset Limited as on March 31, 2006

Name Shareholding (%)

Cummins Turbo Technologies Limited 50 Tata International Limited 30 Tata Motors Limited 15 Tata Industries Limited 5 Total 100%

Key audited financials of Tata Holset Limited (Rs. Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 1,500.00 1,500.00 1,500.00 Preference Capital Nil Nil Nil Reserves and Surplus 3,237.09 2,264.63 1,379.26 Total Income 16,205.17 12,091.10 9,788.18 Total Expenditure 12,744.45 9,411.12 7,474.11

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Particulars Years ended March 31,

2006 2005 2004

Profit before Tax 3,460.72 2,679.98 2,314.07 Profit after Tax 2,255.23 1,733.39 1,514.42 Earnings per share*(Rs.) (Face Value Rs. 10) 15.03 11.56 10.10 Book Value per equity share 31.58 25.10 19.20

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata Precision Industries (India) Limited (“TPID”)

Tata Precision Industries (India) Limited was incorporated on July 28, 1995 and has its registered office at Industrial Area No. 2, A. B. Road, Dewas – 455 001 (M.P.). TPID was incorporated with the objective of developing a manufacturing unit for various supplies and job works for Tata Precision Industries Pte. Limited, Singapore. TPID is mainly engaged in exports of high precisions engineering products in international market and industrial plastic products in the domestic market.

Directors of TPID as on November 7, 2006

Mr. R. S. Thakur, Mr. M. V. Raja Rao Mr. B. B. Parekh

Shareholding Pattern of TPID as at November 7, 2006

Name Shareholding (%)

Tata International Limited, Mumbai 49.9995 Tata Precision Industries Private Limited, Singapore 49.99925 Tata International Limited jointly with Mr. V. Mehrotra 0.00025 Tata International Limited jointly with Mr. Atul Bansal 0.00025 Tata Precision Industries Private Limited, Singapore joitnly with Mr. V. Mehrotra

0.00025

Tata Precision Industries Private Limited, Singapore joitnly with Mr. Atul Bansal

0.00025

Tata Precision Industries Private Limited, Singapore joitnly with Mr. P. C. Bandivadekar

0.00025

Total 100.00 Key audited financials of TPID (In Rs. Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 400 400 400 Preference Capital 200 150 150 Reserves and Surplus 10 10 10

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Particulars Years ended March 31,

2006 2005 2004

Total Income 473.49 388.00 360.80 Total Expenditure 497.57 484.44 455.82 Profit / (Loss) before Tax (24.08) (96.44) (95.02) Profit / (Loss) after Tax (10.76) (96.44) (68.79) Earnings per share*(Rs.) (Face Value Rs. 100)

- - -

Book Value per equity share (Rs.) 101.67 101.81 101.81 *Basic

The company is a potentially sick company within the meaning of Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

Tata Technologies Limited Tata Technologies Limited was incorporated on August 22, 1994 and became a subsidiary of Tata Motors in September 1997. The registered office of Tata Technologies Limited is situated at Pt No 25, Pune Infotech Park, Hinjawadi, Pune - 411 057. Through its operating companies, INCAT and iKnowledge Solutions, the Tata Technologies group is an emerging world leader in the provision of specialized Engineering & Design (E&D), Product Lifecycle Management (PLM) and product-centric IT services to leading manufacturers. It responds to customers’ needs through its operations in 45 cities across 12 countries on three continents and through its offshore development centers in India and Thailand. Its customers are among the world’s premier automotive, aerospace and consumer durable manufacturers. Board of Directors of Tata Technologies Limited

Mr S Ramadorai Mr R Gopalakrishnan Mr P P Kadle Mr C Ramakrishnan Mr P R McGoldrick Mr U Herter

Shareholding Pattern of Tata Technologies Limited

Name Shareholding (%)

Tata Motors Limited 84.87 Trust Walbrook Nominee 2.29 Tata Engineering Services Pte Ltd 2.27 Tata Enterprises Overseas Ltd 1.98 MCCC Engineering Establishment 0.92 Others 7.66 Total 100%

Key audited financials of Tata Technologies Limited (Consolidated) (Rs. Lakhs)

Particulars Years ended March 31,

2006 2005 2004

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Particulars Years ended March 31,

2006 2005 2004

Equity Capital 3,490.92 1,068.43 1,059.78 Preference Capital Nil Nil Nil Reserves and Surplus 24,617.21 2,317.67 1,896.50 Total Income 54,500.38 18,042.84 13,664.34 Total Expenditure 52,559.33 16,976.45 12,870.25 Profit before Tax 1,941.05 1,066.39 794.09 Profit after Tax 1,149.23 771.65 800.63 Earnings per share*(Rs.) (Face Value Rs. 10) 7.83 7.26 7.59 Book Value per equity share 80.61 31.64 27.61

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata Technologies Pte Limited Tata Technologies Pte Ltd was incorporated on February 3, 1981 and has its registered office at 5 Shenton Way, #22-08 UIC Building, Singapore 068808. The Company is a limited liability company incorporated and domiciled in Singapore. The Company has a branch in England and Wales. During the financial period, the Company has registered two business units in Singapore, namely, Incat and iknowledge Solutions. The principal activities of the Company are that of development of software and marketing of computer systems and software, provision of engineering support and maintenance services and computer consultancy and related services. Board of Directors of Tata Technologies Pte Ltd

Mr R N Tata Mr F K Kavarana Mr W Chan Mr P R McGoldrick Mr. P P Kadle Shareholding Pattern of Tata Technologies Pte Ltd

Name Equity Shareholding (%)

Tata Technologies Limited 100 Total 100

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key audited financials of Tata Technologies Pte Limited The financial results of Tata Technologies Pte Limited have been disclosed as part of the consolidated financial results of Tata Technologies Limited. Telco Construction Equipment Company Limited Telco Construction Equipment Company Limited was incorporated on December 30, 1998, acquired Tata Motors' Construction Equipment Business Unit in March 1999 and commenced business on 23 rd March, 1999. The registered office of the company is situated at Jubilee Bldg, 45, Museum Road, Bangalore-560 025. Telcon is engaged in the business of manufacture and sale of construction and Telcon aims to play a major role in

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building the country's infrastructure and core industries and allied equipment and services, in technical and financial collaboration with Hitachi. In line with its objective of being a one-shop stop for construction equipment, Telcon has added new products apart from hydraulic excavators and wheeled equipment to its product line and has also strengthened its infrastructure and plant facilities at its works at Jamshedpur and Dharwad. In 2005-06, the Company sold 2517 machines and recorded gross revenue of Rs.1159.54 crores. Board of Directors of Telco Construction Equipment Co. Limited as on October 18, 2006

Mr P P Kadle Mr V R Mehta Mr K C Mehra Mr M Kimura Mr H Arahata Mr. K Kimura Mr M Tabei alternate to Mr. M. Kimura Mr S Lino, alternate to Mr H Arahata Mr M Narao, alternate to Mr. H. Arahata P M Telang Shareholding Pattern of Telco Construction Equipment Co. Limited as at October 18, 2006 Telco Construction Equipment Co. Limited has an equity share capital of Rs.100 crores.

Name Shareholding (%)

Tata Motors Limited (including 6 shares jointly held with individuals) 60 Sheba Properties 0.25 Hitachi Construction Machinery Equipment Co. Limited 40 Total 100%

Key audited financials of Telco Construction Equipment Co. Limited (Rs. Lakhs)

Particulars Years ended March 31,

2006 2005 2004

Equity Capital 10,000.00 10,000.00 10,000.00 Preference Capital 0 0 - Reserves and Surplus 17,416.00 12,897.05 10,531.20 Total Income 115,994.00 82,548.60 63,414.54 Total Expenditure 102,318.00 76,529.16 59,626.94 Profit before Tax 13,676.00 6,019.44 3,787.60 Profit after Tax 8,684.00 4,076.30 2,066.60 Earnings per share*(Rs.) (Face value Rs. 10) 8.68 4.08 2.07 Book Value per equity share 27.42 22.74 20.05

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata Motors European Technical Centre PLC Tata Motors European Technical Centre PLC (TMETC) was incorporated on September 1, 2005. The registered office of TMETC is situated at 18, Grosvenor Place, London SWIX 7 HS, United Kingdom. TMETC was established as a wholly-owned subsidiary of Tata Motors Limited in the United Kingdom. TMETC is engaged

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in the business of design engineering and development of products for the automotive industry. Working synergistically, TMETC provides to TML with design engineering support and development services, complementing and strengthening the former's skill sets and providing European standards of delivery to Tata Motors' passenger vehicles. Board of Directors of Tata Motors European Technical Centre PLC as on October 27, 2006 Mr Ratan Tata Mr Ravi Kant Mr Charles Tennant Mr Clive Hickman

Shareholding Pattern of Tata Motors European Technical Centre PLC as at September 7, 2006

Name Shareholding (%)

Tata Motors Limited 100 Total 100%

Key audited financials of Tata Motors European Technical Centre PLC

(in Rs. Lakhs) Particulars Years ended March 31,

2006

Equity Capital 388.12 Preference Capital Nil Reserves and Surplus (44.24) Total Income 961.55 Total Expenditure 904.62 Profit before Tax 56.93 Profit after Tax (44.24) Earnings per share*(Rs.) (Face value GBP 1) (8.85) Book Value per equity share 68.78

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata Motors Insurance Services Limited Tata Motors Insurance Services Limited was incorporated on July 14, 1997 as Concorde Motors Pvt. Ltd to set up state of the art distribution and after sales service centres for Tata Motors passenger vehicles. It became a wholly owned subsidiary of Tata Motors on October 2004 and has an equity capital of Rs.50 Lakhs. The registered office of Tata Motors Insurance Service Private Limited is situated at Nanavati Mahalaya, 18 Homi Mody Street, Hutatma Chowk, Mumbai-400 001. Tata Motors Insurance Services Limited recorded a turnover of Rs.1.18 crores for financial year 2005-06.Post certain restructuring initiatives, Tata Motors Insurance Services Limited had discontinued the said sales and service business and now proposes to engage in the business of insurance broking for which an application for registration has been filed with the IRDA. Board of Directors of Tata Motors Insurance Services Limited

Mr P P Kadle Mr Rajiv Dube Mr C Ramakrishnan Mr R S Thakur Mr V Sinha

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Shareholding Pattern of Tata Motors Insurance Services Limited Share capital of the company is divided into 5,00,000 Equity Shares of Rs. 10/- each.

Name Shareholding (%)

Tata Motors Limited 99.998 Tata Motors Limited J/w others 0.002 Total 100% Key audited financials of Tata Motors Insurance Services Limited (Rs. Lakhs)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 50.00 50.00 2,435.00 Preference Capital Nil Nil Nil Reserves and Surplus 82.03 1.54 111.04 Total Income 118.40 258.31 26,255.44 Expenditure 16.07 169.62 25,849.40 Prior Period 12.54 Nil Nil Total Expenditure 28.61 169.62 25,849.40 Profit before Tax 89.79 88.69 406.04 Profit after Tax 80.48 88.69 374.04 Earnings per share*(Rs.) (Face Value Rs. 10) 16.10 0.36 1.54 Book Value per equity share 26.41 10.31 10.46

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

TML Financial Services Limited. TML Financial Services Limited (TMLFSL) with an equity capital of Rs 5 crores was incorporated on June 1, 2006 as a 100% subsidiary of Tata Motors Limited and commenced business on June 9, 2006. The registered office of TMLFSL is situated at Nanavati Mahalaya, 18 Homi Mody Street, Hutatma Chowk, Mumbai-400 001. TMLFSL functions as a Non-Banking Finance Company and aspires to be the preferred financier by choice for Tata Motors sales, its dealers and customers across all its products. TMLFSL offers tailor made schemes for the end user, providing Auto Finance for Passenger Cars, Utility Vehicles, Heavy & Light Commercial Vehicles & Construction Equipment. They have also made a foray into the Refinancing Business. In view of the memorandum of understanding (MoU) between Fiat India & Tata Motors, TMLFSL has commenced disbursement of passenger car loans to the customers of Fiat India. Board of Directors of TML Financial Services Limited as on September 8, 2006

Mr P P Kadle Mr Shyam Mani Mr H N Sinor Mr Bharat Vasani Shareholding Pattern of TML Financial Services Limited as on October 14, 2006 Share capital of the company is divided into 50,000 Equity Shares of Rs. 10/- each.

Name Shareholding (%)

Tata Motors Limited 99.98 Tata Motors Limited J/w others 0.02 Total 100%

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Key audited financials of TML Financial Services Limited. As TML Financial Services Limited was incorporated on June 1, 2006 it has no results to declare as of March 31, 2006. The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata Precision Industries Pte. Limited Tata Precision Industries Pte. Limited was incorporated on June 8, 1971 in the Republic of Singapore. In 1972 with assistance from EDB (Economic Development Board of Singapore). Tata Precision Industries was set up with Development Bank of Singapore as a shareholder. Tata Precision Industries Pte. Limited has its registered office at 1 Robinson Road #19-01, AIA Tower, Singapore 048542. The core business of Tata Precision Industries was the manufacture and supply of Tools, Dies & Moulds to various customers worldwide. It further expanded is activities in the early eighties into mass and batch production of precision machined and plastic injection molded components for the Electronics & Disc Drive Industries Taking the future trend into account, the Company installed Fine Blanking press in 1997 and started the manufacture and supply of fine Blanked components along with the manufacture of Fine Blanking tools in house. Board of Directors of Tata Precision Industries Pte. Limited

Mr F K Kavrana Mr Praveen P Kadle Mr Sarjit Singh Gill Shareholding Pattern of Tata Precision Industries Pte. Limited

Name Shareholding (%)

Tata Motors Limited 49.99 Tata International AG 33.56 Tata Enterprises (Overseas) Ltd AG, Zug, Switzerland 16.45 Total 100% Key audited financials of Tata Precision Industries Pte. Limited (Rs in. Lakhs)

Years ended December 31, Particulars 2005 2004 2003

Equity Capital 2,746.45 2,703.24 2,709.44 Preference Capital Nil Nil Nil Reserves and Surplus (2,860.97) (2,353.05) (1,157.67) Total Income 1,043.66 1,527.98 1,794.94 Total Expenditure 1,503.18 2,731.32 2,622.89 Profit before Tax (459.52) (1,203.34) (827.96) Profit after Tax (459.52) (1,203.34) (827.96) Earnings per share*(Rs.) (Face Value SGD. 1) (4.54) (11.89) (8.18) Book Value (114.53) 350.19 1551.77 Book Value per equity share (1.13) (3.46) (15.33)

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

Tata Technologies Snd Bhd, Malasia. Tata Technologies Snd Bhd, Malasia was incorporated on February 15, 1996. The Company is principally engaged in provision of services, supply and installation of computer systems. However, the Company has ceased

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its operations since the financial year 1999. The Company is a wholly-owned subsidiary of Tata Technologies Pte. Limited, a company incorporated in Singapore. The ultimate holding company is Tata Technologies Limited, a company incorporated in India. Board of Directors of Tata Technologies Snd Bhd, Malasia

Mr P McGoldrick Mr L L Chaun Mr M B Majid Mr F J Wan The Registered office of Tata Technologies Snd Bhd, Malasia is situated at: No 8 First Floor, Jalan Pesta, 1/1 Taman Tun Dr Ismail, 1 Jalan Bakri 84000 Muar Johor.

Shareholding Pattern of Tata Technologies Snd Bhd, Malasia

Name Equity Shareholding (%)Tata Technologies Pte Limited 100 Total 100 The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key audited financials of Tata Technologies Snd bhd Malasia The financial results of Tata Technologies Snd bhd Malasia have been disclosed as part of the consolidated financial results of Tata Technologies Limited.

Tata Technologies (Thailand) Limited TATA Technologies (Thailand) Limited was incorporated as a limited company in Thailand on September 30, 2005 to engage in the business of providing services for research and development in relation to the automobile industry. The major shareholder of the Company is TATA Technologies Limited, which was incorporated in India, holding 99.99% of the Company’s shares. The ultimate parent company is TATA Motors Limited. The registered office of the company is situated at 889 Thai CCTower, Room 108-9 10th Floor, South Sathorn Road, Kwhaeng Yannawa, Khet Sathorn , Bangkok Metropolis 101120. As at March 31, 2006, the Company has retained deficit and capital deficiency, as the Company heavily invested in training costs for its engineers for the 2006 fiscal period. The management believes that the Company will turn out with positive outcome in the forthcoming year due to high skills, experience and synergies of TATA Technologies group. As at March 31, 2006, the Company had 28 employees and the staff costs for the period from September 30, 2005 (date of incorporation) to March 31, 2006 was approximately Baht 2.75 million (Rs. 3.16 million). Board of Directors of TATA Technologies (Thailand) Limited

Mr R Indhewat Mr T Rajasekharan Mr T Khositjiranun Shareholding Pattern of TATA Technologies (Thailand) Limited

Name Equity Shareholding (%) Tata Technologies Limited 100 Total 100

97

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key Financial performance The financial results of TATA Technologies (Thailand) Limited have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited. The Company has extensive transactions and relationship with related companies. Accordingly, the financial statements may not necessarily be indicative of the conditions that would have existed or the results of operations that would have occurred had the Company operated without such affiliations.

Tata Technologies Investments Pte Ltd, Singapore. Tata Technologies Investments Pte Ltd, Singapore was incorporated on February 11, 1992. The registered office of the company is situated at 5 Shenton way, #22-08 UIC Bldg, Singapore 068808. The company is a limited liability company incorporated and domiciled in Singapore. The principal activities of the company are that of investment holding. The company operates in Singapore. The directors have indicated their intention to liquidate the company. The company is a subsidiary of Tata Technologies Pte Ltd, its immediate holding company, which is incorporated in Singapore. The company’s ultimate holding company is Tata Motors Limited, a company incorporated in India. The non-trade amount due from holding company is unsecured, interest free and repayable on demand. Board of Directors of Tata Technologies Investments Pte Ltd, Singapore

Mr F K Kavarana Mr W Chan Mr P McGoldrick

Shareholding Pattern of Tata Technologies Investments Pte Ltd, Singapore

Name Equity Shareholding (%)

Tata Technologies Pte Limited 55 Tata Engineering Services (Pte) Limited 45 Total 100 The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding. Key financials of Tata Technologies Investment Pte Limited The financial results of Tata Technologies Investment Pte Limited have been disclosed as part of the audited consolidated financial results of Tata Technologies Limited.

M/s Graziella Shoes Ltd

Graziella Shoes Limited is the Joint Venture partner of M/s Tata International Limited. M/s Graziella Shoes produce on an average 3000 pairs of Full shoes per day. The registered office of the company is situated at II Floor, MSDF Phase II, MEPZ-SEZ, Tambaram, Chennai 600045.

Directors of Graziella Shoes Ltd as at August 18, 2006 Mr Pucci Dante, Mr Syamal Gupta, Ms Cechi Graziella, Mr R Subramaniam, Ms Cristina Pucci

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Shareholding Pattern of M/S Graziella Shoes as on August 18, 2006

Name Shareholding (%)

Tata International Ltd, Mumbai 50.00 % Mr Pucci Dante 39.42 % Mrs Cechi Graziella 8.77 % Ms.Cristina Pucci 1.81 % Key audited financials of Graziella Shoes Ltd (Rs. in Lakhs)

Years ended March 31, Particulars

2006 2005 2004

Equity Capital 351.81 351.81 351.81 Preference Capital NIL NIL NIL Reserves and Surplus 168.77 149.16 143.48 Total Income 6613.10 7903.23 5620.66 Total Expenditure 6580.59 7828.65 5483.74 Profit before Tax 32.51 74.58 136.92 Profit after Tax 19.60 62.70 125.82 Earnings per share*(Rs.) (Face Value Rs. 10) 0.56 1.78 3.58

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995. Pran Agro Services Private Limited (“Pran Agro”)

Pran Agro was incorporated on July 10, 1989. The Company’s objects are to aid, assist, promote, develop and manufacture agricultural implements, agricultural machinery and equipments required for fisheries, poultry, sheep, cattle and dairy development. The Registered office of Pran Agro is situated at Hoechst House, 3/1A, Ali Road, New Delhi 110 002. Directors of Pran Agro as at 18 August, 2006 Mr. N.D. Rajpal, Mr. S. Joshua Mr. M. M. Tambe

Shareholding Pattern of Pran Agro as on 18 August 2006

Name Shareholding (%)

1. Alembic Limited 50.00 % 2. Tata International Limited 50.00 % Key audited financials of Pran Agro (Rs. In absolute terms)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 360 360 360 Preference Capital 100,000 100,000 100,000 Reserves and Surplus NIL NIL NIL Total Income NIL NIL NIL Total Expenditure NIL NIL NIL

99

Profit before Tax 3,860 3,860 3,860 Profit after Tax 3,860 3,860 3,860

*Basic

Note: The Company does not earn any income. The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

Tata International DLT Private Limited (“TIDLT”) TATA INTERNATIONAL DLT Private Limited is the Joint Venture between Tata International Ltd, and Dutch Lanka Trailer Manufacturers Limited, Sri Lanka for the manufacture and sale of Trailers of all types and description. This private limited company was incorporated on June 29, 2005. The operations of TIDLT had not commenced for the year ended March 31, 2006. The Registered office of TIDLT is situated at Sterling Centre, 3rd floor, Dr. A. B. Road, Worli, Mumbai 400 018.

Directors of TIDLT as on September 28, 2006

Mr. Dilip Kodikara Mr. P. V. Balasubramaniam Mr. S. E. Captain Mr.Bastiaan A. Molenaar Mr. R. Bala Mr. M. M. Tambe Shareholding Pattern: TIDLT as at August 18, 2006

Name Shareholding (%)

Tata International Limited 50.00 % Dutch Lanka Trailer Manufacturers Limited 50.00 % Total 100.00 Key audited financials of TIDLT (Rs. In absolute figures)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 100,000 N.A. N.A. Preference Capital NIL N.A. N.A. Reserves and Surplus NIL N.A. N.A. Total Income NIL N.A. N.A. Total Expenditure NIL N.A. N.A. Profit before Tax NIL N.A. N.A. Profit after Tax NIL N.A. N.A. Earnings per share*(Rs.) (Face Value Rs. 10) NIL N.A. N.A. Book Value per equity share (Rs.) NIL N.A. N.A.

*Basic

The operations of the Company had not commenced for the year ended March 31, 2006, therefore, no profit and loss account was prepared. The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

TATA ZIMBABWE (PVT) LIMITED (“Tata Zimbabwe”)

100

Tata Zimbabwe was incorporated in 1989 and is the distributor of Tata vehicles in Zimbabwe. The Registered office of Tata Zimbabwe is situated at Chiremba Road/Baring Row, Hillside, Harare, Zimbabwe. Directors of Tata Zimbabwe as on September 30, 2006 Mr Raman Dhawan Mr A I Kassim

Shareholding Pattern of Tata Zimbabwe as September 30, 2006

Name Shareholding (%) Tata Africa Holdings (SA) (Pty) Ltd, South Africa 100

Key audited financials of Tata Zimbabwe (Z$)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 150,000 150,000 150,000 Preference Capital - - - Reserves and Surplus 171,784,700 8,922,950 6,925,963 Total Income(A) 162,861,750 36,235,915 7,233,460 Total Expenditure(B) - 34,238,928 7,041,422 Profit before Tax(A-B) 162,861,750 1,996,987 192,038 Profit after Tax 162,861,750 1,996,987 192,038 Earnings per share*(Z$) (Face Value Z$1) (Profit after tax/ no of equity shares)

1,085.75 13.31 1.28

Book Value per equity share (Z$)@ 1,146.23 60.49 47.17 *Basic @ (Equity Capital+ Reserves & Surplus)/ no of equity shares

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

TATA STEEL (KZN) (PROPRIETARY) LIMITED (“Tata Steel (KZN)”)

Brief history and functions of the company Tata Steel (KZN) was incorporated in 2004 and has not commenced its operations. The Registered office of Tata Steel (KZN) is situated at 39 Ferguson Road, Illovo 2196, Johannesburg, Republic of South Africa.

Directors of Tata Steel (KZN) as at September 30, 2006 Mr Raman Dhawan Mr. B. Muthuraman Mr. Koushik Chatterjee Mr. S. Banerjee Shareholding Pattern of Tata Steel (KZN) as on September 30, 2006

Name Shareholding (%) Tata Africa Holdings (SA) (Pty) Ltd, South Africa

10

Tata Steel Limited 90 Changes in Capital Structure in the last 6 months

101

Particulars No. of shares Issued (of

ZAR1 each) Year / date of issue Tata Steel Limited, India 900 April 2006

Key audited financials of Tata Steel (KZN)* (ZAR)

Years ended March 31,

Particulars 2006 2005 Equity Capital 1000 1000

Preference Capital - - Accumulated Losses (958) (885) Total Income(A) - - Total Expenditure(B) (73) (885) Profit before Tax(A-B) (73) (885) Profit after Tax (73) (885) Earnings per share*(Z$) (Face Value Z$1) (Profit after tax/ of equity shares)

- -

Book Value per equity share (Z$)@ 0.042 0.115 *Basic @ (Equity Capital+ Accumulated Losses)/ no of equity shares

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995. * As the company was incorporated in 2004, it has no financials to report as of March 31, 2004. Tata de Mozambique, Limitada

Tata de Mozambique, Limitada was incorporated in March 6, 1991 and was formed with the objective to import and to export vehicles, spare parts and other products and to provide service for the maintenance of Tata vehicles. The Registered office of Tata de Mozambique, Limitada is situated at Av.Milagre Mabote Nº 9 Maputo, Mozambique. Directors of Tata de Mozambique, Limitada as at September 30, 2006

Mr. Raman Dhawan Mr. Sunil Kapur Mr.Armando Emilio Guebuza Mr. A.Sumbana

Shareholding Pattern of Tata de Mozambique, Limitada as September 30, 2006

Name Shareholding (%)

Tata Holdings Mozambique, Limitada 65 Armando Emilio Guebuza 25 Mbatine Investimentos Lda 10

Key audited financials of Tata de Mozambique, Limitada (Meticais ´000)

Years ended December,31 Particulars 2005 2004 2003

Equity Capital 592,000 592,000 592,000 Preference Capital Nil Nil Nil Reserves and Surplus 6,619,615 3,769,750 2,129,719

102

Total Income 77,413,253 79,975,668 47,733,880 Total Expenditure 73,206,010 77,524,282 47,415,390 Profit before Tax 4,207,243 2,451,386 318,490 Profit after Tax 2,849,865 1,640,031 211,029 Earnings per share*(Rs.) (Face Value Rs. 10) [●]** [●]** [●]**

Book Value per equity share (Rs.) [●]** [●]** [●]** * Basic **In Mozambique there are no shares, instead there are only quotas. The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

Tata Holdings Mozambique,Limitada

Tata Holdings Mozambique, Limitada was created on January 17, 1994. The Company’s objectives are the promotion of investments in agricultural projects, transport, construction, services and import/export. The Registered office of Tata Holdings Mozambique, Limitada is situated at Av.Milagre Mabote Nº 9 Maputo,Mozambique. Directors of Tata Holdings Mozambique, Limitada as on September 30, 2006 Mr. Raman Dhawan Mr. Sunil Kapur Shareholding Pattern of Tata Holdings Mozambique, Limitada as on 30 September, 2006

Name Shareholding (%) Tata Africa Holdings (SA) (Pty) Ltd. 99 Raman Dhawan ( nominee of Tata Africa Holdings (SA) (Pty) Ltd

01

Key audited financials of Tata Holdings Mozambique, Limitada (Meticais ´000)

Years ended December,31 Particulars 2005 2004 2003

Equity Capital 2,750,000 2,750,000 2,750,000 Preference Capital Nil Nil Nil Reserves and Surplus (620,244) (645,105) (665,225) Total Income 121,152 57,801 46,222 Total Expenditure 96,291 28,213 37,930 Profit before Tax 24,861 29,588 8,832 Profit after Tax 24,861 20,120 6,006 Earnings per share*(Rs.) (Face Value Rs. 10) [●]** [●]** [●]**

Book Value per equity share (Rs.) [●]** [●]** [●]** * Basic **In Mozambique there are no shares, instead there are only quotas. The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

TATA UGANDA LIMITED Tata Uganda Limited was incorporated in Uganda in 1994. The Company is the supplier of Tata Commercial and utility vehicles and importer of Pharmaceuticals. It is fully owned subsidiary of Tata Africa Holding (SA) (PTY) Ltd of South Africa. Tata Uganda Limited has been serving the commercial transport sector in Uganda

103

for over 12 years. The Registered office of Tata Uganda Limited is situated at Tata Uganda Limited P.O.Box 7153, Plot No. 47, Jinja road, Kampala. Directors of Tata Uganda Limited as on September 30, 2006 Mr. Raman Dhawan Mr. Shalendra Kundra Shareholding Pattern of Tata Uganda Limited as on September 30, 2006

Name Shareholding (%)

Tata Africa Holdings (SA) (PTY) Limited 99.99 Mr. Raman Dhawan 0.01 Key audited financials of Tata Uganda Limited (Ushs’ 000)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 230,000 230,000 230,000 Preference Capital NIL NIL NIL Reserves and Surplus 946,010 469,732 215,818 Total Income (Sales) 10,977,984 7,353,386 7,284,590 Total Expenditure 1,158,097 605,407 774,338 Profit before Tax 590,887 371,588 108,036 Profit after Tax 476,278 253,914 68,335 Earnings per share*(Ushs.) (Face Value Ushs 1,000 )

2,071 1,104 297

Book Value per equity share (Rs.) 5,113 3,042 2,019 Exchange rate is 1USD = 1,825 1,750 1,925

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

TATA NAMIBIA (PTY) LIMITED (“Tata Namibia”)

Tata Namibia was incorporated in 1992. Tata Namibia is the distributor of Tata vehicles in Namibia. The Registered office of Tata Namibia is situated at 24, Orban Street, Klein Windhoek, Windhoek, Namibia.

Directors of Tata Namibia as on September 30, 2006 Mr Syamal Gupta Mr Raman Dhawan Shareholding Pattern of Tata Namibia as at September 30, 2006

Name Shareholding (%) Tata Africa Holdings (SA) (Pty) Ltd, South Africa 100

Key audited financials of Tata Namibia (N$)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 738,230 738,230 738,230 Preference Capital - - - Reserves and Surplus 49,212 43,125 34,440

104

Total Income(A) 22,790 41,566 79,163 Total Expenditure(B) 16,703 32,881 70,828 Profit before Tax(A-B) 6,087 8,685 8,335 Profit after Tax 6,087 8,685 8,335 Earnings per share*(N$) (Face Value N$1) (Profit after tax/ no of equity shares)

0.008 0.012 0.011

Book Value per equity share (N$)@ 1.07 1.06 1.05 *Basic @ (Equity Capital+ Reserves & Surplus)/ no of equity shares

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

Cometal S.A.R.L

The company, COMETAL S.A.R.L., was formed on May 16, 1996. The company was formed with the objective of manufacture of rail wagons, metal structures, trailers, tanks, ferry boats, equipment of a metallic nature or to undertake any other industrial or commercial activity as approved by the Board of Directors of Cometal S.A.R.L. The Registered office of Cometal S.A.R.L is situated at Rua Ismael Alves da Costa Machava, Mozambique. Directors of Cometal S.A.R.L as at September 30, 2006

Mr. Raman Dhawan Mr. Sunil Kapur Mr.Joaquim Luciano Tembe Mr. Miguel Jose Matavel Shareholding Pattern of Cometal S.A.R.L as on September 30, 2006

Name Shareholding (%)

Tata Holdings Mozambique, Limitada 51 State of Mozambique 49

Key audited financials of Cometal S.A.R.L (Meticais ´000)

Years ended December,31 Particulars 2005 2004 2003

Equity Capital 36,000,000 36,000,000 36,000,000 Preference Capital Nil Nil Nil Reserves and Surplus (5,409,541) (98,540) 1,752,500 Total Income 44,586,640 23,961,986 22,093,007 Total Expenditure 49,897,641 25,813,026 23,409,651 Profit before Tax (5,311,001) (1,851,040) (1,316,644) Profit after Tax (5,311,001) (1,851,040) (1,316,644) Earnings per share*(Rs.) (Face Value Rs. 10) [●]** [●]** [●]**

Book Value per equity share (Rs.) [●]** [●]** [●]** * Basic **In Mozambique there are no shares, instead there are only quotas. The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

Drive India.Com Limited

105

The company was incorporated on April 27, 2000 to trade in CDMA mobile handsets, FWPs, accessories etc. However, the actual operations started during the FY 2002-03 with modest sales of Rs.36 crores. Drive India.Com achieved a turnover of 927 crores during the FY 2005-06. The Registered office of Drive India.Com Limited is situated at G 1&2, New Udyog Mandir 2, Mogul Lane, Mahim (West), Mumbai 400 016. Directors of Drive India.Com as at September 30, 2006

Ajay Chopra M.M.Tambe Sanjay Dube Suprakash Mukhophadhya

Shareholding Pattern of Drive India.Com Limited as on September 30, 2006

Name Shareholding (%) Tata Industries Limited 49.98 S H Rajadhyaksha 00.01 Tata Industries Ltd / N J Driver 00.00 Tata Industries Ltd / Rajiv Dhar 00.001 Tata Industries Ltd / Sameer shah 00.001 Tata Industries Ltd / N R Srinivasan 00.001 Tata Industries Ltd / Amita Karia 00.001 Tata International Ltd. 50.000 K.Bhuvan Shankar 00.0001 Key audited financials of Drive India.Com Limited (Rs. in Lakhs)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 85.34 85.34 85.34 Preference Capital NIL NIL NIL Reserves and Surplus 104.69 ( 19.65 ) ( 48.86 ) Total Income 99815.29 49402.01 35495.56 Total Expenditure 99578.11 49355.94 35446.82 Profit before Tax 237.17 46.06 48.73 Profit after Tax 124.34 29.20 38.08 Earnings per share*(Rs.) (Face Value Rs. 10) 14.57 3.42 4.46 Book Value per equity share (Rs.) N.A N.A N.A

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

Light Source Manufacturers Ltd

Tata Africa Holdings (Tanzania) Ltd (“TAHTL”) acquired 51% shareholding in Light Source Manufacturers Ltd (LSML) in July 1995 and took management control of the company from August 1995. The balance shares are with Government of Tanzania through Treasury Registrar. Since the manufacturing operations were not viable, the company undertook trading operations by importing various trade goods through Tata International Ltd. TAHTL has now entered into a share purchase agreement with the Government of Tanzania for acquiring the balance 49% shares. It is now pending allotment and transfer, which is expected shortly. The Registered office of LSML is situated at Plot No 1 & 2, Vingunguti, Nyerere Road, Dar-es-Salaam.

106

Directors of LSML as September 30, 2006

Mr Raman Dhawan Mr. A.S.Bisht Col. J.L.Simbakalia Mr. G.A.Mkiramweni

Shareholding Pattern of LSML as on September 30, 2006

Name Shareholding (%)

Tata Africa Holdings (Tanzania) Ltd 51 Treasury Registrar 49

Key audited financials of LSML (T.Shillings)

Years ended March 31, Particulars 2006 2005 2004

T.Shs ‘000 T.Shs ‘000 T.Shs ‘000 Equity Capital 535,000 535,000 535,000 Preference Capital - - - Reserves and Surplus 744,609 451,591 -52,434 Total Income 4,363,306 3,943,580 2,542,727 Total Expenditure 3,979,798 3,396,965 2,286,329 Profit before Tax 383,508 546,615 232,627 Profit after Tax 270,587 504,025 228,400

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

Pamodzi Hotels Plc Pamodzi Hotels Plc. is a subsidiary Company of Tata Zambia Limited, which is wholly owned by Tata Africa Holdings (SA) (Pty) Limited, which is incorporated in South Africa. The Hotel commenced operations in 1979 as a unit of National Development Corporation Ltd., and operated by British Caledonian hotels. In 1990, Taj group of hotels signed a management contract for 10 years. In 1995, Government of Zambia decided to privatise the hotel and, therefore, Pamodzi Hotels Plc. was incorporated. The present agreement was entered in 2000 for 10 years. Tata Zambia holds 80.02% of stake in the company and balance 19.98% is held by Lusaka stock exchange central share depository limited in its capacity as nominee for nearly 700 shareholders. The Company was listed on the Lusaka Stock Exchange with effect from December 24, 2001. This is the only listed company in the hospitality sector on the Lusaka stock exchange. The Registered office of Pamodzi Hotels Plc is situated at Taj Pamodzi Hotel, P.O Box 35450, Church Road, Lusaka.

Directors of Pamodzi Hotels Plc as at September 30, 2006 Mr. R. Dhawan Mr. R. Balasubramaniam Mr. D. Matongo

Shareholding Pattern of Pamodzi Hotels Plc as on September 30, 2006

Name Shareholding (%)

Tata Zambia Limited 80.02 Lu SE Central Share Depository Ltd.* 19.98

107

* (Lusaka Stock Exchange Central Share Depository Limited holds shares in its capacity as nominee for nearly 700 shareholders) The monthly high and low price and the volume of shares of Pamodzi Hotels Plc traded at the Lusaka Stock Exchange during the past six months:

Lusaka stock exchange Share Price

Month Highest (Kwacha) Lowest (Kwacha) Volume of Shares tradedFebruary 2006 180.00 148.00 29,200 March 2006 180.00 150.00 40,566 April 2006 180.10 150.00 23,427 May 2006 180.10 150.00 --- June 2006 180.10 149.00 40,000 July 2006 180.10 149.00 562 August 2006* 180.10 149.00 65,256

Market Capitalization as on September 22, 2006: 15 billion Kwacha. Mechanism Evolved by the Company for Redressal of Investor Grievances All investor-related matters are handled by the Company Secretary, M/s. Lewis Nathan Advocates. Key audited financials of the company (in Zambian Kwacha million)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 100 100 100 Preference Capital - - - Reserves and Surplus 13,410 4,433 5,537 Total Income 39,614 27,652 21,118 Total Expenditure 30,619 28,922 20,351

Profit before Tax 8,995 (1,270) 767 Profit after Tax 8,976 (1,103) 989 Earnings per share* (Kwacha) 90 (11) 10 Book Value per equity share (Kwacha) 175 85 96

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

TATA AFRICA HOLDINGS (SA) (PTY) LIMITED (“Tata Africa”)

Tata Africa was incorporated in May 1994 and is the investment arm of Tata Group in Africa. The Registered office of Tata Africa is situated at 39 Ferguson Road, Illovo 2196, Johannesburg, Republic of South Africa.

Directors of Tata Africa as on September 30, 2006 Mr Syamal Gupta - Chairman Mr Raman Dhawan – Managing Director Mr F. N. Subedar Mr David R. Geeringh

108

Shareholding Pattern of Tata Africa as September 30, 2006

Name Shareholding (%) Tata International Limited, Mumbai, India 87.76 Tata South-East Asia Limited, Hong Kong 12.24

Total 100.00 Key audited financials of Tata Africa (ZAR)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 3,267,920 3,267,920 3,267,920 Preference Capital - - - Reserves and Surplus 112,792,992 13,000,165 6,003,424 Total Income(A) 532,644,496 301,516,174 128,052,148 Total Expenditure(B) 430,307,000 292,788,957 123,985,897 Profit before Tax(A-B) 102,337,496 8,727,217 4,066,251 Profit after Tax 100,446,411 7,650,325 3,267,269 Earnings per share*(ZAR) (Face Value ZAR 1) (Profit after tax/ no of equity shares)

30.74 2.34 1.00

Book Value per equity share (ZAR)@ 35.52 4.98 2.84 *Basic @ (Equity Capital+ Reserves & Surplus)/ no of equity shares The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

Tata Africa Holdings (Tanzania) Ltd (“TAHTL”)

TAHTL is a firm incorporated in Tanzania under the Companies Ordinance (Cap.212) registered on April 7, 1995 as per certificate of Incorporation No 27362. TAHTL is presently engaged in import and distribution of float glass, industrial chemicals, FAG bearings and other specific items required by the Tanzanian market. TAHTL is now setting up a facility for Distribution of Tata Motors Commercial Vehicles in Tanzania. The Registered office of TAHTL is situated at Plot No 1 & 2, Vingunguti, Nyerere Road, Dar-es-Salaam.

Directors of TAHTL as on September 30, 2006 Mr Raman Dhawan Mr. A. S. Bisht

Shareholding Pattern of TAHTL as on September 30, 2006

Name Shareholding (%) Tata Africa Holdings (SA)(PTY) Ltd 99.9

Mr. Raman Dhawan 1 share

Key audited financials of TAHTL (T.Shillings)

Years ended March 31, Particulars 2006 2005 2004

T.Shs ‘000 T.Shs ‘000 T.Shs ‘000 Equity Capital 1,482,242 300,992 300,992 Preference Capital - - -

109

Years ended March 31, Particulars 2006 2005 2004

T.Shs ‘000 T.Shs ‘000 T.Shs ‘000 Reserves and Surplus 658,085 365,375 173,625 Total Income 3,476,638 1,054,498 636,303 Total Expenditure 3,073,293 818,145 534,073 Profit before Tax 403,345 236,353 102,230 Profit after Tax 292,700 191,250 102,230

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

Tata Africa Holdings (Ghana) Limited Tata Africa Holdings (Ghana) Limited was set up in 1998 as a wholly owned subsidiary of Tata Africa Holdings (SA) (Pty) Ltd was set up with an objective of sales of Tata vehicles and spare parts in Ghana and also explore other trading businesses. The Registered office of Tata Africa Holdings (Ghana) Limited is situated at 17, Dadeban Road, North Industrial Area, Near SSB Bank, P O Box No. GP 20290, Accra, Ghana. Tata African Holding (Ghana) Limited has diversified its business into other areas such as Galvanised Iron and Aluzinc Roofing sheets: This business is done on behalf of its principal, Tata Africa Holdings (SA)(Pty) Ltd., South Africa. This has been contributing significantly to the turnover and profitability of the group with turnover for the year 2005-06 being US $ 2.2 million. Mining Consumables: Tata Africa Holdings (Ghana) Limited has been supplying various mining consumables like speciality chemicals, bearings and conveyor belts to various gold mining companies in Ghana Forklifts: The business of distribution of Voltas Forklifts was commenced in the year 2005-06 and so far the company has sold twelve (12) forklifts.

Directors of Tata Africa Holdings (Ghana) Limited as on September 30, 2006

Mr.Raman Dhawan, Mr. Sudeep Ray Mr. A.N. Kotey

Shareholding Pattern of Tata Africa Holdings (Ghana) Limited as on September 30, 2006

Name Shareholding (%)

Tata Africa Holdings (SA) (Pty) Limited 100 %

Changes in Capital Structure in the last 6 months

Particulars No. of shares Issued (of

Rs. 10 each) Year / date of issue Tata Africa Holdings (SA) (Pty)

Limited 2,160,000 September, 2006

Key audited financials of Tata Africa Holdings (Ghana) Limited (Ghanian Cedis Thousands)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 720,000 720,000 720,000 Preference Capital 0 0 0

110

Reserves and Surplus 7,491,919 2,662,034 528,078 Total Income 83,541,597 61,133,206 15,372,300 Total Expenditure 77,288,323 57,921,453 14,877,799 Profit before Tax 6,253,274 3,211,753 494,501 Profit after Tax 4,829,885 2,133,956 313,092 Earnings per share*(GHC’ 000) (Face Value GHC 1000)

6.71 2.96 0.43

Book Value per equity share (GHC’ 000) 11.41 4.70 1.73 *Basic

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

TATA AUTOMOBILE CORPORATION (SA) (PTY) LIMITED (“Tata Auto”)

Tata Auto was incorporated in October 1997 and is the distributor of Tata vehicles in South Africa. The Registered office of Tata Auto is situated at 17 North Reef Road, Activia Park,Germiston 1429, Johannesburg, Republic of South Africa

Directors of Tata Auto as on September 30, 2006 Mr Syamal Gupta Mr Raman Dhawan Shareholding Pattern of Tata Auto as on September 30, 2006

Name Shareholding (%) Tata Africa Holdings (SA) (Pty) Limited, South Africa 100.00

Key audited financials of Tata Auto

(ZAR) Years ended March 31,

Particulars 2006 2005 2004 Equity Capital 100 100 100 Preference Capital - - - Reserves and Surplus 50,892,756 23,869,703 93,54,701 Total Income(A) 83,18,21,653 21,21,09,985 9,20,42,004 Total Expenditure(B) 6,52,68,078 18,34,11,299 8,30,00,263 Profit before Tax(A-B) 1,79,38,575 2,86,98,686 9,041,741 Profit after Tax 12,70,23,053 2,00,15,002 6,265,150 Earnings per share*(ZAR) (Face Value ZAR 1) (Profit after tax/ no of equity shares)

12,70,230.53 2,00,150.02 62,651.50

Book Value per equity share (ZAR)@ 5,08,928.56 2,38,698.03 93,548.01 *Basic @ (Equity Capital+Reserves & Surplus)/ no of equity shares

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

TATA ZAMBIA LIMITED (“Tata Zambia”)

Tata Zambia was established in the year 1977. The Head Office is located in Lusaka, the Capital of Zambia and operations in Ndola, Chipata and Lilongwe (Malawi). The Registered office is situated at Tata Centre, Plot No.9219, Ben Bella Road, Lusaka.

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The core activities of the Company are as follows:- a) Tata Motors vehicles b) Bicycle, Steel, Motorcycles and General Trading c) Mining supplies d) Bicycle Assembly and Vehicle Body Building Plants e) Investments

Directors as on September 30, 2006 Mr.R.Dhawan Mr.R.Balasubramaniam Mr.J.H.Jearey Mr.J.M.Cruickshank

Shareholding Pattern as at September 30, 2006

Name Shareholding (%)

TATA AFRICA HOLDINGS (SA) (Pty) LTD 99.99 R.DHAWAN 0.01

Key audited financials of Tata Zambia (Zambian Kwacha’000)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 486,952 486,952 486,952Preference Capital None None NoneReserves and Surplus 6,881,049 5,486,103 4,082,329Total Income 33,587,057 40,018,506 24,284,839Total Expenditure 31,190,169 37,321,440 22,210,561Profit before Tax 2,396,888 2,697,066 2,074,278Profit after Tax 1,651,237 1,660,065 1,172,182Earnings per share*(ZK.) (Face Value K. 1) 3.3909 3.4091 2.4071Book Value per equity share (ZK) 14.13 11.27 8.38

*Basic The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

TATA SOUTH EAST ASIA LIMITED (TSEA)

Incorporated in 1993, and its principal activities consist of trading in Hong Kong as well as overseas in both the capacity of a principal and an agent. The Registered office of TSEA is situated at Unit 6-8, 25-F, Enterprise Square, 3, Sheung Yuet Road, Kowloon Bay, Kowloon, Hongkong.

Directors of TSEA as at 30th September 2006

Mr Syamal Gupta Mr R Dhawan Mr F. N. Subedar

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Shareholding Pattern of TSEA as on September 30, 2006

Name Shareholding (%)

Tata International Limited, Mumbai, India 100 Key audited Financials of TSEA (Consolidated) (HK$)

Years ended March 31,

Particulars 2006 2005 2004

Equity Capital 8,510,700 8,510,700 7,737,000 Preference Capital - - - Reserves and Surplus 23,202,102 17,794,690 11,503,461 Total Income(A) 4,851,876,731 4,489,706,586 2,862,711,684 Total Expenditure(B) 4,845,656,897 4,482,483,071 2,859,697,574 Profit before Tax(A-B) 6,219,834 7,223,515 3,014,110 Profit after Tax 5,426,400 6,273,545 1,883,627 Earnings per share*(HK$) (Face Value HK$ 10) (Profit after tax/ no of equity shares)

6.375 7.371 2.434

Book Value per equity share (HK$)@ 37.26 30.90 24.87 *Basic @ (Equity Capital+ Reserves & Surplus)/ no of equity shares

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

TATA INTERNATIONAL (AUSTRALIA) PTY LIMITED (“TIA”)

TIA was incorporated in January, 2001. The principal activities of the Company are coal acquisition and export. The Registered office of TIA is situated at KPMG, Level 30, Central Plaza One, 345, Queen Street, Brisbane QLD 4000, Australia

Directors of TIA as on September 30, 2006 Mr Sudhir Deoras Mr Abhinava Qazi Shareholding Pattern of TIA as at 30 September 2006

Name Shareholding (%) Tata International Limited, Mumbai, India 100

Key audited financials of TIA (AU $)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 1,891 1,891 1,891 Preference Capital - - - Reserves and Surplus 2,319,036 769,156 421,688

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Total Income(A) 254,606,477 201,312,574 164,315,249 Total Expenditure(B) 252,390,208 200,241,553 163,614,992 Profit before Tax(A-B) 2,216,269 1,071,021 700,257 Profit after Tax 1,549,880 747,468 488,362 Earnings per share*(AU $) (Face Value AU $ 1) (Profit after tax/ no of equity shares)

819.61 395.27 258.25

Book Value per equity share (AU $)@ 1227.35 407.74 223.99 *Basic @ (Equity Capital+ Reserves & Surplus)/ no of equity shares

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up.

TATA WEST ASIA FZE (“TWA”)

TWA was incorporated in October, 1993 and its principal activities consist of trading in the United Arab Emirates and overseas in both the capacity of a principal and an agent. The Registered office of TWA is situated at Office No. ZB-07 RA-08, P.O. Box 16980, Jebel Ali Free Zone, Dubai, United Arab Emirates.

Directors of TWA as on September 30, 2006 Mr Syamal Gupta Mr Sudhir Deoras Mr F N Subedar Shareholding Pattern of TWA as on September 30, 2006

Name Shareholding (%) Tata International Limited, Mumbai, India 100

Key audited financials of TWA (AED)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 3,000,000 2,000,000 2,000,000 Preference Capital - - - Reserves (Accumulated losses) (172,420) (377,356) (738,394) Total Income(A) 236,434,939 305,421,085 179,396,605 Total Expenditure(B) 236,230,003 305,060,047 179,232,048 Profit before Tax(A-B) 204,936 361,038 164,557 Profit after Tax 204,936 361,038 164,557 Earnings per share*(AED) (Face Value AED 1,000,000) (Profit after tax/ no of equity shares)

102,468 180,519 82278.50

Book Value per equity share (AED)@ 942,526 811,322 630,803 *Basic @ (Equity Capital+ Accumulated Losses)/ no of equity shares

The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995.

SITEL India Limited SITEL India Limited was incorporated on October 30, 2000 as SITEL India Private Limited. Subsequently it was converted into Public Limited Company under the name SITEL India Limited vide fresh Certificate of

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Incorporation dated October 23, 2003. SITEL India Limited is a 50:50 joint venture between SITEL Corporation, USA and TATA Group and is engaged in domestic and international Contact Center Services. The Registered office of SITEL India Limited is situated at 4A, Park Davis Complex Andheri Kurla Road, Sakinaka Andheri (East) Mumbai 400 072 Directors of SITEL India Limited as on September 7, 2006

Robert Scott Moncrieff F. K. Kavarana K. A. Chaukar Michael Nemer Russell Just

Shareholding Pattern of SITEL India Limited as at September 7, 2006 Share capital of the company is divided into 22,00,000 Equity Shares of Rs. 100/- each.

Name Shareholding (%)

Systems Integrated Netherlands B.V. 49.99 Tata Consultancy Services Limited 39.99 Tata International Limited 10.00 Mr. Bill Fairfield 0.004 Mr. dale Saville 0.004 Mr. Randall Harris 0.004 Mr. F K Kavarana 0.004 Mr. P D Karkaria 0.004 Total 100% Key audited financials of SITEL India Limited (Rs. in Lakhs)

Years ended March 31, Particulars 2006 2005 2004

Equity Capital 2,200 2,200 2,200 Preference Capital Nil Nil Nil Reserves and Surplus 1,688 1,191 1,566 Total Income 7,727 6,996 5,818 Total Expenditure 7,935 7,363 5,613 Profit before Tax 604** (366) 205 Profit after Tax 496** (375) 175 Earnings per share*(Rs.) (Face Value Rs. 100)

22.57** (17.05) 7.95

Book Value per equity share (Rs.)(Face Value Rs. 100)

176.71 154.15 171.19

*Basic ** After Extra Ordinary Item of Insurance Claim of Rs. 812 lac. The company is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up proceeding.

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RELATED PARTY TRANSACTIONS We have various transactions including some transactions with related parties. As a policy, we enter into transactions with related parties on an arms-length basis. The list of related party /Section 301 transactions are as follows: Name of the party Relationship Ashiyana Autobodies Ltd. Associate Tata Motors Limited Enterprise exercising significant influence Mr. N. R. Menon Key Management Personnel (with effect from 1st August, 2004) Mr Ananth Prabhu Key Management Personnel Mr. J. J. Singh Key Management Personnel (upto 31st July, 2004) Mr. D N Naik Director b) Details of transactions with related parties during the fiscal 2006 : (in Rupees)

Nature of Transactions Associate Enterprise exercising significant influence

Key Management Personnel

As per Section 301 of the Act

Sale of goods 929,199 2,480,107,636 - - -Purchase of goods - 66,143,117 - - Managerial remuneration Ananth Prabhu - - 1,781,670 -Others - - 152,669 - Loan taken - 90,000,000 - - Loan repaid - 90,000,000 - - Advance Received - - - - Preference Dividend - 3,610,685 - - Proposed Dividend - 3,951,760

- -

.1.1.1 Redemption of Preference Shares - 60,000,000 - - Interest on loan - 1,276,575 - - Recovery of expenses - 12,391,509 - - Reimbursement made for expenses - 16,632 - - Deputation Charges - 3,822,404 - - Outstanding at year end Due to - 14,509,357 133,634 - Due from 149,829 304,336,676 - - Purchase of Spare parts & Truck Chassis - - - 870,788Purchase of Spare Parts - - - 30,281

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AUDITORS REPORT Ref: To The Board of Directors Automobile Corporation of Goa Limited, Honda, Sattari, Goa Dear Sirs, Re: The proposed Rights issue by Automobile Corporation of Goa Limited (“the Company” or “ACGL”) ACGL is proposing a rights issue of its equity shares. We have been requested by the Company to furnish a report in respect of the financial information relating to ACGL as required by Part II of Schedule II to the Companies Act, 1956 ("the Act") and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000 ("the Guidelines") and related clarifications thereto issued by the Securities and Exchange Board of India (SEBI) under section 11 of the Securities and Exchange Board of India Act, 1992. The financial information referred to above, relating to assets and liabilities and profits and losses of ACGL is contained in Annexures I, II and III to this report: - Annexure I contains a Summary Statement of Assets and Liabilities, as restated, of ACGL as at the

close of the quarter ended 30th June, 2006, the financial year ended on 31st March 2006 and the immediately preceding four financial years.

- Annexure II contains a Summary Statement of Profits and Losses, as restated, of ACGL for the quarter

ended 30th June, 2006, the financial year ended 31st March 2006 and the immediately preceding four financial years.

- Annexure III contains the Significant Accounting Policies adopted in the preparation of the financial

statements of ACGL as relevant to the Summary Statements in Annexures I and II and Notes to the Summary Statements.

Other financial information Other financial information relating to ACGL prepared by the management is attached in Annexures IV to IX of this report: - Annexure IV contains a Summary Statement of Principal terms of Loans and Assets charged as

Security.

- Annexure V contains the Accounting Ratios relating to Earnings Per Share, Return on Net Worth and Net Asset Value Per Share.

- Annexure VI contains the Capitalisation Statement as at 30th June, 2006 and 31st March 2006.

- Annexure VII contains the Statement of Tax Shelters and Tax Benefits. - Annexure VIII contains the Statement of Cash Flows, as restated. - Annexure IX contains the Statement of Dividends.

We have examined the financial information contained in these Annexures and are to state as follows: (a) The financial information (as applicable) contained in these Annexures is based on the audited financial

statements of the Company for the quarter/half year ended 30th September, 2006, approved by the board of directors and for each of the five financial years ended on 31st March 2002, 2003, 2004, 2005 and 2006 adopted by the shareholders.

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(b) The Annexures are prepared in accordance with the requirements of Part II B of Schedule II to “the Act” and paragraph 6.10.2 of Chapter VI of "the Guidelines", to the extent applicable.

This report is intended solely for your use and information for inclusion in the Offer Document in connection with the proposed Rights Issue and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For C. C. Chokshi & Co., Chartered Accountants R. Laxminarayan Partner (Membership No.33023) Place: Mumbai Dated:

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Annexure 1: Summary Statement of Assets and Liabilities, as Restated (Rupees in Lakhs)

As at

30th Jun

e06 31st

March 0631st

March 0531st

March 0431st

March 03 31st

March 02A. Fixed Assets : Gross Block 5,506.37 5,473.06 5,175.72 5,194.66 5,288.22 5,228.58 Less : Depreciation 3,765.64 3,718.31 3,585.19 3,519.94 3,532.34 3,316.65 Net Block 1,740.73 1,754.75 1,590.53 1,674.72 1,755.88 1,911.93

Capital Work in Progress 79.65 14.56 19.53 1.61 3.72 1.82

1,820.38 1,769.31 1,610.06 1,676.33 1,759.60 1,913.75

B. Investments - Unquoted - - - - 0.37 1.12

C. Current Assets, Loans and Advances:

Inventories 2,406.27 2,029.07 2,079.71 1,272.04 1,028.32 765.03 Sundry Debtors 2,127.12 3,384.43 1,727.80 1,062.74 1,012.53 840.51 Cash and Bank Balances 42.24 29.13 37.75 21.72 43.05 38.14

Loans and Advances 2,427.23 1,477.18 446.12 161.82 101.89 163.92

7,002.86 6,919.81 4,291.38 2,518.32 2,185.79 1,807.60

D. Liabilities and Provisions : Secured Loans 374.93 901.04 611.83 470.71 1,419.28 1,808.66 Unsecured Loans 484.28 484.28 359.26 847.81 450.21 763.93

Current Liabilities and Provisions 5,088.13 4,850.70 2,536.74 1,539.15 1,536.46 1,344.70 Deferred tax liability 79.85 121.13 131.70 - - -

6,027.19 6,357.15 3,639.53 2,857.67 3,405.95 3,917.29

E. Net Worth (A+B+C-D) 2,796.05 2,331.97 2,261.91 1,336.98 539.81 (194.82) Represented by :

Shareholders' Funds : Share Capital 493.97 493.97 1,414.03 1,414.03 1,414.03 493.97 Reserves 2,302.08 1,838.00 847.88 59.37 438.46 738.46 Less: Profit and Loss Account Debit

Balance (as restated) - - - (136.42) (899.04) (1,237.14)

Less: Miscellaneous Expenditure - - - - (413.64) (190.11)

2,796.05 2,331.97 2,261.91 1,336.98 539.81 (194.82)

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Annexure II : Summary Statement of Profits and Losses, as Restated

(Rupees in Lakhs)

For the

Qtr ended For the year ended 31 March

30th June

06 2006 2005 2004 2003 2002 INCOME Turnover 7,002.74 25,403.04 15,662.04 11,268.34 7,595.86 4,839.91Other Income 159.00 122.80 200.87 233.95 50.33 17.44Total Income 7,161.74 25,525.84 15,862.91 11,502.29 7,646.19 4,857.35 EXPENDITURE Manufacturing and Other Expenses: Direct Material 5,714.97 20,707.35 12,113.78 8,506.01 5,660.29 3,547.20 Payments to and Provisions for Employees 358.16 1,245.17 1,105.58 976.92 878.45 781.64 Administration and Other Expenses 256.43 1,026.26 711.61 687.51 548.30 537.25 Finance and Treasury Charges (Net) 2.77 45.33 49.49 165.13 261.25 379.52 Depreciation 53.20 192.97 175.07 176.51 223.17 269.58 Total Expenditure 6,385.53 23,217.08 14,155.53 10,512.08 7,571.46 5,515.19 Net Profit / (Loss) before Extraordinary Item and Tax

776.21 2,308.76 1,707.38 990.21 74.73 (657.84)

Extraordinary Items: Deferred revenue expenditure in respect of Voluntary retirement scheme written off

- - - (29.15) (87.48) (50.09)

Write back of Interest no longer payable - - - - 34.29 -Net Profit / (Loss) Before tax 776.21 2,308.76 1,707.38 961.06 21.54 (707.93)Provision for tax : Current tax (302.63) (774.10) (135.00) (49.00) - - Deferred tax 41.29 10.56 (131.70) - - - Fringe Benefit tax (1.09) (17.64) - - - - (262.43) (781.18) (266.70) (49.00) - - Net Profit / (Loss) after tax 513.78 1,527.58 1,440.68 912.06 21.54 (707.93) Impact on account of adjustments required by paragraph 6.10.2.7(b) of Chapter VI of the Guidelines [Refer note 8 of Annexure III]

(49.70) (24.13) 55.84 43.54 14.38 60.92

Adjusted Profit / (Loss) for the year 464.08 1,503.45 1,496.52 955.60 35.92 (647.01) Short provision for tax in respect of earlier years - - (0.63) - 2.18 - Accumulated Profit / (Loss ) 561.67 644.41 (136.42) (899.04) (1,237.14) (590.13) Amount available for appropriation 1,025.75 2,147.86 1,359.47 56.56 (1,199.04) (1,237.14) Preference Dividend - 55.01 105.56 171.06 - -Proposed Dividend - 395.18 395.18 21.92 - -Corporate Dividend tax - 63.14 70.22 - - -Transfer to General reserve - 152.80 144.10 - - -Transfer to Capital redemption reserve account - 920.06 - - - -Transfer from Debenture Redemption Reserve - - - - 300.00 -Balance carried to Summary Statement of Assets and Liabilities, as restated

1,025.75 561.67 644.41 (136.42) (899.04) (1,237.14)

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Annexure III: Significant Accounting Policies And Notes on Accounts

A. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation of financial statements

The financial statements are prepared under historical cost convention on the accrual basis of accounting and in accordance with accounting principles generally accepted in India.

b) Fixed Assets:

Fixed assets are carried at cost of acquisition or construction and include amount added on revaluation, less accumulated depreciation and impairment loss.

c) Depreciation:

1. In respect of fixed assets revalued, depreciation is provided on the basis of useful life of assets as estimated by the external valuers or that calculated on original cost whichever is higher.

2. Depreciation on other fixed assets has been provided in the accounts at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 as under:

i Sheet Metal Divisions (Honda, Bhuimpal, Jejuri) : On Written Down Value Method in respect of buildings, furniture and fixtures and vehicles and on Straight Line Method in respect of plant and machinery.

ii. Bus Body Division: On straight line method.

3. Cost of leasehold land is written off over the period of lease.

4. The difference, if any, between depreciation provided on revalued amount and that calculated on original cost of assets revalued is transferred from Revaluation Reserve to General Reserve.

d) Impairment Loss:

Impairment loss is provided to the extend the carrying amount of assets exceed their recoverable amounts. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

e) Investments :

Current investments are carried at lower of cost and fair value. Long Term investments are carried at cost However when there is a decline, other than temporary, the carrying amount is reduced to recognise the decline.

f) Inventories:

Items of inventory are valued on the basis given below:

i. Raw material :at cost or net realisable value, whichever is lower. Cost is determined by the Weighted Average Method.

ii. Components, Stores and Spares : at cost or net realisable value, whichever is lower. Cost is determined by the FIFO Method.

iii. Work in process and Finished goods : at cost or net realisable value, whichever is lower. Cost is determined on the basis of absorption costing. iv. Scrap: at net realisable value.

g) Retirement Benefits:

Gratuity and superannuation contributions made to respective Trusts in accordance with schemes framed by the Life Insurance Corporation of India are charged to revenue. Besides in respect of gratuity, the difference between the liability determined on the basis of actuarial valuation made at the year end and

121

the balance of the fund maintained with the Life Insurance Corporation of India is provided in the books of account. Contribution as required under the Statute/ Rules is made to the Government Provident Fund. Provision for leave encashment is made on the basis of actuarial valuation made at the year end.

h) Accounting of Cenvat Credit:

Cenvat credit is accounted as per actual credit availed in the Excise records, on receipt of materials.

i) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. At the year-end, monetary items denominated in foreign currency are reported using the closing rates of exchange. Exchange differences arising thereon and on realisation / payments of foreign exchange are accounted as income or expense in the relevant year except in the case of fixed assets acquired from outside India, in which case, these are adjusted in the carrying amount of such assets.

j) Premium on redemption of Debentures:

Premium on redemption is charged to revenue as and when paid.

k) Revenue recognition:

Revenue (income) is recognised when no significant uncertainty as to measurability or collectibility exists.

l) Borrowing costs:

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

m) Taxes on Income:

Tax expense comprise both current tax and deferred tax at the applicable enacted/ substantively enacted rates. Current tax represents the amount of income tax payable / recoverable in respect of taxable income / loss for the reporting period. Deferred tax represents the effect of timing differences between taxable income and accounting income for the reporting period that originate in one period and are capable of reversal in one or more subsequent periods.

n) Provisions and contingencies:

A provision is recognised where the Company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made on the amount of the obligation. A Contingent liability is disclosed when the Company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognised nor disclosed.

o) Government Grants:

Grants related to specific Fixed Assets are disclosed as a deduction from the value of concerned Assets. Grants related to revenue are credited to the Profit and Loss Account. Grants in the nature of promoter's contribution are treated as Capital Reserve.

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Annexure IV: Statement of Principal Terms of Loans and Assets Charged as Security

(Rupees in Lakhs) As at

Notes 30th

June 06

31st March

06

31st March

05

31st March

04

31st March

03

31st March

02 SECURED LOANS: 1. (i) 18% Debentures (Series IV) of Rs.

1000/-

each privately placed with Unit Trust of India.

1and 3 - - - - - 33.33

Interest accrued and due on above - - - - - 5.20

- 38.53 (ii) 17% Non Convertible debentures of

Rs. 75/- each 2 and 3 - - - - - 127.96

Interest accrued and due on above - - - - - 51.52 - - - - 179.48

2. From a Bank/ Financial Institution: Term Loan 1 - - - - 1,021.43 1,146.06 Cash Credit accounts 4 374.93 901.04 611.83 470.71 395.57 440.94

3. Other loans and advances: Dues under hire purchase agreement 5 - - - - 2.28 3.64

Total 374.93 901.04 611.83 470.71 1,419.28 1,808.65 Notes : 1. Debentures Privately placed with Unit Trust of India and Term Loan from a bank / Financial Institution

are secured by :

i) A joint mortgage ranking pari passu by deposit of title deeds in respect of lands and immovable properties of the Company situated at villages Honda and Bhuimpal, at Goa.

ii) Hypothecation of the whole of the movable properties of the Company including Company's movable plant and machinery, machinery spares, tools and accessories and other movables both present and future ranking pari passu subject to prior charges on specified movables in favour of banks for working capital requirement.

2. 17% Non-Convertible Debentures are secured as described in Note 1 above subject to prior charge in favour of the lenders referred to therein.

3. i) Debentures Privately placed with Unit Trust of India Series IV 1999-2001 are redeemable at par in three annual instalments commencing from 9th August, 1999.

ii) 17% Non-Convertible Debentures (1999-2001) are redeemable at par in three annual instalments commencing from 15th December, 1999.

4. Loans and Advances from Banks on Cash Credit account are secured by hypothecation of stocks, stores, work-in-process, book debts present and future, receivables etc. the charge ranking pari passu inter se.

5. Dues under hire purchase agreements are secured by hypothecation of vehicles acquired under hire purchase agreements.

123

Annexure IV: Statement of Principal Terms of Loans and Assets Charged as Security

(Rupees in Lakhs) As at

Unsecured Loans: Notes 30th

June 06

31st March

06

31st March

05

31st March

04

31st March

03

31st March

02 Fixed deposits 1 - - - - - 1.40 Sales tax deferral/Interest-Free Sales Tax Loan 2 484.28 484.28 359.26 247.81 175.21 120.32 Short term loans and advances: - from Bank ( HDFC Bank) 3 - - - 400.00 - - - from others 4 and 5 - - - 200.00 275.00 583.60 - Interest accrued and due on loans - - - - - 58.62 - - - 600.00 275.00 642.22 Total… 484.28 484.28 359.26 847.81 450.21 763.94

Notes : 1. Fixed deposit accepted from ACGL Recreation Club

2. Interest - Free Sales Tax Loan of Sheet Metal Divisions and Jejuri Pressing Unit.

3. Short Term loan of Rs. 400 Lakhs from HDFC Bank with interest @ 7.50% p.a. to be paid before 21st June, 2004

4. Short term loans from others represent Inter Corporate Deposit from Tata Motors Limited except as as at 31st March, 2002, which comprises of Inter Corporate Deposit of Rs. 499.03 Lakhs and Trade advance from Tata Motors Limited of Rs. 84.57 Lakhs at an interest rate of 12% per annum.

5. Interest on Inter Corporate Deposits from Tata Motors Limited range from 7% to 13.5% per annum

124

ANNEXURE V: ACCOUNTING RATIOS RELATING TO EARNINGS PER SHARE, RETURN ON NETWORTH AND NET ASSET VALUE PER SHARE

(Rupees in Lakhs) As at

30th June

06 31st

March 0631st

March 0531st

March 04 31st

March 03 31st

March 021 Adjusted Profit/(Loss) A 464.08 1,503.45 1,496.52 955.60 35.92 (647.01) (see Annexure II) Less: Short provision for tax in respect

of earlier years - - (0.63) - 2.18 -

Less: Preference dividend (including corporate dividend tax at the applicable rate)

- (62.74) (120.36) (119.44) (65.19) -

Profit / (Loss) after extraordinary items B 464.08 1,440.71 1,375.53 836.16 (27.09) (647.01) less: Extraordinary items - - - (29.15) (53.19) (50.09) Profit / (Loss) before extraordinary Items C 464.08 1,440.71 1,375.53 807.01 (80.28) (697.10)

2 Number of outstanding equity shares Weighted average number of shares

outstanding during the year - Nos D 49.40 49.40 49.40 49.40 49.40 49.40

Effects of dilutive potential equity Share Equivalents

E - - - - - -

Weighted average number of equity shares and potential equity share equivalents outstanding

F - - - - - -

Number of equity shares outstanding at the end of the year - Nos

G 49.40 49.40 49.40 49.40 49.40 49.40

3 Net Worth H 2,796.05 2,331.97 2,261.91 1,336.98 539.81 (194.82) (see Annexure I)

4 Accounting Ratios: Nominal Value Per Share (Rs.) 10/- 10/- 10/- 10/- 10/- 10/- Basic and Diluted Earnings Per Share

(Rs.)

- Including Extraordinary Items B/G 9.39 29.16 27.84 16.93 (0.55) (13.10) - Excluding Extraordinary Items C/G 9.39 29.16 27.84 16.34 (1.63) (14.11) Net Asset Value per share (Rs.) H/G 56.60 47.21 45.79 27.06 10.93 (3.94) Return on Networth (%) A/H 16.60 64.47 66.16 71.47 6.65 - (Refer

Note 5)

Notes:

1. The above ratios have been computed on the basis of the restated Summary Statements-Annexures I and II

2. In calculating the Earnings Per Share the effect of dilution is ignored since results are anti-dilutive.

3. The effect of potential dilution pursuant to the Right Issue has not been considered since the quantum of equity shares that will ultimately be subscribed cannot be ascertained at present.

4. Net Assets Value is calculated as Net Worth at the end of each financial year divided by the number of equity shares at the end of each financial year.

5. Return on Net Worth (%) represents Profit/(Loss) after tax as restated, divided by Net Worth. Where the Net Worth is negative this ratio cannot be computed.

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Annexure VI : Capitalisation Statement

(Rupees in Lakhs)

As at 30th June 2006 Pre – Issue

As at 31 March 2006 Debts Short Term Debt 374.93 901.04 Long Term Debt 484.28 484.28 Total Debts 859.21 1,385.32 Shareholders' Funds Share Capital 493.97 493.97 Reserves and Surplus 2,302.08 1,838.00 Total Shareholders' Funds 2,796.05 2,331.97 Long Term Debt / Total Shareholders' Funds 0.17 0.21

Notes:

1. The above has been computed on the basis of the restated Summary Statements-Annexures I and II.

2. Post Issue figures will be completed on subscription to the right issue.

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Annexure VIII : Summary Statement of Cash Flows, as Restated

(Rupees in Lakhs)

For the year ended 31 March

For the Qtr ended 30th June 2006 2006 2005 2004 2003 2002

A Cash Flows from operating Activities 701.30 2,320.73 1,767.22 1,004.61 35.92 (596.93) Profit before tax adjustments for: Depreciation 53.20 192.97 175.07 176.51 222.85 268.18 Loss on sale of fixed assets - 2.06 5.66 0.28 0.10 1.02 Long term investments(trade) - - - - - - Provision for doubtful debts/

advances - - 5.73 0.19 9.27 5.67

Deferred revenue expenditure written off

- - - 5.41 21.63 21.63

Interest expense 2.77 45.33 49.49 165.13 261.25 379.52 Interest Income (4.04) (0.84) (1.20) (0.84) (1.76) (0.24) Provision for doubtful debts written

back - - (0.03) (7.04) - (1.02)

Provision for leave encashment written back

- - (35.36) (0.01) - -

Provision for gratuity written back - (39.76) - - - - Profit on sale of fixed assets (0.82) (10.76) (0.50) (44.85) (0.14) (3.24) Voluntary retirement scheme - - - - (332.65) (38.11) 752.41 2,509.73 1,966.08 1,299.39 216.47 36.48

Operating profit/(Loss) before working capital changes

(Increase)/Decrease in trade and other receivables

451.86 (2,036.19) (829.43) (67.14) (119.88) (200.38)

Decrease/(Increase) in inventories (377.20) 50.64 (807.67) (243.72) (263.29) (14.98) Increase /(Decrease) in trade and

other payables (40.93) 1,656.60 517.99 (226.59) 202.93 379.08

Cash generated from operations 786.14 2,180.78 846.97 761.94 36.23 200.20 (Payment ) of direct taxes (144.59) (667.93) (126.27) (36.17) 2.83 (2.21) Corporate Dividend Tax - - - - - 641.55 1,512.85 720.70 725.77 39.06 197.99

Cash generated from/(used in) operating activities before extra ordinary items

Extra ordinary items: Deferred revenue expenditure in

respect of

voluntary retirement scheme written off

- - - 29.15 87.48 -

Write back of interest no longer payable

- - - - (34.29) -

Net cash generated from/(used in) operating activities

641.55 1,512.85 720.70 754.92 92.25 197.99

Cash flow from investing activities Purchase of Fixed assets (104.37) (391.45) (118.24) (98.64) (71.00) (19.61) Sale of investments - - - 0.38 0.75 - Sale of fixed assets 0.92 47.93 4.27 49.99 2.33 22.11 Interest received 4.23 0.98 0.81 1.00 1.57 0.24 Net cash (used in)/generated from

investing activities (99.22) (342.54) (113.16) (47.27) (66.35) 2.74

Cash flow from financing activities Proceeds from issue of preference

share capital - - - - 920.06 -

Redemption of preferential capital - (920.06) - - - -

127

For the year ended 31 March

For the Qtr ended 30th June 2006 2006 2005 2004 2003 2002

Proceeds from long term borrowings

- 125.02 111.45 (951.71) (234.45) (152.82)

Proceeds/(Repayment) from short term borrowings

(526.11) 289.21 (458.88) 400.14 (413.98) 128.85

Dividend paid (including corporate dividend tax)

(0.13) (626.55) (193.94) (2.46) (0.02) (0.02)

Interest paid (2.79) (46.42) (50.53) (174.79) (292.76) (187.53) Net cash generated/(used in) financing

activities (529.03) (1,178.80) (591.90) (728.82) (21.15) (211.52)

Net (decrease)/increase in cash and

cash equivalents (A+B+C) 13.30 (8.49) 15.64 (21.17) 4.75 (10.79)

Cash and cash equivalents at the beginning of the year

28.87 37.36 21.72 42.89 38.14 48.93

Cash and cash equivalents at the end of the year

42.17 28.87 37.36 21.72 42.89 38.14

Reconciliation of cash and cash

equivalents

As per Balance sheet 42.24 29.13 37.75 21.72 43.05 38.14 less, interest accrued on bank deposits 0.07 0.26 0.39 - 0.16 - 42.17 28.87 37.36 21.72 42.89 38.14

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Annexure IX: Statement of Dividend

Rupees in Lakhs

As at 31 March Equity Dividend 2006 2005 2004 2003 2002

Equity shares (Nos) 49.40 49.40 49.40 49.40 49.40

Face value of shares Rs.10/- each Rs.10/- each Rs.10/- each Rs.10/- each Rs.10/- each

Equity Share Capital 494.00 494.00 494.00 494.00 494.00

Dividend Rate 80% 80% Nil Nil Nil

Dividend amount 395.18 395.18 Nil Nil Nil

Corporate Dividend tax 55.42 55.42 Nil Nil Nil

Rupees in Lakhs As at 31 March

Preference Dividend 2006 2005 2004 2003 2002 Preference shares (Nos) - 9.20 9.20 9.20 - Face value of shares - Rs.100/-

each Rs.100/-

each Rs.100/-

each -

Preference share capital Note 1 920.00 920.00 920.00 - Dividend Rate Note 2 Note 2 Note 2 - Dividend amount 55.01 105.56 171.06 - -

Corporate Dividend tax 7.72 14.80 21.92 - -

Notes:

1. Preference share capital is fully redeemed on 15th November 2005

2. 20,060 11.5%* Cumulative Redeemable Non-Convertible 'A' Series Preference shares of Rs. 100/- each (* or the average of State Bank of India Long Term PLR prevailing as at 1st April and 1st October of each financial year, whichever is lower) 900,000 11.5% Cumulative Redeemable Non-Convertible 'B' Series Preference shares of Rs. 100/- each

129

STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY

BSE

Year ending March 31 High

(Rs.)

Date of High Volume

on Date of High( No. of Shares)

Low (Rs.) Date OF Low Volume

on date of LoO ( No. of Shares)

Average Closing

Price for the year

(Rs.)

2004 184.80 18.02.2004 4346 11.10 04.04.2003 280 85.98

2005 259.90 10.03.2005 63532 75.00 27.08.2004 31844 133.69

2006 475.00 25.01.2006 106266 211.00 21.04.2005 14405 346.65

31st

October, 2006

555.000 20.10.2006 61250 260.3 21.07.2006 63 367.49

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our selected financial and other operating data and our financial statements under Indian GAAP and the related notes to accounts and significant accounting policies that have been incorporated in the section titled “Auditor’s Report”. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. A description of what constitutes a forward-looking statement is provided in “Forward-Looking Statements”. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this Letter of Offer. Unless otherwise stated, the financial information used in this section is derived from our restated audited financial statements under Indian GAAP. Our fiscal year ends on March 31 of each year, hence all references to a particular fiscal year are to the 12-month period ended March 31 of that year. In this section, any reference to "we", "us" or "our" refers to Automobile Corporation of Goa Limited (ACGL). Bracketed numbers indicate losses/ negative figures. Company Background We believe we are one of the leading players in bus body building Industry in India. We are also engaged in the business of manufacturing of pressed parts, components, sub-assemblies and assemblies for various ranges of automobiles. Our promoters are Tata Motors Ltd, Tata International Limited & EDC. We have two distinct business segments viz. the Pressing division (SMD) and the Bus Body Building division (BBD). Our manufacturing facilities for the BBD is located at Bhuimpal (Sattari, Goa), and for SMD are located at Honda, (Sattari, Goa), Bhuimpal (Sattari, Goa), Jejuri (Purandar Dist. Pune) & Bhosari (Bhosari, Pune). All our manufacturing units (except the Bhosari unit which has been set up recently) are certified under ISO/QS 9000-20002. Our SMD plant at Honda, Goa is certified under QS9000 / TS16949 -2002. Opportunities in the Industry The Bus Industry has witnessed significant growth in the recent years which has been primarily driven by the growing economy. For the fiscal year of 2005-06, India had a real GDP growth rate of 8.4%. CMIE projects a real GDP growth rate of 7.9% for fiscal 2007. In order to de-risk their business revenue and overcome the cyclicality of the Indian market, bus manufacturers have started to focus on exports and develop a strategy to make their presence felt in the international markets. We are witnessing increasing demand from the international markets particularly in the developing countries of Arabian Gulf and Africa. In addition to the export market, we expect demand from new segments, such as low floor / semi low floor inter city buses in both diesel and CNG versions, Tarmac coaches for airlines, tourism and hospitality sectors. We have already manufactured and supplied low floor / semi low floor buses for Mumbai, Delhi, Indore and Bhopal (Starbus) and Tarmac coaches to major airlines such as Jet Airways, Indian Airlines, Kingfisher Airlines, Spice Jet and Indigo Airlines. We are also engaged in building of prototype buses on the Hispano bus models for Tata Motors Limited in the Globus range. This range of buses are being developed for the high end luxury segment. Further we expect the following key factors to contribute to the growth of our industry:

Growth in inter city & intra city traffic & urban travel traffic Increase in demand by private Operators Exclusive bus lane; “Bus Rapid Transit System” Progress of Golden Quadrilateral and other road developmental projects

131

Summary of Results of Operations

For the year ended 31 March

Rs. Lakhs

For the Quarter ended

30th June 2006 2006 increase 2005 increase 2004

INCOME Turnover 7,002.74 25,403.04 62.19% 15,662.04 38.99% 11,268.34 Other Income 159.00 122.80 (38.87)% 200.87 (14.14%) 233.95 Total Income 7,161.74 25,525.84 60.92% 15,862.91 37.91% 11,502.29 EXPENDITURE Manufacturing and Other Expenses

Direct Material 5,714.97 20,707.35 70.94% 12,113.78 42.41% 8,506.01 Payments to and Provisions for Employees

358.16 1,245.17 12.63% 1,105.58 13.17% 976.92

Administration and Other Expenses 256.43 1,026.26 44.22% 711.61 3.51% 687.51 Finance and Treasury Charges (Net) 2.77 45.33 (8.41%) 49.49 (70.03%) 165.13 Depreciation 53.2 192.97 10.22% 175.07 (0.82%) 176.51 Total Expenditure 6,385.53 23,217.08 64.01% 14,155.53 34.66% 10,512.08 Net Profit before Extraordinary Item and Tax

776.21 2,308.76 35.22% 1,707.38 72.43% 990.21

Deferred revenue expenditure in respect of Voluntary retirement scheme written off

- - - - - (29.15)

Net Profit / (Loss) before tax 776.21 2,308.76 35.22% 1,707.38 77.66% 961.06 Provision for tax: (262.43) (781.18) 192.91% (266.70) 444.29% (49.00) Net Profit after tax 513.78 1,527.58 6.03% 1,440.68 57.96% 912.06 Impact on account of adjustments required by paragraph 6.10.2.7(b) of Chapter VI of the Guidelines [see note 9 of Annexure III]

(49.70) (24.13) 143.21% 55.84 28.25% 43.54

Adjusted Profit for the period/year 464.08 1,503.45 0.46% 1,496.52 56.61% 955.6

1. Turnover:

Our turnover comprises of sales in the BBD and SMD. In the BBD we primarily manufacture bus bodies and mount them on chassis supplied by our customers. Our manufacturing activities at the BBD involve basic body component manufacture, combination of body aggregates, painting of bus shell, dropping and integrating the shell with the chassis and providing interiors and other fitments.

At the SMD, we procure sheet steel both in Hot Rolled and Cold Rolled versions, and perform a series of pressing operations such as blanking, forming, piercing, etc to manufacture basic auto components using the tooling provided by the OEMs. Further value addition on such components by welding other components, adding bought – out parts; painting etc. is done to manufacture sub assemblies and assemblies.

Our revenues from BBD increased by 166.12% to Rs.17,351.42 Lakhs for fiscal 2006 from Rs.6,520.12 Lakhs in fiscal 2004. For the three months ended June 30, 2006 it stood at Rs.5,009.45 Lakhs.

2. Other Income

132

Our other income primarily comprises of interest on deposits/ advances, excess provision for leave encashment written back, profit on sale of fixed assets, technical / license / other fees, deputation charges and royalty income. Technical fees /royalty income forms a major part of our other income and are derived from our technology license provided to other bus body manufacturers.

3. Manufacturing and other Expenses

Our manufacturing and other expenses comprise of direct material cost, employee related expenses and administrative & other expenses.

Direct material expenses are costs incurred for consumption of raw material and components, and processing / labour charges. Employee related expenses include salaries, wages, bonus, contribution to provident and other funds and staff welfare expenses. Administrative and other expenses include power, repair and maintenance of buildings & others, packing and freight, rates and taxes, insurance, communications, electricity, travel & conveyance and miscellaneous expenses.

4. Finance and Treasury Charges

The finance and treasury charges that are disclosed in the financial statements are interest on loans, expenses for loan arrangement, bill discounting charges, bank charges, profit and loss on redemption of Units and foreign exchange fluctuations.

Comparison of the year ended March 31, 2006 with the year ended March 31, 2005

1. Total income increased by 60.92% to Rs. 25,525.84 Lakhs for the financial year ended March 31, 2006

from Rs. 15,862.91 Lakhs earned in the year ended March 31, 2005. The growth was primarily on account of increase in revenues from Sale of buses. For the fiscal 2006, we have sold 3,004 buses as compared to 1,651 buses in fiscal 2005.

The break up of total income is depicted in the table below:

Rs. Lakhs March 31, 2006 March 31, 2005 Turnover 25,403.04 15,662.04

Pressing Division 8,131.98 6878.43 Bus Body Division 17,271.06 8783.61

Other Income 122.80 200.87 Total Income 25,525.84 15,862.91

Other Income decreased to Rs. 122.80 Lakhs during the year ended March 31, 2006 from Rs. 200.87 Lakhs earned in the previous year. This reduction was on account of reduction of Rs. 82.73 Lakhs in royalty income, and Rs. 59.17 Lakhs in miscellaneous income.

2. Manufacturing and other Expenses

Rs. Lakhs March 31, 2006 March 31, 2005 Manufacturing and other Expenses

Direct Material 20,707.35 12,113.78 Employees expenses 1,245.17 1,105.58 Administrative and other Expenses 1,026.26 711.61

Total 22,978.78 13,930.97

A. Direct Material During the year, direct material expenses increased by 70.94% to Rs. 20,707.35 Lakhs from Rs.12,113.78 Lakhs incurred in the previous year. However as a percentage of total revenues these expenses increased from 76.37% in the year ended March 31, 2005 to 81.12% in the year ended March 31, 2006.

133

This increase in expenses was primarily driven by increase in input costs such as Aluminum, Steel, Plywood, Rexene/Vinyl and wiring harnesses etc. While these increases are partly recovered in the pricing of the products during periodic price revisions, part of them are borne by the company.

B. Employee related expenses

Employee related expenses increased by 12.63% to Rs. 1,245.17 Lakhs during the year ended March 31, 2006 up from Rs. 1,105.58 Lakhs incurred in the year ended March 31, 2005. However as a percentage total revenues, these expenses reduced from 6.97% in year ended March 31, 2005 to 4.88% in the year ended March 31, 2006. This was primarily due to significant increase in sales without corresponding increase in the staff on company rolls.

C. Administrative and other expenses

These expenses increased by 44.22% to Rs. 1,026.26 Lakhs for the year ended March 31, 2006 from Rs. 711.61 Lakhs incurred in the previous year. As a percentage to total revenues, these expenses marginally decreased from 4.49% in year ended March 31, 2005 to 4.02% in the year ended March 31, 2006.

3. Finance and Treasury Charges

The finance and treasury charges for the year ended March 31, 2006 decreased by 8.41% to Rs. 45.33 Lakhs from Rs. 49.49 Lakhs in the previous year. Our outstanding borrowings increased from 971.09 Lakhs for the year ending March 31, 2005 to 1,385.32 Lakhs for the year ending March 31, 2006. However as a percentage of total revenues, these expenses decreased from 0.31% in year ended March 31, 2005 to 0.18% in the year ended March 31, 2006.

4. Depreciation

Depreciation charges increased by 10.22% to Rs. 192.97 Lakhs for the year ended March 31, 2006, from Rs. 175.07 Lakhs charged in the previous year. As a percentage of total revenues, these expenses decreased from 1.10%% in year ended March 31, 2005 to 0.76% in the year ended March 31, 2006.

5. Tax

Total tax charges increased by 192.91% to Rs. 781.18 Lakhs during the year ended March 31, 2006 from Rs. 266.70 Lakhs charged in the previous year. As a percentage of total revenues, these expenses increased from 1.68% in year ended March 31, 2005 to 3.06% in the year ended March 31, 2006. The Company came under the full Corporate Tax bracket during fiscal 2006 as compared to MAT in the previous year

6. Net Profit

The profit before tax for the year ended March 31, 2006 amounted to Rs. 2308.76 Lakhs as against Rs. 1707.38 Lakhs witnessing an increase of 35.22% over the previous year. However, consequent to the incidence of corporate tax at the normal level vis-à-vis MAT in the previous year, the net profit after tax increased only marginally to Rs. 1503.45 Lakhs as against Rs. 1496.52 Lakhs during previous year.

Comparison of the year ended March 31, 2005 with the year ended March 31, 2004

1. Total income for the year ended March 31, 2005 increased by 37.91% to Rs. 15,862.91 Lakhs from Rs.

11,502.29 Lakhs earned in the year ended March 31, 2004. The growth was on account of increase in revenues from both the divisions.

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The break up of total income is depicted in the table below: Rs. Lakhs March 31, 2005 March 31, 2004

Turnover 15,662.04 11,268.34 Pressing Division 6878.43 4864.52 Bus Body Division 8783.61 6403.82

Other Income 200.87 233.95 Total Income 15,862.91 11,502.29

Other Income decreased to Rs. 200.87 Lakhs during the year ended March 31, 2005 from Rs. 233.95 Lakhs earned in the previous year.

2. The major Manufacturing and other expenses comprise:

Rs. Lakhs March 31, 2005 March 31, 2004 Manufacturing and other Expenses

Direct Material 12,113.78 8,506.01 Employees expenses 1,105.58 976.92 Administrative and other Expenses 711.61 687.51

Total 13,930.97 10,170.44

A. Direct Material

During the year, direct material expenses increased by 42.41% to Rs. 12,113.78 Lakhs from Rs.8,506.01 Lakhs incurred in the previous year. However as a percentage of total revenues these expenses increased from 73.95% in the year ended March 31, 2004 to 76.37% in the year ended March 31, 2005. This increase in expenses was primarily driven by increase in raw material cost.

B. Employee related expenses

Employee related expenses increased by 13.17% to Rs. 1,105.58 Lakhs during the year ended March 31, 2005 up from Rs. 976.92 Lakhs incurred in the year ended March 31, 2004. However as a percentage of total revenues, these expenses reduced from 8.49% in year ended March 31, 2005 to 6.97% in the year ended March 31, 2004.

C. Administrative and other expenses

These expenses marginally increased by 3.51% to Rs. 711.61 Lakhs for the year ended March 31, 2005 from Rs. 687.51 Lakhs incurred in the previous year. As a percentage to total revenues, these expenses decreased from 5.98% in year ended March 31, 2004 to 4.49% in the year ended March 31, 2005.

3. Finance and Treasury Charges

The charge to the profit and loss account for the year ended March 31, 2005 towards interest decreased by 70.03% to Rs. 49.49 Lakhs from Rs. 165.13 Lakhs charged in the previous year primarily on account of loan repayment. Our outstanding borrowings reduced from 1318.52 Lakhs for the year ending March 31, 2004 to 971.09 Lakhs for the year ending March 31, 2005. However as a percentage of total revenues, these expenses decreased from 1.44% in year ended March 31, 2004 to 0.31% in the year ended March 31, 2005.

4. Depreciation

Depreciation charges marginally decreased by 0.82% to Rs. 175.07 Lakhs for the year ended March 31, 2005, from Rs. 176.51 Lakhs charged in the previous year. As a percentage of total revenues, these expenses decreased from 1.53% in year ended March 31, 2004 to 1.10% in the year ended March 31, 2005. There was not a major change in the depreciation charge between the two periods.

5. Tax Total tax charges increased by 444.29% to Rs. 266.70 Lakhs during the year ended March 31, 2005 from Rs. 49.00 Lakhs charged in the previous year. As a percentage of total revenues, tax expense increased from 0.43% in year ended March 31, 2004 to 1.68% in the year ended March 31, 2005. This increase was due to provision for deferred tax liability in fiscal 2005 and increase profitability.

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6. Net Profit

The profit before tax for the year ended March 31, 2005 amounted to Rs. 1707.38 Lakhs as against Rs. 961.06 Lakhs witnessing a increase of 77.66% over the previous year. After provision for MAT, net profit after tax increased to Rs. 1,496.52 Lakhs as against Rs. 955.60 Lakhs during previous year.

Information required as per clause 6.10.5.5(a) of the SEBI Guidelines 1. Unusual or infrequent events or transactions:

In Fiscal 2006, we have carried out an early redemption of preference shares aggregating to Rs. 920.06 Lakhs. Other than this and as stated else where in the draft letter of offer there has been no other unusual or infrequent events or transactions.

2. Significant economic changes that materially affected or likely to affect income from continuing operations:

We do not have any significant imported inputs. But for a small portion of direct export comprising less than 1% of our turnover, all other export sales is on Rupee basis to a merchant exporter. Therefore the effect of foreign exchange rate variation on our business is insignificant. Except the above, there are no significant economic changes that materially affect or likely to affect income from continuing operations.

3. Known trends or uncertainties: Apart from what is disclosed in this draft letter of offer, there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

4. Future relationship between cost and revenue:

The expansion of the current operations would enable the company to procure raw materials in bulk and may lead to economies of scale in procurement.

5. Total turnover of the industry:

Total turnover of the industry is not available, 6. Introduction of new product or business segment:

New bus models and variants of existing models are introduced from time to time depending on customer demand

7. Seasonality of the business:

None of the company’s products sold are seasonal in nature. 8. Over dependence on a single supplier / customer:

We do not depend on single supplier for significant inputs. However as mentioned earlier we are predominantly dependent on Tata Motors Ltd for sale of our products. We are a volume producer of buses and sheet metal components, and therefore depend on bulk orders which are possible only through OEMs.

9. Competitive conditions:

We have been strengthening our position in the business segments in which we operate. Most of the players in the bus body building industry are in the unorganized sector with whom we compete. Further, we face significant competition in the sheet metal pressing business.

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INFRASTRUCTURE

Property The Company has several premises which are owned, leased or rented in various locations in India. Office Premises of the Company: The registered office of the Company is situated at Honda, Sattari, Goa – 403530 held on a leasehold basis. The Liaison Office of the Company is situated at 5th Floor, Sujay Apts., Opposite Sushila Bldg., 18th June Road, Panaji, Goa – 403 001 held on a leasehold basis. Commercial Premises of our Company Manufacturing Facilities

Name of the Plant Location Nature of Holding Area Sheet Metal Divisions (SMD)

Honda, Sattari, Goa – 403 530 Lease 17.60 Acres

Bus Body Division (BBD)

Bhuimpal, Sattari, Goa – 403 530 Lease 37.88 Acres

Bhuimpal Pressing Unit (BPU)

Bhuimpal, Sattari, Goa – 403 530 Lease 2.47 Acres

Jejuri Pressing Unit (JPU) F2 MIDC, Jejuri, Taluka Purandhar, Jejuri, Pune

Lease 5.77 Acres

Bhosari W-222, D5 Block, MIDC, Bhosari, Pune

Lease 1,100 Sq. Mtrs

Residential Premises of the Company: The Company has leased the following residential properties. 1. Plot No. 15,

Palm Grove Tonca Bhat, Caranzalem, Goa – 403 002 2. Akshay Complex Flat number F3, First Floor, Chinchwad, Pune

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OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS Except as described below, there are no outstanding litigation, suits or criminal or civil prosecutions, proceedings or tax liabilities against our Company, our Directors, our Promoters or 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 debentures, bonds or fixed deposits, issued by our Company (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). The following are the outstanding or pending litigations or suits or proceedings against the Company and criminal complaints or cases, defaults, non-payment or overdues of statutory dues, proceedings initiated for any economic or civil offences and disciplinary action taken by SEBI or stock exchanges against the Company, its subsidiaries and other group companies and the outstanding or pending litigations or suits or proceedings against the subsidiaries and other group companies. By the company Corporate Litigation The Company entered into a contract to supply 176 buses to Delhi Transport Corporation (“DTC”) in 1998. The company supplied the buses. Dispute arose between the Company and DTC regarding the payment for the buses and the same was arbitrated upon. The company has filed an appeal against the award of the arbitrator before the High Court of Delhi. Against the Company Corporate Litigation SEBI issued a show cause notice to the Company by its letter dated July 21, 2004 alleging violation of Regulation 6(2) and 6(4) of the Takeover Code for the year 1997 and violation of Regulation 8(3) of the Takeover Code for the years 1998, 1999, 2000 and 2001 by a letter dated July 21, 2004. SEBI allowed for a consent order for a payment of Rs. 175,000 as penalty for the violations. The Company agreed to a settlement through consent order but has requested a personal hearing by the Adjudication Officer. The matter is pending before the Adjudication Officer. Civil The Company offered its residential property at Panaji, Goa for sale by advertisement dated 29.04.2002 in the local newspaper. Mr. Gurudas Lotlikar submitted his quotation offering Rs. 39.00 Lakhs for outright purchase. An agreement to this effect was to be executed on October 15, 2003 by his Attorney holder Mrs. Vasanti G Lotlikar. The Company also made alternate arrangements for a residential flat for its Managing Director by paying requisite deposit and commission to the agent. Thereafter, the party showed no interest in the deal and the Company had to withdrawl the offer. Mr. Lotlikar filed a Special Civil Suit no. 171/03/B in the Court of Civil Judge, Sr. Division at Panaji on 26th December, 2003 for temporary injunction. The Suit was dismissed by Order dated April 5, 2005. Mr. Lotlikar then appealed in the High Court of Bombay at Goa vide Civil application no. 231 of 2005 challenging the Order passed by the Civil Judge, Sr. Division at Panaji and also for relief Rs. 10.00 Lakhs as and by way of damages for committing a breach of the agreement by the Company. The High Court vide its Order no. 40 of 2005 dated February 17, 2006 and upon deposit of Rs. 39.00 Lakhs by Mr. Lotlikar to show his bonafide for specific performance for alleged agreement set aside the Order passed by the Civil Judge, Sr. Division at Panaji. The High Court has restrained the Company to enter into any transaction in respect of the premises till the disposal of the said Suit on or before 31st July, 2007.

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Labour Litigation Before the High Court Sixteen employees were terminated by the Company for riotous behaviour during January, 1986. The workers filed a complaint before the Industrial Tribunal praying for reinstatement. The Industrial tribunal gave award in favour of the Company. The award was challenged before the High Court of Bombay (Goa bench) in 2003 (W.P. 230/2000). The case is pending for final hearing. Before the Industrial Tribunal Vishwanath Kochkar an Officer of the Company was dismissed by the Company for indiscipline. He filed a complaint (complaint number IT/6/94) in 1994 before the Industrial Tribunal praying for reinstatement. The case is pending before the Industrial Tribunal. Narayan Gawas, an employee of the Company was dismissed for attempting to commit theft. He filed a complaint before the Industrial Tribunal in 2001 praying for reinstatement. The case is pending before the Tribunal. The AGCL worker’s union filed complaint (complaint no. IT/13/96) in 1996 before the Industrial Tribunal pertaining to interpretation of a Clause in the Memorandum of Settlement dated September 1, 1900 regarding VDA praying for higher VDA rates. The case is pending before the Industrial Tribunal. Deepak Naik, an employee, was dismissed by the Company for riotous and disorderly behaviour during working hours. He filed a complaint (complaint number IT/100/99) in 1999 before the Industrial Tribunal praying for reinstatement. The case in pending before the Industrial Tribunal. Ankush Gawas, an employee, was dismissed by the Company for habitual absenteeism without leave. He filed a complaint (complaint number IT/93/00) in 2000 praying for reinstatement. The case in pending before the Industrial Tribunal. Mr. Samir Parrikar, an employee, was dismissed by the Company for willfully and fraudulently erasing the originally regularized/sanctioned dates entered on his leave card and inserting some other dates for claiming wages. He filed a complaint (complaint number IT/6/02) in 2002 before the Industrial Tribunal praying for reinstatement. The case in pending before the Industrial Tribunal Madhukar Gaonkar, an employee, was dismissed by the Company for habitual absenteeism without leave. He filed a complaint (complaint number IT/49/02) in 2002 before the Industrial Tribunal praying for reinstatement. The case is pending before the Industrial Tribunal. Mr. Ganjan Bhaje, an employee resigned from the Company and was relieved. He filed a complaint (complaint number IT/30/01) in 2001 claiming that he was forcibly made to resign. The case is pending before the Industrial Tribunal. Mr. Vijendra Pangam, an employee was dismissed by the Company for habitual absenteeism without leave. He filed a complaint (complaint number IT/31/03) in 2003 before the Industrial Tribunal praying for reinstatement. The case is pending before the Industrial Tribunal Tax Litigations Sr. No. Asst.

Year Authority before which pending /

Case No.

Nature of the case particulars Status Amount of claim involved

(Rs.) 01 1999 Commissioner

(Appeals) Availment of Modvat credit Case

remanded to Commissioner Appeals by CEGAT

1,939,003.00

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Income Tax: A demand notice was served upon us for amounting to Rs. 37,329,969/- on claims relating to depreciation of assets. The contention is that the actual demand is of Rs. 3,732,996/- which has been wrongly mentioned in the demand notice as Rs. 37,329,969/-, because of a typographical error. An appeal was filed before the High Court of Bombay at Goa and is pending before the High Court Contingent Liability As on June 30, 2006, our contingent liabilities aggregated to Rs. 4697.9 Lakhs. Litigations against Directors Hamza Khan V/s Mr. Shivanand V. Salgaocar & Anthr. Tenancy case No. Jt. Mamlatdar – I/TNC/DELI/2004/2104 filed before Joint Mamlatdar, Quepem, Goa. This application was filed by Mr. Hamza Khan against Mr. Shivanand V. Salgaocar & another., under section 7 of the Goa Agricultural Tenancy Act, 1964. The applicant claims Agricultural Tenancy in respect of property surveyed under survey no.47/3 of Village Sirvoi, Quepem Taluka. The case is pending Trial. Hamza Khan V/s Mr. Shivanand V. Salgaocar & Othrs. Regular Civil Suit No.29/2004/A filed before Quepem Civil Court, Sr. Division. This Civil Suit is filed by Mr. Hamza Khan as plaintiff seeking to restrain the defendants and their representatives from entering the property surveyed under survey no.47/3 of Sirvoi Village, Quepem Taluka, as he is claiming Agricultural Tenancy Rights. The Court adjourned the matter Sine Die, as Agricultural Tenancy Proceedings are pending before the Joint Mamlatdar at Quepem. Regular Civil Appeal No.51/2005/III filed by Mr. Keshav M. K. Dessai against Mr. Shivanand V. Salgaocar & othrs. before the District Court, Margao against the decision in the Civil Suit No.23/05/A relating to encroachment case. This appeal is preferred by Mr. Keshav M. K. Dessai, as appellant against Mr. Shivanand V. Salgaocar & others. This appeal is against the decision in the Civil Suit No.23/05/A, wherein Mr. Keshav M. K. Dessai was one of the defendants. It relates to encroachment in the Property Surveyed under Survey No.6/1 of Village Pirla, Quepem Taluka by Mr. Keshav M. K. Dessai and others. The property is claimed to be owned by Mr. Shivanand V. Salgaocar. This appeal is pending Regular Civil Suit No.65/96/B in the Court of the Civil Judge Junior Division at Bicholim, Goa filed by Mr. Laxmikant Shantaram Sinai Surlekar and 9 others against Mr. Shantaram alias Narayan Keshav Shetkar and his wife. This civil suit has been instituted by Mr. Laxmikant Shantaram Surlekar and 9 others as Plaintiffs against Mr. Shantaram alias Narayan Keshav Shetkar and his wife as defendants, claiming property comprised in Survey No.289/0. This property was sold to Late Mr. V. M. Salgaocar by Mr. Shantaram alias Naryan Keshav Shetkar and his wife. Late Mr. V. M. Salgaocar had purchased this property for the purpose of Mining Business. Mr. Shivanand V. Salgaocar as Legal Heir of Late V. M. Salgaocar has been impleaded in this suit by the plaintiffs.The suit is pending trial. Litigation against the Promoters Tata Motors Limited

Category Status

Taxes Excise: No of cases 314 (pending adjudication before various Authorities, Tribunals and Courts). Demand Amount : Rs 153.34 crores Sales Tax :

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Category Status

No of Cases 223 (pending adjudication before various Authorities, Tribunals and Courts). Demand Amount: Rs 237.85 crores Others: a) Octroi : No of cases -7 i) Demand of Rs 43 crores raised on account of differential octroi by the

Pimpri Chinchwad Municipal Corporation(for short-PCMC).(pending adjudication before the Bombay High Court). (1case)

ii) Demand of Rs 1.70 crores was raised by PCMC towards differential

octroi on casting and forgings imported during the period 1979-84. The demand was challenged by us by way of a Municipal Appeal (by depositing an amount of Rs. 1.20 crores and furnishing bank guarantee of Rs. 50 Lakhs) which, was decided in our favour. PCMC was directed to refund the amount of Rs. 1.20 crores with interest ( Rs –3.61 crores ) and cost (Rs. 1 lakh) . The amount of Rs 4.82 crores (1.20 crores cash deposit + 3.61crores interest thereon + 1 lakh cost) has been withdrawn by us. PCMC has preferred a First Appeal (pending adjudication before the Bombay High Court). (1case)

iii) Demand of Rs 9.79 crores raised by the Corporation on the basis of the

Order passed by the High Court allowing the PIL challenging the stay granted by the State Government to the implementation of highly escalated Octroi rates for the period 6.1.02 to 7.5.02. Said demand has been challenged by MCCIA and affected industries. (pending adjudication before the Supreme Court) ( 2 cases )

iv) Refund of Rs 52.20 Lakhs being claimed by us on double levy of octroi

by PCMC. ( pending adjudication before High Court, Mumbai) (1 case) v) Demand of Rs. 19 Lakhs raised by the Corporation towards demand on

rejected goods sent back to suppliers located outside octroi limits on the ground that the necessary procedure has not been followed. .(pending adjudication before the Bombay High Court). (1case)

vi) Demand of Rs 1.02 crores raised on account of differential octroi, for the

period September 1995 by the Corporation. (pending adjudication before the Bombay High Court). (1case)

b) Road tax: No. of cases -2 i) Demand of Rs.7.95 crores being disputed on account of levy of Road

Tax by the State of Bihar ( now Jharkhand). (pending adjudication before the Supreme Court).

ii) Appeal filed before the Principal Secretary (Transport wing) Home

Department challenging 173 demand notices calling upon the Company to pay an amount of Rs. 97.48 Lakhs towards tax on registered vehicles used within the premises of the Company (pending before Principal Secretary, Mantralaya) (1 case)

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Category Status

c) Property tax: No. of cases - 164 i) Demand of Rs.1.69 crores being disputed on account of property tax

demanded by the Municipal Corporation of Delhi on the property at TML Sales and Service (TSS) Delhi.(pending adjudication before the Delhi High Court). (1case)

ii) Writ petitions have been filed by us challenging the ratable value fixed

by the PCMC in respect of the vacant land at Pimpri, Chikhali and Chinchwad. As per the order of the High Court, PCMC has raised three separate bills amounting to Rs. 14.22.cr., however the same will not be enforced till further orders of the High Court. (pending admission). (3 cases)

iii) Writ Petitions have been filed by PCMC challenging the Orders of the

District Court, Pune fixing the ratable value at the rate of 5% & 6% of the cost of construction. (pending adjudication before the Bombay High Court). (24 cases)

iv) Municipal Appeals challenging the ratable value fixed by the

Corporation @ 8% in respect of our industrial and residential buildings pending adjudication before Small Cases Court, Pune. Similarly appeals have also been filed challenging the change in mode of assessing property tax in respect of recently constructed buildings in Pimpri. (136 cases)

d) Excess Land dispute : No. of cases -1 Pimpri Chinchwad New Township Development Authority (PCNTDA)

is demanding market rate towards premium of the excess land admeasuring 14 acres and 36 gunthas handed over inadvertently to us. We offered premium at the original rate together with interest – refused by PCNTDA. (pending adjudication before the Bombay High Court).

e) Non agricultural assessment (Chikhali): No of cases - 3 i) Demand of Rs 45 Lakhs for the period 1995-1996 to 2001-2002 by the

Revenue Authorities in respect of Chikhali land (pending adjudication before the Bombay High Court). (1 case)

ii) Demand of Rs. 1,16,029/- + Rs. 40,427.76 for the period upto 1983-1984

raised by the Revenue Authorities is respect of Chinchwad land was challenged by us by filing two Writ Petitions. The Petitions have been disposed off on the basis of the Orders passed by the Collector. The assessment will be worked out by the concerned officer at the Revenue Department. (Guided by the base figures and permissible revision in tax every five years the rough estimate of demand upto July 2006 is about 1 cr.) ( 2 cases)

Civil cases

1245 cases are pending adjudication before various Courts at various stages of hearing. In addition ,action has been initiated by the Company against defaulting hirers u/s 138 N I Act. There are 14,516 such cases out of which 2870 cases are

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Category Status

live and the remaining cases are technically pending where payments have been received but the cases are yet to be closed.

Labour Law cases

287 cases are pending adjudication before various Courts and Tribunals at various stages of hearing.

Criminal cases

685 cases are pending adjudication at various stages of hearing.

Consumer cases

2208 cases are pending adjudication before various Consumer Forums and Commissions at various stages of hearing.

Motor Accident Claims

1885 cases are pending adjudication at various stages of hearing.

Public Interest Litigations

4 cases, before the Supreme Court , Bombay High Court and Delhi High Court pending adjudication

Proceedings under Monopolistic and Restrictive Trade Practices Act

16 cases are pending adjudication at various stages of hearing.

Arbitration proceedings

62 cases are pending making of an award at various stages of hearing.

TATA INTERNATIONAL LIMITED 1. In 1977, TIL had chartered a ship from Thakur Shipping Company Limited to carry cargo of steel joists

from Paradip Port to Bunder Abbas, Iran. While unloading the cargo, the vessel was damaged. Thakur Shipping Company Limited filed a suit (Suit No. 1354 of 1980) at the High Court of Bombay for a claim of Rs. 72,851 + interest. Thakur Shipping Company Limited has claimed reimbursement of the damage. The matter is pending before the High Court.

2. D. Manilal & S R Shah filed a suit (Suit No. 1582 of 1980.) at the the High Court of Bombay for a claim of Rs.3.45 Lakhs in respect of the import of caustic potash. TIL had sold the material to an actual user after the defaults committed by D. Manilal & S.R. Shah on whose behalf the material was imported. The parties to the dispute have filed their affidavit of evidence and the matter is fixed for recording of evidence.

3. M/s Northern Skin Corporation (NSC), Delhi had in December 1982 consigned 134 bags of Goat Skin

to TIL through M/s Delhi Golden Transport Service on for Dewas basis. The goods not being as per the desired specifications, TIL refused to accept the delivery and the consignment was returned to M/s NSC through Delhi Golden Transport Service. The suit has been filed against TIL and NSC for recovery of freight and Octroi charges for Delhi-Dewas and Dewas-Delhi transportation by Mr Gurmeet Singh, Sole Proprietor, M/s. Delhi Golden Transport Service (Suit of 1983) in the Court of IInd Class, Sub-Judge, Delhi. for a claim of Rs.5,104/-. Owing to the nature of the claim, the claim is sought to be amicably settled.

4. Auslands und Ruckversicherungs AG and others & Shipping Corporation of India & others have filed a

suit (Suit No. 479 of 1991) in the Bombay High Court against TIL and others. In this case, goods belonging to several companies including Tata Exports Ltd. were loaded on Board the vessel M.V. Vishwa Apurva at the port of Gdansk in Poland. After sailing from the said port of shipment, on August 6, 1987 whilst sailing in the Red Sea, the ship collided with M.V. Dias. After some time, the ship M.V. Vishwa Apurva sank with the whole of the cargo on Board. TIL has been made a pro forma defendant and no amount is claimed from TIL.

5. M/s Power Track Construction has a filed a suit (Special Civil Suit No. 833 of 1994) before the Joint

Civil Judge, Sr. Division, Nagpur. The Company secured various contracts from Railways for electrification and transmission lines at Nagpur. This contract was again subcontracted to various subcontractors, one of them being Power Track Construction. Power Track Construction executed some of the contracts for which they were duly paid. In some of the contracts, they defaulted with the conditions of the contract and claimed that the same was due to the incorrect designs supplied by the

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Company. Power Track Construction filed a suit for claiming damages. TIL has filed written statement and filed application to dismiss the suit for misjoinder and jurisdiction. The application filed for raising the point of jurisdiction is argued by both the parties. On February 18, 2005 the Hon’ble judge rejected our application. On June 6, 2005 TIL filed writ petition No. 2791/05 for challenging order dt. 18.2.2005 in High court of Bombay, Nagpur Bench and on 9.6.2005 the same was admitted and the accordingly the suit was stayed. Notice was issued returnable within 3 weeks. On 30.6.05 the stay was extended till service of notice to other side. The total ampunt claimed in this suit is Rs. 16.45 Lakhs + Interest

6. Shipra Exports filed a suit against TIL(Suit No. 636 of 1996) in the court of Civil Judge S.D. Nashik

relating to export of fruits for a claim of Rs. 4,30,304. By its judgment dated December 12, 2000 the Civil Judge was pleased to order the Company the sum of Rs. 4,30,304 jointly and severally to the Bank. The Company has filed an appeal against the decree in the High Court of Bombay and would come up on Board for admission in due course of time.

7. Two Show Cause notices dated January 27, 1992 were issued by Special Director, Enforcement

Directorate, to TIL and its directors to show cause why adjudicating proceedings should not be held for failure to realize full export value during January 1979 to March 1991. On June 3, 1994 Special Director, Delhi passed a common order for imposing penalty of Rs.15 Lakhs in SCN - I & Rs. 5 Lakhs in SCN – II. On July 25, 1994 TIL filed two appeals being numbered as 367 & 368 of 1994 before FERA Appellate, New Delhi, against the said order dated June 3, 1994. On July 12, 2005 Appeal nos. 367 & 368 of 1994 were fixed before the Appellate Tribunal FERA, Delhi, wherein the bench passed the common order in favour of the TIL by allowing both the appeals and setting aside the impugned order dated June 3, 1994. On August 22, 2005 TIL filed applications before Chief Metropolitian Magistrate to bring the appellate tribunal’s order on record of CMM Court. Presently the matters is pending for arguments by the other side.

8. CASES FILED AGAINST TATA INTERNATIONAL LIMITED BY BOMBAY PORT

TRUST (“BPT”)

Summary Suit No. 1134 of 1983 in the City Civil Court at Bombay.

This suit is being defended on the ground that M/s Resh Printers became the owner of the goods prior to the landing of the consignment in Bombay and therefore they should be held liable for the BPT dues. A Third Party Notice has been issued to join M/s Resh Printers as a Co-Defendant in the Suit. Bombay Port Trust has filed a claim for Rs.37,944.63.

Suit No. 2574 of 1983 in the High Court of Bombay

TIL imported Diathylene Glycol for High Sea Sale to M/s Everest Chemicals and Minerals Private Limited. 72 drums Diathylene Glycol was imported and delivery of the same was not lifted from the warehouses of BPT. BPT sold the goods and claiming towards expenses of sales, custom duty and Port Trust charges. Claim of Rs. 89,547.01 + Interest @ 15% p.a. Suit No. 577 of 1983 pending in the High Court of Bombay

TIL imported a consignment of prime cold rolled steel sheets on behalf of M/s Ratanlal Didwania & Co. Subsequently, the Company opened a Letter of Credit, but the overseas supplier shipped the goods after expiry of L/C and relative import licence. When goods arrived at BPT warehouse, M/s Ratanlal filed bill of entry which was rejected by Customs Authorities. Hence the goods were not cleared. BPT auctioned the goods and has filed a claim for Rs.1,40,533.11 for recovery of the deficit.

City Civil Suit No. 3494 of 1983

In June, 1978, M/s RP Corporation, Calcutta (RPC), defaulted in taking delivery of the goods from BPT. The goods were, therefore, auctioned by the BPT in June, 1980. BPT has claimed auction charges of Rs.42, 225. BPT's solicitors have expressed their willingness to settle the dispute on mutually acceptable terms.

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City Civil Suit No. 3596 of 1986

In June, 1978, M/s RP Corporation, Calcutta (RPC), defaulted in taking delivery of the goods from BPT. The goods were, therefore, auctioned by the BPT in June, 1980. BPT has claimed auction charges of Rs.12,964.48. BPT's solicitors, have expressed their willingness to settle the dispute on mutually acceptable terms.

Suit No. 483 of 1985 in the High Court at Bombay

On August 14, 1979, TIL entered into an agreement with M/s Universal Traders whereby we agreed to import any permissible items under OGL basis for actual users only. The title of the consignment of 212 drums of Diethylene Glycol, was at the request of M/s Universal Traders, transferred by the Company in favour of M/s Everest Chemicals and Minerals Pvt. Ltd. Due to the fault of the shippers, 2 containers out of 3 arrived per s.s. 'Nikday Shchukin', whereas the third container for 72 drums arrived by a different steamer s.s. 'Sovtake Profojuzy'. Since M/s Everest Chemicals defaulted in taking delivery of the consignments, the same were auctioned by the BPT in October 1981 and December 1981 respectively. BPT have filed these suits for recovery of the deficit of Rs. 2,06,702.68.

Suit No.1008 of 1986 in the High Court of Bombay

In January, 1978, the Company had imported 26 bundles of Stainless Steel Strips on behalf of M/s Ravi Dyechem. Since the documents presented were not in conformity with the L/C, we rejected the document and accordingly our bankers were notified. The goods were auctioned by the BPT in April, 1983. The present suit has been filed in the High Court at Bombay for recovering the deficit of Rs.3,80,140/- arising out of the sale by auction. BPT has filed a claim of Rs.3,80,140.

9. FOOD AND DRUGS ADULTERATION MATTERS

In the Court of the JMFC, Panvel Police Case No. 267/1999 Kalamboli Police v. E.A. Engineer & Ors.and Pvt. Complaint No.67/2001 Mr. Vilas Dusane, FDA Inspector V/s E.A. Engineer & Ors. TIL had received orders for export of certain pharmaceutical drugs (drugs) to African Countries. As per the terms of the orders, the Drugs were to be supplied on FOB basis, Mumbai Port. As the drugs were required to be sent in containers the drugs were kept in a transit godown on way to shipment on the vessel. In around March 1999, FDA Inspector (the Complainant) along with other officers of the FDA visited the said godown and sealed the said goods. Samples were also drawn from all the drugs. The Complainant filed a FIR with the local police station. By its order dated 6/3/2000, the court order that the stocks of drugs seized by the police be handed over to TIL as they were of standard quality. However the formalities took a long time to be completed and the foreign buyers refused to take delivery of the same. In the mean time, the said drugs started expiring. An application was made for destruction of the expired drugs. The same was allowed and the goods have since been destroyed.

TIL filed Criminal Writ Petition No. 5158/2002 for quashing of criminal complaint No. 267/1999 which was listed on 13.7.2004 when Justice Augiar admitted the matter and granted the interim stay of the criminal complaint till the pending hearing and final disposal of the petition. On 6.9.2004 Justice Khanvilkar stayed the Cr. C. No 267/99 till the disposal of this writ petition.

The private complaint no. 67/01 filed by the FDA Inspector. TIL has filed a Criminal Writ Petition before the Sessions Court, Alibaug, for quashing of the said private complaint. The same is due for hearing .

10. Gulati Enterprises Referred dispute to an arbitrator for a claim of Rs. 3,00,000. The Company has

objected on the appointment of Arbitrators.

11. Donna Elena S. R. L.(DE) has filed a suit before the High Court of Bombay (Suit No. 826 of 2004) for a claim of Rs. 8,08,86,520. Matter was listed for hearing before Justice S. C. Dharmadhikari, High Court, Bombay on 23.3.2004 for making an urgent application for urgent interim and ad-interin reliefs in terms of the Notice of Motion No. 843 of 2004. On 6.5.2004 Justice S. C. Dharmadhikari disposed off the Nom with out granting any ad interim orders to DE. On 6.12.2004 Justice D. K. Deshmukh confirmed the ad interim order passed earlier and disposed off the Notice of Motion. Now the matter is

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pending for filing our written statement but not listed on the same date. The Company has filed the written statement with High Court and served the same on the plaintiff.

12. In the matter of Arbitration before Justice Mr. Kalyamay Ganguly, Sole Arbitrator V/s. TIL. On 16th November, 1995 the claimants, M/s Banik Distributors & M/s Cee Arr Bee Sales filed their statements of claim for recovery of Rs.13,83,532.17 and Rs.17,30,480.00 respectively, from TIL against the non payment of the bills raised for supply of sanitary wares and fittings. TIL claims that it is not liable to pay the said amount, as the Claimants obtained price in excess of the market rate/price of the said goods with the collusion of some of the officers of TIL. On December 1998 TIL filed its counter claim of Rs.43,97,280/-.

The arbitration proceedings are on, TIL’s witnesses’ are being cross examined.

13. Sarathy Engineering Corpn.

TIL was awarded a contract by National Thermal Power Corporation for the construction of 400 kV Transmission Line Towers between Cuddapah and Red Hills, Madras. The Power and Transmission Division procured steel required for the execution of this contract from TISCO. The erection part was sub-contracted to Sarathy Engineering Corpn., a party from Hyderabad, in February, 1984. During the course of construction work, it was realized that Sarathy Engineering Corpn., would not be able to complete the work as per schedule. As a result the uncompleted portion of the sub-contract was passed on to another local party with the concurrence of Sarathy Engineering Corpn. Later Sarathy Engineering Corpn., accused TIL of non-payment and breach of contract and claimed payment of various amounts aggregating to Rs. 60 Lakhs. Sarathy Engineering Corpn. also appointed an Arbitrator to settle this dispute. TIL filed an Arbitration Petition (File No. S-46 Arbitration No. 124 of 1986) in the Bombay High Court seeking stay of arbitration proceedings initiated by Sarathy Engineering Corpn. The Court has granted interim injunction restraining Sarathy Engineering Corpn. from proceeding with arbitration

EDC Limited Criminal appeal EDC Ltd. had filed a Complaint under section 138 of the NI Act against Ulhas Mehta for cheque dishonouring offence. The lower court imposed a penalty of Rs. 15 lakh and ordered simple imprisonment for six (6) months. Mr. Ulhas Mehta has filed an appeal (Criminal Appeal No. 73/2004) before the District Court, Panaji. The case is pending for before the District Court. Civil cases Cases pending before the civil courts Suit No. 224/92 has been filed before the Civil Judge Senior Division, Panaji by Mr. Kanwal Mehra (Kamal Hotel) against EDC Limited challenging the refusal by EDC Limited to grant loan due to defective title to the property offered as security. The suit is for recovery of Rs. 43,165 along with interest. The case is pending before the Civil Judge. Suit No.R.C.S. 92/98/B has been filed before the Civil Judge Senior Division, Ponda by Mr. Babuli V. Naik against EDC Limited. The plaintiff had defaulted in repayment of Term loan. His hotel property was attached under section 29 of the SFC Act for failure of repayment of loan. The plaintiff has challenged the attachment of his property. The case is pending before the Civil Judge. Mr. S. Khandeparkar claiming to be the heir to a property attached and sold by EDC Limited challenged the said attachment and sale by Suit No. Sp. C.S. 35/93/A before the Civil Judge Junior Division, Ponda. The case is pending before the Civil Judge. Suit No. Sp. C.S. 1997/A has been filed before the Civil Judge Junior Division, Panaji by Mr. Angelo Pereira against EDC Limited challenging EDC’s attachment of plaintiff’s vehicle under Section 29 of the SFC Act. The case is pending before the Civil Judge.

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Suit No. Sp. C.S. 224/96/B has been filed before the Civil Judge Junior Division, Panaji by Goa Soda Factory against EDC Limited challenging EDC’s attachment of Soda unit under Section 29 of the SFC Act. The case is pending before the Civil Judge. Suit No. C.M.A No 101/99/B in Sp.C.S. No. 33/99/B has been filed before the Civil Judge Senior Division, Panaji by Swan Enamel Private Limited against EDC Limited challenging the attachment of a unit of Swan Enamel by EDC Limited under section 29 of the SFC Act on the ground that the interest calculated was not accurate. The case is pending before the Civil Judge. Suit No. S.C.S 54/2000/B has been filed before the Civil Judge Senior Division, Panaji by Triveni Constructions against loanee of EDC Limited for recovery of money. EDC Limited has been made a proforma defendant. The case is pending before the Civil Judge. Suit No. CC-11/28 of 2001 has been filed before the City Civil Court, Mumbai by North Kanara GSB Co-operative Bank Limited against the loanee of EDC Limited praying for release of original documents in a dispute regarding second charge between North Kanara GSB Co-operative Bank Limited and State Bank of India. EDC Limited has been made a proforma party in the case. The case is pending before the City Civil Court of Mumbai. Anmol Granites Private Limited had defaulted in respect of repayment of term loan of Rs. 81,00,000. EDC Limited attached a property of Anmol Granites under section 29 of the SFC Act. Suit No. Sp. C.S. 48/01/B was filed before the Civil Judge Senior Division, Panaji by Anmol Granites Private Limited against EDC Limited challenging the action taken by EDC under Section 29 of the SFC Act and filed a counterclaim for Rs. 1,71,00,00. The case is pending before the Civil Judge. Suit No. RCS No. 7/03/D and Suit No. RCS No. 8/03/D have been filed before the Civil Judge, Senior Division, Ponda by Mr. Dilip N. Shirodhkar and Ms. Pramodini Shirodhkar respectively against EDC Limited challenging the action taken by EDC under Section 29 of the SFC Act for recovery of loans. The plaintiff had defaulted in repayment of Rs. 60 Lakhs corporate loan amount. EDC Limited issued a notice of attachment for a factory unit for the default of payment. The Civil Judge granted an injunction to the plaintiffs. The injunction was confirmed in an appeal. EDC Limited has now filed an appeal before the High Court. The case is pending before the Civil Judge. A hotel property was mortgaged to EDC Limited by M/s Penthouse Builders Private Limited. On default of payment, the mortgaged property was attached and sold. Suit No. S.C.S. 25/02/III has been filed before the Civil Judge Junior Division III, Margao by Alita D’Souza against EDC Limited claiming title to the property as co-owner of the property. The case is pending before the Civil Judge. EDC Limited had attached the hotel property of M/s Penthouse Builders Private Limited for default of repayment on a sanctioned loan of Rs. 63.30 Lakhs under section 29 of the SFC Act. Suit No. Sp. C. S. 54/02 has been filed before the 1st Additional Civil Judge Senior Division, Margoa by M/s Penthouse Builders Private Limited against EDC Limited challenging the attachment. The case is pending before the Civil Judge. Suit No. RCS 12/02 has been filed before the Civil Judge Junior Division, Margao by State Bank of India against Goa Packaging Limited for recovery of an amount of Rs. 3.37 crores. EDC Limited has been made a party to the suit for Term Loan lending to Goa Packaging Limited EDC has filed reply stating that the Goa Packaging Limited has been issued with a no-dues certificate as regards EDC Loan. Suit No. Sp. C.S. 36/2002/A has been filed before the Civil Judge Junior Division, Margao by Kayyar Industries against EDC Limited challenging the action taken by EDC Limited under Section 29 of the SFC Act for attachment of property for default in repayment of a loan amount of Rs.17,00,000. The case is pending before the Civil Judge. Suit No. RCS. 73/03/D has been filed before the Civil Judge Junior Division, Mapusa by Ratan Chopdekar against EDC Limited challenging the attachment of land by EDC Limited under Section 29 of the SFC Act for failure of repayment of loan of Rs. 30 Lakhs. The case is pending before the Civil Judge. Mustaq Zaroo claims to have purchased a shop in hotel Diyana financed by EDC Ltd. The hotel was attached by EDC Limited under section 29 of the SFC Act for failure in repayment of loan. Suit No. R.C.S. 221/03 has been filed before the Civil Judge Junior Division, Mapusa by Mustaq Zaroo against EDC Limited challenging the

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action taken by EDC Limited under Section 29 claiming title in the shop. The case is pending before the Civil Judge. EDC Limited issued a notice of attachment against Goa Metal Industry in relation to hypothecated assets of Goa Metal. Central Bank filed an Execution Application No. 24/95 before the Civil Judge Senior Division, Mapusa to claim their charge against those assets. The case is pending before the Civil Judge. Suit No. Sp. C.S. 163/03 has been filed before the Civil Judge Senior Division, Panaji by Information Technologies (I) Limited against EDC Limited challenging the attachment of factory unit by EDC Limited under Section 29 of the SFC Act for default in repayment of loan. The case is pending before the Civil Judge. Suit No. R.C.S. 163/03 has been filed before the Civil Judge Senior Division, Panaji by Burr Brown (India) Limited against EDC Limited challenging the attachment of factory unit by EDC Limited under Section 29 of the SFC Act for default in repayment of loan. The case is pending before the Civil Judge. Suit No. Sp. C.S. 164/03 has been filed before the Civil Judge Junior Division, Panaji by Bella Vista Hotels Private Limited against EDC Limited challenging the attachment of hotel property by EDC Limited under Section 29 of the SFC Act for default in repayment of a loan amount of Rs. 52 Lakhs. The case is pending before the Civil Judge. Suit No. Sp. C.S. 86/04/B has been filed before the Civil Judge Senior Division, Panaji by Western Coir Foam Private Limited against EDC Limited challenging the attachment of factory unit by EDC Limited under Section 29 of the SFC Act. The case is pending before the Civil Judge. EDC Limited financed a hotel project of Shri Akbar Aga (Hotel Diyana). The hotel was attached under section 29 of the SFC Act for failure of repayment of loan. Ivor D’Souza, Third Party has filed a suit No. Sp.C.S. 16/04/A) before the Civil Judge Senior Division, Mapusa claiming to have purchased premises in the hotel. The suit was filed against the loanee and EDC Limited has been made a party. The case is pending before the Civil Judge. Suit No. RCS 126/204/C has been filed before the Civil Judge Senior Division, Panaji by Goa Mineral water and Granites Private Limited against EDC Limited challenging attachment of hotel property by EDC Limited under Section 29 of the SFC Act for default in repayment of three loans aggregating to Rs. 225 Lakhs. The case is pending before the Civil Judge. Suit No. RCS 299/2003/F has been filed before the Civil Judge Junior Division, Margao by M/s Swan Distilleries Private Limited against EDC Limited challenging the attachment of a factory by EDC Limited under Section 29 of the SFC Act for default on a loan amount of Rs. 3.85 Crores. The case is pending before the Civil Judge. EDC Limited had granted a plot to EDC Co-operative Housing Society. EDC Limited called back the said plot later Suit No. Sp. C.S. 69/2004/A was filed before the Civil Judge Senior Division, Panaji by EDC Co-op Housing Society Limited against EDC Limited challenging its action of cancellation of lease granted to the Society. Injunction was granted by the Civil Judge against EDC Limited. EDC Limited filed an appeal against the injunction in High Court. The case is pending before the Civil Judge. EDC Limited financed a hotel project of Shri Akbar Aga (Hotel Diyana). The hotel was attached under section 29 of the SFC Act for failure of repayment of loan. Baptist L. D’Souza, a Third Party filed a suit (Suit No. RCS 47/03) before the Civil Judge Junior Division, Mapusa against EDC Limited claiming to have purchased a premises in the hotel. The suit is filed against the loanee and EDC Limited. The case is pending before the Civil Judge. Suit No. RCS 19/05/A has been filed before the Civil Judge Senior Division “A”, Panaji by Boroplast Limited against EDC Limited challenging the attachment of property by EDC under Section 29 of the SFC Act for default in repayment of sanctioned loan amount of Rs. 234 Lakhs. The prayer for injunction was dismissed by the Civil Judge. Boroplast Limited has thereafter filed an appeal in the District Court. The case is pending before the Civil Judge. EDC Limited had attached mortgaged property of M/s. Ushma Polymers Pvt. Ltd. under section 29 of the SFC Act and had sold the same. Devika Exim Agro Products Private Limited, a company has filed a suit (Suit No.

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RCS 47/05/A) before the Civil Judge Senior Division “A”, Panaji against EDC Limited for annulment of the sale. The case is pending before the Civil Judge. Mr. Prakash T. Naik, an employee of EDC Limited gave a personal guarantee for a loan. On default of the loan amount, EDC Limited attached the monthly VRS remittance of Mr. Prakash T. Naik amounting to Rs. 4,300 approximately. Mr. Prakash Naik filed a suit (Suit No. S.C.S 53/05/A) before the Civil Judge Senior Division “A”, Panaji challenging the attachment. The Civil Judge granted injunction. Thereafter EDC has filed an appeal before the District Court. The case is pending before Civil Court and District Court. Suit No. S.C.59/05/A has been filed before the 2nd Additional Civil Judge Senior Division, Margao by Goa Industrial Packers and others against EDC Limited challenging the attachment of a factory unit by EDC Limited under section 29 of the SFC Act for failure in default in repayment of the sanctioned loan amount of Rs. 14.50 Lakhs. The case is pending before the Civil Court. Suit No. S.C. 59/05/A has been filed before the Civil Judge Senior Division “A”, Panaji by Gravity Adventures Private Limited against EDC Limited challenging the attachment of site being developed for bungee jumping by EDC Limited under section 29 of the SFC Act for default in repayment of a loan amount of Rs. 20 Lakhs . The case is pending before the Civil Judge. Ram Mirchandani has claimed title to certain premises of a hotel project mortgaged to EDC Ltd. by Falcon Retreat Pvt. Ltd., a loanee of EDC Limited. Flacon Resorts Pvt. Ltd. defaulted in respect of its loan amount of Rs. 700 Lakhs. EDC Limited attached the hotel property under section 29 of the SFC Act. Ram Mirchandani has filed a suit (Suit No. SCS 81/05) before the Civil Judge Senior Division, Mapusa challenging the action taken by EDC under Section 29 of the SFC Act. The case is pending before the Civil Judge. Suit No. RCS 92/2005 has been filed before the Civil Judge Junior Division, Vasco by Mahabaleshwar P. Halankar against EDC Limited challenging the attachment of hotel property by EDC under Section 29 of the SFC Act for default in respect of a loan amount of Rs. 19 Lakhs. The case is pending before the Civil Judge. Suit No. SCS 104/05/A has been filed before the Civil Judge Senior Division, Panaji by Ms. Zena Barbara D’Mello against EDC Limited challenging the attachment of a factory unit and mortgaged premises by EDC Limited under Section 29 of the SFC Act for default in respect of a loan amount of Rs. 50 Lakhs. The case is pending before the Civil Judge. Goa Milk Food Products Limited defaulted in repayment of loan amount. EDC Limited attached the factory building of Goa Milk Food Products Limited. During auction, M/s R. K. Engineering Works was the highest bidder and a Sale letter was issued in its favour. The Bidder was thereafter called for negotiations. M/s. R. K. Engineering Works therefore filed a suit (Suit No. SCS 35/06/A) before the Civil Judge Senior Division, Panaji, against EDC Limited claiming that once a bid has been accepted by EDC Limited it cannot accept another higher bid. M/s R. K. Engineer has also claimed damages at the rate of Rs. 14,500 per month till the date of delivery of possession of the property. The case is pending before the Civil Judge. Anderson Marine Private Limited had defaulted in respect of payment of loan amount. EDC Limited attached the property of Anderson Marine Private Limited under Section 29 of the SFC Act. Assistant Commissioner of Customs filed a suit on behalf of Union of India (Suit No. C.S. 18/06) before the Additional District Court, Margao, Fast Track Court - I praying that EDC should not dispose of the property before Anderson Marine Private Limited pays off its customs duty amounting to Rs. 19.68 Lakhs and a future interest of 14.5 %. The case is pending before the Additional District Court, Margao. Cases pending before the Consumer Forum Complaint No. 78/2000 has been filed before the Consumer Forum, Margao by Gefferey D’souza against EDC Limited for right of passage in premises owned by EDC Limited. The case is pending before the Consumer Forum. Cases pending before the High Court of Maharashtra (Goa Bench) Madhukar Nirgudkar V/s. EDC

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EDC had filed a suit for recovery of its dues against guarantors (Special Civil Suit No. 68/1985/B) on April 11, 1985 in which Madhukar Nirgudkar who had, amongst other, given his personal guarantee was named a defendant. The principal borrower had defaulted and action under section. 29 of SFC Act had been initiated against the principal borrower and the guarantee was invoked for recovery of balance dues. The suit was disposed on December 21, 2001 wherein the defendant was ordered to pay EDC Limited jointly and severally a sum of Rs.19,68,433.77 with future interest at 14 ½ % from April 1, 1985 till payment with costs. Madhur Nirgudkar has filed an appeal against the decree (First Appeal No. 161/2002). Mangala Offset v. EDC Limited A writ petition (W. P. No. 201/2004) was filed against EDC Limited challenging the attachment of property i.e. Shop No. G11 and 12, Lina Apartments, Swatantra Path, Vasco-da-Gama, Goa by EDC Limited under section 29 of the SFC Act. This property was returned pursuant to the High Court Order dated October 13, 2004. Dharmendra Chordia v. EDC Limited Dharmendra Chordia was one of the unsuccessful bidders in the matter of sale of assets of M/s. Accurate Pipes Pvt. Ltd. under the Public Money Recovery of Dues Act by District Recovery Officer (North) Goa. Dharmedra Chordia filed a writ petition challenging the auction process in the Revenue Court. S. C. Kuvelkar and others v. EDC Limited Writ Petition No. 141/2005 has been filed by S.C. Kuvelkar and Others against EDC Limited in the High Court of Bombay (Goa bench). EDC Limited had withdrawn certain allowances under the voluntary retirement scheme (VRS) available to its employees including washing allowance, newspaper allowance, telephone facility allowance, paper allowance and entertainment allowance. The Writ Petition was filed for a writ of mandamus to command EDC Limited to forthwith restore the monthly compensation of persons entitled to the VRS to the amount they were drawing prior to the deductions carried out in the month of May, 2004 and refund the amount with interest @ 21% p.a. from the date of deduction till date of refund. The petition also prayed for a mandamus commanding EDC Limited to constitute/appoint an external outside agency for payment of benefits payable to the Petitioners under VRS. Shri Ram C. Mirchandaney & Others v. EDC Limited M/s. Falcon Resorts Private Limited availed loan facility on pari passu basis from EDC Limited and State Bank of India. M/s. Falcon Resorts Private Limited defaulted in repayment and EDC Limited attached the properties under section. 29 of the SFC Act. Petitioners claim to be the owners in possession of some flats and villas under Rent back scheme. Petitioners had filed a suit calling in question the mortgage deed executed by M/s. Falcon Retreat Pvt. Ltd. and the proposed action of EDC Limited. The lower court refused petitioner’s application for temporary injunction and EDC Limited completed its action under section. 29 of the SFC Act. Thereafter Writ Petition No. 124/2006 has been filed by Shri Ram C. Mirchandaney and others against EDC Limited in the High Court of Bombay (Goa bench). Workmen of Anderson Marine Private Limited v. EDC Limited Writ Petition No. 38/2005 has been filed by Workmen of Anderson Marine Private Limited against EDC Limited in the High Court of Bombay (Goa bench). All that property named Borma, situated at Zorinto on a property bearing Survey No. 221/1 forming a distinct and independent property admeasuring 3,627 sq. mts. including rights to the foreshore land reclaimed admeasuring 5149 sq. mts. alongwith plant and machinery, furniture and fixtures were attached under section 29 of the SFC Act by EDC Limited and the same was sold. The workmen have filed the writ petition praying for a writ of mandamus directing EDC to pay dues comprising of unpaid wages, gratuity, retrenchment compensation, unpaid bonus of the workmen of M/s. Anderson Marine Private Limited The petitioners have also prayed for a writ of mandamus directing EDC Limited to give priority to the payment before appropriating the money recovered from the assets or making payment to any other creditor, to deposit the unpaid Provident Fund and Family Pension Contribution of the workers with the Regional Provident Fund Commissioner and to direct the Regional Provident Fund Commissioner to recover the unpaid contribution of Employees Provident Fund and Family Pension fund from EDC. M/s Asiatic Holiday Resorts v. EDC Limited

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Writ Petition No. 199/2006 has been filed by M/s Asiatic Holiday Resorts against EDC Limited and others in the High Court of Bombay (Goa bench) as a borrower company challenging the auction process of EDC Limited under its statutory powers under section. 29 of the SFC Act. The total claim is for Rs. 4,70,00,000.00 M/s Meta Strips Limited v. EDC Limited Company Application No. 533/05 and 635/05 have been filed by M/s Meta Strips Limited against EDC Limited. The company matter is an application under section. 391(6) of the Act seeking to stay the operation of recall notice of EDC Limited dated March 24, 2005 and all proceedings ancillary and incidental to debt restructuring scheme of arrangement and compromised between Equity Shareholders, Preferential shareholders, Secured Term Debt Creditor and Working Capital Debt Creditor. It was further prayed to stay the announcement of any proceeding against the company pending the scheme to be sanctioned by the court. Cases Pending before the Supreme Court of India SLP No. 19909 to 19919/2004, 19983 to 19991/2004,. 16945/2004 and SLP No. 3189/2006 have been filed by Communidade of Morombo Pequeno against EDC Limited challenging the order and judgement of the Hon’ble High Court of Mumbai allowing the Appeals challenging the enhancement of rates by District Court in various References filed by land owners/tenants. Overdues The Corporation has principal overdues of Rs.29.69 crores and interest overdues of Rs.20.65 crores in respect of its borrowing with financial institutions as on 30/09/2006. The Corporation is in the process of settling the loans with the Financial Institutions by way of a settlement package. Litigations against Group Companies TATA PRECISION LIMITED A Revision Petition is pending before the Commissioner of Commercial Tax, Indore, against levy of interest and penalty Rs. 23,492/- by the Commercial Tax Dept. for the financial year 2002-03. TATA CUMMINS LIMITED (“TCL”) 1. TCL applied for sales tax exemption under Bihar Industrial Policy 1995 and subsequent notifications

issued by the Department of Commercial Taxes. The Department denied exemption citing the fact that TCL does not have a registered lease on land as per the conditions laid in the notifications.

TCL challenged the decision of the Department and the High Court of Jharkhand decided the case in favour of TCL. The State of Jharkhand filed an SLP against the decision in the Supreme Court of India.

The Supreme Court vide its order dated March 26, 2004, allowed TCL to adjust the sales tax deposited with the Government against future sales tax liabilities to the extent of Rs.40 crores and directed the State to refund an amount of Rs.14.5 crores to TCL.

The Department has refunded Rs.14.5 crores as per the direction of the Supreme Court and TCL had also adjusted Rs.40 crore as per the interim order.TCL had also adjusted Rs.5.4 crore against surcharge on sales tax which was paid earlier.

The matter was heard by the Supreme Court and judgment was delivered in favour of TCL.

After the decision of the Supreme Court the amount adjusted against surcharge has been considered as

income in the current year.

State has filed a review petition before the Supreme Court against the order which has been dismissed. State has also filed an application for modification of order, which is pending.

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2. TCL had applied for exemption from the operation of EPS (Employee Provident Fund Scheme) 95. The application was rejected by The Ministry of Labour, New Delhi, vide order dated September 19, 2003 based on which a recovery proceeding was initiated. The Company filed a petition before the High Court of Ranchi pleading for stay on the recovery proceedings and also requesting the Court to instruct Regional Provident Fund Commissioner (RPFC) to grant an exemption to TCL.

The High Court issued interim order restraining the Provident Fund Commissioner from recovery or any other coercive action. The RPFC has filed a counter affidavit.

The Company in the meanwhile has deposited Rs.4.01 crores (USD 0.87 M) as per the demand.

3. Mr. C. H. Sai Rao, canteen contractor engaged by Dee Dee Transport, collided with forks of the forklift

while going out of the factory premises. This resulted in death of Mr. C. H. Sai Rao. The widow of the deceased applied for compensation under Workmen Compensation Act, 1923 against TCL and Dee Dee Transport.

The case is pending before the Labour Court, Jamshedpur. Claim pending is Rs.0.35 million.

4. Inspection carried out by Inspector under the Minimum Wages Act, 1948 pointed out certain violations

relating to maintenance of statutory records and registers as well as payment of wages in respect of labourers employed by Group 4 Securitas Guarding Limited. Show cause was raised against Group 4. The explanation submitted by the contractor was not found satisfactory by the inspectors and the same has resulted in institution of case by Labour Superintendent and Inspector under Minimum Wages Act. The case is lodged before the Court of Judicial Magistrate, at Jamshedpur.

TCL’s appeal not to make the company a party to this case since the matter is entirely related to the operations by the Group 4 Securitas Guarding Limited was turned down by the Court.

5. Excise matter No. III(10-G)7/Audit/JSR/2003-04/566 regarding service tax claimed on Technical

Know how of Rs.91 million provided by TCL is pending before the Deputy Commissioner of Central Excise.

CONCORDE MOTORS (INDIA) LIMITED (“CMIL”) 1. An appeal has been filed by TIL and CMIL (appeal no. 1839/2004) before the Karnataka State

Commission against an order of the consumer forum awarding Rs. 6,00,000 against CMIL. 2. Rural Dev Trust has filed a complaint before the consumer forum (complaint number CD/62/2005)

seeking compensation and replacement of defective vehicle. The complainant has claimed an amount of Rs. 10,00,000.

3. Mr.Nagaraj S.B has filed a complaint before the District Consumer Dispute Redressal Forum

(complaint no. 934/2006) for poor pick up, excess oil consumption and tyre and wear tear in relation to an indicab which was purchased. The complainat has claimed an amount of Rs. 3,91,068.

4. V.Gaudan has filed a complaint before the consumer forum at Chennai (complaint no.OP 309 – 2001)

for replacement of worn tyres.The party has asked for a compensation of Rs. 15,000.

5. A legal notice has been sent by Strainers & Valves (P) Limited to CMIL for replacement of worn out rear tyres. The party has demanded a compensation of Rs. 4 Lakhs.

6. A legal notice has been sent by Dr P Sekhar to CMIL for engine oil leak and reimbursement of actual

costs. The party has demanded a compensation of Rs. 20,000.

7. Anthony Raj has filed a complaint before the District Consumer Forum South (Complaint no. OP 510 / 2001for vehicles damaged at CMIL premises. The party has claimed a compensation of Rs. 5 Lakh.

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8. A legal notice has been sent by Mr. R. Loganathan to CMIL for for certain complaint on the vehicle. The party has demanded a compensation of Rs. 4 Lakhs.

9. A legal notice has been sent by Mr. N D Vijaykumar to CMIL for for front and rear glass damage. The

party has demanded the cost of glass replacement and other damages

10. A notice has been sent by Punniyakotti to CMIL for damage to wheel rims. The party has claimed a replacement of the vehicle.

11. A legal notice has been sent by CIFCO alleging charge of Fraudulent use of Fincnace Company's

funds. The notice asks for refund of Rs. 6.5 Lakhs.

12. Maneklal Textile has filed a complaint (Complaint No. CD 473/04) before the ditrict consumer forum of Hyderabad for replacement of defective vehicle. The party has claimed damages of Rs. 6 Lakhs.

13. Mr. Krishna Rao has filed a complaint (Complaint NO.CD/1324/04) before the District Consumer

Forum of Hyderabad for an excise duty refund of Rs. 50,000.

14. HSBC Bank has filed before the Senior Civil Judge, City Civil Court (Suit No. OS 57/05) against CMIL challenging the delivery of the vehicle to a person not financed. HSBC Bank has made a claim of Rs. 3 Lakhs.

15. P.Joshi has filed a complaint (Complaint No. CD/371/2006) before the District Consumer Forum of

Hyderabad for replacement of a car with manufacturing defect. The party has asked for a replacement or payment Rs.6 Lakhs with interest from the date of payment to CMIL. In addition the party has asked for Rs.1 Lakh for mental agony and Rs. 3000 towards cost.

16. Mr. P.V.Reddy has filed a complaint (Complaint No. DF/MSD/161/2000) before the District Consumer

Forum of Mumbai alleging certain defects in the car. The party has claimed damages of Rs. 4.5 Lakh.

17. Abhay Bhatwadekar has filed a complaint (Complaint No. 11/2002) before the State Consumer Forum of Maharashtra alleging certain defects in the car. The party has asked for damages of Rs. 8.8 Lakhs.

18. Jayesh Ajit Shah has filed a complaint (Complaint No. 390/2001) before the State Consumer Forum of

Maharashtra for refund cost of car registration charges & insurance and compensation of Rs.5 Lakhs. The party has claimed damages for an amount of Rs. 13 Lakhs.

19. Ravinder Pal Singh has filed a complaint (Complaint No. 123 CDRF) before the Consumer Dispute

Redressal Forum of Ludhiana for recurring defects in the vehicle. The party has claimed damages of Rs. 1.1 Lakhs.

20. Lft. Col. G.G Goswami has filed a complaint (Complaint No. 1213/2000) against CMIL before the

District Consumer Ofrum of Lucknow for selling of old model vehicles. The party has claimed replacement of vehicle with new model and Rs. 2.5 Lakhs as compensation.

21. M/s Computer Shack Pvt. Ltd. has filed a complaint (Complaint No. C81/SC/01) before the State

Commission of Uttar Pradesh alleging certain defects in the engine. The party has filed for damages of Rs. 7.28 Lakhs.

22. D.K.Agarwal has filed a complaint (Complaint No. 437/2001) before the District Consumer Forum of

Lucknow for replacement of tyres and rims. The party has calimed damages of Rs. 50.000.

23. Mr. V.N.Singh has filed a complaint (Complaint No. 966/2000) before the District Consumer Forum of Lucknow making CMIL a third party defendant in relation to defective car sold by Kailash Motors. The defendant has claimed damages of Rs. 1.75 Lakhs.

24. Mr. R. S. Rawat has filed a complaint (Complaint No. 814/2001) before the District Consumer Forum

of Lucknow for replacement of engine and payment of compensation amounting to Rs. 2.06 Lakhs.

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25. Zafar Kidwai has filed a civil suit (Suit No. 388/2002) before the city civil court of Lucknow claiming certain defects in the car.

26. Varun Mahendru has filed a complaint (Complaint No. 869/2001) before the District Consumer Forum

of New Delhi alleging certain problems in the vehicle. The party has claimed damages of an amount of Rs. 3.5 Lakhs.

27. Narbir Singh & Co. has filed a complaint (Complaint No. OC/271/01) before the District Consumer

Forum of New Delhi for certain manufacturing defects in the vehicle. The party has claimed damages of Rs. 4.5 Lakhs.

28. Vishal Tents and Decorators have filed a complaint (Complaint No. 1979/2000) before the District

Consumer Fourm of New Delhi alleging various manufacturing defects in the vehicle. The party has claimed damages of Rs. 3 Lakhs.

29. Mr. Subodh Kher has filed a complaint (C-134/2000 ) before the State Commission of New Delhi

claiming certain manufacturing defects in the vehicle.The party has claimed damges for Rs. 6 Lakhs.

30. Mr. Rohit Saran has filed a complaint (Complaint No. 1098/2000) before the District Consumer Forum of New Delhi claiming certain manufacturing defects in the vehicle. The party has claimed Rs. 1.76 Lakhs as damages.

31. Mr. Subhash Ahuja has filed a complaint (Complaint No. C-307/2000) before the State Commission of

New Delhi alleging certain manufacturing documents. The party has claimed damages of Rs. 24 Lakhs.

32. Pradeep Kr Agarwal has filed a complaint (Complaint No. 3241/2000) before the District Consumer Forum of New Delhi alleging certain manufacturing defects. The party has claimed damges of Rs.4.65 Lakhs.

33. Green Vegitable Traders have filed a complaint (Complaint No. OC/1890/99) before the District

Consumer Forum of New Delhi for repeated problems in the vehicle. The party has claimed damages of Rs. 4 Lakhs.

34. Arun Yadav has filed a complaint (Complaint No.2001) before the consumer Dispute Redressal Forum

of Gurgaon for certain manufacturing defects in the vehicle. The party has claimed damges of Rs. 4 Lakhs.

35. Deioneer Specialities has filed a complaint (Complaint No. OC/614/01) before the District Consumer

Forum of New Delhi alleging various complaints relating to a vehicle.The party has claimed damages of Rs. 3.4 Lakhs.

36. Hindusthan Packers have filed a complaint (Complaint No. 1617/2001)before the District Consumer

Fourm of New Delhi alleging various defects in the vehicle. The party has claimed damages of Rs. 4 Lakhs.

37. Mr. Anil Kumar has filed a complaint (Complaint No. 655/01) before the District Consumer Forum of

New Delhi alleging certain manufacturing defects in the chassis. The party has claimed damages of Rs. 1.5 Lakhs.

38. Harbans Singh has filed a complaint (Complaint No. 1252/2001) before the District Consumer Forum

of New Delhi alleginf manufacturing defects in the fuel pump of a vehicle. The party has claimed damages of Rs. 40,000.

39. Brgd. Satish Kapoor has filed a complaint (Complaint No. 165/2002) before the District Consumer

Forum of New Delhi alleging certain manufacturing defects in the vehicle. The party has claimed damages of Rs. 3.50 Lakhs.

40. Chakrash Jain has filed a complaint (Complaint No. OC/1200/01) before the District Consumer Forum

of New Delhi alleging various manufacturing defects in the vehicle. The party has claimed damages of Rs. 3.70 Lakhs.

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41. Neeraj Dixit has filed a complaint (Complaint No. 118/01) before the District State Commission of

New Delhi. The party has claimed an amount of Rs. 8.88 Lakhs.

42. Sunil Bhasin has filed a complaint (Complaint No. 357/2001) before the State Commission of New Delhi alleging various manufacturing defects. The party has claimed damages of Rs. 8.85 Lakhs.

43. Ms Sangeeta Chopra has filed a complaint (Complaint No. 1465/2001) before the Consumer Redressal

Forum of New Delhi alleging fragile windshield. The party has claimed damages of Rs. 65,000.

44. Flaguni Travel has filed a complaint (Complaint No. OC/140/01) before the Consumer Dispute Rderessal Forum of New Delhi alleging excess registration charges. The party has claimed damages of Rs. 19,045 along with interest.

45. Naresh Chander Bansal filed a complaint (Complaint No. 528/2000) before the Consumer Dispute

Redressal Forum of Mazafarnagar claiming that an Euro 1 car was sold as Euro 2. The party has claimed damages of Rs. 12 Lakhs.

46. Window Passions has filed a complaint (Complaint No. 873/2000) before the Consumer Dispute

Redressal Forum alleging repeated complaint son the vehicle. The party has claimed damages of Rs. 4.93 Lakhs.

47. Sunil Mehra has filed a complaint (Complaint No. 67/2001) before the State Commission of New Delhi

claiming that a different coloured car was delivered to him. The party has claimed damages of Rs. 5.8 Lakhs.

48. R. K Prasher has filed a complaint (Complaint No. 2294/99) before the Consumer Dispute Redressal

Forum of New Delhi alleging that excess amount was charged for registration. The party has claimed damages of Rs. 7,500.

49. Mr. Rakesh Sadh has filed a complaint (Complaint No. C254/99) before the State Commission of New

Delhi claiming that a 1998 model of Safari car was sold as a 1999 model. The party has claimed damages of Rs. 14 Lakhs.

50. Mr. R. S. Bakshi has filed a complaint (Complaint No. 3646/00) before the Consumer Dispute

Redressal forum of New Dlhi claiming that the booking amount had not been refunded. The party has asked for damages of Rs. 2.5 Lakhs.

51. Balwant Singh has filed a complaint (Complaint No. 47/02) before the Consumer Dispute Redressal

Forum of New Delhi alleging non delivery of car. The party has claimed damages of Rs. 2 Lakhs.

52. R. C. Grover has filed a complaint (Complaint No. OC/251/2003) before the District Consumer Dispute Redressal Forum of New Delhi alleging manufacturing defects and low mileage. The party has asked for damages of Rs. 5 Lakhs.

53. Easy Finance has filed a civil suit (Suit No. 317/2001) before the Tis Hazari Court of New Delhi

alleging that non payment of sales commission due to him by CMIL. The party has claimed damages of Rs. 3.8 Lakhs.

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TATA PRECISION INDUSTRIES (INDIA) LIMITED (“TPID”) Overdue of interest TPID could not pay the interest on 6% Secured Redeemable Non-convertible Debentures issued to its group company Sheba Properties Limited. MATERIAL DEVELOPMENT There have been no material development in our Company since last balance sheet date.

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GOVERNMENT APPROVALS

In view of the approvals listed below, we can undertake this Issue and our current business activities and no further material approvals are required from any Government authority or the RBI to continue such activities. We have received the following Government approvals that are material to our business: General PAN Number – AABCA6564F Taxpayer’s Identification Number (“TIN”) 30400401016 under the Goa Sales Tax Act, 1964 Factory Approvals (A). Sheet Metal Divisions Hondal, Sattari Approvals relating to manufacture Letter for approval of plans No. I/2(ACG-492)/83-FBI/523 dated April 13, 1983 Factory license number GOA/335 issued by the Chief Inspector of Factories and Boilers, Goa dated September 24, 1997 and renewed for the year 2006. Approvals relating to taxation Central Excise Registration Certificate dated 21.01.2003 issued by the Office of the Deputy Commissioner of Central Excise, Panaji, Goa under Rule 9 of the Central Excise Rules, 2002; the factory was allotted the Excise Registration number – AABCA6564FXM003. Service tax registration (Registration No. GOA/ST/GTA/9/04-05) dated January 11, 2004 issued by the Superintendent of Central Excise (Service Tax), Goa. Recognition of Provident Fund (no. Asst. 601/45/83-84/CIT(II)) dated January 27, 1984 issued by Income Tax Officer for Commissioner of Income Tax, Karnataka under Rule 3(1) of Part A of IVth Schedule to the Income Tax Act, 1961 Approvals relating to labour Certificate carrying Registration Number CL/R - 196 under Contract Labour (Regulation and Abolition) Act, 1970, issued on May 12, 2006 permitting contact labour to be employed in various tasks. Environmental Consents Renewal for consent to operate (No. 5/344 /93 – PCB/ 15 -84) under the Water (Prevention and Control of Pollution) Act, 1974, dated August 3, 2005 issued by the Member Secretary of the Goa State Pollution Control Board valid upto July 31, 2007 (B). Bus Body Division, Bhuimpal, Sattari Approvals relating to manufacture Letter for approval of plans No. VI/FAC-2(AGCL/1076)/1989-IFB/2178 dated June 19, 1989 Letter from the Department of Industrial Developments (Registration No. 1745(87) DLR) dated December 23, 1987 for the manufacture of automobile ancillaries. Factory license number GOA/489 issued by the Chief Inspector of Factories and Boilers, Goa dated October 25, 1996 and renewed for the year 2006.

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Approvals relating to taxation Central Excise Registration Certificate dated 04.06.2003 issued by the Office of the Deputy Commissioner of Central Excise, Panaji, Goa under Rule 9 of the Central Excise Rules, 2002; the factory was allotted the Excise Registration number – AABCA6564FXM002. Service tax registration (Registration No. GOA/ST/GTA/8/04-05 and GOA/ST/CER/137/04-05) dated October 10, 2004 issued by the Superintendent of Central Excise (Service Tax), Goa. Approvals relating to labour Certificate carrying Registration Number CL/CL/R - 252 under Contract Labour (Regulation and Abolition) Act, 1970, issued on May 3, 2006 permitting contact labour to be employed in various tasks Certification ISO 9001 :2001 certification bearing Certificate registration no. 04100 2004 7029 - IND awarded by TUV CERT Certification Body for design, manufacture and sale of bus coaches which is valid until April 1, 2007 Environmental Consents Renewal for consent to operate (No. 5/175 /90 – PCB/ 3271) under the Water (Prevention and Control of Pollution) Act, 1974, dated January 10, 2006 issued by the Member Secretary of the Goa State Pollution Control Board valid upto July 31, 2007 Authorisation number 10/194 / 05-PCB/3229 issued under Rule 5 of the Hazardous Wastes (Management and Handling) Rules 1989 and Amendment Rules, 2003 issued on February 11, 2005 with regard to the disposal of ETP Sludge and sludge from bath containing residues. The authorization is valid for two years from the date of issue. (C).Bhuimpal Pressing Unit, Bhuimpal, Sattari Approvals relating to manufacture Letter for approval of plans No. VI/FAC-2(AGCL/2154)/1997-IFB/2615 dated October 9, 1997 Acknowledgement from the Secretariat of Industrial Assistance (No. 2161 / SIA / IMO / 97) dated July 22, 1997 for receipt of memorandum for the manufacture of pressed sheet metal components for motor vehicles and of manufacture assemblies and sub-assemblies there-from. Factory license number GOA/715 issued by the Chief Inspector of Factories and Boilers, Goa dated November 7, 1997 and renewed for the year 2006. Approvals relating to taxation Central Excise Registration Certificate dated 21.01.2003 issued by the Office of the Deputy Commissioner of Central Excise, Panaji, Goa under Rule 9 of the Central Excise Rules, 2002; the factory was allotted the Excise Registration number – AABCA6564FXM001. Service tax registration (Registration No. GOA/ST/GTA/10/04-05) dated January 13, 2005 issued by the Superintendent of Central Excise (Service Tax), Goa. Approvals relating to labour Certificate carrying Registration Number CL/R - 410 under Contract Labour (Regulation and Abolition) Act, 1970, issued on May 4, 2006 permitting contact labour to be employed in various tasks Certification

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Certificate of ISO/TS 16949: 2002 awarded by TUV Management Service GmbH for manufacturing and supply of sheet metal components and assemblies to the automotive industry with centralized management, marketing production planning, manufacturing process design, quality assurance, materials, tool room, training and maintenance at the Company which is valid from November 15, 2005 until November 14, 2008. Environmental Consents Renewal for consent to operate (No. 5/1193 /98 – PCB/ 3089) under the Water (Prevention and Control of Pollution) Act, 1974, dated December 12, 2005 issued by the Member Secretary of the Goa State Pollution Control Board valid upto December 31, 2007. D Jejuri Unit,Pune Approvals relating to manufacture Factory license issued by the Chief Inspector of Factories and Boilers, Maharashtra and renewed for the year 2006. Acknowledgement from the Secretariat of Industrial Assistance (No. 681 / SIA / IMO / 98) dated April 3, 1998 for receipt of memorandum for the manufacture of pressed sheet metal components for motor vehicles and of manufacture assemblies and sub-assemblies therefrom Approvals relating to taxation Central Excise Registration Certificate dated April 24, 2002 issued by the Superintendent of Central Excise, Maharashtra under Rule 9 of the Central Excise Rules, 2002; the factory was allotted the Excise Registration number – AABC6564F-XM-004. Service tax registration (GTA/PIII/007/STC) dated January 4, 2005 issued by the Superintendent of Central Excise (Service Tax), Maharashtra. Environmental Consents Consent to establish/operate (No. ROP/1193 /98 – PCB/ 3089) under section 25/26 of the Water (Prevention and Control of Pollution) Act, 1974 and Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, dated April 4, 2005 issued by the Sub Regional officer of the Maharashtra State Pollution Control Board valid upto September 30, 2007

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STATUTORY AND OTHER INFORMATION Authority for the Issue Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on July 26, 2006 it has been decided to make the rights offer to the Equity Shareholders of the Company with a right to renounce. We have obtained the approvals for the Issue from State Bank of India from whom we require approvals under Working Capital Consortium Agreement dated December 18, 2003. Prohibition by SEBI Neither the Company, nor its Directors or the Promoter Group Companies, or companies with which the Company’s Directors are associated with as directors or promoters, have been prohibited from accessing or operating in the capital markets under any order or direction passed by SEBI. Further, none of the directors or person(s) in control of the Promoters (as applicable) have been prohibited from accessing the capital market under any order or direction passed by SEBI. Further the Promoter, their relatives (as per Act), the Company and group companies are not detained as willful defaulters by RBI / Government authorities. Eligibility for the Issue The Company is an existing company registered under the Indian Companies Act, 1956 whose Equity Shares are listed on the Bombay Stock Exchange Limited. It is eligible to offer this Issue in terms of Clause 2.4.1(iv) of the SEBI DIP Guidelines. Disclaimer Clause AS REQUIRED, A COPY OF THIS DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (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 RESPOSIBILITY 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, DSP MERRILL LYNCH LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN THIS DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES 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 DSP MERRILL LYNCH LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED [●] WHICH READS AS FOLLOWS: 1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO

LITIGATION LIKE COMMERCIAL DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO 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

COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS

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MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY;

WE CONFIRM THAT: 1. THE DRAFT LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH

THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; 2. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID 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;

3. 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 INVESTMENT IN THE PROPOSED ISSUE;

4. BESIDES US, ALL THE INTERMEDIARIES NAMED IN THE DRAFT LETTER OF OFFER

ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION IS VALID. THE FILING OF THIS DRAFT DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE 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 DRAFT LETTER OF OFFER. Caution The Company and the Lead Manager accepts no responsibility for statements made otherwise than in this Draft Draft Letter of Offer or in any advertisement or other material issued by the Company or by any other persons at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his own risk. The Lead Manager and the Company 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 Draft Letter of Offer with SEBI. 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 there under. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Panaji, India only. This Draft Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations there under. The distribution of the Draft Letter of Offer and the Issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons in whose possession this Draft Letter of Offer may come are required to inform themselves about and observe such restrictions. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Panaji, India only. 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 this Draft Letter of Offer has been filed with SEBI for observations. Accordingly, the Equity Shares represented thereby 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 the legal requirements applicable in such jurisdiction. 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 the Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date.

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The Draft Letter of Offer has been filed with SEBI, SEBI Bhavan, Plot No. C4 / AG Block, Bandra Kurla Complex Bandta (E) Mumbai 400 051, 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 Act. Designated Stock Exchange The Designated Stock Exchange for the purpose of the Issue will be the BSE. Disclaimer Clause of the BSE [●] Impersonation

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection (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” Filing This Draft Draft Letter of Offer was filed with SEBI, SEBI Bhavan, Plot No. C4 / AG Block, Bandra Kurla Complex Bandta (E) Mumbai 400 051 The Draft Letter of Offer has been filed with the Designated Stock Exchange as per the requirements of the law. All the legal requirements applicable till the date of filing the Draft Letter of Offer with the Stock Exchanges have been complied with. Dematerialised Dealing The Company has agreements dated January 1, 2003 and January 29, 2003 with CDSL and NSDL respectively and its Equity Shares bear the ISIN No. INE451C01013. Listing The existing Equity Shares are listed on the Bombay Stock Exchange Limited. The Company has made application to the Bombay Stock exchange for permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of this Draft Letter of Offer. The Company has received in-principle approvals from BSE by letters dated [•]. The Company will apply to the BSE for listing of the 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 any of the Stock Exchanges mentioned above, within 42 days from the Issue Closing Date, the Company shall forthwith repay, without interest, all monies received from applicants in pursuance of this Draft Draft Letter of Offer. If such money is not paid within 8 days after the Company becomes liable to repay it, then the Company and every Director of the Company 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 Companies Act, 1956. Consents Consents in writing of the Auditors, Lead Manager, Legal Advisor, Registrar to the Issue and Banker to the Issue to act in their respective capacities have been obtained and filed with SEBI, along with a copy of the Draft Draft Letter of Offer and such consents have not been withdrawn up to the time of delivery of this Draft Draft Letter of Offer for registration with the stock exchange. The Auditors of the Company have given their written consent for the inclusion of their Report in the form and content as appearing in this Draft Draft Letter of Offer and such consents and reports have not been withdrawn up to the time of delivery of this Draft Draft Letter of Offer for registration for registration with the stock exchange.

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To the best of the Company’s knowledge there are no other consents required for making this Issue. However, should the need arise, necessary consents shall be obtained by the Company. Expert Opinion, if any The Company has not obtained any expert opinion in relation to this issue. Fees Payable to the Lead Manager to the Issue The fee payable to the Lead Manager to the Issue is set out in the Memorandum of Understanding entered into by the Company with DSPML, copies of which are available for inspection at the Registered Office of the Company. Fees Payable to the Registrars to the Issue The fee payable to the Registrars to the Issue is as set out in the relevant documents, copies of which are kept open for inspection at the Registered Office of the Company. Underwriting commission, brokerage and selling commission No underwriting commission, brokerage and selling commission will be paid for this Issue. Other Expenses of the Issue The other expenses of the Issue payable by the Company including, printing and distribution expenses, publicity, listing fees, stamp duty and other expenses are estimated at Rs. [•] Lakhs (around [•]% of the total Issue size) and will be met out of the proceeds of the Issue. The following table provides a break up of estimated issue expenses:

Particulars

In Rs. Lakhs

Advertisement Budget* [●] Legal Advisor’s fee* [●] Postage, Printing and Stationery* [●] Others & Contingencies* [●] Total* [●]

* Will be filled in the Letter of Offer Previous Issues by the Company The Company has not undertaken any previous public or rights issue during the last five years. Promise versus Performance We made a public offer of 11,50,000 equity shares of Rs. 10 each in 1982 to finance part of the finance for setting up the project at Honda Taluka Sattari. We met with the objects of the issue. There were no projections made in this offer. We made a rights issue in 1988 of 14,10,000 new equity shares of Rs. 10 each at a premium of Rs. 15 to the existing shareholders of the company to finance a part of the capital expenditure and the working capital requirements of the proposed Bus Body project as also to meet the additional financial requirements of operations. The Company met with the objects of the issue. We made a rights issue of 17% Secured Redeemanle Partly Convertible Debentures of Rs. 100 each for cash at par to part finance of expansion of its pressings capacity. Projection was made that the project was to be

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completed by October 1992. The Company met with the objects of the issue. The Company completed the project by October 1992. For Promise versus performance the last issue of our promoters please refer to the section titled “Promoters” on page 65 of this Draft Letter of Offer. Date of listing on the Stock Exchange The Equity Shares of our Company were listed on August 3, 1982 on the BSE. Issues for consideration other than cash The Company has not issued Equity Shares for consideration other than cash or out of revaluation reserves. Outstanding Debentures or Bonds and Preference Shares The Company has no outstanding debentures or bonds and preference shares. Option to Subscribe Other than the present Issue, the Company has not given any person any option to subscribe to the Equity Shares of the Company. Changes in Auditors during the last three years There has been no change in the Auditors during the last three years. Capitalisation of Reserves or Profits The Company has not capitalized any of its reserves or profits for the last five years other than those mentioned in the section “Capital Structure” on page 14 of the Draft Letter of Offer. Revaluation of Fixed Assets There has been no revaluation of the Company’s fixed assets for the last five years. Minimum Subscription If the Company does not receive the minimum subscription of 90% of the issue amount, the Company shall forthwith refund the entire subscription amount received within 42 days from the date of the Issue. If there is a delay beyond eight days after the date from which the Company becomes liable to pay the amount, the Company shall pay interest for the delayed period as prescribed under Section 73 of the Companies Act. Investor Grievances and Redressal System The Company has adequate arrangements for redressal of Investor complaints. Well-arranged correspondence system developed for letters of routine nature. The share transfer and dematerialization for the Company is being handled by our registrar and share transfer agent (TSR Darashaw Ltd.) Letters are filed category wise after having attended to. Redressal norm for response time for all correspondence including shareholders complaints is 15 days. For details of Shareholder / Investor Grievance committee, please refer to the section titled “Management” on page 55 of this Draft Letter of Offer. Status of Complaints (a) No. of shareholders complaints as of October 31, 2006: Nil (b) Total number of complaints received during last financial year (2005-2006): 244 (c) Total number of complaints received during current financial year (2006-2007): 100

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(d) Status of the complaints: Out of the 100 complaints received our Company in fiscal 2007, we have resolved 100 complaints.

(e) Time normally taken by it for disposal of various types of Investor grievances: –15 days Investor Grievances arising out of this Issue The investor grievances arising out of the Issue will be handled by Mr. Ananth Prabhu, Compliance Officer and Company Secretary, and Intime Spectrum Registry who are the Registrars to the Issue. The Registrars will have a separate team of personnel handling only our post-Issue correspondence. The agreement between us and the Registrars will provide for retention of records with the Registrars for a period of at least one year from the last date of dispatch of Letter of Allotment/ share certificate / warrant/ refund order to enable the Registrars to redress grievances of Investors. All grievances relating to the Issue may be addressed to the Registrars 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 details 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. 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 / Company Secretary in case of any pre-Issue/ post -Issue related problems such as non-receipt of letters of allotment/share certificates/demat credit/refund orders etc. His address is as follows: Mr. Ananth Prabhu Automobile Corporation of Goa Limited Honda, Sattari, Goa – 403530 Tel: (91 832) 2370227/244 Fax: (91 832) 2370262 Email: rightsissue@acglgoa.com

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TERMS AND PROCEDURE OF THE ISSUE The Equity Shares, now being issued, are subject to the terms and conditions contained in this Draft Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of the Company, the provisions of the Act, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and/or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate and rules as may be applicable and introduced from time to time. Authority for the Issue This Issue is being made pursuant to the resolution passed by the Board of Directors of the Company under Section 81(1) of Act at its meeting held on July 26, 2006. Basis for the Issue The 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 in respect of the shares held in the electronic form and on the Register of Members of the Company in respect of shares held in the physical form at the close of business hours on the Record Date, i.e., [●] fixed in consultation with BSE. Principal Terms and Conditions of the Issue Face value Each Equity Share shall have the face value of Re. 10/-. Issue Price Each Equity Share is being offered at a price of Rs. [●] (including a premium of Rs. [●]). Terms of payment On application, Rs [●], which constitutes the full amount of the Issue Price of Rs [●] shall be payable (“Application Money”). Rights Entitlement Ratio As your name appears as beneficial owner in respect of Equity Shares held in electronic form or appear in the register of members as an Equity Shareholder of the Company as on [●] i.e. the Record Date, you are entitled to the number of Equity Shares set out in Part A of the enclosed CAF. The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company in the ratio of [●] Equity Share for every [●] Equity Shares held as on the Record Date. Rights entitlement on shares held in the pool account of the clearing members on the Record Date shall be considered, and such claimants are requested to – 1. Approach the concerned depository through the clearing member of the Stock Exchange with requisite

details; and 2. Depository in turn should furnish details of the transaction to the Registrar. Only upon receipt of the aforesaid details, rights entitlement of the claimants shall be determined. Fractional entitlements For Equity Shares being offered on rights basis under this Rights issue, if the shareholding of any of the Equity Shareholders is less than [●] or is not in the multiples of [●], the fractional entitlement of such holders shall be

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ignored. Shareholders whose fractional entitlements are being ignored would be given preferential allotment of ONE additional share each if they apply for additional shares. Those Equity shareholders having holding less than [●] Equity shares and therefore entitled to zero Equity Shares under the Right Issue shall be despatched a CAF with zero entitlement. Such equity shareholders are entitled to apply for additional Equity Shares. However, they cannot renunciate the same to third parties. CAF with zero entitlement will be non-negotiable /non-renunciable. 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-tenants with benefits of survivorship subject to provisions contained in the Articles of Association of the Company. Minimum Subscription If the Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), the company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. The issue will become undersubscribed after considering the number of shares applied as per entitlement plus additional shares. The undersubscribed portion shall be applied for only after the close of the Issue. If any person presently in control of the Company desires to subscribe to such undersubscribed portion and if disclosure is made pursuant to the Takeover Code, such allotment of the undersubscribed portion will be governed by the provisions of the Takeover Code. Allotment to Promoters of any unsubscribed portion, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement. For further details please refer to “Basis of Allotment” on page 175 of this Draft Letter of Offer. Ranking of the Equity Shares The Equity Shares shall be subject to the memorandum and articles of association of the Company. The Equity Shares allotted in this Issue shall rank pari passu with the existing Equity Shares of the Company in all respects including dividend. For more details see “Main Provisions of the Articles of Association” on page 183 of this Draft Letter of Offer. 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 applicant’s bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars will be printed on the refund orders/refund warrants which can then be deposited only in the account specified. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Notices All notices to the Equity Shareholder(s) required to be given by the Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper in Goa with wide circulation and/or, will be sent by ordinary post/ to the registered holders of the Equity Share from time to time. 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 on a poll either in person or by proxy;

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• Right to receive offers for rights shares and be allotted bonus shares, if announced; • Right to receive surplus on liquidation; • Right of free transferability of shares; and • Such other rights, as may be available to a shareholder of a listed public company under the Companies

Act and our Memorandum and Articles of Association. For a detailed description of the main provisions of our Articles of Association dealing with voting rights, dividend, forfeiture and lien, transfer and transmission and/or consolidation/splitting, see section titled “Main Provisions of Articles of Association of the Company” on page 183 of this Draft Letter of Offer. Market lot The Equity Shares of the Company are tradable only in dematerialized form. The market lot for Equity Shares in dematerialised mode is one. In case of holding in physical form, the Company would issue to the allottees one certificate for the Equity Shares allotted to one folio ("Consolidated Certificate"). In respect of the Consolidated Certificate, the Company will, upon receipt of a request from the Equity Shareholder, split such Consolidated Certificate into smaller denomination within one month’s time from the request of the Equity Shareholder. No fee would be charged by the Company for splitting the Consolidated Certificate. Nomination facility In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) 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 Equity Shares. A Person, being a nominee, becoming entitled to the 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 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 Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the registered office of the Company or such other person at such addresses as may be notified by the Company. The applicant can make the nomination by filling in the relevant portion of the CAF. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registered the nomination with the Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant would prevail. If the applicant requires to change the nomination, they are requested to inform their respective DP. Offer to Non-Resident Equity Shareholders/Applicants As per regulation 6 of notification No. FEMA 20/200-RB dated May 3, 2000, the RBI has given general permission to Indian companies to issue rights shares to non-resident shareholders including additional shares. Applications received from NRIs and non-residents for allotment of Equity Shares shall be inter alia, subject to the conditions imposed from time to time by the RBI under the Foreign Exchange Management Act, 1999 (FEMA) in the matter of refund of application moneys, allotment of Equity Shares, issue of letter of allotment / notification No. FEMA 20/200-RB dated May 3, 2000. The Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the allotment of Equity Shares, payment of dividend etc. to the non-resident shareholders. The rights shares purchased by non-residents shall be subject to the same conditions including restrictions in regard to the repatriability as are applicable to the original shares against which rights shares are issued.

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By virtue of 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, OCBs shall not be eligible to subscribe to the Equity Shares. 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. Thus, OCBs desiring to participate in this Issue must obtain prior approval from the RBI. On providing such approval to the Company at its registered office, the OCB shall receive the Draft Letter of Offer and the CAF. The Letter of Offer and CAF shall only be dispatched to non-resident Equity Shareholders with registered address in India. The Letter of Offer and CAF should not be forwarded to or transmitted in or into the United States of America or the territories or possessions thereof at any time or to, or for the account or benefit of, “U.S. Persons” (as defined in Regulation S of the United States Securities Act, 1933, as amended), except in a transaction exempt from the registration requirements of the Securities Act. Procedure for Application The CAF would be printed in blue ink for all shareholders, with a additional separate advise for Non-resident shareholders. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrars to the Issue, Intime Spectrum Registry, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. Non-resident shareholders can obtain a copy of the CAF from the Registrars to the Issue, Intime Spectrum Registry, by furnishing the registered folio number, DP ID number, Client ID number and their full name and address. Equity Shares offered to you either in full or in part in favour of any other person or persons. Such renouncees can only be Indian Nationals/Limited Companies incorporated under and governed by the Act, statutory corporations/institutions, trusts (unless registered under the Indian Trust Act), minors (through their legal guardians), societies (unless registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorised under its constitution/bye laws to hold equity shares in a company and cannot be a partnership firm, more than three persons including joint-holders, HUF, foreign nationals (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Draft Letter of Offer could be illegal or require compliance with securities laws Acceptance of the Issue You may accept the Issue and apply for the Equity Shares offered, either in full or in part by filling Part A of the enclosed CAF and submit the same along with the Application Money payable to the Bankers to the Issue or any of the branches as mentioned on the reverse of the CAF 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 thereof in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the cheque drawn on a local bank at Mumbai/demand draft payable at Mumbai of amount net of bank and postal charges, 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. Option available to the Equity Shareholders The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is entitled to. If the Equity Shareholder applies for an investment in Equity Shares, then he can: � Apply for his entitlement in part; � Apply for his entitlement in part and renounce the other part; � Apply for his entitlement in full; � Apply for his entitlement in full and apply for additional Equity Shares.

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Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional Equity Shares. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favor of any other person(s). If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional shares in Part A of the CAF. Applications for additional Equity Shares shall be considered and allotment shall be in the manner prescribed under the section entitled ‘Basis of Allotment’ on page 175 of this Draft Letter of Offer. The renouncees applying for all the Equity Shares renounced in their favor may also apply for additional Equity Shares. In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened for the purpose. Where the number of additional 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 Equity Shares offered to you either in full or in part in favour of any other person or persons subject to the approval of the Board. Such renouncees can only be Indian Nationals (including minor through their natural/legal guardian)/limited companies incorporated under and governed by the Act, statutory corporations/institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorised under its constitution/bye laws to hold equity shares in a company and cannot be a partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Draft Letter of Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not approved by the Board. Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s)/renouncee(s) obtaining the approval of the FIPB and/ or necessary permission of the RBI under the Foreign Exchange Management Act, 1999 (FEMA) and other applicable laws and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approval are liable to be rejected. 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 of the Company who do not wish to subscribe to the Equity Shares being offered but wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). Your attention is drawn to the fact that the Company shall not allot and/or register any Equity Shares in favor of: � More than three persons including joint holders � Partnership firm(s) or their nominee(s) � Minors � Hindu Undivided Family � Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any

other applicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company)

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The right of renunciation is subject to the express condition that the Board/ Committee of Directors shall be entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof. 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 the Company of the person(s) applying for Equity Shares in Part C to receive allotment of such Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the application invalid. Renouncee(s) will also have no further right to renounce any shares in favour of any other person. Procedure for renunciation To renounce the whole offer 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 favor renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part of the CAF. To renounce in part/or renounce the whole to more than one person(s) If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of split forms 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 split forms. On receipt of the required number of split forms 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 Equity Shares, does not agree with the specimen registered with the Company, the application is liable to be rejected. Renouncee(s) The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with the application money. Change and/ or introduction of additional holders If you wish to apply for 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. Please note that: � Part A of the CAF must not be used by any person(s) other than those in whose favour this Issue has

been made. If used, this will render the application invalid. � Request by the applicant for the Split Application Form should reach the Company on or before [●]. � Only the person to whom this Draft Letter of Offer has been addressed to and not the renouncee(s) shall

be entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again.

� Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

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How to Apply Resident Equity Shareholders Applications should be made on the enclosed CAF provided by the Company. The enclosed CAF should be completed in all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Lead Manager or by the Registrar to the Issue or by the Company at any offices except in the case of postal applications as per instructions given elsewhere in the Draft Letter of Offer. The CAF consists of four parts: Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares Part B: Form for renunciation Part C: Form for application for renouncees Part D: Form for request for split application forms Non-resident Equity Shareholders Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund of application moneys, allotment of Equity Shares, issue of letters of allotment/ certificates/ payment of dividends etc. Letter of offer and CAF shall be dispatched to non-resident Equity Shareholders in India only The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:

Option Option Available Action Required

A. Accept whole or part of your entitlement without renouncing the balance.

Fill in and sign Part A (All joint holders must sign)

B. Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

C. Accept only a part of your entitlement of the Equity Shares offered to you (without renouncing the balance)

Fill and sign Pat A of the CAFs

D. Renounce your entitlement in full to one person (Joint renouncees not exceeding three are considered as one renouncee).

Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign)

E. 1. Accept a part of your entitlement and renounce the balance to one or more renouncee(s) OR 2. Renounce your entitlement to all the Equity Shares offered to you to more than one renouncee

Fill in and sign Part D (all joint holders must sign) requesting for Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below. (i) For the Equity Shares you wish to accept, if any, fill in and sign Part A of one split CAF (only for option 1).

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Option Option Available Action Required

(ii) For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand over the split CAFs to the renouncees. (iii) Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

F. 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 renouncees must fill in and sign Part C.

Applications for Equity Share should be made only on the CAF, which are provided by the Company. The CAF should be completed in all respects as explained under the head “INSTRUCTIONS” indicated on the reverse of the CAF before submission to the Banker to the Issue at its collecting branches mentioned on the reverse of the CAF on or before the closure of the subscription list. Non Resident Shareholders/Renouncee should forward their applications to Banker to the Issue as mentioned in the CAF for Non-Resident Equity Share-holders. No part of the CAF should be detached under any circumstances. Applicants must provide information in the CAF as to their savings / current / NRE / NRO / FCNR bank account and the name of the bank with whom such account is held to enable the Registrar to print the said details in the refund orders after the name of the payees. For applicants residing at places other than designated Bank Collecting branches. Applicants residing at places other than the cities where the Bank collection centres have been opened should send their completed CAF by registered post/speed post to the Registrars to the Issue, [•], alongwith bank drafts payable at Mumbai in favour of “[•]” crossed “A/c Payee only” so that the same are received on or before closure of the Issue (i.e. [●]). The Company will not be liable for any postal delays and applications received through mail after the closure of the Issue, are liable to be rejected and returned to the applicants. Applications by mail should not be sent in any other manner except as mentioned below. All application forms duly completed together with cash/ cheque/demand draft for the application money must be submitted before the close of the subscription list to the Bankers to the Issue named herein or to any of its branches mentioned on the reverse of the CAF. The CAF alongwith application money must not be sent to the Company or the Lead Manager to the Issue or the Registrars to the Issue except as mentioned above. The applicants are requested to strictly adhere to these instructions. Failure to do so could result in the application being liable to be rejected with the Company, the Lead Manager and the Registrars not having any liabilities to such applicants. Availability of duplicate CAF In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant 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 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. Thus in case the orginal and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored. 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 an Account Payee Cheque drawn on a local bank at Mumbai/ Demand Draft payable at Mumbai which should be drawn in favor of "[•]" in case of resident shareholders and non-resident shareholders applying on nonrepatriable basis and in favour of "[•]" in case of non-resident shareholders applying on repatriable basis and marked “A/c Payee Only” and send the same by registered post directly to the Registrar to the Issue so as to reach them on or before the closure of

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the Issue. The envelope should be superscribed "[•]" in case of resident shareholders and non-resident shareholders applying on nonrepatriable basis and in favour of "[•]" in case of non-resident shareholders applying on repatriable basis. The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company, 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 [•]. � Name and address of the Equity Shareholder including joint holders � Registered Folio Number/ DP ID No. and Client ID No. � Number of shares held as on Record Date � Certificate numbers and distinctive numbers, if held in physical form. � Number of Rights Equity Shares entitled � Number of Rights Equity Shares applied for � Number of additional Equity Shares applied for, if any � Total number of Equity Shares applied for � Total amount paid on application at the rate of Rs. [●] (application amount only) per Equity Share � Particulars of cheque/draft � Savings/Current Account Number and name and address of the bank where the Equity Shareholder will

be depositing the refund order � PAN/GIR number, Income Tax Circle/Ward/District, photocopy of the PAN card/ PAN

communication / Form 60 / Form 61 declaration where the application is for Equity Shares of a total value of Rs.50,000 or more for the applicant and for each applicant in case of joint names

� Signature of Equity Shareholders to appear in the same sequence and order as they appear in the

records of the Company Payments in such cases, should be through a cheque/ demand draft payable at Mumbai be drawn in favor of " [●]" in case of resident shareholders and non-resident shareholders applying on nonrepatriable basis and in favour of "[●]" in case of non-resident shareholders applying on repatriable basis and marked “A/c Payee Only”. 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 applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications. The Company shall refund such application amount to the applicant without any interest thereon. Last date of Application The last date for submission of the duly filled in CAF is [●]. The Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 60 (sixty) days from the Issue Opening Date. 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 offer contained in this Draft Letter of Offer shall be deemed to have been declined

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and the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the section entitled ”Basis of Allotment”. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM. Mode of payment for Resident Equity Shareholders/ Applicants � All cheques / drafts accompanying the CAF should be drawn in favour of " [●]" and marked ‘A/c

Payee only’ � Applicants residing at places other than places where the bank collection centres have been opened by

the Company for collecting applications, are requested to send their applications together with Demand Draft of amount net of bank and postal charges, for the full application amount favouring " [●]" and marked ‘A/c Payee only’ 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. The Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Mode of payment for Non-Resident Equity Shareholders/ Applicants As regards the application by non-resident equity shareholders, the following further conditions shall apply: Payment by non-residents must be made by demand draft / cheque payable at Mumbai or funds remitted from abroad in any of the following ways: Application with repatriation benefits Payment by NRIs/ FIIs/ foreign investors must be made by demand draft/cheque payable at Mumbai or funds remitted from abroad in any of the following ways: � By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad

(submitted along with Foreign Inward Remittance Certificate); or � By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in

Mumbai; or � 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.

• All cheques/drafts submitted by non-residents applying on repatriable basis should be drawn in favour of "[•]" payable at Mumbai and crossed ‘A/c Payee only’ for the amount payable.

A separate cheque or bank draft must accompany each application form. Applicants may note that where payment is made by drafts purchased from NRE/FCNR 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 account should be enclosed with the CAF. In the absence of the above the application shall be considered incomplete and is liable to be rejected. In the case of NR who remit their application money from funds held in FCNR/NRE Accounts, refunds and other disbursements, if any shall be credited to such account details of which should be furnished in the appropriate columns in the CAF. In the case of NRIs who remit their application money through Indian Rupee Drafts from abroad, refunds and other disbursements, if any will be made in US Dollars at the rate of exchange prevailing at such time subject to the permission of RBI. The Company will not be liable for any loss on account of exchange rate fluctuation for converting the Rupee amount into US Dollars or for collection charges charged by the applicant’s Bankers. Application without repatriation benefits

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As far as non-residents holding shares on non-repatriation basis is 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 Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the allotment of Equity Shares will be on non-repatriation basis. All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in favour of [●]’ payable at Mumbai and must be crossed ‘A/c Payee only’ for the amount payable. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF. If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. In the absence of the above, the application shall be considered incomplete and is liable to be rejected. New demat account shall be opened for holders who have had a change in status from resident Indian to NRI. Note: � In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the

investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961.

� In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the

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 CAF 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.

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 with immediate effect. Hence, payment through Stockinvest would not be accepted in this Issue Basis of Allotment Subject to the provisions contained in this Draft Letter of Offer, the Articles of Association of the Company and the approval of the Designated Stock Exchange, the Board will proceed to allot the 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 applied for Equity Shares renounced in their favour, in full or in part.

(b) If the shareholding of any of the Equity Shareholders is less than [●] or is not in multiples of [●], then

the fractional entitlement of such holders for Equity Shares shall be ignored. Equity Shareholders whose fractional entitlements are being ignored would be given preferential allotment of ONE additional Equity Share each if they apply for additional shares. (For further details please see the section “Terms of the Issue – Fractional Entitlements” on page 165 of this Draft Letter of Offer)

(c) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as

part of the Issue and have also applied for additional Equity Shares. The allotment of such additional

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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) above. The allotment of such 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.

(d) Allotment to the renouncees who having applied for the Equity Shares renounced in their favour have

also applied for additional Equity Shares, provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The allotment of such additional Equity Shares will be made on a proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation with the Designated Stock Exchange, as a part of the Issue and not as a preferential allotment.

(e) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is

surplus available after making full allotment under (a), (b), (c) and (d) above. After taking into account allotment to be made under (a) and (b) above, if there is any unsubscribed portion, the same shall be deemed to be ‘unsubscribed’ for the purpose of regulation 3(1)(b) of the Takeover Code which would be available for allocation under (c), (d) and (e) above. Underwriting The present Issue is not underwritten. Allotment / Refund The Company will issue and dispatch letters of allotment/ share certificates/ demat credit and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of six weeks from the Issue Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73 of the Act. In case of those shareholders who have opted to receive their Right Entitlement Shares in dematerialised form by using electronic credit under the depository system, an advice regarding the credit of the Equity Shares shall be given separately. In case the Company issues letters 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 Companies Law Board under Section 113 of the Act or other applicable provisions, if any. Allottees are requested to preserve such letters of allotment, which would be exchanged later for the share certificates. For more information, please refer to the section entitled ‘Letters of Allotment / Share Certificates / Demat Credit’ on page [●] of this Draft Letter of Offer. Letters of allotment/ share certificates/ demat credit/ refund orders above the value of Rs. [●] will be dispatched by registered post/ speed post to the sole/ first applicant’s registered address. However, refund orders for value not exceeding Rs. [●] shall be sent to the applicants by way of certificate of posting. Such cheques or pay orders will be payable at par at all the centres where the applications were originally accepted and will be marked ‘A/c payee’ and would be drawn in the name of the sole/ first applicant. Adequate funds would be made available to the Registrar to the Issue for the dispatch of such letters of allotment/ share certificates/ demat credit and refund orders. The Company shall ensure at par facility is provided for encashment of refund orders/ pay orders at the places where applications are accepted. As regards allotment/ refund to non-residents, the following further conditions shall apply: In case of non-residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ or payment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of non-residents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any other disbursement, shall be credited to such accounts (details of which should be

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furnished in the CAF) and will be made net of bank charges/ commission in US Dollars, at the rate of exchange prevailing at such time. The Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount into US Dollars. The share certificate(s) will be sent by registered post at the Indian address of the non-resident applicant. Payment of Refund Mode of making refund The payment of refund, if any, would be done through various modes in the following order of preference: 1. ECS – Payment of refund would be done through ECS for applicants having an account at any of the

following fifteen centres: Ahmedabad, Bangalore, Bhubaneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthapuram. 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 payment of refunds is mandatory for applicants having a bank account at any of the abovementioned fifteen centres, except where the applicant, being eligible, opts to receive refund through NEFT, direct credit or RTGS.

2. NEFT (National Electronic Fund Transfer) – Payment of refund shall be undertaken through NEFT

wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available 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 applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the applicants through this method.

3. Direct Credit – Applicants having bank accounts with the Refund Banker(s), in this case being, [•]

shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company.

4. RTGS – Applicants having a bank account at any of the abovementioned fifteen centres and whose

refund amount exceeds Rs. 1 million, have the option to receive refund through RTGS. Such eligible applicants who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the Bid-cum-application Form. In the event the same is not provided, refund shall be made through ECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company. Charges, if any, levied by the applicant’s bank receiving the credit would be borne by the applicant.

5. For all other applicants, including those who have not updated their bank particulars with the MICR

code, the refund orders will be despatched under certificate of posting for value up to Rs. 1,500 and through Speed Post/ Registered Post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn on the [●] and payable at par.

Letters of Allotment / Share Certificates / Demat Credit Letter(s) of allotment/ share certificates/ demat credit or letters of regret will be dispatched to the registered address of the first named applicant or respective beneficiary accounts will be credited within 6 (six) weeks, from the date of closure of the subscription list. In case the Company issues letters of allotment, the relative share certificates will be dispatched within three months from the date of allotment. Allottees are requested to preserve such letters of allotment (if any) to be exchanged later for share certificates. Export of letters of allotment (if any)/ share certificates/ demat credit to non-resident allottees will be subject to the approval of RBI. Option to receive Equity Shares in Dematerialized Form Applicants to the Equity Shares of the Company issued through this Issue shall be allotted the securities in dematerialised (electronic) form at the option of the applicant. The Company signed agreements dated January

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2, 2003 and January 29, 2003 with CDSL and NSDL, which enables the Investors to hold and trade in securities in a dematerialised form, instead of holding the securities in the form of physical certificates. In this Issue, the allottees who have opted for Equity Shares in dematerialised form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain space for indicating number of shares applied for in demat and physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and/or dematerialized form should be made. If such applications are made, the application for physical securities will be treated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares. The Equity Shares of the Company will be listed on the BSE and NSE. Procedure for availing the facility for allotment of Equity Shares in this Issue 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 exhibited in the records of the Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with the Company). In case of Investors having various folios in the Company 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 of the Company 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 Equity Shares pursuant to this Issue 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 Equity Shares arising out of this Issue may be made in dematerialized form even if the original Equity Shares of the Company 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 the records of the Company.

Responsibility for correctness of information (including applicant’s age and other details) filled in the CAF vis-à-vis such information with the applicant’s depository participant, would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be the same as registered with the applicant’s depository participant. If incomplete / incorrect beneficiary account details are given in the CAF the applicant will get Equity Shares in physical form. The Equity Shares pursuant to this Issue allotted to investors opting for 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 him the confirmation of the credit of such Equity Shares to the applicant’s depository account. Renouncees will also have to provide the necessary details about their beneficiary account for allotment of securities in this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected. Utilisation of Proceeds Subscription received against this Issue will be kept in a separate bank account(s) and the Company would not have access to such funds unless it has received minimum subscription of 90%, of the Issue and the necessary approvals of the Designated Stock Exchange, to use the amount of subscription. General instructions for applicants

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(a) Please read the instructions printed on the enclosed CAF carefully. (b) Application should be made on the printed CAF, provided by the Company except as mentioned under

the head Application on Plain Paper 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 this Draft 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 applicants, details of occupation, address, father’s / husband’s name must be filled in block letters.

(c) The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting

Bank or to the Registrar to the Issue and not to the Company or Lead Manager to the Issue. Applicants residing at places other than cities where the branches of the Bankers to the Issue have been authorised by the Company for collecting applications, will have to make payment by Demand Draft payable at Mumbai of amount net of bank and postal charges, and send their application forms 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.

(d) PAN/ GIR Number: Applications for a total value of Rs. 50,000 or more, i.e. where the total number of

securities applied for multiplied by the Issue price, is Rs. 50,000 or more the applicant or in the case of application in joint names, each of the applicants, should mention his/ her PAN number allotted under the Income-Tax Act, 1961 and also submit a photocopy of the PAN card(s) or a communication from the Income Tax authority indicating allotment of PAN (“PAN Communication”) along with the application for the purpose of verification of the number. Applicants who do not have PAN are required to provide a declaration in Form 60 / Form 61 prescribed under the I.T.Act along with the application. Application Forms without this photocopy/ PAN Communication/ declaration will be considered incomplete and are liable to be rejected.

(e) Bank Account Details: It is mandatory for applicants to provide information as to their savings/current

account number and the name of the Company 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.

(f) Payment by cash: The payment against the application should not be effected in cash if the amount to

be paid is Rs. [●]or more. 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. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.

(g) Signatures should be either in English or Hindi or in any other language specified in the Eight 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 the Company or depositories.

(h) 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 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 the Company, 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.

(i) 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 Company. Further, in case of joint applicants who are renouncees, the number of applicants should not exceed three. 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.

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(j) Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for

allotment of 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 Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a Non-Resident 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.

(k) All communication in connection with application for the 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. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the in house, Investor Service Department, [●], Maharashtra 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.

(l) Split forms cannot be re-split. (m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be

entitled to obtain split forms. (n) Applicants must write their CAF number at the back of the cheque / demand draft. (o) Only one mode of payment per application should be used. The payment must be either in cash or 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.

(p) 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 cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against application in cash please refer point (f) above)

(q) 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.

Grounds For Technical Rejections Applicants 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 for; � Bank account details (for refund) are not given; � Age of first applicant not given; � PAN photocopy/ PAN Communication/ Form 60 / Form 61 declaration not given if Application is for

Rs. 50,000 or more; � In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant

documents are not submitted; � If the signature of the existing shareholder does not match with the one given on the Application Form

and for renouncees if the signature does not match with the records available with their depositories; � If the Applicant desires to have shares in electronic form, but the Application Form does not have the

Applicant’s depository account details;

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� Application Forms are not submitted by the Applicants within the time prescribed as per the

Application Form and the Draft Letter of Offer; � Applications not duly signed by the sole/joint Applicants; � Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to

invest in the Issue; � Applications accompanied by Stockinvest; � In case no corresponding record is available with the Depositories that matches three parameters,

namely, names of the Applicants (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s identity;

� Applications by US persons; � Applications by ineligible Non-residents (including on account of restriction or prohibition under

applicable local laws) and where last available address in India has not been provided. Disposal of application and application money No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to the Issue / Registrar to the Issue 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 Equity Shares allotted, will be refunded to the applicant within six weeks from the close of the Issue in accordance with section 73 of the Act. For further instruction, please read the Composite Application Form (CAF) carefully. Utilisation of Issue Proceeds The Board of Directors declares that: (i) The funds received against this Issue will be transferred to a separate bank account other than the bank

account referred to sub-section (3) of Section 73 of the Act. (ii) Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in

the balance sheet of the Company indicating the purpose for which such moneys has been utilised. (iii) Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate

separate head in the balance sheet of the Company indicating the form in which such unutilised moneys have been invested.

The funds received against this Issue will be kept in a separate bank account and the Company will not have any access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that the minimum subscription of 90% of the Issue has been received by the Company. Undertakings by the Company 1. The complaints received in respect of the Issue shall be attended to by the Company expeditiously and

satisfactorily.

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2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock Exchanges where the securities are to be listed will be taken within seven working days of finalization of basis of allotment.

3. The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post shall

be made available to the Registrar to the Issue. 4. The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within

the specified time. 5. No further issue of securities affecting equity capital of the Company shall be made till the securities

issued/offered through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc.

6. The Company accepts full responsibility for the accuracy of information given in this Draft Letter of

Offer and confirms that to 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.

7. 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.

Important � Please read this Draft Letter of Offer carefully before taking any action. The instructions contained in

the accompanying Composite Application Form (CAF) are an integral part of the conditions of this Draft Letter of Offer 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 Split

Application Forms 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 superscribed ‘[●]’ on the envelope) to the Registrar to the Issue at the following address:

Intime Spectrum Registry Limited C-13, Pannalal Silk Mills Compound LBS Marg, Bhandup (W), Mumbai – 400 078 Tel: 022 - 25963838 Fax: 022- 25946969 Email: isrl@intimespectrum.com Website: www.intimespectrum.com Contact Person: Mr. Vishwas Attavar

� It is to be specifically noted that this Issue of Equity Shares is subject to the section entitled ‘Risk

Factors’ beginning on page vii of this Draft Letter of Offer.

The Issue will not be kept open for more than 30 days unless extended, in which case it will be kept open for a maximum of 60 days.

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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF THE COMPANY

Share Capital and Variation of Rights Allotment of Shares Articles 7, 8 and 9 of the AoA provides that subject to and in accordance with Section 81 of the Act and the Articles, the shares of the company shall be under the control of the Directors who may issue, allot or otherwise dispose off the same or any of them on such terms and conditions and at such times and either at a premium or at par or (subject to the provisions of Section 79 of the Act) at a discount as the Board may deem fit and with the sanction of the Company in General Meeting to give to any person or persons the option or right to call for any shares either at premium or at par during such time and for such consideration as the Directors think fit, and may issue and allot shares in the capital of the company on payment in full or part of any property sold and transferred or for any services rendered to the company in the conduct of its business and any shares which may so be allotted may be issued as fully paid up shares and if so issued, shall be deemed to be fully paid shares. Provided that option or right to call of shares shall not be given to any person or persons without the sanction of the company in the General Meeting. Article 15 of the AoA provides that except as allowed by section 77 of the Act no part of the funds of the Company shall be employed in the purchase of or lent on the security of the shares of the Company. Underwriting and Brokerage Article 22 of the AoA provides that the Company may subject to the provisions of Section 76 and other

applicable provisions (if any) of the Act at any time pay a commission to any person in consideration of his subscribing or agreeing to subscribe, for any shares or debentures of the Company.

Article 23 of the AoA provides that the Company may on the issue of shares or debentures pay such

brokerage as may be reasonable and lawful. Call on shares Article 24 of the AoA provides that the board of directors, from time to time, by means resolution passed at meetings of the Board but subject to certain conditions provided in the AoA, make such calls as they think fit, upon the members in respect of moneys unpaid on shares held by them respectively and not by the conditions of allotment thereof made payable at fixed times, and each member shall pay the amount of every call so made on him to the Company, or where payable to a person other than Company, to the person and at the time or times appointed by the Directors. A call may be made payable by instalments. Article 25 of the AoA provides that where any calls for the share capital are made on shares, such calls shall be made on uniform basis on all shares falling under the same class. When call deemed to be made A call shall be deemed to have been made at the time when the resolution of the board authorizing the call was passed and may be required to be paid by installments. When interest on call or installment payable Article 30 of the AoA provides that if a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due, shall pay interest (at an amount not exceeding 18%) thereon from the day appointed for payment thereof to the time of actual payment at such rate, if any, as the Board may determine and the Board may also waive payment of any such interest wholly or in part. Payment of calls in advance Article 28 of the AoA provides that the Board may receive from any member willing to advance the same, all or any part of the moneys uncalled and unpaid upon any shares held by him. Upon all or any of the moneys so advanced, the Board may (until the same would, but for such advance, become presently payable) pay interest at

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such rate, if any, not exceeding 9%. Provided that money paid in advance of calls shall not confer a right to participate in profits or dividend. The Directors may at any time repay the amount so advanced. Lien First lien Article 42 of the AoA provides that the Company shall have a first and paramount lien on every share (not being a fully-paid share), for all moneys called or payable at a fixed time in respect of such shares. Additionally, 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. The Directors may at any time declare any shares to be wholly or in part exempt from the provisions of this Article. Sale of shares on which company has lien Article 43 of the AoA provides that the company may sell in such manner as the board thinks fit, any shares on which the company has a lien Proceeds of sale Article 44 of the AoA provides that net proceeds of any such sale after payment of the costs of such sale shall be applied in or towards the satisfaction of debts, liabilities or engagements of such member and residue (if any) paid to such member or the person (if any) entitled by transmission to the shares so sold. Different classes of shares Article 75 of the AoA provides that if at any time the share capital is divided into different classes of

shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the provisions of Sections 106 and 107 of the Act, and whether or not the company is being wound up, be varied with the consent by way of a special resolution passed at a separate meeting of the holders of the shares of that class.

Variation of rights Article 67 of the AoA provides that rights conferred upon the holders of the shares of any class issued

with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

Holding of shares upon trust Article 14 of the AoA provides that except as required by law, no person shall be recognized by the company as

holding any share upon any trust, and the company shall not be bound by, or be compelled in any way to recognize (even when having notice) any equitable, contingent, future or partial interest in any share, or any interest in any fractional part of a share, or (except only as by these Articles or by law otherwise provided) any other rights in respect of share except an absolute right to the entirety thereof in the registered holder.

Transfer of Shares Declining registration Article 54 of the AoA provides that the Board may, subject to the provisions of the Act and the applicable

clauses of the Listing Agreement of the Stock Exchanges on which the Company’s shares maybe listed, decline to register the transfer of shares (whether fully-paid or not) to any person (whether a member or not). 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 transferor notice of the refusal to register such transfer.

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Refusal to recognize instrument of transfer Article 52of the AoA provides that the Board may decline to recognize any instrument of transfer unless

the instrument of transfer is duly stamped and completed and is accompanied by the certificate of the shares to which it relates, and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer.

Suspension of registration Transmission of Shares Recognition of title to shares Article 56 provides that on the death of a member, the survivor/s where the member was a joint holder,

and his legal representatives where he was a sole holder, shall be the only persons recognized by the company as having any title to his interest in the shares.

Notice for registration Article 57 provides that if the person who becomes entitled to the a share in consequence of the death or

insolvency of a member, shall elect 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.

Refusal to Registration Article 58 of the AoA provides that subject to the provisions of the Act and the Articles, the Director

shall have the same rights to refuse to register a person entitled by transmission to any shares or his nominee as if he where the transferee named in the ordinary transfer presented for registration.

Forfeiture of shares Notice for payment of call Article 34, provides that if any member fails to pay the whole or any part of any call or instalment or any money due in respect of any shares either by way of principal or interest on or before the day appointed for the payment of the same, the Directors may, at any time thereafter during such time as the call or instalment or any part thereof or moneys remain unpaid or a judgement or decree in respect thereof remains unsatisfied in whole or in part, serve a notice on such member or on the person (if any) entitled to the share by transmission requiring him to pay such call or installment or such part thereof or other moneys as remain unpaid together with any interests that may have accrued and all expenses (legal or otherwise) that may have been incurred by the Company by reason of such non-payment. Article 35 provides the requirements for such notice. As per it such notice shall name a day (not being less than fourteen days from the date of the notice) and place or places on and at which the money is to be paid and shall also state that in the event of non-payment of such money at or before the time and place appointed, the shares in respect of which the same is owing, will be liable to be forfeited. Resolution of forfeiture If the requirements of a notice for the payment of a call are not be complied with Article 36 of the AoA provides that the shares, may at any time before payment of all calls or installment interest and expenses due in respect thereof, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared and bonus in respect of forfeited shares and not actually paid before the forfeiture. Transfer of forfeited share Article 38 provides that any share that has been forfeited for the non-payment of calls shall be deemed to be the property of the Company and may be sold, re-allotted or otherwise disposed of either to the original holder thereof, or to any other person, upon such terms and in such manner as the Directors shall think fit.

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Non-payment of any sum Article 40 provides that any member whose shares have been forfeited shall notwithstanding the forfeiture, be liable to pay and shall forthwith pay to the Company all calls, instalments, interest expenses and other moneys owing upon or in respect of such shares at the time of the forfeiture together with interest thereon Conversion of shares into stock Transfer of stocks Article 64 of the AoA provides that the holders of stock may transfer the same or any part thereof in the same manner as, and subject to the same regulations under which the shares from which the stock arose might before the conversion have been transferred, or as near thereto as circumstances admit; provided that the Board may, from time to time, fix the minimum amount of stock transferable, so however that such minimum shall not exceed the nominal amount of the shares from which the stock arose. Alteration of Capital Increase of share capital Article 62 and 63 of the AoA provides that the Company may, from time to time, by resolution passed in the General Meeting increase the share capital by such sum and with such terms and conditions as may be specified in the resolution. (a) Article 66 of the AoA provides that the company may by ordinary resolution consolidate and divide all

or any of its share capital into shares of larger amount than its existing shares; sub-divide its existing shares or any of them into shares of smaller amount than is fixed by the memorandum, subject, nevertheless, to the provisions of clause (d) of Section (1) of Section 94 of the Act; cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person.

(b) Article 65 of the AoA states that the company may, by special resolution, reduce in any manner and

with, and subject to, any incident authorized and consent required, by law its share capital. Issue of Debentures, etc. Article 79 of the AoA provides that any debentures, debenture-stock or other securities may be issued at a

discount, premium or otherwise and may be issued on condition that they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares, attending (but not voting) at the General Meeting, appointment of Directors or otherwise. Debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the company in the General Meeting.

General Meetings Power of Board Article 89 of the AoA states that the Board may, whenever it thinks fit, call an extraordinary general

meeting. If at any time there are not within India directors capable of acting who are sufficient in number to form a quorum, any director or any two members of the company may call an extraordinary general meeting, in the same manner as nearly as possible, as that in which such a meeting may be called by the Board.

Proceedings at General Meetings Quorum necessary for business Article 99 of the AoA provides that no business shall be transacted at any general meeting unless a

quorum of members is present at the time when the meeting proceeds to business and that five members present in person, shall be a quorum.

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Chairman Article 102 provides that the Chairman, if any, of the Board shall preside as chairman at every general

meeting of the company. If there is no such Chairman, or if he is not present within fifteen minutes after the time appointed for holding the meeting, or is unwilling to act as chairman of the meeting, the directors present shall elect one of their number to be chairman of the meeting. It provides further that if no director is willing to act as chairman or if no director is present within fifteen minutes after the time appointed for holding the meeting, the members present shall choose one of their number to be chairman of the meeting.

Power to adjourn meeting Article 104 of the AoA states that the Chairman may, with the consent of any meeting at which a quorum

is present, and shall, if so directed by the meeting, adjourn the meeting from time to time and from place to place. It is further provided that no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

Poll Article 108 of the AoA provides that any business other than that upon which a poll has been demanded

may be proceeded with, pending the taking of the poll. Votes of Members Right to vote Objection as to qualification of voter Qualification of payment of calls- Article 123 provides that subject to the provisions of the Act no Member shall be entitled to be present or to vote at any General Meeting either personally or by proxy or attorney or as a proxy or attorney for any other member or be reckoned in a quorum whilst any call or other sum shall be overdue and payable to the Company in respect of any of the Shares of such Members for more than one month Time for objection- Section 132 provides that no objection shall be made to the validity of any vote except at the meeting or poll at which such vote shall be tendered, and every vote, whether given personally or by proxy, not disallowed at such meeting or poll, shall be deemed valid for all purposes of such meeting or poll whatsoever. Instrument appointing proxy (a) Article 125 of the AoA states that the instrument appointing a proxy and the power of attorney or other

authority, if any under which it is signed or a notrially certified copy of that power or authority, shall be deposited at the registered office of the company not less than 48 hours before the time for holding meeting at which the person named in the instrument proposes to vote and in default of the instrument of proxy shall not be treated as valid.

(b) Article provides that a vote given in accordance with the terms of an instrument of proxy shall be

valid, notwithstanding the previous death or insanity of the principal or the revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the shares in respect of which the proxy is given, provided that no intimation in writing of such death, insanity, revocation or transfer shall have been received by the company at its office before the commencement of the meeting or adjourned meeting at which the proxy is used.

Board of Directors Number of Directors Article 142 of the AoA provides that until it is otherwise determined by the Company in General Meeting and subject to the provisions of Section 253 of the Act, the number of Directors shall not be less than three and not more than twelve.

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Other payments to directors Article 157 of the AoA provides that subject to the provisions of Sections 198, 309, 310, 311 and 314 of the Act, if any Director, being willing shall be called upon to perform extra services (which expression shall include work done by a Director as a member of any Committee formed by the Directors or to make special exertions on going or residing out of his usual place of residence or otherwise) for any of the purposes of the Company, the Company shall remunerate the Directors so doing either by a fixed sum or otherwise as may be determined by the Directors, and such remuneration may be, either in addition to or in substitution for his share in the remuneration above provided. Article 158 provides that the Board of Directors may, subject to the limitations provided by the Act allow and pay to any Director who attends a meeting at places other than his usual place of residence for the purpose of attending a meeting such sum as the Board may consider fair compensation for traveling, hotel and other incidental expenses properly incurred by him, in addition to his fee for attending such meeting as above specified. Qualification shares Article 155 of the AoA provides that Directors of the Company shall not be required to hold qualification shares. Official seal for use abroad Article 184 of the AoA provides inter alia that the Company shall be at liberty to have an official Seal in accordance with section 50 of the Act. Foreign Registers Article 237 provides that the Company may keep a Foreign Register of Members in accordance with Sections 157 and 158 of the Act and that Subject to the provisions of Sections 157 and 158 the Directors may from time to time make such provisions as they may think fit in respect of the keeping of such branch Registers of Members and/or Debenture holders. Negotiable instruments Article 178(14) provides that the Board of Directors shall exercise the power to determine from time to time who shall be entitled to sign on the Company’s behalf bills, notes, receipts, acceptances, endorsements, cheques dividend warrants, releases, contracts and documents and to give the necessary authority for such purpose, through resolutions passed at Meetings of the Board. Additional/Alternate Directors Article 153 of the AoA provides that Subject to the provisions of the Articles and Sections 260, 261 and 284(6) and other applicable provisions of the Act, the Directors shall have powers at any time and from time to time to appoint a person as an Additional Director. The Additional Directors shall retire from office at the next following Annual General Meeting, but shall be eligible for re – election. Article 152 of the AoA provides that The Board of Directors may appoint an Alternate Director to act for a Director- the Original Director- at his suggestion or otherwise, during his absence for a period of not less than 3 months from the state in which meetings of the Board are ordinarily held. An Alternate Director appointed under this Article shall not hold office as such for a period longer than permissible to the original director in whose place he has been appointed and shall vacate office if and when the original director returns to the State in which meetings of the Board are ordinarily held. If the term of the office of the original Director is determined before he so returns to the State aforesaid any provision for the automatic re – appointment of retiring Directors in default of another appointment shall apply to the original, and not to the Alternate Director.

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Proceedings of Board Voting at a Board meeting Article 140 provides that questions arising at any meeting of the Board shall be decided by a majority of votes, and in case of an equality of votes, the Chairman of the meeting (whether the Chairman or Vice Chairman appointed by virtue of these Articles or the Director presiding at such meetings) shall have a second or casting vote. Continuing directors Article 159 of the AoA provides that Continuing Directors may act notwithstanding any vacancy in their body, but if and as long as their number is reduced below the quorum fixed by these Articles for a meeting of the Board of Directors, the Continuing Directors may act for the purpose of increasing the number of Directors to that fixed for the quorum or for summoning a general meeting of the Company, but for no other purpose. Election of Chairman Article 138 of the AoA provides that the Directors may elect a Chairman of their meetings, and determine the period for which he is to hold office. The Directors may also appoint a Vice-Chairman of the Board of Directors to preside at meetings of the Directors at which the Chairman shall not be present. As per Article 139, when both the Chairman and the Vice Chairman are absent, the Directors may elect one amongst themselves present to preside over the meeting. Committees of Directors Article 142 of the AoA provides that the Board of Directors may, subject to the provisions of Section 292 and other applicable provisions of the Act, appoint a Committee of the Board, and delegate any of the Powers and may, from time to time revoke and discharge any such Committees of the Board either wholly or in a part. All acts done by any such Committees in conformity with such regulations, and in fulfillment of the purposes of their appointment but not otherwise shall have the like force and effect as if done by the Board. Procedure of Committees’ Meetings Article 143 of the AoA provides that the meetings and proceedings of Committees consisting of two or more members shall be governed by the same provisions contained in the Articles for regulating the meetings and proceedings of the Directors, so far as they are applicable thereto and are not superseded by any regulations made by the Directors under the Article 142. Acts of Committees Article 146 of the AoA provide that subject to the provisions of the Act and the AoA, all acts done by any meeting of the Directors or by a Committee of Directors or by any person acting as a Director shall, notwithstanding that it is afterwards discovered that there was a defect in the appointment of such Directors or person, or that they or any of them were or was disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director. Resolutions of Board and Committees Manager or Secretary Article 239 of the AoA provides that the Directors may from time to time appoint, and at their discretion remove, any individual possessing the qualifications prescribed under the Act to perform any functions which by the Act are to be performed by the Secretary and to execute any other ministerial or administrative duties, which may from time to time be assigned to the Secretary by the Directors. The Seal Article 184 of the AoA declares that the Board shall provide a Common Seal for the purposes of the Company and shall have, power from time to time to destroy the same and substitute a new Seal in lieu thereof. Further,

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the Board is to provide for the safe custody of the Seal for the time being, and the Seal shall never be used except by or under the authority of the Directors or committee of Directors. Dividends and Reserve Declaration of Dividend Article 189 of the AoA the Company in General Meeting may (subject to Section 205 of the Act) declare a dividend to be paid to the members according to their respective rights as well as interest in the profits and may fix the time for payment subject to the provisions of the Act. Further, when a dividend has been so declared, the warrant in respect thereof shall be posted within forty-two days from the date of the declaration to the shareholders entitled to the payment of the same. Interim Dividend Article 191 of the AoA provides that the Directors may (Subject to the provisions of the Act), from time to time, pay to the members such interim dividends as in, their judgement the position of the Company justifies. Reserve Payment of dividends Article 196 of the AoA provides that unless it is otherwise directed, any dividend may be paid by cheques or warrant sent through post to the registered address of the member or person entitled. Board’s power Article 190 of the AoA provides that the Company in General Meeting may not declare a dividend higher than that recommended by the Board of Directors but that it may declare a lower dividend. Further, no dividend is payable except out of the profits of the year or any other undistributed profits or otherwise than in accordance with the provisions of Sections 205, 206 and 207 of the Act and the declarations of the Directors as to the amount of the net profits of the Company is conclusive. No dividend bearing interest against company Article 190 provides inter alia that no dividend shall carry interest as against the Company. Unpaid/unclaimed dividend Article 198 of the AoA provides that as per the provisions of Section 205 A of the Act, unclaimed dividend may be transferred within seven days from the date of expiry of the 42 day period to a special account to be called “Unpaid Dividend Account of Automobile Corporation of Goa Ltd.” in any scheduled bank. Accounts Article 201 of the AoA provides that the Company shall keep at its registered office proper books of account as would give a true and fair view of the state of affairs of the Company as per the provisions of section 209 of the Act. Article 202 of the AoA provides that if the company has any branch office in India or abroad, books of account relating to transactions effected at that office Winding up Article 248 of the AoA provides that “If the company shall be wound up, and the assets available for distribution among the members as such shall be insufficient to repay the whole of the paid up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in the proportion of the capital paid up or which ought to have been paid up at the commencement of the winding up, on the shares held by them respectively. And if in a winding

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up the assets available for distribution among the members shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed amongst the members in proportion to the capital at the commencement of the winding up, or which ought to have been paid up on the shares held by them respectively. But this Article is to be without prejudice to the rights of the holders of shares issued upon special terms and conditions.” Article 249 of the AoA provides that (a) If the Company shall be wound up, whether voluntarily or otherwise, the liquidator may, with the

sanction of a special resolution, divide amongst the contributories, in specie or in kind, any part of the assets of the Company and may, with the like sanction, vest any part of the assets of the Company in Trustees upon such trusts for the benefit of the contributories or any of them, as the Liquidator, with the sanction, shall think fit

(b) If thought expedient any such division may, subject to the provisions of the Act, be otherwise than in

accordance with the legal rights of the contributories (except where unalterably fixed by the Memorandum of Association) and in particular any class may be given preferential or special rights or may be excluded altogether or in part but in case any division otherwise than in accordance with the legal rights of the contributory ho would be prejudiced thereby shall have a right to dissent and ancillary rights as if such determination were a special resolution passed pursuant to section 494 of the Act.

(c) In case any shares to be divided as aforesaid involve a liability to calls or otherwise any person entitled

under such division to any of the said shares may within ten days after the passing of the special resolution by notice in writing direct the Liquidator to sell his proportion and pay him the proceeds and the Liquidator shall if practicable act accordingly.

Indemnity Article 252 of the AoA provides that “Subject to the provisions of section 201 of the Act, every Director of the Company, Managing Director, Secretary and other officer or employee of the Company shall be indemnified by the Company against and it shall be the duty of the Directors out of the funds of the Company to pay all costs, losses and expenses which any such Director, managing Director, Secretary or Officer or employee may incur or become liable to by reason of any contract entered into or a deed done by him as such Director, Managing Director, Secretary or Officer or employee or in any way in the discharge of his duties. Subject as aforesaid every Director, Managing Director, Secretary or other Officer or employee of the Company shall be indemnified against any liability incurred by them in defending any proceedings whether civil or criminal in which judgement is given in his favour or in which he is acquired or in connection with any application under section 633 of the Act in which relief is given to him by his Court.”

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts (not being contracts entered into in the ordinary course of business carried on by the Company or entered into more than two years before the date of this Draft Letter of Offer) which are or may be deemed material have been entered or are to be entered into by the Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of the Company situated at Honda, Sattari, Goa – 403530 from 10.00 AM to 12.00 Noon from the date of the Draft Letter of Offer until the date of closure of the Rights Issue. A. Material Contracts

1. MOU dated November 24, 2006 between Company & Lead Manager

2. MOU dated September 6, 2006 with Registrar to the Issue B. Documents

1. Certificate of Incorporation of the Company dated September 1, 1980.

2. Memorandum and Articles of the Company.

3. Shareholders Resolution passed at the Annual General Meeting held on June 28, 2005 September 29, 2006 appointing C C Chokshi & Co, Chartered Accountants, as statutory auditors for the fiscal 2006 and fiscal 2007.

4. Copy of the Board Resolution dated July 26, 2006 approving this Issue.

5. Consents of the Directors, Auditors, Lead Manager to the Issue, Legal Counsel to the Issue, Bankers to the Issue and Bankers to the Company, Registrars to the Issue and Registrars to the Company, to include their names in the Draft Draft Letter of Offer to act in their respective capacities.

6. Appointment of Company Secretary as Compliance Officer and consent thereto.

7. Letter dated October 31, 2006 from an independent tax advisor of the Company confirming Tax Benefits as mentioned in this Draft Draft Letter of Offer.

8. The Report of the Auditors, C. C. Choksi & Co., Chartered Accountants as set out herein dated November 13, 2006 in relation to the restated financials of the Company for the last five financial years.

9. Annual Reports of the Company for the last five Financial Years.

10. Application made for In-principle listing approval dated [•], to the BSE.

11. In-principle listing approval for the current Rights Issue dated [•] from BSE.

12. Letter No. [•] dated [•] issued by SEBI for the Issue.

13. Due Diligence certificate dated November 27, 2006.

14. Tripartite agreement with NSDL & CDSL dated January 29, 2003 and January 1, 2003 respectively.

15. Copy of resolution appointing the Managing Director of the Company.

16. Copy of the contract appointing the Managing Director of the Company dated September 16, 2004

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DECLARATION No statement made in this Draft Letter of Offer contravenes any of the provisions of the Act and the rules made thereunder. All the legal requirements connected with the said issue as also the guidelines, instructions etc. issued by SEBI, Government and any other competent authority in this behalf have been duly complied with. Yours faithfully On behalf of the Board of Directors of Automobile Corporation of Goa Limited Mr. S. V. Salgaocar

Mr. D. N. Naik

Mr. P F X D’Lima

Mr. P. M. Telang

Mr. R. S. Thakur

Mr. S. M. Kuvelker

Mr. N. R. Menon

Mr. Ananth Prabhu

Place: Mumbai Date: November 27, 2006 Enclosure: Composite Application Form