For Equity Shareholders of our Company only For private ... · HKD Hongkong Dollars, the legal...

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

(Our Company was incorporated on April 2, 1947 as Coates of India Limited under the Indian Companies Act, 1913 with registrationnumber 15202 of 1947. Our Company Identification Number is L24223WB1947PLC015202. The name of our Company was changed toDIC India Limited with effect from August 6, 2004. For changes in registered office please refer to the section titled ‘History and Other

Corporate Matters, beginning on page no. 66 of the Letter of Offer.

Registered and Head Office: Transport Depot Road, Kolkata – 700 088; Tel. No. (033) 2449 7126; Fax no. (033) 2449 5267Contact Person: Mr. T.B. Chatterjee, Sr. Exec. Vice President (Corp. Affairs & Legal) & Company Secretary and Compliance Officer

E-mail: [email protected]; Website: www.dicindialtd.com

For private circulation to the Equity Shareholders of Our Company only

ISSUE OF 22,95,179 FULLY PAID EQUITY SHARES WITH A FACE VALUE OF RS.10/- EACH AT A PREMIUM OF Rs. 215PER EQUITY SHARE FOR AN AMOUNT AGGREGATING TO RS. 5164.15 LACS ON RIGHTS BASIS TO THE EXISTINGSHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 1 FULLY PAID EQUITY SHARE FOR EVERY 3 FULLY PAID UPEQUITY SHARES HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, I.E. ON OCTOBER 26, 2007("ISSUE")

THE ISSUE PRICE IS 22.5 TIMES THE FACE VALUE OF THE EQUITY SHARES

GENERAL RISKS

Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in thisIssue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefullybefore taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examinationof the Issuer and the Issue including the risks involved. The securities have not been recommended or approved by theSecurities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Investorsare advised to refer to the section titled "Risk Factors" beginning on page no vii of the Letter of Offer before making aninvestment in this Issue.

ISSUER'S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that the Letter of Offer contains allinformation with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information containedin the Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions andintentions expressed herein are honestly held and that there are no other facts, the omission of which makes the Letter of Offeras 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 our Company are listed on the Calcutta Stock Exchange Association Limited, Bombay StockExchange Limited and National Stock Exchange of India Limited. Our Company has received in-principle approvals fromCalcutta Stock Exchange Association Limited by letter dated August 9, 2007, from the Bombay Stock Exchange Limited byletter dated July 19, 2007 and from the National Stock Exchange of India Limited by letter dated July 26, 2007 granting in-principle approval for listing the securities arising from this Issue. For the purpose of this Issue, the Designated Sock Exchangeis Bombay Stock Exchange Limited.

LETTER OF OFFERDated: October 15, 2007

For Equity Shareholders of our Company only

SBI Capital Markets Limited202, Maker Tower "E", Cuffe Parade,Mumbai - 400 005Tel : +91 22 2218 9166Fax : +91 22 2218 8332Email : [email protected] : www.sbicaps.com

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR RECEIVING REQUESTS FOR SPLIT FORMS ISSUE CLOSES ONNovember 20, 2007 December 4, 2007 December 19, 2007

C.B.Management Service (P) Ltd.,P-22, Bondel Road,Kolkata - 700 019Tel : + 91 33 2280 6692/93/94Fax : + 91 33 2287 0263Email : [email protected]

TABLE OF CONTENTS

PAGE NO.

DEFINITIONS AND ABBREVIATIONS...................................................................................................................... ii

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA................................................. V

FORWARD LOOKING STATEMENTS ..................................................................................................................... vi

RISK FACTORS ........................................................................................................................................................ vii

SUMMARY .......................................................................................................................................................... 01

THE ISSUE .......................................................................................................................................................... 02

SUMMARY OF FINANCIAL STATEMENTS ........................................................................................................... 03

GENERAL INFORMATION ...................................................................................................................................... 10

CAPITAL STRUCTURE ........................................................................................................................................... 15

OBJECTS OF THE ISSUE....................................................................................................................................... 22

BASIC TERMS OF THE ISSUE ............................................................................................................................... 31

BASIS FOR ISSUE PRICE ...................................................................................................................................... 33

STATEMENT OF TAX BENEFITS ........................................................................................................................... 34

INDUSTRY OVERVIEW .......................................................................................................................................... 38

BUSINESS OVERVIEW ........................................................................................................................................... 43

REGULATIONS AND POLICIES ............................................................................................................................. 65

HISTORY AND OTHER CORPORATE MATTERS ................................................................................................. 70

OUR MANAGEMENT............................................................................................................................................... 80

OUR PROMOTER .................................................................................................................................................... 95

DIVIDEND POLICY .................................................................................................................................................. 97

FINANCIAL STATEMENTS ..................................................................................................................................... 98

FINANCIAL INFORMATION OF GROUP COMPANIES ....................................................................................... 193

MANAGEMENT DISCUSSION AND ANALYSIS .................................................................................................. 206

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS................................................................... 210

GOVERNMENT APPROVALS ............................................................................................................................... 233

OTHER REGULATORY AND STATUTORY DISCLOSURES .............................................................................. 245

ISSUE RELATED INFORMATION ........................................................................................................................ 253

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OUR COMPANY ........................................... 273

DECLARATION ...................................................................................................................................................... 284

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DEFINITIONS AND ABBREVIATIONS

TERM DESCRIPTION “DIC”, “our Company”, “the Company” and “ Issuer”, “we”, “us”

Unless the context otherwise requires, refers to DIC India Limited, a public limited company incorporated under the Companies Act, 1956

“Subsidiaries” “our subsidiaries”

Unless the context otherwise requires, refers to DIC Coatings India Limited and Rohit (Printing Inks and Paints) Industries Private Limited.

Promoter(s) Unless the context otherwise requires, refers to DIC Asia Pacific Pte Ltd., Singapore Promoter Group Companies

Unless the context otherwise requires, refers to the following companies

1. Gunong Printing Ink (M) Sdn Bhd 2. DIC (Vietnam) Co. Ltd 3. DIC Graphics Australia Pty Ltd 4. DIC Graphics New Zealand Ltd 5. Coates Brothers (Singapore) Private Limited 6. Coates Brothers (Malaysia) Sdn Bhd 7. DIC Graphics (Hong Kong) Limited 8. Coates (Thailand) Ltd 9. Dainippon Ink & Chemicals (Phillipines) Inc. 10. Dainippon Ink & Chemicals (HK) Inc. 11. Dainippon Ink & Chemicals (Thailand) Company Limited. 12. DIC Colortron Pty Ltd 13. DIC (Malaysia) Sdn Bhd 14. DIC Holdings (M) Sdn. Bhd. 15. DIC Lanka (Pvt) Limited 16. PT DIC GRAPHICS 17. DIC Pakistan Limited 18. PT Pardic Jaya Chemicals 19. DIC Fine Chemicals Limited

General/Conventional Terms TERM DESCRIPTION AGM Annual General Meeting AUD Australian Dollars, the legal currency of Commonwealth of Australia Articles / Articles of Association / AoA

The Articles of Association of our Company

Auditors The statutory auditors of our Company, being M/s. Lovelock & Lewes., Chartered Accountants

Board of Directors/Board The Board of Directors of our Company or a Committee thereof. BSE Bombay Stock Exchange Limited CAGR Compounded Annual Growth Rate CDSL Central Depository Services (India) Limited Companies Act or the Act The Companies Act, 1956, and any amendments thereto CSE Calcutta Stock Exchange Association Limited Director(s) Director(s) of our Company, unless otherwise specified DP Depository Participant Designated Stock Exchange

BSE

EPS Earning Per Share Equity Share(s) or Share(s)

Equity shares of face value of Rs.10/- each of our Company unless otherwise specified in the context thereof.

Equity Shareholder(s) Means a holders of Equity Shares as on the Record Date FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999 and the amendments from time to time

and the regulations framed thereunder for the time being in force

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FII(s) Foreign Institutional Investors registered with SEBI under applicable laws Finacial Year / Fiscal / FY Financial Year ending December 31 GoI Government of India HKD Hongkong Dollars, the legal currency of Hongkong IDR Indonesian Rupees, the legal currency of the Republic of Indonesia Indian GAAP Generally Accepted Accounting Principles in India IT Act The Income-tax Act, 1961 and any amendments thereto KIADB Karnataka Industrial Area Development Board Lead Manager SBI Capital Markets Limited Letter of Offer / Offer Document

The Letter of Offer dated October 15, 2007

LKR Lankan Rupees, the legal currency of the Republic of Sri Lanka Memorandum or MoA or Memorandum of Association

Memorandum of Association of our Company

MYR Malaysian Rupees, the legal currency of Malaysia NAV Net Asset Value NRI / Non-Resident Indian A person resident outside India, as defined under FEMA and who is a citizen of

India or a person of Indian origin, each such term as defined under the FEMA (Deposit) Regulations 2000, as amended

Non-Resident A person who is not resident in India except NRIs and FIIs. NSE National Stock Exchange of India Limited NSDL National Securities Depository Limited NZD New Zealand Dollars, the legal currency of New Zealand OCB/Overseas Corporate Body

A company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest is irrevocably held by NRIs, directly or indirectly, as defined under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, as amended. OCBs are not permitted to invest in this Issue.

PHP Phillipines Peso, the legal currency of the Republic of Phillipines RBI The Reserve Bank of India RoNW Return on Net Worth Renouncees The persons who have acquired Rights Entitlements from Equity Shareholders. RoC Registrar of Companies Rights Entitlement The number of securities that a shareholder is entitled to in proportion to his/her

existing shareholding in our Company Rs./ Rupees/INR Indian Rupees, the legal currency of the Republic of India. SEBI Securities and Exchange Board of India SEBI Act, 1992 Securities and Exchange Board of India Act, 1992 and amendments thereto SEBI Guidelines/SEBI DIP Guidelines

The SEBI (Disclosure and Investor Protection) Guidelines, 2000 as amended, including instructions and clarifications issued by SEBI from time to time

SGD Singapore Dollars, the legal currency of the Republic of Singapore Stock Exchanges BSE, NSE and CSE Takeover Code The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as

amended to date THB Thai Bahts, the legal currency of the Kingdom of Thailand VND Vietnamese Dollar, the legal currency of the Republic of Vietnam

iv

Issue related Terms and Abbreviations TERM DESCRIPTION Applicant Any Equity Sharehoder and/or Renouncee who makes an application pursuant to

the terms of the Letter of Offer and the CAF Bankers to the Issue Axis Bank Limited Allottee The successful applicant to whom the Equity Shares are being / or have been

issued CAF Composite Application Form Issue / Rights Issue Issue of 22,95,179 Fully Paid Equity Shares with a face value of Rs.10/- each at a

premium of Rs. 215/- per Equity share for an amount aggregating to Rs. 5164.15 lacs on Rights basis to the existing shareholders of our Company in the ratio of 1 fully paid Equity Share for every 3 Equity Shares held by the existing shareholders on the record date, i.e. on October 26, 2007.

Issue Closing Date December 19, 2007 Issue Opening Date November 20, 2007 Issue Price Rs.225/- per Equity Share Record Date October 26, 2007 Registrar to the Issue or Registrar / Registrar and Transfer Agent

C.B.Management Services (P) Ltd.

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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Unless stated otherwise, the financial data in this Letter of Offer is derived from our Company’s audited consolidated financial statements for the Financial years ended December 31, 2006, 2005, 2004, 2003 and 2002 and for the six months period ended June 30, 2007 prepared in accordance with Indian GAAP and the Companies Act and the annual financial statements and the financial statements for the six months period ended June 30, 2007, have been restated in accordance with the applicable SEBI Guidelines as stated in the report of our statutory auditors M/s. Lovelock & Lewis, included in the Letter of Offer. Our fiscal year commences on January 1 and ends on December 31 of the year. Unless stated otherwise, reference herein to a fiscal year (eg. fiscal 2006), is to the fiscal year ended December 31 of a particular year. The fiscal year of our subsidiary commences of January 1 and ends on December 31 of the year. Unless stated otherwise, reference herein to a fiscal year (eg. fiscal 2006), is to the fiscal year ended December 31, of a particular year. The degree to which the Indian GAAP financial statements (consolidated or unconsolidated) included in the Letter of Offer will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI Guidelines. Any reliance by persons not familiar with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI Guidelines on the financial disclosures presented in the Letter of Offer should accordingly be limited. In the Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. All references to “Rs.”or “INR” refer to Rupees, the lawful currency of India. Unless stated otherwise, throughout the Letter of Offer, all figures have been expressed in Lacs, except :

• in the section titled “Capital Structure” on page no.15 of the Letter of Offer where certain figures have been expressed in absolute numbers;

• in the section titled “History and Other Corporate Matters” beginning on page 70 of the Letter of Offer under the financials of the subsidiaries;

• in the section titled “Industry Overview” beginning on page 38 of the Letter of Offer where certain figures have been stated in million and billion as per the data source.

The exchange rates used for the purpose of converting foreign exchange currencies into Indian Rupees in the Letter of Offer as per the RBI reference rate on June 27, 2007 is as follows :

Currency Exchange Rate for conversion to INR USD 40.84

Japanese Yen 0.33 Market data used in the Letter of Offer has been obtained from industry publications and internal Company reports. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe market data used in the Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company reports, while believed to be reliable, have not been verified by any independent source.

vi

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

national and international economies; • Changes in laws and regulations relating to the sectors/areas in which we operate; • Increased competition in the sectors/areas in which we operate; • Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch

and implement various projects and business plans for which funds are being raised through this Issue; • Our ability to meet our capital expenditure requirements; • Fluctuations in operating costs; • Our ability to attract and retain qualified personnel; • Changes in technology; • Changes in political and social conditions in India or in countries that we may enter, the monetary and

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

• 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, see the sections titled “Risk Factors” “Business Overview” and “Management Discussion and Analysis” beginning on pages vii, 43 and 206 of the Letter of Offer respectively. 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 our Company nor the Lead Manager nor any of the 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 requirements, Our Company and the 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 Stock Exchanges.

vii

RISK FACTORS An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in the Letter of Offer, including the risks and uncertainties described below, before making an investment in our Equity Shares. If any of the following risks actually occur, our business, results of operations and financial condition could suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment. The financial and other implications of material impact of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However there are a few risk factors where the impact is not quantifiable and hence the same has not been disclosed in such risk factors. Unless otherwise stated in the relevant risk factors set forth below, our Company is not in a position to specify or quantify the financial or other implication of any risks mentioned herein. Materiality The Risk Factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality:

1. Some events may not be material individually but may be found material collectively; 2. Some events may have material impact qualitatively instead of quantitatively; 3. Some events may not be material at present but may have material impact in future.

INTERNAL RISK FACTORS Risks in Relation to our Business and Results of Operations: 1. Our Company, and our subsidiaries are involved in certain legal and regulatory proceedings that, if

determined against our Company, could have a material adverse impact on our Company. Our Directors, are also involved in certain legal and regulatory proceedings.

Our Company is party to various legal proceedings. These proceedings are pending at different levels of adjudication before various courts, and if determined against our Company, could have an adverse impact on the business, financial condition and results of operations. No assurance can be given as to whether these matters will be resolved in favour of or against our Company and/ or these entities, nor can any assurance be given that no further liability will arise out of these or future claims. A classification of the legal proceedings (including show cause and summons notices) instituted against our Company, and the monetary amount* involved in these legal proceedings is given in the following table Sr.No. Nature of Case Number of

Cases Amount Involved (Rs.)

1. Show cause notice issued by the Registrar of Companies, Kolkata dated July 26, 2006 for violation of sections 187-C, 3(1)(iv) and 31, 211, 217(1)(c) of the Companies Act, 1956 after scrutinising the balance sheet as at December 31, 2005 and Profit and Loss Account for the year ended said date, whereby the Registrar had asked our Company to show cause within fifteen days as to why the prosecution should not be launched against our Company and send a copy of the Balance Sheet along with other requisite documents. Our Company has filed the requisite documents and also a reply to the same.

1 Fine of Rs.10,000/- each defaulting party.

viii

Our Company has subsequently received another show cause notice dated February 16, 2007 for violations under Sections 211(1), 211(3A) and 217(1)(e) of the Companies Act, 1956 Our Company has filed a compounding application on July 12, 2007, with regards to section 211(1) and 211(3A) of the Companies Act, 1956 and has gone for fresh representation for alleged default under Section 217(e) of the Companies Act, 1956

2. Income Tax Cases: Our Company involved in proceedings under the Income tax act with matters pending before various Commissioner of Income Tax Appeals. Our Company has been served with a show cause notice under section 274 read with section 271 of the Income Tax Act.

8

Rs.131.03 Lacs (Only 5 cases is quantifiable)

3. Excise Cases 9 Rs. 399.86 Lacs plus interest and penalty wherever not quantified.

4. Custom Cases 3 Rs. 74.97 Lacs plus interest and penalty wherever not quantified. (one case not quantifiable)

5. Service Tax Cases 5 Rs. 153.33 Lacs plus interest and penalty wherever not quantified

6. Sales Tax 6 Rs. 146.83 Lacs A classification of the legal proceedings (including show cause and summons notices) instituted by our Company, and the monetary amount* involved in these legal proceedings is given in the following table Sr.No. Nature of Case Number of

Cases Amount Involved (Rs. *)

Criminal Proceedings 1 Section 138 under Negotiable Instruments Act,

1881. 24 Rs. 490.09 Lacs plus

interest and penalty

2 Section 200 of the Code of Criminal Procedure, 1973

2

Not quantifiable

3 Money suit 1 Rs.0.93 Lacs plus interest and penalty

Winding Up Petition 4 Under section 433, 434 and 439 of the Companies

Act 2 Rs.82.99 Lacs plus

interest and penalty.

Civil Case 5 Under order 7 rule 1 of Civil Procedure Code,

1908 1 Rs. 2.49 Lacs

One of our Independent Directors, Mr. Subir Bose, is involved in the following legal and regulatory proceedings in his capacity as the Managing Director of Berger Paints India Limited. No assurance can be given as to whether these matters will be resolved in favour of or against our director. The details of the cases are as follows :

ix

Sr.No. Nature of Case Number of


Criminal Proceedings 1 As an occupier of the factory of Berger Paints

India Limited for violation of section 37 of the Factories Act, 1948.

1 Not ascertainable

2 As a managing director of Berger Paints India Limted for alleged non-payment of provident fund dues

1

Not ascertainable

Legal proceedings involing Our Subsidiary DIC Coatings India Limited : Sr.No. Nature of Case Number of


1 MRTP 1 Not quantifiable For further details on these proceedings, see the section "Outstanding Litigations and Defaults" on page 210 of the Letter of Offer.

2. We have contingent liabilities in our balance sheet, as restated, as at June 30, 2007, December 31, 2006,

2005, 2004, 2003 and 2002 The financial statements for June 30, 2007 December 31, 2006, 2005, 2004, 2003 and 2002 state that there are no contingent liabilities not provided for except otherwise as below.

Year ended December 31 Particulars Six months ended June 30, 2007

2006 2005 2004 2003 2002

Estimated amount of Contracts remaining to be executed on Capital Account

346.13 357.82 85.43 72.03 24.40 48.26

Income tax matter 91.07 91.07 67.79 67.79 0.00 0.00 Disputed Sales Tax, excise duties etc

654.43 635.54 1,284.93 1,238.27 781.37 738.77

Gaurantees given on behalf of third parties

0.00 1.00 24.77 51.92 90.25 128.27

Bills Discounted 531.86 407.17 208.17 0.00 0.00 0.00 In the event any of the abovementioned obligations materialize, our Company will face additional financial burden to the extent, thereby affecting our profitability 3. Potential fluctuations in future operating results Although our Company’s financial performance has demonstrated significant growth in revenues over the past decade (Rs.15300 Lacs in FY 1997 to Rs. 33950 Lacs in FY 2006) these results may fluctuate in future, depending on a number of factors including inter-alia, the international price of inks, fluctuation of the rupee vis-à-vis major international currencies, import tariffs and other regulations in India as well as within countries where our Company exports or proposes to export its products, domestic duties and taxes, greenfield ink projects being set up in India, country and customer specific considerations in markets where our Company exports its products, changes in printing technologies, changes in preferences of customers of ink and paper, changes in relationship between revenues and costs, consolidation in the ink industry, changes in government policies, increases in prices of key raw materials or in technology and other general economic and business factors. Due to any or all of these factors, it is possible that in future, our Company’s operating and financial performance may vary from the expectations of shareholders, market analysts and public.

x

4. Over- dependence on customers The single largest customer accounted for almost 30% of the domestic sales of News Ink of our Company in FY 2006. The contribution to sales of the top five customers of our Company in the domestic market is 10% in case of Liquid Inks. Accordingly, our Company is dependent on a few customers for a large part of sales. Our Company can provide no assurance that it would continue to realize significant revenues from its existing customers in India and/or overseas in future. 5. Risks of increase in input costs Our Company may not be able to pass on increase in the raw material and other direct costs, if any, to its customers. DIC has a diversified income stream comprising recurring income from customers under longterm supply contracts. Over a period of time, our Company expects that several more of DIC’s customers would enter into long-term supply agreements. These long-term contracts reduce DIC’s flexibility in changing its product prices in response to changes in raw material costs. Also, in the past, as a result of increase in input costs, our Company’s profit margins have varied and our Company can provide no assurances that (a) in future, input costs will not increase (b) it will be in a position to pass through increases, if any, to its customers and (c) present profit margins of our Company or of its subsidiaries will be sustained, will improve or will not be adversely affected. 6. Our Company has a negative cash flow for the period ended June 30, 2007

We have a negative cash flow of Rs.44.80 Lacs for the period ended June 30, 2007 arising from repayment of short term borrowings and increase in working capital requirements. Any losses and negative cash flows in the future could adversely affect our results of operations and financial condition. For further details refer to section titled “Financial Statements” beginning on page 98 of the Letter of Offer 7. Our Promoter Group Companies have incurred losses in the last three years.

Some of our Promoter Group Companies have incurred losses in the last three years as follows :

Name of the Entity Currency in FY2006 FY2005 FY2004

DIC Marketing Sdn Bhd MYR - - (334) DIC (Vietnam) Co. Ltd. VND (4096338) (884856) - Coates (Thailand) Ltd THB - (2101) - DIC (Phillipines) PHP - (7551) (14452) PT DIC Graphics IDR (6356830) (9606816) (6512208)

8. We have to renew, maintain or obtain statutory and regulatory permits and licenses as required to

operate our business and any delay or inability to obtain the same may have an adverse impact on our business.

Being in the manufacturing business, we require several statutory and regulatory permits, licenses and approvals to operate our business. Many of these approvals are granted for fixed periods of time and need renewal from time to time. We are required to renew such permits, licenses and approvals. There can be no assurance that the relevant authorities will issue any of such permits or approvals in time or at all. Further, these permits, licenses and approvals are subject to several conditions, and we cannot assure that we shall be able to continuously meet such conditions or be able to prove compliance with such conditions to statutory authorities, and this may lead to cancellation, revocation or suspension of relevant permits/licenses/approvals. Failure by us to renew, maintain or obtain the required permits, licenses or approvals, or cancellation, suspension or revocation of any of our permits, licenses or approvals may result in the interruption of our operations and may have a material adverse effect on our business.

xi

9. We are yet to apply / receive approvals for the following licenses/approvals for some of our units .

Company may be subject to fines and penalties under the relevant laws . Sr. No.

Approval / Consent Authority Status

1. Consent to establish and operate under section 25 & 26of Water (Prevention and Control of Pollution) Act1974, for our Chennai unit.

Regional Officer, Tamil Nadu State Pollution Control Board, Tamil Nadu

Will be applied in duecourse

2. Consent under section 21 of the Air (Prevention andControl of Pollution) Act 1981, for our Chennai unit.



3. Authorization under rule 3(c) and 5(5) of the HazardousWaste (Management and Handling) Rules, 1989 framedunder the Environmental (Protection) Act, 1986, for ourChennai unit.



4. Renewal for consent to establish and operate undersection 25 & 26 of Water (Prevention and Control ofPollution) Act 1974, at our Kolkata unit

The Environmental Engineer, West Bengal Pollution Control Board,

Application for renewalhas been made datedAugust 1, 2007

5. Renewal for consent to establish and operate underSection 25 & 26 of Water (Prevention and Control ofPollution) Act 1974, and section 21 of the Air(Prevention and Control of Pollution) Act 1981 at ourDelhi unit

Delhi Pollution Control Board, New Delhi

Common Applicationfor renewal of consenthas been made datedAugust 21, 2006

6. Renewal for consent granted to hire Shri AmarsinghRathod as contractor for at our unit at Ahmedabad,pursuant to section 12(2) of the Contract Labour(Regulation and Abolition) Act, 1970

Licensing Officer and Assistant Labour Commissioner, Ahmedabad

Application datedAugust 16, 2007, forrenewal of license

7. For testing and approval certificate of Pressure Vesselsof 500 Litres Compressor Air Receiver installed at theNoida unit

Meenal Engineers & Consultants (private party)

Application datedJanuary 10, 2007

If our Company fails to obtain the approvals or the renewals for the consents within the prescribed time, any of the aforesaid approvals, our Company and its officials may be subject to fines and penalties under relevant legislations, which although are not quantifiable at this stage, may adversely affect our Company’s turnover and profitability. 10. We are yet to apply for consents/approvals in relation to the Objects of the Issue. Any delay in obtaining

the consents could adversely affect implementation of the project. One of the Objects of the Issue is the commissioning of the Mother Plant at Noida, which would require additional power requirement totalling to 1050 KVA. Our Company proposes to meet the additional power requirement by installation of D.G.Sets for which consent would have to be obtained from the Chief Engineer, Electric Safety, Uttar Pradesh. Any delay in obtaining the consents could adversely affect implementation of the project thereby causing time and cost over-run 11. Our loan agreements have several restrictive covenants We have entered into agreements for term loan and financial facilities with State Bank of India, Bank of Baroda, Standard Chartered Bank and Hongkong and Shanghai Banking Corpoartion Limited. These agreements contain several restrictive covenants. Before effecting any of the belowmentioned transactions, we would require prior approval from all our Bankers. These transactions include:

a. Change or in any way alter our Company’s capital structure;

xii

b. Effect any scheme of amalgamation or reconstruction; c. Implement a new scheme of expansion or take up an allied line of business of manufacture; d. Enlarge the scope of the other trading activities, if any, undertaken at the time of the application and

notified to the Bank as such; e. Declare a dividend or distribute profits after deduction of taxes, except where the installments of

principal and interest payable to the Bank are paid regularly; f. Withdraw or allow to be withdrawn during the currency of the loan any moneys brought in by the

Borrower or the proprietors, partners or directors of the Borrowers; g. Invest any funds by way of deposits, or Loans or in share capital of any other concern so long as

money is due to the Bank, the Borrower, will however, be free to deposit funds by way of security, with third parties in the normal course of business or if required for the business;

h. Borrow or obtain credit facilities of any description from any other Bank or credit agency or money lenders or enter into any hire purchase arrangements during the currency of the loan.

These covenants may restrict our business decision-making ability. For further details on the loan agreements, refer to the sections titled “Capital Structure” beginning on page no. 20 of the Letter of Offer

12. If we default in repayments of debt to our lenders, it may, by virtue of contractual provisions, enforce/

seek to enforce security interests on our assets, which in turn may adversely affect operations and/ or profitability.

The current debt agreements with State Bank of India, Bank of Baroda, Standard Chartered Bank and

Hongkong and Shanghai Banking Corpoartion Limited contain certain restrictive covenants, which require us to obtain their prior consent before undertaking certain actions. We have obtained the written approval from all our dealing Banks for this Issue. If we default on the repayment of debt, the lenders could enforce their security interests on our assets limiting the ability to carry out operations. For details of these loan agreements please refer to the Auditors Report under Section titled “Financial Statements” beginning on page no. 98 of the Letter of Offer. 13. Increased competition may result in lower prices of or a decreased market share for our products. Our

failure to effectively compete may reduce our profitability.

We experience competition across markets for our products from domestic and international players. We compete with other ink manufacturers on the basis of availability of technology, product, and product range, product traits, quality and other factors as well as based on price, reputation, customer service and customer convenience. Our failure to compete effectively may decrease, or prevent us from increasing our market share and reduce our profitability. 14. Any loss of or breakdown of our machineries, at any of our manufacturing facilities may have an

adverse effect on business, financial condition and results of operations.

Our manufacturing facilities are subject to operating risks, such as the breakdown or failure of equipment, power supply or processes, performance below expected levels of output or efficiency, obsolescence, labour disputes, industrial accidents and the need to comply with directives of relevant government authorities. The occurrence of any of these risks could significantly affect our operating results. Although, we have taken precautions to minimize the risks of any significant operational issues at our manufacturing facilities, our business and operations may be adversely affected by any disruption of operations at manufacturing facilities. 15. Any disruption in supply of power at our plants may have an adverse affect on our production. The power requirements of our Company are presently met by purchase of electricity from the State Boards of Uttar Pradesh, Delhi, West Bengal, Gujarat, Maharashtra, Tamil Nadu and Karnataka. We also buy electricity from Calcutta Electric Supply Corporation, Kolkata and Reliance Energy Limited, Mumbai. Although we have a standby arrangement to substantially meet our power requirements through DG sets, any disruption in supply of power at our plants may have an adverse effect on our production 16. Our foreign trade activities expose us to a continuing risk of foreign currency fluctuations. The financial

instruments used to hedge these risks may not adequately cover the entire risks arising out of exchange fluctuations

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Our Company imports raw materials, finished products and machinery and undertakes exports of finished products, which involves risks associated with foreign exchange fluctuations, which could adversely affect the revenues and profitability of our operations. Any borrowings in foreign currency could also face similar risks. Although we use financial instruments like forward contracts and interest rate swap, they may not adequately cover risks arising out of exchange fluctuations 17. We may face the risk of increased administrative costs and may face difficulties in implementation of

various controls on our operations as our manufacturing facilities are scattered over geographically dispersed areas.

The manufacturing facilities of our Company are situated in differed cities viz. Kolkata, Mumbai, New Delhi, Noida, Ahmedabad and Chennai. By reasons of our operations being scattered we may face difficulties in implementation of various controls. In addition to this our administrative costs may also increase due to having manufacturing facilities scattered geographically, as compared to manufacturing faciltieis located in a single area. 18. Any failure in our ERP systems could adversely impact our business.

Any disruption of the functioning of our existing ERP systems could disrupt our ability to track, record and analyse the work in progress, cause loss of data and disruption in operations including, among others an ability to assess the progress of the projects, process financial information or manage creditors/debtors or engage in normal business activities. This may have an adverse effect on our operations. 19. We have made applications for renewal of registration of trademarks We have made applications for renewal of registration of our trademarks. Our products are known by our trademarks, which are advertised by us, and if any of our applications for registration are not accepted or if any of the oppositions filed against our trademark applications are successful, we may lose the statutory protection available to us under the Trade Marks Act, 1999 for such trademarks. For further details, please refer to section titled “Business Overview” beginning on page no. 43 of the Letter of Offer. 20. We are yet to apply for registration of some of our trademarks. We may not be able to protect our

intellectual property rights against piracy Unauthorized third parties may try to infringe our trademarks. Inability to protect our proprietary technology against unauthorized copying or use, may adversely affect our business and market competitiveness. We are yet to apply for trademark registration of some of our brand names. Failure to obtain registrations of these marks could have an adverse effect on our business. For further details refer to section titled “Business Overview” beginning on page no. 43 of the Letter of Offer. 21. We utilise various properties on a leasehold/license basis and any termination of these leases/licenses

and/or non-renewal could adversely affect our operations. Some of the properties used by us for business are leasehold or have been taken on a leave and license basis. Any termination of these leases/ licenses whether due to any breach or otherwise, or non-renewal thereof, could adversely affect the business operations. Our Company owns leasehold land at Banglore. The lease period has expired in February 2007. Our Company has applied to KIADB for transfer of the land in our favour with freehold rights. Approval from the KIADB is yet awaited 22. Agreements for some of our immovable properties remain to be stamped and registered, as required by

the Registration Act, 1908. Our Company has leased out office premises at Kolkata, Mumbai, and Ahmedabad. The deeds of conveyance and agreements for lease agreements entered into by our Company remain to be stamped and registered. In accordance with the provisons of the Indian Stamp Act, an un-stamped document is not admissible as evidence

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in any Court of Law and the consequences of non-registration include, inter alia a registered document, in relation to any property, would take precedence over an unregistered document in relation to the same property. 23. We are dependent on our management team for success whose loss could adversely impact our

Company’s profitability. Our success largely depends on the continued services and performance of our management and other key employees. The need for capable senior management in the industry is intense, and we may not be able to retain our senior management or attract and retain new senior management in the future. The loss of service of the promoters and other senior management could seriously impair the ability to continue to manage and expand the business efficiently. Further, the loss of any of the senior management or other key personnel may adversely affect the operations, finances and profitability of our Company. Any failure or inability of our Company to efficiently manage its human resources would adversely affect our ability to implement new projects and expand our business. 24. We have taken unsecured loans in the past, some of which may be payable on demand A summary of the unsecured loans availed by our Company as on June 30, 2007 and as on December 31 2006, 2005, 2004, 2003 and 2002 is as follows:

(Rs.in Lacs) Year ended December 31, Particulars Six months

ended June 30, 2007

2006 2005 2004 2003 2002

Short Term Loans From Banks 1808.70 2078.90 2188.40 1900.00 0.00 0.00 From Others 1900.00 600.00 0.00 0.00 0.00 0.00

From Subidiary 155.90 150.00 0.00 50.00 0.00 0.00 Fixed Deposit 0.00 0.00 0.00 0.00 406.80 925.50 Commercial Paper Loans 2000.00 2000.00 1200.00 800.00 800.00 1900.00 Non-Convertible Privately Placed Debentures

0.00 0.00 0.00 0.00 0.00 300.00

External Commerical Borrowings from Holding Companies

458.70 458.70 0.00 0.00 0.00 0.00

Other Loans from Banks 0.00 0.00 700.00 700.00 0.00 0.00 Terms Loans from Banks 0.00 0.00 0.00 0.00 2600.00 300.00 Total 6323.30 5287.60 4088.40 3450.00 3806.80 3425.50 Some of our unsecured loans may be payable on demand which may adversely affect our working capital requirements and the short term liquidity of our Company. For further details please refer to section titled “Objects of the Issue” beginning on page no. 22 of the Letter of Offer 25. We have entered into certain transactions with related parties, including our Promoter Group and our

Directors

We have entered into certain transactions with related parties, including our Promoter Group and our Directors and may continue to do so. These transactions or the future transactions may involve potential conflicts of interests. For details on transactions with Related parties refer to section titled “Finanical Statements” beginning on page no. 98 of the Letter of Offer 26. Renunciation by any shareholder in favour of a non-resident or FII will require prior approval of the

RBI and/or FIPB subject to certain terms and conditions. Renunciation of rights entitlement in our Company by any shareholder in favour of a non-resident or a FII will require prior approval of the RBI and/or FIPB subject to certain terms and conditions. There can be no certainty as to the conditions subject to which the approval will be granted or if the approval will be granted at all. For more details on the restrictions applicable to non residents or FIIs please refer to the section titled “Issue Related Information” beginning on page no. 253 of the Letter of Offer.

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27. Our employees may unionise in future. Our Company’s operations could be adversely affected in case of labour or industrial unrest at any of its plants

We have a total of 598 employees as on date. For the categorywise break-up of manpower, please refer to page no.50 of the Letter of Offer. Although, as on date, our employees are not represented by any labour union and currently we have not faced any union related problem, our employees may unionise in future. In that case, we may face the risks of strike, agitation and work stoppages, which may disrupt our production activities, adversely affect our operations, adversely affect our ability to meet delivery commitments to clients thus adversely affecting our reputation, and in turn cause financial losses to our Company. 28. Employee health, safety and regulatory measures are very important in our industry; any negligence in

this regard can adversely affect our performance. Our manufacturing process involves certain processes which may pose as a health hazard to our employees. Although we attempt to mitigate our liability by taking precautionary measures for our employees’ welfare and availing of insurance, we cannot assure that these measures would prove adequate to mitigate the losses which may be caused by any negligence in this regard, and the same can adversely affect our performance. Risks arising from Objects of the Issue 29. The objects of our Issue have not been appraised by any independent agency The use of proceeds of the Issue will be in accordance with the chapter titled "Objects of the Issue” beginning on page no. 22 of the Letter of Offer. These costs related to the Objects of our Issue, are based on our internal estimates. No bank or financial institution has appraised the objects of the Issue for which proceeds are proposed to be raised through the Issue, and their utilization will be based on our management's internal estimates. Any upward variation in estimated cost components may result in cost overrun. 30. We are yet to place orders for plant and machinery for the proposed normal upgradation, expansion and

modernization. Although we have placed orders for 93% of the plant and machinery requirements for setting up of the Liquid Ink Mother Plant at Noida, we are yet to place orders for plant and machinery for the proposed normal upgradation, expansion and modernization. We may be subject to risks on account of inflation in the price of machinery and other equipments that we require for the project. Our project could face time and cost overrun which could have an adverse effect on the operations of our Company. Further, in respect of the machinery/equipment/other project related services that we propose to import/ procure from overseas, we may be subject to the risks arising out of currency rate fluctuations. These factors may increase the overall cost of our project. Further, although we have provided for contingencies, we may face the following risks in relation to the project

• The budgeted resources for implementation of the project may be inadequate because of cost overruns, which in turn will require additional fund requirement and may impact the overall implementation of the project.

• Delays in the scheduled implementation of the project for any reason, including construction delays, delays in receipt of government approvals or delays in delivery of equipment by suppliers, could result in cost overrun, which in turn will require additional funds and may impact the overall profitability of the project.

31. Our Company has commenced the implementation of commission/ expansion of project and any time or

cost overruns could adversely affect our profitability and operations Our Company has commenced the implementation of commission/ expansion of project, as envisaged in our objects of the Issue, since 2006. Any adverse variations in the size, timing, costs related to such expansion or our ability to sustain in the markets or the pricing policies vis-à-vis those of our competitors could substantially affect our profitability and operations.

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32. Our Company has not made any arrangement nor has entered into any agreements for firm selling commitments either in the domestic or overseas market, for the proposed increase of the manufacturing capacity of its News Ink Plant at Noida through its proposed expansion plans.

Our Company has proposed the expansion of the capacity for the News Ink colour by 2400 tonnes per annum during the next 18 months and have not not made any arrangement nor has entered into any agreements for firm selling commitments either in the domestic or overseas market, for the proposed increase in the output. In the absence of an adequate market to absorb the increased output, our Company may have an excess capacity for the News Ink colour after the proposed expansion. Further, the funds earmarked for the proposed expansion may not be effectively utilized. Such excess capacity build-up may lead to burden of fixed and variable costs associated in relation thereto, without the corresponding benefits accruing to our Company, thus adversely affecting the financial performance of our Company.

33. Changes in technology may render our current technologies obsolete or require us to make substantial

capital investments In the recent years, our industry has experienced advancement in technology and sophistication in production process. Modernisation and technology upgradation is essential to reduce costs and to increase the output. Although we strive to keep our technology, plant and machinery in line with the latest technological standards, we may be required to implement new technology or upgrade or retro fit the machineries employed by us. Further, the costs in upgrading our technology and modernizing the plant and machineries involve substantial costs which could substantially affect our finances and operations. 34. Delay in raising funds from the Rights Issue Our expansion project is proposed to be substantially funded from the proceeds of this Rights Issue. Any delay or failure of the same, may adversely impact the implementation of the project, since we have not made any alternate arrangements for funds. Risks arising out of shareholding / Equity Shares 35. We may continue to be controlled by our Promoter and Promoter Group following the Issue and our

other shareholders may not be able to affect the outcome of shareholder voting After the Issue, our Promoter and persons/entities in the Promoter Group will collectively hold approximately 65.76% of the fully diluted post Issue equity capital of our Company. In the event of under susbscription, the unsubscribed portion of the Issue will be allotted to the Promoters, thereby further increasing their holdings. Consequently, they may exercise substantial control over us and inter alia may have the power to elect and remove a majority of our Directors and to determine the outcome of significant corporate transactions and decisions requiring approval of our Board of Directors. Further, they may be able to influence any shareholder action or approval requiring a majority vote, and may be able to delay, prevent or deter a change in control. 36. The market price of our Equity Shares may be adversely affected by additional issues of equity or equity

linked securities by our Company or by sale of a large number of our Equity Shares by our significant shareholders

We may finance our growth plans through additional equity offerings. Any future issuance of equity or equity-linked securities by our Company may dilute the shareholding of investors in our Equity Shares and could adversely affect the market price of our Equity Shares. 37. Over the last two years, the trading of our Equity Shares on the CSE has been negligible The trading of our Equity Shares on CSE, in the last two years, has been negligible. Investors dealing on this exchange may face certain difficulties in trading the Equity Shares held by them.

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External Risk Factors: 38. There are a number of factors outside our control, which may prejudicially affect us There are several factors outside our control that may cause fluctuations to our revenues and operating results and/or prejudicially affect our business, financial condition and results of operations. These include:

• The availability and duration of tax benefits and the availability of other Government incentives,

and change in Government policies in the sector(s) in which we operate; • Currency exchange rate fluctuations; • Changes in Indian law relating to foreign exchange management and to foreign equity ownership

in Indian companies that could constrain our ability to raise capital outside India through the issuance of equity or convertible debt securities; and

• The economies of India, and other principal international markets, more particularly in countries of export, as well as other general economic factors.

• Prices of crude oil in the international market. 39. A slowdown in economic growth in India could cause our business to suffer. The Indian economy has shown sustained growth over the last few years with gross domestic products (“GDP”) showing sustained growth. However, any slowdown in the Indian economy could lead to a slowdown in the industries we operate in and adversely affect our financial performance. 40. Adverse impact of changes in the domestic tax laws, fiscal laws and the regulartory enviornment Any changes in the tax laws in India particularly income tax might lead to increased tax liability of our Company thereby putting pressures on profitability. Also, any changes in the fiscal policies of the Government, more particularly those relating to banking policies, may result in variations in the existing interest rate structure, which if not to the advantage of our Company, can cause the finance costs of our Company to significantly rise, thereby affecting our finances and profitability. Moreover, any changes in the regulatory environment applicable to our business and operations in and outside the country will significantly impact the business of our Company. 41. Natural disasters could dirupt our operations and result in loss of revenues and increased costs Our plants are susceptible to natural disasters such as droughts, floods, earthquakes as well as acts of violence from terrorists and war. The occurrence of any of the above event 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. Also, any negative impact of natural disasters on the Indian economy could adversely affect our business, results of operations and the market price of our Equity Shares. 42. Emergence of competition from other manufacturing countries The global ink market is highly comptetitive. We may face global competition from countries. Our market position will depend on effective marketing initiatives and our ability to anticipate and respond to various competitive factors affecting the industry including pricing strategies. Any failure by us to compete efficiently, including in terms of pricing, could adversely effect our business, operations and profitability.

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Notes to Risk Factors:

This is an Issue of 22,95,179 fully paid Equity Shares with a face value of Rs.10/- each at a premium of Rs. 215/- per Equity Share for an amount aggregating to Rs. 5164.15 Lacs on Rights basis to the existing shareholders of our Company in the ratio of 1 fully paid Equity Share for every 3 Equity Shares held by the existing shareholders on the Record Date, i.e. On October 26, 2007

1. The net worth of our Company as per our restated financials as at December 31, 2006 is Rs 10851.80 lacs and as per restated financial statements as on June 30, 2007 is 11312 Lacs.

2. The average cost of acquisition of Equity Shares by our Promoter is as follows :

Promoter Cost of acquisition (per Equity Share) DIC Asia Pacific Pte Ltd., Singapore SGD 4.5229

3. Book value of the Equity Shares of our Company, as per our restated financials as on December 31,

2006 and as per our restatd financial statements as on June 30, 2007 is Rs. 157.60 and Rs. 164.29 per Equity Share respectively.

4. All information shall be made available by the LM and our Company to the existing shareholders of

our Company and no selective or additional information would be available only to a section of the investors in any manner whatsoever.

5. Investors are advised to refer the paragraph on “Basis of Issue Price” on page no. 33 of the Letter of

Offer before making an investment in the Issue.

6. Please refer to the section on "Issue Related Information" on page no. 253 of the Letter of Offer for details of the basis of allotment.

7. Other than as stated in the section titled Our Management”, “Our Promoter” and “Financial

Information of Group Companies” “Financial Statements” beginning on page nos. 80, 95, 193 and 98 of the Letter of Offer our Promoter/ Directors/ Key Management Personnel have no interest other than reimbursement of expenses incurred or normal remuneration or benefits.

8. There have been no transactions in the shares of our Company on the Stock Exchanges by the

Promoters/Directors of our Company during the past 6 months.

9. Other than as stated in the Letter of Offer the other ventures of promoters have no business interests/other interests in the issuer Company.

10. For details regarding loans and advances made to any person(s)/ companies in which directors are

interested refer to section titled “ Our Management”, “Our Promoter” and “Financial Information of Group Companies” beginning on page nos. 80, 95 and 193 respectively of the Letter of Offer.

11. The name of our Company was changed from Coates of India Limited to DIC India Limited, with

effect from August 6, 2004, to reflect the busines group which our Company is a part of. 12. The Lead Manager and our Company shall keep the shareholders/public informed of any material

changes till the listing and trading commencement as per the terms of the listing agreement and the SEBI Guidelines.

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13. The aggregate value of Related Party Transactions for the previous three years is as follows:

Financial Year Value (Rs. in Lacs)

2004 2169.17 2005 2126.58 2006 3456.00

For further details refer to section titled “Financial Statements” beginning on page no. 98 of the Letter of Offer

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SUMMARY Industry Overview: Ink contains various pigments and dyes used for coloring a surface to render an image or text. Therefore it finds its most use in publishing and packaging industries. In the present day, Printing Inks are a blend of various ingredients, formulated to create graphic design or text on a variety of substrates or surfaces ranging from paper to polyfilms, foils and metals. These inks are a complex mixture of pigments, flushes, resins, vegetable oils, waxes and solvents. Printing ink is a mixture of colouring matter, dispersed or dissolved, in a vehicle to form a fluid or paste, which is used for printing on a substrate and then dried. Depending on the process and end use, inks are classified into Lithography (or Offset), Flexography, Energy-Curing, Gravure, Letterpress and Specialty ink. Although, most of the raw materials used in ink manufacture are available in India, a large percentage is imported due to huge demand. Business Overview The fortunes of the printing ink industry are linked to the economy, particularly the publishing and packaging sectors. Despite the high GDP growth in the recent past, the growth of the packaging sector in India was impacted by the slow growth of the FMCG sector, restricting the topline growth of the printing ink industry. However, the fortunes of the FMCG industry have revived. This will directly benefit DIC India Limited. Moreover, the publishing sector is on the rebound. The increasing urbanization and literacy levels as well as new launches and higher media spend are likely to result in comfortable growth rates for the publishing industry. The focus of the government on education would further accelerate the demand of the publishing sector. With more foreign publication houses setting up their outfits in India, the publication sector is poised for major growth. All this will benefit DIC India Limited.

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THE ISSUE Equity Shares proposed to be issued by our Company 22,95,179 Rights Entitlement One Equity Share for every three Equity Shares

held on the Record Date Record Date October 26, 2007 Issue Price per Equity Share Rs.225 Equity Shares outstanding prior to the Issue 68,85,537 Equity Shares of Rs. 10 each Equity Shares outstanding after the Rights Issue of Equity Shares

91,80,716 Equity Shares of Rs. 10 each

Terms of the Issue For more information, see “Issue Related Information” on page no. 253 of the Letter of Offer.

Terms of Payment Due Date Amount On Right Issue application Entire Issue Price i.e., an amount of Rs. 225 to be

paid at the time of application

Objects of the Issue For further details on the Objects of the Issue please refer to page no. 22 of the Letter of Offer

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SUMMARY FINANCIAL STATEMENTS

DIC INDIA LIMITED ( Consolidated) Consolidated Summary Statement of Assets and Liabilities (Restated) Annexure I

Rs. in Lacs

As At As At 31st December 30.6.2007 2006 2005 2004 2003 2002

A Fixed Assets Gross Block 9921.70 9670.40 8634.80 7875.40 7005.60 6212.50 Less: Depreciation 4581.60 4299.30 3894.70 3433.90 3035.70 2671.60 Net Block 5340.10 5371.10 4740.10 4441.50 3969.90 3540.90 Capital Work in Progress 736.40 442.40 280.10 152.70 102.80 212.00 Total Fixed Assets 6076.50 5813.50 5020.20 4594.20 4072.70 3752.90 B Investments 0.20 0.20 0.30 1.30 1.10 1.10

C Current Assets, Loans and Advances

Interest accrued on investment 0.10 0.10 0.10 0.00 0.00 0.00 Inventories 5206.50 5579.40 4312.50 3635.70 2720.50 2814.10 Sundry Debtors 13016.60 11959.30 10598.20 9243.30 8819.10 8989.60 Cash & Bank Balances 1620.50 1623.20 1618.90 1756.20 2068.80 1781.20 Loans and Advances 2333.00 1964.40 1437.60 501.70 614.00 542.00 Total Current Assets 22176.70 21126.40 17967.30 15136.90 14222.40 14126.90 D Total Assets (A+B+C) 28253.40 26940.10 22987.80 19732.40 18296.20 17880.90 Liabilities and Provisions E Loan Funds Secured Loans 1570.30 1639.80 352.70 338.80 443.80 652.90 Unsecured Loans 6167.40 5137.60 4088.40 3400.00 3806.80 3425.50 Sub Total 7737.70 6777.40 4441.10 3738.80 4250.60 4078.40 F Deferred Tax Liabilities-Net 620.10 606.10 532.40 617.50 564.90 531.60 G Current Liabilities & Provisions Liabilities 7139.30 7239.70 6797.60 5212.50 4018.10 4399.20 Provisions 249.20 445.33 504.49 407.79 410.59 290.00 Sub Total 7388.50 7685.03 7302.09 5620.29 4428.69 4689.20

H Total Liabilities and Provisions (E+F+G) 15746.30 15068.53 12275.59 9976.59 9244.19 9299.20

I

Net Worth (D-H) 12507.10 11871.57 10712.21 9755.81 9052.01 8581.70

J Represented by:- Shareholders Funds Share Capital 688.60 688.60 688.60 688.60 688.60 688.60 Reserve & Surplus 11818.50 11182.97 10023.61 9067.21 8386.11 7938.60

Less: Miscellaneous Expenditure to the extent not written off 0.00 0.00 0.00 0.00 22.70 45.50

Net Worth 12507.10 11871.57 10712.21 9755.81 9052.01 8581.70

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Notes :

a. The total sales of our Company has grown 14.13% during the period from 2002-06. This increase has lead to the overall increase in the working capital requirement, including debtors. The debtors have grown @ 7.91% during the same period which is normal

b. From FY 2004-05 to FY 2005-06, our Company’s overall net sales had increased from Rs.27855.5 Lacs to Rs.33949.6 Lacs, registering a growth of 22%. This had its impact on the receivables and the inventory, which went up by 14.17% and 32.63% resulting from growing business. With the prices of crude going northwards during the FY 2005-06, the raw material prices also went up as crude is an important raw material in our Company’s finished products. As a result, though operating profit went up, profit after tax took a hit during FY 2005-06. The increase in the raw material price and the growth in the business led to negative cash generation. To tide over the negative cash position and the increased working capital reqirement, our Company had to resort to borrowing by way of secured loan whereby the secured loan amount increased from Rs.352.7 Lacs in FY 2004-05 to Rs.1642.4 Lacs in FY 2005-06.

Consolidated Summary Statement of Profit and Loss (Restated) Annexure II Rs. in Lacs

For six months ended For the year ended 31st December

30.06.07 2006 2005 2004 2003 2002 Income Sales Of products manufactured by the Company 23530.30 40898.90 34002.20 30011.80 26026.60 23531.00 Of products traded by the Company 480.00 2076.60 1791.20 1243.90 1453.80 1946.40 Sub Total 24010.30 42975.50 35793.40 31255.70 27480.40 25477.40 Less: Excise Duty 3040.70 5408.90 4628.60 4113.80 3529.70 3239.00 Net Sales 20969.60 37566.60 31164.80 27141.90 23950.70 22238.40 Other Income 297.20 708.30 381.80 250.00 231.20 250.60 TOTAL INCOME 21266.80 38274.90 31546.60 27391.90 24181.90 22489.00 Expenditure Material consumed 15579.70 27608.90 22380.90 19212.00 16885.60 15340.90 Staff Costs 1369.80 2582.10 2391.70 2206.60 1966.40 1873.10 Other Expenses 2544.90 4754.60 4020.50 3681.30 3403.20 3141.10 Interest and discount on issue of Commercial Paper 445.00 604.70 375.40 313.70 356.00 408.50 Depreciation 326.20 603.20 560.10 491.20 446.50 435.50 TOTAL EXPENDITURE 20265.60 36153.50 29728.60 25904.80 23057.70 21199.10 Profit before Tax without adjustments 1001.20 2121.40 1818.00 1487.10 1124.20 1289.90 Adjustment for regrouping of Wealth Tax ( Refer Note 2a of Annexure IV) 0.00 0.00 0.00 (2.50) (2.50) (2.50) Adjustment relating to Prior period ( Refer Note2b of Annexure IV) 0.00 0.00 0.00 0.00 27.80 Adjustment for Bad debts Recovered ( Refer Note 2c of Annexure IV) (21.70) (4.30) (1.30) (10.10) 7.40 (14.80) Adjustment for Liability written back ( Refer Note 2d of Annexure IV) (1.60) (19.30) 0.00 0.00 (6.10) 2.90 Adjustment for additional depreciation of earlier years ( Refer Note 2f Annexure IV) 0.00 0.00 0.00 0.00 0.00 24.60 Profit before Tax after adjustment 977.90 2097.80 1816.70 1474.50 1123.00 1327.90

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Provision for Taxation Current Tax 316.40 508.00 611.00 470.60 275.40 446.50 Adjustment for Tax provision of earlier years written Back ( Refer Note 2e of Annexure IV )

0.00 28.30 0.00 0.00 75.00 0.00

Tax impact of above adjustment (7.92) (6.44) (0.40) (4.60) (0.71) 4.90 Fringe Benefit Tax 15.80 52.90 59.90 0.00 0.00 0.00 Deffered Tax 18.00 73.70 (85.10) 52.60 33.30 9.80 Sub Total 342.28 656.46 585.40 518.60 382.98 461.20 Profit after Tax 635.62 1441.34 1231.30 955.90 740.01 866.70 Add: Surplus brought forward from previous year 4598.46 3589.11 2734.11 2128.21 1767.20 1354.00 Appropriation Transfer to debenture Redemption Reserve 0.00 0.00 0.00 0.00 0.00 75.00 Transfer to General Reserve 0.00 150.00 101.50 75.20 86.50 106.70 Proposed Dividend 0.00 241.00 241.00 241.00 241.00 241.00 Tax on Proposed Dividend 0.00 41.00 33.80 33.80 51.50 30.80 Balance Carried to Balance Sheet 5234.08 4598.46 3589.11 2734.11 2128.21 1767.20 This report should be read alongwith the Significant accounting Policies in Annexure X, Notes to the Re-stated Statements in Annexure IX of the Auditors’s Report under section titled “Financial Statements” beginning on page no. 98 of the Letter of Offer, prepared after making adjustments and regrouping as considered appropriate and have been prepared in accordance with Part IIB of Schedule II of the Act and the SEBI Guidelines.

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3. There have been certain changes in the financial figures as appearing in the Letter of Offer as against those appearing in the Draft Letter of Offer. The changes in figures are on account of the following : (a) Recovery of bad debt amounting to Rs. 6.60 Lacs made by DIC India Limited, provision of which was made in the financial statements for the year ended

December 31, 2006; (b) Recovery of bad debt amounting to Rs. 15.10 Lacs made by DIC Coatings India Limited, provision of which was made in the financial statements for the year

ended December 31, 2003; (c) Liability written back amounting to Rs. 1.60 Lacs, provision of which was made in the financial statements of DIC Coatings India Limited, for the year ended

December 31, 2006 (d) Resultant changes in tax implications after giving effect to (a), (b) and (c) above. Reproduced hereinbelow, is the table showing comparative differences, in the financial figures given in the Letter of Offer (LO) as against those given in the Draft Letter of Offer (DLO) for the years FY 2006, 2005, 2004 and 2003. There has been no change in any of the financial figures of FY 2002 Consolidated Summary Statement of Assets and Liabilities (Restated) (Rs. In Lacs) As At As At 31st December

30.6.2007 2006 2005 2004 2003 2002.

A Fixed Assets as per LO as per DLO as per LO as per DLO as per LO as per DLO as per LO as per DLO Gross Block 9,921.70 9,670.40 9,670.40 8,634.80 8,634.80 7,875.40 7,875.40 7,005.60 7,005.60 6,212.50

Less: Depreciation 4,581.60 4,299.30 4,299.30 3,894.70 3,894.70 3,433.90 3,433.90 3,035.70 3,035.70 2,671.60

Net Block 5,340.10 5,371.10 5,371.10 4,740.10 4,740.10 4,441.50 4,441.50 3,969.90 3,969.90 3,540.90

Capital Work in Progress

736.40 442.40 442.40 280.10 280.10 152.70 152.70 102.80 102.80 212.00

Total Fixed Assets 6,076.50 5,813.50 5,813.50 5,020.20 5,020.20 4,594.20 4,594.20 4,072.70 4,072.70 3,752.90

B Investments 0.20 0.20 0.20 0.30 0.30 1.30 1.30 1.10 1.10 1.10

C Current Assets, Loans and Advances

Interest accrued on investment

0.10 0.10 0.10 0.10 0.10 - - - - -

Inventories 5,206.50 5,579.40 5,579.40 4,312.50 4,312.50 3,635.70 3,635.70 2,720.50 2,720.00 2,814.10

Sundry Debtors 13,016.60 11,959.30 11,937.60 10,598.20 10,583.10 9,243.30 9,228.20 8,819.10 8,804.00 8,989.60

Cash & Bank Balances 1,620.50 1,623.20 1,623.20 1,618.90 1,618.90 1,756.20 1,756.20 2,068.80 2,068.80 1,781.20

Loans and Advances 2,333.00 1,964.40 1,964.40 1,437.60 1,437.60 501.70 501.70 614.00 614.00 542.00

Total Current Assets 22,176.70 21,126.40 21,104.70 17,967.30 17,952.20 15,136.90 15,121.80 14,222.40 14,207.30 14,126.90

- 7 -

D Total Assets (A+B+C) 28,253.40 26,940.10 26,918.40 22,987.80 22,972.70 19,732.40 19,717.30 18,296.20 18,281.10 17,880.90

Liabilities and Provisions

E Loan Funds

Secured Loans 1,570.30 1,639.80 1,639.80 352.70 352.70 338.80 338.80 443.80 443.80 652.90

Unsecured Loans 6,167.40 5,137.60 5,137.60 4,088.40 4,088.40 3,400.00 3,400.00 3,806.80 3,806.80 3,425.50

Sub Total 7,737.70 6,777.40 6,777.40 4,441.10 4,441.10 3,738.80 3,738.80 4,250.60 4,250.60 4,078.40

F Deferred Tax Liabilities-Net

620.10 606.10 606.10 532.40 532.40 617.50 617.50 564.90 564.90 531.60

G

Current Liabilities & Provisions

Liabilities 7,139.30 7,239.70 7,241.30 6,797.60 6,797.60 5,212.50 5,212.50 4,018.10 4,018.10 4,399.20

Provisions 249.20 445.33 437.50 504.49 499.40 407.79 402.70 410.59 405.50 290.00

Sub Total 7,388.50 7,685.03 7,678.80 7,302.09 7,297.00 5,620.29 5,615.20 4,428.69 4,423.60 4,689.20

H

Total Liabilities and Provisions (E+F+G)

15,746.30 15,068.53 15,062.30 12,275.59 12,270.50 9,976.59 9,971.50 9,244.19 9,239.10 9,299.20

I Net Worth (D-H) 12,507.10 11,871.57 11,856.10 10,712.21 10,702.20 9,755.81 9,745.80 9,052.01 9,042.00 8,581.70

J Represented by:-

Shareholders Funds

Share Capital 688.60 688.60 688.60 688.60 688.60 688.60 688.60 688.60 688.60 688.60

Reserve & Surplus 11,818.50 11,182.97 11,167.50 10,023.61 10,013.60 9,067.21 9,057.20 8,386.11 8,376.10 7,938.60

Less: Miscellaneous Expenditure to the extent not written off

- - - - 22.70 22.70 45.50

Net Worth 12,507.10 11,871.57 11,856.10 10,712.21 10,702.20 9,755.81 9,745.80 9,052.01 9,042.00 8,581.70

- 8 -

Consolidated Summary Statement of Profit and Loss (Restated)

Rs. In Lacs

For six months ended

For the year ended 31st December

30.06.07 2006 2005 2004 2003 2002

Income as per LO as per DLO as per LO as per DLO as per LO as per DLO as per LO as per DLO

Sales

Of products manufactured by the Company

23530.3 40,898.90 40,898.90 34,002.20 34,002.20 30,011.80 30,011.80 26,026.60 26,026.60 23531

Of products traded by the Company

480 2,076.60 2,076.60 1,791.20 1,791.20 1,243.90 1,243.90 1,453.80 1,453.80 1946.4

Sub Total 24010.3 42,975.50 42,975.50 35,793.40 35,793.40 31,255.70 31,255.70 27,480.40 27,480.40 25477.4

Less: Excise Duty 3040.7 5,408.90 5,408.90 4,628.60 4,628.60 4,113.80 4,113.80 3,529.70 3,529.70 3239

Net Sales 20969.6 37,566.60 37,566.60 31,164.80 31,164.80 27,141.90 27,141.90 23,950.70 23,950.70 22238.4

Other Income 297.2 708.30 708.30 381.80 381.80 250.00 250.00 231.20 231.20 250.6

TOTAL INCOME 21266.8 38,274.90 38,274.90 31,546.60 31,546.60 27,391.90 27,391.90 24,181.90 24,181.90 22489

Expenditure

Material consumed 15579.7 27,608.90 27,608.90 22,380.90 22,380.90 19,212.00 19,212.00 16,885.60 16,885.60 15340.9

Staff Costs 1369.8 2,582.10 2,582.10 2,391.70 2,391.70 2,206.60 2,206.60 1,966.40 1,966.40 1873.1

Other Expenses 2544.9 4,754.60 4,754.60 4,020.50 4,020.50 3,681.30 3,681.30 3,403.20 3,403.20 3141.1

Interest and discount on issue of Commercial Paper

445 604.70 604.70 375.40 375.40 313.70 313.70 356.00 356.00 408.5

Depreciation 326.2 603.20 603.20 560.10 560.10 491.20 491.20 446.50 446.50 435.5

TOTAL EXPENDITURE 20265.6 36,153.50 36,153.50 29,728.60 29,728.60 25,904.80 25,904.80 23,057.70 23,057.70 21199.1

Profit before Tax without adjustments

1001.2 2,121.40 2,121.40 1,818.00 1,818.00 1,487.10 1,487.10 1,124.20 1,124.20 1289.9

Adjustment for regrouping of Wealth Tax ( Refer Note 2a of Annexure IV)

0 - - (2.50) (2.50) (2.50) (2.50) -2.5

Adjustment relating to Prior period ( Refer Note2b of Annexure IV)

0 -

-

-

27.8

- 9 -

Adjustment for Bad debts Recovered ( Refer Note 2c of Annexure IV)

-21.7 (4.30) (10.90) (1.30) (1.30) (10.10) (10.10) 7.40 (7.70) -14.8

Adjustment for Liability written back ( Refer Note 2d of Annexure IV)

-1.6 (19.30) (20.90) - - (6.10) (6.10) 2.9

Adjustment for additional depreciation of earlier years ( Refer Note 2f Annexure IV)

0 - - - 24.6

Profit before Tax after adjustment 977.9 2,097.80 2,089.60 1,816.70 1,816.70 1,474.50 1,474.50 1,123.00 1,107.90 1327.9

Provision for Taxation

Current Tax 316.4 508.00 508.00 611.00 611.00 470.60 470.60 275.40 275.40 446.5

Adjustment for Tax provision of earlier years

28.30 75.00

written Back ( Refer Note 2e of Annexure IV )

0 28.30

-

-

75.00

0

Tax impact of above adjustment

-7.92 (6.44) (9.20) (0.40) (0.40) (4.60) (4.60) (0.71) (5.80) 4.9

Fringe Benefit Tax 15.8 52.90 52.90 59.90 59.90 - - 0

Deffered Tax 18 73.70 73.70 (85.10) (85.10) 52.60 52.60 33.30 33.30 9.8

Sub Total 342.28 656.46 653.70 585.40 585.40 518.60 518.60 382.98 377.90 461.2

Profit after Tax 635.62 1,441.34 1,435.90 1,231.30 1,231.30 955.90 955.90 740.01 730.00 866.7

Add: Surplus brought forward from previous year

4598.46 3,589.11 3,579.10 2,734.11 2,724.10 2,128.21 2,118.20 1,767.20 1,767.20 1354

Appropriation

Transfer to debenture Redemption Reserve

0 - - - 75

Transfer to General Reserve 0 150.00 150.00 101.50 101.50 75.20 75.20 86.50 86.50 106.7

Proposed Dividend 0 241.00 241.00 241.00 241.00 241.00 241.00 241.00 241.00 241

Tax on Proposed Dividend 0 41.00 41.00 33.80 33.80 33.80 33.80 51.50 51.50 30.8

Balance Carried to Balance Sheet

5234.08 4,598.46 4,583.00 3,589.11 3,579.10 2,734.11 2,724.10 2,128.21 2,118.20 1767.2

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GENERAL INFORMATION

Dear Shareholder(s),

Pursuant to the resolution passed by the Board of Directors of our Company at its meeting held on April 18, 2007, and the resolution passed at the Annual General Meeting held on May 29, 2007, it has been decided to make the following offer to the Equity Shareholders of our Company, with a right to renounce:

ISSUE OF 22,95,179 FULLY PAID EQUITY SHARES WITH A FACE VALUE OF RS.10/- EACH AT A PREMIUM OF Rs. 215 PER EQUITY SHARE FOR AN AMOUNT AGGREGATING TO RS.5164.15 LACS ON RIGHTS BASIS TO THE EXISTING SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 1 FULLY PAID EQUITY SHARE FOR EVERY 3 EQUITY SHARES HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, I.E. ON OCTOBER 26, 2007 THE ISSUE PRICE IS 22.5 TIMES THE FACE VALUE OF THE EQUITY SHARES

IMPORTANT

• This offer is applicable only to those Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the Depositories in respect of the Equity Shares held in the electronic form and in the Register of Members of our Company in respect of the shares held in physical form as on October 26, 2007, i.e. Record Date, fixed in consultation with the BSE

• Your attention is drawn to the section titled “Risk Factors” beginning on page no. vii of the Letter of Offer.

• Please ensure that you have received the CAF with the Letter of Offer.

• In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar will issue a duplicate CAF on the request of the shareholder who should furnish the registered folio number/DP ID/client ID number and his/her full name and address to the Registrar. Please note that those applicants who are making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation, even if it is received/found subsequently. In case the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored.

• Please read the Letter of Offer and the instructions contained herein and in the CAF carefully, before filling in the CAF. The instructions contained in the CAF are an integral part of the Letter of Offer and must be carefully followed. Applications are liable to be rejected if they are not in conformity with the terms of the Letter of Offer or the CAF.

• All enquiries in connection with the Letter of Offer or CAF should be addressed to the Registrar to the Issue, C.B. Management Services (P) Ltd., quoting the Registered Folio Number/Depository Participant (DP) Number and Client ID Number and the CAF Numbers as mentioned in the CAF.

• The offer will be kept open for a minimum period of thirty days. If extended, it will be kept open for a maximum period of sixty days.

• The Issue Program is as follows:

Issue Opens on – November 20, 2007

Last date for request for split application forms – December 4, 2007

Issue Closes on – December 19, 2007

• The funds received against the Issue will be kept in separate bank account(s) and our Company will not have any access to such funds unless we satisfy the Designated Stock Exchange with suitable documentary evidence that the minimum subscription of 90% of the Issue has been received by our Company. If our 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. Our Promoter have undertaken to subscribe to the unsubscribed portion, if any, to ensure that the Issue is successful.

- 11 -

• All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock Exchange have been complied with.

Name and Registered Office: DIC India Limied Transport Depot Road, Kolkata – 700 088, West Bengal Tel: (033) 2449 6591/6 Fax: (033) 2449 5267 Email: [email protected] Website: www.dicindialtd.com Details of Registration Our Company was incorporated on April 2, 1947 bearing Registration Number 15202 of 1947-1948. Our Company Identification Number (CIN) is L24223WB1947PLC015202 Our Company is registered with the Office of the Registrar of Companies, West Bengal, Nizam Palace, 2nd M.S.O. Building, 2nd Floor, 234/4, A.J.C.Bose Road, Kolkata – 700 020. Board of Directors Our current Board of Directors comprises of the following persons:

Name of the director Designation Directors’ Identification Number Dr. Prabir Kumar Dutt Chairman and Managing Director 00026833 Mr. Paul Koek Non Executive 00081930 Mr. Mitsunobu Miyasaka

Non Executive 01448616

Mr. Dipak Banerjee Non Executive and Independent Director 00028123 Mr. Rasendu Patatunda Non-Executive and Independent Director 00028515 Prof. Ranjan Das Non-Executive and Independent Director 01738493 Mr. Subir Bose Non-Executive and Independent Director 00048451

Brief Details of our Chairman and Whole Time Directors: Dr. Prabir Kumar Dutt

Dr P K Dutt, aged 63 years, was born on 14th March, 1942. After completing B.Sc, M.Tech. (Chemical Engineering & Chemical Technology) and Ph.D. (Polymer Chemistry), Dr Dutt joined our Company on 1st August, 1970 as a Chemist. In September, 1980 his services were lent to Coates Brother Plc, UK and he worked till March, 1982 as Executive Assistant to Group Managing Director .From April, 1982 he was on deputation to Coates Brothers (West Africa) Ltd. and worked there as Techno-Commercial Manager and later became its Managing Director. On his return to India, Dr Dutt joined the Board of our Company in May, 1984. Dr Dutt was appointed as the Managing Director for a period of five years with effect from 26th July, 1991. On expiry of his term, Dr Dutt was re-appointed as the Managing Director successively for a further period of five years each with effect from July 26, 1996, July 26, 2001 and July 26, 2006. Consequent to the death of Mr. J N Sapru, the erstwhile Chairman of our Company, Dr. Dutt has been appointed as the Chairman of the Board w.e.f. May 29, 2007, in terms of clause 126 of the Articles of Association of Company. Company Secretary and Compliance Officer Mr. T.B. Chatterjee Transport Depot Road, Kolkata – 700 088, West Bengal Tel: (033) 2449 6591/6 Fax: (033) 2449 5267 Email: [email protected] Website: www.dicindialtd.com

- 12 -

Legal Advisors to the Issue M/s. Crawford Bayley & Co State Bank Buildings, 4th floor N.G.N Vaidya Marg, Mumbai 400 023 India Tel.: +91-22-2266 8000 Fax. : +91-22-2266 3978 Email: [email protected] Bankers to the Company Bank of Baroda 3B, Camac Street, Kolkata –700 016 Tel.: +91 33 2229 5181 Fax : +91 33 2226 4576 Email: [email protected] Website : www.bankofbaroda.com Standard Chartered Bank 19, N S Road, Kolkata – 700 001 Tel.: +91-33 2222 0102 Fax : +91-33 2230 1696 Email: [email protected] Website : www.standardchartered.co.in State Bank of India Commercial Branch, 24/1/1 Alipore Road, Kolkata – 700 027 Tel.: +91 33 24481329 Fax : +91 33 244 81329 Email: [email protected] Website : www.statebankofindia.com HSBC Limited 31, BBD Baugh Kolkata – 700 001 Tel.: +91 33 2243 8585 Fax : +91 33 2248 5686 Email: [email protected] Website : www.hsbc.co.in ABN AMRO Bank N.V. Azimgunj House Unit No 3.4.& 5 7 Camac Street Kolkata-700017 Phone: 033 3982 8000/ 2282 0990 Fax: 033 2282 3158 Email : [email protected] Website: www.abnamro.co.in

- 13 -

Lead Manager to the Issue SBI Capital Markets Limited 202, Maker Tower “E”, Cuffe Parade, Mumbai – 400 005 Tel : +91 22 2218 9166 Fax : +91 22 2218 8332 Email : [email protected] Website: www.sbicaps.com Contact Person: Mr. Ajay Srivastava

Registrar to the Issue and Registrar and Transfer Agents for the Company M/s. C.B. Management Services (P) Ltd. P-22, Bondel Road, Kolkata – 700 019 Tel: (033) 2280 2486 Fax: (033) 2287 0263 Email: [email protected] Contact Person: Mr. P. Basu 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 Letter of Offer / Letter of Allotment / Share Certificate(s) / Refund Orders / Demat Credit. Bankers to the Issue Axis Bank Limited 7 Shakespeare Ssarani Kolkata – 700071 Tel. : +91 33 2282 4787 Fax : +91 33 2282 7611 Contact Person : Mr. Prasun Das Email: [email protected] Website : www.axisbank.com Auditors to the Company M/s. Lovelock and Lewes Plot Y-14, Block EP, Sector V Salt Lake, Kolkata – 700 091 Tel.: +91 33 23579260 Fax : +91 33 23577496 Email: [email protected] Inter-se Allocation of Responsibilities Not Applicable

Credit Rating Details This being a Rights Issue of Equity Shares, no credit rating is required. IPO (Initial Public Offering) Grading This being a Rights Issue of Equity Shares and not an IPO, requirement to obtain IPO Grading is not applicable. Trustees

- 14 -

This being a Rights Issue of Equity Shares, appointment of Trustees is not required. Monitoring Agency Not Applicable Appraising Entity

Not Applicable Underwriting / Standby arrangements The present Issue is not underwritten and our Company has not made any standby arrangements for the Issue.

Minimum subscription clause

i. If our Company does not receive the minimum subscription of 90% of the issued amount the entire

subscription shall be refunded to the applicants within 42 days from the date of closure of the issue. ii. If there is a delay in the refund of subscription by more than 8 days after our Company becomes liable

to repay the subscription amount (i.e. 42 days after closure of the issue), our Company shall pay interest for the delayed period at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

iii. All moneys received out of this Rights Issue through the Letter of Offer shall be transferred to a separate bank account.

In case, this Rights Issue is undersubscribed, after considering the number of equity shares applied as per entitlement/ renouncement and additional equity shares, the undersubscribed portion can be applied for only after the close of the Issue. DIC Asia Pacific Pte Ltd., Singapore, our Promoter, has undertaken to subscribe to such unsubscribed portion if the issue does not have subscription to the extent of 90% of the Issue size, after considering the above allotment, to ensure that the Issue is successful. This acquisition of additional Equity Shares, if allotted to DIC Asia Pacific Pte Ltd., Singapore, our Promoter, shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of our Company.

- 15 -

CAPITAL STRUCTURE

The share capital of our Company as on the date of filing of the Letter of Offer with SEBI and the Stock Exchanges is as set forth below. Aggregate nominal

value (in Lacs)

Aggregate value at Issue Price (in Lacs)

Authorised Share Capital 1,50,00,000 Equity Shares of Rs. 10/- each 1500.00 Issued, Subscribed & Paid-up Share Capital 68,85,537 Equity Shares of Rs 10/- each fully paid- 688.55 Present issue being offered to the existing Shareholders through the Letter of Offer

22,95,179 Equity Shares of Rs. 10/- each. 229.51 5164.15 Paid-up Capital after the issue* 91,80,716 Equity Shares of Rs. 10/- each fully paid-up 918.07 Securities Premium Account Before the Issue 1673.60 After the Issue 6608.23

* The Capital Structure Statement is prepared on the assumption that proposed rights issue of Equity

Shares 22,95,179 @ Rs.225 per Equity Share will be subscribed fully. Notes to Capital Structure

Details of increase/reclassification in our Authorised Share Capital, since inception

Sr.No. Details of increase/ reclassification in Authorised Share Capital Date and type of Meeting 1 Incorporation –Rs. 20,00,000 consisting of 2,00,000 Equity Shares of

Rs.10 each

2 Increase of authorised capital from Rs.20, 00,000 to Rs.50, 00,000 consisting of 5,00,000 Equity Shares of Rs.10 each

EGM held on December 28, 1967

3 Increase of authorised capital from Rs. 50,00,000 to Rs.100, 00,000 consisting of 10,00,000 Equity Shares of Rs.10 each

EGM held on August 1, 1974

4 Increase of authorised capital from Rs. 100,00,000 to Rs.1,50, 00,000 consisting of 15,00,000 Equity Shares of Rs.10 each

AGM held on April 21, 1978

5 Increase of authorised and reclassification capital from Rs 1,50,00,000 to Rs. 1,80,00,000 consisting of Rs. 15,00,000 Equity Shares of Rs. 10 each and Rs 30,00,000 preference share of Rs. 100 each

AGM held on April 29, 1982

6 Increase of Authorised and reclassification capital from Rs 1,50,00,000 to Rs. 3,50,00,000 consisting of Rs. 35,00,000 equity shares of Rs. 10 each.

AGM held on September 28, 1989

7 Increase of Authorised capital from Rs 3,50,00,000 to Rs. 7,00,00,000 consisting of 70,00,000 equity shares of Rs. 10 each.

AGM held on July 20, 1992

8 Increase of Authorised capital from Rs. 7,00,00,000 consisting of 70,00,000 equity shares to Rs.15,00,00,000 consisting of 1,50,00,000 Equity Shares of Rs. 10 each.

AGM held on May 29, 2007

- 16 -

(i) Build up of Equity Share Capital

Date of Allotment / Board Meeting

Number of Shares

Face Value

per Equity Share (Rs.)

Issue Price per

Equity Share (Rs.)

Nature of Payment of Considerati

on

Reasons of Allotment of Capital

Cumulative Equity Shares

Cumulative Securities Premium

(Rs.)

April 16, 1947 2 10 10 Cash Subcribers to the MoA 2 January 8, 1948 31900

10 *Allotment

other than Cash

Further Issue of shares to Promoters

31,902

September 22, 1960 5,866 10 - *Allotment other than

Cash


37,768

January 5, 1961 247 10 - *Allotment other than

Cash


38,015

1 10 *Partly for Cash and

partly other than cash


38016 April 6, 1961

18290 10 10 Cash Further Issue of shares to Promoters

56,306

March 15, 1962 28,153 10 75 Cash Issue of shares to Others 84,459 18,29,945 May 22, 1964 96,000 10 10 Cash Further Issue of shares to

Promoters and others 1,80,459

January 29, 1968 180,459 10 NA Cash Bonus Issue 3,60,918 April 25, 1975 360,918 10 NA Cash Bonus Issue 7,21,836 August 30, 1977 2,00,000 10 18 Cash Public Issue 9,21,836 34,29,945 November 1, 1978 1,84,366 10 NA Cash Bonus Issue 11,06,202 August 20, 1986 2,21,241 10 NA Cash Bonus Issue 13,27,443 January 1, 1990 8,84,962 10 NA Cash Bonus Issue 22,12,405 November 6, 1992 22,12,405 10 NA Cash Bonus Issue 44,24,810 September 22, 1993 11,61,503 10 40 Cash Rights Issue 55,86,313 3,82,75,035 February 1, 1994 12,99,224 10 112 Cash Preferential Allotment to

Promoters 68,85,53717,07,95,883

* For details refer to Note No. (xviii) hereinbelow Notes :

i. Bonus Issue on January 29, 1968, in the ratio 1:1 was made by capitalizing Rs18.05 Lacs from the Share Premium Account

ii. Bonus Issue on April 25, 1975, in the ratio of 1:1 was made by capitalizing Rs. 36.09 Lacs from the Share Premium and General Reserve Account.

iii. Bonus Issue on November 1, 1978, in the ratio of 1: 5 was made by capitalizing Rs. 18.44 Lacs out of the Share Premium Account and General Reserves

iv. Bonus Issue on August 20, 1986, in the ratio of 1:5 was made by capitalizing Rs. 22.12 Lacs from the General Reserve Account

v. Bonus Issue on January 1, 1990, in the ratio of 2:3 was made by capitalizing Rs. 88.50 Lacs from the General Reserve and the Share Premium Accounts

vi. Bonus Issue on November 6, 1992, in the ratio of 1:1 was made by capitalizing Rs. 221.24 Lacs from the General Reserve Account

(ii) Details of the shareholding of the Promoters, Promoter Group, directors of the Promoter in our

Company as on the date of filing of the Letter of Offer with SEBI is as follows:

- 17 -

Sr. No.

Name of the Promoter / Promoter Group Entitties

No. of Shares held % of shareholding

1 DIC Asia Pacific Pte. Ltd., Singapore 45,27,888 65.76 (iii) Details of purchase and sale of securities of our Company by the Promoter and Directors of

Promoter, in the last 6 months Our Promoter and our Promoter group have not sold any Equity Shares, directly or indirectly, during a period of six months preceding the date on which this Draft Letter Offer is filed with SEBI. (iv) Shareholding pattern of our Company prior to the Issue and post Issue:

Pre-Issue Post-Issue Shareholder's Category No. of Shares %age No. of Shares %age

A. Promoters Holding 1. Promoters - Indian Promoters NIL NIL NIL NIL - Foreign Promoters Bodies Corporate 45,27,888 65.76 60,37,184 65.76

Sub-Total (A) 45,27,888 65.76 0 0.00 2. Promoter Group/Persons acting in concert NIL NIL NIL NIL B. Non-Promoter Holding 1. Mutual Funds/ UTI 9 0 0.0001 12 0.00 2. Banks, Financial Institutions, Insurance Companies (Central/State Govt. Institutions/Non-Govt. Institutions)

3,21,716 4.67 4,28,955 4.67

3. FIIs - - - - Sub-Total of (B) 3,21,725 4.67 4,28,967 4.67 C. Other Investors 1. Employees - - 2. Bodies Corporate 2,53,403 3.68 3,37,871 3.68 3. Indian Public 17,61,739 25.58 23,48,985 25.59 4. NRIs/OCBs 18,954 0.28 25,272 0.28 5. Any Others (Specify) Clearing Members 1,828 0.03 2,437 0.03 Sub-Total of (C) 19,45,637 29.57 27,14,565

29.57

D. Shares offered to through this Issue Nil Nil Nil Nil Grand Total (A+B+C+D) 68,85,537 100.00 91,80,716 100 Since the current issue is a Rights Issue, the Shareholding Pattern Post Issue will remain unchanged, assuming that all the applicants exercise their Rights in full. (a) Equity shares held by the top 10 Shareholders as on the date of filing the Letter of Offer with

SEBI* Sr.No. Name of the Shareholder Number of Equity

Shares % of shareholding

1 DIC Asia Pacific Pte Ltd 45,27,888 65.76 2 United India Insurance Company Limited 2,03,814 2.96 3 National Insurance Company Ltd 1,13,964 1.66 4 Pushpa C Varma 67,328 0.98 5 Hitesh Ramji Javeri 65,101 0.95 6 Kamal Nayan Saraogi 53,574 0.78 7 Vikash C Varma 42,619 0.62 8 Harshavardhan Himatsingka 33,195 0.48 9 Udaipur Cotton Mills Co Ltd 28,378 0.41 10 Harshavardhan Himatsingka 25,583 0.37 * Beneficiary postion as on October 12, 2007.

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(b) Equity shares held by the top 10 Shareholders, 10 days prior to filing the Letter of Offer with the Stock Exchanges*

Sr.No. Name of the Shareholder Number of Equity

Shares % of shareholding 1 DIC Asia Pacific Pte Ltd 45,27,888 65.76 2 United India Insurance Company Limited 2,03,814 2.96 3 National Insurance Company Ltd 1,13,964 1.66 4 Pushpa C Varma 67,328 0.98 5 Hitesh Ramji Javeri 65,101 0.95 6 Kamal Nayan Saraogi 53,574 0.78 7 Vikash C Varma 42,619 0.62 8 Harshavardhan Himatsingka 33,195 0.48 9 Udaipur Cotton Mills Co Ltd 28,378 0.41

10 Harshavardhan Himatsingka 25,583 0.37 * Beneficiary position as on October 02, 2007 (c) Equity shares held by the top 10 Shareholders, two years prior to filing the Letter of Offer with the Stock Exchange*

Sr.No. Name of the Shareholder Number of Equity

Shares % of shareholding 1 DIC Asia Pacific Pte Ltd 45,27,888.00 65.76 2 United India Insurance Company Limited 1,46,308.00 2.12 3 National Insurance Company Ltd 1,45,175.00 2.11 4 Pushpa C Varma 70,217.00 1.02 5 UTI-Unit Scheme For Charitable And Religious 62,350.00 0.91 6 Mahenderpal Ramdattamal Bahl 62,000.00 0.90 7 Vikash C Varma 51,242.00 0.74 8 Hitesh Ramji Javeri 47,312.00 0.69 9 Mackertich Consultancy Services Private Limit 38,460.00 0.56

10 Tara Chand Jain 24,337.00 0.35 * Beneficiary position as on October 10, 2005

(vi) The present Issue being a Rights Issue, as per extant SEBI DIP Guidelines, the requirements of

promoters’ contribution and lock-in are not applicable.

(vii) Neither our Company, the Promoters, Directors of our Company, nor the Lead Manager to the Issue have entered into any buy-back, standby or similar arrangements for any of the securities being issued through this Letter of Offer. However our Promoter, DIC Asia Pacific Pte. Ltd. have confirmed that they would subscribe to their entitlement and would also subscribe to the unsubscribed portion, if any, of the Issue.

(viii) Our 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.

(ix) The Equity Shares of our Company are fully paid up and there are no partly paid up shares as on date.

(x) Our Company undertakes that at any given time, there shall be only one denomination for the

Equity Shares of our Company and our Company shall comply with such disclosure and accounting norms as specified by SEBI from time to time.

(xi) Our Company has 8211 Shareholders as on the date of filing the Letter of Offer with SEBI as per

beneficiary position as on October 12, 2007.

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(xii) Our Company has not issued any Equity Shares or granted any options under any scheme of employee’s stock option or employees stock purchase.

(xiii) The equity shareholders of our Company do not hold any warrants, options or convertible loans or

debentures, which would entitle them to acquire further shares in our Company. There are no outstanding options, warrants, debentures, convertible instruments held by anybody that will entitle such persons to acquire further Equity Shares in our Company.

(xiv) There would be no further issue of capital, whether by way of issue of bonus shares, preferential

allotment, and rights issue or in any other manner during the period commencing from submission of the Letter of Offer with SEBI until the Equity Shares offered through the Letter of Offer have been listed.

(xv) Our Company presently does not have any intention or proposal to alter its capital structure within

a period of six months from the date of opening the issue, by way split/consolidation of the denominations of Shares or further issue of Shares whether preferential or otherwise.

(xvi) We have not issued any Equity Shares out of revaluation reserves.

(xvii) Our Company has capitalized its reserves since inception. The details for the same are as follows:

Sr. No.

Financial Year

Particulars of Capitalisation of Reserves or Profit

1 1968 Rs.18.05 Lacs from the Share Premium Account for issue of 1,80,459 Equity Shares as bonus shares in the ratio of 1:1

2 1975 Rs. 36.09 Lacs from the Share Premium and General Reserve for issue of 3,60,918 Equity Shares as bonus shares in the ratio of 1:1

3 1978 Rs. 18.44 Lacs from the Share Premium and General Reserve for issue of 1,84,366 Equity Shares as bonus shares in the ratio of 1:5

4 1986 Rs. 22.12 Lacs from the General Reserve for issue of 2,21,241 Equity Shares as bonus shares in the ratio of 1:5

5 1990 Rs. 88.50 Lacs from the Share Premium and General Reserve Account for issue of 8,84,962 Equity Shares as bonus shares in the ratio of 2:3

6 1992 Rs. 2.21 Lacs from the General Reserve Account for issue of 22,12,405 Equity Shares as bonus shares in the ratio of 1:1

(xviii) Our Company has not made a public offering of its Equity Shares in the immediately preceding

two years from the date of filing of the Letter of Offer.

(xix) Our Company has allotted 35013 shares alloted for consideration other than cash, the details of which are as follows :

Date of allotment

Number of Equity Shares allotted

Allottees Particulars of allotment

10,000

Coates Bros. Co. Ltd.

Allotment resolution of 16.04.1947 given effect to pursuant to receipt of approval of RBI letter dated 17.12.1947

12,400


Against part payment of the price of the stock in trade, machinery etc in terms of Clause 5 of Sale Agreement

January 8, 1948

6,500

Clive Street Nominees Ltd.

Nominee of M/s. Coates Bros. Co. Ltd.

5,866

Against import of machinery of Rs 1,21,981/- and pursuant to RBI's approval dated 28.07.1959

September 22, 1960

Coates Bros. Co. Ltd. Part satisfaction of the sum of Rs. 58,666.67/-

January 5, 1961 Coates Bros. Co. Against purchase of machinery of Rs. 2,466.66

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247 Ltd. 1

Total of 6113 ( 5866+247) shares amounting to Rs. 61130/- were allotted against imports of Rs 61133.33 under Original plant for shares scheme.

April 6, 1961


As such 1 share was allotted for Rs. 6.67 in cash and Rs. 3.33 for other than in cash in full settlement of the above Scheme.

(xx) The Issue will remain open for a minimum of 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.

(xxi) If our 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 our Company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), our 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.

(xxii) The issue will become undersusbcribed after considering the number of shares applied as per the

entitlement plus additional shares by the shareholders. The undersubscribed portion can be applied for only after the close of the Issue. Our Promoter, DIC Asia Pacific Pte Ltd., Singapore, has undertaken to subscribe to such undersubscribed portion if the issue does not have subscription to the extent of 90% of the Issue size, after considering the above allotment, to ensure that the Issue is successful. This acquisition of additional Equity Shares, if allotted to DIC Asia Pacific Pte Ltd., Singapore, Promoters, shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of our Company.

(xxiii) The Promoter of our Company does not have any intention to delist the Company. The Promoter

currently holds 65.76% of the present equity share capital of our Company. In case the Promoters and persons in the promoter group subscribe to the unsubscribed portion in the issue to the extent stated above, the public shareholding after the Rights Issue will not fall below the “permissible minimum level” as specified in the listing condition or listing agreement and thus sub clause 17.1 and 17.2 of the SEBI (Delisting ofSecurities) Guidelines, 2003 will be not be applicable in this Issue.

(xxiv) For Equity Shares being offered on rights basis under this Issue, shareholders are entitled to the

allotment of one Equity Share for every 3 Equity Shares held. In the case of any share holding other than in mutiples of 3, fractional entitlement will be ignored. Equity sharesholders whose fractional entitlement is being ignored would be given preferential allotment of one additional Equity Share each, if they apply for additional Equity Share.

(xxv) The terms of issue to Non-Resident Equity Shareholders/Applicants have been presented under the

section “Issue Related Information” on page 253 of the Letter of Offer.

(xxvi) There are restrictive covenants in the agreements that our Company has entered into with our Bankers for long-term borrowings. Some of these restrictive covenants require the prior consent of the said banks and include, for example, restrictions pertaining to the declaration of dividends, alteration of the capital structure, entrance into any merger/amalgamation, expenditure in new projects, change in key personnel, change in the constitutional documents and the right to appoint a nominee director on the Board of Directors of our Company upon an event of default.

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Our Company has in accordance with such agreements obtained the consent of such banks and financial institutions to proceed with the Rights Issue, the details of which are as follows :

Sr.No Name of the Bank Sanction Letter Number and Date. 1 Standard Chartered Bank No CBG/AR dated May 21, 2007 2 Hongkong and Shanghai Banking Corporation

Limited May 21, 2007

3 State Bank of India Br/Adv/07/815 dated May 23, 2007 4 Bank of Baroda No CS:32:ADV:CC dated May 22,

2007

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OBJECTS OF THE ISSUE

Our Company intends to utilize the proceeds of the present Rights Issue of 22,95,179 Equity Shares at Rs 225 each aggregating to Rs.5164.15 Lacs, towards the following objects:

• Setting up Liquid Inks (LI) Mother Plant at Noida

• Expansion of News Ink plant at Noida

• Technology upgradation at the Sheetfed plant situated at Kolkata and normal modernization and upgradadtion

• Repayment of overdraft, short-term borrowings etc.

• Issue expenses

The main objects clause and objects incidental or ancillary to the main objects clause of the Memorandum of Association of our Company enable our Company to undertake its existing activities and the activities for which the funds are being raised through this Issue. In view of the competitive nature of the industry segment we operate in, we may have to revise our business plans from time to time and consequently our fund requirements may change. This may include rescheduling of capital expenditure programs, starting non- planned new project’s, 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 our management. The stated fund requirements and deployment have not been appraised by any bank or financial institution. In case of any shortfall/cost overrun, we intend meeting the fund requirements from our own resources/borrowing programmes. Requirement of Funds:-

(Rs. in Lacs) Sr. No.

Particulars Total

1 Setting up of LI Mother Plant at Noida 1898.00 2 Technology upgradation of Sheetfed plant at Kolkata and normal modernization and

upgradation 950.00

3 Expansion of News Ink at Noida 300.00 4 Repayment of short term borrowings 2618.35 5 Issue expenses 100.00

Total Cost 5866.35 Means of Finance:-

(Rs. in Lacs) Sr. No. Particulars Total

1. Proceeds of the Rights Issue 5164.15 2. Unsecured Loan from DIC Asia Pacific Pte. Ltd., Singapore, our Promoter* 458.70 3. Internal Accruals 243.50

Total 5866.35 *The amount of Rs 458.70 Lacs has already been raised by way of External Commerical Borrowings from DIC Asia Pacific Pte Ltd., Singapore

Appraisal Our project has not been appraised by any independent authority and is based on internal management estimates.

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Details about the External Commercial Borrowings taken from DIC Asia Pacific Pte Ltd., Singapore

Name of the Lenders DIC Asia Pacific Pte Ltd., Singapore Details of the loan agreement

External Commercial Borrowing Agreement dated August 24, 2006

Loan Amount Loan facility in an aggregate amount of US$ 3 Million equivalent to Rs.458.70 Lacs

Details of Disbursement of Loan

In three tranches and not later than December 31, 2008. First drawdown: US$ 1 Million on on September 25, 2006 equivalent to Rs.458 lacs. Our Company does not intend to further drawdown.

Purpose To part finance the cost of setting up of Liquid Ink Mother Plant at Noida Plant.

Interest 5.90% floating p.a., payable half-yearly, subject to deduction of withholding tax and other taxes and levies as may be applicable under the Indian statutory legislations

Repayment The Borrower to repay the Loan in full on the date falling 36 months from the date of each drawdown

Negative/ Restrictive Covenants

1. The Borrower shall ensure that no substantial change is made to the general nature or scope of the business of the Borrower from that carried on at the date hereof without prior written consent of the Lender;

2. Any change to the current capital structure, scheme of amalgamation / reconstruction must be informed to the Lender prior to being undertaken except if ;

a. made in the ordinary course of business, b. disposal of assets in exchange for other assets

comparable or superior as to type, quality and value; c. scheme of arrangement in form of merger,

amalgamation, de-merger, takeover etc;

The amount to be spent for the stated objects of the Issue is proposed to be funded through the proceeds of the present Rights Issue only. Hence we are not required to make further arrangement of the funds. The said arrangement of the funds is in compliance of clause 2.8 of SEBI (DIP) Guidelines, 2000.

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FUNDS REQUIREMENT

The detailed cost break up of the proposed expansion, modernization and technology upgradation activities as envisaged in the Objects of the Issue are as follows I. Setting up of Liquid Ink (LI) Mother Plant at Noida Within the over all policy of the Indian Union government to encourage investment in building up of the capital assets, State governments are inviting entrepreneurs and corporates to set up the manufacturing facilities in their respective States and also encouraging the setting up of the Special Economic Zones (SEZ). Government of Uttranchal has declared the Baddi and Haridwar in Uttranchal as duty free zones for printing and packaging products to encourage international players in retail business to make this region a level playing field for all printing commodity supply business. Our Company, in order to be competitive and to make use of increased opportunity in the neighbouring state of Uttranchal and also to support the enhanced market demand in Northern Zone, embarked on setting up of a Mother plant for manufacturing Liquid Ink.. This will also reduce the costs of production and also minimize the wastages. Presently, the production of Liquid Inks is decentralized due to which the benefits of economy of scale in liquid ink manufacturing facilities cannot be availed. The objective of setting up of LI Mother Plant is to install seamless and automated state of the art production facility. This would facilitate significant reduction in handling costs and wastages, thereby improving cost and work efficiency. Moreover, our Company would also benefit from other advantages related to bulk production viz. consistency in quality, lower logistics costs and increase in productivity. Location of the Project The project is being executed on the existing land of our Company and adjacent to its existing plant located at C – 55, A & B, Phase – II, Dist: Gautam Budh Nagar, Noida.- 201305, UP. Detailed break-up of the cost of the Project Particulars Cost (Rs. in Lacs.) Plant and Machinery 1465.11 Building 118.00 Civil Structure 42.00 Engineering Consultancy 106.88 Contingencies 100.00 Interest Capitalisation 66.00 TOTAL 1898.00 Our statutory auditor vide their letter dated October 15, 2007 has certified that out of the total project cost of Rs.1898.00 lacs, an amount of Rs.1099.60 lacs has already been incurred towards the project. An amount of Rs 458.70 Lacs has been funded through an External Commerical Borrowings raised by us from DIC Asia Pacific Pte Ltd., Singapore and Rs. 243.50 lacs through internal accruals of our Company and Rs. 397.40 lacs through term loan taken from Mizuho Corporate Bank Limited. Our Company intends to repay the amount of Rs.397.40 lacs utilised from loan taken from Mizuho Corporate Bank Limited from the proceeds of the Issue. Plant and Machinery Plant and Machinery required for the project will be both indigenous and imported. Our Company may take necessary decisions in case we receive better alternatives, which may be considered to be in the interest of our Company. The detailed cost estimate on the basis of the quotations received from suppliers is given as below.

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Our Company has estimated a total expenditure of Rs. 1465.11 Lacs towards Plant & Machinery for stting up of the Mother Plant, details of which are as follows: (a) The details of Plant & Machinery for which orders have been placed are as under :- (Rs.in Lacs)

Sr.No Name Of Machinery Supplier Cost

(including ST and

shipment)

Purchase Order No. Expected Date Of Delivery

1. Grinding Machine** Asada Iron Works, Tokyo

167.00 Contract Order s 1309 of May’07

for JPY 3,69,90,000

October 2007 and December 2007

2. Pigment Handling System Maschinen Fabrik (India) Private Limited

59.00

Contract Order No: NOD / M-054

/ 2007

October-November2007

3. Instrumentation and electrical equipments / Valve, Sensor, Flowmeter

Ascent Consultant & Engineers

213.50 NOD/M/078/2007/1

September and October, 2007

4. Pipelines Shefa Engg. Pvt. Ltd. 50.00 NOD/M120/2007 P.O.No1.2

November 2007

5. Air handling System AC Humidification Engineers Pvt. Ltd.

23.67 NOD/M76/2007 P.O.No1.2

October, 2007

6. D.G.Set (750 KVA) 50.00 NOD/M4/2007 P.O.No1.2

October, 2007

7. Gas Balancing System 8.00 NOD/M120/2007 P.O.No1.2

October, 2007

8. Fire Protection Godsend Trading & Marketing Corp.

40.19 NOD/M79/2007 P.O.No1.2

November 2007

TOTAL 611.36

Notes :-

** In respect of these items the exchange rate of the Japanese Yen has been assumed @ Rs 0.3535

The final cost of the machinery shown above includes customs duty, countervailing duty, education cess, special additional duty, excise duty, value added tax / central sales tax, freight, miscellaneous charges such as transportation, packing etc. as applicable.

(b) The details of Plant & Machinery which have already been purchased and delivery received are as under :- Rs. in Lacs)

Sr.No.

Name Of Machinery Supplier Reference of Bill Date of Bill Amount

1. Grinding Machine Bhuler AG, Switzerland Asada Iron Works, Tokyo

Buhler:inv no.5747/2006 ASADA INV. NO.169/2007

November19, 2006 February 16, 2007

114.74

2. Underground Solvent Storage Tanks

Shefa Engineers Pvt Ltd. and APS Builders

Variuos bills Various dates

108.66

3. Chilling Plant Mistcold Sales & Services Pvt. Ltd.

Various bills Various dates

24.75

4. Weigh Bridge Horizen Scales & Systems Pvt. Ltd.

5148/04/06-07 February 20, 2007

6.50

5. Fire Protection System Firepro Systems Pvt. Ltd. APS Builders

Various bills Details attached

Various dates

17.20

19.40 6. Air Compressor /Drier Ingersoll-Rand

(India) Limited 2154

April, 18, 2007

9.60

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Friulair 014 May 29, 2007

6.50

7. Tanks and Agitators Shefa Engineers Pvt Ltd.

Various bills

Various dates

147.75

8. Automation System & Electrical System

Rockwell Automation India Pvt. Ltd

Bill No 1 Bill No 2

107.00 75.21

9. Fire Protection System S.Lal

Various bills

Various dates

12.31

10. Load cell with device net etc

Horizon Scales & Systems Pvt. Ltd.

Various bills

Various dates

54.85

11. Different Types of Pumps Apporva Valves DEA 1001399 & 515267

47.27

Total 751.74 (c) The details of Plant & Machinery for which orders are yet to be placed are as under :- (Rs.in Lacs)

Sr.No. Name of Machinery Supplier Quotation Amount 1. 4. 300 KVA Power Connection Not decided Not yet received 43.70 2. 6. Chilled Water Line connection Not decided Not yet received 8.00 3. 7. Flameproof Monitor & Control Not decided Not yet received 26.00 4. 10. Dust Filter Not decided Not yet received 10.00 5. 12. Miscellaneous equipments and

accessories 14.31

TOTAL 102.01 Building, Civil Structure and Engineering Consultancy Breakup of the Building Structure:

Sl. No. Particulars Amount (Rs. Lacs) 1 Pre fab Structure of with roof insulation rolling shutter 55.24 2 Civil Work: a) Foundation & Tie Beam 13.67 b) Wall & Plaster 5.34 c) Flooring with reinforce steel 16.90 d) Painting of structure & wall 4.23 e) Mazzenine floor for office 1.75 f) Dismantling of D.P. godown, barrel yard 10.34 TOTAL 54.90 3 Architect,s Fees 3.86 4 Approval fees, deposites etc. 4.00 TOTAL 118.00 Breakup of the Building Structure:

Sl. No. Particulars Amount (Rs. Lacs) 1 Civil Work 24.60 2 Contingency (4%) 0.98 3 Prefab Structure 14.00 4 Taxes & Govt. Levies 2.62 TOTAL (rounded off) 42.00

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Our Company has awarded the job work related to prefab structure of the Mother Plant and Works Office to M/s Vardhman Precision Profiles & Tubes Pvt. Ltd., D-II/208, Savitri Nagar, New Delhi – 110 017 and civil structure related to Mother plant to M/s S.Lal, Building contractor, B-19, Bholi Nagar, South Extension-II, New Delhi- 110 049 and civil work related to Works Office to M/s Interform, Interior Design, Execution & Project Consultant, C-84, Gulmohar Commercial Complex, sector-15, Noida – 201301. Our Company has awarded the Engineering Consultancy job to M/s Buhler India Limited vide letter dated 18 August, 2006. Schedule of Implementation The indicative broad milestones for the work on the expansion of LI Mother Plant are as follows: Particulars Date of Commencement Date of Completion Percentage of

Completion Civil Works & Building November 2006 October 2007 90% Installation of Plant and Machinery May 2007 November 2007 90% The Civil works for the proposed project which includes factory office building, production area, areas for packing and other civil foundations has already commenced. The commissioning and trial production is scheduled to commence by December 2007 and January 2008 respectively. Market structure/ Competition/ Export possibilities The Liquid Ink is used for flexible packaging mainly by FMCG companies like Hindustan Unilever Ltd., Nestle, Procter & Gamble and Heinz etc. There are number of printers who undertake the jobs on behalf of all end-users. Our Company supply the product to these printers directly and also through dealers net work as far practicable to cover unorganized sectror. Our Company faces competition from other ink manufacturers in the organized sector in India viz, Sakata Inx (India) Ltd., Micro Inks Ltd., SICPA (India) Ltd. and Incowax Pvt. Ltd. Company by consolidating the Liquid Ink plant at Noida would be in a position to deliver the product to the end users quickly and efficiently. The quality planned to produce from this project will leave scope for export to neighboring countries. Marketing strategy Our Company intends to have cost leadership as well quality leadership through this project. This will help it to compete with all international players currently in the market as well future players expected to be in the market.

II Technology upgradation at the Sheetfed plant at Kolkata and normal modernization /upgradation

We have planned to modernize the manufacturing process and the quality of and Sheetfed by integrating with the technology provided by DIC Japan, our ultimate holding company, under the technology agreement entered into with it. This would involve implementing robust raw material supply chain in order to ensure the consistency in quality, bulking and would also results in the minimization of wastages. In order to make this plan effective, we would require investments in operational controls through computerised process control and Piping system for flow of liquids to reduce manual material handling. Our Company intend to finance the regular modernization and upgradation of plants situated at various locations to the extent of Rs.400 lacs from the proceeds of the Rights Issue.The investment on plants is required on continous basis to facilitate the production process, to maintain the quality of the ink produced and also on equipments for reseach & development.

Plant and Machinery for Sheetfed The details of Plant & Machinery for which orders are yet to be placed are as under : (Rs. In Lacs)

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Schedule of Implementation The indicative broad milestones for the work on technology upgradation at Kolkata and regular mordernization/ upgradation are as follows: Particulars Expected month of

Commencement Expected date of Completion

Percentage of Completion

Installation of 3 Lines Buhler 4th qtr. 2008 1st qtr. 2009 - Modernization/upgradation Ongoing III. Expansion of News Ink at Noida The print media for printing newspapers, flyers and other similar products meant for mass distribution utilizes News ink. The healthy growth in the India economy and recovery and subsequent acceleration in the demand for FMCG products together lead to increase in advertisements in the newspapers. As a result, the number of colour page advertisements has increased, and per se, the number of pages (including supplements) in the frontline newspapers has gone up in the recent times. The regional players in print media have expanded their presence with more editions in other metros, small towns’ etc. Further, there has been an increase in number of newspapers – be it financial or general, be it in vernacular or English, in the recent times. Further, the increasing literacy rate in the country has increased the demand for the newspapers, which coupled with savvy advertisement and marketing has lead to rise in circulation as well. As a result, we have observed growth in demand for printing inks from the publishing industry in general, and newspapers in particular. Presently the News Ink colour is being manufactured at our Noida plant and News Ink black at Kolkata and Ahmedabad plants. Our current capacity of the News Ink black is 7200 tonnes per annum and News Ink colour is 8400 tonnes per annum. In order to meet the growing demand of the publishing industry we propose to increase our exiting capacity to 18000 tonnes per annum during the next 18 months. Plant and Machinery The details of Plant & Machinery for which orders are yet to be placed are as under (Rs.in Lacs)

Sr.No. Name of Machinery Supplier Qty Expected

Amount 1. Grinding Machine Buhler, Switzerland 2 260.00 2. Balancing equipments Sundry 40.00 TOTAL 300.00

Schedule of Implementation The indicative broad milestones for the work on Mordernization are as follows: Particulars Expected month of

Commencement Expected date of Completion

Percentage of Completion

2 Lines- News Inks at Noida 2nd qtr. 2008 3rd qtr. 2008 -

Sr.No. Name of Machinery Supplier Qty Estimated Amount 1 Triple roll mill Buhler, Switzerland 2 300 2 Pead K120 Buhler, Switzerland 1 150 3 Balancing equipment Sundry 100 4 Modernization / Upgradation Sundry 400 TOTAL 950

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IV Repayment of overdraft, short-term borrowings etc: As on June 30, 2007, our Company has borrowings in the form of overdraft, short term loans, commercial paper and inter-corporate deposits amounting to Rs.7434.90 lacs. (approx.), the break-up of which is given below. Out of which our Company intends to repay to the extent of Rs.2617.65 Lacs from the proceeds of the Rights Issue. Sl. No. Nature of Borrowings Amount (Rs. in Lacs) 1 Overdraft 1570.30 2 Short-term 3708.70 3 Commercial Paper 2000.00 4 Inter corporate loan 155.90 TOTAL 7434.90 Our Company has been borrowing money on an ongoing basis from various Banks, Financial Institutions etc. to meet its financial requirements. Some of the borrowings have been availed at a high rate of interest. In order to reduce the interest burden, our Company proposes to utilize the Issue proceeds to partly repay its borrowings. The Chartered Accountants D.Prosod & Associates vide their certificate dated August 21, 2007 have certified the details of the borrowings which our Company intends to repay out of the proceeds of the Issue and have also certified that the said borrowings have been raised for working capital purposes and have been utilized for the same. The details of the borrowings which our Company intends to repay,either in part or in full, are as follows :

(Rs. In Lacs) Name of the Lender

ABN Amro Bank

Can Bank Mutual Fund

DIC Coatings India Limited

Bank of Baroda

State Bank of India

Nature of Loan Unsecured Short Term Loan

Unsecured Short Term Loan

Unsecured Short Term Loan

Secured Overdraft facility

Secured Overdraft facility

Purpose of Loan

To meet working capital requirements





Date of disbursement

Rs. 400 lacs on July 15, 2006 an Rs. 1000 lacs on December 30, 2006

December 15, 2006

Rs. 50 lacs each on December 4, December 16 and December 17, 2006

Facility Agreement dated April 9, 2007

Facility Agreement dated December 23, 2006

Rate of Interest

Rs. 400 lacs @ 8.55%, Rs.1000 lacs @ 12.03%

Mibor + 0.80%. The Mibor as on December 6, 2006 was 8.21%

7.50% 13.50% 13%

Repayment Terms

Maturity period of 7 – 30 days with roll over option when required with the maximum period of Loan upto 12 months

Issue for 89 days with daily put / call option

Repayable after 90 days with a renewal option for a further period of 90 days with revised interest, if required.

On demand On demand

Special or Restrictive covenants, if any.

Dainippon Ink & Chemicals, Japan, through DIC Asia Pacific Pte Ltd, to hold minimum 65.76% in the share capital of our Company

None None Bank to be informed of any changes in the management of our Company The bank may by notice require our Company to

Prior notice to be given before effecting any change in the accounting systems Bank should be kept informed on any event

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repay forthwith the entire amount if there is any mis representation

which will affect the profit or the business of our Company

Amount Outstanding as on the last audited Balance Sheet date – December 31, 2006

1400.00 600.00 150.00 100.00 158.40

Amount outstanding as on June 30, 2007

1400.00 1500.00 150.00 46.96 117.43

In addition to the above, our Company has availed of a term loan of Rs. 1000 lacs from Mizhou Corporate Bank Limited vide their sanction letter no. BPD/29/07-08 dated May 07, 2007. However, the first draw-down was taken on July 18, 2007. The Company intends to repay this loan from the proceeds of the Rights Issue. V Issue Expenses The estimated issue expenses are as under: -

Particulars Amount in Lacs % of Total Issue

Expenses % of Total Issue Size

Lead Management Fees 45.00 45% 0.87% Registrar to the Issue Fees 0.75 0.75 Legal Advisors’ Fees 7.00 7% Stamp Duty, Auditors, Listing, Filing, Rating, and Misc. Expenses 47.25 47.25 0.58% TOTAL 100 100% 1.93% INTERIM USE OF FUNDS

The issue proceeds pending utilization shall be used to repay short term loans and also to temporarily invested in fixed deposit with banks/ liquid instruments including money market, mutual funds.

MONITORING OF UTILISATION OF FUNDS

The Audit Committee appointed by the Board of Directors will monitor the utilisation of the issue proceeds.

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BASIC TERMS OF THE ISSUE The Equity Shares, proposed to be issued on rights basis, are subject to the terms and conditions contained in the Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of our Company, the provisions of the Companies Act, approvals from the RBI, guidelines issued by SEBI, approvals from the Stock Exchanges where equity shares of our Company are listed, FEMA, 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, the provisions of the Depositories Act, to the extent applicable and any other legislative enactments and rules as may be applicable and introduced from time to time. Basis for the Issue The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders of our Company whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in dematerialized form and on the Register of Members of our Company in respect of the Equity Shares held in physical form at the close of business hours on the Record Date, i.e., October 26, 2007 , fixed in consultation with, BSE, the Designated Stock Exchange The Equity Shares are being offered for subscription in the ratio of one Equity Shares for every three Equity Shares held by the Equity Shareholders on the Record Date. Rights Entitlement As your name appears as beneficial owner in respect of the shares held in electronic form or appears in the Register of Members as an equity shareholder of our Company as on October 26, 2007 (Record Date), you are entitled to the number of shares as disclosed in Block I of Part A of the enclosed CAF. Rights Entitlement Ratio

1. The eligible shareholders shall be entitled to the following:

a. One Equity shares for every three Equity Shares held on the Record Date.

2. 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:

(a) Approach the concerned depository through the clearing member of the Stock exchange with

requisite details; and (b) 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. Principal Terms of the Issue Face Value Each Equity Share shall have a face value of Rs. 10. Issue Price Each Equity Share is being offered at a price of Rs. 225 for cash. Terms of payment Full amount of Rs. 225 per share is payable on application.

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Payment should be made in cash / or by cheque / demand draft / drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub member of the Bankers’ to the Issue clearing house located at the centre where the application is accepted. A separate cheque/ draft must accompany each application form. Outstation cheques/ drafts will not be accepted and application(s) accompanied by such cheques/ drafts will be rejected. Fractional Entitlements Fractional entitlement will be ignored. Equity sharesholders whose fractional entitlement is being ignored would be given preferential allotment of one additional Equity Share each, if they apply for additional Equity Share. Those Equity Shareholders having less than three (3) Equity Shares and therefore are entitled to zero Equity Shares under the Rights issue, shall be dispatched 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 shall 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-holders with benefits of survivorship subject to provisions contained in the Articles of Association of our Company.

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BASIS FOR ISSUE PRICE Quantitative Factors Information presented in this section is derived from our audited restated financial statements prepared in accordance with Indian GAAP. 1. Earnings Per Share (EPS) for the last three years

Year ending on EPS (Rs.) Weights

31.12.2004 10.84 1

31.12.2005 14.70 2

31.12.2006 13.83 3

Weighted Average EPS 13.62

2. P/E Multiple in relation to Issue Price of Rs. 225/-

PE Ratio in terms of Weighted Average EPS 16.52

PE Ratio in terms of EPS as on Dec 2006 16.26

3. Industry PE Micro Inks Limited, which is the only listed company other than DIC India Limited engaged in the manufacturing of printingk ink, has reported negative net profit for the FY ended on December 2006 and therefore has no P/E. The P/E multiple for DIC India Limited as on October 25 is 16.0 times. (Source: Capitaline)

4. Return on Net worth (RoNW) for the last three Years

Year Ended % Weights

31.12.2004 7.91 1

31.12.2005 9.94 2

31.12.2006 8.77 3

Based on the above the weighted average RoNW works out to 9% Minimum Return on Increased Net worth required to maintain Pre Issue EPS of Rs. 13.83 is 7.93% Net Asset Value as on December 31, 2006 Rs.157.60 Net Asset Value as on June 30, 2007 Rs.164.29 Net Asset Value after the issue Rs. 178.37 Comparison of all accounting ratios of our Company with industry average and accounting ratios of peer group companies

Company EPS (Rs.) P/E RoNW% Book Value (Rs)

Micro Inks Negative NA NA 289.00

DIC India Ltd. 13.83 15.54 8.77 157.60

(Source:Capital Market Magazine, Oct 22-Nov 24, 2007, Sector-Printing and Stationery)

The face value of each Equity Share is Rs. 10/- and the issue price of the equity shares viz., Rs 225. per Equity Share is 22.5 times of the face value. Based on the above, the Lead Manager and our Company are of the opinion that the issue price of Rs 225/- is justified.

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STATEMENT OF TAX BENEFITS

To, The Board of Directors DIC India Limited Transport Depot Road Kolkata – 700 088 Dear Sirs,

Subject: Statement of Possible Tax Benefits We hereby certify that the enclosed annexure states the possible tax benefits available to DIC India Limited (formerly Coates of India Limited) (the “Company”) and to the Shareholders of the Company under the provisions of the Income Tax Act, 1961 (IT Act) and other direct tax laws presently in force in India. Several of these tax 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 tax benefits is dependent upon fulfilling of such conditions , which is based on business imperatives, in the case of the company and on the specific circumstances, in the case of the shareholders. The benefits discussed below are not exhaustive. The statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for a professional tax advice. Each investor is advised to consult his or her or their own tax consultant with respect to the specific tax implications of an investment in the issue.

We do not express any opinion or provide any assurance as to whether:

• The Company or its shareholders will continue to obtain these benefits in future; or • The conditions prescribed for availing the benefits have been/would be met with.

The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. This report is intended solely for your information and for the inclusion in the Offer Document in connection with the proposed Rights Issue of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent. For Doshi, Chatterjee, Bagri & Co. Chartered Accountants Sd/- Partner K R Sriram Membership No. June 27, 2007

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BENEFITS AVAILABLE UNDER THE INCOME TAX ACT, 1961 (“THE IT ACT”):

Benefits available to the Company The Company will be entitled to deduction under the sections mentioned hereunder from its total income chargeable to Income Tax. 1. By virtue of section 10(34) and 10(35) of the IT Act, dividend income from domestic company and units

of specified mutual fund are exempt from tax in the hands of the Company.

2. Subject to fulfillment of conditions, the Company will be eligible, inter alia, for the following specified deductions in computing its business income:-

(a) Section 35(1)(i) and (iv) of the IT Act, 1961 in respect of any revenue or capital expenditure

incurred, other than expenditure on the acquisition of any land, on scientific research related to the business of the Company.

(b) In terms of Sec 35(2AB) of the IT Act, the Company is entitled to claim the deduction of a sum equal

to one and one –half times of the expenditure incurred on scientific research on in –house research & development facility as approved by the prescribed authority.

(c) Subject to compliance with certain conditions laid down in Section 32 to the IT Act, 1961 the

company will be entitled to deduction for depreciation:

i. In respect of tangible assets and intangible assets in the nature of know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature acquired on or after 1st day of April, 1998 at the rates prescribed under the Income Tax Rules;

ii. In respect of new machinery or plant which has been acquired and installed after 31st March 2005 for manufacturing facilities a further sum of 20% of the actual cost of such machinery or plant as additional depreciation in the year in which the new plant and machinery is first put to use.

3. As per the provisions of section 35DDA of the I T act, any expenditure incurred in any previous year by

way of payment of any sum to an employee in connection with his voluntary retirement, in accordance with any scheme or schemes of voluntary retirement, 1/5th of the amount so paid shall be deducted in computing the profits and gains of the business for that previous year, and the balance shall be deducted in equal installments for each of the four immediately succeeding previous year.

4. Subject to fulfillment of certain conditions laid down in Section 80JJAA of the IT Act, 1961 the company

will be entitled to deduction for 30% of the additional wages paid to the new regular workmen employed during the previous year. This deduction will be allowed for 3 assessment years, including the assessment year relevant to the previous year in which such employment is provided.

5. Under section 115-O of the IT Act, no tax is chargeable on any amount declared, distributed or paid by

way of dividend on or after April 1, 2005 out of current income of an undertaking or enterprise engaged in developing or developing and operating or developing, operating and maintaining a special economic zone.

Benefits available to resident shareholders 1. Under section 10(34) of the IT Act, income by way of dividends referred to in Section 115-O received on

the shares of the Company is exempt from income tax in the hands of shareholders. 2. (a) The long-term Capital Gains accruing to the members of the Company on sale of the Company’s

shares in a transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, shall be exempt from tax as per provisions of section 10(38).

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(b) The short-term Capital Gains accruing to the members of the Company on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, tax will be chargeable @ 10% [plus applicable surcharge and education cess] as per provisions of section 111A.

(c) As per the provisions of Section 112 of the Act, long term gains accruing to the members of the Company from the transfer of shares of the Company, otherwise than as mentioned in point 2(a) above, shall be charged to tax - @ 20% (plus applicable surcharge and education cess) after deducting from the sale proceeds the indexed cost of acquisition or – 10% (plus applicable surcharge and education cess) after deducting from the sale proceeds the cost of acquisition without indexation.

(d) The members are entitled to claim exemption in respect of tax on long term capital gains under section 54EC of the IT Act, if the amount of capital gains is invested in certain specified bonds / securities subject to the fulfillment of the conditions specified in those sections.

(e) Individuals or HUF members can avail exemption under section 54F by utilization of the sales consideration for purchase / construction of a residential house within the specified time period and subject to the fulfillment of the conditions specified therein.

3. Section 88E provides that where the total income of a person includes income chargeable under the head

“Profits and gains of business or profession” arising from purchase or sale of an equity share in a company entered into in a recognised stock exchange, i.e., from taxable securities transactions, he shall get rebate equal to the securities transaction tax paid by him in the course of his business. Such rebate is to be allowed from the amount of income tax in respect of such transactions calculated by applying average rate of income tax.

Benefits available to Non-Resident shareholders 1. Dividends (whether interim or final) declared, distributed or paid by the Company are exempt in the

hands of shareholders as per the provisions of Section 10(34) of the Act. 2. Under the provisions of section 90(2) of the IT Act, if the provisions of the Double Taxation Avoidance

Agreement (DTAA) between India and the country of residence of the non- resident are more beneficial, then the provisions of the DTAA shall be applicable.

3. Non Resident Indians (as defined in section 115C (e) of the IT Act), being shareholders of an Indian

Company, have the option of being governed by the provisions of Chapter XII-A of the IT Act, which interalia entitles them to the following benefits in respect of income from shares of an Indian Company acquired, purchased or subscribed to in convertible foreign exchange. As per the provisions of section 115 E of the IT Act, and subject to the conditions specified therein, long-term capital gains arising on the transfer of Company’s shares will be charged to income Tax @ 10% (plus applicable surcharge and education cess)

- As per the provisions of Section 115G of the Act, Non-Resident Indians are not obliged to file a return of income under Section 139(1) of the Act, if their only source of income is income from investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

- Under Section 115H of the Act, where the Non-Resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year under Section 139 of the Act to the effect that the provisions of the Chapter XII-A shall continue to apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

- As per the provisions of Section 115-I of the Act, a Non-Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under Section 139 of the Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act.

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- As per the provisions of section 115F of the IT Act and subject to the fulfillment of the conditions specified therein, the Long Term Capital Gains arising on the transfer of Company’s shares shall be exempted from income tax entirely / proportionately if all or a portion of the net consideration is invested within 6 months of the date of transfer in specified asset as defined in section 115C (f) or any savings certificates referred to in section 10(4B) of the IT Act. The amount so exempted shall, however, be chargeable to tax as long term capital gains under the provisions of section 115F (2) if the specified assets are transferred or converted in to money within 3 years from the date of acquisition as specified in the said section.

Benefits available under the Wealth-tax Act, 1957 Shares of company held by the shareholder will not be treated as an asset within the meaning of section 2(ea) of Wealth Tax Act, 1957. Hence no Wealth Tax will be payable on the market value of shares of the Company held by the shareholder of the company.

Benefits available under The Gift Tax Act

Gift tax is not leviable in respect of any gifts made on or after 1 October, 1998. Therefore, any gift of shares of the Company will not attract Gift tax.

Notes:

• The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of equity shares;

• The above Statement of Possible Direct Tax Benefits sets out the possible tax benefits available to the

Company and to the shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws;

• This statement is only intended to provide general information to the investors and is neither designed

nor intended to be a substitute for a professional tax advice. In view of the individual nature of tax consequences, the changing tax laws, each investor is advised to consult his or her or their own tax consultant with respect to the specific tax implications arising out of their participation in the issue;

• In respect of non-residents, the tax rates and the consequent taxation, mentioned above shall be further

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

• The stated benefits will be available only to the sole/first named holder in case the shares are held by

joint shareholders.

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INDUSTRY OVERVIEW Market data used in the Letter of Offer has been obtained from industry publications and internal Company reports. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe market data used in the Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company reports, while believed to be reliable, have not been verified by any independent source. OVERVIEW: Ink contains various pigments and dyes used for coloring a surface to render an image or text. . Therefore it finds its most use in publishing and packaging industries. In the present day, Printing Inks are a blend of various ingredients, formulated to create graphic design or text on a variety of substrates or surfaces ranging from paper to polyfilms, foils and metals. These inks are a complex mixture of pigments, flushes, resins, vegetable oils, waxes and solvents. Printing ink is a mixture of colouring matter, dispersed or dissolved, in a vehicle to form a fluid or paste, which is used for printing on a substrate and then dried. Depending on the process and end use, inks are classified into Lithography (or Offset), Flexography, Energy-Curing, Gravure, Letterpress and Specialty ink. Although, most of the raw materials used in ink manufacture are available in India, a large percentage is imported due to huge demand. COMMONLY USED INKS: Lithographic or Offset Inks: The process of lithography is better known as offset, due to the use of offset blankets to transfer inks from the litho plate to the substrate. Generally, offset inks are oil-based paste inks, are highly viscous, and use varnish systems consisting of resins that dry either by oxidation or heat evaporation. Pigment concentration is relatively high, as the ink is applied in a very thin film of approximately three microns

There are a number of offset variations:

• Web offset printing is done at speeds of up to 9,000 feet per minute. In order to accommodate the higher speeds, the inks must have lower viscosity and tack, while maintaining a high resistance to water. Heatset inks dry through heat, running through ovens on the press. Non-heatset inks dry by penetration, with the oils being absorbed into the non-coated substrate.

• Sheetfed offset inks dry via oxidation. Since oxidation causes the resins to crosslink, they have better resistance properties than many other types of offset inks.

• Direct lithography, used in areas such as business forms, does not use the offset blanket, instead transferring the image to the substrate.

• News inks consist of pigment dispersed in mineral or soya oil, rather than more expensive vehicles. The oil is absorbed into the substrate, rather than dried by heat.

• Metal deco inks are used on beverage cans; these are cured by high temperature, which requires synthetic resin varnishes. They are highly pigmented and very viscous.

1. Flexographic Inks: In flexographic, ink is dispensed by anilox roller onto a plate and then transferred to

the substrate. Flexographic inks are liquid inks, utilizing solvent or water. Water-based flexographic inks are mainly used on kraft, corrugated, lightweight news-type paper or polyolefin film, while solvent-based inks are used on films and some paper surfaces.

2. Energy-Curing Inks: The inks consist of monomers and oligomers and are fluid, but are more viscous than flexographic inks. They offer excellent gloss and resistance properties. There are two types of energy-curable inks:

• Ultraviolet (UV) inks incorporate photoinitiators, and use UV lamps for curing. UV inks are used in a number of processes, including packaging, screen printing, and compact discs.

• Electron beam (EB) inks are cured by electrons. They are found in flexible packaging and folding cartons, particularly in food packaging, where the minimal odors and extractables are advantageous.

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3. Gravure Inks: They are low viscosity liquid inks, and engraved cylinders impart the ink onto the substrate. Gravure inks are mainly solvent-based, drying through evaporation. Gravure inks are found in longer-run applications.

4. Letterpress Inks: Letterpress inks are viscous, and exhibit high tack. They are oil-based, and use resins that oxidize. Use of letterpress inks is declining in recent years.

5. Specialty Inks: There are many other types of inks that are gaining in usage. Among these are:

• Screen inks are a growing niche market with various end-use applications, from billboard advertising to labeling.

• Ink jet inks are a direct-to-substrate technology, consisting primarily of either pigment-based or dye-based systems that are channeled through a printer head.

• Thermochromic and photochromic inks are heat or light-sensitive respectively, and will change color when exposed to heat or light. These are particularly useful for packaging or for sensitive documents.

• Metallic inks, incorporating aluminum, bronze or copper flakes, are primarily found in packaging applications, where catching the customer's eye is critical.

• Magnetic and electronic inks react to impulses and form new images.

• Intaglio is used for currency and stamps, with the inks being compressed into the substrate. Currency inks are very viscous and highly pigmented.

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GLOBAL INK INDUSTRY: The world market of Printing Inks is around US $15 - 16 billion. The USA leads with a global market share of 30%. Among the leading Ink manufacturing companies worldwide, Dainippon Ink / Sun Chemicals is the largest (source: Ink World Magazine). The other key players are Flint Ink Corp., Sakata Inx, Sicpa, Toyo Inks etc. The global printing inks industry has witnessed major consolidations and alliances in the past and all this has led to a few dominant players controlling the ink markets. These majors have achieved a high growth rate because of vertical integration, which ensured consistency and high quality at a low cost. The market for printing inks - by region: • USA is the largest market for Printing Inks with a 31% share and growing at a rate of 2% to 3% • Followed by Europe with a collective 28% share or US $3.8 billion. • Asia Pacific growing at a rate of 6.73%. Category wise, Lithographic Printing Inks are the leading segment worldwide with 48% market share followed by Flexographic/Gravure inks with 36%. End-user industry-wise, packaging and commercial printing industries are largest shareholders who use ink industry’s end product.

(Source: Ink World Magazine – Nov.2006)

Major challenges to the global Ink industry are increases in raw material costs, greater competition for limited supply, ongoing consolidation of companies all along the supply chain, profitability challenges, shifts in regional demand as markets such as China and India win increased business at the expense of more mature markets and competition with electronic and other media outlets. In 2005, three huge acquisitions changed the ink industry. The merger of Flint Ink and XSYS Print Solutions into Flint Group formed the second-largest ink manufacturer. Siegwerk Group’s purchase of SICPA’s packaging ink division increased Siegwerk’s global presence. The acquisition of Micro Inks gave Huber Group access to India and Asia as well as an internal supply of key raw materials. For ink manufacturers, keeping ink prices down while the price of raw materials, manufacturing and transportation has risen dramatically has led to dangerously low margins. As a result, ink companies have had no alternative but to increase their own prices. Supply is also a major issue. Because of its overall size, the ink industry has little leverage for key ingredients such as acrylic acid (also used for diapers), organoclay (used for drilling), carbon black and naphthenic oil (key ingredients for tires), among others. Ink manufacturers must pay a higher price just to maintain supply. There is also additional worldwide demand for these materials. Major international players in Ink industry along with their 2006 turnover:

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(Source: Ink World Magazine – Nov.2006)

DIC/Sun Chemicals is undisputed global leader in Ink Industry. It’s turnover in 2006 was over $4.5 billion. Other bigger players in this industry are Flint group and Siegwerk Group with their respective turnover of around $2.7 billion and $2.2 billion. (Source: Ink World Magazine). Major growth area for the ink industry is increasing supplies to packaging industry, especially in flexible packaging and rigid plastic packaging. Toner-based printing is becoming increasingly competitive with offset for targeted marketing. Meanwhile, inkjet printing continues to grow rapidly in the large-format segment. Publication and commercial printing continue to show a decline year over year. INDIAN INK INDUSTRY: The growth of the printing ink sector including that of rotogravure and flexographic inks has been very fast. Many new and innovative products are being introduced on a regular basis to meet the specific requirements of customers and other factors such as environmental concerns. However, to meet the current as well as future requirements of the end users with regard to quality, technology and innovative products, the Indian Inks industry needs to update its research & development activities. This is for increased qualitative and quantitative products by absorption of imported technology and its up-gradation through in-house R&D. The requirements of the printing inks of the future are high gloss, instant setting, high speed, quick drying etc. Development work towards modification of resins, structural vehicles, water-based inks, environment-friendly inks and introduction of innovative product range needs to be undertaken vigorously. Quality of the end product in line with international standard also needs special attention. 2005-2006 was difficult year for the Printing Ink industry particularly in view of the steep increase in input costs and rising interest rates. Crude oil prices touched a high of $78 per barrel and was consistently hovering in the range of $60 - 70 per barrel during the major part of the year which led to steep hike in prices of petro-based products. Thus, high input costs led to decline in margins of all the companies. Unfortunately, the full impact of cost increase could not be passed on to the end user due to stiff price competition. The fortunes of the printing ink industry are linked to the growth in the economy in general and the publishing and packaging sectors in particular. There was positive growth in the publishing sector thus neutralizing the impact of top-line growth from the packaging sector. This segment has a huge growth potential and is expected to grow in the coming years in view of the country's large population and rising literacy levels brought about by the Government's continuous endeavor. With more foreign publication houses setting up their outfits in India, the Publication sector is poised for major growth.

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The Indian economy has managed healthy economic growth. Adequate monsoons led to healthy growth in agriculture industries and services. The impact of agricultural growth has increased the demand in rural areas for the fast moving consumer goods (FMCG) sector, which is a major consumer of packaging material. At present, 80 per cent of the units are in the organized sector, the remaining being in the fragmented unorganized sector. The estimate of the Indian printing inks market is around $300 million for 2006 with publishing and packaging segments accounting for 40% each and industrial coatings and other segments for the balance 20%. In volume terms, industry has grown from 70,000 tons in 2000 to 102,000 tons (source: All India Printing Ink Manufacturers' Association). The Indian per capita consumption is 70g as compared to 350g in the developed markets. The organized sector which dominates the market share (69%) comprises two large and 10-12 medium sized units. The unorganized sector constitutes 450 small sized local players. Some of the major players in Indian Ink Industry: DIC India Limited and Micro Inks limited are the largest players in Indian Ink Industry each enjoying a market share of approx. 32% . Other key players in the Indian ink market are Sakata (6%), Incowax(4%) and Sicpa India (3%).

Growing literacy level which impacts newspaper ink and growing use of packaging for all kinds of commodities are the drivers for growth of the industry.

Industry Outlook

The demand for the printing ink is the backbone for the industry to survive in these difficult times of rising costs. This industry would be worst hit if there were further rise in the prices of the raw materials than the others would, as the major raw materials are crude oil based. The demand for printing ink continues to be healthy both from publishing segment as well as from packaging segment for industrial sector. If the crude based input prices ease, and the players are able to retain the recent hike in printing ink prices, then the printing ink sector can regain its lost sheen.

Industry Drivers

The most important drivers of consumption in the Indian Ink industry are:

• The strength of the economy • The growth of consumerism and increased urbanization • Increased rates of literacy • Increased rates of education and • Increased government outlay for the education sector.

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BUSINESS OVERVIEW

Background

DIC India Limited (DIL) , formerly known as Coates of India Limited , is a 65.76% subsidiary of DIC Asia Pacific Pte Ltd, Singapore, which in turn is a wholly-owned subsidiary of DIC Inc, Japan (DIC), the flagship company of the DIC group. DIL is engaged in manufacturing printing inks including paste inks, liquid inks and metal coatings which are used as intermediaries in the publication and packaging industry. DIC, along with its subsidiaries, are the world leaders in printing inks with a global market share of nearly 31 per cent. DIC is one of the Japan’s diversified chemical companies and the core of DIC Group having its presence in 60 countries worldwide. DIC is not only a leader in Graphic Arts but has a strong presence in printers’ supplies, machinery, pigments and reprographic products. Group operations are currently divided into four principal segments viz., Graphic Arits Materials, Industrial Materials, High Performance and Applied Products and Electronics and Information Materials. DIC conducts both business-specific and corporate specific R&D. Corporate R&D efforts are overseen by the Corporate R&D Division and spearheaded by the Central Research Laboratories, in Japan. DIC’s corporate R&D net works also includes two corporate R&D facilities: the DIC Berlin Gmbh R&D Laboratory, in Germany and Qingdao DIC Finechemicals Co., Ltd., in PRC. Sun Chemical operates research centers in the United States, Germany and the United Kingdom, while Eques Coatings C.V has a research center in the Netherlands. Leveraging the change, DIC India Limited has passed on from strength to strength with the technical resources to offer to the Printing Industry. At DIC India Limited , there is a fusion of technologies from all around the world DIC Group’s R&D facilities that provide a firm background for development of products that are of global standards. The R&D is devoted towards continuous technological advancements. DIC India Limited has also a state of the art R&D Centre at Kolakata which is recognized by the Department of Science & Industrial Research , Government of India, New Delhi.

DIC India Limited has its registered and head offices at Kolkata and manufacturing facilities at Kolkata, Delhi, Mumbai, Chennai, Noida, Ahmedabad and Bangalore. The seven factories manufacture inks of diverse kinds including black inks, offset inks, liquid inks, screen inks and print finish inks. These cover virtually all printing processes in use in the country today. The industrial coatings manufacturing facility of its wholly owned subsidiary DIC Coatings India Limited is located at Bangalore. DIC India Limited has access to the portfolio of products and technology available with DIC and Sun Chemical. The focus on quality ensures uniformly high reliability of the Company’s products and services. The reliability extends to ensuring both consistent quality as well as, importantly, timely delivery.

Business

The fortunes of the printing ink industry are linked to the economy, particularly the publishing and packaging sectors. Despite the high GDP growth in the recent past, the growth of the packaging sector in India was impacted by the slow growth of the FMCG sector, restricting the topline growth of the printing ink industry. However, the fortunes of the FMCG industry have revived. This will directly benefit DIC India Limited. Moreover, the publishing sector is on the rebound. The increasing urbanization and literacy levels as well as new launches and higher media spend are likely to result in comfortable growth rates for the publishing industry. The focus of the government on education would further accelerate the demand of the publishing sector. With more foreign publication houses setting up their outfits in India, the publication sector is poised for major growth. All this will benefit DIC India Limited. Plant Location

Our Company has four base factories at Kolkata, Mumbai, Noida, Ahmedabad.. Apart from the above there are 3 blending factories at Chennai,Delhi and Bangalore. Currently our Company has manufacturing facilities for production of more than one product at all the manufacturing locations. In order to get the benefits of economies of scale, reduction of wastage our Company is in the process to consolidate its production facilities in one location for each product.

The locations of our factories are as follows :

Kolkata Transport Depot Road, Kolkata – 700 088 Mumbai Chandivali Farm, Off Saki Vihar Road, Mumbai – 400 072 New Delhi 7, D.L.F. Industrial Area, Shivaji Marg, New Delhi – 110 015 Noida C-55 A&B, Phase II, Dist. Gautam Budh Nagar, Noida – 201 305 (U.P.)

- 44 -

Ahmedabad Plot No. 633 & 634, G.I.D.C. Industrial Estate, Phave IV, Vatva, Ahemdabad – 382 445 Chennai 60, Sheik Maistry Street, Royapuram, Chennai – 600 013 Bangalore 66A, Bommasandra Industrial Area, Hosur Road, Anekal Taluk, Bangalore – 562 158 *66B, Bommasandra Industrial Area, Hosur Road, Anekal Taluk, Bangalore – 562 158 Factory of DIC Coatings India Limited, the wholly-owned subsidiary of our Company RANGE OF INKS- DIC INDIA LIMITED

The products manufactured at various locations are as under: Location Products manufactured Current Capacities (MT) Kolkata Offset, News black, Speciality Gravure,

Inks for paper board 13488

Mumbai Offset and Liquid Ink 5892 New Delhi Offset Blending factory 300 Noida Liquid Ink , News Ink colour 13056 Ahmedabad News Black, Service factory for Liquid Ink 3600 Chennai Service factory 180 Bangalore Adhesives and Service Factory

Can coatings ( DIC Coatings India Limited- 100% subsidiary )

360 ( Ink) 3000 (Adhesives)

Printing Ink

Offset Inks

Screen Inks

Liquid Inks

Metal Printing

Inks

Radiating Cure

Products

Sheetfed Offset Ink

Web Offset Inks

Coldset Offset Inks

Headset Offset Inks

PCB CD&DVD

Conventional

Gravure Inks

Flexographic Inks

Solvent Based

Water Based

UV UV Inks UV Varnish

- 45 -

END-USE OF THE PRODUCTS PRODUCT Markets served COMMERCIAL Sheetfed Offset Heatset Offset Acqudous & UV Curing Inks and Varnishes Screen Inks: UV & Conventional

Brochures Signage Leaflets Danglers POPs Calenders & Diaries

PUBLICATION Coldset Web Enhanced Coldest Web Headset Web

Newspapers Supplements Magazines

PACKAGING Flexo & Gravure Sheetfed Offset Screen Inks – UV Curing Aqueous & UV Curing Overprinting Inks & Varnishes

Labels & Tags Flexible packaging Corrugated Containers Cartons

SERVICES & SUPPLIES Pressroom Consumables (Founts, Washes etc) Blankets

Pressroom Maintenance Maintaining Print Quality Process Standardization

Technology and Manufacturing Process Printing inks play a very crucial role in the economy – be it education, entertainment, consumer goods or ever electronic products. Printing ink industry has grown significantly during the last decade. With rapidly growing literacy and increasing load on publicity and advertisement and other mass media, as also very high growth in packaging, printing inks have found an ever increasing demand and this is considered to be a very potential area of investment. The level of technology has also been fast growing, keeping in line with the growth in printing and packaging industries. Ink comprises finely dispersed pigments in a vehicle, which is made up of resins & additives dissolved in solvent or oils. In order to achieve a fine dispersion of pigment powder, grinding is the major manufacturing process in case of flexo, gravure inks, screen inks and metal printing inks. However, in case of offset inks, fine dispersion of pigments is achieved by the process of flushing. So in case of offset ink mixing, the key steps involved in the manufacturing process are filtration & packing whereas for other inks manufacturing process comprise premixing, grinding, filtration & packing. Manufacturing Process Flowchart

- 46 -

. The majority of printing inks consist of pigment in powder form dispersed into varnish and manufacture is mainly concerned with the mechanical means of making these dispersions efficiently, economically and often very quickly, it is not a chemical reaction process. The mechanical means of producing dispersions are generally classified into two main groups – mixing and milling (i.e. dispersion). Mixing is the mechanical agitation of pigment and vehicle together and is usually continued until no dry pigment is discernible. Milling is the process by which the pigment/vehicle mixture reaches a point suitable for its intended printing process. The process of manufacture of printing inks essentially involves the mixing of the various ingredients in right proportion and subsequent dispersions of the mixture. A mixing operation essentially consists of a pan in which a suitable agitator revolves and thereby mixing the ingredients with the vehicle. Various mixers are used for this purpose. After the mixing operation, the dispersion of the paste is generally done on water-cooled three roll mills or in Bead mills until the pigments are thoroughly mixed in the vehicles. Little heat is usually evolved during the operations. Water cooling of the equipment is required to remove this heat.

• After the required dispersion obtained it goes to another mixer of final quality control check. Then it is potted off in different containers as per customer’s requirements.

Raw Material The raw materials used are pigments, resins, oils, solvents and miscellaneous chemicals. The import content of raw material is in excess of 33%. The rest of the raw materials are procured indigenously. We also process certain raw materials & intermediate locally, which are consumed for manufacturing of printing inks.

- 47 -

Pigments

� Sudarshan Chemicals Industries Pvt Ltd � Ciba Speciality Chemicals ( I) Ltd. � Kemira Pigments � Micro Inks Ltd. � Flamingo Pigments Pvt. Ltd.

Resins

� The Kouyoh Trading Co. Ltd. � Mahendra Rosin & Turpentines.Pvt. Ltd. � Hexion Speciality Chemicals � Miwon Commercial Co. Ltd. � Mitsui & Co. Ltd.

Oils

� HPCL � Apar Industries Ltd � Viscus Oils Pvt. Ltd. � IOCL

Solvents .

� Reliance Industries Ltd . � Senco Petrochem Pvt. Ltd. � Madhusudan Organics Ltd. � Dhampur Speciality Sugar Ltd � Premier Lubricants Pvt. Ltd

Miscellaneous Chemicals

� Cutch Oil & Allied Industries � Sojitz Corporation � Hexion Specialy Chemical � Kanoria Chemical & Industries Ltd.

COLLABORATIONS Our Company has technical collaboration with Dainippon Ink & Chemicals Inc., Japan (DIC, Japan), which was assigned subsequently by DIC Japan in favour of DIC Asia Pacific Lte Ltd., Singapore, the brief information of which is given below:

i) Name of the Collaborator – Dainippon Ink & Chemicals Inc., Japan ii) Place of registration: Japan iii) Year of Incorporation: 1937 iv) Turnover during the last two years: 31.3.2006- US$ 8.588 billion 31.3.2005- us$ 8.571

billion v) General Information: World’s largest printing ink manufacturing company with more than

228 subsidiaries and affiliated in 60 countries vi) Areas of Technical collaboration: Manufacturing of printing ink

DIC Japan has also entered a Technical Collaboration Agreement on 1st April 2007 with DIC India Limited for Technical information, including Intellectual Property Rights, Trademarks and use of brand names for manufacturing poly-ester, poly-urethane and poly-urea resin, used an intermediate products in manufacture of Gravure Inks and other products. The same comes under direct approval route and necessary intimation has already been made to the Reserve Bank of India. The agreement is valid upto 31st December 2016.

- 48 -

The other details regarding our collaborators, as required under SEBI (DIP) Guidelines is as follows : Collaborators Nature of

Collaboration Place of

Registration of colloborator

Year of incorporation of

collaborator

Paid up share capital in Fiscal 06

Turnover for Fiscal 06

DIC Asia Pacific Pte Ltd., Singapore

License Agreement in the areas of manufacturing printing ink

Singapore September 12, 1967

Singpoare $1,848.69 Lacs

Singapore $ 515.1 Lacs

Dainippon Ink and Chemicals Limited, Japan

Licence agreement in the areas of manufacturing poly-ester, poly-urethane and poly-urea resin for Gravure Inks and other products

Japan March 15, 1937 JPY 824230 Lacs

JPY 10048400 Lacs

For further details refer to the section titled “History and Other Corporate Matters” beginning on page 70 of the Letter of Offer. Utilities Details of the utilities at the plant locations are as follows:

Location of the plant Power (in KW) Water Manpower (Nos) Kolkata 1288 Borewell 279 Mumbai 670 BMC connection 177

New Delhi 100 MCD connection 32 Noida 680 NOIDA ½” pipe line and borewell 51

Ahmedabad 275 GIDC (50mm & 25 mm line) 20 Chennai 83.15 Borewell 13

Bangalore 17.9 Borewell 26 Total 598 Marketing and Selling Arrangements The marketing and selling arrangement for all our product categories is as follows: News Ink -Contractual and/or non contractual –direct sales to publication and newspaper houses - pricing depends on payment terms and logistics, cost incurred for transshipment to publishing location.

Liquid Inks - Pricing depends on criticality of printing & packaging requirements e.g. speed of printing, lamination characteristics etc. End use criteria of food and non-food, nature of aggressiveness of product to be packed e.g. oils, detergents etc –all have different ink characteristics & diverse application requirements. Print buyers, printers and DIC India Limited decide the outer framework / boundaries of the ink properties which forms the basis of marketing arrangements either direct or indirect with the customer.

Offset Inks - Price offers through standard price list for non-contractual products, which are sold through dealer network. For contractual sales to direct customers, pricing and other marketing terms depends on the business nature i.e. volume, quality etc. Lamination Adhesive - The product is sold directly to converters who do the printing jobs for FMCG segments.

- 49 -

Demand and Supply Forecast

Year Market Demand (MT)

DIC India Limited (MT)

2007 100000 32000 2008 114000 37000 2009 123000 40000 2010 132000 44000 2011 142000 49500 2012 152000 55000

(Source: Company’s own estimate) Demand is anticipated to grow by around 10,000 million tonnes per annum. Most of this growth is expected to be in high quality printing. As a consequence, our sales are expected to grow faster than Market growth in view of our long-standing credibility in high quality Market segment. Competitors Product wise competitors of our Company are given below: Products Name of the Competitors News Ink Micro Inks, Sakata Inxs & Incowax. Liquid Inks Sicpa India Ltd., Micro Inks, Sakata Inx Lamination Adhesive Heinkel , Rohm & Haas Offset Inks Micro Inks, Sakata Inx, Incowax Capacity and Capacity Utilisation

Actual Production Capacity Utilization (%)

Product Units

Installed Capacity

2006 2006 2005 2004 2006 2005 2004 Printing Inks Tonnes 36876 27140 23356 20768 73.6 72.7 73.5 Press Room Chemicals

Tonnes 480 254 323 289 52.9 67.2 60.2

Rubber Blankets Sq. Yards 16670 6263 - - - - The proposed capacity utilization for printing inks, based on the current demand and supply has been estimated by our Company as follows :

2007 2008 2009 76.50% 77% 78%

Export Possibility and Export Obligations The enhancement of capacity would enable our Company to increase its presence in export field in the neighboring countries. The existing export obligations are as under :

Export Obligation in

Sr. No.

Jt. DGFT File No. License No. Date

RS. US $

E.O. Period

Duty saved RS.

1 02/21/021/00327/AM05 0230000878 10.02.2005 139,.35 3,00,648.11 8 years i.e. 09.02.2013

15.85

2 02/036/021/00024/AM03 0230000232 28.06.2002 429.67 8,79,580.00 8 years i.e. 27.06.2010

22.39

- 50 -

However as on June 30, 2007 our Company has made exports of Rs. 737.21 lacs thereby fulfilling its export obligations under the above licenses completely. Business Strategy Our Company wants to be the preferred supplier to the National & International printers & converters through continuous quality enhancement & providing best of services to enable the customer establish global competencies through use of our value added inks for all applications from News paper to Compact Disc or from calendars to toothpaste cartoons. Manpower

The recruitment procedure for the appointment of employees of our Company, is centralized at Kolkata. A brief note on the recruitment process is given hereinbelow:

1. There are three sources of recruitment commonly used viz recruitment agencies/newspaper advertisements, campus recruitment and by referrals

2. Resume are invited out of which suitable ones are shortlisted after which interviews are carried out to assess the shortlisted candidates

3. Successful candidates are issued provisional Letters of Offer with the expected date of joining within 7 days of receipt.

4. The appointment is subject to satisfactory medical examination. The medical check-up must be done immediately after issue of the provisional offer letter and before the person joins. If the candidate is found to be medically unfit, the offer will be withdrawn. On joining a detailed appointment letter is issued by the MD.

Present manpower of our Company

We have 598 employees working as on date. The details of manpower employed by us are as follows : Category of Manpower Total Kolkata Mumbai Delhi Chennai Noida Ahmedabad Technical Staff 50 25 10 4 5 3 3 General Staff 145 65 37 8 14 14 7 Supervisors 36 13 13 0 1 6 3 Works 284 145 99 9 12 18 1 Managers & above 83 31 18 11 7 10 6 598 279 177 32 39 51 20

Insurance

Our Company avails of insurance for its assets and employees based on management perception of risks and possible loss. Currently, the insurance policies we have availed of include the following:

i. Fire; ii. Marine Insurance;

iii. Vehicle Insurance; iv. Electronic Equipment; v. Product Liability;

vi. Group Mediclaim; vii. Directors’ and Officers liability;

viii. Burglary; ix. Public Liability Industrial Risks; x. Money Insurance;

xi. Group Personal Accident Policy; xii. Individual Personal Accident Policy;

xiii. Workmens’ Compensation; xiv. Special Contingency; xv. Export Credit Insurance Policy.

- 51 -

Intellectual Property The brands owned by our Company are Ultralam, Unilam, Briteflex, Polytone , Lancer G , Colour Fest , New Prima , Lotus (T) , Savannah, Vynilon, Eurospeed, Eurogloss, Superchromo, Chromostar. The status of the various trademarks applied for and registered in the name of our Company is as follows:

Name Date of Application

Trademark Registration Certificate Number and date of Issue

Valid Upto Current Status

Class Number Date FREEDOM PLASTISOLS (I)

August 26, 1996

2 725333 August 26, 1996

374245, May 20, 2005

August 25, 2016

This trademark has been renewed for a period of ten years from August 26, 2006 vide intimation from the Office of Trademark Registry No. RLC/VBC/9815 dated August 3, 2006. The renewal has been advertised in the Trade Mark Journal No 1348.

L O T U S (T) August 26, 1996

2 725334 August 26, 1996

374646, May 21,2005

August 25, 2006

Due for renewal.

MAXTONE February 9, 1999

2 840476 February 9, 1999

339064, March25, 2005

February 8, 2009

Registered Trademark.

POLYCAT August 6, 1999

2 870134 August 6, 1999

273600, November 6,2003

August 5, 2009


SUNPACK August 6, 1999

2 870136 August 6, 1999

256509, April21, 2005

August 5, 2009


POLYSAFE November 6, 2001

16 1056814 November 6, 2011

334357, March19, 2005

November 5, 2011


ALSTAR November 6, 2001

16 1058615 November 6, 2011

334351, March19, 2005

November 5, 2011


PETSTAR November 6, 2001

16 1058619 November 6, 2011

334552, March19, 2005

November 5, 2011


CASHON November 6, 2001

16 1058617 November 6, 2011

334547, March19, 2005

November 5, 2011


- 52 -

Name Date of

Application Trademark Registration Certificate

Number and date of Issue

Valid Upto Current Status

Class Number Date

Savannah September 29, 2004

2 1311843 September 29, 2004

456502, October 29,

2005

September 28, 2014


VYNILON October 8, 2004

2 1313986 October 8, 2004

475393, November 29,

2005

October 7, 2014


PRIMA October 8, 2004

2 1313988 October 8, 2004


2005

October 7, 2014


PASSPORT Coldset

October 8, 2004

2 1313989 October 8, 2004


2005

October 7, 2014


COLOUR FEST

October 8, 2004

2 1313990 October 8, 2004


2005

October 7, 2014


EUROGLOSS October 8, 2004

2 1313991 October 8, 2004


2005

October 7, 2014


CHROMO STAR

October 8, 2004

2 1313992 October 8, 2004


2005

October 7, 2014


SILCHROME GLOSS

October 8, 2004

2 1313985 October 8, 2004


2005

October 7, 2014


- 53 -

Facilities and Infrastructure Details of Freehold Properties of our Company Sr. No.

Date of Agreement

Nature of Agreement

Parties to the Agreement Description on of Property and Area

Total Consideration Paid

1. June 14,

1990

Indenture Agreement

Managar Properties Limited, Maurya Properties Limited, Ranisati Commercial Company Limited and Teage Tools & Construction (India) Private Limited, Coldtech Rubbers (Pvt) Ltd., DIC India Limited

Mani Tower, Flat No. UB 03 Binova Bhave Sarani, Kolkata ad measuring to 1534 Sq. Ft.

Rs. 6,19,296/- on Building and Rs. 46,020/- on Land

2. June 14, 1990

Indenture Agreement

Managar Properties Limited, Maurya Properties Limited, Ranisati Commercial Company Limited and Teage Tools & Construction (India) Private Limited, Coldtech Rubbers (Pvt) Ltd., DIC India Limited

Mani Tower Flat UB -10 Binova Bhave Sarani, Kolkata, ad measuring to 1534 Sq. mts.

Rs. 6,21,840/0 on building and Rs. 46,020/- on Land

3. July 15, 1988

Indenture Agreement

Sunil Kumar Bhattacharjee, Salil Kumar Bhattacharjee and DIC India Limited and Cosmopolitan Projects & Development Pvt. Ltd.

Ganga Apartment, Flat No. 3B, No. 118, Block ‘F’, New Alipore, Kolkata,

Rs. 6,84,786/- for building and Rs. 90,000/- for land

4. May 10, 2005

Sale Deed Shri Inderjit Juneja, M/s Ambience Apartments Pvt. Ltd. And DIC India Limited

2/29 Sarva Priya Vihar, New Delhi 110 016 ad measuring 156.19 sq. mts.

Rs. 30,00,000/-

5. September 5, 1987

Sale Agreement

Shri Rattan Ramchand Malhotra and DIC India Limited

Sheffield Towers, Flat No. 401 & 402, Lokhandwala Complex, Andheri (w), Mumbai – 400 053 ad measuring 950 Sq Ft

Rs. 4,78,770/-

6. October 15, 1993

Sale Deed Mr. Jaikishan Rochiram Mirchandani and DIC Indian Limited

Juhu Sun-n-Sea, Flat No. B 51, Juhutara Road, Mumbai – 400 049 admeasuirng to 790 Sq. Ft.

Rs. 47,43,650/-

7. September 19, 1985

Agreement for transfer of ownership

Shri Chand R Kataria and DIC India Limited

Mangnum Towers, Flat No. 701 & 702, Lokhandwala Complex, Andheri (w) , Mumbai- 400 053 ad measuring 950 Sq. Ft.

Rs. 3,23,000/-

8. May 30, 1997

Deed of Conveyance

Setu Real Estate and DIC India Limited

Setuvilla, Flat No. 402, 55/B, Radha Vallabh Colony, Jahar Chowk, Mani

Rs. 11,67,291/-

- 54 -

Sr. No.

Date of Agreement

Nature of Agreement

Parties to the Agreement Description on of Property and Area

Total Consideration Paid

Nagar, Ahemdabad ad measuring 183 Sq. Yards

9 March 18, 2005

Lease –cum–sale Agreement

*Karnataka Industrial Area Development Board and DIC India Limited

Plot No 66A in Survey Nos. 260,261 and 308 in Bommasandra Industrial Area, Bommasandra Village, Anekal Taluk admeasuring 12137 sq. mtrs.

Allotment consideration of Rs.28,62,102/- and an yearly lease rent of Rs. 3,000/- and maintainence charge of Rs.2,500/- per annum.

10 May 8, 1962

Deed of Conveyance

Manubhai Amritlal Sheth and DIC India Limited

The Chandivali Farm, village of Chandivali, Greater Bombay admeasuring to 10,194.40 sq yards and 5270.60 sq yards

Rs. 1,13,872/-

February 27, 1990

Land Agreement

Mr. Abraham Thomas and DIC India Limited

Rs. 2,76,660/- 11

February 27, 1990

Construction Agreement

Kaymo Finance Private Limited and DIC India Limited

Flat No 5D Temple Trees, Venkatnarayana Road, Tyagaraya Nagar, Madras – 600 017, admeasuring 1044 square feet

Rs.2,97,540/-

*The Banglore property of our Company has been obtained vide lease cum sale agreement dated March 18, 2005 from the Karnataka Industrial Area Development Board. The lease was was a period of two years expiring in February 17, 2007. Our Company has vide letter dated February 1, 2007 applied to the Board for renewal cum transfer of rights on freehold basis to our Company. The Karnataka Industrial Area Development Board (KIADB) has carried out an inspection of the property.

- 55 -

Details of Leasehold Properties of our Company. Details of Agreement Early

Termination Clause

Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement

Date Refundable/Non-

Refundable Security Deposit, if

any

Lease Rental

Tenure with or without

extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

The Board of Trustees of The Port of Calcutta

DIC India Limited (Coates of India Limited)

Property ad measuring 19371.67 sq mts situated at Transport Depot Road, Thana South Port Police, Calcutta District 24 Paraganas (south) Registration District Alipore, Kolkata

Lease Agreement

January 18, 1966

The lessee has to deposit a sum of Rs. 30,000/- as security. The lessor shall refund the entire amount or deduct any amount to be paid towards the moneys, loss, costs or damages due to or suffered by the lessor at the termination of the agreement.

Monthly rent of Rs. 7219.90/- subject to the right of the lessor to enhance the rent every ten years upto 25% less rebate of 5% if rent is paid regularly.

The agreement extended to a further period of thirty years after expiration of the aforesaid terms of thirty years

NA NA

The Board of Trustees of The Port of Calcutta

DIC India Limited

Property ad measuring 4989.634 Sq mts. At Transport Depot Road, Police Station: Taratala, District – 24 Paragans (South), Kolkata Registrat

Lease Agreement

August 14, 2006

The lessee has to deposit in cash a sum equivalent to twelve months’ rent and taxes as security. The lessor shall refund the entire amount or deduct any amount to be paid towards

Rs. 37,05,103 paid as non-refundable and non-adjustable premium. Monthly rent of Rs. 77,189.63/- subject to the right of

The agreement is valid for a period of fifteen years.

NA NA

- 56 -

Details of Agreement Early Termination Clause

Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

ion District: Alipore

the moneys, loss, costs or damages due to or suffered by the lessor at the termination of the agreement.

the lessor to revise the rent every five years. The rent will be enhanced at the rate of 5.1% every year during the tenure.

M/s LCI (India) Ltd.,

DIC India Limited

Property ad measuring 19,926 Sq Ft. At POYSHA, Anilnagar, Budge Trunk Road, P.O. Maheshtala, P.O. Gobindnagar, Kolkata-700 141

Lease Agreement

March 1, 2006

Security deposit equivalent to six months rentals to be refunded through adjustment of Rs. 28948/- on 36th instalment.

Rs. 1,60,000/- pm

36 months for the successive period for renewal

If the rent is unpaid for ninety days after becoming due and payable then the lessor shall grant a one month notice to the lessee to quit. However if the lessor pays the rent during the one month

The lesse may give three months notice in writing to terminate the lease at any time during the term of the lease.

- 57 -


Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

notice period the notice to quit shall stand rescinded.

Mohatta Brothers Property

DIC India Limited

Property ad measuring 2250 Sq. Mts. At Hains Road, Off Dr. E Moses Road, Worli, Mumbai – 400 018.

Lease Agreement

February 20, 2001

NA Rs.78,000/-

December 31, 2009

NA NA

Kusum Trading

DIC India Limited

Property ad measuring 2330.375 Sq.ft. alongwith compound admeasuring 710.50 square feet at Hains Road, Off Dr. E Moses Road, Worli, Mumbai – 400 018

Lease Agreement

February 20, 2001

NA Rs.78,000/-

December 31, 2009

NA

- 58 -


Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

Gujrat Industrial Development Corpoation

DIC India Limited

Property ad measuirng 5280 Sq mts. At Plot No., Phase IV, GIDC Vatva, Mehmedabad Highway, Ahemdabad 382 445

Lease Agreement

December 28, 1992

NA Rs. 34,98,002/- in addition balance amount of Rs. 10,49,400/- with interest @ rate of 20% with period of ten years commencing from November 1992 and also such additional sum as may be determined by the licensor alonwith 20% interest n the same.

For a term a ninety years from the date of possession being given to the licensee or execution of the agreement, whichever is earlier.

In the event of any breach of any condition or covenant of the presents by the licensee, the licensor shall be entitled to terminate the agreement by giving 24 hours notice.

NA

Dr R N Bhargava Mr R Bhargava Mr. R Bhargava

DIC India Limited

7 DLF Industrial Area, Shivaji Marg, New Delhi – 110 015.

Lease Agreement

December 29, 2000

NA Rent of Rs. 68,750/- per month

9 years NA NA

- 59 -


Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

M.L. Shaikh Dawood, L.Y.Sirajudeen, L.Y.Riyasudeen, L.Y.Gayasudeen, L.Y.Nazimudeen And L.Y.Mohammed Ibrabim.

DIC India Limied

Property ad measuring 8 grounds 1812 Sq. Ft. at No. 33 Sheik Maistry Street, Royapuram, Madras.

Lease Agreement

March 9, 2002

NA Rs.28,750/-.

December 31, 2010.

The lessee shall terminate the agreement at the conclusion of the ninth year i.e. on January 1, 2011.

NA

- 60 -


Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

Deed of Assignment * The plot of land was allotted to M/s Anip Faucets Pvt Ltd. vide lease deed dated April 23, 1987. Corporation has granted permission vide their letter No. RMA/AB/ ALT/VTW / PL / 6569 dated November 12, 1993

May 12, 1994

NA NA NA NA NA M/s Anip Faucets Private Limited

M/s DIC India Limited

Plot No 634/P admeasuring 1980 sq. mtrs at Vatva Industrial Estate of Gujarat Industrial Development Corporation, Ahmedabad.

Deed of Conveyance

May 12, 1994

Premium amount of Rs. 7,01,800

99 years NA NA

- 61 -


Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

Gujarat Industrial Development Corporation


Plot No.633, Phase II, Vatva Industrial Estate, Ahmedabad, admeasuring 5280 sq. mtrs

Lease Agreement

December 28, 1992

Total Premium payable is Rs. 13,99,200/-

Out of which Rs.349,800/- has been an initial payment and Rs.10,49,800 was paid in 32 quarterly instalments over a period of 8 years beginning from December 1994

99 years Licensor shall be entitled to terminate the lease in an event of default of any of the lease provisions by the Leasee.

Vishwa Moulds P Ltd through its Director Mr. Ajit Prahlad Patel


Plot No A/43 Ashwamegh Industrial Estate, Sarkhej Bavla Highway, Changodar, Ahmedabad.

Lease Agreement

November 4, 2006

Rs. 37,500/-

Rs. 37,500/- per month

Three years from November 4, 2006.

In event of default in payments by the Lessee, the Lessor shall be entitled to terminate the Lease

Right to terminate by giving three months written notice

- 62 -


Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

New Okla Industrial Development Authority a body corporate consituted under U.P. Industrial Developmemt Act

DIC India Limited

Industrial Plot No. 55 Block No. C Phase II, New Okhla Industrail Deveploment Area, District Gaziabad admeasuring 7377=50 square meters.

Lease Deed

April 6, 1995

Premium of Rs. 46,47,825/-

Rs.116195.62 annually for the first ten years and the rent may be enhanced after ten years not exceeeding 50% of the annual lease.

90 years from April 6, 1995

In case of breach of any terms and conditions of the lease agreement, the lessor shall have the right to cancell the lease agreement.

-

Bhaskar Mitter, Sugato Chaudhuri Arijit Chaurduri

DIC India Limited

No 52B Ballygunge Circular Road, Kolkata,

Lease Deed

November 20, 2000

Rs. 26,000/-

Rs.26,000/-

Upto April 30, 2011

Failure on part of the lessee to pay lease rentals or in the event of default to perform any of the lease covenants

Option to terminate the lease by giving two months prior notice or rent in lieu of notice.

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Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

Mr Rajeshbhai Natubhai Patel

DIC India Limited

S.No 450, Godown No 16 & 17 of R.K.Estate, Mojhe Fatehwadi, Taluka Daskoi, Ahmedabad

Lease Agreement

June 9, 2003

Rs.10,312/-

Rs.10,312/- p.m.as rent and Rs.500/- towards common charges

For three years with effect from June 9, 2003, can be renewed on mutual consent

Failure on part of the lessee to pay rentals for any three months, with prior written notice.

Mrs. Pratibha Nigam

DIC India Limited

Flat No. 301, Urvashi Apartments, 7/29, Tilak Road, Kanpur

Lease Agreement

May 8, 2007

Rs.18, 000/-

Rs.5,500/- per month and Society charges of Rs. 1,000/- p.m.

2 years. Lease can be renewed for a further period of two years with mutual consent

Not provided

By giving one months’ prior notice or rent in lieu of notice

Mr. Mukka Rajeshwar Rao

DIC India Limited

Plot No 1, Park View Colony, Bowenpally, Secunderabad

Rental Agreement

November 27, 2006

Rs.1,70,000/-

Rs.20,000/- p.m. after comletion of one year monthly rental will increase by 8%

2 years. Lease can be renewed for a further period of two years by mutual consent

In case of default by the lessee to pay the rent for three months continously, the lessor can by giving one months’ notice terminate the agreement

By giving two months written notice

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Sr.No

Name of the

Lessor / Licensor

Name of the

Lessee / Licensee

Description of

Property

Type of

Agreement



any

Lease Rental


extension clause

By Lessor

/Licensor

By Lesse

e / Licen

see

Mr. K Appavoo

DIC India Limited

Door No (Old No.) 69, West Mada, Church Street, Royapuram, Chennai – 600 13

Lease Agreement

January 20, 2004

Rs.2,10,000/-

Rs.25,200/- p.m.and maintainence charges of Rs.1,500/- p.m.

A term of 11 months each beginning from February 1, 2004 upto July 2010.

In case of default by the lessee to pay the rent for three months continously, the lessor can by giving one months’ notice terminate the agreement

By giving three months written notice

T.R.Lakshman

DIC India Limited

Factory Building No F-58, Corporation No.58-8, Industrial Estate, Rajaji Nagar, Banglore - 560044

Lease Agreement

December 10, 2001

Rs.85,500/-

Rs.10,350/- with an increase of 10% every two years.

60 months commencing from March 1, 2001 with an option to renew for a further period of four years by giving written notice three months prior to expiry of the term

In case of default by the lessee to pay the rent for two quarters continously, the lessor can by giving one months’ notice terminate the agreement

By giving three months written notice

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REGULATIONS AND POLICIES

Our Company operates in the printing inks industry. Laws relating to excise, customs, sales tax, pollution control, factory and labour-related matters etc. are applicable to our Company, as they are applicable to all manufacturers. The Factories Act, 1948 The Factories Act, 1948 (“Factories Act”) defines a factory to cover any premises which employs ten (10) or more workers and in which the manufacturing process is carried on with the aid of power and any premises where there are at least twenty (20) workers even though there is no electricity aided manufacturing process being carried on. The Factories Act which is a social legislation provides that an occupier of a factory i.e. the person who has ultimate control over the affairs of the factory and in case of a company, any of the directors, must ensure the health, safety, welfare, working hours, leave and other benefits for workers employed in factories. It was enacted primarily with the object of protecting workers from industrial and occupational hazards. Under this statute, an approval must be granted prior to the setting up of the factory and a license must be granted post the setting up of the same, by the Chief Inspector of Factories. In case of contravention of any provision of the Factories Act or rules framed there under, the occupier and the manager of a factory may be punished with the imprisonment for a term of up to two (2) years or with a fine of up to Rs. 100,000 or with both, and in case of a contravention continuing after conviction, with a fine of up to one thousand rupees per day of the contravention. The Contract Labour (Regulation and Abolition) Act, 1970 The Contract Labour (Regulation and Abolition) Act, 1970 applies to those establishments where twenty (20) or more workmen are employed or were employed on any day of the preceding twelve (12) months as contract labour and to every contractor or sub-contractor who employs or who employed twenty (20) or more workmen on any day of the preceding twelve (12) months, provided they were not employed in the core activities as notified. The legislation seeks to regulate the working conditions of the contract labour and to provide for its abolition in certain cases. This statute provides that any employer seeking to employ contract labour must register his establishment to the appropriate authority, which is the Joint Labour Commissioner of that particular state. The Trade Unions Act, 1926 The Trade Unions Act, 1926 was enacted to provide for the registration of trade unions and for defining the law in relation to trade unions. This legislation sets out the procedure for registration of trade unions and also provides the rights and liabilities of registered trade unions. The statute also provides immunity to registered trade unions from civil suits in certain cases. This legislation is of great significance for those organizations whose workers have organized and formed registered trade unions. The Employee’s State Insurance Act, 1948 The Employees State Insurance Act, 1948 is applicable to all factories and to such establishments as the Central Government may notify, unless a specific exemption has been granted. The employers in such factories and establishments are required to pay contributions to the Employees State Insurance Corporation, in respect of each employee at the rate prescribed by the Central Government. Companies which are controlled by the Government are exempt from the aforesaid requirement if the employees are receiving benefits which are similar or superior to the benefits prescribed under the Employees State Insurance Act, 1948. Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 Under the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952, compulsory provident fund, family pension fund and deposit linked insurance is payable to employees in factories and other establishments for their benefit. The legislation provides that an establishment employing more than twenty (20) persons, either directly or indirectly, in any capacity whatsoever, is either required to constitute its own provident fund or subscribe to the statutory employee’s provident fund. The employer of such establishment is required to make a monthly contribution to the provident fund equivalent to the amount of the employee’s contribution to the

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provident fund, subject to a minimum contribution of 12% of the basic wages, dearness allowance and retaining allowance, if any payable to each of the employee’s. Payment of Bonus Act, 1965 An employee in a factory who has worked for at least thirty (30) 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 statute 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 provision of the legislation is punishable by imprisonment up to six (6) months or a fine up to one thousand rupees or both. Payment of Gratuity Act, 1972 Under the Payment of Gratuity Act, 1972 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 of the employee, or the employee has worked at least two hundred and forty (240) days in a period of twelve (12) months or one hundred and twenty (120) days in a period of six (6) months immediately preceding the date of reckoning. An employee, who after having completed at least five (5) continuous years of service in an establishment resigns, retires, or is disabled due to an accident or disease, is eligible to receive gratuity. To meet this liability, employers of all establishments to which the legislation applies are liable to contribute towards gratuity. The Indian Boilers Act, 1923 The Indian Boilers Act, 1923 and the rules made thereunder are meant to regulate and ensure proper design, manufacture, operation and maintenance of boilers, in order to prevent safety hazards. This legislation requires that any boiler in use, in India, must be certified or registered, and that no boiler may function without the same. The Petroleum Act, 1934 This statute divides petroleum into three classes, A, B and C based upon the flash point of the same, and regulates the import, storage, transport, production, refining and blending of petroleum based upon the same. For the import, transport and storage of petroleum, a license is required, and the provisions in the license as well as the rules made under the Petroleum Act, 1934 must be complied with. The Indian Explosives Act, 1884 The purpose of the statute is to regulate the manufacture, possession, use, sale, transport and importation of explosives. The Central Government has the power to make rules with respect to regulation or prohibition, the manufacture, possession, use and sale of explosives. The statute requires that any person who intends to engage in any of the above mentioned activities with regard to explosives must apply for a license under the Indian Explosives Act, Service Tax Chapter V of the Finance Act 1994 (as amended), and Chapter V-A of the Finance Act 2003 requires that where provision of certain listed services, whole taxable services exceeds Rs. 400,000, a service tax with respect to the same must be paid. Every person who is liable to pay service tax must register himself for the same. Central Excise Excise duty imposes a liability on a manufacturer to pay excise duty on production or manufacture of goods in India. The Central Excise Act, 1944 is the principal legislation in this respect, which provides for the levy and collection of excise and also prescribes procedures for clearances from factory once the goods have been manufactured etc. Additionally, the Central Excise Tariff Act, 1985 prescribes the rates of excise duties for various goods.

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Value Added Tax VAT is a system of multi-point levy on each of the entities in the supply chain with the facility of set-off input tax whereby tax is paid at the stage of purchase of goods by a trader and on purchase of raw materials by a manufacturer. Only the value addition in the hands of each of the entities is subject to tax. VAT is based on the value addition of goods, and the related VAT liability of the dealer is calculated by deducting input tax credit for tax collected on the sales during a particular period. VAT, is essentially a consumption tax applicable to all commercial activities involving the production and distribution of goods and the provisions of services, and each State that has introduced VAT has its own VAT Act, under which, persons liable to pay VAT must register themselves and obtain a registration number from the Excise Tax Officer of that respective State. Sales Tax The tax on sale of movable assets within India is governed by the provisions of the CST Act, or the state legislations depending upon the movement of goods pursuant to such sale. If the goods move inter-state pursuant to a sale arrangement, then the taxability of such sale is determined by the CST Act. On the other hand, when the taxability of an arrangement of sale of movable assets which does not contemplate movement of goods outside the state where the sale is taking place is determined as per the local sales tax/VAT legislations in place within the states The Income Tax Act, 1961 The Income Tax Act provides that any company deducting tax must apply to the assessing officer for the allotment of a tax deduction account number. Furthermore, the legislation requires every tax payer to apply to the assessing officer for a personal account number. The Water (Prevention and Control of Pollution) Act, 1974 The Water ( Prevention and Control of Pollution) Act, 1974 (“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”). This statute provides that prior permission from the relevant SPCB is required for the setting up of any industry, which is likely to discharge effluents. In addition, the Water (Prevention and Control of Pollution) Cess Act, 1977 (Water Cess Act ) requires a person carrying on any industry to pay cess in this regard The Air (Prevention and Control of Pollution) Act, 1981 This statute seeks to prevent and abate the level of air pollution and grants certain powers to the SPCB to ensure the same. Under the provisions of this legislation, every facility has to obtain a consent order from the relevant SPCB in order to carry on its industrial operations. The SPCB is required to grant consent within four (4) months of receipt of the application. The consent may contain conditions relating to specifications of pollution control equipments to be installed. The Environment (Protection) Act, 1986 The Environment (Protection) Act, 1986 and the rules made thereunder provides for ambient standards in respect of noise for different categories of areas (residential, commercial, and industrial) and silence zones have been notified. Noise limits have been prescribed for automobiles, domestic appliances and construction equipment at the manufacturing stage. The Noise Pollution (Regulation and Control) Rules 2000 (as amended in 2002) provides that the owner of any diesel generator set with upto 1000 KVA requires an acoustic chamber and must have a conformance certificate. Hazardous Wastes (Management and Handling) Rules, 1989 The Hazardous Wastes (Management and Handling) Rules, 1989 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. It must also be ensured that the persons working on the site are given adequate training and equipment for performing their tasks.

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Trade Marks Act, 1999 The Indian law on trademarks is enshrined in the Trade Marks Act, 1999. Under the existing legislation, a trademark is a mark used in relation to goods so as to indicate a connection in the course of trade between the goods and some person having the right as proprietor to use the mark. A ‘mark’ may consist of a word or invented word, signature, device, letter, numeral, brand, heading, label, name written in a particular style and so forth. The trademark once applied for, is advertised in the trademarks journal, oppositions, if any are invited and after satisfactory adjudications of the same, a certificate of registration is issued. The right to use the mark can be exercised either by the registered proprietor or a registered user. The present term of registration of a trademark is ten years, which may be renewed for similar periods on payment of prescribed renewal fee. Export Promotion Capital Goods Scheme (“EPCG”) This scheme framed under the Foreign Trade Policy facilitates import of capital goods at a concessional rate of duty coupled with an appropriate export obligation to be fulfilled by the person availing the benefits under the scheme within a designated period of time. Foreign Investment Foreign investment in India is regulated by the FEMA, the regulations framed by the RBI and policy guidelines issued by the Ministry of Commerce and Industry (through various Press Notes issued from time to time). Foreign investment in companies engaged in manufacture of automotive parts is under the automatic route (i.e. prior approval of the FIPB is not required). Foreign investment by way of subscription to equity shares of a company engaged in production of automotive parts currently does not require the prior approval of the RBI or the FIPB, except for a post subscription filing with the RBI in Form FC-GPR within thirty (30) days from the issue of shares by our Company. The Government of India has indicated that in all cases where foreign direct investment is allowed on an automatic basis without FIPB approval, the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. Transfers of equity shares previously required the prior approval of the FIPB. However, vide a circular dated October 4, 2004 issued by the RBI, the transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that (i) the activities of the investee company are under the automatic route under the FDI Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (ii) the non-resident shareholding is within the sectoral limits under the FDI policy, and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI. Shops and Establishments Acts Our Company is governed by various Shops and Establishment Acts as applicable in the states where it has offices, factories and sales depots. These Acts regulate the conditions of work and employment in shops and commercial establishments and generally prescribe obligations in respect of inter alia registration, opening and closing hours, daily and weekly working hours, holidays, leave, health and safety measures and wages for overtime work. The following acts are applicable to our offices, factories and sales depots:

1. The West Bengal Shops and Commercial Establishment Act, 1963 2. The Bombay Shops and Establishments Act, 1948 3. The Andhra Pradesh Shops and Establishments Act, 1988 4. The Gujarat Shops and Establishments Act 5. The Tamilnadu Shops and Establishments Act 6. The Karnataka Shops and Commercial Establishments Act, 1961 7. The Madhya Pradesh Shops and Establishments Act, 1958 8. The Uttar Pradesh Shops and Commercial Establishments Act, 1962

For details of our Company’s registration under the applicable Shops and Establishment Acts, please refer to the chapter “Government Approvals” on page 233 of the Letter of Offer.

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The Electricity Act, 2003 The Electricity Act, 2003 (hereinafter referred to as the “Act”) was enacted with effect from June 10, 2003 repealing and replacing all the three Acts i.e. Indian Electricity Act, 1910, Electricity (Supply) Act, 1948 and Electricity Regulatory Commissions Act, 1998. The Act seeks to provide for demarcation of the roles of generation, transmission and distribution to provide for individual accountability of each. Some of the major provisions of the Act include inter alia the following: 1. de-licenses generation, makes captive-generation freely permissible; 2. provides open access for transmission, distribution and trading; 3. specifies technical standards, grid standards and safety requirements; and 4. introduces power trading as a distinct activity from power generation, transmission and distribution. As regards captive power generation, Section 7 of the Act provides that a generating company may establish, operate and maintain a generating station without obtaining a license under this Act if it complies with prescribed technical standards. Section 9(1) of the Act allows any person to construct, maintain or operate a captive generation plant and dedicated transmission lines, subject to the condition that supply of electricity from the captive generating plant through the grid shall be regulated in the same manner as the generating station of a generating company. Section 9(2) of the Act further states that every person who has constructed a captive generating plant and maintains and operates such plant shall have the right to open access for the purposes of carrying electricity from captive generating plant to the destination of his use, subject to availability of adequate transmission facility. Other Regulations In addition to the above, our Company is required to comply with the provisions of the Companies Act, 1956, the Foreign Exchange Management Act, 1999, various sales tax related legislations and other applicable statutes.

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HISTORY AND OTHER CORPORATE MATTERS Incorporation and history of our Company Our Company was incorporated on April 2, 1947 as Coates of India Limited under the Indian Companies Act, 1913 with registration number 15202 of 1947, as a subsidiary of Coates Brothers p.l.c. On enactment of the Companies Act in the year 1956, our Company was converted into a private limited company and renamed as Coates of India Private Limited with effect from April 16, 1956. With effect from April 12, 1962, our Company was re-converted into public company viz. Coates of India Limited In the year 1991, our Company acquired and merged business of Karson Paints Limited, a dormant unit with which subsequently became the site for the new integrated resin and metal coating unit of our Company. In the same year, Total S.A., the giant Paris headquartered, oil and chemicals conglomerate, acquired Coates Brothers p.l.c., our holding company thereby making Total S.A.our ultimate holding company. In the year 1997, our Company, in order to concentrate and focus on its printing inks and adhesives business, decided to transfer its packaging coatings business to a Coates Coating India Private Limited which is a susbsidiary of our Company. In the year 1999, there was a again a change in our ultimate holding company from Total to Dainippon Ink & Chemicals Inc., Japan, due to the sale by Total S.A. of its worldwide ink business, including its stake in Coates Brothers p.l.c. to Sun Chemicals B.V., which in turn is a wholly owned subsidiary of Dainippon Ink & Chemicals Inc., Japan. In the same year, Sun Chemicals B.V. acquired 8.42% stake in our Company pursuant to an open offer made by it under SEBI Takeover Regulations. In the year 2001, Dainippon Ink & Chemicals Inc., Japan, our ultimate holding company decided to consolidate all its investments in Asian Group companies under DIC Asia Pacific Pte Limited, Singapore. Pursuant to this decision, the 51% stake held by our holding company Coates p.l.c., was transferred to Sun Chemicals, thereby increasing the stake of Sun Chemicals in our Company from 8.42% to 59.42%, due to which Sun Chemicals became our holding company. In the year 2002, our holding company once again changed from Sun Chemicals to DIC Asia Pacific Pte Ltd., Singapore as the entire stake of 59.42% held by Sun Chemicals was transferred to DIC Asia Pacific Pte Ltd., Singapore. Subsequently, DIC Asia Pacific Pte Ltd. took the creeping acquisition route to acquire additional 6.34% stake in our Company thereby raising its stake to 65.76%. To reflect the busines group to which our Company is a part of, the name of our Company was changed to DIC India Limited, with effect from August 6, 2004 At the time of incorporation the Registered Office of our Company was situated at 6, Hastings Road, Calcutta. With effect from April 1, 1961, the Registered Office of our Company was Premises No 3, Canal East Road, Ultadanga, Calcutta – 700 004. With effect from May 1, 1971, the registered office of our Company was shifted to the present address which is Transport Depot Road, Kolkata – 700 088 Major Events Year Event

Incorporation of our Company in April 2, 1947 in Calcutta, Our Company actually commenced business on November 1, 1947

1947

Our Company was able to declare dividends in its first year of operation 1951 Our Company opened its first service centre at Mumbai to meet demands from the western region

In August 1953, Mumbai operation shifted to Haines Road, Worli where blending unit set up 1953 Manufacture of printing ink at this blending unit was done from Standard imported intermediates. Our Company opened a unit at Madras Our Company undertook further expansion plans for which it acquired additional plots of land at Kolkata, for estabilishing a factory

1958

Our Company set up a full fledged R&D department set up in Kolkata for both its products, inks and metal coating

Our Company opened a office at Delhi. Re-Conversion of our Company into a Public Limited Company as by virtue of the enactment of the Companies Act in the year 1956 it was a private company.

Our Company appointed Coates Bros. & Co., London, (their holding company), as consultant and technical advisors to take advantage of the R&D activities of its parent company

1962

Our Company set up Chandivali (Mumbai) unit This unit was the first captive resin plant, other than those resin plant under the paint industry, in India.

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Our Company undertook further expansion plans at its Head office at Kolkata 1963 Our Company commenced production of Metal coating at its unit at Chandivli, Mumbai.

Our Company set up a factory at Najfgarh Road, Delhi for its blending activities 1966 Company acquired its property at Transport Depot Road, Kolkata. Construction at Kolkata factory was completed and the factory was inagurated in 21st April, 1972 Our Company shifted its Metal Coating research division from Kolkata to Mumbai

1972

The R&D department of our Company was granted recognition by India's Department of Science & Technology.

1978 Our Company opened new sales offices at Ahmedabad, Bangalore and Patna 1983 Our Company acquired 100% stake in Rohit (Printing Inks & Paints) Industries (P) Ltd in May, thereby

making it a wholly owned subsidiary

1990 Our Company acquired leasehold land at Noida for setting up its new solvent based ink factory, which was inaugurated in a record time of six months.

Our Company set up another plant at Ahmedabad, Gujarat for manufacturng and storage facilites a

Our Company acquired Karson Paints, a company engaged in the same line of business. Our Company set up it Integrated resin & metal coating unit at Bangalore. Subsequently, the Mumbai unit activties of resin & metal coating were discontinued thereby leaving activities of printing ink only Our Company commenced production of Industrial adhesives produced in assocaitoon with Bostik Limited, U.K. then a world leader in adhesives

1991

Total acquires Coates Brothers PLC, our holding company thereby making Total our ultimate holding company Change in our financial year from April - March to January - December 1994 Our Company achieved a turnover of Rs 10,000 Lacs

1997 Demerger of the packaging coatings division of Coates of India Limited into Coates Coatings India Private Limited, which is a wholly owned subsidiary of Coates of India Limited Change in our ultimate holding company from Total to Dainippon Ink & Chemicals Inc., Japan. Change was due to sale by Total of its worldwide ink business, including its stake in Coates Bros PLC to Sun Chemicals, which in turn is a wholly owned subsidiary of Dainippon Ink & Chemicals Inc., Japan

1999

Acquistion of 8.42% stake by Sun Chemicals in our Company pursuant to an open offer made by it under SEBI Takeover Regulations.

2001 DIC Japan, our ultimate holding company decided to consolidate all its investments in Asian Group companies under DIC Asia Pacific Pte Limited, Singapore. Pursuant to this decision, 51% stake held by our holding company Coates PLC, was transferred to Sun Chemicals, thereby increasing the stake of Sun Chemicals in our Company from 8.42% to 59.42%, due to which Sun Chemicals became our holding company Change in our holding company from Sun Chemicals to DIC Asia Pacific Pte Ltd., Singapore as the entire stake of 59.42% held by Sun Chemicals was transferred to DIC Asia Pacific Pte Ltd., Singapore. T

2002

DIC Asia Pacific Pte Ltd. took the creeping acquisition route to acquire additional 6.34% stake in our Company thereby raising its stake to 65.76%

2004 To reflect the busines group to which our Company is a part of, the name of our Company was changed to DIC India Limited, with effect from August 6, 2004

2007 DIC India is seeking the approval from its members for merger of its subsidiary Rohit (Printing Inks and Paints) Industries Private Limited with DIC India Limited.

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Main Objects of our Company: The main objects of our Company as contained in the Memorandum of Association of our Company are reproduced below: “To carry on the business (in all its branches) of Printing Ink and Varnish Manufacturers, Oil Distillers or Refiners, Block Manufacturers, Bronze and Fine Colour Manufacturers and Merchants, Paint, Enamel, Varnish and Synthetic Resin Manufacturers, Distemper and Pigment Manufacturers, Manufacturers of Cosmetics, Polishes and compounds and products of a similar nature, makers of and dealers in any plates or other things, that may from time to time be used in the process of printing, dealers in all machines, materials and things, used by printers, of any description and in all materials and things connected with the above business or any form of them.” The Objects as set out in the Memorandum of Association of our Company enables us to undertake activities for which the funds are being raised in the Issue. The existing activities of our Company are in accordance with the Objects Clause of our Memorandum of Association. Changes in the Memorandum Of Association

Date of Change Particulars of Change January 22, 1960 New set of Memorandum and Articles of Association adpoted

December 28, 1967 Increase of authorised capital from Rs.20, 00,000 to Rs.50, 00,000 consisting consisting of 5,00,000 Equity Shares of Rs.10 each

August 1, 1974 Increase of authorised capital from Rs. 50,00,000 to Rs.100, 00,000 consisting consisting of 10,00,000 Equity Shares of Rs.10 each

April 21, 1978 Increase of authorised capital from Rs. 100,00,000 to Rs.150, 00,000 consisting consisting of 15,00,000 Equity Shares of Rs.10 each

April 29, 1982 Increase in Authorised capital from Rs 1,50,00,000 to Rs. 1,80,00,000 consisting of Rs. 1,50,00,000 equity shares and Rs 30,00,000 preference share

September 23, 1982 Amendment in the Objects Clause by inserting Clauses 2(c) and 2(d)

September 28, 1989 Increase of Authorised capital from Rs 1,50,00,000 to Rs. 3,50,00,000 consisting of Rs. 3,50,00,000 equity shares. Pref. Shares cancelled.

July 30, 1992 Increase of Authorised capital from Rs 3,50,00,000 to Rs. 7,00,00,000 consisting of 70,00,000 equity shares.

June 29, 2004 Change in name from Coates of India Limited to DIC India Limited

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Our Subsidiaries We have the following two wholly owned subsidiaries as on the date of filing the Letter of Offer. 1. DIC Coatings India Limited : DIC Coatings India Limited was incorporated on December 20, 1996 at Calcutta under the name of Coates Coatings India Private Limited. The Registration Number was 21-82326. The name of the company was changed to Coates Coatings India Limited with effect from May 9, 2001. The name was further changed to DIC Coatings India Limited, with effect from June 29, 2004. The company is not a listed company. The registered office of the company is situated at Transport Depot Road, Kolkata – 700 088. The object for which the company is incorporated is as follows:

1. “To carry on the business, in all is branches, of manufacturers, producers, buyers, sellers, wholsellers, retailers, importers, exporters and dealers in paint, enamel, varnish, synthetic resin, coatings and all other objects or things that may be used in the process of painting, coatings, decorating, polishing and furnishing of any surface.

2. To manufacture, buy , sell, export, import and deal in oil, chemicals and other materials, things and by-

products that may be used in painting, coatings, decorating and finishing of any surface or that may be required by customers or persons having dealings with the Company and to act as agents for disposal of such articles and things.”

This company is currently engaged, inter alia, in the business of industrial coatings and as toll manufacturers of prepared adhesives on behalf of its holding company DIC India Limited with effect from May 2006. The company also manufactures synthetic resins for internal consumption only. The Board of Directors of DIC Coatings India Limited as on September 30, 2007 comprises of the following Directors Sr.No Name of the Director Designation 1 Dr. P K Dutt Chairman 2 Mr. Anil Puri Executive Director 3 Mr. Sandip Chatterjee Director 4 Mr. T. B. Chatterjee Director The Shareholding Pattern of DIC Coatings India Limited as on September 30, 2007 is as follows: Name of the Shareholder Number of Shares

held %age of shareholding-

DIC India Limited 10753141 99.99 Mr. T B Chatterjee (Nominee of DIC India Limited) 1 Mr .G Sasi (Nominee of DIC India Limited) 1 Mr. Anil Puri (Nominee of DIC India Limited) 1 Mr. Sandip Chatterjee (Nominee of DIC India Limited) 1 Dr. P K Dutt (Nominee of DIC India Limited) 1 Mr. Anjan Mukhopadhyay (Nominee of DIC India Limited) 1 Brief Audited Financials in the last three years*

[Amount in Rs.] Particulars FY 2006 FY 2005 FY 2004

Total Income 38,12,33,198 33,92,89,504 27,87,47,172 Profit After Tax 3,02,07,054 2,22,97,737 2,08,19,564 Equity Share Capital 10,75,31,695 10,75,31,695 10,75,31,695 Reserves and Surplus 8,18,06,507 5,15,99,453 2,93,01,716 Earning Per Share (EPS) 2.81 2.07 1.94 Book Value Per Share 17.60 14.79 12.72 * financial results have been proivded in absolute figures

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2. Rohit (Printing Inks and Paints) Industries Private Limited (“RIPL) Rohit (Printing Inks and Paints) Industries Private Limited was incorporated on March 25, 1982, at Mumbai. The registration number was 11-26779. The registered office of the Company is situated at Tranport Depot Road, Kolkata – 700 088. DIC India has obtained the approval from its members for merger of this subsidiary into DIC India Limited on June 29, 2007. The process of completion of other statutory formalities is in progress. The object for which the company is incorporated is as follows: “To manufacture, produce, process, refine, reprocess or prepare, re-pack, import, export, buy, sell and deal in printing inks, paints, enamels and varnishes and raw materials such as natural and synthetic resins, pigments, lithographic and other chemicals, lithographic and sensitivised plates, drying and non drying oils and varnishes, solvents, greases, waxes, driers, containers and packing materials and intermediates required for the manufacturing of inks, paints, enamels and varnishes and lithographic chemicals, plates.” The Board of Directors of Rohit (Printing Inks and Paints) Industries Private Limited as on September 30, 2007 comprises of the following Directors Sr.No Name of the Director Designation 1 Mr. Sandip Chatterjee Director 2 Mr. Anjan Kumar Mukhopadhyay Director 3 Mr. Ratan Kumar Srivastava Director 4 Mr. N R Sharma Director The Shareholding Pattern of Rohit (Printing Inks and Paints) Industries Private Limited as on September 30, 2007 is as follows: Name of the Shareholder Number of Shares held

[Face value of Shares Rs 100/-] %age of shareholding-

DIC India Limited 1094 99.99 Mr. T B Chatterjee (Nominee of DIC India Limited) 1 Mr .G. Sasi (Nominee of DIC India Limited) 1 Mr. S. Venkatesan (Nominee of DIC India Limited) 1 Mr. Sandip Chatterjee (Nominee of DIC India Limited) 1 Mr. Nandana Chakrabarti (Nominee of DIC India Limited)

1

Mr. A K Mukherjee (Nominee of DIC India Limited) 1 Brief Audited Financials in the last three years*

[Amount in Rs.] Particulars FY 2006 FY 2005 FY 2004

Total Income 2,13,41,824 1,63,206 6,00,000 Profit After Tax 1,85,34,425 (4,95,570) 23,885 Equity Share Capital 1,10,000 1,10,000 1,10,000 Reserves and Surplus 1,66,56,781 54,648 54,648 Earning Per Share (EPS) 16,849 - 21.71 Book Value Per Share 15242.53 149.68 149.68 * financial results have been proivded in absolute figures

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Shareholders Agreement There is no shareholders’ agreement among our shareholders in relation to our Company Other Agreemen ts

Except for the agreements mentioned hereunder, we are not a party to, or have entered into, any other material contracts not being a contract:

(i) entered into in the ordinary course of our business carried on, or intended to be carried on, by us; or

(ii) entered into more than two years before the date of filing the Letter of Offer with SEBI.

1. License Agreement entered into by our Company with Dainippon Ink & Chemicals Inc., Japan and

DIC India Limited

Nature of Agreement

License Agreement dated April 1, 2007

Parties to the Agreement

Dainippon Ink & Chemicals Inc., Japan and DIC India Limited (erstwhile Coates of India Limited)

Effective Date of Agreement

means January 1, 2007

DIC India is in need of Technical information, including Intellectual Property Rights, Trademarks and use of brand names for manufacturing poly-ester, poly-urethane and poly-urea resin, used an intermediate products in manufacture of Gravure Inks and other products

DIC Japan is willing to make available to DIC the technical know how as aforesaid and the right to use the trade names and brand names

DIC Japan grants DIC India an NON-EXCLUSIVE LICENSE , royalty bearing license to use technical information for manufacturing, distributing, selling and using of products in Territory. (Territory in the agreement has been defined as India,

DIC India, to make DIC Coating India Limited (DCIL), its wholly owned subsidiary bound by the provisions of this agreement, as if DCIL were a party to this agreement and DIC India and DCIL would be jointly and severally responsible for all duties and liabilities under this agreement DIC India to enter into a toll manufacturing agreement for products manufactured by DCIL on behalf of DIC India

DIC India is not granted the right to sub-license to any third party and shall not make licensed information available to third parties

Improvements made by DIC India, independently or jointly shall be jointly owned with DIC Japan and DIC India shall grant non-exclusive, worldwide, royalty free license to DIC Japan for such improvements made by it.

Salient terms of the agreement

DIC India may use trademarks for purpose of sales and promotion of products with prior writtent consent of DIC Japan. However, the trademarks shall be strictly used with words "manufactured by DIC India under license from DIC Japan" as a preface. DIC India is restricted from applying for registration, identical or similar trademarks in the territory or elsewhere.

DIC India shall own the right to file patent applications and to obtain patents with respect to the improvements made by it after prior notification to DIC Japan of such proposed patent application, provided it is not adverse to the interests of DIC Japan, in which case DIC Japan shall have the right to refuse the patent application. Similarly, DIC Japan shall also have the right to file patent applications and obtain patents with respect to improvements made by DIC India, jointly with DIC India

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Compensation DIC India to pay DIC Japan a royalty of 3% on total net sales for all products manufactured

and sold by DIC India. The payment to be made on half yearly basis. Royalty to be calculated on ex-factory wholsesale price. (net of excise and other levies) less landed cost of imported raw materials.

Validity The agreement to remain in force upto December 31, 2016, subject to receipt of necessary approvals from regulatory authorities unless terminated earlier by either party.

Renewal clause The agreement will be automatically renewed on expiration of the term, for consecutive period of one year each, thereafter unless written termination notice is given by either party six months prior to the expiration of the then effective term.

DIC is not granted the right to sub-license to any third party and shall not make licensed information available to third parties

Secrecy / Non Disclosure

The obligation under this article shall survive any termination or expiration of this Agreement

Termination clause

In event DIC India decides to cease manufacture of the products and notifies the same to DIC Japan in writing, or is subject to discontinuance of business, liquidation, dissolution or bankruptcy, DIC Japan may terminate the agreement by giving written notice to DIC India, 60 days prior to cessation

Either party may terminate this agreement forthwith, if other party is in breach of any provisions of this agreement and is unable to rectify the same in 90 days, in which event the other party may claim damages from the defaulting party. DIC India to hand over all licenses information in tangible

DIC Japan shall have the right to unilaterally terminate the agreement by giving 60 days prior written notice to DIC India if DIC Japan ceases to hold at least 50% shares or interest, directly or indirectly, in DIC India

Assignment clause

Neither party shall assign this Agreement without the consent in writing of the other party

Arbitration Tokyo, Japan, in accordance with the Commercial Arbitration Rules of the Japan Commerical Arbitration Association

The Government of India, Minsitry of Commerce & Industry, Department of Industrial Policy & Promotion, Secreteriat of Industrial Assistance has vide letter No. 12(19)/2006-FC dated April 25, 2007 informed the comapny the raw materials stated in the agreement are not covered under the components category and therefore the proposal qualifies for the automatic route. Our Company is advised to approach the Reserve Bank of India for the same

Details of Sanctions from regulatory authorities

Our Company has filed the relevant agreement with the RBI on April 13, 2007 2. Technical Collaboration Agreement entered into by our Company with DIC Asia Pacific Pte

Ltd., Singapore Nature of Agreement

Technical Collaboration Agreement signed on December 5, 2000.


Dainippon Ink & Chemicals Inc., Japan and DIC India Limited (erstwhile Coates of India Limited)

date of agreement to mean date on which either party signs the agreement after signature of the other, the time difference between both signature not being more than three weeks of sigining first by either party

Date of Agreement

The agreement has been signed by DIC India, at Calcutta on December 5, 2000 and by DIC Japan at Tokyo on November 14, 2000

Effective Date of Agreement

Agreement to be effective upon receipt by DIC India and DIC Japan of all statutory approvals as may be necessary

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Coates has approched DIC, Japan to make availabe technical know how for upgrading its manufacturing technology for existing as well as future products relating to printing inks and allied products on continuous basis at its units situated at Kolkata, Mumbai, Noida, Ahmedabad, New Delhi, Chennai or any other future place.

DIC Japan is willing to make available to DIC the technical know how as aforesaid and the right to use the trade names and brand names

DIC Japan grants DIC an NON-EXCLUSIVE LICENSE to use licensed information for manufacture of products in Territory. (Territory in the agreement has been defined as India, Bangladesh, Nepal and such other countries as may be mutually agreed between the parties)

DIC Japan grants DIC a NON-EXCLUSIVE LICENSE to sell products in any countries except where DIC has its plant, its subsidiaries or joint venture arrangements for the manufacture of products. Also, in cases where DIC has already granted exclusive selling rights to any third party. However, DIC may export to such countries after obtaining prior consent of DIC Japan DIC is not granted the right to sub-license to any third party and shall not make licensed information available to third parties

Improvements made by DIC India, independently or jointly shall be jointly owned with DIC Japan and DIC India shall grant non-exclusive license without compensation to DIC Japan for such improvements made by it.


DIC India may use trademarks for purpose of sales and promotion of products with prior writtent consent of DIC Japan. However, the trademarks shall be strictly used with words "manufactured by DIC India under license from DIC Japan" as a preface. DIC India is restricted from applying for registration, identical or similar trademarks in the territory or elsewhere.

Compensation DIC India to pay DIC Japan a royalty of 2% on total net sales for all products manufactured and sold by DIC India in India and abroad. The payment to be made on half yearly basis. Royalty to be calculated on ex-factory wholsesale price. (net of excise and other levies) less landed cost of imported raw materials. However, goods sold and purchased by DIC India manufactured under technical collaboration with Varn International, UK, will be excluded for the purposes of calculating royalty.

Validity The agreement to remain in force for seven years from the Effective date provided that DIC Japan, directly or indirectly owns more than 50% of shares of DIC India.

Renewal clause The agreement may be extended for a further period of five years after mutual agreement, one year prior to the date of expiration.



The obligation under this article shall survive for ten years after termination of this Agreement

Termination clause Either party may terminate this agreement forthwith, if other party is in breach of any provisions of this agreement and is unable to rectify the same in 30 days or other party becomes bankrupt, insolvent or is placed under liquidation.DIC India to hand over all licenses information in tangible

Assignment clause Neither party shall assign this Agreement without the consent in writing of the other party

Arbitration Tokyo, Japan, in accordance with the Commercial Arbitration Rules of the Japan Commerical Arbitration Association when DIC India submits to arbitration or in Kolkata, India in accordance with the Commercial Arbitration Rules of the Indian Commerical Arbitration Association, when DIC Japan submits to arbitration

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The Government of India, Minsitry of Commerce & Industry, Department of Industrial Policy & Promotion, Secreteriat of Industrial Assistance has vide letter No. 8(2001)/719(2000)/PAB-IL dated January 3, 2001, conveyed its approval subject to the following terms and conditions Royalty payment not to exceed 2% (Internal and Export sales). Royalty shall be payable for a period of seven years from date of commencement of commercial production during the period of the collaboration agreement. Further, royalty payment to be restricted to licenses capacity plus 25% in excess thereof, else prior approval of Government would be required Duration of the agreement to be 10 years from date of agreement or 7 years from date of commencement of commerical production Foreign collaboration have had or have no previous technical collaboration or trademark agreement in India in same or allied field

This agreement should not adversely afftect any existing technical or trademark arrangements, if any. This approval would be valid for two years within which the agreement is to be filed with the Reserve Bank of India / Authorised Foreign Exchange Dealer

The Government of India, Minsitry of Commerce & Industry, Department of Industrial Policy & Promotion, Secreteriat of Industrial Assistance has vide letter No. 8(2001)/719(2000)/PAB-IL dated May 9, 2003, conveyed its approval for amendment in the name of the foreign collaborator from Dainippon Ink & Chemicals Inc., Japan to DIC Asia Pacific Pte Limited, Singapore. The letter dated January 3, 2001, shall be deemed to have been amended to the extent of change in name of the foreign collaborator. All other terms and conditions in their approvals would remain unchanged

Details of Sanctions from regulatory authorities

Reserve Bank of India, Kolkata has referred to the approval letter of the GoI and allotted registration Number FT 2001 CAG 0313 vide its letter No. CA EC 1106/03.12.0311/2000-2001 dated April 20, 2001

3. Our Company has a Technical Service and Support Agreement dated August 11, 2003, with Tusons Chemical Industries Limited, Bangladesh. Nature of Agreement

Technical Service and Support Agreement dated August 11, 2003


DIC India Limited (erstwhile Coates of India Limited) and Tusons Chemical Industries Limited (“TCIL”)

Effective date The date on which either party signs the agreement after signature of the other, the time difference between both signature not being more than three weeks of sigining first by either party TCIL is in need of Technical support information, including in establishing a separate printing ink manufacturing unit for paste ink products in the territory of Bangladesh DIC is willing to make available to TCIL its expertise and knowledge in manufacturing of printing ink by way of support information and has agreed to enter into a suitable service and support agreement with TCIL. A non-exclusive agreement, for provided support information, which includes engineering design, lay out of plant, instrumentation, manning, operations and all aspects of establishment of a blending and colour matching unit for ultimate manufacture of ink TCIL is not granted the right to sub-license to any third party and shall not make licensed information available to third parties


TCIL may use trademarks for purpose of sales and promotion of products with words "manufactured under technical assistance of DIC India" as a preface.

Compensation TCIL to pay DIC a royalty of 3% on total net sales/ex works price of the products in convertible currency. Royalty is payable on half yearly basis and convertible in US Dollars at the official rate in force on the date of remittance.

Validity The agreement to remain in force for a period of five years. Renewal clause The agreement can be renwed for a further period of five years.

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The obligation under this article shall survive for a period of ten years from date termination or expiration of this Agreement

Termination clause

Either party may terminate this agreement forthwith, if other party is in breach of any provisions of this agreement and is unable to rectify the same in 90 days or in case the other party becomes insolvent, bankrupt or is placed under liquidation.

DIC shall have the right to unilaterally terminate the agreement by giving 180 days prior written notice to TCIL in case of unsatisfactory performance by TCIL

Assignment clause

Neither party shall assign this Agreement without the consent in writing of the other party

Arbitration Kolkata, India, in accordance with the Indian Arbitration Act, 1996. Although the agreement is subsisting, our Company has undertaken no activies in pursuance to the said agreement since the past 2 years. Strategic Partners Our Company does not have any strategic partners. Financial Partners Our Company does not have any financial partners.

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OUR MANAGEMENT

Board of Directors The Board of Directors is composed of the following persons: Full Name, Father’s Name, Address and Occupation

Nature Age Qualifications Date of Appointment and tenure

Other Directorships and interests in partnership firms and sole proprietorships held, if any.

Dr. Prabir Kumar Dutt S/o Prafulla Kumar Dutt Flat 2A, 2nd floor, P-384B Keyatola Lane, Kolkata – 700 029. Service

Chairman and Managing Director

65 B.Sc, M.Tech. (Chemical Engineering & Chemical Technology) and Ph.D. (Polymer Chemistry)

First appointed in May 1984. Has been appointed as Managing Director, since July 26, 1991. He shall hold office for a period of five years with effect from July 26, 2006.

1. DIC Coatings India Ltd.

2. DIC Lanka (Private) Ltd.

3. CHNHB Association

4. DIC Fine Chemicals Private Limited

Mr. Paul Koek S/o Alfred Koek 76, Bayshore Road, #4-17, Costa Del Sol Singapore 469990 Service

Non Executive

47 CPA June 29, 2004. He is liable to retire by rotation.

1. Coates Brothers (Singapore) Pte Ltd.

2. Coates Brothers (Malaysia) Sdn Bhd

3. Coates Thailand Ltd.

4. TFE Co. Ltd, Thailand

5. DIC Pakistan Ltd.

6. DIC Lanka (Pvt) Ltd

7. DIC (Vietnam) Co Ltd.

8. PT DIC Graphics

9. Gunong Printing Ink (M) Sdn Bhd

10. DIC Fine Chemicals Pvt Ltd

Mr. Mitsunobu Miyasaka S/o Yoshifumi Miyasaka 8 Keppel Bay Drive #02-08, Carribean, Singapore

Non Executive

54 Master’s Degree in Engineering.

April 18, 2007. He is liable to retire by rotation.

1. DIC Asia Pacific Pte Ltd.

2. Dainippon Ink &

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Service

Chemicals (Thailand) Co Ltd.

3. DIC International (Thailand) Co Ltd

4. PT DIC Graphics

5. DIC Colortron Pty Ltd

6. DIC Australia Pty Ltd

7. PT Pardic Jaya Chemicals

8. DIC Fine Chemicals Pvt Ltd.

Mr. Dipak Banerjee S/o Bir Kumar Banerjee 57A Garcha Road, Kolkata – 700 019. Professional

Non Executive and Independent Director

61 Chartered Accountant

March 8, 2001. He is liable to retire by rotation.

1. TM International Logistics Ltd.

2. Tata Sponge Iron Ltd.

3. Tata Metalliks Ltd.

4. Tata Pigments Ltd.

5. Mjunction Services Ltd

6. The Tinplate Co of India Ltd.

7. HBP Business Advisory Services Pvt Ltd.

8. International Shipping & Logistics FZE, Dubai

9. P N Ganguli & Co., Partner

Mr. Rasendu Putatunda S/o Indu Bhushan Putatunda 1/53, Dover Place, Kolkata – 700 019.

Non-Executive and Independent Director

70 Mechanical Engineering

November 17, 2000. He is liable to retire by rotation.

1. VXL Technologies Ltd

Prof. Ranjan Das S/o S.K.Das

Non-Executive

58 M.Sc (Applied Mathematics) and

July 27, 2007 . Till next Annual

Linc Pen & Plastics Limited

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21/2, Lake East, 3rd Road, Santoshpur, Kolkata – 700 075 Professor

and Independent Director

Doctorate in Strategic Management

General Meeting, since appointed as Additional Director

Mr. Subir Bose S/o Late Dr. A.N. Bose 37, Ahiripukur Road, Kolkata – 700 019 Service

Non-Executive and Independent Director

58 B.Tech in Chemical Engineering from IIT (Kanpur) and PGDBA from IIM, Ahmedabad.

July 27, 2007 . Till next Annual General Meeting, since appointed as Additional Director

1. Berger Paints India Limited

2. Berger Paints (Bangladesh) Pvt Ltd

3. Beepee Coarting Pvt. Ltd.

4. Berger Jenson Nicholson (Nepal) Pvt Ltd

5. Berger paints (Cyprus) Ltd

Note: None of the above mentioned Directors are on the RBI List of willful defaulters. Brief Profile of the Directors: Dr Prabir Kumar Dutt Dr P K Dutt, aged 65 years, was born on 14th March,1942. After completing B.Sc, M.Tech. (Chemical Engineering & Chemical Technology) and Ph.D. (Polymer Chemistry), Dr Dutt joined our Company on 1st August, 1970 as a Chemist. In September, 1980 his services were lent to Coates Brother Plc, UK and he worked till March, 1982 as Executive Assistant to Group Managing Director .From April, 1982 he was on deputation to Coates Brothers (West Africa) Ltd. and worked there as Techno-Commercial Manager and later became its Managing Director. On his return to India, Dr Dutt joined the Board of our Company in May, 1984. Dr Dutt was appointed as the Managing Director for a period of five years with effect from July 26, 1991. On expiry of his term, Dr Dutt was re-appointed as the Managing Director successively for a further period of five years each with effect from July 26, 1996 and July 26, 2001, July 26, 2006. He was appointed as Chairman and Manging Director of our Company with effect from May 29, 2007 Mr Paul Koek Mr P Koek, aged 45 years was born on June 14, 1960. Mr Koek holds a CPA qualification and is registered with the Institute of Certified Public Accountants of Singapore. He is a Fellow Member (FCCA) with the Chartered Association of Certified Accountants and a Senior Member with the Association of Accounting Technicians. Mr Koek brings with him a wealth of more than 21 years of work experience in the field of regional tax, group accounting and treasury management. Mr Koek is presently the Group Finance Director - DIC Asia Pacific Pte Ltd, subsidiary of Dainippon Ink and Chemicals Inc., Japan. Mr Koek was inducted on the Board with effect from June 29, 2004. Mr. Mitsunobu Miyasaka Born on August 6, 1953, Mr. Miyasaka is the Regional Managing Director of DIC Asia Pacific Pte Limited, Singapore, a subsidiary of Dainippon Ink & Chemicals Inc, Japan. Mr. Miyasaka graduated from the Nagoya University in Japan with a Master’s Degree in Engineering. During his term of 29 years in Dainippon Ink & Chemicals Inc., Japan he has held many key positions in our Company. In March 2006, he held the position of

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General Manager of Graphic Arts Materials, Technical Administrative Department and undertook many significant projects. He also currently holds the position of Corporate Officer and is a senior member of the Executive Committee in Japan. His expertise covers the technology and market development of offset, news and gravure inks. He is well versed and has been instrumental in the Group’s advancement in the ‘Cost Down’ Projects and will continue to help manage the entities in the region. His recent active involvement in the development of the new business segments of the group in digital ink, color filters and conductive ink will be an asset to the regional entities under his new ambit. Mr Dipak Banerjee Born on 19th February, 1946, Mr D Banerjee, a Chartered Accountant, underwent training with Lovelock & Lewes (now a part of Price Waterhouse Coopers). He started his career with Life Insurance Corporation in 1970 and thereafter, in 1975, joined Hindustan Lever. His tenure with Lever included a two year secondment to Lever Brother, Nigeria. In 1992, Mr Banerjee became the Commercial Director of Unilever Plantations Group. Between 1993 and 1997 he was designated as Commercial Officer – Africa and Middle East Group of Unilever, London and retired in July 2000 as Chairman, Unilever Uganda Ltd. Mr Banerjee joined the Board of your Company on 8th March, 2001, which appointment, was duly approved by the members at the Annual General Meeting held on June 7, 2001. Mr Banerjee was further re-appointed by the Members in the Annual General Meeting held on June 25, 2003. Mr. Rasendu Putatunda Born on August 31, 1937, Mr. R B Putatunda graduated in Mechanical Engineering with First Class honours from the Jadavpur University, Kolkata. He started his professional career with GKW in 1958 and underwent two years advance training in West Germany in Technology and Management discipline on a West German scholarship. On his return in 1962, Mr. Putatunda joined Philips India Limited. During his 35 years with Philips, Mr. Putatunda held various positions and in 1988 became a member of the Board of Directors of Philips and retired as Director and Senior Vice President in 1997. Mr Putatunda was inducted on the Board on November 17, 2000. He does not hold any shares of our Company. Prof. Ranjan Das Prof. Ranjan Das, aged 58 years was born on September 9, 1949. Prof. Das holds a M.Sc(Applied Mathematics) and a Doctorate in Strategic Management. Prof. Ranjan Das is currently a Professor of Strategic Management in the Indian Institute of Management, Kolkata. He has over 12 years of experience in strategic, business and functional management consulting and executive education. Prior to that he has held senior position as General Manager of MNC company and Managing Director of a 50:50 Joint Sector Company. Prof. Das was inducted on the Board with effect from 27th July, 2007 Mr. Subir Bose Mr. Subir Bose, aged 58 years was born on December 10, 1949. Mr Bose holds a B. Tech in Chemical Engineering from IIT (Kanpur) and PGDBA from IIM, Ahmedabad. Mr. Bose has over 33 years of experience in the paints industry and is currently the Managing Director of Berger Paints India Limited besides holding Directorship of several of its group companies. Mr. Subir Bose was inducted on the Board with effect from 27th July, 2007. Compensation of Executive Directors The total remuneration paid to the Directors for Financial Year 2006 is Rs. 80.95 Lacs

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Compensation payable to Mr. P.K. Dutt – Managing Director Our Shareholders at the Annual General Meeting held on May 15, 2006, approved the re-appointment of Dr. P. K. Dutt as Managing Director our Company with effect from July 26, 2006 for a further period of three years on the terms and conditions as contained in the resolution passed therefor which has been reproduced hereinbelow :

““RESOLVED THAT consent be and is hereby accorded to the re-appointment of and payment of remuneration to Dr P K Dutt as Managing Director of our Company, for a period of three years, with effect from July 26, 2006, on the terms and conditions as set out in the Explanatory Statement attached to and forming part of this notice and which shall also form part of the minutes of the meeting.””

The details of his remuneration are as follows :

1. Salary Details

Description 1 Salary

Pay Scale Annual Increment to commence from

Rs 1,25,000 per month Rs 1,25,000 – 7,500 –1,47,500 1st April, 2007

2 Management Allowance

Rs 1,50,000 per month

3 Performance Bonus

Not exceeding 100% of the Basic Salary, payable annually, for each financial year, as may be determined by the Remuneration Committee and finally approved by the Board.

4 Perquisites [see note below] Annual ceiling for specified perquisites

Rs 22,00,000/- In addition to the aforesaid Salary, Management Allowance and Performance Bonus, Dr P K Dutt shall be entitled to perquisites like furnished accommodation or house rent allowance in lieu thereof, gas, electricity, water, furnishing, club fees, medical insurance, personal accident insurance, medical reimbursement and leave travel concession for self, wife and dependent children, tax borne by our Company on non-monetary perquisites payable and all other perquisites in accordance with the Rules of our Company, as may be determined by the Board from time to time, such perquisites being restricted to Rs 22,00,000 per annum in the case of Dr P K Dutt For purposes of calculating the above ceiling, perquisites shall be evaluated as per Income Tax Rules wherever applicable. In the absence of any such Rule, perquisites shall be evaluated at actual cost. (b) The following, however, shall not be included in the computation of perquisites for the purpose of calculating the said ceiling , as aforesaid: i) Provision for use of company car for official duties and telephone at residence (including payment for local calls and long distance official calls);

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2. Minimum remuneration : Notwithstanding anything contained herein above, where in any financial year during the currency of tenure of the appointment/s, in the event of our Company having no profit or its profit is inadequate, the Board of Directors may determine the remuneration payable to each of the managerial personnel within the limits stated in Section II of Part II of Schedule XIII to the Companies Act, 1956, as may be amended from time to time, and other applicable provisions of the Companies Act, 1956. 3. Total remuneration :

The total remuneration payable to Dr. P K Dutt shall not exceed 10% of the net profit calculated in accordance with Section 198 and Section 309 of the Companies Act, 1956. 4. Sitting fees :

Dr P K Dutt shall not receive any sitting fees for attending meetings of the Board or any Committee thereof 5. Contribution to Provident Fund

Company’s contribution to Provident Fund and Superannuation Fund not exceeding 27% of the remuneration and Company’s contribution to Gratuity Fund as actuarially determined or upto such other limit as may be prescribed under the Income Tax Act, 1961 and Rules made thereunder for this purpose; 6. Leave Entitlement Encashment of unavailed leave, as per the Rules of our Company, at the time of retirement / cessation of service. Details of Borrowing Powers of Directors The shareholders of our Company have passed a resolution at the EGM of our Company held on January 10, 1991, authorising the Board of Directors of our Company pursuant to Section 293(1)(d) of the Companies Act, 1956 to borrow, such sum or sums of money as they may deem requisite for the purpose of the business of our Company not withstanding that the monies to be borrowed together with the monies already borrowed by our Company (apart from temporary loans obtained from the bankers of our Company in the ordinary course of business) shall exceed the aggregate of the paid up capital of our Company and its free reserves, that is to say, reserves not set up for any specific purposes provided that the total amount together with the monies already borrowed by the Board of Directors shall not at time exceed 2.75 (two and three-fourth) times the aggregate of share capital and reserves at the date of the last audited Balance Sheet of our Company, The total secured borrowings of our Company as on June 30, 2007 are Rs.6323.30 Lacs. The Articles of Association of our Company authorises the board to borrow. For further details regarding provisions of our Articles of Association dealing with borrowing powers, please refer section titled “Main Provisions of the Articles of Association of our Company” beginning on page 273 of the Letter of Offer. Corporate Governance The guidelines in respect of corporate governance are applicable to our Company as its shares are listed on BSE, NSE and CSE. Our Company is ensuring on-going compliance with all requirements pertaining to corporate governance. Our Company has regularly complied with all mandatory and also some of non-mandatory requirements of corporate governance norms as enumerated in Clause 49 of the Listing Agreements with stock exchanges. The following committees of the Board of Directors for compliance with the corporate governance requirements have been constituted:

• Audit Committee; • Shareholder's Committee/Investor Grievance Committee • Remuneration Committee; and • Share Transfer Committee.

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Audit Committee The Audit Committee was constituted vide a resolution passed by the Board at its meeting held on August 29, 2000. The committee was twice re-constiuted vide resolution passed at the meeting of the Board of Directors of our Company held on November 17, 2000 and March 8, 2001. The terms of reference of the Audit Committee are as follows: • Overseeing our Company’s financial reporting process and the disclosure of its financial information to

ensure that the financial statements are 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. • Appointment, removal and terms of remuneration of internal auditors • Reviewing, with the management, the annual financial statements before submission to the Board for

approval, with particular reference to: (1) 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; (2) Changes, if any, in accounting policies and practices and reasons for the same; (3) Major accounting entries involving estimates based on the exercise of judgement by management; (4) Significant adjustments made in the financial statements arising out of audit findings; (5) Compliance with listing and other legal requirements relating to the financial statements; (6) Disclosure of any related party transactions; (7) 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, and 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.

• Discussions with internal auditors on any significant findings and follow up thereon. • Reviewing internal audit reports in relation to internal control weaknesses • Reviewing management letters / letters of internal control weaknesses issued by the statutory auditors • 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 nonpayment of declared dividends) and creditors.

The audit committee consists of the following Directors:

Name of the Director Designation in the Committee Nature of Directorship Mr. D Banerjee Member – Chairman Independent and Non-Executive Mr P Koek Member Non-Executive Mr. R B Putatunda Member Independent and Non-Executive

Mr. T. B. Chatterjee, Executive Senior Vice President (Corporate and Legal Affairs) and Company Secretary has been designated as the Secretary to the Committee and Mr. B K Basu, Vice President and Chief Financial Officer is a permanent invitee to the Audit committee meetings.

Shareholders' / Investors' Grievance Committee The shareholders'/investors' grievance committee was constituted vide a resolution passed by the Board at its meeting held on August 29, 2000. It was reconstituted on July 27, 2007

- 87 -

Our Company has formed a shareholders' / investors' grievance committee pursuant to clause 49 of the listing agreement for looking into the redressal of shareholders' and investors' complaints like transfer of shares, non-receipt of balance sheet etc. The composition of the shareholders' / investors' grievance committee is as follows:

Name of the Director Designation in the Committee Nature of Directorship Mr. R.B.Putaunda Member – Chairman Independent and Non-Executive Dr. P K Dutt Member Executive Mr. P. Koek Member Non-Executive The terms of reference of this committee inter alia include issuing of share certificates, approving transfer of shares, consolidation of share certificates and exercising such powers in connection with the transfer, and transmission of shares, consolidation and sub-division of share certificates,issue of share certificates etc.

In order to expedite the process of Share Transfers, Board of Directors of our Company at their meeting held on April 27, 2007 decided to delegate authority for approval of share transfers, severally, to the following officers of our Company : 1. Mr. T B Chatterjee - Executive Senior Vice President (Corporate and Legal

Affairs) and Company Secretary 2. Mr.S Chatterjee - Chief Financial

Officer 3. Mr.G.Sasi - Asst. Manager – Secretarial & Insurance All share transfers approved by any of the abovenamed officials are to be placed at the committee of Directors’ Meeting for its noting

Remuneration Committee The Remuneration Committee was constituted vide a resolution passed by the Board at its meeting held on February 8, 2002. It has been re-constituted on July 27, 2007. The Committee will comprise of three Directors, all being Non-Executive Directors. The names of the Committee members are as below: Name of the Director Designation in the Committee Nature of Directorship Mr. D Banerjee Member – Chairman Independent and Non-Executive Mr. M. Miyasaka Member Non-Executive Mr. P. Koek Member Non-Executive

Shareholding of Directors The Articles of our Company do not require the Directors to hold any qualification shares. Except for Dr. P.K. Dutt who hold 100 shares, none of the directors of our Company hold any shares as on date of filing the Letter of Offer. Interest of Directors All the Directors of our Company, apart from normal remuneration and benefits from our Company and their shareholding in our Company, if any, have no other interest in our Company except in respect of the commercial transaction between our Company, its subsidiaries and other companies in which they are Directors/interested.

Changes in the Directors in the last three years

Name of the Director Date of Change Reason Mr. Hisato Tanemura 15-Oct-07 Resigned Prof. Ranjan Das 27-Jul-07 Appointment Mr. Subir Bose 27-Jul-07 Appointment

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Mr. Bodi Singh Kampani 2-Apr-07 Resignation Mr. Mayasuki Saito 18-Apr-07 Resigned Mr. Mitsunobu Miyasaka 18-Apr-07 Appointment Mr. Kazuo Kudo 29-Jun-04 Resigned Mr. Babulal Madhavji Varma 31-Oct-03 Resigned Mr. Naoki Tsuji 29-Jun-04 Resigned Mr. Mayasuki Saito 29-Jun-04 Appointment Mr. Paul Koek 29-Jun-04 Appointment

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Organisation Chart

HUMAN RESOURCESV. P. - HR

LEGAL & SECRETARIALSr. EXECUTIVE V. P. & C0MPANY SECRETARY

BUYINGSr. V. P. & CHIEF BUYER

MARKETINGHEAD - MARKETING STRATEGY

ENGINEERINGV. P. - ENGINEERING SERVICES

FINANCECHIEF FINANCIAL OFFICER

COSTING & INFORMATIONCHIEF INFORMATION OFFICER

MANUFACTURING SUPPORTSr. V. P. - CORPORATE MFG SUPPORT

GRAPHIC ARTS BUSINESSCHIEF OPERATING OFFICER

SRV.P - SOUTH

SALES / MKTING / TECH SERV / DEPOT

ERG. M. - EAST

SALES / MKTING / TECH SERV

V. P. - COMMERCIAL, NRS. SARKAR

NRCOO - NR

SALES/ MKTING / TECH SERV / NOIDA FTY

CHANDIVALI FTYSr V. P. - MFG (WR)

MUMBAISr. V.P - MUMBAIP. P. KHANDEKAR

SALES / MKTING / TECH SERV

GUJARATV. P . - GUJARAT

M. B. SHAHSALES/MKTING/T.S./A'BAD NB FTY ADMIN

REGIONS NEWS INKS BUSINESSCHIEF OPERATING OFFICER

MANAGING DIRECTOR

- 90 -

Key Managerial Personnel Our Key managerial personnel, other than our whole-time Directors, are as under:

Experience in SrNo Name and Address Designation

Age Qualification Date of Joining

DIC the Industry

Present rofile and responsibilities

Remuneration paid at the end of the last F.Y (Rs. in Lacs)

Previous employment

1 Mr. A. D. Chatterjee CB - 114, Salt Lake Kolkata - 700 064

Chief Operating Officer - Graphic Arts

54 M.Sc, MBA May 19, 1978

28 29 To regularly review the Graphics Art Divisions activities and market and customer trends, product ranges, competitor activity, manufacturing efficiency and profit margins to ensure continued profitable growth

14.47 M L Dalmiya Co. Ltd. (Sr. Executive)

2 Mr. Samir Bhaumik Pearl Court III, Flat No. 302 Essel Complex, Main Mehrauli Gurgaon Road, Gurgaon

Chief Operating Officer - Newsinks

53 B.Com, FCA July 7, 1997 9 30 To regularly review the News Inks Divisions activities and market and customer trends, product ranges, competitor activity, manufacturing efficiency and profit margins to ensure continued profitable growth

13.5 JBA Printing Inks Ltd. (Accounts Manger)

3 Mr. N. R. Sharma 7, Gaurav Apartments, Behind Ashok Nagar Nahur, Mulund (W) Mumbai - 400 080

Sr. Vice President - Corporate Manufacturing Support

57 B.E., Dip in Computers

October 2, 1989

17 35 Aim to achieve operational excellence in manufacturing process through standardization of manufacturing practices all over our Company

12.75 M/s Josi's Engineering Co. Ltd. (Works

Manager - Bombay & Faridabad plants)

- 91 -

4 Mr. T. B. Chatterjee Flat 3, Poulami Apartment 1/1, Currie Road Howrah - 711 104

Sr. Executive Vice President - Corporate Affairs & Legal & Company Secretary

52 M.COM, FCS August 21, 1996

10 26 To ensure all legal and statutory compliance for our Company

12.42 Asiatic Oxygen Ltd. (Company Secretary &

Finance Manager)

5 Mr. V. R. De Udita, Flat UD060308 Bengal Ambuja Hsg. Dev. Ltd. 1050/1, Survey Park Kolkata - 700 075

Vice President - Engineering Services

53 B.Sc, Dip. MECH ENGG

October 23, 1979

27 28 To coordinate in respect of all Engineering Matters, Capex coordination, equipment productivity, safety, health, and environmental issues

12.38 Greaves Foseco Ltd. (Assistant Maintenance

Officer)

6 Mr. R. G. Ganguly B-303 Redwood Evershine Green New Link Road, Oshiwara, Andheri (W), Mumbai - 400 053

Sr. Vice President & Chief Buyer

57 B.E, MBA February 1, 1990

17 35 To establish and plan material supply in such manner as to maintain production schedule within agreed upon financial, inventory and technical norms.

12.13 M/s Britannia Industries Ltd. (Asst. Operations Manger, Manager on Special

Assignments)

7 Mr. Rajiv Chopra 1/211, Jodhpur Park Kolkata - 700 068

Vice President. - Human Resources

57 B.Sc, PGDM March 1, 2006

1 32 To provide the right people to our Company and manage them in a manner that is consistent with our Company’s objective of growth and profit.

0.96 Eveready India Ltd. (Vice President - HR)

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8 Mr. P. S. Mukherjee

Flat E 1216 Golden Magic Block Brigade Gardenia, J.P. Nagar, 8th Phase, Bangalore - 560 078

Vice President - South Region

47 B.COM, MBA November 1, 1985

21 22 To maintain and increase profitability of the Southern Region of our Company

10.56 Sonodyne Electronics Co. Pvt. Ltd.

(Marketting Executive)

9 Mr. P. P. Khandekar A6, Satya Vijay Co-Op. Housing Society Sardar Pratap Singh Marg, Bhandup (W), Mumbai - 400 078

Sr. Vice President - Sales & Commercial, WR (Mumbai)

53 B.Sc,Dip in Business Mgmt.

December 6, 1976

30 31 To maintain and increase profitability of the Mumbai Region of our Company

10.45 Goodlass Nerolac Paints ltd (Chemist)

10 Mr. Anjan Kumar Mukhopadhyaya 11, Chandi Ghosh Road Kolkata - 700 040

Chief Information Officer

54 B.Com.,ICWA April 27, 1982

25 31 To ensure the development and execution of accounting systems and controls for inventories, manufacturing and distribution costs & to provide information to top management for evaluating profitability of specific products & to ensure the maintenance of effective financial control systems

10.36 Textile Processing Corporation Of India

Ltd. (Works Accountant)

11 Mr. Subhashis Sarkar Flat P 403, 3rd Floor Block P-5, Sector 21 Jalvayur Vihar Noida - 201 301

V. P. - Commercial, North Region

47 B.Com, ICAI April 20, 1998

9 21 To maintain and increase profitability of the Northern Region of our Company

9.35 M/s Vinay Cements Ltd. (Dy. General

Manager - Finance)

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12 Mr. Sandip Chatterjee 56/1, 1 Panchasayar Block - U-1 Kolkata - 700 094

Chief Financial Officer

44 B.Com, ICAI September 15, 1988

18 18 To direct the efforts of our Company towards meeting the financial objectives and requirements set out for the business and to monitor financial performance against plans

9.04 STP Ltd. (Asst. Internal Auditor)

13 Mr. M B Shah A-903, Devraj Apartments Opp. NRI Tower, B/h Judges Bunglow Police Chowky Bodakdev Ahmedabad – 54

Vice President - Gujarat

45 B.Com, LLB, August 1, 1983

23 24 To maintain and increase profitability of the Gujarat Region of our Company

8.89 HECCO National Radio & ECE Ltd ( Accounts Trainee)

All the aforesaid persons named as our Key Managerial Personnel are the permanent employees of our Company.

94

Relationship of our Key Managerial Personnel with our Promoter, Directors and other Key Managerial Personnel

None of our key managerial personnel is related with either our Promoter, Directors or any other Key Managerial Personnel Our Company does not have any arrangement or understanding with any of its customers, suppliers or others pursuant to which any person has been selected a director or member of the senior management. Details of Shareholding of our Key Managerial Personnel in our Company

None of our Key Managerial Personnel hold any shares in our Company except as given below:

Sr. No. Name of the Shareholder Number of Shares 1. Mr. A. D. Chatterjee 150 2. Mr. T. B. Chatterjee 1 3. Mr. V. R. De 150 4. Mr. R. G. Ganguly 150 5. Mr. P. S. Mukherjee 100 6 Mr. P. P. Khandekar 3 7 Mr. Anjan Kumar Mukhopadhyaya 1 8 Mr. Sandip Chatterjee 1 9 Mr. M B Shah 300

Bonus or Profit Sharing Plan for the Key Managerial Personnel

We have developed a structured incentive programme including a performance linked variable pay structure for our employees. Our Company’s compensation for employees has a variable component that is linked to the corporate and individual performance. Save and except the variable components to the key managerial personnel there is no bonus or profit sharing plan for the key managerial as on the date of the Letter of Offer. Changes in the Key Managerial Personnel

The details of the changes in the key managerial personnel during the last three years are as follows;

Sr.No Name of the Key Managerial Personnel

Designation Date of Change Particulars of Change

1 Mr.Asim Mukhopadhyay Sr. Vice-President - Mfg.& Logistics

31-Mar-07 Resigned

2 Mr. J.L.Basu Vice-President & General Manager - Personnel

30-Jun-07 Retired

3 B.K.Basu Sr. Vice President - Corporate & Internal Audit

2-May-05 transferred to holding company

4 Mr. Rajeev Chopra Vice-President - Human Resources

1-Mar-05 Appointed

Interest of Key Managerial Personnel

For interest of our key managerial personnel being our whole-time Directors, please refer paragraph titled “Interest/Payment or Benefit to our Promoter” beginning on page no. 96 of the Letter of Offer. Employees As on date of filing the Letter of Offer with SEBI, our Company does not have any employee stock option scheme or employee stock purchase scheme. No amount or benefit has been paid or given within two preceding years or are intended to be given to any of our employees (including whole-time Directors) except the normal remuneration for services rendered as employees and dividend on Equity Shares, if any, held by them.

95

OUR PROMOTER Our Promoter is DIC Asia Pacific Pte Ltd, Singapore a private company, limited by shares. The Company was incorporated as Dainippon Ink & Chemicals (Singapore) Pte in the Republic of Singapore, on September 12, 1967, bearing company registration Number 196700304Z (old registration Number)304/1967 under the applicable laws, having its principal place of business at 19 International Road, Jurong, Singapore 619623 and the registered office at 78, Shenton Way #16-01, Singapore 079120. The name of the Company was changed to DIC Asia Pacific Pte Ltd, vide fresh certificate of incorporation dated October 1, 2001. The principal activities of the Company comprise of investment holding, marketing of chemicals, manufacture and sale of printing inks and the import and sale of printers’ sundry materials. Shareholding Pattern The entire share capital of the Company i.e. 216707 shares are held by Dainippon Ink & Chemicals Inc., Japan. Board of Directors The details of the Board of Directors of DIC Asia Pacific Pte Ltd, Singapore as on September 30, 2007 are as given in the table below:

Name Designation Mr. Yoshikazu Aoygai Director Mr. Yasuyoshi Ikezoe Director Mr. Yoshihisa Kawamura Director Mr.Koji Tanigami Director Mr. Hideki Inouchi Director Mr. Mitsunobu Miyasaka Regional Manging Director Financial Performance:

(Amount in SG $000) FY 2006 FY 2005 FY 2004

Sales and other Income 51,510 45,485 45,356 Profit after tax 15,297 8,694 10,785 Equity Capital 1,84,869 1,75,329 1,75,329 Reserves and Surplus 30,873 21,813 20,137 Earnings per share (of SG $1,000 each) 56 50 85 Book value per share (of SG $.1,000 each) 1.17 1.12 1.11 We confirm that the Bank Account Numbers and our Company Registration Number have been submitted to the Stock Exchanges on which the securities are proposed to be listed, at the time of filing the Draft letter of Offer with them. Details of Promoter of our Promoter Company, DIC Asia Pacific Pte Ltd ( in pursuance to clause 6.9.6.2 of the SEBI (DIP) Guidelines, 2000.) Our Promoter Company, DIC Asia Pacific Pte Ltd, Singapore, was incorporated on September 12, 1967 as a 100% subsidiary of Dainippon Ink & Chemicals Inc., Japan. (hereinafter referred to as “DIC Japan”). DIC Japan, was incorporated on March 15, 1937, under the laws of Japan bearing corporate registration number 0114-01-003807. Its registered office is situated at 35-38, Dakshita 3-chome, Itabashi-ku, Tokyo 174-850, Japan and its corporate headquarters at DIC Building, 7-20 Nihonbashi 3-chome, Chuo-ku, Tokyo 103-8233, Japan. DIC Japan is a diversified chemical company engaged in business of manufacture of printing inks, organic pigments and resins.

96

The entire paid up share capital of our Promoter Company DIC Asia Pacific Pte Ltd., Singapore, has been held by Dainippon Ink & Chemicals Inc., Japan since its inception. DIC Asia Pacific Pte Ltd., Singapore has been compliant with the provisions of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Common Pursuits of our Promoter Our Promoter does not have any interest in our Company except as contained in the sections titled “Business Overview” and “Financial Information of Group Companies” and paragraph titled “Interest/Payment or Benefit to our Promoter” beginning on pages 43, 193 and 96 of the Letter of Offer. Our Promoter, DIC Asia Pacific Pte Ltd., Singapore, provides inter alia technical know how and the right to use the trade names and brand names, technical support and assistance to us in terms of the Technical Collaboration Agreement signed by our Company on December 5, 2000, as more particularly described in the section titled “History and Other Corporate Matters” beginning on page no. 70 of the Letter of Offer. We have not entered into any exclusive arrangement, non-competition or secrecy obligation binding our Promoter in relation to our Company. Our Promoter, DIC Asia Pacific Pte Ltd., Singapore, may directly or indirectly engage in common pursuit with us by providing technical assistance or entering into technical collaboration with any person or entity including any competitors or potential competitors, and furnish any information and/or technology including those furnished or being furnished to our Company. Interest /Payment or Benefit to our Promoter Except for: 1. the royalty of 2% on total net sales for all products manufactured and sold by DIC India in India and

abroad paid to DIC Asia Pacific Pte.Ltd., Singapore, as per the technical collaboration agreement signed by our Company on December 5, 2000, as stated in the section titled “History and Other Coporate Matters” and “Business Overview” beginning on pages 70 and 43 of the Letter of Offer ;

2. dividend paid to DIC Asia Pacific Pte.Singapore, on the Equity Shares held by them as per dividend declared for each financial year;

we have not paid any amount or given any benefit to our Promoter within two years before filing the Letter of Offer with SEBI, neither is any such amount or benefit proposed as on the date of filing the Letter of Offer with SEBI. Related Party Transactions For a list of our related party transactions, please refer section titled “Financial Statements” beginning on page 98 of the Letter of Offer Currency of Presentation Throughout the Letter of Offer unless the context otherwise requires all references to “Rupees” / “Rs.” is the legal currency of the Republic of India

97

DIVIDEND POLICY Dividends, other than interim dividends, will be declared at the annual general meeting of the shareholders based on the recommendation of the Board of Directors. The Board may, at its discretion, recommend dividends to be paid to our shareholders. Generally, the factors that may be considered by the Board of Directors before making any recommendations for the dividend include, without limitation, our future expansion plans and capital requirements, profits earned during the fiscal year, cost of raising funds from alternate sources, liquidity position, applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories of investors from time to time and general market conditions. The dividends declared by us, excluding dividend tax, during the last five years are as below: Year ended

December 31, 2006

Year ended December 31, 2005




Equity Shares (Face Value of Rs.10/- each)

@35% on the equity share capital amounting to Rs. 24099379/-





98

FINANCIAL STATEMENTS

To

The Board of Directors

DIC India Limited

Transport Depot Road

Kolkata- 700088

Dear Sirs,

1) We have examined the financial information of DIC India Limited (the Company) (as set out in

Annexure I to Annexure XIV attached to this report), stamped and initialled by us for identification, as

approved by the Board of Directors of the Company prepared in terms of the requirements of

Paragraph B, Part II of Schedule II of the Companies Act, 1956 (the Act) and the Securities and

Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 as amended to date

(SEBI Guidelines) and in terms of our engagement agreed upon with you in accordance with our

engagement letter dated 20.04.07 in connection with the proposed Rights issue of Equity shares of the

Company.

2) These information have been extracted by the Management from the financial statements for the year

ended 31.12.2002, 31.12.2003, 31.12.2004, 31.12.2005, 31.12.2006 and six months ended 30.06.2007.

Our Company has also confirmed that the restated financial information has been made after

incorporating:

a) adjustments for the changes in accounting policies retrospectively in respective financial years to

reflect the same accounting treatment as per changed accounting policy for all the reporting

periods.

b) adjustments for the material amounts in the respective financial years to which they relate and

c) there are no extra-ordinary items that need to be disclosed separately in the accounts and qualification

requiring adjustments except for the matter stated in paragraph 3 below.

3) As indicated in Note 7 on Annexure IX disclosure in terms of Accounting Standard-15 (Revised) on

Employee Benefits issued by the Institute of Chartered Accountants of India has not been considered

in the financial results for the six months period ended June 30, 2007. Also no adjustment in respect

thereof has been considered in the Summary Statement of Profit and Loss (Restated) and Summary

Statement of Assets and Liabilities (Restated).

4) As indicated in Note 9 (b) of Annexure IX in the absence of relevant information and data we are

unable to verify the Segment Assets and Segment Liability figures as given in Note 9 (a) of Annexure

IX. .

5) We have also examined the financial information of the Company for the period 01.01.2007 to

30.06.2007 prepared and approved by the Board of Directors for the purpose of disclosure in the offer

document of the Company mentioned in Paragraph (1) above.

99

The financial information for the above period was examined in accordance with the Auditing and

Assurance Standards issued by The Institute of Chartered Accountants of India to the extent

applicable, for the purpose of audit of financial information. Those standards require that we plan and

perform our audit to obtain reasonable assurance, whether the financial information under examination

is free of material misstatement.

Based on the above, we report that in our opinion and according to the information and explanations

given to us subject to our remarks in paragraph 3 and 4 above, we have found the same to be correct

and the same have been accordingly used in the financial information appropriately.

6) In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI

Guidelines and terms of our engagement agreed with you subject to the matter stated in paragraph 3

above we further report that:

a) The Summary Statement of Assets and Liabilities (Restated) of the Company, as at 31.12.2002,

31.12.2003, 31.12.2004, 31.12.2005, 31.12.2006 and 30.06.2007 examined by us, as set out in

Annexure I to this report are after making adjustments and regrouping as in our opinion were

appropriate and more fully described in the Notes to the Restated Statements set out in Annexure

IX.

b) The Summary Statement of Profit and Loss (Restated ) of the Company for the year ended

31.12.2002, 31.12.2003, 31.12.2004, 31.12.2005, 31.12.2006 and for the period from 01.01.2007

to 30.06.2007 examined by us, as set out in Annexure II to this report are after making

adjustments and regrouping as in our opinion were appropriate and more fully described in the

Notes to Restated Statements set out in Annexure IX

c) The Statement of Cash Flows (Restated) of the Company for the year ended 31.12.2002,

31.12.2003, 31.12.2004, 31.12.2005, 31.12.2006 and for the period from 01.01.2007 to 30.06.2007

examined by us, as set out in Annexure III to this report are based on the Summary Statement of

Assets and Liabilities (Restated) and Summary Statement of Profit and Loss (Restated) of the

Company as referred to in paragraph 6(a) and 6(b) above.

d) Based on above and subject to our remarks in Paragraph 3 above, we confirm that the restated

financial information have been made after incorporating:

(i) adjustments for the changes in accounting policies retrospectively in respective

financial years to reflect the same accounting treatment as per changed accounting

policy for all the reporting periods.

(ii) adjustments for the material amounts in the respective financial years to which they

relate and

(iii) there are no extra-ordinary items that need to be disclosed separately in the accounts

and qualification requiring adjustments.

e) We have also examined the following other financial information set out in Annexures prepared

by the management and approved by the Board of Directors relating to the Company for the year

ended 31.12.2002, 31.12.2003, 31.12.2004, 31.12.2005, 31.12.2006 and period from 01.01.2007 to

30.06.2007.

(i) Statement of Secured Loans (Restated) included in Annexure IV

(ii) Statement of Unsecured Loans (Restated) included in Annexure V.

(iii) Statement of Investments (Restated) included in Annexure VI.

(iv) Agewise Analysis of Debtors (Restated) included in Annexure VII

100

(v) Details of Other Income included in Annexure VIII

(vi) Summary of Accounting Ratio included in Annexure XI

(vii) Capitalisation Statement included in Annexure XII

(viii) Statement of Dividend Paid included in Annexure XIII

(ix) Tax Shelter Statement included in Annexure XIV.

7) In our opinion subject to our remarks in Paragraph 3 above, the financial information contained in

Annexure I to VIII and XI to XIV of this report read along with the Significant Accounting Policies in

Annexure X, Notes to the Restated Statements in Annexure IX prepared after making adjustments and

regrouping as considered appropriate and have been prepared in accordance with Part IIB of Schedule

II of the Act and the SEBI Guidelines.

8) Our report is intended solely for use of the management and for inclusion in the offer document in

connection with the proposed rights issue of equity shares of the Company. Our report should not be

used for any other purpose except with our consent in writing.

Place: Kolkata

Dated:15th October , 2007

Prabal Kr. Sarkar

Partner

Membership No. : 52340

For and on behalf of

Lovelock & Lewes

Chartered Accountants

101

Summary Statement of Assets and Liabilities (Restated) Annexure-I As At As At 31st December 30.06.07 2006 2005 2004 2003 2002 A Fixed Assets Gross Block 9120.30 8908.70 7831.60 7074.90 6512.90 5717.20 Less: Depreciation 4242.70 3988.80 3594.50 3191.90 2817.30 2461.30 Net Block 4877.60 4919.90 4237.10 3883.00 3695.60 3255.90 Capital Work in Progress 708.10 435.20 274.00 152.70 102.50 212.00 Sub Total 5585.70 5355.10 4511.10 4035.70 3798.10 3467.90 B Investments 1075.30 1075.30 1075.40 1076.40 1076.40 1077.50 C Current Assets, Loans and Advances Inventories 4712.60 5135.20 3871.80 3258.60 2475.70 2521.20 Sundry Debtors 11696.20 10887.70 9541.10 8479.10 8078.70 8052.80 Cash & Bank Balances 1119.00 1163.80 1452.40 1579.80 1818.00 1574.40 Loans and Advances 2375.10 1951.20 1442.70 544.20 655.70 604.20 Sub Total 19902.90 19137.90 16308.00 13861.70 13028.10 12752.60 D Total Assets (A+B+C) 26563.90 25568.30 21894.50 18973.80 17902.60 17298.00 Liabilities and Provisions E Loan Funds Secured Loans 1570.30 1642.40 352.70 338.80 443.80 652.90 Unsecured Loans 6323.30 5287.60 4088.40 3450.00 3806.80 3425.50 Sub Total 7893.60 6930.00 4441.10 3788.80 4250.60 4078.40 F Deferred Tax Liabilities-Net 601.80 587.80 508.50 596.70 551.60 516.90 G

Current Liabilities & Provisions

Liabilities 6575.90 6788.10 6297.20 4766.30 3771.20 3834.60 Provisions 180.60 410.60 466.00 378.00 379.80 342.70

102

Sub Total 6756.50 7198.70 6763.20 5144.30 4151.00 4177.30 H Total Liabilities and Provisions ( E+F+H) 15251.90 14716.50 11712.80 9529.80 8953.20 8772.60 I Net Worth (D-H) 11312.00 10851.80 10181.70 9444.00 8949.40 8525.40 Represented by Shareholders Funds Share Capital 688.60 688.60 688.60 688.60 688.60 688.60 Reserve & Surplus 10623.40 10163.20 9493.10 8755.40 8283.50 7882.30

Less: Miscellaneous Expenditure to the extent not written off or adjusted 0.00 0.00 0.00 0.00 22.70 45.50

Net Worth 11312.00 10851.80 10181.70 9444.00 8949.40 8525.40

Summary Statement of Profit and Loss (Restated) Annexure-II Rs. in Lacs

For the six month

ended For the year ended 31st December 30.06.2007 2006 2005 2004 2003 2002 Income Sales Of products manufactured by the Company 21175.00 36633.90 30146.10 26862.30 23310.40 20929.70 Of products traded by the Company 480.00 2076.60 1791.20 1243.90 1453.80 1946.40 Sub Total 21655.00 38710.50 31937.30 28106.20 24764.20 22876.10 Less: Excise Duty 2686.10 4760.90 4081.80 3655.50 3147.60 2869.60 Net sales 18968.90 33949.60 27855.50 24450.70 21616.60 20006.50 Other Income 296.90 521.80 452.30 319.90 453.50 543.60 Total Income 19265.80 34471.40 28307.80 24770.60 22070.10 20550.10 Expenditure Material consumed 14148.20 25034.20 20042.70 17412.20 15342.70 13828.80 Staff Costs 1267.90 2380.20 2208.50 2013.70 1816.90 1730.80 Other Expenses 2386.00 4451.80 3713.00 3435.30 3196.60 3028.90 Interest/Discount on issue of commercial paper 450.50 607.60 374.40 316.00 355.30 408.10 Depreciation 297.70 543.80 497.50 455.10 412.90 373.20

103

TOTAL EXPENDITURE 18550.30 33017.60 26836.10 23632.30 21124.40 19369.80 Profit before Tax without adjustments 715.50 1453.80 1471.70 1138.30 945.70 1180.30

Adjustment for regrouping of Wealth Tax ( Refer Note 1a of Annexure IX) 0.00 0.00 0.00 (2.50) (2.50) (2.50)

Adjustment relating to Prior period items ( Refer Note 1b of Annexure IX) 0.00 0.00 0.00 0.00 0.00 27.80

Adjustment for Bad debts Recovered ( Refer Note 1c of Annexure IX) (6.60) (4.3) (1.30) (10.10) (7.70) (4.00)

Adjustment for Liability written back ( Refer Note 1d of Annexure IX) 0.00 (20.90) 0.00 0.00 (6.10) 2.90 Profit before Tax after adjustment 708.90 1428.60 1470.40 1125.70 929.40 1204.50 Less: Provision for Taxation Current Tax ( Refer Note 3 of Annexure IX) 219.00 327.20 491.00 338.50 152.50 310.50

Adjustment for Tax provision of earlier years written back ( Refer Note 1e of Annexure IX) 0.00 28.30 0.00 0.00 75.00 0.00

Tax Impact of adjustments (2.20) (7.00) (0.40) (4.60) (5.80) 8.90 Fringe Benefit Tax 18.00 48.70 55.50 0.00 0.00 0.00 Deferred Tax 13.90 79.30 (88.20) 45.10 34.70 21.00 Sub Total 248.70 476.50 457.90 379.00 256.40 340.40 Profit after Tax 460.20 952.10 1012.50 746.70 673.00 864.10 Add: Surplus brought forward from previous year 3611.80 3091.70 2455.50 2058.80 1733.20 1300.50 Appropriation Transfer to Debenture Redemption Reserve 0.00 0.00 0.00 0.00 0.00 75.00 Transfer to General Reserve 0.00 150.00 101.50 75.20 75.60 84.60 Proposed Dividend 0.00 241.00 241.00 241.00 241.00 241.00 Tax on Proposed Dividend 0.00 41.00 33.80 33.80 30.80 30.80 Balance Carried to Balance Sheet 4072.00 3611.80 3091.70 2455.50 2058.80 1733.20

104

ADJUSTMENTS TO BALANCE IN PROFIT AND LOSS ACCOUNT AS AT JANUARY 1, 2002 Rs. in Lacs

Balance in profit as at January 1,2002 as per audited Fianancial Statement 1,149.90

Add: Provision for Dividend Tax of earlier years written back 28.10 Less Prior year adjustment ( Note 1b of Annexure IX) (27.80) Add : Bad debts recovered (Note 1c of Annexure IX) 34.00 Adjustment for Tax provision of earlier years written Back (Note 1e of Annexure IX ) 103.30 Adjustment for Liability written back (Note 1d of Annexure IX) 24.10

Tax Impact of Adjustments above (11.10)

Total 1,300.50

Statement of Cash Flow (Restated) Annexure-III Rs. in Lacs

For the Year ended 31st December

Particulars For six months

ended 30.06.2007

2006 2005 2004 2003 2002 A Cash Flow from Operating Activities Net Profit before Interest, Tax and Extraordinary Items 1159.40 2036.20 1844.80 1441.70 1284.70 1612.60 Adjustment for: Add: Depreciation & Amortisation 323.50 553.60 499.00 456.80 414.40 374.60 Oracle Project Cost written off 22.70 22.70 22.70 Fixed Asset written off 10.30 1.40 16.90 8.40 5.90 Provision for diminution in value of investments 1.10 Provision for Leave Encashment 6.00 Provision for Bad & Doubtful Debts 36.00 Loss on sale of assets (105.30) 3.00 Profit on sale of Assets (125.90) (89.30) (1.90) Unrealised Exchange Gain (Net) (10.60)

105

Interest Received (7.70) (20.80) (8.90) (7.30) (27.80) (34.70) Dividend Received (161.30) (236.60) Operating Profit before Working Capital Changes 1411.60 2444.50 2245.60 1933.80 1540.30 1744.50 (Increase)/Decrease in Trade and Other Receivables (1287.70) (1853.20) (1938.50) (283.70) (180.60) (855.80) (Increase)/Decrease in Inventories 422.70 (1263.30) (613.20) (782.90) 45.40 (726.30) (Increase)/Decrease in Trade Payables & Other Liabilities (199.90) 508.20 1547.40 1062.20 (3.00) 650.70 Cash generated from operation 346.70 (163.80) 1241.30 1929.40 1402.10 813.10 Less: Payment of Direct Taxes (172.40) (490.30) (470.90) (364.30) (115.80) (313.20) Net Cash from Operating Activities 174.30 (654.10) 770.40 1565.10 1286.30 499.90 B Cash Flow from Investing Activities Purchase of Fixed Assets (581.30) (1466.40) (1020.90) (720.10) (771.60) (777.10) Sale of Fixed Assets 120.80 193.20 136.20 5.90 9.50 8.50 Interest Received 7.70 37.10 4.20 7.30 52.70 11.90 Dividend Received 161.30 236.60 Net Cash Flow from Investing Activities (452.80) (1236.10) (880.50) (706.90) (548.10) (520.10) C Cash Flow from Financing Activities Net increase in Bank Borrowings (73.40) 1289.70 13.90 (105.00) (209.10) (362.60) Issue of Commercial Paper Loan 3500.00 5100.00 5000.00 3200.00 7300.00 6700.00 Repayment of Commercial Paper Loan (3500.00) (4300.00) (4600.00) (3200.00) (8400.00) (5600.00) Issue of Unsecured Debenture 14800.00 9000.00 Redemption of Unsecured Debentures (13500.00) (8400.00) (300.00) Interest and Discounts on issue of Commercial Paper (448.50) (612.40) (394.20) (369.90) (403.70) (449.50) Repayment of Term Loan (700.00) (50.00) (3600.00) (300.00) (300.00) Repayment of Fixed Deposits 0.00 (400.00) (510.50) (249.30) Acceptance of Term Loan 458.70 288.40 3650.00 2600.00 300.00 Repayment of Short Term Loan from Banks (22416.20) (109.50) Acceptance of Short Term Loan from Banks 22153.80 Acceptance of Short term loan from Subsidiary 400.00 150.00 Repayment of short term loan from subsidiary (400.00) Dividend Paid including Dividend Tax (282.00) (274.90) (275.40) (271.50) (271.30) (273.40) Net Cash Flow from Financing Activities 233.70 1601.60 (17.30) (1096.40) (494.60) (234.80) Net increase in Cash and Cash Equivalents (44.80) (288.60) (127.40) (238.20) 243.60 (255.00) Cash and Cash Equivalents (Opening Balance) 1163.80 1452.40 1579.80 1818.00 1574.40 1829.40

106

Cash and Cash Equivalents (Closing Balance) 1119.00 1163.80 1452.40 1579.80 1818.00 1574.40 Notes to the Cash Flow Statement Cash In Hand 13.00 12.40 4.80 6.90 6.60 7.30 Cheques in Hand 573.40 756.80 531.20 556.40 573.90 430.90 Remittance in Transit 291.90 50.60 Balance with Bank 240.70 394.60 865.80 1016.50 1237.50 1136.20 Total 1119.00 1163.80 1452.40 1579.80 1818.00 1574.40

Note: The Cash Flow Statements have been prepared under indirect method as set out in Accounting Standard 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India.

A. Secured Loans ( Restated ) Annexure-IV

Rs. in Lacs As At As At 31st December Sl.

No. Particulars 30.06.2007 2006 2005 2004 2003 2002

Overdraft/Working capital Loans: From Banks 1569.00 1642.40 352.70 338.80 443.80 652.90 Interest Accrued & Due 1.30 Grand Total 1570.30 1642.40 352.70 338.80 443.80 652.90

B. Principal terms of Secured Loans as on 30.06.07 (as Restated)

Rs. in Lacs

Sr. no. Particulars Rate of interest Outstanding as

on 30.06.07 Date of

Repayment Repayment terms Security

Overdraft/ Working Capital Loan : 1. Bank of Baroda 14.83% 51.60 - Payable on demand 2. State Bank of India 13.00% 117.40 - Payable on demand 3 Standard Chartered Bank 9.41% 1400.00 July 2007

Refer Note below.

107

Description of Security

(A) Mortgage of immovable properties of industrial land at Plot 633 & 634 at Vatwa Industrial Estate at Ahmedabad; Transport Depot Road, Kolkata; Chandivali Farm at Mumbai; Plot C-55A Noida Phase II , U.P. (together with all structures thereon )and also by deposit of title deeds/share certificates in respect of the residential flats at Mumbai, Kolkata , Chennai and New Delhi ;

The Consortium of Banks shares the relevant securities on pari passu basis. It is, however, agreed that the banks will release the first charge in case the Company borrows in future against securities mentioned in item (A) above.

A. Unsecured Loans ( Restated ) Annexure-V Rs. in Lacs

As At 31st December Sl. No. Particulars

As At 30.06 2007 2006 2005 2004 2003 2002

I Short Term loans From Banks 1808.70 2078.90 2188.40 1900.00 0.00 0.00 From Others 1900.00 600.00 0.00 0.00 0.00 0.00 From Subsidiary 155.90 150.00 0.00 50.00 0.00 0.00 II Fixed Deposits 0.00 0.00 0.00 0.00 406.80 925.50 III Commercial Paper Loans 2000.00 2000.00 1200.00 800.00 800.00 1900.00 IV Non- Convertible Privately Placed Debentures 0.00 0.00 0.00 0.00 0.00 300.00 V External Commercial Borrowing from Holding 458.70 458.70 0.00 0.00 0.00 0.00 Company

VI Other loans from Banks 0.00 0.00 700.00 700.00 0.00 0.00 VII Term Loans from bank 0.00 0.00 0.00 0.00 2600.00 300.00

Total 6323.30 5287.60 4088.40 3450.00 3806.80 3425.50 B.Break- up of Unsecured Loans as on 30.06.2007 ( Restated ) Annexure-V Rs. in Lacs

Name of the lender Amount Interest

rate Repayment Schedule

Date Terms Short term loan from Banks ABN Amro 1000.00 8.70% July 2007 Fixed period loan repayable on maturity ABN Amro 400.00 8.55% 14.07.07 Fixed period loan repayable on maturity PCFC Loan - Citi Bank 406.70 6.34% 21.09.07 Fixed period loan repayable on maturity

108

Citi Bank 2.00 02.07.07 Immediate Short Term loan from Others ABN AMRO Mutual Fund A/c ABN Amro Flexi Debt Fund 100.00 6.55% 03.07.07 On the date of redemption or on the date of

Put/Call option, whichever is earlier.

ABN AMRO Money Plus Fund 1300.00 4.65% 09.07.07 On the date of redemption or on the date of Put/Call option, whichever is earlier.

Lotus India Trustee Company Private Limited A/c Lotus India Liquid Plus Fund 500.00 3.04% 14.08.07 On the date of redemption or on the date of Put/Call option, whichever is earlier.

Short term loan from Subsidiary DIC Coatings India Limited 50.30 8.5% 31.8.07 Fixed period loan repayable on maturity DIC Coatings India Limited 50.20 8.25% 12.07.07 Fixed period loan repayable on maturity DIC Coatings India Limited 50.20 8.25% 13.07.07 Fixed period loan repayable on maturity DIC Coatings India Limited 5.20 Interest accrued and due repaid on July 2007 Commercial Paper Loans Deutche Trustee Services (India) Pvt. Ltd. A/c DWS Fixed Term Fund Series 30 1000.00 10.10% 10.07.07 Fixed period loan repayable on maturity United Bank of India 1000.00 10.35% 14.08.07 Fixed period loan repayable on maturity

External Commercial Borrowing From Holding Company ++ DIC Asia Pacific Pte. Ltd. 458.70 7.96% 21.09.09 Fixed period loan repayable on maturity ++ Loan amount USD 1000000 with rate of interest at 5.9% . Both Principal & interest have been fully hedged .

Investments- At Cost ( Restated ) Annexure-VI Rs. In Lacs

As At As At 31st December 30.06.2007 2006 2005 2004 2003 2002

Particulars Class

Face value

of each Rs.

No. of Shares/ Units Amount






109

Long term investments ( Fully paid): TRADE Quoted In Subsidiary Companies:

DIC Coatings India Ltd. Equity 10 10753147 1075.30 10753147 1075.30 10753147 1075.30 10753147 1075.30 10753147 1075.30 10753147 1075.30

Rohit (Printing Inks & paints) Industries Pvt. Ltd.

Equity 100 1100 1.10 1100 1.10 1100 1.10 1100 1.10 1100 1.10 1100 1.10

OTHER THAN TRADE Un Quoted Others: Non Redeemable 6.5% Registered Debentures in The Bengal Chamber of Commerce & Industry

Db# 1000 2.00

7% Debenture stock in Royal Calcutta Golf Club

Db# 1.00 1.00 1.00

Shares of Housing Co-operative Societies:* The Versova Neptune Co-operative Housing Society Ltd.

Equity

50 5 0.10 5 0.10 5 0.10 5 0.10 Versova Woodland Co-operative Housing Society Ltd.

Equity

50 5 5 5 5 Magnum tower Co-operative Housing Society Ltd.

Equity

50 10 10 10 10 10 10 Brooklyn Co-operative Housing Society Ltd.

Equity 50 5 5 5 5 5 5

Sheffield Tower Co-operative Housing Society

Equity 50 5 5 5 5 5 5

110

Ltd. Stellar Tower Co-operative Housing Society Ltd.

Equity

50 10 10 10 10 10 10 Apna Ghar Co-operative Housing Society Ltd. @

Equity 50 5 5 5 5 5 5

Mani Towers Flat Owners Association

Equity 10 20 20 20 20 20 20

Juhu Sun & Sea Co-operative Housing Society Ltd.

Equity

50 10 10 10 10 10 10 Total 1076.40 1076.40 1076.50 1077.50 1077.50 1077.50 Less: Provision for Diminution in value 1.10 1.10 1.10 1.10 1.10 0.00

Total 1075.30 1075.30 1075.40 1076.40 1076.40 1077.50 *These Investments relate to ownership flats included in Fixed Assets-Buildings # denotes Debentures. @ The investment has not yet been transferred / sold although the related ownership flat was sold in March 2007

Agewise analysis of Sundry Debtors: ( Restated ) Annexure-VII Rs. In Lacs As At As at 31st December Age wise break up 30.06.2007 2006 2005 2004 2003 2002 Debts outstanding over six months Secured - considered good 8.60 11.90 8.30 0.30 0.50 0.30 Unsecured - Considered Good 895.70 609.40 673.80 555.10 512.70 472.10 Unsecured -Considered Doubtful 36.00 0.00 69.80 0.00 0.00 0.00 Less Provision for doubtful debts (36.00) 0.00 (69.80) 0.00 0.00 0.00 Other Debts Secured - considered good 109.50 92.40 81.50 86.60 77.70 76.60 Unsecured - Considered Good 10682.40 10174.00 8777.50 7837.10 7487.80 7503.80 Total 11696.20 10887.70 9541.10 8479.10 8078.70 8052.80

111

Details of Other Income-Restated Annexure-VIII Rs. in Lacs


30.06.2007 2006 2005 2004 2003 2002 Other Income 290.30 490.00 451.00 309.80 431.20 528.60 Net profit/(Loss) before tax as restated 708.90 1428.60 1470.40 1125.70 929.40 1204.50 Percentage 41% 34% 31% 28% 46% 44% Break Up of Other Income Sale of container (Recurring) 17.70 39.80 60.50 58.90 56.30 49.30 Sale of Scrap 31.00 Fees for services rendered (Gross) ( Recurring) 30.00 37.50 90.00 90.00 90.00 90.00 Commission received (Recurring) 8.90 27.10 44.70 28.50 9.30 4.80 Discounts ( Recurring) 10.70 61.80 72.00 73.00 60.10 47.60 Exchange Gain 79.00 47.00 55.20 17.60 - - Provision/Liability no longer required written back - 69.70 - - - 51.80 Miscellaneous receipt - 60.40 30.40 34.50 24.40 13.80 Profit on Disposal of Fixed Assets 105.30 125.90 89.30 - 1.90 - Dividend on Long term investment (Trade) - - - - 161.30 236.60 Interest on Long term investment (other than trade) - - 0.10 0.10 0.10 0.10 Interest on loans and Advances 7.70 20.80 8.30 4.70 24.20 28.90 Interest from Deposit with Bank - - 0.50 2.50 3.60 5.70

Total 290.30 490.00 451.00 309.80 431.20 528.60 Annexure-IX Notes to the Restated Statements ( All amounts in rupees in Lacs unless otherwise stated) 1. Notes on Adjustments made to Statement of Assets and Liabilities and Profit and Loss as Restated.

112

a. During the financial year ended 31 December 2005 provision for Wealth Tax was regrouped from Provision for taxes to the head Rates and taxes as included under Other

Expenses. The effect of this regrouping has been considered for the years ended 31st December 2004, 31st December 2003 and 31st December 2002 as well.

b. Prior period adjustments as disclosed in the Profit and Loss Account for the year ended 31 December 2002 has been adjusted with opening reserves.

c. Debts considered doubtful of recovery and written off in the Profit and Loss accounts when recovered subsequently have been adjusted with the profits of the years in which such debts were written off.

d. The Company has written back to the Profit and Loss Account provisions and accruals made on estimates which had been provided for in the earlier years but no longer

considered payable. Accordingly the effect of these write backs has been considered in the respective years in which these accruals were originally recorded with a corresponding reduction in the recorded period expenses in the " Summary Statement of Profits and Losses as Restated".

e. Provision for taxes for earlier years written back has been adjusted with the profits of the years to which the provision relates.

2.

Qualifications in the Auditors’ Report a) The auditors in their report for the six months period ended 30th June, 2007 have commented on the fact that disclosure in terms of Accounting Standard 15 (Revised) on

Employee Benefits issued by the Institute of Chartered Accountants of India has not been considered in the financial statements for the six months period ended 30th June 2007. No adjustment in the Summary Statement of Profit and Loss (Restated) and Summary Statement of Assets and Liabilities (Restated) has been considered in respect therof.

b) The auditors in their report for the six months period ended 30th June, 2007 have commented that in the absence of relevant information and data they were unable to

verify the segment assests and segment liabilities for the period from 1st January 2007 to 30th June 2007, which has no impact on the Summary Statement of Profit and Loss (Restated), Summary Statement of Assets and Liabilities (Restated) and the Statement of Cash Flows (Restated). Thus no adjustment is necessary in respect thereof.

3. The tax accounting year for the Company being different i.e. from 1st April to 31st March , Provision for taxation made in the accounts for the year ended on 31.12.2002,

31.12.2003, 31.12.2004,31.12.2005, 31.12.2006 is based on the profit for the respective calendar year including the profit for the period from 1st January to 31st March . Ultimate liability for taxation is determined on the basis of the profit for the last nine months of the respective financial period together with that of subsequent three months up to 31st March following, as one composite income. Provision for the six months ended 30.06.2007 is based on the profit for the six months ended 30.06.2007.

As At As at December 31st

30.06.2007 2006 2005 2004 2003 2002

113

4. Estimated amount of Contracts remaining to be executed on Capital Account 346.13 357.82 85.43 72.03 24.40 48.26

5. Contingent Liabilities: Contingent Liability not provided for in respect of:

(a) Income tax matter 91.07 91.07 67.79 67.79

(b) Disputed Sales Tax, excise duties etc. 654.43 635.54 1,284.93 1,238.27 781.37 738.77

(c ) Guarantees given on behalf of third parties 0.00 1.00 24.77 51.92 90.25 128.27

(d) Bills Discounted 531.86 407.17 208.17

6. Remuneration to Managing Director and Whole Time Directors Salary 9.83 20.51 18.45 17.37 16.29 15.21 Commission 4.00 18.79 24.15 23.31 22.41 23.13

Management Allowance 11.10 8.57

Contribution to Provident and other Funds 3.16 8.32 8.23 7.88 7.72 7.16

Performance Bonus 9.83 13.50 9.23 8.69 4.07 -

Estimated value of Perquisites 8.98 20.28 17.89 17.11 12.87 11.62

7. Disclosure requirement in terms of Accounting Standard-15 (Revised) on Employee Benefits issued by the Institute of Chartered Accountants of India would be considered at the

time of annual closure of accounts in December 2007.

8. Related Parties disclosure pursuant to Accounting Standard 18 issued by the Institute of Chartered Accountants of India

A List of Related parties For six months ended For the year ended 31st December 30.6.2007 2006 2005 2004 2003 2002

Ultimate Holding Company Dinippon Inks & Chemicals Inc., Japan

Dinippon Inks & Chemicals Inc.,

Japan

Dinippon Inks & Chemicals Inc., Japan



Japan

Dinippon Ink & Chemicals Inc,Japan

114

Holding Company DIC Asia Pacific Pte ltd. , Singapore

DIC Asia Pacific Pte ltd. , Singapore




Sun Chemical Group B.V, The

Netherlands(up to 29th April,2002)

DIC Asia Pacific Pte ltd. ,

Singapore(from 30th April,2002)

Subsidiaries DIC Coatings India Limited




Coates Coatings India Limited

Coates Coatings India Limited

Rohit (Printing Inks & Paints) Industries

Private Limited


Private Limited


Private Limited


Private Limited


Private Limited


Private Limited

Fellow Subsidiaries (as certified by the management)

Sun Chemical Group B.V.




Coates Brothers (Caribbean) Ltd

Sun Chemical Corp. Sun Chemical Corp. Sun Chemical Corp. Sun Chemical Ltd. Sun Chemical

Pigments S.L. Reichhold Ltd,

Canada

Sun Chemical of

Michigan LLC Sun Chemical of

Michigan LLC Sun Chemical of

Michigan LLC Sun Chemical Corp. Gunong Printing Ink

(M) Sdn Bhd Premier Polymers,

Inc

Camus Water Technologies LLC



Sun Chemical of Michigan LLC

DIC Alkylphenol Singapore Pte. Ltd.,

Singapore

Reichhold Holding Inc

SC Funding LLC SC Funding LLC SC Funding LLC Camus Water

Technologies LLC Ault & Wiborg

International Reichhold Inc,

USA

New England Manufacturers

Insurance Corp.


Insurance Corp.


Insurance Corp.

SC Funding LLC Coates (Lanka) Ltd. Reichhold Investimentos Ltda

Sun Chemical Investments LLC




Insurance Corp.

Coates Screen, U.K. Reichhold CZ s.r.o

Weesp Finance C.V. Weesp Finance C.V. Weesp Finance C.V. Sun Chemical

Investments LLC Coates Screen, U.S.A Oy Reichhold AB,

Finland

115

Sun Chemical Management, L.L.C.



Weesp Finance C.V. New England Manufacturers

Insurance Corp.

Reichhold France SAS

Rycoline LLC Rycoline LLC Sun Chemical Realty Holdings, Inc.


Beijing Reichhold Organic Chemicals

Ltd

Reichhold B.V.

Rycoline Products, LLC


Rycoline LLC Sun Chemical Realty Holdings, Inc.


Reichhold Finance Europe B.V.

General Printing Ink Corp.



Rogersol, Inc. Chia Lung Chemical Industrial Corp

Reichhold Holdings International B.V

Sun Chemical Ltd. Sun Chemical Ltd. Sun Graphic, LLC Rycoline Inc. Coates (Ghangzhou) PRC Ltd

Reichhold A.S.

Sun Chemical S.A. de C.V.


Sun Chemical Ltd. Rycoline Products, Inc. Coates (Shenzhen) Printing Supplies Co.

Ltd.

Reichhold Norway., A.S.

Inmobiliaria Sunchem, S.A. de C.V.

Inmobiliaria Sunchem, S.A. de

C.V.


Sun Graphic, Inc. Coates Brothers (Australia) Pty Ltd

Reichhold Inc, U.A.E

Sun Chemical (Colores) S.A. de C.V.

Sun Chemical (Colores) S.A. de

C.V.


Sun Chemical Ltd. Coates Brothers (Coates Brothers Plc.

U.K.)

Reichhold Holdings U.K. Ltd

Sun Chemical de Panama, S.A.




Coates Brothers (East Africa) Ltd

Reichhold Receivables Corp.

Sun Chemical (Chile) S.A.




Coates Brothers (Jamaica) Ltd

Innovative Performance Systems Inc.

Sun Chemical Inks S.A.




Coates Brothers (Malasia) Sdn Bhd


Sun Chemical do Brasil Ltda.


Sun Chemical Inks S.A. Sinclair International, Inc.

Coates Brothers (Singapore) Pte Ltd

Coates Brothers PLC

116

Coates Brothers(Caribbean)Lt

d.

Coates Brothers(Caribbean)

Ltd.



Coates Brothers (South Africa) Ltd


Sinclair del Centro America S.A.


Coates Brothers(Caribbean)Ltd

.


Coates Brothers (West Africa) Ltd


Sun Chemical Aruba N.V. (formerly:Odeon

International N.V.)

Sun Chemical Aruba N.V.

(formerly:Odeon International N.V.)


Sun Chemical S.A. Coates Brothers (Zambia) Ltd


Sun Chemical AG Sun Chemical AG Sun Chemical Aruba N.V. (formerly:Odeon

International N.V.)

Sun Chemical Inks S.A. Coates Brothers (Zimbabwe) Private

Ltd

Coates Brothers (South Africa) Ltd

Sun Chemical N.V./S.A.


Sun Chemical AG Sun Chemical do Brasil Ltda.

Coates Brothers New Zealand Ltd

Coates Brothers (West Africa) Ltd

Visol, S.A. Visol, S.A. Sun Chemical N.V. Coates Brothers(Jamaica)Ltd.

Coates Brothers(Hongkong)

Ltd.

Coates Brothers (Zimbabwe) Private

Ltd

O+R Inktchemie NV O+R Inktchemie NV Visol, S.A. Coates Brothers(Caribbean)Ltd

.

Coates Lorilleux A.S., Turkey

Coates Lorilleux Switzerland

Sun Chemical A/S Sun Chemical A/S O+R Inktchemie NV Sinclair del Centro America S.A.

Coates Lorilleux AB, Sweden

Coates Lorilleux Portugal

Sun Chemical Inks A/S Sun Chemical Inks A/S

Sun Chemical A/S Sinclair del Ecuador S.A.

Coates Lorilleux Belfast Limited.,

U.K.

Coates Lorilleux AB

Sun Chemical Ltd. Sun Chemical Ltd. Sun Chemical Inks A/S Sun Chemical Ecuador

S.A. Coates Lorilleux

LLC, Russia Coates Lorilleux

A.S., Norway

Parker Williams Design Ltd.


Sun Chemical Ltd. Sun Chemical Aruba N.V. (formerly:Odeon

International N.V.)

Coates Lorilleux S.A. France


117

ECG Holdings Ltd. ECG Holdings Ltd. Coates Brothers Sun Chemical AG Coates Lorilleux Ptg.

Inks Division Coates Lorilleux

OY, Finland

Watt Gilchrist Ltd. Watt Gilchrist Ltd. Jackview Ltd. Sun Chemical N.V. Coates Lorilleux S.A.

Spain Coates Lorilleux Poland SP ZOO

Sun Chemical Ink Ireland


Sparkybrook Ltd. Visol, S.A. Coates Lorilleux SRO


U.K.

Glenside Properties Limited



Hartmann-Sun Chemical EOOD

Coates of Ireland Ltd Coates Lorilleux S.A. France

European Manufacturers

Insurance Co.Ltd.


Insurance Co.Ltd.


Sun Chemical A/S Coates Screen Inks GmbH

Coates Lorilleux S.A. Spain

Weesp Unlimited Weesp Unlimited European Manufacturers

Insurance Co.Ltd.

Sun Chemical Inks A/S Coates Electrographics

Lorilleux Argentina S.A.

Sun Chemical Oy Sun Chemical Oy Weesp Unlimited Sun Chemical Ltd. Cotisa Tintas S.L Coates Lorilleux

SRO

Sun Chemical S.A.S Sun Chemical S.A.S Sun Chemical Oy Coates Brothers Dainichi Building

Materials Inc. Coates of Ireland

Ltd

Societe Fonciere de la Manche


Sun Chemical S.A. Coates Lorilleux Belfast Ltd.

Dainippon Ink & Chemicals

(Philippines) Inc.

Coates Screen Inks GmbH

Sun Chemical Holding GmbH


France Chemie Experimentale,

S.A.(FCE)

Jackview Ltd. Dainippon Ink & Chemicals (Thailand)

Co., Ltd

Coates Screen USA

Sun Chemical Osterode Druckfarben GmbH

Sun Chemical Osterode

Druckfarben GmbH

Assemblage Intermoleculaire on

Chimei Organique(AIC)S.A.S.

Sparkybrook Ltd. Dainippon Ink and Chemicals (HK) Ltd

Coates Screen UK

Hartmann Druckfarben GmbH



Sun Chemical Inks (Ireland) Ltd.

Dainippon Ink Ecp-Engineering Co. Ltd.

Coates Zambia Ltd

Coates Screen Inks GmbH.



Coates of Ireland Ltd Deqing DIC Synthetic Resins Ltd

Cotisa Tintas S.L

118

Sun Chemical Lasfelde GmbH




DIC (China) Co., Ltd.

DIC Americas, Inc.

Sun Chemical Central Europe Holding & Co

KG

Sun Chemical Central Europe

Holding & Co KG



Insurance Co.Ltd.

DIC (Malaysia)Sdn Bhd

Reichhold Finance USA., Inc

Sun Chemical Central Europe Holding GmbH



Sun Chemical Oy DIC (Sarawak) Sdn Bhd

Reichhold Management Inc

Sun Chemical B.V. Sun Chemical B.V. Sun Chemical Lasfelde GmbH

Sun Chemical S.A. DIC (Taiwan ) Ltd Reichhold Quimica de Mexico, S.A de

C.V.

Sun Chemical Holding B.V.



KG


S.A.(FCE)

DIC Americas, Inc. Reichhold Trading S/A

Eques Coatings B.V. Eques Coatings B.V. Sun Chemical Central Europe Holding GmbH



DIC Berlin GmbH R&D Laboratory

Reichhold Chemie GmbH

Eques Coatings C.V. Eques Coatings C.V. Sun Chemical B.V. Sun Chemical Holding

GmbH DIC Capital Corp. Reichhold

Denmark A.S.

Sun Chemical Nyomdafestek

Kereskedelmi Es Gyatro KFT(Sun

Chemical KFT)



Chemical KFT)


Sun Chemical Pigmente GmbH

DIC Career Co. Ltd. Reichhold S.A.

Sun Chemical Group S.p.A.


Eques Coatings B.V. Sun Chemical Osterode Druckfarben GmbH

DIC Coatings S.L Reichhold Gmbh

Sun Chemical, d.o.o.e.l.


Eques Coatings C.V. Hartmann Druckfarben GmbH

DIC Color Coating, Inc.

Reichhold Finance B.V.

119

Sun Chemical, d.o.o. Sun Chemical, d.o.o. Sun Chemical Nyomdafestek


Chemical KFT)


DIC Colorants Taiwan Co. Ltd.

Reichhold Investments, B.V.

Sun Chemical A/S (formerly:Coates

Lorilleux A/S)


Lorilleux A/S)

Sun Chemical S.p.A. Sun Chemical Lasfelde GmbH

DIC Colorants, Inc. Reichhold S.r.l.

Sun Chemical, S.r.o. Sun Chemical, S.r.o. Sun Chemical Group S.p.A.


KG

DIC Colortron Pty Ltd

Reichhold Holdings A.S.

Sun Chemical, S.r.o. Sun Chemical, S.r.o. Sun Chemical, D.O.O. Sun Chemical Central Europe Holding GmbH

DIC Colour & Design Co. Ltd.

Reichhold Sverige AB

Sun Chemical Portugal-Tintas Graficas Ltda.


Sun Chemical, D.O.O. Sun Chemical B.V. DIC Colour Industries Sdn Bhd

Teeches Insurance Ltd., Bermuda

Sun Chemical s.r.l. Sun Chemical s.r.l. Sun Chemical A/S (formerly:Coates

Lorilleux A/S)


DIC Compounds (Malaysia) Sdn Bhd

Reichhold U.K. Ltd

Sun Chemical ZAO Sun Chemical ZAO Sun Chemical, S.r.o. Sun Chemical Nyomdafestek


Chemical KFT)

DIC EP, Inc Reichhold Corporate Holding

B.V.

Sun Chemical S.A. Sun Chemical S.A. Sun Chemical, S.r.o. Sun Chemical S.p.A. DIC Epoxy (Malayasia) Sdn Bhd

Beijing Reichhold Organic Chemicals

Ltd

Sun Chemical Pigments

S.L.(formerly:Coates Lorilleux S.A.)





DIC Europe GmbH Gibbon Group plc

120

Sun Chemical Sp (z.o.o) (formerly:Sun

Chemical Sp (z.o.o)(Ltd.�)

Sun Chemical Sp (z.o.o)

(formerly:Sun Chemical Sp

(z.o.o)(Ltd.�)

Sun Chemical s.r.l. Sun Chemical, D.O.O. DIC Express Co. Ltd. Gibbon Finecal Ltd.

Hartman d.o.o. Hartman d.o.o. Sun Chemical ZAO Sun Chemical, D.O.O. DIC Filtec., Inc. Gibbon Inks and Coatings Ltd.



Sun Chemical OOO Sun Chemical A/S (formerly:Coates

Lorilleux A/S)

DIC Global Logistics Co. Ltd.

Inmobiliarla Sun Chem., S.A. de

C.V.

Sun Chemical AB Sun Chemical AB Sun Chemical S.A. Sun Chemical, S.r.o. DIC Holdings (M)

Sdn.Bhd Kemisk Vaerk

Koge (U.K.) Ltd.

CST Grafiska AB CST Grafiska AB Sun Chemical Pigments S.L.(formerly:Coates

Lorilleux S.A.)

Coates Lorilleux SRO. DIC Imaging Products U.S.A Inc

Polychrome Corp

Sun Chemical AG (S.A., Ltd.)




Sun Chemical, S.r.o. DIC Information Service Inc.

Glenside Properties Ltd

Sun Chemical Zagreb d.o.o.


Hartman d.o.o. Sun Chemical Portugal-Tintas Graficas Ltda.

DIC Interior Co. Ltd. Hartman., d.o.o

Sun Chemical Ukraine Limited



Sun Chemical s.r.l. DIC International (Australia) Pty Ltd

Hartman Druckfarben GmbH

Coates Lorilleux Murekkep Ve Kimya

San.Tic.A.S.


San.Tic.A.S.

Sun Chemical AB Sun Chemical A/O DIC International (NZ) Ltd

Hartman-Sun Chemical EOOD

Sun Chemical Murekkep ve Kimya

Sanayi ve Ticaret A.S.



CST Grafiska AB Sun Chemical Moscow Printing Ink

DIC International (Thailand) Co Ltd

Interbak AS

121

Coates Brothers(Zambia)Ltd.

(formerly:Coates Zambia Ltd.�

Coates Brothers(Zambia)Ltd

. (formerly:Coates Zambia Ltd.�


Coates Lorilleux LLC DIC International (USA) Inc


Coates Brothers(West Africa)Ltd.

Coates Brothers(West

Africa)Ltd.


Sun Chemical S.A. DIC International Chemicals (S) Pte

Ltd

SC Funding LLC

Coates Brothers(Zimbabwe)Pri

vate Ltd.

Coates Brothers(Zimbabwe)

Private Ltd.


Sun Chemical Pigments S.L.(formerly:Coates

Lorilleux S.A.)

DIC Korea Corp Sinclair del Centro America S.A.

Coates Brothers(East Africa)Ltd.



San.Tic.A.S.



DIC Lifetec Co. Ltd. Sinclair del Equador S.A.

Coates Brothers(South Africa)Limited.


Interbak AS. Hartman d.o.o. DIC Machinery & Printers Supplies,

Inc.

Sinclair S.A.

DIC Americas, Inc. DIC Americas, Inc. Sun Chemical Murekkep ve Kimya


Sun Chemical AB DIC Machinery & Supplies Sdn Bhd

Sinclair International, Inc

DIC International (USA), LLC





DIC Plapallet Pte Ltd., Singapore


Earthrise Nutritionals LLC




DIC Plastics, Inc. Sun Chemical A/O

Premier Polymers, LLC Premier Polymers, LLC


vate Ltd.

Coates Lorilleux A.S. DIC Precision Corp. Sun Chemical A/S, Denmark

DIC Imaging Products U.S.A., LLC

DIC Imaging Products U.S.A.,


Interbak AS. DIC Sheet, Inc. Sun Chemical A/S, Norway

122

LLC

DIC Europe GmbH DIC Europe GmbH Coates Brothers(South Africa)Limited.



DIC Space Amenity Co. Ltd.

Sun Chemical AB, Sweden

DIC Berlin GmbH R & D Laboratory


DIC Americas, Inc. Coates Brothers(Zambia)Ltd.


DIC Synthetic Resins (Zhongshan) Co Ltd

Sun Chemical A.G., Austria

DIC Coatings, S.L. DIC Coatings, S.L. DIC International (USA), LLC


DIC Technologies Corp.

Sun Chemical AG (S.A. Ltd),

Switzerland

DIC Holdings B.V. DIC Holdings B.V. Earthrise Nutritionals LLC


vate Ltd.

DIC Technologies Ltd.

Sun Chemical Corp

DIC Performance Resins GmbH


Premier Polymers, LLC Coates Brothers(East Africa)Ltd.

DIC Zhangjiagang Chemicals Co., Ltd.

Sun Chemical Ltd., U.K.

DIC Holdings Austria GmbH




Shenzhen Coates Lorilleux Chemicals

Ltd

Advanced General Printing Insk Ltd.

Chia Lung Chemical Industrial Corp.


DIC NC Properties, LLC

Reichhold Investments B.V.

DK Polymer Corp. General Printing Ink Corp.

DIC (Taiwan) Ltd. DIC (Taiwan) Ltd. DIC Europe GmbH Reichhold Holdings US, Inc. (formerly:DIC

Americas,Inc.)

Earthrise Nutritionals Sun Chemical do Brasil Ltda

DIC Colorants Taiwan Co., Ltd.



Reichhold Management, Inc.

European Manufacturers Insurance Co.

Ltd.,Ireland

Sun Chemical B.V., Holland

P.T. DIC Astra Chemicals


DIC Coatings, S.L. Reichhold Holding, Inc. France Chemie Experimentale S.A.

(FCE)


123

PT. DIC Graphics PT. DIC Graphics DIC Performance Resins GmbH

Reichhold, Inc. Fuji Label Co., Ltd. Sun Chemical Inks (Ireland) Ltd

P.T. Pardic Jaya

Chemicals P.T. Pardic Jaya

Chemicals DIC Holdings Austria

GmbH Reichhold Finance

U.S.A., Inc. Glenside Properties

Ltd Sun Chemical Inks

A/S

DIC Asia Pacific Pte Ltd




Guangshou DIC Express Co. Ltd.


DIC Plapallet Pte., Ltd. DIC Plapallet Pte., Ltd.

DIC (Taiwan) Ltd. Innovative Performance Systems, Inc.

Guangzhou DIC International Trading

Co Ltd

Sun Chemical Ltd, Canada

DIC International Chemicals(S)Pte.,Ltd.

DIC International Chemicals(S)Pte.,Ltd

.


Reichhold Ltd. Hainan DIC Microalgae Co Ltd

Sun Chemical Ltd, U.K.

DIC Alkylphenol Singapore Pte., Ltd.



Reichhold Quimica de Mexico, S.A. de C.V.

Hartman., d.o.o., Slovenia

Sun Chemical Moscow Printing

Ink

Dainippon Ink & Chemicals (Thailand)

Co., Ltd.


Co., Ltd.

PT. DIC Graphics Reichhold Investimentos Ltda.


Sun Chemical N.V.

Siam Algae Co., Ltd. Siam Algae Co., Ltd. P.T. Pardic Jaya Chemicals

Reichhold do Brasil Ltda.

Hartman-Sun Chemical EOOD,

Bulgeria

Sun Chemical Investments Plc

DIC International (Thailand) Co., Ltd.



Reichhold Trading S/A Immobiliaria Sunchem, S.A. de

C.V., Mexico

Sun Chemical Equador S.A.

Siam Chemical Industry Co., Ltd.


DIC Plapallet Pte., Ltd. Teeches Insurance Ltd. Shanghai DIC International Trading

Co Ltd


C.V.

Coates Thailand Ltd. Coates Thailand Ltd. DIC International Chemicals(S)Pte.,Ltd.


Innovative Performance

Systems., Inc.


124

TFE Company Ltd. TFE Company Ltd. DIC Alkylphenol Singapore Pte., Ltd.

Reichhold Holdings Austria GmbH.

Interbak AS Sun Chemical Nyomdafestek

Kereskedemi

DIC Color (Thailand) Co., Ltd.



Co., Ltd.

Reichhold CZ s.r.o. Jackview Limited., U.K.

Sun Chemical Druckfarben GmbH


(Philippines), Inc..



Siam Algae Co., Ltd. Reichhold Denmark A.S.

Kitanihon DIC Co. Ltd.

Sun Chemical Druckfarben Moers

GmbH

Zhongshan DIC Colour Co., Ltd.



Oy Reichhold AB Kyushu Polymer Co. Ltd.

Sun Chemical Oy

DIC(China)Co., Ltd. DIC(China)Co., Ltd. Siam Chemical Industry Co., Ltd.

Reichhold SAS (formerly:Reichhold

S.A.)



Hainan DIC Microalgae Co., Ltd.


Coates Thailand Ltd. Reichhold France SAS Nantong DIC Color Co., Ltd

Sun Chemical Pigments S.L.

Yunnan DIC Ink Co.,

Ltd. Yunnan DIC Ink Co.,

Ltd. TFE Company Ltd. Reichhold GmbH Nichei Plastics, Inc Sun Chemical

Pigments GmbH

Qingdao DIC Finechemicals Co., Ltd.

Qingdao DIC Finechemicals Co.,

Ltd.


Reichhold B.V. Nippon Plapallet Co. Sun Chemical Portugal – Tintas

Graficas S.A.

Qingdao DIC Liquid Crystal Co., Ltd.




Reichhold Holdings International

B.V.(formerly:Swift Houtstra International

B.V.)

Nichiei Kaihatsu, Inc.

Sun Chemical S.A. Argentina

Shanghai DIC Ink Co., Ltd.



Reichhold Corporate Holdings B.V.

Nihon Packaging Material Co. Ltd.

Sun Chemical S.A. France

125

Shanghai DIC Pressure-sensitive

Adhesive Materials Co.,Ltd.



DIC(China)Co., Ltd. Reichhold Corporate Holdings �B.V.

Nippon Decor, Inc. Sun Chemical S.A. Spain

Shenzhen-DIC Co., Ltd.



Reichhold Finance B.V. Nishinihon Butyphenol, Inc.


Shanghai DIC International Trading

Co.,Ltd.


Co.,Ltd.

Yunnan DIC Ink Co., Ltd.


Oy Reichhold AB, Finland

Sun Chemical S.p.A

DIC Logistics China Co., Ltd.



Reichhold S.r.l. P.T. DIC Astra Chemicals

Sun Chemical Services S.A.

Deqing DIC Synthetic Resins,Ltd.



Reichhold A.S. P.T. DIC Graphics Sun Chemical Sp (z.o.o) (Ltd)

Zhaoqing DIC Gum Rosins, Ltd.



Reichhold Holding A.S. P.T. DIC Indonesia Sun Chemical Zagreb d.o.o

Guangzhou DIC International Co., Ltd.

Guangzhou DIC International Co.,

Ltd.


Reichhold Norway A.S. P.T. Pardic Jaya Chemicals

Sun Chemical D.O.O., Macedonia

DIC Synthetic Resins (Zhongshan) Co., Ltd.

DIC Synthetic Resins (Zhongshan) Co.,

Ltd.


Co.,Ltd.

Reichhold Sverige AB Premier Polymers, Inc

Sun Chemical D.O.O., Yugoslavia

Taiyuan Coates Lorilleux Chemicals

Limited.


Limited.


Reichhold Holdings (U.K.) Ltd.

Prisma Panama S.A. Sun Chemical S.r.o Czekh

DIC Graphics (Guangzhou) Ltd.



Reichhold U.K. Ltd. PT Coates Indonesia Sun Chemical Group S.P.A.

DIC Graphics (Shenzhen) Ltd.



Beijing Reichhold Organic Chemicals Ltd.

Qingdao DIC Finechemicals Co.

Ltd

Sun Chemical S.r.o., Slovakia

126

Seiko PMC (Zhangjiagang) Corp.



Reichhold, Inc. Qingdao DIC Liquid Crystal Co., Ltd

Tintas S.A.

Seiko PMC (Shanghai) Commerce & Trading

Corp.

Seiko PMC (Shanghai)

Commerce & Trading Corp.


DIC Americas, Inc. Shanghai DIC Ink Co Ltd

Usher-Walker plc




Limited.

DIC International (USA), Inc.

Reichhold A.S. Usher-Walker Group Ltd.


Ltd.


Ltd.

Coates (Guangzhou) PRC Ltd.

Earthrise Nutritionals Inc.

Reichhold B.V. DIC France S.A.R.L.

Nantong DIC Color Co., Ltd.


Coates (Shenzhen)Printing

Co.,Ltd.

Premier Polymers, Inc. Reichhold Chemie GmbH

Visol S.A.

Changzhou Huari New Material Co., Ltd.

Changzhou Huari New Material Co.,

Ltd.


DIC Imaging Products U.S.A., Inc.

Reichhold Corporate Holdings B.V.,

Holland

DIC Europe GmbH

Dainippon Ink & Chemicals (HK) Ltd.



Ltd.

DIC Europe GmbH Reichhold CZ s.r.o DIC France S.A.R.L

DIC Express Co., Ltd. DIC Express Co., Ltd.

Guangzhou DIC Express Co., Ltd.


Reichhold Denmark AS.

DIC (U.K.) Ltd

Tien Lee Hong Co., Ltd.



Eques Coatings B.V. Reichhold do Brasil Ltda., Brazil

DIC International (USA) Inc

DIC Graphics (Hong Kong) Ltd.



DIC Coatings, S.L. Reichhold Finance B.V.

DIC Imaging Products U.S.A Inc

DIC Compounds (Malaysia) Sdn. Bhd.





Earthis Nutritionals

127

Gunong Printing Ink (M) Sdn. Bhd.


DIC Express Co., Ltd. DIC (Taiwan) Ltd. Reichhold Finance USA., Inc

DIC Berlin GmbH R&D Laboratory

DIC (Malaysia) Sdn.

Bhd. DIC (Malaysia) Sdn.

Bhd. Tien Lee Hong Co.,

Ltd. DIC Colorants Taiwan

Co., Ltd. Reichhold France

SAS DIC Coatings S.L

DIC Epoxy (Malaysia) Sdn.Bhd.


Coates Brothers(Hong Kong)Ltd.


Reichhold Gmbh Zhongshan DIC Colour Co Ltd

Coates Brothers(Malaysia)SD

N.BHD.

Coates Brothers(Malaysia)S

DN.BHD.


PT. DIC Graphics Reichhold Holding (U.K.) Ltd

Hainan DIC Microalgae Co Ltd

DIC Holdings (M) Sdn.Bhd.



P.T. Pardic Jaya Chemicals

Reichhold U.K. Ltd Qingdao DIC Finechemicals Co.

Ltd

DIC India Ltd. DIC India Ltd. DIC (Malaysia) Sdn.

Bhd. DIC Asia Pacific Pte

Ltd Reichhold Holding

A.S. Shanghai DIC Ink

Co Ltd

DIC Coatings India Ltd.



DIC Plapallet Pte., Ltd. Reichhold Holding Inc

Shenzhen-DIC Co., Ltd

DIC Korea Corp. DIC Korea Corp. Coates Brothers(Malaysia)SD

N.BHD.


Reichhold Holdings Austria GmbH

Shenzhen Coates Lorilleux chemicals

Ltd.

DIC International (N.Z.) Ltd.




Reichhold Holdings International B.V

Shanghai DIC International Tradin

g Co Ltd

DIC Graphics New Zealand Ltd


DIC India Ltd. Dainippon Ink & Chemicals (Thailand)

Co., Ltd.

Reichhold Holdings US, Inc. (Formerly

DIC Americas, Inc.)

Deqing DIC Synthetic Resins

Ltd

DIC Colortron Pty.Ltd. DIC Colortron Pty.Ltd.


Siam Algae Co., Ltd. Reichhold Inc, U.A.E Guangzhou DIC International

Trading Co Ltd

DIC International (Australia) Pty. Ltd.


DIC Korea Corp. DIC International (Thailand) Co., Ltd.

Reichhold Inc, USA DIC Synthetic Resins (Zhongshan)

Co Ltd

128

DIC Graphics Australia Pty Ltd




Reichhold Investimentos Ltda

Taiyuan Coates Lorilleuz

Chemicals Ltd

DIC Lanka (Private) Ltd.



Coates Thailand Ltd. Reichhold Ltd, Canada

Coates (Ghangzhou) PRC

Ltd

DIC (Vietnam) Co., Ltd.


DIC Colortron Pty.Ltd. TFE Company Ltd. Reichhold Management Inc

DIC Alkydphenol Singapore Pte. Ltd.

DIC Investments Japan, Inc.





Coates Printing (Shenzhen)

Supplier Ltd.

DIC Machinery & Printer's Supplies, Inc.

DIC Machinery & Printer's Supplies,

Inc.




Reichhold Quimica de Mexico, S.A de

C.V.

Nantong DIC Color Co., Ltd

TOPIC.Co., Ltd. TOPIC.Co., Ltd. DIC Lanka (Private) Ltd.


Reichhold Receivables Corp.,

U.S.A.

Dainippon Ink and Chemicals (HK)

Ltd

Kyushu Polymer Co., Ltd.



DIC(China)Co., Ltd. Reichhold S.r.l. DIC Express Co. Ltd.





Reichhold SAS ( formarly:Reichhold

S.A.)

Tien Lee Hong Co. Ltd.

Kitanihon DIC Co.,Ltd. Kitanihon DIC Co.,Ltd.




Coates Brothers(Hongkong

)Ltd.

Shin DIC Kako Co., Ltd.


TOPIC.Co., Ltd. Qingdao DIC Finechemicals Co., Ltd.

Reichhold Trading S/A

Chia Lung Chemical Industries

Corp (Ink)

DIC Technologies Ltd. DIC Technologies Ltd.



Renaissance, Inc. DIC (Taiwan ) Ltd

129

Nishinihon Butylphenol,Inc.


DIC Color Coating, Inc. Shanghai DIC Ink Co., Ltd.

SC Funding LLC DIC Korea Corp

DIC Sheet, Inc. DIC Sheet, Inc. Kitanihon DIC Co.,Ltd. Shenzhen-DIC Co.,

Ltd. Seiko PMC Corp. P.T. DIC Astra

Chemicals

DIC Precision Corp. DIC Precision Corp. Shin DIC Kako Co., Ltd.


Co.,Ltd.

Seiko Polymer Corp. P.T. DIC Indonesia

DIC Plastics, Inc. DIC Plastics, Inc. DIC Technologies Ltd. DIC Logistics China Co., Ltd.

Amagadai Golf Club, Inc.


Nichiei Plastics, Inc. Nichiei Plastics, Inc. Nishinihon Butylphenol,Inc.



PT Coates Indonesia

Nippon Plapallet Co. Nippon Plapallet Co. DIC Sheet, Inc. Zhaoqing DIC Gum Rosins, Ltd.

Shin DIC Kako Co. Ltd.

DIC Compounds (Malaysia) Sdn

Bhd

DIC EP, Inc. DIC EP, Inc. DIC Precision Corp. Guangzhou DIC International Co., Ltd.

Siam Algae Co Ltd Gunong Printing Ink (M) Sdn Bhd

DIC Colorants Inc. DIC Colorants Inc. DIC Plastics, Inc. DIC Synthetic Resins (Zhongshan) Co., Ltd.

Siam Chemical Industry Co. Ltd.,

Thailand

DIC (Malaysia)Sdn Bhd

Fuji Label Co., Ltd. Fuji Label Co., Ltd. Nichiei Plastics, Inc. Taiyuan Coates Lorilleux Chemicals

Limited.

Coates (Thailand) Ltd

DIC Colour Industries Sdn Bhd

DIC Filtec, Inc. DIC Filtec, Inc. Nippon Plapallet Co. Coates (Guangzhou) PRC Ltd.


DIC Machinery & Supplies Sdn Bhd



DIC EP, Inc. Coates(Shenzhen)Printing Supplies Co.,Ltd.

Sinclair del Equador S.A.

DIC (Sarawak) Sdn Bhd

DIC Lifetec Co.,Ltd. DIC Lifetec Co.,Ltd. DIC Colorants Inc. DIC Zhangjiagang Chemicals Co., Ltd.

Sinclair International, Inc, Panama

DIC Epoxy (Malayasia) Sdn

Bhd

130

Dainichi Building Materials, Inc.


Fuji Label Co., Ltd. Shenzhen Coates Lorilleux Chemicals

Ltd.

Sparkybrook Limited., U.K.

DIC Plapallet Pte Ltd.

Nippon Decor, Inc. Nippon Decor, Inc. DIC Filtec, Inc. Guangzhou DIC Express Co., Ltd.


Coates Brothers (Malasia) Sdn Bhd

DIC Interior Co., Ltd. DIC Interior Co.,

Ltd. Nihon Packaging Material Co. Ltd.


Sun Chemical A/O, Russia

DIC Holdings (M) Sdn.Bhd

DIC Capital Corp. DIC Capital Corp. DIC Lifetec Co.,Ltd. Changzhou Huari New Material Co., Ltd.

Sun Chemical A/S, Denmark

Kodak Polychrome Graphics Co. Ltd.

Renaissance, Inc. Renaissance, Inc. Dainichi Building Materials, Inc.


Sun Chemical A/S, Norway

Kodak Polychrome Graphics LLC

DIC Information Service Inc.


Nippon Decor, Inc. DIC Express Co., Ltd. Sun Chemical AB, Sweden

DIC International Chemicals (S) Pte

Ltd

Nichiei Development Co., Ltd..


DIC Interior Co., Ltd. Tien Lee Hong Co., Ltd.


Switzerland

Coates Brothers (Singapore) Pte Ltd

Seiko PMC Corp. Seiko PMC Corp. DIC Capital Corp. Coates Brothers(Hong Kong)Ltd.

Sun Chemical Aruba N.V. (formerly:

Odeon International N.V.)


(Thailand) Co., Ltd

Dainippon Ink Eco-Engineering Co., Ltd.


Renaissance, Inc. DIC Compounds (Malaysia) Sdn. Bhd.


Siam Algae Co Ltd

DIC Global Logistics Co., Ltd.




Sun Chemical Corp,U.S.A.

Siam Chemical Osterode

Druckfarben GmbH

DIC Technology Corp. DIC Technology Corp.


DIC (Malaysia) Sdn. Bhd.

Sun Chemical D.O.O., Macedonia

DIC International (Thailand) Co Ltd

131

DIC Career Co.,Ltd. DIC Career Co.,Ltd. Seiko PMC Corp. DIC Epoxy (Malaysia) Sdn.Bhd.

Sun Chemical D.O.O., Yugoslavia

Sudarshan Chemical Industries

Ltd.

DIC Colour & Design Co.,Ltd.


Seiko Polymer Corp. Coates Brothers(Malaysia)SD

N.BHD.

Sun Chemical de Panama S.A.


DIC Space Amenity Co., Ltd.




Sun Chemical do Brasil Ltda

Coates New Zealand Ltd.

Rohit (Printing Inks&Paints) Ind.Ptv.Ltd.



DIC India Ltd. Sun Chemical Equador S.A.

DIC International (NZ) Ltd

Sun Chemical de Centro America, S.A.

de C.V.


de C.V.

DIC Technology Corp. DIC Coatings India Ltd.



Tintas S.A. Tintas S.A. DIC Career Co.,Ltd. DIC Korea Corp. Sun Chemical Inks (Ireland) Ltd

DIC International (Australia) Pty Ltd

Lorilleux Maroc S.A. Lorilleux Maroc S.A. DIC Colour & Design Co.,Ltd.


Sun Chemical Inks A/S, Denmark

Coates Brothers (Australia) Pty Ltd

Kyodo Printing Co.(S'pore) Pte., Ltd.



Coates Zealand Ltd. Sun Chemical Inks S.A.

Dow Reichold Speciality Latex

LLC

Shanghai Long Feng Food Additives Co.,

Ltd.


Ltd.


DIC Colortron Pty.Ltd. Sun Chemical Investments LLC

Yantai Huada chemicals Industry

Co. Ltd.

Wuxi DIC Epoxy Co., Ltd.





Lorilleux Maroc S.A.

Suzhou Lintong Dyestuff Chemical

Co.,Ltd.


Co.,Ltd.


de C.V.

Coates Brothers Australia Pty Ltd.

Sun Chemical Ltd, British Virgin Islands

Prisma Panama S.A.

132

TOA-DIC Zhangjiagang

Chemicals Co., Ltd.


Chemicals Co., Ltd.

Tintas S.A. Coates (Lanka) Ltd. Sun Chemical Ltd, Canada

Sun Chemical de Panama

Shanghai Showa Highpolymer Co., Ltd.

Shanghai Showa Highpolymer Co.,

Ltd.

Lorilleux Maroc S.A. DIC Investments Japan, Inc.


Sun Chemical de Centro america,

S.A.

Aekyung Chemical Co., Ltd.




Sun Chemical Moscow Printing Ink

Sun Chemical Corp, USA

Kang Nam Chemical Co., Ltd.


Nippon DPC Corp. Towa Process Inc. Sun Chemical N.V., Belgium

Coates (Lanka) Ltd.

Lidye Chemical Co., Ltd.



Ltd.


Sun Chemical Nyomdafestek Kereskedemi,

Hungary

Aekyung Chemnical Co. Ltd.

Bridgestone REI Komposit Sdn. Bhd.



DIC Color Coating, Inc. Sun Chemical of Michigan LLC


Samling Housing Products Sdn. Bhd.



Co.,Ltd.

Kitanihon DIC Co.,Ltd. Sun Chemical Offset do Brasil Ltda

Sun Chemical European

Dispersion Plant S.A.

DIC Pakistan Ltd. DIC Pakistan Ltd. TOA-DIC Zhangjiagang

Chemicals Co., Ltd.



Druckfarben GmbH

Sun Chemical s.r.l.

Hamamatsu Dainippon Ink Hanbai, Inc.

Hamamatsu Dainippon Ink

Hanbai, Inc.


DIC Technologies Ltd. Sun Chemical Oy, Finland

Coates Lorilleux LLC, Russia

Gunma Kosoku Offset, Inc.





Reichhold do Brasil Ltda., Brazil

DIC Manroland Co.,Ltd.



DK Polymer Corp. Sun Chemical Portugal – Tintas

Graficas S.A.

DIC Finance (B.V.I.) Ltd.,

133

Oxirane Chemical

Corp. Oxirane Chemical

Corp. Lidye Chemical Co.,

Ltd. DIC Sheet, Inc. Sun Chemical S.A.

Argentina DIC Colorants

Taiwan Co. Ltd.

Mizushima Kasozai, Inc.



DIC Precision Corp. Sun Chemical S.A. France

TFE Company Ltd.,

Nippon Epoxy Resin Manufacturing Co.,

Ltd.


Ltd.


DIC Plastics, Inc. Sun Chemical S.A. Spain


(Philippines) Inc.

Japan Formalin Company, Inc.


DIC Pakistan Ltd. Nichiei Plastics, Inc. Sun Chemical S.A.de C.V. Mexico

Nippon DPC Corp.

Shin Nihon Kasei, Inc. Shin Nihon Kasei, Inc.


Nippon Plapallet Co. Sun Chemical S.p.A Wuxi DIC Epoxy Co. Ltd.

DIC Bayer Polymer

Ltd. DIC Bayer Polymer

Ltd. Gunma Kosoku Offset,

Inc. DIC EP, Inc. Sun Chemical s.r.l.,

Romania Ault & Wiborg

International

DH Material Inc. DH Material Inc. DIC Manroland Co.,Ltd.

DIC Colorants Inc. Sun Chemical S.r.o Czekh


Japan Fine Coatings,

Inc. Japan Fine Coatings,

Inc. Oxirane Chemical

Corp. Fuji Label Co., Ltd. Sun Chemical S.r.o.,

Slovakia

SUNDIC, Incorporated SUNDIC, Incorporated


DIC Filtec, Inc. Sun Chemical Services S.A.,

Belgium

Techno Science, Inc. Techno Science, Inc. DIC-Hexcel Ltd. Nihon Packaging

Material Co. Ltd. Sun Chemical Sp

(z.o.o)

YD Plastics Co., Ltd. YD Plastics Co., Ltd. Nippon Epoxy Resin Manufacturing Co.,

Ltd.

DIC Lifetec Co.,Ltd. Sun Chemical Swale

Japan Vilene Co., Ltd. Japan Vilene Co.,

Ltd. Japan Formalin Company, Inc.



Tsuruga Terminals Co. Tsuruga Terminals

Co. Shin Nihon Kasei, Inc. Nippon Decor, Inc. Sun Chemical Zagreb

d.o.o

Tsuruga Chemicals Service Co.


DIC Bayer Polymer Ltd.

DIC Interior Co., Ltd. Sun Chemicals (Colores) S.A. de

C.V. Mexico

134

DIC Fine Chemicals Pvt. Ltd.

DH Material Inc. DIC Capital Corp. Sudarshan Chemicals Industries Ltd.

Japan Fine Coatings, Inc.

Renaissance, Inc. Taiyuan Coates Lorilleuz Chemicals

Ltd

SUNDIC, Incorporated DIC Information Service Inc.

Teeches Insurance Ltd., Bermuda

Techno Science, Inc. Nichiei Kaihatsu, Inc. TFE Company Ltd.,

Thailand

YD Plastics Co., Ltd. Seiko PMC Corp. Tien Lee Hong Co.

Ltd.

Mannan Foods Co.,

Ltd. Seiko Polymer Corp. Towa Process Inc.

Japan Vilene Co., Ltd. Amagadai Golf Club,

Inc. Visol S.A.

Shin Sanso Kagaku Co. Dainippon Ink Eco-Engineering Co., Ltd.

Weesp Finance C.V.

Tsuruga Terminals Co. DIC Global Logistics

Co., Ltd. Zhongshan DIC

Colour Co Ltd


DIC Technology Corp.

DIC Career Co.,Ltd.

DIC Colour & Design

Co.,Ltd.

DIC Space Amenity

Co., Ltd.

CST Grafiska AB


Dagest S.A.

135

Kodak Polychrome Graphics Co.,Ltd.



de C.V.

Tintas S.A.


Dow Reichhold Specialty Latex LLC


Nippon DPC Corp.


Ltd.

Wuxi DIC Epoxy Co.,

Ltd.


Co.,Ltd.


Chemicals Co., Ltd.



136


Lidye Chemical Co.,

Ltd.



Coates Lorilleux

(Pakistan) Ltd.


Gunma Kosoku Offset,

Inc.

Kodak Polychrome Graphics Ltd.

DIC Manroland

Co.,Ltd.

Oxirane Chemical

Corp.

Mizushima Kasozai,

Inc.

DIC-Hexcel Ltd.


Ltd.

Japan Formalin

Company, Inc.

Shin Nihon Kasei, Inc.

DIC Bayer Polymer

Ltd.

137

Banpo Industries,Ltd.


Inc.

SUNDIC, Incorporated

Techno Science, Inc.

YD Plastics Co., Ltd.

Mannan Foods Co.,

Ltd.

Japan Vilene Co., Ltd.

Shin Sanso Kagaku Co.

Tsuruga Terminals Co.


Key Management Personnel P.K.Dutt P.K.Dutt P.K.Dutt P.K.Dutt P.K.Dutt P.K.Dutt

B.S.Kampani(upto 31st

March 2007) B.S.Kampani B.S.Kampani B.S.Kampani B.S.Kampani B.S.Kampani

B Transactions with Related Parties Sl. No. Particulars For six months

ended For the year ended 31st December

30.06.2007 2006 2005 2004 2003 2002 I Sales & services to and other recoveries from

related Parties a) Ultimate Holding Company 19.43 13.11 18.75 - 2.14 - b) Holding Company - 7.98 8.76 36.78 - 9.29

138

c) Subsidiaries 53.16 38.95 90.27 104.68 114.30 110.25 d) Fellow Subsidiaries 283.33 509.99 427.50 364.86 421.85 282.47 II Purchase/other services from related parties

a) Ultimate Holding Company 415.00 925.61 545.51 552.03 278.32 376.77 b) Holding Company 4.33 18.38 17.20 - - - c) Subsidiaries 4.60 116.48 46.67 39.78 59.44 63.77 d) Fellow Subsidiaries 563.46 758.63 254.52 329.62 1,087.91 1,428.99 III Royalty Paid/Payable a) Ultimate Holding Company - - - - 61.25 266.70 b) Holding Company 249.02 432.06 338.48 317.45 233.57 - IV Dividend Paid/payable Holding Company - 158.48 158.48 158.48 150.95 163.65 V Dividend Received Subsidiaries - - - - 161.30 236.57 VI Remuneration paid/payable Key Management Personnel 42.84 80.96 68.95 65.35 65.31 62.71 VII Sale of Fixed Assets Subsidiaries 4.64 - - 0.12 - - VIII Loans Received Subsidiaries 150.00 - - 150.00 - 50.00 IX Expenses incurred by the Company on behalf of

the Group/Subsidiaries a) Holding Company - 6.91 - - - - b) Subsidiaries 55.18 228.53 97.73 - 56.70 52.10 X Expenses incurred by the Group/Subsidiaries on

behalf of the Company

Subsidiaries 1.36 85.87 34.93 28.93 5.06 3.13 XI Payment of Interest Holding Company 16.77 7.16 - - - - Subsidiaries 6.22 XII Payment of Processing Charges

139

Subsidiaries 48.90 62.91 18.63 17.27 2.97 - XIII OUTSTANDING BALANCE PAYABLE XIII(i) Purchase of Goods a) Ultimate Holding Company 299.06 535.53 469.11 259.81 149.90 206.76 b) Holding Company - 6.52 17.20 - - - c) Subsidiaries 4.46 - - - - - d) Fellow Subsidiaries 292.49 235.66 93.45 115.02 291.29 316.39 XIII(ii) Royalty a) Ultimate Holding Company - - - - - 139.80 b) Holding Company 229.82 356.34 327.55 165.12 156.92 - XIII(ii) Dividend Holding Company - - - - - - XIII(iv) Loan/Advances Accepted a) Holding Company 458.70 465.86 - - - - b) Subsidiaries 167.84 150.00 - 50.00 - - c) Fellow Subsidiaries - - - - - - XIII(v) Interest a) Holding Company 16.77 b) Subsidiaries 4.55 - - 0.80 - - XIII(vi) Remuneration Key Management Personnel 7.73 23.29 24.38 23.00 26.48 23.13 XIV Outstanding balance Receivable XIV(i) Sale of Goods a) Ultimate Holding Company 1.09 - 8.76 7.81 - 9.23 b) Fellow Subsidiaries 148.79 130.58 134.55 - 177.77 103.69 XIV(ii) Recovery of expenses Holding Company - - - 9.05 - - XIV(iii) Loans/Advances granted Subsidiaries 149.26 38.30 62.95 75.25 67.28 79.46 Fellow Subsidiaries 27.48 XIV(iV) Rendering of services a) Ultimate Holding Company - 7.31 8.18 - - 0.92 b) Fellow Subsidiaries - - 10.74 - - -

140

9. Segmental Reporting a) Based on the guiding principles given in the Accounting Standard on Segment Reporting (AS17) issued by the Institute of Chartered Accountants of India the financial

information about the primary business segments are as under:

Printing Ink Adhesive Total

Particulars

For six months ended 30.06.2007

For the year ended 31.12.2006


30.06.2007

For the year ended

31.12.2006

For six months ended 30.06.2007

For the year ended 31.12.2006

Segment Revenue External Sales 18125.51 33115.10 843.39 834.50 18968.90 33949.60 Less: Inter Segment Sales 0.00 0.00 0.00 0.00 0.00 0.00 Net Revenue 18125.51 33115.10 843.39 834.50 18968.90 33949.60 Segment Results Segment/Operating Results 1061.50 1852.60 87.15 183.60 1148.65 2036.20 Unallocable Expenses (Net) 0.00 0.00 0.00 0.00 10.75 0.00 Interest Expenses 0.00 0.00 0.00 0.00 (450.50) (607.60) Provision for Tax (including Deferred Tax) 0.00 0.00 0.00 0.00 (248.70) (476.50) Net Profit 1061.50 1852.60 87.15 183.60 460.20 952.10 Segment Assets 22435.43 25127.40 1149.45 238.20 23584.88 25365.60 Unallocated common assets 0.00 0.00 0.00 0.00 2979.02 196.10 Total Assets 22435.43 25127.40 1149.45 238.20 26563.90 25561.70 Segment Liabilities 16598.47 6782.60 577.97 131.90 17176.44 6914.50 Unallocated liabilities & Provisions 0.00 0.00 0.00 0.00 9387.46 18647.20 Total Liabilities 16598.47 6782.60 577.97 131.90 26563.90 25561.70 Depreciation 261.79 543.80 0.00 0.00 261.79 543.80 Unallocated Depreciation 0.00 0.00 0.00 0.00 35.91 0.00 Total Depreciation 261.79 543.80 0.00 0.00 297.70 543.80 Capital Expenditure including CWIP 579.91 1466.30 579.91 1466.30 Segment results for earlier years have not been given because Lamination Adhesive business became a part of the Company only from the year ended 31.12.06. b) Segments Assets and Segment Liabilities for the six months period ending on June 30, 2007 given in table 9(a) above have been computed on estimated basis as per

available data.

141

10 The Company has filed an application before the Hon'ble High Court of Calcutta under Section 391, 394 and other applicable provisions of the Companies Act, 1956 for merger of its subsidiary Rohit (Printings Ink & Paints) Industries Pvt. Limited with itself with effect from April 1, 2007. The petition for sanction of the scheme is now pending before the Hon'ble High Court of Calcutta. Pending completion of formalities and receipt of final approval, no effect has been given to the accounts for the six months ended June 30, 2007.

142

AAnnnneexxuurree XX

SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCYY

AACCCCOOUUNNTTIINNGG CCOONNVVEENNTTIIOONN TThese financial statements are prepared under the historical cost convention.

FFIIXXEEDD AASSSSEETTSS FFiixxeedd aasssseettss aarree ssttaatteedd aatt tthheeiirr oorriiggiinnaall ccoosstt ((iinncclluuddiinngg ccoosstt iinncciiddeennttaall ttoo aaccqquuiissiittiioonn)) lleessss ddeepprreecciiaattiioonn.. Loss on scrapping of Fixed Assets and profit or losses on sale of Fixed Assets are included in the Profit & Loss Account and calculated as the difference between the value realised and the book value. Depreciation is provided in accordance with Section 205 read with Schedule XIV to the Companies Act, 1956(the Act), in the following manner:

(i) On plant and machinery and computers added during the period 01.11.1977 to 31.10.1987 on Straight Line Method, on the basis of specified period (within the meaning of Sec .205(2)(b)of the Act) determined in the year of acquisition, at rates prescribed under the Income Tax Act, 1961 and rules framed hereunder , as was in force during the relevant financial year.

(ii) On plant and machinery added from 01.11.1987, on Straight Line Method at rates specified in Schedule XIV to the Act as existing at the time of capitalisation.

(iii) On Silos included in plant and machinery added from 1.1.2006, on Straight Line Method @ 20% (iv) On Research equipment added from 1.1.2003, on Straight Line Method @ 25% (v) On Air conditioners, on Written Down Value Method @ 13.91%.

(vi) On computers added from 01.11.1987, on Straight Line Method @ 25%.

(vii) On all other assets, on Written Down Value Method, at rates specified in Schedule XIV to the Act.

(viii) All assets costing Rs 5,000 or less are fully depreciated in the year of additions.

143

(ix) In respect of assets acquired, sold or discarded during the period, prorated depreciation, for the period during which each such asset was in use, after rounding off part of the month to the whole month.

(x) Leasehold land is amortized over the period of the lease and freehold land is not depreciated.

On Accounting Standard 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India becoming mandatory with effect from 01.04.2004, cash generating unit/assets are assessed for possible impairment at balance sheet dates based on external and internal sources of information. Impairment loss, if any, recognised as an expense in the Profit & Loss Accounts INTANGIBLE ASSETS On Accounting Standard on Intangible assets becoming mandatory for accounting period commencing on or after 01.04.2003, Intangible assets are recognised only when future economic benefits attributable to the assets will flow to the enterprises and cost can be measured reliably and are being amortized over its useful life of four years. ASSETS ACQUIRED UNDER LEASE For assets acquired under operating lease, rentals payable are charged to profit and loss account. FFoorr aasssseettss aaccqquuiirreedd uunnddeerr ffiinnaannccee lleeaassee:: ((ii)) IInn rreessppeecctt ooff aasssseettss aaccqquuiirreedd pprriioorr ttoo 11..44..22000011,, rreennttaallss ppaayyaabbllee aarree cchhaarrggeedd ttoo tthhee PPrrooffiitt aanndd LLoossss AAccccoouunntt aanndd ffuuttuurree rreennttaallss aarree ddiisscclloosseedd aass ccoommmmiittmmeennttss.. (ii) In respect of assets acquired on or after 1st April, 2001, the same are capitalised at the lower of their respective cash cost and the present value of minimum lease payments after discounting them at an appropriate discount rate. INVENTORIES Inventories are valued using first-in first-out (FIFO) formula, and are valued at the lower of cost and net realizable value. In respect of finished goods, cost, comprises of expenditure incurred in the normal course of business in bringing inventories to their location and condition including relevant overheads, calculated on basis appropriate to the business carried on by our Company. Excise duty payable on finished goods lying in the factory of manufacture and Customs Duty payable in respect of goods, intended for trading, cleared from port but kept in bonded warehouse are included in the value of closing stock after creating suitable provision for the liability. Intermediates are valued inclusive of attributable production overheads.

144

Stock of raw materials is valued inclusive of expenditure incurred in the normal course of business in bringing inventories to their present location. Customs duty payable for materials cleared from port but kept in bonded warehouse are included in the value of closing stock after creating suitable provision for liability.

IINNVVEESSTTMMEENNTTSS Long term investments are stated at cost, and where applicable, provision is made against diminution in value. Profits or losses on sale of investments are included in the Profit & Loss Account and calculated as the difference between the net proceeds realised and the book value. Dividends are accounted for in the year in which it is received. RETIREMENT / TERMINAL BENEFITS TThhee lliiaabbiilliittyy ffoorr GGrraattuuiittyy uunnddeerr tthhee PPaayymmeenntt ooff GGrraattuuiittyy AAcctt,, 11997722 aanndd ffoorr cceerrttaaiinn ccaatteeggoorriieess ooff eemmppllooyyeeeess iinn aaccccoorrddaannccee wwiitthh tthheeiirr ccoonnddiittiioonnss ooff eemmppllooyymmeenntt,, aaccccrruueedd dduurriinngg tthhee yyeeaarr iiss ddeetteerrmmiinneedd aatt tthhee yyeeaarr eenndd bbyy iinnddeeppeennddeenntt aaccttuuaarriieess,, ffuunnddeedd sseeppaarraatteellyy aanndd cchhaarrggeedd ttoo tthhee PPrrooffiitt && LLoossss AAccccoouunntt.. The expected annual cost of providing pension to management staff under the defined benefit scheme as per respective conditions of their employment is calculated at the year end by independent actuaries, funded separately and charged to the Profit & Loss Account. In respect of other categories of employee who are not covered under defined benefit scheme, contributions for pension are made to separate fund. The liability accrued during the year in respect of retirement/terminal benefit payable to certain employees governed by agreement with the Union/ representing them is actuarially determined at the year end and charged to the Profit & Loss Account. The liability accrued up to the close of the year for encashment of leave not availed by the management staff as stipulated in their respective terms of employment is actuarially determined at the year end and charged to the Profit and Loss Account. Short term employee benefits are recognized on an undiscounted basis whereas long term benefits are recognized on a discounted basis.

SSAALLEESS Sales represent the amount received/receivable for goods sold including excise duty thereon.

TTRRAANNSSAACCTTIIOONNSS IINN FFOORREEIIGGNN CCUURRRREENNCCIIEESS Transactions in foreign currencies are accounted for in the following manner:

145

(a) In case of forward exchange contract the premium or discount arising at the inception of a such contract is amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the statement of Profit & Loss in reporting period in which the exchange rates changed. Profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the period.

(b) Transactions not covered by forward foreign exchange contracts are accounted for in the following manner :

(i) Export Sales and import purchases are accounted for at exchange rates prevailing at the time of the transactions.

(ii) Exchange difference related to the acquisition of Fixed Assets from country outside India is adjusted in the carrying amount of related Fixed Assets.

(iii) Gains / losses (not related to the acquisition of Fixed Assets) arising out of the foreign currency transactions are recognised in the Profit and Loss Account.

(iv) Other assets and liabilities are restated at the rates ruling at the year-end and the differences on such retranslation are recognised in the Profit and Loss Account

BBOORRRROOWWIINNGG CCOOSSTT Borrowing cost that are directly attributable to the acquisition or construction of an assets that necessarily takes a substantial period of time to get ready for its intended use are capitalised till substantial completion of all the activities that are necessary for this purpose. Other borrowing cost are charged to revenue.

AACCCCOOUUNNTTIINNGG FFOORR IINNCCOOMMEE TTAAXX CCuurrrreenntt ttaaxx//FFrriinnggee BBeenneeffiitt TTaaxx rreepprreesseennttss tthhee aammoouunntt tthhaatt ootthheerrwwiissee wwoouulldd hhaavvee bbeeeenn ppaayyaabbllee uunnddeerr tthhee IInnccoommee TTaaxx AAcctt,, 11996611 hhaadd tthhiiss ffiinnaanncciiaall yyeeaarr bbeeeenn rreecckkoonneedd aass tthhee bbaassiiss ffoorr ccoommppuuttaattiioonn ooff ttaaxx ppaayyaabbllee uunnddeerr tthhee pprreevvaaiilliinngg ttaaxxaattiioonn llaawwss.. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised.

146

Summary of Accounting Ratios Annexure-XI Rs. in Lacs

As At Year ended 31st December

30.06.2007 2006 2005 2004 2003 2002 A Net Worth 11312.00 10851.80 10181.70 9444.00 8949.40 8525.40 B Adjusted Profit after Tax 460.20 952.10 1012.50 746.70 673.00 864.10 C Number of Share outstanding at the end 6885537 6885537 6885537 6885537 6885537 6885537 D Weighted Average Number of Share outstanding 6885537 6885537 6885537 6885537 6885537 6885537 Earnings Per Share (EPS) (Rs.)(B/D) 6.68 13.83 14.70 10.84 9.77 12.55 Return to Net Worth (%) (B/A) 4.07 8.77 9.94 7.91 7.52 10.14 Net Asset value per Share (Rs.) (A/C)*1000000 164.29 157.60 147.87 137.16 129.97 123.82 Definition of Key Accounting ratios 1. EPS represents Basic Earnings per Share calculated as per Accounting Standard 20 issued by ICAI 2. Return on net worth is arrived at by dividing PAT by total Shareholder's Funds. (Net Worth) at the end of the year.

Capitalisation Statement (Restated) Annexure XII Rs. in Lacs

Particulars Pre Issue as at Adjusted for Rights after conversion 30.6.07 Loan Funds Short Term Debts 7434.90 4816.55 Long Term Debts 458.70 458.70 Total debts 7893.60 5275.25 Shareholders Funds Share Capital 688.60 918.12

147

Reserves & Surplus 10623.40 15558.03 Less : expenses in connection with the issue -100.00 Total Shareholders Fund 11312.00 16376.15 Debt Equity Ratio 0.04 0.03 (Long term Debt/Equity)

Note: The issue proceeds, issue expenses and utilization of the proceeds of the issue are as given by the management and are not verifiable by the auditors

Dividend Paid Annexure-XIII Rs. Lacs


Particulars 30.06.2007 2006 2005 2004 2003 2002 Equity Share 688.60 688.60 688.60 688.60 688.60 688.60 Rate of Dividend - 35% 35% 35% 35% 35% Dividend Amount - 241.00 241.00 241.00 241.00 241.00 Dividend Tax - 41.00 33.80 33.80 30.80 30.80

Tax Shelter Statement Annexure-XIV Rs. In Lacs

As at 31st December

As At 30.06.2007 2006 2005 2004 2003 2002

A. Profit before Tax after adjustment 708.90 1,428.60 1,470.40 1,125.70 929.40 1,204.50 B. Tax rate 0.34 0.34 0.34 0.37 0.36 0.37 C. Tax on Notional Rate 240.96 480.87 494.94 411.89 333.47 442.65 D. Adjustments 1. Deduction U/s 80HHC 0.00 0.00 0.00 0.00 0.00 15.00 2. Difference between Book and Tax Depreciation (34.84) 31.70 (43.50) 136.90 111.30 68.00 3.Profit on Sale of Fixed Assets 105.34 125.90 0.00 0.00 0.00 0.00 4.Provision for doubtful debts added back/written off 0.00 69.80 (69.80) 0.00 0.00 0.00 5. Capital Profit 0.00 0.00 89.30 0.00 0.00 0.00

148

6. Disallowances under Section 43B (16.50) (25.00) (25.00) (10.00) (12.00) (9.00) 7.Oracle expenses claimed earlier years 0.00 0.00 0.00 (22.70) (22.70) (22.70) 8. Perquisite tax 0.00 0.00 0.00 0.00 0.00 (0.90) 9. Provision for leave encashment (7.00) (14.10) 0.00 0.00 0.00 0.00 10. Assets written off (10.35) (1.40) 0.00 0.00 0.00 0.00 11. Deduction u/s 35DDA 1.20 2.42 (6.60) 8.20 8.20 8.20 12. Deduction u/s 352AB 33.75 78.20 85.00 100.00 65.00 69.30 13. Allowance U/s 80M 0.00 0.00 0.00 161.30 206.50

15.Oracle implementation cost treated as capital expenditure in accounts 0.00 130.40 0.00 0.00 0.00 0.00

16.Others 0.00 (4.72) (2.73) 0.77 0.56 1.00 E Net adjustments 71.60 393.20 26.67 213.17 311.66 335.40 F. Tax Saving on net adjustments 24.10 132.35 8.98 78.00 111.82 123.26 G. Total Income Tax Provided (C-F) 216.86 348.52 485.96 333.89 221.65 319.39 H Capital Gain Tax 0.00 0.00 4.60 0.00 0.00 0.00 I Total Tax provided (G+H) 216.86 348.52 490.56 333.89 221.65 319.39

149

To

The Board of Directors

DIC India Limited.

Transport Depot Road

Kolkata-700088

Dear Sirs,

1) We have examined the attached consolidated financial information of DIC India Limited (the Company) and its subsidiaries (collectively referred to as the ‘group’) as approved by the Board of Directors of the Company prepared in terms of the requirements of Paragraph B, Part II of Schedule II of the Companies Act, 1956 (the Act) and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 as amended to date (SEBI Guidelines) and terms of our engagement agreed with you in accordance with our letter dated 20.4.07 in connection with the proposed rights issue of Equity shares of the Company.

2) These information have been prepared by the Management from the consolidated financial statements for the year ended 31.12.2002, 31.12.2003, 31.12.2004, 31.12.2005, 31.12.2006 and six months ended 30.06.2007. We did not audit the financial statement of the subsidiary Rohit (Printing Inks & Paints) Industries Pvt. Ltd. included in the consolidated financial statements of the group, for the financial years ended 31.12.2002, 31.12.2003, 31.12.2004, 31.12.2005, 31.12.2006 and six months 30.06.2007 whose Financial Statements reflect total assets of Rs. 28.30 Lacs, Rs.20.10 Lacs, Rs.22.81 Lacs, Rs.20.90 Lacs, Rs.186.54 Lacs and Rs 169.99 Lacs respectively and total revenue of Rs. 7.60 Lacs, Rs.8.14 Lacs, Rs.6.00 Lacs, Rs.1.63 Lacs, Rs.213.42 Lacs and Rs.5.13 Lacs respectively. These financial statements have been audited by another firm of Chartered Accountants JCR & CO., whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in these Consolidated Summary Statement of Assets and Liabilities(Restated), Consolidated Summary Statement of Profit and Loss (Restated) and Consolidated Statement of Cash Flows ( Restated) are based solely on the report of the said auditors.

3) As indicated in Note 7(a) on Annexure IV disclosure in terms of Accounting Standard-15 (Revised) on Employee Benefit issued by The Institute of Chartered Accountants of India in respect of DIC India Limited has not been considered in its Financial Statements for the six months period ended June 30, 2007 and as indicated in Note 7(b) on Annexure IV provision for certain employee benefits as per Accounting Standard 15(Revised) on Employee Benefits issued by The Institute of Chartered Accountants of India in respect of DIC Coatings India Limited has not been ascertained and in the absence of which we are unable to comment on the appropriateness of the provision made in its Financial Statements for the six months period ended June 30, 2007 in this regard. Also no adjustment in respect thereof has been considered in the Consolidated Summary Statement of Profit and Loss ( Restated) , Consolidated Summary Statement of Assets and Liabilities ( Restated) and Consolidated Statement of Cash Flows ( Restated ).

4) As indicated in Note 9(b) of Annexure IV in the absence of relevant information and data we are

unable to verify the Segment Assets and Segment Liability figures as given in Note 9 (a) of Annexure IV.

5) We have also examined the consolidated financial information of the Company and its subsidiaries for the

six months ended 30th June 2007 prepared and approved by the Board of Directors for the purpose of disclosure in the offer document of the Company mentioned in Paragraph (1) above.

The consolidated financial statement for the above period was examined to the extent applicable for the purpose of audit of financial information in accordance with the Auditing and Assurance Standards issued by the Institute of Chartered Accountants of India. Those Standards require that we plan and perform our audit to obtain reasonable assurance, whether the consolidated financial information under examination is free from material misstatement.

150

Based on the above, we report that in our opinion and according to the information and explanations given to us subject to our remarks in paragraph 3 and 4 above, we have found the same to be correct and the same have been used in the consolidated financial information appropriately. We did not audit the financial statements of the subsidiary Rohit (Printing Inks & Paints) Industries Pvt. Ltd. included in the consolidated financial statements of the group; for the six months ended 30.06.2007 whose Financial Statements reflect total assets of Rs 169.99 Lacs and total revenue of Rs.5.13 Lacs. These financial statements have been audited by another firm of Chartered Accountants JCR & CO., whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in these Consolidated Summary Statement of Asset and Liabilities (Restated), Consolidated Summary Statement of Profit and Loss (Restated) and Consolidated Statement of Cash Flows (Restated) are based solely on the report of the said auditors.

6) In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines and terms of our engagement agreed with you and subject to the matter stated in paragraph 3 above we further report that:

a) The Consolidated Summary Statement of Assets and Liabilities (Restated) of the Group examined by us, as set out in Annexure I to this report are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Notes to the Restated Statements set out in Annexure IV.

b) The Consolidated Summary Statement of Profit and Loss (Restated) of the Group examined by us, as set out in Annexure II to this report are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Notes to the Summary Statement as Restated set out in Annexure IV.

c) The Consolidated Statement of Cash Flows (Restated) of the Group for the year ended 31.12.2002, 31.12.2003, 31.12.2004, 31.12.2005, 31.12.2006 and six months period ended 30.06.2007 examined by us, as set out in Annexure III to this report are based on the Consolidated Summary Statement of Assets and Liabilities (Restated) and Consolidated Summary Statement of Profit and Loss (Restated) of the Group as referred to in paragraph 6(a) and 6(b) above.

7) Based on our examination of these Consolidated Restated Summary Statements, for the respective years, we confirm that subject to our remarks in paragraph 3 above the restated financial information has been made after incorporating:

(i) adjustments for the changes in accounting policies retrospectively in respective financial years to reflect the same accounting treatment as per changed accounting policy for all the reporting periods.

(ii) adjustments for the material amounts in the respective financial years to which they relate.

(iii) further, there are no extra-ordinary items that need to be disclosed separately in the accounts and qualification requiring adjustments.

In our opinion the financial information contained in Annexure I to III of this report read along with the Significant Accounting Policies contained in Annexure V and Notes to the Restated Statement in Annexure IV prepared after making adjustments and regrouping as considered appropriate have been prepared in accordance with Part IIB of Schedule II of the Act and the SEBI Guidelines.

151

8) Our report is intended solely for use of the management and for inclusion in the offer document in connection with the proposed rights issue of equity shares of the Company. Our report and should not be used for any other purpose except with our consent in writing.

Place: Kolkata

Dated: 15th October, 2007

Prabal Kr. Sarkar

Partner

Membership No: 52340

For and on Behalf of

Lovelock and Lewes

Chartered Accountants

152

DIC INDIA LIMITED ( Consolidated) Consolidated Summary Statement of Assets and Liabilities (Restated) Annexure I Rs. in Lacs As At As At 31st December

30.6.2007 2006 2005 2004 2003 2002 A Fixed Assets Gross Block 9921.70 9670.40 8634.80 7875.40 7005.60 6212.50 Less: Depreciation 4581.60 4299.30 3894.70 3433.90 3035.70 2671.60 Net Block 5340.10 5371.10 4740.10 4441.50 3969.90 3540.90 Capital Work in Progress 736.40 442.40 280.10 152.70 102.80 212.00 Total Fixed Assets 6076.50 5813.50 5020.20 4594.20 4072.70 3752.90 B Investments 0.20 0.20 0.30 1.30 1.10 1.10 C Current Assets, Loans and Advances Interest accrued on investment 0.10 0.10 0.10 0.00 0.00 0.00 Inventories 5206.50 5579.40 4312.50 3635.70 2720.50 2814.10 Sundry Debtors 13016.60 11959.30 10598.20 9243.30 8819.10 8989.60 Cash & Bank Balances 1620.50 1623.20 1618.90 1756.20 2068.80 1781.20 Loans and Advances 2333.00 1964.40 1437.60 501.70 614.00 542.00 Total Current Assets 22176.70 21126.40 17967.30 15136.90 14222.40 14126.90 D Total Assets (A+B+C) 28253.40 26940.10 22987.80 19732.40 18296.20 17880.90 Liabilities and Provisions E Loan Funds Secured Loans 1570.30 1639.80 352.70 338.80 443.80 652.90 Unsecured Loans 6167.40 5137.60 4088.40 3400.00 3806.80 3425.50 Sub Total 7737.70 6777.40 4441.10 3738.80 4250.60 4078.40 F Deferred Tax Liabilities-Net 620.10 606.10 532.40 617.50 564.90 531.60 G Current Liabilities & Provisions Liabilities 7139.30 7239.70 6797.60 5212.50 4018.10 4399.20 Provisions 249.20 445.33 504.49 407.79 410.59 290.00 Sub Total 7388.50 7685.03 7302.09 5620.29 4428.69 4689.20 H Total Liabilities and Provisions (E+F+G) 15746.30 15068.53 12275.59 9976.59 9244.19 9299.20 12507.10 11871.57 10712.21 9755.81 9052.01 8581.70

153

I

Net Worth (D-H)

J Represented by:- Shareholders Funds Share Capital 688.60 688.60 688.60 688.60 688.60 688.60 Reserve & Surplus 11818.50 11182.97 10023.61 9067.21 8386.11 7938.60

Less: Miscellaneous Expenditure to the extent not written off 0.00 0.00 0.00 0.00 22.70 45.50

Net Worth 12507.10 11871.57 10712.21 9755.81 9052.01 8581.70 Consolidated Summary Statement of Profit and Loss (Restated) Annexure II Rs. in Lacs

For six months

ended For the year ended 31st December

30.06.07 2006 2005 2004 2003 2002 Income Sales Of products manufactured by the Company 23530.30 40898.90 34002.20 30011.80 26026.60 23531.00 Of products traded by the Company 480.00 2076.60 1791.20 1243.90 1453.80 1946.40 Sub Total 24010.30 42975.50 35793.40 31255.70 27480.40 25477.40 Less: Excise Duty 3040.70 5408.90 4628.60 4113.80 3529.70 3239.00 Net Sales 20969.60 37566.60 31164.80 27141.90 23950.70 22238.40 Other Income 297.20 708.30 381.80 250.00 231.20 250.60 TOTAL INCOME 21266.80 38274.90 31546.60 27391.90 24181.90 22489.00 Expenditure Material consumed 15579.70 27608.90 22380.90 19212.00 16885.60 15340.90 Staff Costs 1369.80 2582.10 2391.70 2206.60 1966.40 1873.10 Other Expenses 2544.90 4754.60 4020.50 3681.30 3403.20 3141.10

Interest and discount on issue of Commercial Paper 445.00 604.70 375.40 313.70 356.00 408.50

154

Depreciation 326.20 603.20 560.10 491.20 446.50 435.50 TOTAL EXPENDITURE 20265.60 36153.50 29728.60 25904.80 23057.70 21199.10 Profit before Tax without adjustments 1001.20 2121.40 1818.00 1487.10 1124.20 1289.90 Adjustment for regrouping of Wealth Tax ( Refer Note 2a of Annexure IV) 0.00 0.00 0.00 (2.50) (2.50) (2.50) Adjustment relating to Prior period ( Refer Note2b of Annexure IV) 0.00 0.00 0.00 0.00 27.80 Adjustment for Bad debts Recovered ( Refer Note 2c of Annexure IV) (21.70) (4.30) (1.30) (10.10) 7.40 (14.80) Adjustment for Liability written back ( Refer Note 2d of Annexure IV) (1.60) (19.30) 0.00 0.00 (6.10) 2.90 Adjustment for additional depreciation of earlier years ( Refer Note 2f Annexure IV) 0.00 0.00 0.00 0.00 0.00 24.60 Profit before Tax after adjustment 977.90 2097.80 1816.70 1474.50 1123.00 1327.90 Provision for Taxation Current Tax 316.40 508.00 611.00 470.60 275.40 446.50 Adjustment for Tax provision of earlier years written Back ( Refer Note 2e of Annexure IV )

0.00 28.30 0.00 0.00 75.00 0.00

Tax impact of above adjustment (7.92) (6.44) (0.40) (4.60) (0.71) 4.90 Fringe Benefit Tax 15.80 52.90 59.90 0.00 0.00 0.00 Deffered Tax 18.00 73.70 (85.10) 52.60 33.30 9.80 Sub Total 342.28 656.46 585.40 518.60 382.98 461.20 Profit after Tax 635.62 1441.34 1231.30 955.90 740.01 866.70 Add: Surplus brought forward from previous year 4598.46 3589.11 2734.11 2128.21 1767.20 1354.00 Appropriation Transfer to debenture Redemption Reserve 0.00 0.00 0.00 0.00 0.00 75.00 Transfer to General Reserve 0.00 150.00 101.50 75.20 86.50 106.70 Proposed Dividend 0.00 241.00 241.00 241.00 241.00 241.00 Tax on Proposed Dividend 0.00 41.00 33.80 33.80 51.50 30.80 Balance Carried to Balance Sheet 5234.08 4598.46 3589.11 2734.11 2128.21 1767.20

155

ADJUSTMENTS TO BALANCE IN PROFIT AND LOSS ACCOUNT AS AT JANUARY 1, 2002 Rs. in Lacs

Balance in profit as at January 1,2002 as per audited Fianacial Statement 1221.20 Add: Provision for Dividend Tax of earlier years written back 28.10 Less Prior year adjustment ( Note 2b of Annexure IV) (27.80) Add : Bad debts recovered (Note 2c of Annexure IV) 44.80 Adjustment for Tax provision of earlier years written Back (Note 2e of Annexure IV ) 103.30 Adjustment for Liability written back (Note 2d of Annexure IV) 24.10 Depreciation of earlier years adjusted (Note 2f of Annexure IV) (24.60) Tax Impact of Adjustments above (15.10)

Total 1354.00

156

Consolidated Statement of Cash Flows (Restated) Annexure-III Rs. in Lacs

For the year ended

Particulars For six months ended 30.06.07

2006 2005 2004 2003 2002 A Cash Flow from Operating Activities Net Profit before Interest,Tax and Extraordinary Items 1422.90 2702.50 2192.10 1788.20 1479.00 1736.40 Adjustment for: Add: Depreciation & Amortisation 351.90 613.10 561.60 492.90 448.00 412.40 Preliminary expenses written off 0.00 0.00 0.00 0.00 0.00 3.60 Oracle Project Cost written off 0.00 0.00 0.00 22.70 22.70 22.70 Fixed Asset written off 10.40 1.60 0.00 16.90 8.40 5.90 Unrealised foreigh exchange (gain)/loss (net) (10.40) 0.00 0.00 0.00 0.00 (0.10) Provisions 0.00 0.00 0.00 0.00 1.80 1.10 Bad Debts written off 0.00 0.00 0.00 0.00 17.80 8.80 Provision For Bad & Doubtful Debt 36.00 0.00 0.00 0.00 0.00 0.00 Provision For Leave Encashment 7.50 0.00 0.00 0.00 0.00 0.00 Provision For Wealth Tax 0.10 0.00 0.00 0.00 0.00 0.00 Provision for diminution in value of investments 0.00 0.00 0.00 0.00 1.10 0.00 Loss on sale of assets 0.00 0.00 0.00 2.30 0.00 0.50 Less: Profit on sale of Assets (105.30) (336.50) (89.90) 0.00 (3.20) 0.00 Interest Received (15.50) (24.90) (10.40) (11.90) (35.80) (45.80) Liabilities no longer required - written back (1.60) 0.00 0.00 (0.10) (2.00) 0.00 Operating Profit before Working Capital Changes 1696.00 2955.80 2653.40 2311.00 1937.80 2145.50 (Increase)/Decrease in Trade and Other Receivables (1468.00) (1914.10) (2268.00) (307.00) (228.50) (828.80) (Increase)/Decrease in Inventories 372.80 (1266.80) (676.80) (915.20) 93.60 (757.20) (Increase)/Decrease in Trade Payables & Other Liabilities (93.70) 476.20 1602.00 1263.20 (35.10) 640.20 Cash generated from operation 507.10 251.10 1310.60 2352.00 1767.80 1199.70 Less: Payment of Direct Taxes (242.60) (672.00) (588.20) (497.90) (239.20) (453.10) Net Cash from Opearting Activities 264.50 (420.90) 722.40 1854.10 1528.60 746.60 B Cash Flow from Investing Activities Purchase of Fixed Assets (637.60) (1493.80) (1035.50) (1047.40) (799.50) (798.30)

157

Sale of Fixed Assets 116.10 422.40 138.10 13.80 13.60 10.20 Interest Received 19.70 41.90 5.90 12.40 60.90 21.50 Dividend Received Net Cash Flow from Investing Activities (501.80) (1029.50) (891.50) (1021.20) (725.00) (766.60) C Cash Flow from Fianacing Activities Net increase in Bank Borrowings (73.40) 1289.70 13.90 (105.00) (209.10) (362.60) Issue of Commercial Paper Loan 3500.00 5100.00 5000.00 3200.00 7300.00 6700.00 Repayment of Commercial Paper Loan (3500.00) (4300.00) (4600.00) (3200.00) (8400.00) (5600.00) Issue of Unsecured Debentures 14800.00 0.00 0.00 0.00 0.00 0.00 Redemption of Unsecured Debentures (13500.00) 0.00 0.00 0.00 (300.00) 0.00 Acceptance of Short Term Loan from Others 0.00 600.00 0.00 0.00 0.00 Interest and Discounts on issue of Commercial Paper (447.70) (609.00) (395.10) (369.00) (404.40) (448.90) Repayment of Term Loan 0.00 (700.00) 0.00 (3500.00) (300.00) (300.00) Fixed Deposit Receipts 0.00 0.00 0.00 0.00 0.00 0.00 Repayment of Fixed Deposits 0.00 0.00 0.00 (400.00) (510.50) (249.30) Acceptance of Term Loan 0.00 458.70 288.40 3500.00 2600.00 300.00 Repayment of Short Term Loan from Bank (22416.10) (109.50) 0.00 0.00 0.00 0.00 Interest Paid 0.00 (0.30) 0.00 0.00 0.00 0.00 Acceptance of Short Term Loan from Bank 22153.80 0.00 0.00 0.00 0.00 0.00 Dividend Paid includind Dividend Tax (282.00) (274.90) (275.40) (271.50) (292.00) (273.40) Net Cash Flow from Financing Activities 234.60 1454.70 31.80 (1145.50) (516.00) (234.20) Net increase in Cash and Cash Equivalents (2.70) 4.30 (137.30) (312.60) 287.60 (254.20) Cash and Cash Equivalents (Opening Balance) 1623.20 1618.90 1756.20 2068.80 1781.20 2035.40 Cash and Cash Equivalents (Closing Balance) 1620.50 1623.20 1618.90 1756.20 2068.80 1781.20 Notes to the Cash Flow Statement Cash In Hand 13.20 12.70 5.70 7.30 7.10 7.70 Cheques in Hand 637.10 767.20 531.20 556.40 573.90 430.90 Remittance in Transit 291.90 0.00 50.60 0.00 0.00 0.00 Balance with Bank 678.30 843.30 1031.40 1192.50 1487.80 1342.60 1620.50 1623.20 1618.90 1756.20 2068.80 1781.20

158

DIC INDIA LIMITED ( Consolidated) Annexure-IV Notes to the Consolidated Summary Statement of Assets and Liabilities and Consolidated Summary Statement of Profit and Loss as Restated ( All amounts in Rupees in Lacs unless otherwise stated) 1. List of Subsidiaries

Name of the Company Country of

Incorporation Proportion of

Ownership (a) DIC Coatings India Limited India 100% (b) Rohit (Printing Inks & Paints) Industries Pvt Limited India 100% 2. Notes on Adjustments made to Consolidated Summary Statement of Assets and Liabilities and Profit and Loss as Restated. a. During the financial year ended 31 December 2005 provision for Wealth Tax was regrouped from Provision for taxes to the head Rates and

taxes as included under Other Expenses. The effect of this regrouping has been considered for the years ended 31st December 2004, 31st December 2003 and 31st December 2002 as well.

b. Prior period adjustments as disclosed in the Profit and Loss Account for the year ended 31 December 2002 has been adjusted with opening reserves.

c. Debts considered doubtful of recovery and written off in the Profit and Loss accounts when recovered subsequently have been adjusted with the profits of the

years in which such debts were written off.

d. The group has written back to the Profit and Loss Account provisions and accruals made on estimates which had been provided for in the earlier years but no

longer considered payable. Accordingly the effect of these write backs has been considered in the respective years in which these accruals were originally recorded with a corresponding reduction in the recorded period expenses in the " Summary Statement of Profits and Losses as Restated".

e. Provision for taxes for earlier years written back has been adjusted with the profits of the years to which the provision relates.

159

f. During the year 2002 DIC Coating India Limited changed its accounting policy in respect of providing for depreciation on fixed assets so as to adopt a uniform method of depreciation for the same class of assets. This retrospective change resulted in an additional depreciation charge including Rs 24.6 Lacs relating to prior years which has been adjusted with the opening reserve.

3. Qualifications in the Auditors’ Report

(a) The auditors in their report for the six months period ended 30th June, 2007 have commented that provision for certain Employee Benefits as per

Accounting Standard – 15 (Revised) on Employee Benefits issued by the Institute of Chartered Accountants of India in respect of DIC Coatings India Limited has not been ascertained and in the absence of which they were unable to comment on the appropriateness of the provision made in this regard. No adjustment in the Consolidated Summary Statement of Profit and Loss (Restated), Consolidated Summary Statement of Assets and Liabilities (Restated) and the Consolidated Statement of Cash Flows (Restated) has been considered in respect therof in the absence of relevant information.

(b) The auditors in their report for the six months period ended 30st June, 2007 have commented on the fact that disclosure in terms of Accounting Standard 15

(Revised) on Employee Benefits issued by the Institute of Chartered Accountants of India has not been considered in the financial statements for the six months period ended 30th June 2007 of DIC India Limited. No adjustment in the Consolidated Summary Statement of Profit and Loss (Restated) and Consolidated Summary Statement of Assets and Liabilities (Restated) has been considered in respect therof.

c) The auditors in their report for the six months period ended 30th June, 2007 have commented that in the absence of relevant information and data they were

unable to verify the segment assests and segment liabilities for the period from 1st January 2007 to 30th June 2007, which has no impact on the Consolidated Summary Statement of Profit and Loss (Restated) and Consolidated Summary Statement of Assets and Liabilities (Restated). Thus no adjustment is necessary in respect thereof.

4. The tax accounting year for all the Companies being different i.e. from 1st April to 31st March , Provision for taxation made in the accounts for the year ended on 31.12.2002, 31.12.2003, 31.12.2004,31.12.2005 and 31.12.2006 is based on the profit for the respective calendar year including the profit for the period from 1st January to 31st March. Ultimate liability for taxation is determined on the basis of the profit for the last nine months of the respective financial period together with that of subsequent three months up to 31st March following as one composite income. Provision for six months ended on 30.06.2007 is based on the profit for the six months ended 30.06.2007

As At As at December 31st 30.06.2007 2006 2005 2004 2003 2002

5 Estimated amount of Contracts remaining to be executed on Capital Account

376.39 385.50 88.80 72.00 24.40 48.30

6 Contingent Liabilities:

160

Contingent Liability not provided for in respect of: (a) Income tax matter 164.74 91.10 67.80 67.80 0.00 0.00 (b) Disputed Sales Tax, excise duties etc. 761.46 745.80 1284.90 1239.10 781.30 739.60 (c ) Guarantees given on behalf of third parties 0.00 0.90 24.70 51.90 90.20 128.30 (d) Bills Discounted 531.86 407.20 208.20 0.00 0.00 0.00

(e) Claim against the Company not acknowledged as debts 0.00 0.00 20.70 0.00 0.00 0.00

7(a) 7(b)

In respect of DIC India Limited disclosure requirement in terms of Accounting Standard-15 (Revised) issued by the Institute of Chartered Accountants of India on Employees benefits effective from 1st January 2007 would be considered at the time of annual closure of accounts in December 2007.

In respect of DIC Coatings India Limited cost of employee benefit in accordance with Accounting Standard - 15 (Revised) is yet to be ascertained. Provision, however has been made in these accounts on an estimated basis and any variance in this regard will be adjusted at the year end.

8. Related Parties disclosure pursuant to Accounting Standard 18 issued by the Institute of Chartered Accountants of India

A List of Related parties For six months ended

For the year ended 31st December

30.06.2007 2006 2005 2004 2003 2002

Ultimate Holding Company






Japan

Dinippon Ink & Chemicals Inc,Japan

Holding Company DIC Asia Pacific Pte ltd. , Singapore





Singapore

Sun Chemical Group B.V, The Netherlands(up

to 29th April,2002)


Singapore(from 30th April,2002)

161

Fellow Subsidiaries (as certified by the management)






Sun Chemical Corp. Sun Chemical Corp. Sun Chemical Corp. Sun Chemical Ltd. Sun Chemical

Pigments S.L. Reichhold Ltd,

Canada




Sun Chemical Corp. Gunong Printing Ink (M) Sdn Bhd

Premier Polymers, Inc





DIC Alkylphenol Singapore Pte.

Ltd., Singapore

Reichhold Holding Inc

SC Funding LLC SC Funding LLC SC Funding LLC Camus Water Technologies LLC

Ault & Wiborg International

Reichhold Inc, USA


Insurance Corp.


Insurance Corp.


Insurance Corp.

SC Funding LLC Coates (Lanka) Ltd.

Reichhold Investimentos

Ltda





Insurance Corp.

Coates Screen, U.K.

Reichhold CZ s.r.o

Weesp Finance C.V. Weesp Finance C.V. Weesp Finance C.V. Sun Chemical Investments LLC

Coates Screen, U.S.A





Weesp Finance C.V. New England Manufacturers

Insurance Corp.


Rycoline LLC Rycoline LLC Sun Chemical Realty Holdings, Inc.


Beijing Reichhold

Organic Chemicals Ltd

Reichhold B.V.



Rycoline LLC Sun Chemical Realty Holdings, Inc.

Camus Water Technologies

LLC

Reichhold Finance Europe

B.V.

162




Rogersol, Inc. Chia Lung Chemical

Industrial Corp

Reichhold Holdings

International B.V

Sun Chemical Ltd. Sun Chemical Ltd. Sun Graphic, LLC Rycoline Inc. Coates (Ghangzhou)

PRC Ltd

Reichhold A.S.



Sun Chemical Ltd. Rycoline Products, Inc. Coates (Shenzhen)

Printing Supplies Co. Ltd.


Inmobiliaria Sunchem, S.A. de

C.V.



Sun Graphic, Inc. Coates Brothers (Australia) Pty

Ltd

Reichhold Inc, U.A.E


C.V.



Sun Chemical Ltd. Coates Brothers (Coates Brothers

Plc. U.K.)

Reichhold Holdings U.K.

Ltd






Reichhold Receivables

Corp.






Innovative Performance Systems Inc.


Sun Chemical Inks S.A. Sun Chemical (Chile) S.A.


Coates Brothers (Malasia) Sdn

Bhd

Camus Water Technologies

LLC



Sun Chemical Inks S.A. Sinclair International, Inc.

Coates Brothers (Singapore) Pte

Ltd

Coates Brothers PLC

163

Coates Brothers(Caribbean)

Ltd.


.



Coates Brothers (South Africa)

Ltd





.


Coates Brothers (West Africa)

Ltd



(formerly:Odeon International N.V.)

Sun Chemical Aruba N.V. (formerly:Odeon

International N.V.)


Sun Chemical S.A. Coates Brothers (Zambia) Ltd


Sun Chemical AG Sun Chemical AG Sun Chemical Aruba N.V. (formerly:Odeon

International N.V.)

Sun Chemical Inks S.A. Coates Brothers (Zimbabwe) Private Ltd

Coates Brothers (South Africa)

Ltd



Sun Chemical AG Sun Chemical do Brasil Ltda.

Coates Brothers New Zealand Ltd

Coates Brothers (West Africa)

Ltd

Visol, S.A. Visol, S.A. Sun Chemical N.V. Coates Brothers(Jamaica)Ltd.

Coates Brothers(Hongko

ng)Ltd.

Coates Brothers (Zimbabwe) Private Ltd

O+R Inktchemie NV O+R Inktchemie NV Visol, S.A. Coates Brothers(Caribbean)Ltd

.


Coates Lorilleux Switzerland

Sun Chemical A/S Sun Chemical A/S O+R Inktchemie NV Sinclair del Centro America S.A.

Coates Lorilleux AB, Sweden

Coates Lorilleux Portugal

Sun Chemical Inks A/S

Sun Chemical Inks A/S Sun Chemical A/S Sinclair del Ecuador S.A.


U.K.

Coates Lorilleux AB

Sun Chemical Ltd. Sun Chemical Ltd. Sun Chemical Inks A/S Sun Chemical Ecuador S.A.


Coates Lorilleux A.S., Norway

164



Sun Chemical Ltd. Sun Chemical Aruba N.V. (formerly:Odeon

International N.V.)



ECG Holdings Ltd. ECG Holdings Ltd. Coates Brothers Sun Chemical AG Coates Lorilleux Ptg. Inks Division

Coates Lorilleux OY, Finland

Watt Gilchrist Ltd. Watt Gilchrist Ltd. Jackview Ltd. Sun Chemical N.V. Coates Lorilleux S.A. Spain

Coates Lorilleux Poland SP ZOO



Sparkybrook Ltd. Visol, S.A. Coates Lorilleux SRO


U.K.





Coates of Ireland Ltd



Insurance Co.Ltd.


Insurance Co.Ltd.


Sun Chemical A/S Coates Screen Inks GmbH

Coates Lorilleux S.A. Spain

Weesp Unlimited Weesp Unlimited European Manufacturers

Insurance Co.Ltd.

Sun Chemical Inks A/S Coates Electrographics


Sun Chemical Oy Sun Chemical Oy Weesp Unlimited Sun Chemical Ltd. Cotisa Tintas S.L Coates Lorilleux

SRO

Sun Chemical S.A.S Sun Chemical S.A.S Sun Chemical Oy Coates Brothers Dainichi Building

Materials Inc.

Coates of Ireland Ltd



Sun Chemical S.A. Coates Lorilleux Belfast Ltd.


(Philippines) Inc.

Coates Screen Inks GmbH

165




S.A.(FCE)

Jackview Ltd. Dainippon Ink & Chemicals

(Thailand) Co., Ltd

Coates Screen USA


Druckfarben GmbH




Sparkybrook Ltd. Dainippon Ink and Chemicals

(HK) Ltd

Coates Screen UK




Sun Chemical Inks (Ireland) Ltd.

Dainippon Ink Ecp-Engineering

Co. Ltd.

Coates Zambia Ltd




Coates of Ireland Ltd Deqing DIC Synthetic Resins

Ltd

Cotisa Tintas S.L





DIC (China) Co., Ltd.

DIC Americas, Inc.

Sun Chemical Central Europe

Holding & Co KG


KG



Insurance Co.Ltd.

DIC (Malaysia)Sdn

Bhd

Reichhold Finance USA.,

Inc




Sun Chemical Oy DIC (Sarawak) Sdn Bhd

Reichhold Management Inc

Sun Chemical B.V. Sun Chemical B.V. Sun Chemical Lasfelde GmbH

Sun Chemical S.A. DIC (Taiwan ) Ltd

Reichhold Quimica de

Mexico, S.A de C.V.




KG


S.A.(FCE)

DIC Americas, Inc.


Eques Coatings B.V. Eques Coatings B.V. Sun Chemical Central Europe Holding GmbH



DIC Berlin GmbH R&D

Laboratory


166

Eques Coatings C.V. Eques Coatings C.V. Sun Chemical B.V. Sun Chemical Holding

GmbH DIC Capital

Corp. Reichhold

Denmark A.S.



Chemical KFT)



Chemical KFT)



DIC Career Co. Ltd.

Reichhold S.A.



Eques Coatings B.V. Sun Chemical Osterode Druckfarben GmbH

DIC Coatings S.L

Reichhold Gmbh


Sun Chemical, d.o.o.e.l. Eques Coatings C.V. Hartmann Druckfarben GmbH


Reichhold Finance B.V.

Sun Chemical, d.o.o. Sun Chemical, d.o.o. Sun Chemical Nyomdafestek


Chemical KFT)



Reichhold Investments,

B.V.


Lorilleux A/S)


Lorilleux A/S)

Sun Chemical S.p.A. Sun Chemical Lasfelde GmbH

DIC Colorants, Inc.

Reichhold S.r.l.

Sun Chemical, S.r.o. Sun Chemical, S.r.o. Sun Chemical Group S.p.A.


KG


Reichhold Holdings A.S.

Sun Chemical, S.r.o. Sun Chemical, S.r.o. Sun Chemical, D.O.O. Sun Chemical Central Europe Holding GmbH

DIC Colour & Design Co. Ltd.




Sun Chemical, D.O.O. Sun Chemical B.V. DIC Colour Industries Sdn

Bhd

Teeches Insurance Ltd.,

Bermuda

Sun Chemical s.r.l. Sun Chemical s.r.l. Sun Chemical A/S (formerly:Coates

Lorilleux A/S)



Bhd

Reichhold U.K. Ltd

167

Sun Chemical ZAO Sun Chemical ZAO Sun Chemical, S.r.o. Sun Chemical Nyomdafestek


Chemical KFT)

DIC EP, Inc Reichhold Corporate

Holding B.V.

Sun Chemical S.A. Sun Chemical S.A. Sun Chemical, S.r.o. Sun Chemical S.p.A. DIC Epoxy (Malayasia) Sdn

Bhd

Beijing Reichhold

Organic Chemicals Ltd




Lorilleux S.A.)



DIC Europe GmbH

Gibbon Group plc





Sun Chemical s.r.l. Sun Chemical, D.O.O. DIC Express Co. Ltd.

Gibbon Finecal Ltd.

Hartman d.o.o. Hartman d.o.o. Sun Chemical ZAO Sun Chemical, D.O.O. DIC Filtec., Inc. Gibbon Inks and Coatings Ltd.



Sun Chemical OOO Sun Chemical A/S (formerly:Coates

Lorilleux A/S)

DIC Global Logistics Co.

Ltd.

Inmobiliarla Sun Chem., S.A. de

C.V.

Sun Chemical AB Sun Chemical AB Sun Chemical S.A. Sun Chemical, S.r.o. DIC Holdings (M) Sdn.Bhd

Kemisk Vaerk Koge (U.K.) Ltd.

CST Grafiska AB CST Grafiska AB Sun Chemical Pigments S.L.(formerly:Coates

Lorilleux S.A.)

Coates Lorilleux SRO. DIC Imaging Products U.S.A

Inc

Polychrome Corp

168





Sun Chemical, S.r.o. DIC Information Service Inc.




Hartman d.o.o. Sun Chemical Portugal-Tintas Graficas Ltda.

DIC Interior Co. Ltd.

Hartman., d.o.o




Sun Chemical s.r.l. DIC International

(Australia) Pty Ltd

Hartman Druckfarben

GmbH


San.Tic.A.S.


San.Tic.A.S.

Sun Chemical AB Sun Chemical A/O DIC International

(NZ) Ltd

Hartman-Sun Chemical EOOD





CST Grafiska AB Sun Chemical Moscow Printing Ink

DIC International

(Thailand) Co Ltd

Interbak AS






Coates Lorilleux LLC DIC International

(USA) Inc





Sun Chemical S.A. DIC International

Chemicals (S) Pte Ltd

SC Funding LLC

Coates Brothers(Zimbabwe)

Private Ltd.


vate Ltd.



Lorilleux S.A.)

DIC Korea Corp Sinclair del Centro America

S.A.




San.Tic.A.S.



DIC Lifetec Co. Ltd.


169



Interbak AS. Hartman d.o.o. DIC Machinery & Printers

Supplies, Inc.

Sinclair S.A.

DIC Americas, Inc. DIC Americas, Inc. Sun Chemical Murekkep ve Kimya


Sun Chemical AB DIC Machinery & Supplies Sdn

Bhd

Sinclair International, Inc






DIC Plapallet Pte Ltd., Singapore






DIC Plastics, Inc.

Sun Chemical A/O

Premier Polymers, LLC

Premier Polymers, LLC Coates Brothers(Zimbabwe)Pri

vate Ltd.

Coates Lorilleux A.S. DIC Precision Corp.


DIC Imaging Products U.S.A.,

LLC



Interbak AS. DIC Sheet, Inc. Sun Chemical A/S, Norway

DIC Europe GmbH DIC Europe GmbH Coates Brothers(South Africa)Limited.



DIC Space Amenity Co.

Ltd.

Sun Chemical AB, Sweden



DIC Americas, Inc. Coates Brothers(Zambia)Ltd.


DIC Synthetic Resins

(Zhongshan) Co Ltd


DIC Coatings, S.L. DIC Coatings, S.L. DIC International (USA), LLC


DIC Technologies

Corp.


Switzerland

DIC Holdings B.V. DIC Holdings B.V. Earthrise Nutritionals LLC


vate Ltd.

DIC Technologies

Ltd.

Sun Chemical Corp

170



Premier Polymers, LLC Coates Brothers(East Africa)Ltd.

DIC Zhangjiagang

Chemicals Co., Ltd.

Sun Chemical Ltd., U.K.





Shenzhen Coates Lorilleux

Chemicals Ltd

Advanced General Printing

Insk Ltd.



DIC NC Properties, LLC

Reichhold Investments B.V.

DK Polymer Corp.


DIC (Taiwan) Ltd. DIC (Taiwan) Ltd. DIC Europe GmbH Reichhold Holdings US, Inc. (formerly:DIC

Americas,Inc.)

Earthrise Nutritionals





Reichhold Management, Inc.

European Manufacturers Insurance Co.

Ltd.,Ireland




DIC Coatings, S.L. Reichhold Holding, Inc. France Chemie Experimentale

S.A. (FCE)


PT. DIC Graphics PT. DIC Graphics DIC Performance Resins GmbH

Reichhold, Inc. Fuji Label Co., Ltd.

Sun Chemical Inks (Ireland)

Ltd




Reichhold Finance U.S.A., Inc.


Sun Chemical Inks A/S





Guangshou DIC Express Co. Ltd.


171

DIC Plapallet Pte., Ltd.

DIC Plapallet Pte., Ltd. DIC (Taiwan) Ltd. Innovative Performance Systems, Inc.

Guangzhou DIC International

Trading Co Ltd

Sun Chemical Ltd, Canada

DIC International Chemicals(S)Pte.,Ltd

.



Reichhold Ltd. Hainan DIC Microalgae Co

Ltd





Reichhold Quimica de Mexico, S.A. de C.V.

Hartman., d.o.o., Slovenia


Ink


Co., Ltd.


Co., Ltd.

PT. DIC Graphics Reichhold Investimentos Ltda.

Hartmann Druckfarben

GmbH

Sun Chemical N.V.

Siam Algae Co., Ltd. Siam Algae Co., Ltd. P.T. Pardic Jaya Chemicals

Reichhold do Brasil Ltda.

Hartman-Sun Chemical

EOOD, Bulgeria

Sun Chemical Investments Plc




Reichhold Trading S/A Immobiliaria Sunchem, S.A.

de C.V., Mexico

Sun Chemical Equador S.A.



DIC Plapallet Pte., Ltd. Teeches Insurance Ltd. Shanghai DIC International

Trading Co Ltd


C.V.

Coates Thailand Ltd. Coates Thailand Ltd. DIC International Chemicals(S)Pte.,Ltd.


Innovative Performance

Systems., Inc.


TFE Company Ltd. TFE Company Ltd. DIC Alkylphenol Singapore Pte., Ltd.

Reichhold Holdings Austria GmbH.

Interbak AS Sun Chemical Nyomdafestek

Kereskedemi




Co., Ltd.

Reichhold CZ s.r.o. Jackview Limited., U.K.

Sun Chemical Druckfarben

GmbH

172





Siam Algae Co., Ltd. Reichhold Denmark A.S.

Kitanihon DIC Co. Ltd.

Sun Chemical Druckfarben

Moers GmbH




Oy Reichhold AB Kyushu Polymer Co. Ltd.

Sun Chemical Oy

DIC(China)Co., Ltd. DIC(China)Co., Ltd. Siam Chemical Industry Co., Ltd.

Reichhold SAS (formerly:Reichhold

S.A.)





Coates Thailand Ltd. Reichhold France SAS Nantong DIC Color Co., Ltd

Sun Chemical Pigments S.L.



TFE Company Ltd. Reichhold GmbH Nichei Plastics, Inc

Sun Chemical Pigments GmbH

Qingdao DIC Finechemicals Co.,

Ltd.



Reichhold B.V. Nippon Plapallet Co.

Sun Chemical Portugal – Tintas

Graficas S.A.





Reichhold Holdings International

B.V.(formerly:Swift Houtstra International

B.V.)

Nichiei Kaihatsu, Inc.

Sun Chemical S.A. Argentina




Reichhold Corporate Holdings B.V.


Sun Chemical S.A. France



Shanghai DIC Pressure-sensitive Adhesive Materials Co.,Ltd.

DIC(China)Co., Ltd. Reichhold Corporate Holdings �B.V.

Nippon Decor, Inc.

Sun Chemical S.A. Spain

173




Reichhold Finance B.V. Nishinihon Butyphenol, Inc.



Co.,Ltd.


Co.,Ltd.




Sun Chemical S.p.A




Reichhold S.r.l. P.T. DIC Astra Chemicals

Sun Chemical Services S.A.




Reichhold A.S. P.T. DIC Graphics

Sun Chemical Sp (z.o.o) (Ltd)

Zhaoqing DIC Gum

Rosins, Ltd. Zhaoqing DIC Gum

Rosins, Ltd. Shanghai DIC Ink Co.,

Ltd. Reichhold Holding A.S. P.T. DIC

Indonesia Sun Chemical

Zagreb d.o.o

Guangzhou DIC International Co.,

Ltd.



Reichhold Norway A.S. P.T. Pardic Jaya Chemicals

Sun Chemical D.O.O.,

Macedonia

DIC Synthetic Resins (Zhongshan) Co.,

Ltd.



Co.,Ltd.

Reichhold Sverige AB Premier Polymers, Inc


Yugoslavia


Limited.


Limited.


Reichhold Holdings (U.K.) Ltd.

Prisma Panama S.A.

Sun Chemical S.r.o Czekh




Reichhold U.K. Ltd. PT Coates Indonesia

Sun Chemical Group S.P.A.




Beijing Reichhold Organic Chemicals Ltd.

Qingdao DIC Finechemicals

Co. Ltd

Sun Chemical S.r.o., Slovakia




Reichhold, Inc. Qingdao DIC Liquid Crystal

Co., Ltd

Tintas S.A.

Seiko PMC (Shanghai)

Commerce & Trading Corp.

Seiko PMC (Shanghai) Commerce & Trading

Corp.


DIC Americas, Inc. Shanghai DIC Ink Co Ltd

Usher-Walker plc

174




Limited.

DIC International (USA), Inc.

Reichhold A.S. Usher-Walker Group Ltd.


Ltd.


Ltd.

Coates (Guangzhou) PRC Ltd.

Earthrise Nutritionals Inc.

Reichhold B.V. DIC France S.A.R.L.



Coates (Shenzhen)Printing

Co.,Ltd.

Premier Polymers, Inc. Reichhold Chemie GmbH

Visol S.A.

Changzhou Huari New Material Co.,

Ltd.



DIC Imaging Products U.S.A., Inc.

Reichhold Corporate

Holdings B.V., Holland

DIC Europe GmbH




Ltd.

DIC Europe GmbH Reichhold CZ s.r.o

DIC France S.A.R.L

DIC Express Co., Ltd.

DIC Express Co., Ltd. Guangzhou DIC Express Co., Ltd.


Reichhold Denmark AS.

DIC (U.K.) Ltd




Eques Coatings B.V. Reichhold do Brasil Ltda.,

Brazil

DIC International

(USA) Inc




DIC Coatings, S.L. Reichhold Finance B.V.

DIC Imaging Products U.S.A

Inc





Reichhold Finance Europe

B.V.

Earthis Nutritionals



DIC Express Co., Ltd. DIC (Taiwan) Ltd. Reichhold Finance USA.,

Inc

DIC Berlin GmbH R&D

Laboratory






DIC Coatings S.L



Coates Brothers(Hong Kong)Ltd.


Reichhold Gmbh Zhongshan DIC Colour Co Ltd

175

Coates Brothers(Malaysia)S

DN.BHD.

Coates Brothers(Malaysia)SD

N.BHD.


PT. DIC Graphics Reichhold Holding (U.K.)

Ltd

Hainan DIC Microalgae Co

Ltd





Reichhold U.K. Ltd

Qingdao DIC Finechemicals

Co. Ltd

DIC India Ltd. DIC India Ltd. DIC (Malaysia) Sdn.

Bhd. DIC Asia Pacific Pte

Ltd Reichhold

Holding A.S. Shanghai DIC

Ink Co Ltd




DIC Plapallet Pte., Ltd. Reichhold Holding Inc


DIC Korea Corp. DIC Korea Corp. Coates Brothers(Malaysia)SD

N.BHD.


Reichhold Holdings Austria

GmbH

Shenzhen Coates Lorilleux

chemicals Ltd.





Reichhold Holdings

International B.V

Shanghai DIC International

Tradin g Co Ltd



DIC India Ltd. Dainippon Ink & Chemicals (Thailand)

Co., Ltd.

Reichhold Holdings US,

Inc. (Formerly DIC Americas,

Inc.)

Deqing DIC Synthetic Resins

Ltd

DIC Colortron Pty.Ltd.

DIC Colortron Pty.Ltd. DIC Coatings India Ltd.

Siam Algae Co., Ltd. Reichhold Inc, U.A.E

Guangzhou DIC International

Trading Co Ltd



DIC Korea Corp. DIC International (Thailand) Co., Ltd.

Reichhold Inc, USA

DIC Synthetic Resins

(Zhongshan) Co Ltd





Reichhold Investimentos

Ltda

Taiyuan Coates Lorilleuz

Chemicals Ltd

176




Coates Thailand Ltd. Reichhold Ltd, Canada

Coates (Ghangzhou)

PRC Ltd



DIC Colortron Pty.Ltd. TFE Company Ltd. Reichhold Management Inc

DIC Alkydphenol

Singapore Pte. Ltd.






Coates Printing (Shenzhen)

Supplier Ltd.

DIC Machinery & Printer's Supplies,

Inc.





Reichhold Quimica de

Mexico, S.A de C.V.

Nantong DIC Color Co., Ltd

TOPIC.Co., Ltd. TOPIC.Co., Ltd. DIC Lanka (Private) Ltd.


Reichhold Receivables

Corp., U.S.A.

Dainippon Ink and Chemicals

(HK) Ltd

Kyushu Polymer Co.,

Ltd. Kyushu Polymer Co.,

Ltd. DIC (Vietnam) Co.,

Ltd. DIC(China)Co., Ltd. Reichhold S.r.l. DIC Express Co.

Ltd.


DIC Color Coating, Inc. DIC Investments Japan, Inc.


Reichhold SAS ( formarly:Reichh

old S.A.)

Tien Lee Hong Co. Ltd.

Kitanihon DIC Co.,Ltd.

Kitanihon DIC Co.,Ltd. DIC Machinery & Printer's Supplies, Inc.



Coates Brothers(Hongko

ng)Ltd.



TOPIC.Co., Ltd. Qingdao DIC Finechemicals Co., Ltd.


Chia Lung Chemical

Industries Corp (Ink)

DIC Technologies Ltd.

DIC Technologies Ltd. Kyushu Polymer Co., Ltd.


Renaissance, Inc. DIC (Taiwan ) Ltd

Nishinihon

Butylphenol,Inc. Nishinihon

Butylphenol,Inc. DIC Color Coating, Inc. Shanghai DIC Ink Co.,

Ltd. SC Funding LLC DIC Korea Corp

DIC Sheet, Inc. DIC Sheet, Inc. Kitanihon DIC Co.,Ltd. Shenzhen-DIC Co.,

Ltd. Seiko PMC

Corp. P.T. DIC Astra

Chemicals

177

DIC Precision Corp. DIC Precision Corp. Shin DIC Kako Co., Ltd.


Co.,Ltd.

Seiko Polymer Corp.

P.T. DIC Indonesia

DIC Plastics, Inc. DIC Plastics, Inc. DIC Technologies Ltd. DIC Logistics China Co., Ltd.

Amagadai Golf Club, Inc.


Nichiei Plastics, Inc. Nichiei Plastics, Inc. Nishinihon Butylphenol,Inc.



PT Coates Indonesia

Nippon Plapallet Co. Nippon Plapallet Co. DIC Sheet, Inc. Zhaoqing DIC Gum Rosins, Ltd.

Shin DIC Kako Co. Ltd.


Bhd

DIC EP, Inc. DIC EP, Inc. DIC Precision Corp. Guangzhou DIC International Co., Ltd.

Siam Algae Co Ltd

Gunong Printing Ink (M) Sdn Bhd

DIC Colorants Inc. DIC Colorants Inc. DIC Plastics, Inc. DIC Synthetic Resins (Zhongshan) Co., Ltd.

Siam Chemical Industry Co.

Ltd., Thailand

DIC (Malaysia)Sdn

Bhd

Fuji Label Co., Ltd. Fuji Label Co., Ltd. Nichiei Plastics, Inc. Taiyuan Coates Lorilleux Chemicals

Limited.


DIC Colour Industries Sdn

Bhd

DIC Filtec, Inc. DIC Filtec, Inc. Nippon Plapallet Co. Coates (Guangzhou) PRC Ltd.

Sinclair del Centro America

S.A.

DIC Machinery & Supplies Sdn

Bhd



DIC EP, Inc. Coates(Shenzhen)Printing Supplies Co.,Ltd.


DIC (Sarawak) Sdn Bhd

DIC Lifetec Co.,Ltd. DIC Lifetec Co.,Ltd. DIC Colorants Inc. DIC Zhangjiagang Chemicals Co., Ltd.

Sinclair International, Inc, Panama

DIC Epoxy (Malayasia) Sdn

Bhd

178



Fuji Label Co., Ltd. Shenzhen Coates Lorilleux Chemicals

Ltd.

Sparkybrook Limited., U.K.

DIC Plapallet Pte Ltd.

Nippon Decor, Inc. Nippon Decor, Inc. DIC Filtec, Inc. Guangzhou DIC Express Co., Ltd.


Coates Brothers (Malasia) Sdn

Bhd

DIC Interior Co., Ltd. DIC Interior Co., Ltd. Nihon Packaging

Material Co. Ltd. Nantong DIC Color

Co., Ltd. Sun Chemical

A/O, Russia DIC Holdings (M) Sdn.Bhd

DIC Capital Corp. DIC Capital Corp. DIC Lifetec Co.,Ltd. Changzhou Huari New Material Co., Ltd.


Kodak Polychrome

Graphics Co. Ltd.

Renaissance, Inc. Renaissance, Inc. Dainichi Building Materials, Inc.


Sun Chemical A/S, Norway

Kodak Polychrome

Graphics LLC



Nippon Decor, Inc. DIC Express Co., Ltd. Sun Chemical AB, Sweden

DIC International

Chemicals (S) Pte Ltd



DIC Interior Co., Ltd. Tien Lee Hong Co., Ltd.


Switzerland

Coates Brothers (Singapore) Pte

Ltd

Seiko PMC Corp. Seiko PMC Corp. DIC Capital Corp. Coates Brothers(Hong Kong)Ltd.


(formerly: Odeon

International N.V.)


(Thailand) Co., Ltd



Renaissance, Inc. DIC Compounds (Malaysia) Sdn. Bhd.


Siam Algae Co Ltd





Sun Chemical Corp,U.S.A.

Siam Chemical Osterode

Druckfarben GmbH

179


DIC Technology Corp. Nichiei Development Co., Ltd..



Macedonia

DIC International

(Thailand) Co Ltd

DIC Career Co.,Ltd. DIC Career Co.,Ltd. Seiko PMC Corp. DIC Epoxy (Malaysia) Sdn.Bhd.


Yugoslavia

Sudarshan Chemical

Industries Ltd.



Seiko Polymer Corp. Coates Brothers(Malaysia)SD

N.BHD.

Sun Chemical de Panama S.A.







Coates New Zealand Ltd.




DIC India Ltd. Sun Chemical Equador S.A.

DIC International

(NZ) Ltd


de C.V.


de C.V.

DIC Technology Corp. DIC Coatings India Ltd.



Tintas S.A. Tintas S.A. DIC Career Co.,Ltd. DIC Korea Corp. Sun Chemical Inks (Ireland)

Ltd

DIC International

(Australia) Pty Ltd

Lorilleux Maroc S.A. Lorilleux Maroc S.A. DIC Colour & Design Co.,Ltd.


Sun Chemical Inks A/S, Denmark

Coates Brothers (Australia) Pty

Ltd




Coates Zealand Ltd. Sun Chemical Inks S.A.

Dow Reichold Speciality Latex

LLC


Ltd.


Ltd.


DIC Colortron Pty.Ltd. Sun Chemical Investments LLC

Yantai Huada chemicals

Industry Co. Ltd.







180


Co.,Ltd.


Co.,Ltd.


de C.V.

Coates Brothers Australia Pty Ltd.

Sun Chemical Ltd, British

Virgin Islands

Prisma Panama S.A.


Chemicals Co., Ltd.


Chemicals Co., Ltd.

Tintas S.A. Coates (Lanka) Ltd. Sun Chemical Ltd, Canada

Sun Chemical de Panama

Shanghai Showa Highpolymer Co.,

Ltd.


Lorilleux Maroc S.A. DIC Investments Japan, Inc.


Sun Chemical de Centro america,

S.A.






Ink

Sun Chemical Corp, USA



Nippon DPC Corp. Towa Process Inc. Sun Chemical N.V., Belgium

Coates (Lanka) Ltd.




Ltd.


Sun Chemical Nyomdafestek Kereskedemi,

Hungary

Aekyung Chemnical Co.

Ltd.




DIC Color Coating, Inc. Sun Chemical of Michigan LLC





Co.,Ltd.

Kitanihon DIC Co.,Ltd. Sun Chemical Offset do Brasil

Ltda

Sun Chemical European

Dispersion Plant S.A.

DIC Pakistan Ltd. DIC Pakistan Ltd. TOA-DIC Zhangjiagang

Chemicals Co., Ltd.



Druckfarben GmbH

Sun Chemical s.r.l.

Hamamatsu Dainippon Ink

Hanbai, Inc.



DIC Technologies Ltd. Sun Chemical Oy, Finland







Reichhold do Brasil Ltda.,

Brazil

181




DK Polymer Corp. Sun Chemical Portugal – Tintas

Graficas S.A.

DIC Finance (B.V.I.) Ltd.,

Oxirane Chemical Corp.



DIC Sheet, Inc. Sun Chemical S.A. Argentina





DIC Precision Corp. Sun Chemical S.A. France

TFE Company Ltd.,


Ltd.


Ltd.


DIC Plastics, Inc. Sun Chemical S.A. Spain


(Philippines) Inc.



DIC Pakistan Ltd. Nichiei Plastics, Inc. Sun Chemical S.A.de C.V.

Mexico

Nippon DPC Corp.


Shin Nihon Kasei, Inc. Hamamatsu Dainippon Ink Hanbai, Inc.

Nippon Plapallet Co. Sun Chemical S.p.A

Wuxi DIC Epoxy Co. Ltd.




DIC EP, Inc. Sun Chemical s.r.l., Romania

Ault & Wiborg International

DH Material Inc. DH Material Inc. DIC Manroland Co.,Ltd.

DIC Colorants Inc. Sun Chemical S.r.o Czekh

Kang Nam Chemical Co.,

Ltd.




Fuji Label Co., Ltd. Sun Chemical S.r.o., Slovakia


SUNDIC, Incorporated Mizushima Kasozai, Inc.

DIC Filtec, Inc. Sun Chemical Services S.A.,

Belgium

Techno Science, Inc. Techno Science, Inc. DIC-Hexcel Ltd. Nihon Packaging Material Co. Ltd.

Sun Chemical Sp (z.o.o)

182

YD Plastics Co., Ltd. YD Plastics Co., Ltd. Nippon Epoxy Resin Manufacturing Co.,

Ltd.

DIC Lifetec Co.,Ltd. Sun Chemical Swale


Japan Vilene Co., Ltd. Japan Formalin Company, Inc.



Tsuruga Terminals

Co. Tsuruga Terminals Co. Shin Nihon Kasei, Inc. Nippon Decor, Inc. Sun Chemical

Zagreb d.o.o




DIC Interior Co., Ltd. Sun Chemicals (Colores) S.A. de

C.V. Mexico

DH Material Inc. DIC Capital Corp. Sudarshan Chemicals

Industries Ltd.


Renaissance, Inc. Taiyuan Coates Lorilleuz

Chemicals Ltd

SUNDIC, Incorporated DIC Information Service Inc.

Teeches Insurance Ltd.,

Bermuda

Techno Science, Inc. Nichiei Kaihatsu, Inc. TFE Company

Ltd., Thailand

YD Plastics Co., Ltd. Seiko PMC Corp. Tien Lee Hong

Co. Ltd.

Mannan Foods Co.,

Ltd. Seiko Polymer Corp. Towa Process

Inc.

Japan Vilene Co., Ltd. Amagadai Golf Club,

Inc. Visol S.A.

Shin Sanso Kagaku Co. Dainippon Ink Eco-Engineering Co., Ltd.

Weesp Finance C.V.

183

Tsuruga Terminals Co. DIC Global Logistics Co., Ltd.

Zhongshan DIC Colour Co Ltd



DIC Career Co.,Ltd.

DIC Colour & Design

Co.,Ltd.


CST Grafiska AB


Dagest S.A.

Kodak Polychrome Graphics Co.,Ltd.



de C.V.

Tintas S.A.


Dow Reichhold Specialty Latex LLC


184

Nippon DPC Corp.


Ltd.

Wuxi DIC Epoxy Co.,

Ltd.


Co.,Ltd.


Chemicals Co., Ltd.




Lidye Chemical Co.,

Ltd.



Coates Lorilleux (Pakistan) Ltd.


Gunma Kosoku Offset,

Inc.

185

Kodak Polychrome Graphics Ltd.

DIC Manroland

Co.,Ltd.

Oxirane Chemical

Corp.

Mizushima Kasozai,

Inc.

DIC-Hexcel Ltd.


Ltd.

Japan Formalin

Company, Inc.


DIC Bayer Polymer

Ltd.

Banpo Industries,Ltd.


Inc.


Techno Science, Inc.

YD Plastics Co., Ltd.

Mannan Foods Co.,

Ltd.


Shin Sanso Kagaku Co.

Tsuruga Terminals Co.

Tsuruga Chemicals

186

Service Co.

Key Management Personnel

P.K.Dutt P.K.Dutt P.K.Dutt P.K.Dutt P.K.Dutt P.K.Dutt

B.S.Kampani( upto

31st March 2007) B.S.Kampani B.S.Kampani B.S.Kampani B.S.Kampani B.S.Kampani

Anil Puri Anil Puri Anil Puri Anil Puri Anil Puri Anil Puri

B) Transactions with Related parties

Particulars For six months

ended For the year ended 31st December 30.06.2007 2006 2005 2004 2003 2002

I Sales & services to and other recoveries from related Parties

a) Ultimate Holding Company 19.43 13.11 18.75 9.25 2.14 1.28 b) Holding Company - 7.98 8.76 20.26 - 9.29 c) Fellow Subsidiaries 283.33 526.40 427.50 - 421.85 282.47 II Purchase/other services from related parties a) Ultimate Holding Company 415.00 926.89 546.53 552.38 278.32 376.77 b) Holding Company 4.32 18.38 17.20 - - - c) Fellow Subsidiaries 563.46 758.63 254.52 329.62 1,087.91 1,428.99 III Royalty Paid/Payable a) Ultimate Holding Company - - - - 61.25 266.70 b) Holding Company 249.02 432.06 338.48 317.45 233.57 - IV Dividend Paid/payable Holding Company - 158.48 158.48 158.48 150.95 163.65 V Remuneration paid/payable Key Management Personnel 42.84 104.66 89.02 82.52 80.77 76.29

VI Expenses incurred by the Company on behalf of the Group/Subsidiaries

Ultimate Holding Company 6.91 - - - - VII Payment of Interest Holding Company 16.77 7.16 - - - - VIII Outstanding Balance Payable

187

VIII(i) Purchase of Goods a) Ultimate Holding Company 299.34 535.85 469.11 259.81 149.90 206.76 b) Holding Company - 6.52 17.20 - - - c) Fellow Subsidiaries 292.49 235.66 93.45 115.02 - - VIII(ii) Royalty a) Ultimate Holding Company - - - - - 139.80 b) Holding Company 229.82 356.34 327.55 165.12 156.92 - VIII(iii) Dividend Holding Company - - - - - - VIII(iv) Loan Accepted a) Holding Company 458.70 465.86 - - - - b) Fellow Subsidiaries - - - - - - VIII(v) Interest Holding Company 16.77 - - - - - VIII(vi) Remuneration Key Management Personnel 7.73 25.74 27.00 25.25 27.35 23.88 IX Outstanding balance Receivable IX(i) Sale of Goods a) Ultimate Holding Company 1.09 b) Holding Company 148.79 - 8.76 7.81 - 9.23 c) Fellow Subsidiaries - 130.58 134.55 134.24 177.77 103.69 IX(ii) Recovery of expenses Holding Company - 6.91 - - - - IX(iii) Rendering of services a) Ultimate Holding Company - 7.31 8.18 6.19 - 0.92 b) Holding Company - - - 9.05 - - c) Fellow Subsidiaries - - 10.74 - - - iX (iv) Loans / Advances Granted a) Fellow Subsidiaries 27.48

188

9 Segment Reporting a Based on the guiding principles given in the Accounting Standard on Segment Reporting (AS17) issued by the Institute of Chartered Accountants of India the financial

information about the primary business segments are as under: Printing Inks Industrial Coatings Lamination Adhesive Total


30.06.07

For the year

ended 31.12.06

For the year

ended 31.12.05

For six month

s ended 30.06.

07

For the year

ended 31.12.06

For the year

ended 31.12.0

5


30.06.07

For the year

ended 31.12.

06

For the year

ended 31.12.05


30.06.07

For the year ended

31.12.06

For the year

ended 31.12.0

5

REVENUE

External Sales 18125.59

33115.10 27855.60 2026.7

6 3534.20 3107.5

0 843.40 1032.

40 246.20 20995.7

5 37681.70 31209.3

0

Less: Inter Segment sales

(21.56) (1.50) (0.30) (4.59) (113.60) (40.40) 0.00 (3.80) (26.15) (115.10) (44.50)

Total Revenue 18104.03 33113.60 27855.30 2022.1

7 3420.60 3067.1

0 843.40 1032.

40 242.40 20969.

60 37566.60 31164.8

0 RESULTS

Segment/Operating Results

743.96

1989.7 1812.20 275.47 344.80 369.20 97.21

221.10 (11.10)

1116.64 2555.6 2170.30

Un-allocated Income (Net of Expenses) 306.26 146.90 22.00

Interest Expenses (445.00

) (604.70) (375.60)

Provision for Tax ( including Deferred Tax & Fringe Benefit Tax

(342.28) (656.46) (585.40)

Net Profit

743.96 1989.7 1812.20 275.47 344.80 369.20 97.21 221.1

0 (11.10)

635.62 1441.34 1231.30

OTHER INFORMATION

189

Segment Assets 22435.43 24027.50 20797.50 2032.

52 1540.90 1451.7

0 1447.43 494.5

0 497.70 25915.3

8 26062.90 22746.9

0

Un-allocated Assets 2338.0

2 855.50 225.80

Total Assets 22435.43 24027.50 20797.50 2032.5

2 1540.90 1451.7

0 1447.43 494.5

0 497.70 28253.

40 26918.40 22972.7

0

Segment Liabilities 5983.60 6960.50 11763.70 552.63 368.80 388.80 579.78 133.4

0 26.30 7116.0

1 7462.70 12178.8

0

Un-allocated Liabilities & Provisions

21137.39 19455.70

10793.90

Total Liabilities 5983.60 6960.50 11763.70 552.63 368.80 388.80 579.78 133.4

0 26.30 28253.

40 26918.40 22972.7

0 Depreciation 261.44 543.10 497.70 16.41 20.40 20.70 8.71 29.20 29.50 286.56 592.70 547.90

Un-allocable Depreciation

39.64 10.50 12.20

Total Depreciation 261.44 543.10 497.70 16.41 20.40 20.70 8.71 29.20 29.50 326.20 603.20 560.10

Capital Expenditure including CWIP 579.91 18.38 598.29 1493.70 1188.20

b Segments Assets and Segment Liabilities for the six month period ending on 30th June 2007 given in table 9(a) above have been computed on estimated basis as per

available data.

10.

The Company has filed an application before the Honourable High Court of Calcutta under section 391, 394 and other applicable provisions of the Companies Act 1956 for merger of its subsidiary Rohit (Printing Ink and Paints) Industries Pvt Limited with itself with effect from April 1, 2007.

190

DIC INDIA LIMITED (CONSOLIDATED) Annexure V

SIGNIFICANT ACCOUNTING POLICY

ACCOUNTING CONVENTION

These financial statements are prepared under the historical cost convention. FIXED ASSETS Fixed assets are stated at their original cost (including cost incidental to acquisition) less depreciation. Loss on scrapping of Fixed Assets and profit or losses on sale of Fixed Assets are included in the Profit & Loss Account and calculated as the difference between the value realised and the book value. Depreciation is provided in accordance with Section 205 read with Schedule XIV to the Companies Act, 1956(the Act), in the following manner:

(xi) On plant and machinery and computers added during the period 01.11.1977 to 31.10.1987 on Straight Line Method, on the basis of specified period (within the meaning of Sec .205(2)(b)of the Act) determined in the year of acquisition, at rates prescribed under the Income Tax Act, 1961 and rules framed hereunder , as was in force during the relevant financial year.

(xii) On plant and machinery added from 01.11.1987, on Straight Line Method at rates specified in

Schedule XIV to the Act as existing at the time of capitalisation.

(xiii) On Silos included in plant and machinery added from 1.1.2006, on Straight Line Method @ 20% (xiv) On Research equipment added from 1.1.2003, on Straight Line Method @ 25% (xv) On Air conditioners, on Written Down Value Method @ 13.91%.

(xvi) On computers added from 01.11.1987, on Straight Line Method @ 25%.

(xvii) On all other assets, on Written Down Value Method, at rates specified in Schedule XIV to the Act.

(xviii) All assets costing Rs 5,000 or less are fully depreciated in the year of additions.

(xix) In respect of assets acquired, sold or discarded during the period, prorated depreciation, for the

period during which each such asset was in use, after rounding off part of the month to the whole month.

(xx) Leasehold land is amortized over the period of the lease and freehold land is not depreciated.

On Accounting Standard 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India becoming mandatory with effect from 01.04.2004, cash generating unit/assets are assessed for possible impairment at balance sheet dates based on external and internal sources of information. Impairment loss, if any, recognised as an expenses in the Profit & Loss Accounts

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IINNTTAANNGGIIBBLLEE AASSSSEETTSS On Accounting Standard on Intangible assets becoming mandatory for accounting period commencing on or after 01.04.2003, Intangible assets are recognised only when future economic benefits attributable to the assets will flow to the enterprises and cost can be measured reliably and are being amortized over its useful life of four years.

AASSSSEETTSS AACCQQUUIIRREEDD UUNNDDEERR LLEEAASSEE For assets acquired under operating lease, rentals payable are charged to profit and loss account. FFoorr aasssseettss aaccqquuiirreedd uunnddeerr ffiinnaannccee lleeaassee:: ((ii)) IInn rreessppeecctt ooff aasssseettss aaccqquuiirreedd pprriioorr ttoo 11..44..22000011,, rreennttaallss ppaayyaabbllee aarree cchhaarrggeedd ttoo tthhee PPrrooffiitt aanndd LLoossss AAccccoouunntt aanndd ffuuttuurree rreennttaallss aarree ddiisscclloosseedd aass ccoommmmiittmmeennttss.. (ii) In respect of assets acquired on or after 1st April, 2001, the same are capitalised at the lower of their respective cash cost and the present value of minimum lease payments after discounting them at an appropriate discount rate.

IINNVVEENNTTOORRIIEESS Inventories are valued using first-in first-out (FIFO) formula, and are valued at the lower of cost and net realizable value. In respect of finished goods, cost, comprises of expenditure incurred in the normal course of business in bringing inventories to their location and condition including relevant overheads, calculated on basis appropriate to the business carried on by our Company. Excise duty payable on finished goods lying in the factory of manufacture and Customs Duty payable in respect of goods, intended for trading, cleared from port but kept in bonded warehouse are included in the value of closing stock after creating suitable provision for the liability. Intermediates are valued inclusive of attributable production overheads. Stock of raw materials is valued inclusive of expenditure incurred in the normal course of business in bringing inventories to their present location. Customs duty payable for materials cleared from port but kept in bonded warehouse are included in the value of closing stock after creating suitable provision for liability.

IINNVVEESSTTMMEENNTTSS Long term investments are stated at cost, and where applicable, provision is made against diminution in value. Profits or losses on sale of investments are included in the Profit & Loss Account and calculated as the difference between the net proceeds realised and the book value. Dividends are accounted for in the year in which it is received. RETIREMENT / TERMINAL BENEFITS TThhee lliiaabbiilliittyy ffoorr GGrraattuuiittyy uunnddeerr tthhee PPaayymmeenntt ooff GGrraattuuiittyy AAcctt,, 11997722 aanndd ffoorr cceerrttaaiinn ccaatteeggoorriieess ooff eemmppllooyyeeeess iinn aaccccoorrddaannccee wwiitthh tthheeiirr ccoonnddiittiioonnss ooff eemmppllooyymmeenntt,, aaccccrruueedd dduurriinngg tthhee yyeeaarr iiss ddeetteerrmmiinneedd aatt tthhee yyeeaarr eenndd bbyy iinnddeeppeennddeenntt aaccttuuaarriieess,, ffuunnddeedd sseeppaarraatteellyy aanndd cchhaarrggeedd ttoo tthhee PPrrooffiitt && LLoossss AAccccoouunntt.. The expected annual cost of providing pension to management staff under the defined benefit scheme as per respective conditions of their employment is calculated at the year end by independent actuaries, funded separately and charged to the Profit & Loss Account. In respect of other categories of employee who are not covered under defined benefit scheme, contributions for pension are made to separate fund.

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The liability accrued during the year in respect of retirement/terminal benefit payable to certain employees governed by agreement with the Union/ representing them is actuarially determined at the year end and charged to the Profit & Loss Account. The liability accrued up to the close of the year for encashment of leave not availed by the management staff as stipulated in their respective terms of employment is actuarially determined at the year end and charged to the Profit and Loss Account. Short term employee benefits are recognized on an undiscounted basis whereas long term benefits are recognized on discounted basis.

SSAALLEESS Sales represent the amount received/receivable for goods sold including excise duty thereon.

TTRRAANNSSAACCTTIIOONNSS IINN FFOORREEIIGGNN CCUURRRREENNCCIIEESS Transactions in foreign currencies are accounted for in the following manner: (c) In case of forward exchange contract the premium or discount arising at the inception of a such contract is

amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the statement of Profit & Loss in reporting period in which the exchange rates changed. Profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the period.

(d) Transactions not covered by forward foreign exchange contracts are accounted for in the following manner :

(v) Export Sales and import purchases are accounted for at exchange rates prevailing at the time of the transactions.

(vi) Exchange difference related to the acquisition of Fixed Assets from country outside India is

adjusted in the carrying amount of related Fixed Assets.

(vii) Gains / losses (not related to the acquisition of Fixed Assets) arising out of the foreign currency transactions are recognised in the Profit and Loss Account.

(viii) Other assets and liabilities are restated at the rates ruling at the year-end and the differences on

such retranslation are recognised in the Profit and Loss Account

BBOORRRROOWWIINNGG CCOOSSTT Borrowing cost that are directly attributable to the acquisition or construction of an assets that necessarily takes a substantial period of time to get ready for its intended use are capitalised till substantial completion of all the activities that are necessary for this purpose. Other borrowing cost are charged to revenue.

AACCCCOOUUNNTTIINNGG FFOORR IINNCCOOMMEE TTAAXX CCuurrrreenntt ttaaxx//FFrriinnggee BBeenneeffiitt TTaaxx rreepprreesseennttss tthhee aammoouunntt tthhaatt ootthheerrwwiissee wwoouulldd hhaavvee bbeeeenn ppaayyaabbllee uunnddeerr tthhee IInnccoommee TTaaxx AAcctt,, 11996611 hhaadd tthhiiss ffiinnaanncciiaall yyeeaarr bbeeeenn rreecckkoonneedd aass tthhee bbaassiiss ffoorr ccoommppuuttaattiioonn ooff ttaaxx ppaayyaabbllee uunnddeerr tthhee pprreevvaaiilliinngg ttaaxxaattiioonn llaawwss.. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised.

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FINANCIAL INFORMATION OF GROUP COMPANIES 1. DIC (MALAYSIA) SDN BHD The company is incorporated as Gunong Printing Ink (M) Sdn Bhd on April 9, 1975, bearing company registration Number 23632-A under the applicable laws. The name of the company was changed to DIC (Malaysia) SDN BHD with effect from January 8, 2007 The principal place of business is situated at PT 501 & 502, Persiaran Sabak Bernam, Seksyen 26, Kawasan HICOM, 40400 Shah Alam, Selangor Darul Ehsan and the registered office is situated at 2nd Floor, No. 2-4, Jalan Manau, 50460 Kuala Lumpur. This company is currently engaged, inter alia, in the business of manufacturing and trading of printing inks, and letting off property. Shareholding Pattern The Shareholding Pattern as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore 5,37,05,202 93.50 Tabah Holdings Sdn Bhd 22,55,555 3.93 Ruang Pemula Sdn Bhd 14,75,245 2.57 Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Ng Chew Ying Director Mr Fong Ah Loon Director Mr Mitsunobu Miyasaka Director Mr Paul Koek Director Mr Nik Ariff Bin Nik Hassan Director Ms Fatimah Bet Sulaiman Director Financial Performance:

(Amount in MYR’000) FY 2006 FY 2005 FY 2004

Sales and other Income 139305 52827 29,494 Profit after tax 4987 680 1,558 Equity Capital 57436 12436 12,436 Reserves and Surplus 6535 8139 8,205 Earnings per share (MYR per share) 1.43 0.55 1.25 Net Asset Value (MYR per share) 23944 (6193) 20641 2. DIC MARKETING SDN BHD The company is incorporated as DIC (Malayasia) Sdn Bhd on February 26, 1974, bearing company registration Number 17567-V under the applicable laws. The name of the company was changed to DIC Marketing Sdn Bhd with effect from January 8, 2007. The principal place of business is situated at PT 501 & 502, Persiaran Sabak Bernam, Seksyen 26, Kawasan HICOM, 40724 Shah Alam, Selangor Darul Ehsan and the registered office is situated at Unit 07-02, Level 7, Menara Luxor, 6B Persiaran Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan. This company is currently engaged, inter alia, in the business of trading of printing inks, sundries, resins chemicals and printing machines.

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Shareholding Pattern The entire paid up capital of MYR 3,00,000 is held by DIC Asia Pacific Pte Ltd., Singapore. Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Ng Chew Ying Director Mr Chua Sing Heng Director Mr Fong Ah Loon Director Mr Mitsunobu Miyasaka Director Financial Performance:


Sales and other Income 115539 214161 224603 Profit after tax 4652 3801 (334) Equity Capital 300 300 300 Reserves and Surplus 16868 26257 22456 Earnings per share (MYR per share) 155.07 126.70 (11.13) Net Asset Value (MYR per share) 17169 26557 22756 3. DIC HOLDINGS (M) SDN. BHD. The company is incorporated as DIC Holdings (M) Sdn. Bhd.on January 1, 2002, bearing company registration Number 570070-W under the applicable laws, having its principal place of business at PT 501 & 502, Persiaran Sabak Bernam, Seksyen 26, Kawasan HICOM, 40724 Shah Alam, Selangor Darul Ehsan and the registered office at Level 19, Uptown 1, Jalan SS21/58, Damansara Uptown, 47400 Petaling Jaya, Selangor Darul Ehsan. This company is currently engaged, inter alia, in the business of investment holding. The company has become a dormant company since September 2006. Shareholding Pattern The entire paid up capital of MYR 5,00,000 is held by DIC Asia Pacific Pte Ltd., Singapore Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Ng Chew Ying Director Mr Lim Pui Lee Director Financial Performance:


Sales and other Income 1569 2788 5700 Profit after tax 192 413 4283 Equity Capital 500 500 500 Reserves and Surplus 4961 16289 15876 Earnings per share (MYR per share) 3.84 8.26 85.66 Net Asset Value (MYR per share) 5461 16789 16376

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4. COATES BROTHERS (MALAYSIA) SDN BHD The company is incorporated as Coates Brothers (Malaysia) Sdn Bhd on April 25, 1959, bearing company registration Number 003428-A under the applicable laws, having its principal place of business and the registered office at Lot 27, Seksyen 15, Persiaran Selangor, 40700 Shah Alam, Selangor Darul Ehsan. This company is currently engaged, inter alia, in the business of manufacture and sale of printing inks and distribution of graphic equipment. This company has become dormant since September 2006. Shareholding Pattern The entire paid up capital of MYR 24,00,000 is held by DIC Asia Pacific Pte Ltd. Singapore Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Ng Chew Ying Director Mr Paul Koek Director Ms Kuay Hua Peng Director Financial Performance:


Sales and other Income 43213 58298 57549 Profit after tax 4253 4130 3071 Equity Capital 2400 2400 2400 Reserves and Surplus 4581 16673 14077 Earnings per share (MYR per share) 17.72 17.21 12.80 Net Asset Value (MYR per share) 8052 21925 19330 5. DIC (VIETNAM) CO. LTD The company is incorporated as DIC (VIETNAM) CO. LTD on September 8, 1998, bearing company registration Number 015/GP-KCN-VS under the applicable laws, having its principal place of business and the registered office at 31 VSIP Street 6, Vietnam Singapore Industrial Park, Thuan An District, Binh Duong Province, Vietnam. This company is currently engaged, inter alia, in the business of manufacture and sale of printing ink. Shareholding Pattern The entire paid up capital of VND 15,84,82,40,000 is held by DIC Asia Pacific Pte Ltd. Singapore Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Mitsunobu Miyasaka Director Mr Soh Thiam Soon Director Mr Paul Koek Director Mr Mitsuo Kondo Director Mr Mitsunobu Miyasaka Director Mr Soh Thiam Soon Director

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Financial Performance: (Amount in VND’000)

FY 2006 FY 2005 Sales and other Income 5492264 - Profit after tax (4096338) (884856) Equity Capital 15848240 15848240 Reserves and Surplus (4981193) (884856) Earnings per share (VND per share) - - Net Asset Value (VND per share) 10867046 14963384 6. DIC AUSTRALIA PTY LTD / DIC GRAPHICS AUSTRALIA PTY LTD The company is incorporated as DIC Graphics Australia Pty Ltd / Coates Brothers Australia Pty Ltd, on June 1, 1949, bearing company registration Number ACN 000-079-550 under the applicable laws. The name of the Company was changed to DIC AUSTRALIA PTY LTD with effect from 20th December 2006. The principal place of business and the registered office is at 323 Chisholm Road, Auburn NSW 2145, Australia. This company is currently engaged, inter alia, in the business of manufacture of printing inks and distribution of printing products. Shareholding Pattern The entire paid up capital of AUD 51,98,000 is held by DIC Asia Pacific Pte Ltd. Singapore Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Dr David Rands Director Mr Michael Leatherland Director Mr Mitsunobu Miyasaka Director Mr Kaoru Ino Director Mr Paul Koek Director Financial Performance:

(Amount in AUD’000) FY 2006 FY 2005 FY 2004

Sales and other Income 87233 80458 79279 Profit after tax 4457 6078 7032 Equity Capital 5198 5198 5198 Reserves and Surplus 36011 34054 29053 Earnings per share (AUD per share) 17.15 23 27 Net Asset Value (AUD per share) 41209 39252 34251 7. DIC COLORTRON PTY LTD The company is incorporated as DIC Colortron Pty Ltd on March 31, 1999, bearing company registration Number CAN 086-431-816 under the applicable laws, having its principal place of business and the registered office at 323 Chisholm Road, Auburn NSW 2145, Australia. This company is currently engaged, inter alia, in the business of manufacture and supply of ink and ancillary products. Shareholding Pattern The entire paid up capital of AUD 65,00,100 is held by DIC Asia Pacific Pte Ltd, Singapore

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Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Mitsunobu Miyasaka Director Dr David Rands Director Financial Performance:

(Amount in AUD’000) FY 2006 FY 2005 FY 2004

Sales and other Income 17356 19028 18496 Profit after tax 108 571 882 Equity Capital 6500 6500 6500 Reserves and Surplus 3694 3585 2853 Earnings per share (AUD per share) 0.17 0.88 1.36 Net Asset Value (AUD per share) 10194 10086 9353 8. DIC GRAPHICS NEW ZEALAND LTD / DIC NEW ZEALAND LTD The company is incorporate as DIC Graphics New Zealand Ltd / Coates New Zealand Ltd on June 25, 1932, bearing company registration Number 42969 under the applicable laws. The name of the company was changed to DIC New Zealand Limited with effect from 8th January 2007. The principal place of business and the registered office is at 313 – 315 Church Street, Penrose, Auckland, New Zealand. This company is currently engaged, inter alia, in the business of manufacture and sale of printing and news inks and disribution of printing products. Shareholding Pattern The entire paid up capital of NZD 88,74,000 is held by DIC Asia Pacific Pte Ltd. Singapore Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Dr David Rands Director Mr Mitsunobu Miyasaka Director Mr Stephen Parker Director Mr Kaoru Ino Director Mr Paul Koek Director Financial Performance:

(Amount in NZD’000) FY 2006 FY 2005 FY 2004

Sales and other Income 30673 33322 32464 Profit after tax 1545 2565 1947 Equity Capital 8874 8874 8874 Reserves and Surplus 2048 503 (2485) Earnings per share (NZD per share) 3.49 5.79 4.40 Net Asset Value (NZD per share) 10922 9377 6853

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9. COATES BROTHERS (SINGAPORE) PRIVATE LIMITED The company is incorporated as Coates Brothers (Singapore) Private Limited on July 10, 1967, bearing company registration Number 196700199Z under the applicable laws, having its principal place of business and the registered office at 19 International Road, Jurong, Singapore 619623. This company is currently engaged, inter alia, in the business of manufacture and sale of printing ink and rollers and the import and sale of printing products. The company is a dormant company. Shareholding Pattern The entire paid up capital of SGD 10,000 is held by DIC Asia Pacific Pte Ltd. Singapore Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Paul Koek Director Financial Performance:

(Amount in SGD’000) FY 2006 FY 2005 FY 2004

Sales and other Income - - 10420 Profit after tax - - 152 Equity Capital 10 2250 2250 Reserves and Surplus - 6114 6114 Earnings per share (SGD per share) - - 0.68 Net Asset Value (SGD per share) 10 8364 8364 10. DIC GRAPHICS (HONG KONG) LIMITED The company is incorporated as Coates Brothers (Hong Kong) Ltd. on October 27, 1964, bearing company registration Number 10783 under the applicable laws. The name of the Company was changed to DIC Graphics (Hong Kong) Limited with effect from 24th January 2006. The principal place of business and the registered office is at 18 Dai Fu Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong. This company is currently engaged, inter alia, in the business of manufacture and sale of printing inks, lithographic paints, printer supplies and chemicals and investment holding. Shareholding Pattern The entire paid up capital of HKD 1,03,00,000 is held by DIC Asia Pacific Pte Ltd. Singapore Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Yang Yeong-Show Director Mr Shinichi Sakamoto Director Ms Liu Wai-Ching, Janny Director

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Financial Performance: (Amount in HKD’000)

FY 2006 FY 2005 FY 2004

Sales and other Income 140477 128553 125012 Profit after tax 4964 2675 3428 Equity Capital 10300 10300 10300 Reserves and Surplus 56610 51646 48972 Earnings per share (HKD per share) 48.19 25.97 33.28 Net Asset Value (HKD per share) 67712 62661 60045 11. DAINIPPON INK & CHEMICALS (HK) INC. The company is incorporated as Dainippon Ink & Chemicals (HK) Inc. on October 1, 1970, bearing company registration Number 03084556 under the applicable laws, having its principal place of business and the registered office at Room 1304, East Ocean Centre, 98 Granville Road, Tsim Sha Tsui East, Kowloon, Hong Kong. This company is currently engaged, inter alia, in the business of trading of printing inks, dye stuffs, resins and related chemicals and investment holding. Shareholding Pattern The entire paid up capital of HKD 1,60,00,000 is held by DIC Asia Pacific Pte Ltd., Singapore. Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Lee Sai Kit Director Mr Kaoru Ino Director Mr Kazuo Hatakenaka Director Mr Shuji Tayama Director Mr Yasufumi Miyazaki Director Mr Shomei Karasawa Director Financial Performance:

(Amount in HKD’000) FY 2006 FY 2005 FY 2004

Sales and other Income 957366 956778 728638 Profit after tax 12919 16738 19106 Equity Capital 16000 16000 16000 Reserves and Surplus 203949 210424 216085 Earnings per share (HKD per share) 807.44 1046.13 1194.13 Net Asset Value (HKD per share) 219949 226424 232085 12. COATES (THAILAND) LTD The company is incorporated as Coates (Thailand) Ltd on June 30, 1994, bearing company registration Number 0135537002425 under the applicable laws, having its principal place of business and the registered office at 101/100 Moo 20, Phaholyothin Road, Tambol Kong 1, Amphur Klong Luang, Pathumthani, Thailand. This company is currently engaged, inter alia, in the business of manufacture and distribution of can coating and printing inks. The company has ceased operations in 2005, but still engaged in renting a building and equipments to related companies.

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Shareholding Pattern The Shareholding Pattern of as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore 6,85,998 99.9 Chusak Narkprasit 2 0.1 The Shareholding Pattern of preference share as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore 27,994 3.9 Hold in Trust of DIC AP 6 0.0008 DIC Thailand 686,000 96.0992 Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Shinji Yamauchi Director Mr Kazutaka Tai Director Mr Paul Koek Director Financial Performance:

(Amount in THB’000) FY 2006 FY 2005 FY 2004

Sales and other Income 4532 16418 94949 Profit after tax 677 (2101) 5913 Equity Capital 140000 140000 140000 Reserves and Surplus (45537) (46214) (44113) Earnings per share (THB per share) 0.99 (3.06) 8.62 Net Asset Value (THB per share) 95169 94112 95887 13. DAINIPPON INK & CHEMICALS (THAILAND) COMPANY LIMITED. The company is incorporated as Dainippon Ink & Chemicals (Thailand) Company Limited on July 31, 1960, bearing company registration Number 3101015195 under the applicable laws, having its principal place of business at 700/610 Moo 4 Amata Nakorn Industrial Estate, Phase 6, Tambol Ban Kao, Aumphur Panthong Chonburi and the registered office at 21st Floor, Sermmit Tower, 150 Soi Asoke, Sukhumvit 21Road, Kweng North Kongtoey, khet Wattana, Bangkok Thailand. This company is currently engaged, inter alia, in the business of manufacture and sale of ink products, chemicals and printing accessories. Shareholding Pattern The Shareholding Pattern of as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore 5,16,875 96.26 Hold in trust of DIC AP 125 0.02 Koravit Numchunchai 6,667 1.24 Choochai Numchunchai 6,667 1.24 Chookiat Numchunchai 6,666 1.24 Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

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Name Designation Mr June Namchuanchai Director Mr Shinji Yamauchi Director Mr Mitsunobu Miyasaka Director Mr Kazutaka Tai Director Financial Performance:

(Amount in THB’000) FY 2006 FY 2005 FY 2004

Sales and other Income 1002509 905245 828470 Profit after tax 131675 67104 103310 Equity Capital 537000 537000 537000 Reserves and Surplus 565179 479148 457689 Earnings per share (THB per share) 245.21 124.96 277 Net Asset Value (THB per share) 1103979 1017948 996489 14. DAINIPPON INK & CHEMICALS (PHILLIPINES) INC. The company is incorporated as Dainippon Ink & Chemicals (Phillipines) Inc. on November 8, 1974, bearing company registration Number 58659 under the applicable laws, having its principal place of business and the registered office at No.26 1st Avenue, Bo. Bagumbayan, Taguig, Metro Manila. This company is currently engaged, inter alia, in the business of manufacture and sale of chemical products including printing inks, coatings and varnishes. Shareholding Pattern The Shareholding Pattern of ordinary share as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore 1,15,009 98.68Hold in trust of DIC AP 4 0.01Felix K Maraba Jr 737 0.63Esther P Magleo 790 0.68 The Shareholding Pattern of preference share as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore 5,000 100.00 Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr FK Maramba Jr Director Ms Esther P Magleo Director Mr Yasuo Suzuki Director Mr Mitsunobu Miyasaka Director Mr Yugo Tanaka Director Mr Toba Tjitasura Director Financial Performance:

(Amount in PHP’000) FY 2006 FY 2005 FY 2004

Sales and other Income 329981 315234 327256 Profit after tax 11945 (7551) (14452) Equity Capital 12154 12154 12154 Reserves and Surplus 41762 29817 42635

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Earnings per share (PHP per share) 979.10 (619) (1185) Net Asset Value (PHP per share) 52877 41971 54789 15. DIC LANKA (PVT) LIMITED The company is incorporated as Coates (Lanka) Ltd on March 30, 1982, bearing company registration Number PVS 8384 under the applicable laws. The name of the company was changed to DIC Lanka (Pvt) Limited with effect from 12th April 2005 having its principal place of business at and the registered office at 147, Katuwana Industrial Estate, Homagama, Sri Lanka. This company is currently engaged, inter alia, in the business of manufacture of printing and printing rollers, import and trading of graphics and paper products and global distribution. Shareholding Pattern The Shareholding Pattern as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore 15,13,250 79.09 Polychrone Inks Limited 4,00,000 20.91 Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Mitsunobu Miyasaka Director Mr Mitsuo Kondo Alternate Director to Mr. Mitsunobu Miyasaka Dr PK Dutt Director Mr Paul Koek Director Mr Kumara Semage Director (Mr Vasantha Kumara W.) Alternate Director to Mr. Kumara Semage Mr Munawar Hussain Babary Director Financial Performance:

(Amount in LKR’000) FY 2006 FY 2005 FY 2004

Sales and other Income 288549 283431 260983 Profit after tax 9306 10718 15117 Equity Capital 19134 19134 19134 Reserves and Surplus 79520 70215 68106 Earnings per share (LKR per share) 4.86 5.60 4.50 Net Asset Value (LKR per share) 98653 89347 50044 16. PT DIC GRAPHICS The company is incorporated as PT DIC GRAPHICS on September 24, 2002, bearing company registration Number 92-31-T-Industri-2003 under the applicable laws, having its principal place of business and the registered office at JI. Rawa Gelam III Blok II L Kav 8-9 Kawasan Industri Pulogadung, Jakarta Indonesia. This company is currently engaged, inter alia, in the business of manufacture, import, export and trading and distribution of printing ink, varnishes, coatings and others Shareholding Pattern The Shareholding Pattern as on September 30, 2007, is as follows :

Name of the Shareholder Series No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore Series A 14,562 74.07

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DIC Asia Pacific Pte Ltd., Singapore Series B 4,898 25.38 DIC Asia Pacific Pte Ltd., Singapore Series C 100 0.51 Dainippon Ink & Chemical Inc Series A 5 0.03 Dainippon Ink & Chemical Inc Series B 2 0.01 Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Shunichi Morishita Director Mr Mitsunobu Miyasaka Director Mr Shinji Yamauchi Director Mr Yusuf Kristano Director Mr Paul Koek Director Financial Performance:

(Amount in IDR’000) FY 2006 FY 2005 FY 2004

Sales and other Income 217793408 217590874 188400114 Profit after tax (6356830) (9606816) (6512208) Equity Capital 66337316 66337316 66337316 Reserves and Surplus (14800,93) (8443363) 1163453 Earnings per share (IDR per share) (317841.50) (480340.80) (325610.40) Net Asset Value (IDR per share) 55539789 61895619 71502435 17. DIC PAKISTAN LIMITED The company is incorporated as Coates Lorilleux Pakistan Limited on January 5, 1994, bearing company registration Number K-05099 under the applicable laws. The name of the company was changed to DIC Pakistan Limited with effect from 17 December 2001. The principal place of business and head office is at Shahrah-e-Roomi, P.O. Amer Sidhu, Lahore-54760, Pakistan and the registered office is at 4th Floor, The Forum, Suite # 416-422G-20, Block 9, Khayaban-E-Jami Clifton Karachi, Pakistan. This company is currently engaged, inter alia, in the business of manufacturing, processing and selling of finished and semi-finished inks and lacquers. Shareholding Pattern The Shareholding Pattern as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd., Singapore 27,61,874 44.96 Hold in trust of DIC AP 3,374 0.04 Packages Limited 33,72,750 54.92 Mujeeb Rashid 1,125 0.02 Syed Aslam Mehdi 1,124 0.02 Syed Henna Babar Ali 1,125 0.02 MH Babary 1,124 0.02 Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Mujeeb Rashid Director Mr Syeda Henna Babar Ali Director Mr Munawar Hussain Babary Director

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Mr Syed Aslan Mehdi Director Mr Mitsunobu Miyasaka Director Mr Paul Koek Director Mr Mitsuo Kondo Director Financial Performance:

(Amount in PKR’000) FY 2006 FY 2005 FY 2004

Sales and other Income 853225 737756 639293 Profit after tax 93383 74796 75013 Equity Capital 61425 61425 61425 Reserves and Surplus 137364 68550 79749 Earnings per share (PKR per share) 15.20 12.21 12.21 Net Asset Value (PKR per share) 198789 129975 141174

18. DIC FINE CHEMICALS PRIVATE LIMTED The company has been incorporated on July 12, 2007 vide Certificate of Incorporation No. U24220WB2007FTC117114 of 2007-08. The registered office of the company is at Transport Depot Road, Kolkata. Details of Shareholding The initial capital of the Company will be Rs.1,00,000. DIC Asia Pacific Pte Ltd has agreed to subscribe to 98% of the share capital The Board of Directors as on September 30, 2007

Name Designation Dr. Prabir Kumar Dutt Director Mr. Timir B.Chatterjee Director Mr. Mitsunobu Miyasaka Director Mr. Paul Koek Director Mr. Yoshihisa Kawamura Director Mr. Naoyoshi Furuta Director 19. PT PARDIC JAYA CHEMICALS Our Promoter, DIC Asia Pacific Pte Limited, has vide declaration dated October 9, 2007 informed us of their acquisition of 95.70% shareholding stake in PT Pardic Jaya Chemicals, thereby making it a subsidiary of our Promoter Company and Our Promoter Group company. The details has been given hereunder. The company is incorporated as PT Pardic Jaya Chemicals on September 5, 1977 bearing company registration Number 01.000.132.9.402.001 under the applicable laws. The principal place of business and the registered office is at JI Gatot Subroto KM 1, Cibodas, Tengerang, Jakarta Indonesia This company is currently engaged, inter alia, in the business of manufacturing and trading of synthetic resins and organic chemicals. Shareholding Pattern The Shareholding Pattern as on September 30, 2007, is as follows :

Name of the Shareholder No. of Shares %age of shareholding- DIC Asia Pacific Pte Ltd 38,643 95.70 Dainippon Ink & Chemicals Inc 282 0.70 PT Futan Trading 850 2.10

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PT Polindo Intercitra 625 1.50 Board of Directors The Board of Directors as on September 30, 2007 comprises of the following Directors

Name Designation Mr Hiroshi Hisata Director Mrs. Sjafri Abdul Muin Director Mr. Purwanto Director Mr Shigenobu Azuma Director Mr Yasuo Nakajima Director Mr Achmad Suriawinata Independent Director Mr Toshio Hasumi Independent Director Mr. Mitsunobu Miyasaka Independent Director Financial Performance:

(Amount in IDR’000) FY 2006 FY 2005 FY 2004

Sales and other Income 325251202 328324177 287273513 Profit after tax (11351537) 2667273 145106 Equity Capital 16766000 16766,000 16766000 Reserves and Surplus 140641239 153326785 150659512 Earnings per share (IDR per share) (280) 66021 3591 Net Asset Value (IDR per share) 169692035 183034884 179255051

Companies with which the Promoter has disassociated in the last three years: Our Promoter, has not disassociated with any company in the last three years.

Details of Group Companies whose names have been struck off from the Registrar of Companies.

None of the group / associate companies had their names struck off from the Registrar of Companies

Promoter Group Referred To BIFR/Under Winding Up/Having Negative Net Worth

None of our Promoter Group companies have been referred to BIFR / under winding up/having negative net worth

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MANAGEMENT’S DISCUSSION AND ANALYSIS Printing Ink industry has witnessed an encouraging growth in domestic market during the last couple of years . However, the year 2005-2006 was a difficult one for the Printing Ink industry particularly in view of the steep increase in input costs and rising interest rates. Crude oil price had taken a flight from US $23.36 in May, 2003 to reach US $78.22 on 9th August, 2006. Thereafter, it cooled down a bit to reach US $56.02 on 4th October 06 - a 28 per cent fall from its high. Since then, it has remained at an average high of US $58-63 per barrel during the major part of 2006 r which led to steep hike in prices of petro-based products. The Company is a major consumer of petro-based inputs. Thus, high input costs led to decline in margins. Unfortunately, the full impact of cost increase could not be passed on to the end user due to stiff price competition in the market. The fortunes of the printing ink industry are linked to the growth in the economy in general and the publishing and packaging sectors in particular. The FMCG sector has seen a turnaround and its fortunes are looking up. Publication sector is expected to grow in the coming years in view of the country's large population and rising literacy levels brought about by the Government's continuous endeavour. Packaging sector is also expected to be driven by retail boom and more and more improvements in lifestyle and urbanization. Due to the operating conditions as enumerated above, our Company's overall net sales increased from Rs.27,855.5 lacs in 2005 to Rs.33,949.6 lacs in 2006 registering a growth of 22% in terms of value and 16% in terms of volume. Growth was registered in all product groups and particularly more in News Inks. Our continuous effort for better productivity led to an increase in operating profit of our Company by 15% inspite of the adverse impact of raw material cost . The following discussion on the financial operations and performance should be read in conjunction with the audited financial results of the Issuer for the years ended 31 March 2006, 2005 and 2004.

Year ended on 31st December Particulars FY 2006 FY 2005 FY 2004

Income (Rs. Lakh) (Rs. Lakh) (Rs. Lakh)

Sales

Of products manufactured by our Company 36633.9 30146.1 26862.3

Of products traded by our Company 2076.6 1791.2 1243.9

Sub Total 38710.5 31937.3 28106.2

Less: Excise Duty 4760.9 4081.8 3655.5

Net sales 33949.6 27855.5 24450.7

Other Income 521.8 452.3 319.9

Total Income 34471.4 28307.8 24770.6

Expenditure

Material consumed 25034.2 20042.7 17412.2

Staff Costs 2380.2 2208.5 2013.7

Other Expenses 4451.8 3713 3435.3

Interest/Discount on issue of commercial paper 607.6 374.4 316

Depreciation 543.8 497.5 455.1

TOTAL EXPENDITURE 33017.6 26836.1 23632.3

Profit before Tax without adjustments 1453.8 1471.7 1138.3

Adjustment for regrouping of Wealth Tax 0 0 -2.5

Adjustment relating to Prior period items 0 0 0

Adjustment for Bad debts Recovered -10.9 -1.3 -10.1

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Adjustment for Liability written back -20.9 0 0

Profit before Tax after adjustment 1422 1470.4 1125.7

Less: Provision for Taxation

Current Tax 327.2 491 338.5

Adjustment for Tax provision of earlier years written back 28.3 0 0 Tax Impact of adjustments -9.2 -0.4 -4.6

Fringe Benefit Tax 48.7 55.5 0

Deferred Tax 79.3 -88.2 45.1

Sub Total 474.3 457.9 379

Profit after Tax 947.7 1012.5 746.7

PAT as a percentage of Total Income from Operations 2.75% 3.58% 3.01% COMPARISON OF RECENT FINANCIAL YEAR WITH THE PREVIOUS FINANCIAL YEARS ON THE MAJOR HEADS OF THE PROFIT & LOSS ACCOUNT. Result of operations for the year ended 31st December, 2006 compared to the year ended 31st December, 2005 Net Sales The net sales in FY 2006 was Rs.33949.6 Lacs as compared to the previous year of Rs.27855.5 Lacs, resulting in an increase of about 22% over the last year. The income from other sources has also increased from Rs.452.3 Lacs to Rs.521.8 Lacs. Overall our company registered a growth of 22% in terms of value and 16% in terms of volume. Growth was registered in all product groups and particularly more in News Inks. With effect from 1st May, 2006, Company took over the manufacture of lamination adhesives which was earlier being manufactured by its subsidiary company Material Consumption Material consumption cost increased from Rs.20042.7 Lacs in the FY 2005 to Rs.25034.2 Lacs in the FY 2006. This huge increase was mainly due to the continuous price hike of petro-based products due to abnormal increase in crude oil prices apart from the increase in level of consumptin driven by increase in sales .. Staff Cost Staff cost (administrative cost) as a percentage of income from operations executed marginally decreased from 7.93% in the FY 2005 to 7.01% in the FY 2006. The cost increased by Rs.171.7 Lacs in real terms on account of normal increment increase in operations. Interest/Discount on issue of commercial paper Interest/Discount on issue of commercial paper increased to Rs.607.6 Lacs in FY2006 from Rs.374.4 Lacs in FY2005, a marginal increase to 62.29% from 18.48%. This increase was due to higher borrowings through Commercial Paper apart from increase in rate towards the end of 2006.. Depreciation The depreciation expenses increased marginally from Rs.497.5 Lacs in the FY 2005 to Rs.543.8 Lacs in FY 2006 on account of marginal increase in the Issuer’s fixed assets which is primarily attributed to the purchase of new machinery and equipment.

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Profit after Tax Due to rising interest rates (the average interest rate was 9.15% against average of 7.25% in 2005), the interest cost has gone up resulting in PBT and PAT taking a hit. Profit after tax decreased from Rs.1012.5 Lacs in FY2005 to Rs.947.7 Lacs in the FY 2006. Profit after tax decreased from 3.58% of total income from operations to 2.75% of total income from the operations in the FY 2006. Result of operations for the year ended 31st December, 2005 compared to the year ended 31st December, 2004 Net Sales The net sales in FY 2005 was Rs.27855.5 Lacs as compared to the previous year of Rs.24450.7 Lacs, resulting in an increase of about 14% over the last year. The income from other sources has also increased from Rs.319.9 Lacs to Rs.452.3 Lacs. Overall company registered a growth of 14% in terms of value and 11.34% in terms of volume. The main areas of growth were Sheetfed Inks, UV Inks and News Inks. Sales also took a major hit because of the disruption in activities in the Western region caused by the flood/inundation in the month of July 2005. Material Consumption Material consumption cost increased from Rs.17412.2 Lacs in the FY 2004 to Rs. 20042.7 Lacs in the FY 2005 on account of an increase in turnover. Material consumed increased by 15.1% was mainly due to the continuous price hike of petro-based products due to abnormal increase in crude oil prices Staff Cost Staff cost (administrative cost) as a percentage of income from operations marginally decreased from 8.24% in the FY 2004 to 7.93% in the FY 2005. Interest/Discount on issue of commercial paper Interest/Discount on issue of commercial paper increased to Rs.374.4 Lacs in FY2005 from Rs.316 Lacs in FY2004, mainly due to increase in borrowings through issue of Commercial Paper Depreciation The depreciation expenses increased from Rs.455.1 Lacs in the FY 2004 to Rs.497.5 Lacs in FY2005 on account of marginal increase in the Issuer’s fixed assets which is primarily attributed to the purchase of new machinery and equipment. Profit after Tax Profit after tax increased from Rs.746.7 Lacs in FY2004 to Rs.1012.5 Lacs in the FY 2005. Profit after tax increased from 3.01% of total income from operations to 3.58% of total income from the operations in the FY 2005. Factors that may affect results of the operations: Unusual or infrequent events or transactions We do not anticipate any specific events or transactions affecting the business . Significant economic / regulatory changes that may affect income from operations Liberalization of FDI norms by Government in retail sector –single / multiple brand is expected to have positive impact on our business . Similarly with the rising literacy level, we expect our business of News Ink to grow further.

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Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations Sudden increase in the price of the crude and other petroleum based solvents which are used as one of the key raw-materials in the production of the Ink have in the past and in the future also expected to adversely effect our revenues and income. Future relationship between costs and income We do not expect any material changes in relationship between costs and income . Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products –NA. New Products or business segments In the offset inks business we have introduced Fusion G , Challenge G and UV Offset Ink . These high –end product will add to the profitability of our Company in future . Seasonality of business Though the demand of products like Offset ink, liquid inks are to some extant seasonal, but the business on the whole is not. Dependence on single or few suppliers or customers We are not dependent on single or few supplier, but in case of news ink business , our Company is dependant on a few large customers . Competitive Conditions Our Company faces competition from other ink manufacturers in the organized sector in India viz, Sakata Inx (India) Ltd., Micro Inks Ltd., SICPA (India) Ltd. and Incowax Pvt. Ltd. . Our Company , by consolidating the Liquid Ink & News Ink plant at Noida and by continuously upgrading technology , would be in a position to be competitive .. Working results Information relating to our Company on sales, gross profit etc as required by the Mimistry of Finance Ciruclar No. F2/5/SE/76 dated Februray 5, 1977 read with amendments of even number dated March 8, 1977 is as under : The working results of our Company for the period from July 1, 2007 to September 30, 2007 are as follows :

(Rs. In Lacs) Particulars Amount Net Sales / Income from operations 10245.53 Other Income 105.73 Gross Profit / (Loss) excluding depreciation and taxes 604.26 Depreciation 160.53 Provision for taxation 163.19 Net Profit / (Loss) 280.61

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OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

As on date of filing the Letter of Offer with SEBI, there are no outstanding litigations against our Company, our Directors, our Promoter and our Promoter Group/Group companies or any disputes, tax liabilities, non payment of statutory dues, overdues to banks/ financial institutions, defaults against banks/ financial institutions, defaults in dues towards instrument holders like debenture holders, fixed deposits, defaults in creation of full security as per terms of issue/ other liabilities, proceedings initiated for economic/civil/ any other offences (including past cases where penalties may or may not have been imposed and irrespective of whether they are specified under paragraph (i) of Part 1 of Schedule XIII of the Companies Act) against our Company, our Directors, our Promoter and our Promoter Group/Group companies, except the following: A. Outstanding litigation and contingent liabilities of our Company: Sr.No Particulars

i. Litigation involving Criminal Offences Cases Filed By Our Company

1. Our Company has filed a criminal proceeding under section 200 of the Code of Criminal Proceedings, 1973 (as amended) for the offence punishable under section 420/400/120B of the Indian Penal Code read with section 156(3) of the Code of Criminal Proceedings, 1973 (as amended), being case no. C/14389/of 2006 before the learned Chief Metropolitan Magistrate, Calcutta against Directors of M/s R. Solomon and Company Pvt. Ltd. The matter has been admitted on May 9, 2007 Our Company has obtained an order for the issue of Non-bailable warrants against the opposite party which are also under dispute. Our Company has not followed up on the issue of non-bailable arrest warrant, as our Company has also filed a winding up petition for this matter at the High Court, Kolkata, which has been progressing. The details and progress of the winding up petition have been given hereinbelow.

2. Our Company has filed a criminal proceedings under section 200 of the Code of

Criminal Proceedings, 1973 (as amended) for the offence punishable under section 420/409120B of the Indian Penal Code read with section 156(3) of the Code of Criminal Proceedings, 1973 (as amended), being case no. C/14389/of 2006 before the learned Chief Metropolitan Magistrate, Calcutta against Sri. G.C. Bhatacharya proprietor of M/s. Kunal Traders. The date of hearing was on August 23, 2007. Due to absence of the other party on the date of hearing the Court ordered for Summons and Court Notice to be served on the opposite party, to be present on September 26, 2007. On the date, the opposite party was granted interim bail. The next date of hearing has been fixed on January 11, 2008 for evidencing at Court.

3. Our Company has filed a Money Suit, being Money suit No. 15/2003 before the

6th Judicial Magistrate at Judge Court, Alipore against M/s JSV Flexi Pack & Others for realization of he Company’s legitimate dues for Rs. 93,105/-. The date of hearing was fixed on August 23, 2007, however due to illness of the opposite party the next date of hearing has been fixed on November 18, 2007

4. Our Company has filed a legal action under section 138 and 141 of the

Negotiable Instruments Act, 1881, being Case No. C-3212/05 before the Ld. Chief Judicial Magistrate, Alipore against M/s Kaushik Enterprise for realization of Rs. 18,84,480/-. The matter had been fixed in July 2007 which had been taken up and an affidavit of evidence has been filed by our Company against the opposite party. The matter is pending.

5. Our Company has filed a legal action under section 138 and 141 of the

Negotiable Instruments Act, 1881, being Case No. C-3211/2005 before the Ld. Chief Judicial Magistrate, Alipore against M/s Solomon Solvents Pvt. Ltd. And ors. for realization of Rs. 2,30,000/-. The matter had been fixed on July, 2007

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which had been taken up and an affidavit of evidence has been filed by our Company against the opposite party. The matter is pending.

6. Our Company has filed a criminal action under section 138 and 141 of the

Negotiable Instruments Act, 1881, being Case No. C-4181 of 2005 before the Notary Public, Alipore against M/s Solomon & Co. Private Ltd. And 2 others for realization of Rs. 2,50,000/-. The next date of hearing was in July 2007 wherein the advocate of our Company cross-examined the opposite party. The next date of hearing has been fixed on December 11, 2007.


Negotiable Instruments Act, 1881, being Case No. 201/S/03 of 2003 before the Additional Chief Metropolitan Magistrate at 23rd Court, Mumbai, against Sharp Industries Limited for realization of Rs. 1,21,10,909/-. The. The case has been transferred to Small Causes Court at Mumbai, and the next date of hearing has been fixed on November 5, 2007


Negotiable Instruments Act, 1881, being Case No. 202/S/03 of 2003 before the Additional Chief Metropolitan Magistrate at 23rd Court, Mumbai, against Sharp Industries Limited for realization of Rs. 55,44,249/-. The case has been transferred to Small Causes Court at Mumbai and the next date of hearing has been fixed on November 5, 2007


Negotiable Instruments Act, 1881, being Case No. 203/S/03 of 2003 before the Additional Chief Metropolitan Magistrate at 23rd Court, Mumbai, against Sharp Industries Limited for realization of Rs. 5,00,000/-. The case has been transferred to Small Causes Court at Mumbai and the next date of hearing has been fixed on November 5, 2007


Negotiable Instruments Act, 1881, being Case No. 4459/S/05 of 2005 before the Additional Chief Metropolitan Magistrate at 23rd Court, Mumbai, against Sharp Industries Limited for realization of Rs. 30,50,641/-. The case has been transferred to Small Causes Court at Mumbai. The new Case No. is 452/SS/07 and the next date of hearing has been fixed on November 15, 2007.


Negotiable Instruments Act, 1881, being Case No. 211/S/03 of 2003 before the Additional Chief Metropolitan Magistrate at 23rd Court, Mumbai, against Sharp Industries Limited for realization of Rs. 45,12,552/-. The case has been transferred to Small Causes Court at Mumbai and the next date of hearing has been fixed on November 5, 2007.


Negotiable Instruments Act, 1881, being Case No. 204/S/03 of 2003 before the Additional Chief Metropolitan Magistrate at 23rd Court, Mumbai, against Akar Laminaters Limited for realization of Rs. 60,49,765/-. The case has been transferred to Small Causes Court at Mumbai and the next date of hearing has been fixed on November 5, 2007.


Negotiable Instruments Act, 1881, being Case No. 210/S/03 of 2003 before the Additional Chief Metropolitan Magistrate at 23rd Court, Mumbai, against Akar Laminaters Limited for realization of Rs. 48,33,636/-. The case has been transferred to Small Causes Court at Mumbai. The new case No. is 453/SS/07 and the next date of hearing has been fixed on November 15, 2007.


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Negotiable Instruments Act, 1881, being Case No. 212/S/04 of 2004 before the Additional Chief Metropolitan Magistrate at 23rd Court, Mumbai, against Akar Laminaters Limited for realization of Rs. 29,90,391/-. The case has been transferred to Small Causes Court at Mumbai. The new case No. is 454/SS/07 and the next date of hearing has been fixed on November 15, 2007.


Negotiable Instruments Act, 1881, being Case No. 2542/01/03 of 2003 before the Metropolitan Magistrate at New Delhi, against M/s Nutech Packaging Ltd for realization of Rs. 3,50,000/-. . The amount in dispute has been realized and our Company is in the process of withdrawing the complaint.


Negotiable Instruments Act, 1881, being Case No. 2543-01-03 of 2003 before the Metropolitan Magistrate at New Delhi, against M/s Nutech Packaging Ltd for realization of Rs. 2,00,000/-. The amount in dispute has been realized and our Company is in the process of withdrawing the complaint.


Negotiable Instruments Act, 1881, being Case No. 2544-01-03 of 2003 before the Metropolitan Magistrate at New Delhi, against M/s Nutech Packaging Ltd for realization of Rs. 1,41,426/-. The amount in dispute has been realized and our Company is in the process of withdrawing the complaint.






Negotiable Instruments Act, 1881, being Case No. 1787/1/2006 of 2006 before the Metropolitan Magistrate at New Delhi, against M/s Mitra Prakashan Ltd for realization of Rs. 5,00,000/-. . The Court has ordered the issue of Non-Bailable Warrants against the opposite party. The next date of hearing has been fixed on December 20, 2007.


Negotiable Instruments Act, 1881, being Case No. 1300/1/2006 of 2006 before the Metropolitan Magistrate at New Delhi, against M/s Oriental Trading Co. for realization of Rs. 12,92,144/-. The next date of hearing is December 13, 2007


Negotiable Instruments Act, 1881, being Case No. 1301/1/2006 of 2006 before the Metropolitan Magistrate at New Delhi, against M/s Oriental Trading Co. for realization of Rs. 20,00,000/-. The next date of hearing is December 13, 2007.


Negotiable Instruments Act, 1881, being Case No. 985/07 of 2007 before the Metropolitan Magistrate at New Delhi, against M/s Alka International Ltd. for realization of Rs. 2,00,000/-. . Our Company has received payment of a part of the amount. The next date of hearing is October 17, 2007.


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Negotiable Instruments Act, 1881, being Case No. 670/07 of 2007 before the Metropolitan Magistrate at New Delhi, against M/s Alka International Ltd. for realization of Rs. 3,00,000/-. . Our Company has received payment of a part of the amount. The next date of hearing is October 17, 2007


Negotiable Instruments Act, 1881, being Case No. 1368/07 of 2007 before the Metropolitan Magistrate at New Delhi, against M/s Alka International Ltd. for realization of Rs. 11,87,106/-. . Our Company has received payment of a part of the amount. The next date of hearing is October 17, 2007.


Negotiable Instruments Act, 1881, being Case No. 1499/1/3 before the Metropolitan Magistrate at New Delhi, against M/s Kirti Ink Traders for realization of Rs. 1,62,592/-. The next date of hearing is December 14, 2007.


Negotiable Instruments Act, 1881, before the Metropolitan Magistrate at Mumbai, against M/s Prime Print being Case Nos. 2239/8/07 and 2240/S/07 for realization of amounts of Rs.178,072/- and Rs.120,000/- respectively. The case is pending and the next date of hearing has been fixed on December 27, 2007.

ii. Litigation/Disputes involving Securities related offences, including penalties imposed by

SEBI or any other securities market regulator in India or abroad Nil

iii. Litigation involving Civil and Economic Offences Cases filed by our Company Our Company has filed a Civil Suit O.S.No. 2502 of 2003 in the Court of City Civil Judge at Chennai under Order 7 Rule 1 of Civil Procedure Code, against M/s Scan Graphics for non-payment of Rs.2,48,954/-

iv. Litigation in relation to labour laws, and employee related cases Nil

v. Litigation involving revenue authorities (customs/excise/sales tax/income tax/service tax)

Sr. No.

Authority Before whom pending

Nature of the case and particulars Financial Implications (Rs.) (in case of non-favourable outcome

Excise Cases

1. Customs, Excise and Service Tax Appellate Tribunal, Kolkata

Our Company received a show cause notice No 186/A-3/Jt. Commr.(Tech)/Kol-I-2001 dated June 6, 2001 from the Joint Commissioner of Central Excise, Kolkata I Commissionerate, Kolkata alleging contravention of the provisions of section 4(1)(b) of Central Excise Act, 1985 read with Rule 6b(ii) of the erstwhile Central Excie (Valuation) Rules, 1975 and Rule 9(1), 173C, 173G of Central Excise Rules, 1944 with regard to under-valuation of goods transferred to other units for captive consumption resulting in short payment of Central Excise duty of Rs. 7,40,440/- during the Financial year 1999-2000. Our Company filed a reply addressed to the Joint Commissioner of Central Excise, Kolkata-I Commissionerate, dated July 12, 2001, stating therein that our Company has submitted to the department a statement of goods cleared for captive consumption on September 15, 2000 and that each and every allegation made in the show cause notice is contrary to and/or inconsistent with the statements made in the said notice. Our Company has submitted that we are not liable to pay the duties, penalties and interests as contained in the show cause notice. Our Company had vide this letter also requested for a personal hearing in the matter which was granted on January 16, 2002, wherein our Company has submitted a written statement. Subsequently, the Joint Commissioner of Central Excise, Kolkata I Commisionerate, Kolkata passed an order-in- original No 132/2001(Ch32 & 38)(15)196-CE/Kol-I-2001 Jt Commr (Tech)/21/2002 dated May 7, 2002 confirming the demand Excise Duty of Rs. 7,40,440/- under section 11A of the Central Excise Act, 1944, Rs. 7,40,440/- as penalty under section 11AC of the Central Excise Act, 1944 and interest under section 11AB of the Central Excise Act, 1944 Our Company has filed an appeal against order-in-original No 132/2001(Ch32 & 38)(15)196-CE/Kol-I-2001 Jt Commr (Tech)/21/2002 dated July 11, 2002 before the Commissioner (Appeals) Central Excise) and an application for stay dated July 12, 2002 before the Joint Commissioner Central Excise (Tech). The Commissioner (Appeal II) Central Excise) passed an Order-in-appeal No 06/Kol-IV/2003 dated November 27, 2003 dismissing the appeal

Excise Duty of Rs. 7,40,440/- Under section 11A of the Central Excise Act, 1944 Rs. 7,40,440/- as penalty under section 11AC of the Central Excise Act, 1944 Interest under section 11AB of the Central Excise Act, 1944

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and disposing the stay application. Our Company has filed an appeal against the order-in-appeal on May 26, 2004 before the Customs, Excise Service Tax Appellate Tribunal. The matter has been heard on June 25, 2007 by the Tribunal and the Tribunal passed the order in open in our favour. The copy of the order is yet to be received by our Company.

2. Joint commissioner of central excise, Kolkata

Our Company received a show cause notice No V(CH 32&38)(15) 27 – CE/Kol-VI/03 4586 dated December 2, 2003, from the Joint Commissioner of Central Excise, Kolkata VI Commissionerate, Kolkata alleging contravention of the provisions of Rule 7(4) of Cenvat Credit Rules, 2002, whereby our Company had availed Cenvat credit illegally, amounting to Rs. 14,86,148/- for the period from November 2002 to February 2003 on basis of input invoices meant for stock transfer, which was not allowable, as the inputs were not purchased, and utilised the same towards the payment of duty of their final products. Our Company filed a reply addressed to the Joint Commissioner of Central Excise, Kolkata-I Commissionerate, dated January 2, 2004, stating therein that each and every allegation made in the show cause notice is contrary to and/or inconsistent with the statements made in the said notice. Our Company has submitted that we are not liable to pay any duty whatsoever and the computation of the said purported demand made in the show cause notice has been disputed. Our Company had requested for a personal hearing to be granted, in the event our contentions made in the reply are not accepted. Our Company would make further subsmissions and produce evidences in support of the denials/ contentions made by it. No personal hearing has been granted till date. The matter is yet pending.

Rs. 14,86,148/- as per section 11A(2) of the Central Excise Act, 1944 read with Rule 12 of Cenvat Credit Rules 2002; Penalty of an amount equivalent to the amount of duty as per Rule 13 of Cenvat Credit Rules, 2002 Appropriate interest as per section 11AB of the Central Excise Act, 1944.

3. Commissioner of Central Excise, Commissionerate VI, Kolkata

Our Company received a Show Cause cum Demand Notices

1. No V(15)94/CE/Adjn/Comm/Kol-VI/05/852 dated January 31, 2006 issued by the Commissioner of Central Excise, Kolkata, resulting in short payment of excise duty to the tune of Rs.46,13,639/- and education cess to the tune of Rs.47,655/- for the period from January 2001 to September 2005.

2. No V(15)3/Tara-II/DIC/Adjn/06-07/887 dated July 14, 2006 issued by the Assistant Commissioner of Central Excise, Kolkata, resulting in short payment of excise duty to the tune of Rs.4,73,047/- and education cess to the tune of Rs.9,461/- for the period from

Excise Duty amount of Rs 46,13,639/- and Rs.4,73,047/- totalling to Rs. 50,86,686/- and education cess of Rs.47,655/- and Rs.9,461/- totalling to Rs. 57,116/- Penalty of Rs.51,43,802/- under section 11AC of the Central Excise Act, 1944

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October 2005 to December 2005. alleging that our Company has violated the provisions of sections 4(1)(b) & 11A of the Central Excise Act, 1944, and Rule 8 of Central Excise Valuation Rules, 2000, by not including the “Royalty” amount of 2% paid to M/s Dainippon Ink & Chemicals Inc., Japan, in the cost of production of their intermediate product cleared to their sister concerns for arriving at the “Transaction Value” for assessing duty payable, with an intent to evade payment of Central Excise duty. Our Company has in its replies dated

1. May 26, 2006, addressed to the Commissioner of Central Excise, Commissionerate VI- Kolkata, against show cause notice number 852

2. September 13, 2006, addressed to the Commissioner of Central Excise, Commissionerate VI- Kolkata, against show cause notice number 887

submitted that payment of royalty is neither a direct expense as per the Cost Accounting Standard 4 issued by the Institute by the Cost and Works Accountants of India, nor a selling overhead and has prayed for quashing aside the said show cause notice. Our Company had requested for a personal hearing to be granted, in the event our contentions made in the reply are not accepted. Our Company would make further subsmissions and produce evidences in support of the denials/ contentions made by it. Personal hearing was granted to us vide letter dated February 5, 2007, (as per adjudication proceeding personal hearing was granted on February 19, 2007) Further, in written submission dated February 19, 2007, at the time of personal hearing our Company for both the above mentioned show cause notices, had prayed for setting aside the order on the same grounds as mentioned in the reply dated May 26, 2006. The Additional Commissioner, Central Excise has vide his order in original No 02/Kol-VI/Addl Commr/2007 dated dated March 21, 2007 confirmed:

1. the entire demand of Rs 46,13,639/- and Rs.4,73,047/- totalling to Rs. 50,86,686/- and education cess of Rs.47,655/- and Rs.9,461/- totalling to Rs. 57,116/-

2. penalty of Rs.51,43,802/-

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Our Company has filed an appeal against the order-in-original on May 22, 2007 and an application for stay. The personal hearing for the stay application had been fixed on September 6, 2007. The hearing did not take place and fresh date for hearing is awaited. The matter is pending.

4. Commissioner of Central Excise, Kolkata

Our Company received a Show Cause cum Demand Notice No V(05)8/Tara-o4/DIC/Adjn/Comm/150 dated February 2, 2007, issued by the Assistant Commissioner of Central Excise, Commissionerate VI, Kolkata, alleging that our Company has violated the provisions of sections 4(1)(b) & 11A of the Central Excise Act, 1944, and Rule 8 of Central Excise Valuation Rules, 2000, by not including the “Royalty” amount of 2% paid to M/s Dainippon Ink & Chemicals Inc., Japan, in the cost of production of their intermediate product cleared to their sister concerns for arriving at the “Transaction Value” for assessing duty payable, with an intent to evade payment of Central Excise duty amounting to Rs. 3,57,780/- and education cess of Rs.7,156/- for the period from January 2006 to March 2006. Our Company has in its reply dated April 6, 2007, addressed to the Commissioner of Central Excise, Commissionerate VI- Kolkata, submitted that payment of royalty is neither a direct expense as per the Cost Accounting Standard 4 issued by the Institute by the Cost and Works Accountants of India, nor a selling overhead and has prayed for quashing aside the said show cause notice. Our Company had requested for a personal hearing to be granted, in the event our contentions made in the reply are not accepted. Our Company would make further subsmissions and produce evidences in support of the denials/ contentions made by it. Intimation from the Department is yet awaited.

Excise duty of Rs.3,57,780/- Interest as per section 11AB of the Central Excise Act, 1944; Penalty as per Rule 25 of the Central Excise Rules, 2002

5. Commissioner (Appeals), Central Excise, Mumbai

Our Company has received a show cause notice No. C.EX/RI/GI/Coates/1/04/3 386 dated November 3, 2004 issued by the Depty Commissioner of Centarl Excise Mumbai, alleging clandestine removal of printing ink since the output quantity does not tally with the input quantity. Our Company filed a reply against the show cause notice on November 29, 2004 refuting the allegations made therein and stating that in process industry there is always a process loss. It is more so due to the evaporating nature of the raw materials used in manufacturing printing ink. Hence the input cannot be equal to the output mathematically. Our Company had also requested for a personal hearing in the matter, which was granted on February 25, 2005.

Excise Duty of 1,74,507 Penalty of RS 1,74, 507/- under section 11AC of the Central Excise Act, 1944 Interest under section 11AB of the Central Excise Act, 1944

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Subsequent to this, the Deputy Commisioner of Central Excise, Mumbai passed order-in-original No. G-I/35/2005 dated May 16, 2005 confirming the duties and penalties payable as per the show cause notice. Our Company has filed an appeal before the Commissioner (Appeals)

6. Customs, Excise and Service Tax Appellate Tribunal, Chennai.

Our Company has received a show cause notice No. 20/2001 dated August 17, 2001, issued by the Joint Commissioner, Central Excise Chennai, demanding reversal of the credit taken on intermediates, on removal of the finished goods manufactured out of it. It has been alleged that no manufacturing process has been carried on the intermediates and merely label has been changed after receiving the same in the factory before removing the same as finished goods. We paid duty on the basis of the sale price of the finished goods. Our Company filed a reply on December 15, 2001 with a requset for personal hearing, which was granted for on January 12, 2002. Subsequent to the hearing, the Joint Commissioner, Central Excise Chennai, passed an order-in-original No. 5/2002 dated February 2, 2002 confirming the demand of duty and penalties Our Company has filed an appeal against the order-in-original with the Commissioner (Appeals) on April 10, 2002. However after hearing the case on January 29, 2003, the Commissioner (Appeals) passed order-in-appeal No 23/03 dated February 25, 2003, confirming the order of the lower authority Our Company has filed an appeal dated April 23, 2004, against the order-in-appeal alongwith a stay application filed before the Customs, Excise and Service Tax Appellate Tribunal Chennai. The stay application was heard and our Company was order to make a pre-deposit of Rs. 1 Lac, which has been made on February 21, 2005. On February 28, 2005, the stay of demand was extended till further hearing of the appeal.

Excise Duty of Rs.2,95,011/- Interest under section 11AB of the Central Excise Act, 1944 Penalty under section 11AC of the Central Excise Act, 1994

7. Commissioner of Central Excise, Kolkata

Our Company has received a two Show cause notices No. 214/A-3/Commr/KOL-1/2002 dated September 19, 2002 and 14/KOL-VI/2003-04 dated December 2, 2003 issued by the Commissioner of Central Excise, Kolkata alleging contravention of provision of Rule 7(4) of the CENVAT Credit Rules, 2001 read with the Ministry of Finances M.F.(D.R.) F. No. B-4/7/2000-TRU dated April 3, 2000 for illegal availment of credit for the period from April 2000 to December 2001 and November, 2002 to February, 2003, respectively on the basis of input

Excise Duty of Rs. 91,61,509/- and Rs. 14, 86,158/- respectively. Penalty of Rs 91,61,509/- and Rs. 14,86,158/- respectively under section 11AC of the Central Excise Act, 1944. Interest under section

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invoices meants for stock transfer, which was not allowable as the inputs were not purchased and utilized the same towards payment of duty on final products with the intention to evade payment of duty on the final products. Our Company filed replies dated November 8, 2002 and January 5, 2004, respectively highlighting that it is an established principle that for the purpose of availing credit it is not necessary that the material has to be only purchased. On this contention several judgements has been relied upon in the reply. Even otherwise, as per C.E. Act the term ‘sales’ include inter-unit transfer also. Further intimation from the department is yet awaited.

11AB of the Central Excise Act, 1944.

8. Assistant Commissioner, Central Excise, Kolkata

Our Company has received a show cause notice No. V(15)/6/Tara-II/DIC/Adjn/06-07/1829 dated December 26, 2006 issued by the Assistant Commissioner, Central Excise, Kolkata, alleging contravention of provisions of Rule 11(2) & 11(4) of the Central Excise Rules, 2002 that the invoice number has been re-initialised during the middle of the year and two sets of invoices have been used for home consumption and export and that why penalty under Rule 25 of the Central Excise Rules, 2002 should not be imposed on our Company Our Company has filed a reply dated January 20, 2007 claiming contrary to the department’s allegations and praying for setting aside the show cause notice. Our Company has requested for a personal hearing in the matter. Reply is awaited.

Penalty Under Rule 25 of the Central Excise Rules, 2002

9. Central Excise Service Tax Appellate Tribunal, Mumbai.

Our Company has received show cause notice No V/PI/Enq./12-77/2004/41 dated January 4, 2006, issued by Joint Commissioner, Central Excise, Mumbai regarding alleged clandestine removal of good material without payment of duty in the guise of scrap arising out of fire and in respect of which our Company has filed the remission application. In this show cause notice there has been a demand for reversal of credit on inputs used in semi-finished and intermediate goods destroyed in fire. Thereafter, our Company received a second show cause notice No. V/Misc.(30)57/2004/83 dated November 16, 2006 issued by Commissioner of Central Excise, Mumbai, stating that the application for remission has been rejected on the aforesaid allegations that the material for which the remission claim has been filed had actually been clandestinely removed. Our Company filed its replies against the aforesaid two show cause notices on March 29, 2006 and February 5, 2007, stating that there is no

Excise duty of Rs. 11,90,752/- under section 11A of the Central Excise Act, 1944 Reversal of CENVAT credit of Rs.5, 66,907/- under Rule 14 of CENVAT Credit Rules. Interest under section 11AB of the Central Excise Act, 1944; Penalty of Rs.17,57,659/- under section 11AC of the Central Excise Act, 1944; Penalty of Rs.100,000/- on the Vice President of our Company and Rs.50,000/- each of the

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proof that it has been removed clandestinely. The proof Department has produced is self contradictory. This is a settled position that once the input is used in relation to manufacture, credit need not be reversed in case of destruction of material at any stage of the process. Our Company had requested for a personal hearing which was held on April 16, 2006 and February 27, 2007 before the Commissioner of Central Excise, Mumbai. Subsequently, the Commissioner of Central Excise., Mumbai has passed a common order-in-original No. 07/Commr/M.II/2007 dated March 27, 2007, in both the above cases, in which the demand of duty of Rs. 11, 90,752/- on finished goods under section 11A of the Central Excise Act., on demand of reversal of credit of Rs.5,66,907/- on the inputs used in semi-finished/intermediate goods destroyed by fire under Rule 14 of CENVAT Credit Rules has been confirmed. Penalty of an equivalent has been confirmed under section 11AC of the Central Excise Act. Further a personal penalty of Rs. 100,000 on the Vice-President and RS. 50,000/- each on the Works Manager and Manager-Excise & Customs has been imposed. Our Company has filed four appeals (One for our Company and three against the Vice President, Works Manager and Manager- Excise and Customs) on June 25, 2007, before the Central Excise Service Tax Appellate Tribunal . The stay application has been heard by the Tribunal on August 16, 2007 and vide order No. S/557-560/07/C-II/EB dated August 16, 2007 directed our Company to make a pre-deposit of Rs. 200,000/- which our Company has made on September 6, 2007.

Works Manager and the Manger – Excise and Customs

Custom Cases 10. Customs, Excise and

Service Tax Appellate Tribunal, Kolkata

Our Company has received the following Demand cum show cause notices 1. No. S2-40/2001 SIB dated October 10 / 15, 2001 alleging wrong availment of DEPB credit amount to Rs.16, 50,000/- against DEPB License No. 02602422 dated February 1, 1999, wrong availment of the benefit of Special Additional Duty amounting to Rs. 2,79,460/- and consequent erroraneous availament of DEPB credit. Show cause was also served for confiscation of goods under section 111(o) of the Customs Act, 1962 in addtion to monetary penalties. The demands under the show cause notice are as follows:

• Custom duty Rs.19,29,460/- under proviso 28(1) of the Customs Act, 1962 along with interest as applicable

• Penal action under section 112 and/or 114A of the Customs Act, 1962

Custom duty of Rs 19,29,460/- under proviso 28(1) of the Customs Act, 1962 Custom duty of Rs 11,89,774/-under proviso 28(1) of the Customs Act, 1962 Custom duty of Rs 3,08,933/-under proviso 28(1) of the Customs Act, 1962 Penalty aggregating to Rs.30,00,000/- for all the three cases

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2. No. S21-39/2000 SIB dated October 10 / 15, 2001 alleging wrong availment of DEPB credit amount to Rs.10,14,701/- against DEPB License No. 02602426 dated February 1, 1999, wrong availment of the benefit of Special Additional Duty amounting to Rs. 1,75,073/- and consequent erroraneous availament of DEPB credit. Show cause was also served for confiscation of goods under section 111(o) of the Customs Act, 1962 in addtion to monetary penalties. The demands under the show cause notice are as follows :

• Custom duty and interest of Rs. 11,89,774/- under proviso 28(1) of the Customs Act, 1962


3. No. S2-41/2001 SIB dated October 10 / 15, 2001 alleging wrong availment of DEPB credit amount to Rs.2,56,475/- against DEPB License No. 02601998 dated January 4, 1999, wrong availment of the benefit of Special Additional Duty amounting to Rs. 52,458/- and consequent erroraneous availament of DEPB credit. Show cause was also served for confiscation of goods under section 111(o) of the Customs Act, 1962 in addtion to monetary penalties. The demands under the show cause notice are as follows:

• Custom duty and interest of Rs. 3,08,933/- under proviso 28(1) of the Customs Act, 1962


Our Company has filed the following replies a. Letter dated July 22, 2002, against duty demand of Rs. 19,29,460/-denying all the allegations therein. Our Company had requested for a personal hearing which was granted on January 11, 2005. b. Letter dated January 4, 2003, against duty demand of Rs. 11,89,774/- denying all the allegations therein. Our Company had requested for a personal hearing which was granted on January 11, 2005. c. Letter dated March 19, 2003, against duty demand of amount Rs. 3,08,933/- denying all the allegations therein. Our Company had requested for a personal hearing which was granted on January 11, 2005. Subsequent to the personal hearing we have received the following orders-in-original

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a. Order-in-original number Kol/Cus/Port/26/2005 dated February 28, 2005 issued by Commissioner of Customs (Port), Kolkata, confirming the duty of Rs 19,29,460/- under proviso 28(1) of the Customs Act, 1962 and in addition to this imposing a penalty of Rs.10,00,000/- b. Order-in-original number Kol/Cus/Port/44/2005 dated March 21, 2005 issued by Commissioner of Customs (Port), Kolkata, confirming the duty of Rs 11,89,774/- under proviso 28(1) of the Customs Act, 1962 and in addition to this imposing a penalty of Rs.10,00,000/- c. Order-in-original number Kol/Cus/Port/82/2005 dated June 14, 2005, issued by Commissioner of Customs (Port), Kolkata, confirming the duty of Rs 3,08,933/- under proviso 28(1) of the Customs Act, 1962 and in addition to this imposing a penalty of Rs.10,00,000/- Our Company filed an appeal along with stay application before The Customs, Excise and Service Tax Appellate Tribunal, Kolkata against the above mentioned order-in-original as follows: 1. Appeal No CDM-58/05 dated May 18, 2006 2. Appeal No. CDM-63/05 dated May 18, 2006 3. Appeal No CDM-111/05 dated May 18, 2006 The Customs, Excise and Service Tax Appellate Tribunal, Kolkata, heard all the three Stay Applications and has passed the following orders : 1. Order No. S.576/Kol/2006 dated May 18, 2006 2. Order No. S.577/Kol/2006 dated May 18, 2006 3. Order No. S.567/Kol/2006 dated May 18, 2006 ruling that the demands made by the department are barred by limitation and the question of liability of confiscation and consequent penalty willl be determined at the regular hearing. It was further directed that our Company make a pre-deposit of 30% of the penalty imposed by July 25, 2006. On such deposit further pre-deposit would be waived recover would be stayed pending regular hearing of the appeal. Pursuant to the above orders our Company make a pre-deposit of Rs.9 Lacs (RS. 3 Lacs for each of the appeals under each order) which an amount of Rs.300,000/- under each order, has been pre-deposited with the authorities . The case has been fixed for hearing on merit on July 2, 2007.

11. Assistant Commissioner of Customs

Our Company has received a No S/26Misc-1643/2006 Group IIC/D dated October 31, 2006 issued by the Assistant Commissioner of

Custom duty of Rs.10,68,395/-

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Customs, Group II C & D, JNCH, alleging that our Company has misstated the facts in the Bills of Entry and wrongly claimed the benefit of the notification no. 21/2002 Cus dated March 1, 2002 due to which duty amount of Rs.10,68,395/- has been short levied. Our Company has filed a reply dated January 11, 2007, addressed to the Assistant Commissioner of Customs claiming a contrary view from that of the department and claiming the benefit of the said exemption notification and therefore no duty is payable. Our Company has been granted a personal hearing on June 1, 2007. Order is yet awaited.

12. Deputy Commissioner of Customs, Oil Unit, Mumbai

Our Company has received a show cause notice No S/7-92/97 PT II dated October 19, 2006 issued by the Deputy Commissioner of Customs, Oil Unit from the Office of the Commissioner of Customs (Imports), Mumbai alleging that our Company has paid duty on basis of ullage reportsa nd not on the invoice value i.e. the transaction value which is relevant for purposes of assessment under section 14 of the Customs Act. It has also been alleged that our Company has not included demurrage and other costs in the assessable value as required by Rule 9(2)(b) of the Custom Valuation Rules, 1988. Therefore it has been alleged that our Company has not provided all details / documents for arriving at the final duty. Our Company had filed a reply dated January 10, 2007, addressed to the Deputy Commissioner of Customs. Oil Unit, claiming a contrary view from that of the department and claiming the benefit of the said exemption notification and therefore no duty is payable. Our Company had requested for a personal hearing in the matter, which was granted on February 14, 2007. Subsequent to our submissions and personal hearing The Assistant Commissioner of Customs has passed Order No 1440/AC/011/LR/2006-07 dated March 28, 2007 confirming

1. the pending provisionally assessed Bills of Entry be finally assessed on basis of transaction value

2. the duty of Rs.905/- short paid against B/E No. 551984dated March 18, 2005 be paid by our Company

the differential duty demand of Rs.6,53,428/- on account of demurrage / detention and lighterage / barging charges, as stated in the show cause notice, be dropped

Customs duty of Rs.905/-

Service Tax Cases 13. Joint Commissioner of

Central Excise, Our Company received a Show Cause cum Demand Notice No. V(15)/11/ Tara-II/ S.Tax/04/858 dated November 18, 2004 issued by the Joint Commissioner of Central Excise,

Service tax amounting to Rs. 29,65,608/- Interest on delayed

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Kolkata VI-Commissionerate, Kolkata, alleging non-payment of service tax amounting to Rs.29,65,608/- for transfer of technical know how for manufacturing of ink and allied products and for rendering taxable service under category of “Scientific and Technical consultancy services” to M/s Dainippon Ink & Chemicals Inc., Japan, for the period between July 1, 2001 to June 30, 2003 thereby violating provisions of sections 66 & 68 of the Finance Act, 1994 read with provisions of sub clause IV in clause (d) of sub rule I of Rule 2, Rule 6 and Rule 7 of the Service Tax Rules, 1994 and old provision clause (i) of second proviso t osub rule (1) of Rule 6 as applicable before August 16, 2002 Our Company vide its letter dated September 18, 2006, addressed to the Additional Commissioner of Service Tax, submitted that it is not liable to pay any service tax, as it is royalty on technical know and does not construe any “service” provided. Our Company had requested for a personal hearing to be granted, in the event our contentions made in the reply are not accepted. Our Company would make further subsmissions and produce evidences in support of the denials/ contentions made by it.

payment of service tax @ 15% as per section 75 of the Finance Act, 1994 Penalty under section 76 of the Finance Act, 1994 Penalty under section 77 of the Finance Act, 1994 Penalty under section 78 of the Finance Act, 1994

14. Joint Commissioner of Central Excise,

Our Company received a Show Cause cum Demand Notice No. V(15)/15/ Tara-II/ S.Tax/04/30 dated March 8, 2005, issued by the Joint Commissioner of Central Excise, Kolkata VI-Commissionerate, Kolkata, alleging non-payment of service tax amounting to Rs.24,73,958/- for transfer of technical know how for manufacturing of ink and allied products and for rendering taxable service under category of “Scientific and Technical consultancy services” to M/s Dainippon Ink & Chemicals Inc., Japan, for the period between July 1, 2003 to June 30, 2004 thereby violating provisions of sections 66 & 68 of the Finance Act, 1994 read with provisions of sub clause IV in clause (d) of sub rule I of Rule 2, Rule 6 and Rule 7 of the Service Tax Rules, 1994 and old provision clause (i) of second proviso t osub rule (1) of Rule 6 as applicable before August 16, 2002. Personal hearing was granted to us vide letter dated May 20, 2005, for May 27, 2005 Further, in written submission dated May 27, 2005, at the time of personal hearing our Company had prayed for setting aside the order. The matter is pending.

Service Tax of Rs. 24,73,958/-

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15. Additional Commissioner. Service Tax, Kolkata

Our Company received a Show Cause cum Demand Notice No. V(5)/113/ST-Adjn/Addl.Comm/06/6370 dated August 16, 2006, issued by the Additional Commissioner. Service Tax, Kolkata, alleging non-payment of service tax amounting toRs. 31,70,856/- (Rs.31,18,677/- as service tax and Education Cess of Rs.52,179/-) for transfer of technical know how for manufacturing of ink and allied products and for rendering taxable service under category of “Scientific and Technical consultancy services” to M/s Dainippon Ink & Chemicals Inc., Japan, for the period between July 1, 2004 to June 30, 2005 thereby violating provisions of sections 66 & 68 of the Finance Act, 1994 read with provisions of sub clause IV in clause (d) of sub rule I of Rule 2, Rule 6 and Rule 7 of the Service Tax Rules, 1994 and old provision clause (i) of second proviso tosub rule (1) of Rule 6 as applicable before August 16, 2002. It has also been alleged that our Company has violated of Section 70 for non-submission of returns and thereby attracted the provisions of section 73 & 75 of the Finance Act, 1994, for recovery of service tax and education cess alongwith interest and also the provisions of sections 76, 77 & 78 of the Finance Act, 1944 for impose of penalty. Our Company has requested for a personal hearing. Intimation from the department is yet pending.

Service tax and education cess collectively amounting to Rs. 31,70,856/- Interest as admissible as per section 75 of Finance Act, 1994 Penalty under section 66 of Finance Act, 1994 Penalty under section 77 of Finance Act, 1994

16. Commissioner of Service Tax, Kolkata

Our Company has received a Show Cause Cum Demand Notice No. V(5)/84/ST-Adjn/JC/06/2914 dated April 13, 2006, from The Office Of The Additional Commissioner Service Tax, Kolkata alleging that our Company has wrongly availed the benefit of Exemption Notification Number 32/2004-ST dated December 3, 2004 thereby violating section 68(1) of the Chapter V/VA of Finance Act, 1994 read with Rule 6 of Service Tax Rules, 1994 by short payment of Service Tax and Education Cess collectively amounting to Rs. 7,46,854/- during the period from January 2005 to September 2005

Our Company has filed a reply vide latter dated July 28, 2006, addressed to the Joint Commissioner, Service Tax submitted that the exemption notification applies to company as it is applicable in respect to services provided by a goods transport agency and not determined on basis of who is paying the service tax. Our Company, in view of the above, has prayed that the said show cause notice be quashed. Further, our Company had requested for a personal hearing to be granted, in the event our contentions made in the reply are not accepted. Our Company would make further subsmissions and produce evidences in support of the denials/ contentions made by it.

Order has been passed by The Joint Commissioner of Service Tax dated June 14, 2007 in favour of our Company

Service Tax amount of Rs. 7,46,854/- Interest under section 75 of the Finance Act, 1994 Penalty under section 76 of the Finance Act, 1994

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17. Commissioner of Central Excise, Noida,

Our Company had received a show cause notice No V(15)Adj./Noida/DIC/65/06/1829 dated September 28, 2006, issued by Commissioner of Central Excise, Noida, alleging that the service tax on royalty paid to Dainippon Ink & Chemicals Inc., Japan for the period till August 15, 2002 and from August 16, 2002 to September 10, 2004 amounting to Rs. 7,17,405 and Rs. 52,41,031/- respectively and to Varn Holding Plc for the period till August 15, 2002 being an amount of Rs.17,873/- , for using the technology provided by them for manufacturing printing ink and press room chemical technical, amounts to payment of fees for receiving taxable service from them. It has been opined by the department that the said service falls under the category of service by ‘Consulting Engineer’. Our Company has filed a reply dated November 27, 2006 wherein we have referred to a number of judgements in which it has been held that payment of Royalty is not for rendering service of a Consulting Engineer. However, w.e.f. September, 2004 a category of service, viz. IPR Service, has been introduced in the Service Tax legislature. Accordingly, for payment of Royalty to DIC, Japan, registration has been obtained under the said category. Hence, the said litigation does not have any recurring effect.

Service Tax (including Cess) Rs. 59,76,309/- Penalty under section 76 & 78 of the Finance Act, 1994; Interest at appropriate rate under section 75 of the Finance Act, 1994;

Sales Tax Proceedings 18. The Deputy

Commissioner of Commercial Taxes, Corporate Division, West Bengal

Pertains to Assessment Year-2003-04 The Assistant Commissioner of Commercial Taxes, West Bengal passed assessment order dated June 30, 2006, alleging that our Company is liable to Sales Tax of Rs.11,11,111.00/- by considering additional sales on an adhoc basis. Our Company filed an appeal on October 13, 2006 against the said assessment order. This case is pending before the Deputy Commissioner of Commercial Taxes, Corporate Division West Bengal, the appellate authority,. The hearing is yet to take place.

Sales Tax of Rs. 11,11,111/-.

19. The Deputy Commissioner of Commercial Taxes, Corporate Division West Bengal.

Pertains to Assessment Year-2002-03 The Assistant Commissioner of Commercial Taxes, West Bengal passed assessment order dated June 30, 2005, alleging that our Company is liable to Sales Tax of Rs. 37,03,704/- by considering additional sales on an adhoc basis relating to the matter of difference of purchase/ Invoice value with the Way Bill Register. Our Company filed an appeal on October 25, 2005 against the said assessment order. This case is pending before the Deputy

Sales Tax of Rs.37,03,704/-

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Commissioner of Commercial Taxes, Corporate Division West Bengal, the appellate authority,. The hearing is yet to take place.

20. The Deputy Commissioner of Commercial Taxes, Corporate Division West Bengal

Pertains to Assessment Year-2001-02 The Assistant Commissioner of Commercial Taxes, West Bengal passed assessment order dated June 30, 2004, alleging that our Company is liable to Sales Tax of Rs. 38,94,364/- by considering additional sales on an adhoc basis and estimating the purchase tax payable on an adhoc amount Our Company filed an appeal on August 30, 2004 against the said assessment order. This case is pending before the the Deputy Commissioner of Commercial Taxes, Corporate Division West Bengal, the appellate authority,. The hearing is yet to take place.

Sales tax of Rs.38,94,364/-

21. Additional Commissioner of Commercial Taxes, West Bengal .

Pertains Assessment Year-2000-01 The Deputy Commissioner of Commercial Taxes, West Bengal passed assessment order dated July 25, 2006, alleging that our Company is liable to Sales Tax of Rs. 8,44,164/- for non-submission of Sales Tax forms “C” Forms Our Company filed an appeal on August 31, 2006, against the said assessment order. This case is pending before the Additional Commissioner of Commercial Taxes, Corporate Division West Bengal, the appellate authority,. The hearing is yet to take place.

Sales tax of Rs.8,44,164/-

22. Deputy Commissioner of Commercial Taxes, Corporate Division, west Bengal

Pertains to Assessment Year-1996-97 The Assistant Commissioner of Commercial Taxes, West Bengal passed assessment order dated June 23, 1999, alleging that our Company is liable to Sales Tax of Rs. 24,03,376/- for non-submission of Sales Tax forms Our Company filed an appeal on August 11, 1999, against the said assessment order. This case is pending before the Additional Commissioner of Commercial Taxes, Corporate Division West Bengal, the appellate authority,. The hearing of the Appeal is yet to take place.

Sales Tax of Rs.24,03,376/-, including an interest amount of Rs.18,605/-

23. Deputy Commissioner of Commercial Taxes, Corporate Division,

Pertains to Assessment Year 1996-97 The Deputy Commissioner of Commercial Taxes,

Sales tax of is Rs. 27,07,821/-

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West Bengal.

West Bengal passed assessment order dated June 23, 1999, alleging that our Company is liable to Sales Tax of Rs. 27,07,821/- for non-submission of Sales Tax forms “C” Forms Our Company filed an appeal on August 11, 1999, against the said assessment order. This case is pending before the Deputy Commissioner of Commercial Taxes, Corporate Division West Bengal, the appellate authority,. The hearing of the Appeal is yet to take place.

Income Tax Procedings 24. Deputy Commissioner

of Income-tax

Pertains to assessment year 2005-06. Intimation under Section 143(1) of the Income Tax Act, 1961, acknowledged as received on July 12, 2006 for payment of tax amount of Rs. 20,948. Our Company has filed a petition under Section 154, filed on August 4, 2006, claiming a refund of Rs. 485,440/- due to mis-calculation of interest under section 234C of the I.T. Act, 1961. Order of the department is awaited

25. Commissioner of Income-tax (Appeal)

Pertains to Assessement year 2004-05. The Assistant Commissioner under Section 143(3) of the I.T. Act, 1961, passed an order dated December 29, 2006, confirming the pricing of the Transfer pricing officer in case of international transactions undertaken by our Company, recomputation of deduction claimed under Section 80HHC and disallownce of expenses under section 14A stating

1. That the total income of the our Company to be Rs.8,94,51,220/- (instead of Rs. 8,42,33,740/- as per the return filed by us.)

2. penalty proceedings under section 271(1)(c) be initiated against our Company

Our Company has filed an appeal dated January 18, 2007, against the abovementioned order, before he Commissioner of Income Tax (Appeals) – X. Our Company has received a notice dated February 1, 2007 for hearing on February 13, 2007. An application dated February 5, 2007 for adjornment. Pursuant to which it was fixed on February 21, 2007. However on the said date, due to the absence of concerned officials the matter was not heard. Hearing was fixed on August 22, 2007. The matter was heard and our Company was informed that the next date of hearing would be intimated by way of notice. Our Company has not received any notice till date. The matter is pending.

26. Income Tax Appellate Tribunal.

Pertains to Assessemnt year 2003-04. The Assistant Commissioner under Section 143(3) of the I.T. Act, 1961, passed an order dated March

Tax demand of Rs.7,13,441/-

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31, 2006 disallowing expenses claimed on account of custom duty on materials lying in bonded warehouses, recomputation of deduction under section 80HHCm stating the total income of the our Company to be Rs.693,09,470/- instead of Rs. 676,89,603/- as per the return filed by us. Thus the additional tax amount demanded was Rs.7,13,441/- Our Company had filed an appeal against the above assessment order on April 17, 2006, before Commissioner of Income Tax (Appeals). In reply to the appeal, the Commissioner of Income Tax, Kolkata, passed an order dated December 28, 2006 allowing appeal only on grounds of disallowing expenses claimed on account of custom duty on materials lying in bonded warehouses, but confirmed the Assessing officers computation under section 80HHC. Our Company had filed an appeal against the above assessment order on March 7, 2007 before the Income Tax Appellate Tribunal. The next date of hearing is December 23, 2007. The matter is pending

27. Hon’ble Calcutta High Court

Assessment Year 1992-93 The Deputy Commissioner Special Range 17, Kolkata, vide assessment order u/s 143(3) dated February 21, 1995, disallowed expenses on account of exchange fluctuation loss, expenditure on repair and maintenance, and 80HHC computation. Our Company filed an appeal against the said assessment order before the Commissioner of Income Tax (Appeals 11) vide Appeal No. 109/CIT(A)-11/SR/17/94-95. After hearing the matter, the Commissioner of Income Tax (Appeal-11) passed order No 109/CIT(A)-11/SR/17/94-95 dated November 1,1995 allowing repairs and maintenance expenses and disallowing exchange fluctuation loss Thereafter our Company on April 23, 1996 field an appeal against the order of Commissioner of Income Tax (Appeal-11) before the ITAT, Kolkata ITAT disallowed our appeal vide their order no. ITA No. 1003/cal/96 dated January 18, 2002 on the question of allowance of exchange fluctuation loss Subsequently, against the order of ITAT :

• Our Company has filed an appeal before the Hon’ble Calcutta High Court against disallowance of Exchange Fluctuation loss amounting to Rs. 997,815 .

The estimated amount of income tax liability is Rs. 9,52,693/-

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• The Department has filed an appeal for

trading loss not considered for the purpose of deriving profit under Section 80HHC amounting to Rs. 18,40,952/-

No hearing of the above appeal has taken place.


Assessment Year 1993-94 The Deputy Commissioner Special Range 17, Kolkata, vide assessment order u/s 143(3) dated February 29, 1996, challenging the computation of deduction of 80HHC (a) without considering trading loss for the purpose of total profit and (b) computation of Turnover for the purpose of 80HHC without considering excise duty and disallowance of adjustment of loss on renunciation profit on right share Our Company filed an appeal against the said assessment order before the Commissioner of Income Tax (Appeal 11)- Appeal No. 35//CIT(A)-11/SR/17/97-98 who passed order no No 35//CIT(A)-11/SR/17/97-98 dated 14.12. 2000 allowing our Companys contention in regard to (a) Renunciation loss as stated above (b) non-consideration of excise duty for the purpose of computing turnover and (c) also trading loss vide order The Income Tax Department filed an appeal before the ITAT , Kolkata vide appeal no. IT A No. 425/Cal /2001 against the above order of CIT(A) who vide their order refer ITA No. 425/cal/2001 dated 23.4.2003 upheld the CIT (Appeal)’s order regarding computation of turnover without considering Excise duty for the purpose of Section 80HHC and also renunciation loss but accepted the contentions of the Department in the areas of computing Profit after considering Trading Loss. Subsequently, against the order of ITAT :

(a) Our Company has filed an appeal before the Hon’ble Calcutta High Court claiming as aforesaid.

(b) The Department has also filed an appeal claiming as aforesaid.

No hearing of the above appeal has taken place.

The estimated amount of income tax liability is Rs. 1,12,38,879/-


Assessment Year 1994-95 The Deputy Commissioner Special Range 17, Kolkata, passed an assessment order u/s 143(3) dated February 5, 1997, challenging the computation of deduction of 80HHC (a) without considering trading loss for the purpose of total profit and (b) computation of Turnover for the purpose of 80HHC and Provision of Long term Retirement benefit without doing funding

The estimated amount of tax involved Rs. 1,35,188/-

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An appeal was filed by our Company against the above assessment order before the Commissioner of Income Tax (Appeals 11)- Appeal No. 63/CIT (A) -11/SR/17/96-97 And 97-98 who passed an Order in appeal No 63/CIT(A)-11/SR/17/96-97 and 27 of 97-98 dated February 22, 1999 rejecting all grounds of our Company. Our Company further appealed before the ITAT, Kolkata on May 11, 1999 against the order of the Commissioner of Income Tax (Appeal) who vide their order no. ITA No. 746/cal/99 dated February 4, 2003 disallowed our appeal Our Company has gone in appeal against the said order of ITAT before the Hon’ble Calcutta High Court on the question of Trading Loss only. Final hearing in the matter is yet to take place.


Assessment Year 1995-96 The Deputy Commissioner Special Range 17, Kolkata, passed an assessment order u/s 143(3) dated March 31, 1998, arbitrary addition of Rs. 1,95,53,846 on account of capital gain on sale of shares in the Assessment year 1993-94 , increase of sale proceeds of company vehicles during the year without assigning any reason, disallowance of exchange loss provision of non-funded retirement benefits and leave encashment and Trading loss for the purpose of computation of profit under section 80HHC An appeal was filed by our Company against the above assessment order before the Commissioner of Income Tax (Appeals 11)- Appeal No. No Appeal No. 25/CT(A) /11/SR/17/97.98 of 97-98, who passed an Order in appeal No 25/CIT(A)-11/SR/17/97-98 dated 2.10.98 allowing all ground excepting employee retirement benefits (non-funded) portion amounting to Rs. 28,00,000 and also deduction of Trading Loss against total profit for the purpose of Section 80HHC

Our Company further appealed before the ITAT, Kolkata on November 21, 1998 against the order of the Commissioner of Income Tax (Appeal) who vide their order no. ITA No. 746/cal/99 dated February 4, 2003 disallowed our appeal vide their order no. ITA No. 1700/cal/98 dated 3.2.2003 on all the grounds Our Company has gone in appeal against the said order of ITAT before the Hon’ble Calcutta High Court on the question of Trading Loss only Final hearing is yet to take place.

The estimated amount of tax involved Rs. 63,440/-

vi. Litigation involving customers/suppliers/agents Nil

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vii. Litigation in the nature of winding up petitions/ liquidation/ bankruptcy / closure filed by / against our Company Cases filed by our Company

28. Our Company has filed a winding up petition under section 433,434 and 439 of the Companies Act, 1956, being Company Petition No. 23 of 2006 before the High Court, Calcutta against Py Pak Private Limited, wherein Py Pak Private Limited has failed to make payments of dues of Rs. 3,01,515/- plus interest (less Rs. 10,000/- already received). The matter is in listing now.

29. Our Company has filed a winding up petition under section 433,434 and 439 of

the Companies Act, 1956, being Company Petition No. 465 of 2005 before the High Court, Calcutta against R. Solomon & Company Private Limited, wherein R. Solomon & Company Private Limited has failed to make payments of dues of Rs. 80,07,771/-. The High Court has vide its order dated August 6, 2007 directed the opposite party to pay the outstanding amount in 6 instalments comprising of the principal, interest and penalties beginning from July 13, 2007. The Opposite party has gone in appeal before the Supreme Court against the said High Court order. The Special Leave Petition has by the opposite party, been filed by on September 14, 2007. The matter was heard on October 9, 2007 by the Supreme Court who has directed the opposite party to repay the entire outstanding in eight installments beginning from November 2007. The copy of the order is awaited.

Contingent Liabilities as on June 30, 2007

Year ended December 31 Particulars Six months ended June 30, 2007

2006 2005 2004 2003 2002

Estimated amount of Contracts remaining to be executed on Capital Account

346.13 357.82 85.43 72.03 24.40 48.26

Income tax matter 91.07 91.07 67.79 67.79 0.00 0.00 Disputed Sales Tax, excise duties etc

654.43 635.54 1,284.93 1,238.27 781.37 738.77

Gaurantees given on behalf of third parties

0.00 1.00 24.77 51.92 90.25 128.27

Bills Discounted 531.86 407.17 208.17 0.00 0.00 0.00 In the event the obligations materialize, our Company will face additional financial burden to the extent, thereby affecting our profitability. Our Company owes an amount exceeding Rs. 1 Lac which is due for more than 30 days as on the date of the balance sheet i.e. June 30, 2007, to the following small scale undertakings:

Names of the Small Scale Undertakings Vikram Industries Perfect Forms B.G.Industries Vard Organics Navyug Industries Associated Metal Containers

Tin Box Company Metal Products & Engineering Co. Apex Enterprise

Somani Oil Industries Mehta Petro Refineries Ltd. Anupam Colours & Chemicals Sohan Dye-Chem Pvt. Ltd. Marigold Paints Pvt. Ltd. Alpha Chemie Shri Metal Container J.P.Drums Pvt. Ltd. Gem Synthetics & Polymer (India)

S.K.Enterprise Films & Printers (India) Pvt.Ltd. Hi Tec Blow Moulders Pvt. Ltd.

Ripple India Limited Dutta Enterprises Mehta-Chem Resins & Allied Chem Ind. Pvt. Ltd. Daya Tin Industries Royal Indstries

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Rama Cans Pvt. Ltd. Bijoya Drums Pvt. Ltd. S.S.Packaging

Setco Chemicals (I) Pvt. Ltd.

Suru Chemicals & Pharmaceuticals

Veekay Chemicals

B. Non payment of statutory dues or dues to Banks / Institutions: Nil C. Overdue interest/ principal as on current date: There have been no defaults and there are no overdues in respect of bonds, debentures and fixed deposits (placed through public or private placement) and arrears in respect of cumulative preference shares or any other liabilities as on current date. Litigations/disputes/penalties or any proceedings known to be contemplated by government authorities. a. Notices issued and penalties levied on our Company and our Directors, by Government

Authorities

1. Show cause notice issued by the Registrar of Companies, Kolkata dated July 26, 2006 for violation of sections 187-C, 3(1)(iv) and 31, 211, 217(1)(c) of the Companies Act, 1956 after scrutinising the balance sheet as at December 31, 2005 and Profit and Loss Account for the year ended said date, whereby the Registrar had asked our Company to show cause within fifteen days as to why the prosecution should not be launched against our Company and send a copy of the Balance Sheet along with other requisite documents.

Our Company has filed the requisite documents and also a reply to the same.

Our Company has subsequently received another Show cause notice dated February 16, 2007 for violations under sections 211(1), 211(3A) and 217(1)(e) of the Companies Act, 1956

Our Company has filed a compounding application on July 12, 2007, with regards to section 211(1) and 211(3A) of the Companies Act, 1956 and has gone for fresh representation for alleged default under section 217(e) of the Companies Act, 1956. The date of hearing has been fixed on October 16, 2007.

There are no litigations against any other company whose outcome could have materially adverse effect on the position of our Company. D. Outstanding Litigations and defaults pertaining to our Directors and Promoter: Our Promoter is not involved in any litigation. One of our Independent, Non-Executive Directors, Mr. Subir Bose, is involved in the following criminal litigations Case No. Authority

before whom pending

Nature of Case Amount Involved (Rs. *)

9/L/2006/D Ld. Judicial Magistrate of First Class, Ponda, Goa

As an occupier of the factory of Berger Paints India Limited for violation of section 37 of the Factories Act, 1948 and failure to take measures to prevent outbreak of fire as required under section 38 of the Factories Act, 1948 for an accidental fire which did not cause any injury to any person. The hearing matter will take place soon.

Not ascertainable

635/2005 of 2005 with CRR

No 635 before the Ld. Additional

A complaint was lodged by the Regional Provident Fund Commissioner, West Bengal, against Berger Paints India Limted and the concerned factory manager

Not ascertainable

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No 1326 of 2006

Chief Judicial Magistrate, Srirampur and No 1326 before the High Court, Kolkata

for alleged non-payment of provident fund dues to the employees of the factory at Rishra, West Bengal. The Rishra factory was transferred from ICI India Limited as a part of business and the provident fund dues of the employees were duly deposited with the approved trust fund of ICI India limited. Once all formalities with the Regional Commissioner were completed the due have been transferred to the office of the Regional Provident Fund Commissioner. The company (i.e. Berger Paints) has filed an revision application before the High Court at Kolkata against the proceedings under Case No 635/2005 and a stay has been granted. Simultaneously, a writ petition has been filed by Berger paints Limited praying for a declaration that the deposit of the provident fund dues in the trust fund of ICI India Limited is valid.

E. Outstanding litigations, defaults, etc., pertaining to matters likely to affect operations and finances of our subsidiaries, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII to the Companies Act, 1956, etc: Nil

F Penalties imposed upon issuer company or promoter group companies or directors or promoters by any government authorities in the last five years. : Nil G. Outstanding Litigations against our Company’s subsidiaries.

Our subsidiary, DIC Coatings of India Limited received a letter dated 20.04.2005 claiming that the company had allocated territiorial restrictions as well as was offering differential discounts to the dealers. In view of the above, the Agreements were registrable under section 33(1) of the MRTP Act 1969. DIC Coatings India Limited vide letter dated 20.05.2005, rebutted both those claims The DG sent another letter dated 29.07.2007 asking the company to re-confirm that the company was not imposing territorial restrictions and there was uniform rate of discount to all dealers which was duly given by our letter dated 03.08.2005 The DG by its letter dated 18.10.2005 asked for the details and criteria for offering Special Discounts and Annual commission including various slabs to the dealers. The company relied by its letter dated 26.10.2005 stating that commission etc. were given on various commercial terms like basis of payment, annual offtake etc. The DG again asked for the basis of such payment by its letter dated 14.12.2005 The company provided a detailed reply by its letter dated 22.03.2006 hereby the contentions were as follows:

1. Eligibility of special discount arises only in case of dealers whose payment terms are within 60 days. Presently the rate is 3% (as against the earlier rate of 5%).

2. The company was earlier a part of DIC India Ltd., the parent Company which handled both Printing Inks and Coatings. Subsequent to de-merger of DIC Coatings from the parent Company on 31st December 21997, many of the old dealers who were still conducting business in both Printing Inks and Coatings used to get commission according to their previous entitlements. However, the company has already devised a policy towards payment of commission based on turnover, the annual commission slab lying between 1.5% to 3.5%. However, two dealers who had long association with the company were still being paid the earlier rates.

Subsequently, a letter dated March 7, 2007 was received from the MRTP Commission that a case was called and nobody was present n behalf of the company. The company had not received any complaint and got the compliant from the office of MRTP Commission and registered our appearance. The next date of hearing is awaited.

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H. Outstanding litigations involving Promoter Group/Group companies:

None of our Promoter Group/Group companies are involved in any outstanding litigations. Material developments since the last Balance Sheet date There have been no material developments since the last Balance Sheet date, i.e. December 31, 2006.

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GOVERNMENT APPROVALS Except for pending approvals mentioned under this section and under the section titled “Risk Factors” beginning on page no. vii of the Letter of Offer, our Company has received the necessary consents, licenses, permissions and approvals from the Government/RBI and various Government agencies required for our present business. Our Company can undertake all our present activities and activities as proposed in the section titled “Objects of the Issue” beginning on page 22 of the Letter of Offer. Our Company has received the following significant Government approvals, licenses and permissions: Incorporation

1. Certificate of Incorporation bearing No. 21-15202 dated April 2, 1947 from the Registrar of Companies, Calcutta.

2. Fresh Certificate of Incorporation consequent to name change dated August 6, 2004 from the Registrar

of Companies, Kolkata. General Licenses/Approvals/ Certificates

1. The Permanent Account Number of our Company is AABCC0703C 2. The Tax Deduction Account Number CALC00179E

Ahmedabad Unit

1. Licence for working a factory under the Factories Act, 1948 bearing Licence No. 30/303/2/6517/A dated October 9, 1999, issued by the Chief Superintendent, Factories, Gujarat valid upto December 21, 2007 issued to our Company for our Company’s factory premises situated at Plot No 634/A, G.I.D.C Phase-IV, Vatva, Ahmedabad and to employ not more than 500 persons.

2. Acknowledgement No. 2550/SIA/IMO/2001 dated November 9, 2001 received pursuant to the

provision of Press Note 6 dated July 29, 1993 and Press Note 17 dated November 28, 1997 from Secretariat Of Industrial Assistance, Ministry of Commerce and Industry confirming receipt of our Company's Industrial Entrepreneur's Memorandum for manufacture of News Black Printing Ink falling under NIC Code 3035 giving broad description as Manufacture of Prinitng, Writing or Drawing Ink at our Company's factory premises situated at Plot No 633 & 634, G.I.D.C Phase-IV, Vatva, Ahmedabad.

3. Consolidated consent order/ authorisation No.2270 dated June 11, 2004, issued by the Environmental

Engineer, Gujarat Pollution Control Board to our Company under section 25 of the Water (Prevention and Control of Pollution) Act, 1974, under section 21 of the Air (Prevention and Control of Pollution) Act, 1981 and authorization under rule 3(c) and 5(5) of the Hazardous Waste (Management and Handling) Rules, 1989 framed under the Environmental (Protection) Act, 1986, for our Company’s factory premises situated at 633, 634, Phase IV, GIDC, Vatva Indstrial Estate, Vatva, Ahmedabad, Gujarat – 382445. This consolidated consent is valid upto April 10, 2008

4. License No. P/HQ/GJ/15/1806(P12161) dated February 22, 1999 issued by Controller of Explosives

issued to our Company for importation and storage of 76 KL petroleum of Classes A&B, at our Company’s factory premises situated at 633, 634, Phase IV, GIDC, Vatva Indstrial Estate, Vatva, Ahmedabad, Gujarat – 382445, under Petroleum Act, 1934. The License is valid upto December 31, 2008.

5. Central Excise Registration Certificate bearing Registration No.AABCC0703CXM004 dated August

20, 2004, issued by the Assistant Commissioner of Central Excise, Ahmedabad under Rule 9 of the Central Excise Rules, 2002 to our Company for manufacturing of Excisable Goods for our Company’s factory premises situated at 633, 634, Phase IV, GIDC, Vatva Indstrial Estate, Vatva, Ahmedabad, Gujarat – 382445.

6. Central Excise Registration Certificate bearing Registration No.AABCC0703CXD005 dated August

20, 2004, issued by the Assistant Commissioner of Central Excise, Ahmedabad under Rule 9 of the Central Excise Rules, 2002 to our Company for operating a manufacturer’s depot at our Company’s

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factory premises situated at 633, 634, Phase IV, GIDC, Vatva Indstrial Estate, Vatva, Ahmedabad, Gujarat – 382445.


20, 2004, issued by the Assistant Commissioner of Central Excise, Ahmedabad under Rule 9 of the Central Excise Rules, 2002 to our Company for operating a manufacturer’s depot at our Company’s factory premises situated at R.K.Estate, 16, Opp. V-Trans, Sarkhej Bavla Highway, Sarkhej, Ahmedabad, Gujarat – 382210

8. Central Excise Registration Certificate bearing Registration No.AABCC0703CXD027 dated November

16, 2006, issued by the Deputy Commissioner / Assistant Commissioner of Central Excise, Ahmedabad under Rule 9 of the Central Excise Rules, 2002 to our Company for operating a manufacturer’s depot at our Company’s factory premises situated at Ashwamegh Industrial Estate, A/43, Sarkhej Bavla Highway, Changodar, Chanerdar, Ahmedabad, Gujarat – 382213.

9. Letter dated February 12, 2005, by the Deputy Commissioner of Service Tax allotting to our Company

the service tax code number AABCC0703CST004, for payment of service tax for transport of goods by road for our factory at 633, 634, Phase IV, GIDC, Vatva Indstrial Estate, Vatva, Ahmedabad, Gujarat – 382445.

10. Certificate of Registration bearing No. GU IIA 5363, with effect from November 1, 1994, issued by the

Central Sales Tax Office, Ahmedabad for our Company’s Depot at 633, 634, Phase IV, GIDC, Vatva Indstrial Estate, Vatva, Ahmedabad, Gujarat – 382445.

11. Certificate of Registration bearing No.0757004482 dated July 1, 2002, (letter issued on June 12, 2002)

as Manufacturer / Reseller, issued by the Sales Tax Department, Ahmedabad, Gujarat, under Rule 9 of the Gujarat Sales Rules, 1969 to our Company for our Company’s factory premises situated at 633, 634, Phase IV, GIDC, Vatva Indstrial Estate, Vatva, Ahmedabad, Gujarat – 382445. The license has also been duly endorsed on May 16, 2004 to include registration of our Company’s godown situated at R.K.Estate, 16, Opp. V-Trans, Sarkhej Bavla Highway, Sarkhej, Ahmedabad, Gujarat – 382210, with effect from December 8, 2003.

12. Certificate of Registration dated May 22, 1996, bearing No. 801/95, granted by the Registering Officer pursuant to section 7(2) of the Contract Labour (Regulation and Abolition) Act, 1970 to our Company for our Company’s factory premises situated at Plot No 634/A, G.I.D.C Phase-IV, Vatva, Ahmedabad

.

13. Certificate of Registration under section 5(1) of the Gujarat State Tax on Professions, Trades, Callings and Employments Act, 1976 bearing No.E109080582 dated September 1, 2000, issued by the Profession Tax Officer, Ahmedabad to our Company for our Company’s factory premises situated at 634/A, G.I.D.C Phase-IV, Vatva, Ahmedabad

14. Letter No 20765-34 dated January 31, 1997 from the Regional Director, Regional Office, Employee

State Insurance Corporation, Ahmedabad, allotting Code No. 20765-34, issued to our Company under the provisions of Section 1(3)of the Employees’ State Insurance Act, 1948, for our factory at 633, 634, Phase IV, GIDC, Vatva Indstrial Estate, Vatva, Ahmedabad, Gujarat – 382445.

Chennai Unit

1. License to work a factory – Inspectorate of Factories License Book issued under Rule 4(6) of the Tamil Nadu Factories Rules, 1950 by the Deputy Chief Inspector of Factories, Chennai. This is valid upto December 31, 2008

2. Central Excise Registration Certificate bearing Registration No.AABCC0703CXM001 dated August 16, 2004, issued by the Deputy Commissioner of Central Excise, Chennai under Rule 9 of the Central Excise Rules, 2002 to our Company for manufacturing of excisable goods at our Company’s factory premises situated at no. 92 New No. 60, Sheik Maistry Street, Royapuram, Chennai, Tamil Nadu, 600013.

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3. Central Excise Registration Certificate bearing Registration No.AABCC0703CXD026 dated June 27, 2006, issued by the Deputy Commissioner of Central Excise, Chennai under Rule 9 of the Central Excise Rules, 2002 to our Company for operating a manufacturer’s depot at our Company’s factory premises situated at no. 60 (Old no. 92) , Sheik Maistry Street, Royapuram, Chennai, Tamil Nadu, 600013.

4. Certificate of Registration bearing No.1180019 dated March 14, 1996, to be registered as a dealer under section 20 of Tamil Nadu General Sales Tax Act, 1951, issued by the Commercial Tax Officer, Madras, under the Tamil Nadu General Sales Tax Act, 1959, to our Company for our Company’s factory premises at 92 Sheik Maistry Street, Royapuram, Madras 13 with additional place of business at No.11 Araothoon Road, Royapuram, Madras 6000013.

5. Certificate of Registration dated January 10, 2007, to be registered as a dealer under the Tamil Nadu Value Added Tax Act, 2006, issued by the Commercial Tax Officer, Madras under rule 5(1)(a) of the Tamil Nadu Value Added Tax Act, 2006, to our Company for our Company’s factory premises at 92 Sheik Maistry Street, Royapuram, Madras 6000013 with additional place of business at Royapuram, Tamil Nadu.

6. Certificate of Registration under Section 69 of the Finance Act, 1994 (32 of 1994) No REGN.NO.GTA/139DIVN-I STC dated February 17, 2005, by the Assistant Commissioner, Service Tax allotting to our Company the service tax code number AABCC0703CST002, for payment of service tax on services of Goods Transport Agency for our Company’s premises at 92 Sheik Maistry Street, Royapuram, Madras 6000013.

7. Letter No EE/O&M/VPD/JE R46/F.LT CT/D 77/2K dated January 17, 2001 from the Executive Engineer, O&M, providing electronic meter, at our Company's factory premises situated at 92 Sheik Maistry Street, Royapuram, Madras 6000013.

8. License for Fire and Rescue Service bearing license no. 1164/06 dated December 19, 2006, by Divisional Officer, Tamil Nadu Fire and Rescue Dept., Chennai for manufacturing, storing and selling of printing ink and allied products, under section 13 of Tamil Nadu fire and Rescue Service Act, 1985.

9. Clearance from Chennai Metropolitan Development Authority vide letter No A4/4002/2000 dated March 17, 2001, for approval of area plans for our Company’s factory premises situated at 92 Sheik Maistry Street, Royapuram, Madras 6000013.

10. License under section 287 of Cc Mc Act bearing no. B017011065dated March 5, 2007 for manufacturing of printing ink issued by licensor inspector.

11. Certificate of Registration under Section 5(1) of the Tamil Nadu State Tax on Professions, Trades, Callings and Employments Act, 1976 bearing No.02/017/IN0014, issued by the Profession Tax Officer, Chennai to our Company for our Company’s factory premises situated at 92 Sheik Maistry Street, Royapuram, Madras 6000013.

12. Letter dated April 22, 1994, from the Regional Director, Regional Office, Employee State Insurance Corporation, Chennai, allotting Code No. S1-349731, issued to our Company under the provisions of Section 1(3)of the Employees’ State Insurance Act, 1948, for our factory at 92 Sheik Maistry Street, Royapuram, Madras 6000013.

Delhi Unit

1. License to work a factory under the Factories Act, 1948 bearing Licence No. 1640 dated March 3, 1965, issued by the Chief Superintendent, Factories, Maharashtra, valid upto December 21, 2011 issued to our Company for our Company’s factory premises situated at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015, and to employ not more than 75 persons.

2. Application dated December 26, 2006, in prescribed Form No 2, for registration and grant or renewal

of license for the period from January 2007 to December 2011 and notice of occupation as specified in section 6 & & of the Factories Act, 1948, for manufacturing of printing ink by employing not more than 34 workers at our Company’s factory premises situated at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015.

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3. Central Excise Registration Certificate bearing Registration No.AABCC0703CXM012 dated

December 30, 2004, issued by the Assistant Commissioner of Central Excise, Delhi under Rule 9 of the Central Excise Rules, 2002 to our Company for manufacturing of excisable goods at our Company’s factory premises situated at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015.

4. Central Excise Registration Certificate bearing Registration No.AABCC0703CXD020 dated December

30, 2004, issued by the Assistant Commissioner of Central Excise, Delhi under Rule 9 of the Central Excise Rules, 2002 to our Company for operating a manufacturer’s depot at our Company’s factory premises situated at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015.

5. Certificate of Registration bearing No.LC/23/030265/0363 dated December 31, 1982, as Manufacturer

/ Importer / Reseller for Printing Ink and Printing Ink Sunorics, issued by the Sales Tax Department, Delhi, under Rule 16 of the Delhi Sales Tax Rules, 1975, to our Company for our Company’s factory premises at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015.

6. Provisional Registration Number 07680030265 allotted by Sales Tax Officer, Delhi under Delhi Value

Added Tax.

7. Certificate of Registration bearing No. LC/23/030265/0363 dated March 31, 1963, (letter issued on May 10, 1963) issued by the Central Sales Tax Office, Delhi under the Central Sales Tax (Registration and Turnover Rules) 1957, for our Company’s premises at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015.

8. Certificate of Registration under Section 69 of the Finance Act, 1994 (32 of 1994) No DL-I/ST/R-

IX/GTO/959/DIC/2005 dated February 3, 2005, by the Superintendent, Service Tax allotting service tax number AABCC0703CST003, to our Company for payment of service tax on services of Goods Transport Agency for our Company’s premises at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015.

9. Letter No ED9 (14)/Distt West/S.West/03/535 dated June 18, 2003, from the Chief Engineer, Delhi

Electric Supply Undertaking granting consent to our Company for installation of DG Sets of 125 KVA capacity, at our Company's factory premises situated at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015.

10. Letter No E.D.9(14)/Distt. West/S.West./03/535 dated June 18, 2003, issued by Assistant Electrical

Inspector, Delhi confirming that the electrical installation of 125 KVA of D G Sets installed at our Company’s premises at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015, is in order and conformity with the Indian Electric rules, 1956.

11. Factory License No FLCOWZ05002501(I/L 81884) dated May 30, 2005, issued by Municipal

Corporation of Delhi under section 416 and 417 of the Delhi Municipal Corporation Act, 1957, for our Company's factory premises situated at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015. The License is valid upto March 31, 2008

12. Letter dated June 5, 1985, from the Regional Director, Regional Office, Employee State Insurance

Corporation, Delhi, confirming Code No. 11-1495-90, issued to our Company under the provisions of Section 1(3)of the Employees’ State Insurance Act, 1948, for our factory at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015.

Kolkata Unit

1. License to work a factory under the Factories Act, 1948 bearing License No. 7411 and Registration No. 7-TP/10/71 dated January 29, 1971, issued by the Chief Inspector of Factories, West Bengal, valid upto December 21, 2007 issued to our Company for our Company’s factory premises situated at Transport Depot Road, Kolkata – 700 088.

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2. Acknowledgement No. 3491/SIA/IMA/2004 dated September 16, 2004 received pursuant to the provision of Press Note 6 dated July 29, 1993 and Press Note 17 dated November 28, 1997 from Secretariat Of Industrial Assistance, Ministry of Commerce and Industry confirming receipt of our Company's Industrial Entrepreneur's Memorandum for manufacture of Printing Ink falling under NIC Code 3035 giving broad description as Manufacture of Printing, Writing or Drawing Ink at our Company's factory premises situated at Transport Depot Road, Kolkata – 700 088.

3. Authorization No 94/2S(HW)-971/2001 dated June 27, 2006, (previous authorization No.

465/30/WPB-S/97 dated February 28, 2001) under the Hazardous Waste (Management and Handling) Rules, 1989 framed under the Environmental (Protection) Act, 1986, for our Company’s factory premises situated at Transport Depot Road, Kolkata – 700 088. This consent is valid upto March 31, 2011.

4. License No. P/HQ/WB/15/2410(P1736) dated May 29, 2003, issued by Controller of Explosives issued

to our Company for importation and storage of 15 KL petroleum of Class B, at our Company’s factory premises situated at Transport Depot Road, Kolkata – 700 088, under Petroleum Act, 1934. The License is valid upto December 31, 2007.

5. License No. P/HQ/WB/15/131(P419) dated October 1, 2004, issued by Controller of Explosives issued

to our Company for importation and storage of 156.2 KL petroleum of Classes A& B, at our Company’s factory premises situated at Transport Depot Road, Kolkata – 700 088, under Petroleum Act, 1934. The License is valid upto December 31, 2008.

6. License No WBRL/L-2580 dated August 14, 2006 issued by the Special Officer & Deputy Secretary,

Local Govt & Urban Development Deptt., Govt of West Bengal, under the West Bengal Fire Services Act, 1950

7. Certificate of Importer Exporter Code (IEC) dated bearing IEC No. 0288000552 issued by the

Assistant Director General of Foreign Trade, Kolkata on April 11, 1988. The certificate has been duly endorsed on June 14, 2006 to include the following units of our Company

Unit at Full Address Transport Depot Road, Kolkata – 700088 Kolkata Poysha, Budge Budge Trunk Road, Anil Nagar, Gobindapur, Kolkata, West Bengal – 700 141 Chandivali Farm, Off Saki Vihar Road, Mumbai – 400 072 Mumbai Off Dr. E. Moses Road, Worli, Mumbai – 400 018

Thane Prithivi Complex, Gala No 2, Building No. P-6, Kalher Village, Bhiwandi, Dist. Thane, Maharashtra – 421302

Ahmedabad Plot No 633 & 634, GIDC Estate, Phase IV, Vatva, Ahmedabad-382445 Chennai 92, Sheikh Maistry Street, Royapuram, Chennai – 600 013

66B, Bommasandra, Industrial Area, Hosur Road, Anekal Taluk, Bangalore – 562158 Bangalore 66A, Hosur Road, Bommsandra, Industrial Area, Hosur Road, Anekal Taluk, Bangalore – 562158

New Delhi 7, DLF Industrial Area, Shivaji Marg, New Delhi – 110 015 Noida C 55 A&B, Phase II, Noida, Dist. Gaqutam Budh Nagar, Noida, UP-201305

8. Central Excise Registration Certificate bearing Registration No.AABCC0703CXD022 dated October 10, 2005, issued by the Deputy/Assistant Commissioner of Central Excise, Kolkata under Rule 9 of the Central Excise Rules, 2002 to our Company for operating as dealer of excisable at our Company’s factory premises situated at Transport Depot Road, Kolkata – 700 088.

9. Certificate of Registration under Section 69 of the Finance Act, 1994 (32 of 1994) No CFA/CAL-I/300

dated March 27, 2001, by the Deputy Commissioner, Central Excise allotting to our Company the service tax code number 1671064295, for payment of service tax on services of clearing and forwarding agent for our Company’s premises at Transport Depot Road, Kolkata – 700 088.

10. Certificate of Registration bearing No. 1543(AW), dated February 19, 2001, for registration as

Manufacturer / Reseller and stating that the registration is valid from July 1, 1957 until cancelled,

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issued by the Assistant Commissioner, Commercial Sales Tax Office, Mumbai for our Company’s premises at Transport Depot Road, Kolkata – 700 088.

11. Certificate of Registration under West Bengal Value Added Sales Tax Act, 2003, issued by the

Commissioner, Commercial Taxes, allotting No.19230107120 dated March 12, 2003, issued for our Company’s premises at Transport Depot Road, Kolkata – 700 088.

12. Certificate of Registration dated April 21, 1977, bearing No. S/7/112/77CL/LC, granted by the

Registering Officer pursuant to section 7(2) of the Contract Labour (Regulation and Abolition) Act, 1970 to our Company for our Company’s factory premises situated at Transport Depot Road, Kolkata – 700 088 and duly endorsed for name change on March 28, 2007 by the Registering Officer.

13. Certifcate of Registration bearing No. 07-509 dated April 6, 1993, issued by the Senior Inspecting

Officer, Directorate of Electricity, West Bengal, granting consent to our Company for installation of DG Sets of 180, 180, 187.50 and 320 KVA capacity each, at our Company's factory premises situated at Transport Depot Road, Kolkata – 700 088.

14. License No WBRL/1-2580 dated August 14, 2006 under the West Bengal Fire Services Act, 1950.

Mumbai Unit

1. License to work a factory under the Factories Act, 1948 bearing Licence No. 303.7/24277/C0313 dated March 31, 2004, issued by the Chief Superintendent, Factories, Maharashtra, valid upto December 21, 2007 issued to our Company for our Company’s factory premises situated at Chandivali Farm, Off Saki Vihar Road, Mumbai – 400 072, and to employ not more than 250 persons.

2. Permission to establish and work a factory No. Sub-L-227 of 72-73 dated May 17, 2003 issued by

the Assistant Commissioner, Muncipal Corporation of Greater Bombay, under sections 390 and 479 of the Bombay Municipal Corporation Act, for manufacturing Priniting Inks, Synthetic Raisins etc., at Company premises situtated at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072 upto March 31, 2012.

3. Acknowledgement No. 3587/SIA/IMA/2004 dated September 22, 2004 received pursuant to the

provision of Press Note 6 dated July 29, 1993 and Press Note 17 dated November 28, 1997 from Secretariat Of Industrial Assistance, Ministry of Commerce and Industry confirming receipt of our Company's Industrial Entrepreneur's Memorandum for manufacture of Printing Ink falling under NIC Code 3035 giving broad description as Manufacture of Printing, Writing or Drawing Ink at our Company's factory premises situated at Chandivali Farm, Off Saki Vihar Road, Mumbai – 400 072.

4. Consolidated consent order/ authorisation No.BO/RO-RD/PCI-I/MU-0646-06/R/CC-31 dated

January 10, 2007, issued by the Principal Scientific Officer, Maharashtra Pollution Control Board to our Company under Section 26 of the Water (Prevention and Control of Pollution) Act, 1974, under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 and authorization under rule 5 of the Hazardous Waste (Management and Handling) Rules, 1989 and Amendment Rules 2003, 1986, for our Company’s premises situated at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072. This consolidated consent is valid upto November 30, 2011.

5. License No. CR//VGL/MISC/SOLVENT/2000/148 dated March 21, 2005, issued by Controller for

Rationing and Director of Civil Supply, for acquisition, storage, sale and use of Solvent, Raffinate & Slop, at Company’s factory premises situated at Chandivali Farm, Off Saki Vihar Road, Mumbai – 400 072. The License is valid upto March 20, 2008

6. License No. P/HQ/MH/15/593(P5940) dated September, 20, 1983, issued by Controller of

Explosives issued to our Company for importation and storage of 45 KL petroleum of Classes B & C, at our Company’s factory premises situated at Chandivali Farm, Off Saki Vihar Road, Mumbai – 400 072, under Petroleum Act, 1934. The License is valid upto December 31, 2007.

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7. License No. P/HQ/MH/15/2046(P7337) dated September 26, 2000, issued by Controller of Explosives issued to our Company for importation and storage of 142 KL petroleum of Classes A&B, at our Company’s factory premises situated at Chandivali Farm, Off Saki Vihar Road, Mumbai – 400 072, under Petroleum Act, 1934. The License is valid upto December 31, 2008.

8. Letter No EZ/ECI-1044/CIL/PAS/2001 dated December 15, 2001 from the Chief Engineer, BSES, granting consent to our Company for installation of DG Sets of 275 KVA capacity, subject to receiving approval permission from the Maharashtra State Electricity Board, at our Company's factory premises situated at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072, with a condition not to run the DG sets in parallel to BSES supply.

9. Letter No Co-ord/Cell/DGS/7-9/90/Licensee/BSES No 44384 dated November 28, 2001 from the Chief Engineer (Commercial), Maharahtra State Electricity Board (MSEB), granting consent to our Company for installation of DG Sets of 275 KVA capacity, at our Company's premises situated at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072, with a condition, amongst other conditions, not to run the DG sets in parallel to MSEB supply.

10. Letter No CE(Elec)/Desk-5(4)/429/02 dated February 14, 2002, from the Chief Engineer

(Electrical), Public Works Department, Government of Maharashtra, allotting Registration No E/BB/465 for generator sets installed at our Company's premises situated at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072, as required under provision of Rule No 4(i) of the Bombay Electricity Duty Rules, 1962.

11. Layout Plan for our Company's premises situated at Off Saki Vihar Road, Chandivali Farm,

Mumbai – 400 072, duly approved by the Chief Fire Officer, Mumbai and Mumbai Muncipal Corporation

12. Central Excise Registration Certificate bearing Registration No.AABCC0703CM002 dated

November 24, 2004, issued by the Deputy Commissioner of Central Excise, Mumbai under Rule 9 of the Central Excise Rules, 2002 to our Company for manufacturing of excisable goods at our Company’s factory premises situated at Chandivali Farm, Off Saki Vihar Road, Mumbai – 400 072.

13. Certificate of Registration bearing No.400 072 S 1 dated April 1, 1996, (letter issued on March 18,

1996) as Manufacturer / Importer / Reseller for Printing Ink and Printing Ink Sunorics, issued by the Sales Tax Department, Mumbai, under section 22 / 22A of of the Bombay Sales Tax Act, 1959, to our Company for our Company’s factory premises at Worli, Near Dhobi Talao, Off Dr. Moses Road, Worli, Mumbai with additional place of business at Mane Road, Nagpur

14. Certificate of Registration issued by the Registration Officer, Sales Tax Department bearing No.

27600005341 dated April 1, 2006, (letter issued on April 1, 2006) as Manufacturer issued for our Company’s premises Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072, with additional places of business at Gala No 3 & 4, Pritavi Complex, Kalhar Village, Building No 6 Thane, Bhiwandi - 421302 and Gala No 2, Orithavi Complex, Building No 2, Mumbai – 400 072

15. Certificate of Registration under Section 69 of the Finance Act, 1994 (32 of 1994) No ST/DN-

V/GTA/REGN/2189/04-05 dated March 9, 2005, by the Superintendent, Service Tax allotting to our Company the service tax code number AABCC0703CST007, for payment of service tax on services of Goods Transport Agency for our Company’s premises at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072.

16. Certificate of Registration bearing No. 400 072, dated April 1, 1996, (letter issued on March 18,

1996) issued by the Central Sales Tax Office, Mumbai for our Company’s premises at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072.

17. Registration/Membership certificate No. 146529-LIC-/06/7149 valid upto December 31, 2007,

issued by Mumbai Municipal Corporation for registration as local manufacturing / trade bodies in printng ink

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18. Certificate of Registration under Section 5(2) of the Maharashtra State Tax on Professions, Trades,

Callings and Employments Act, 1975 bearing No.PT/E/1/1/30/8 dated August 16, 1975 issued by the Profession Tax Officer,Mumbai to our Company for our Company’s factory premises situated at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072.

19. Permanent Account Number under the Income Tax Act is AABCC0703C.

20. Certificate of Registration of Establishment under the Bombay Shops and Commercial

Establishments Act bearing Registration No. l-iv/000604 dated November 23, 2006 issued by the Inspector under the Bombay Shops and Establishment Act, 1948 for our Company's premises situated at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072, for serving breakfast and lunch.

21. Letter No. MH/PF/Exemption/THN/1231 dated October 7, 2003, by the Regional Provident Fund

Commissioner, Thane, allotting Code No. to our Company under the provisions of the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 for our Company's factory premises situated at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072

22. Letter No B/InsV/31-1910-34/400072/98 dated February 27, 1998 from the Regional Director,

Regional Office, Employee State Insurance Corporation, Mumbai, allotting Code No. 20765-34, issued to our Company under the provisions of Section 1(3)of the Employees’ State Insurance Act, 1948, for our Company’ premises at Off Saki Vihar Road, Chandivali Farm, Mumbai – 400 072

Noida Unit

1. Registration and Licence to work a factory under the Factories Act, 1948 bearing Licence No. G2B - 2446 dated March 16, 1990 issued by the Chief Inspector of Factories, Uttar Pradesh, valid upto December 21, 2007 issued to our Company for our Company’s factory premises situated at C-55 A & B, Phase II, Noida and to employ not more than 150 persons.

2. Acknowledgement No. 2024/SIA/IMA/2004 dated June 7, 2004 received pursuant to the provision of

Press Note 6 dated July 29, 1993 and Press Note 17 dated November 28, 1997 from Secretariat Of Industrial Assistance, Ministry of Commerce and Industry confirming receipt of our Company's Industrial Entrepreneur's Memorandum for manufacture of Coldset Colour, Printing Ink/Liquid Ink/Screen Ink falling under NIC Code 3035 giving broad description as Manufacture of Prinitng, Writing or Drawing Ink and for the manufacture of Press Room Chemicals under NIC Code 3053 at our Company's factory premises situated at C-55 A & B, Phase II, Noida. There have been two amendments to this IEM Acknowledgement dated August 17, 2004 in categories of products and as on October 13, 2004, for change in name of our Company from Coates of India Limited to DIC India Limited.

3. Acknowledgement No. 5721/SIA/IMO/2006 dated November 10, 2006 received pursuant to the

provision of Press Note 6 dated July 29, 1993 and Press Note 17 dated November 28, 1997 from Secretariat Of Industrial Assistance, Ministry of Commerce and Industry confirming receipt of our Company's Industrial Entrepreneur's Memorandum for manufacture of Coldset Colour, Printing Ink/Liquid Ink/Screen Ink falling under NIC Code 3035 giving broad description as Manufacture of Printing, Writing or Drawing Ink at our Company's factory premises situated at C-55 A & B, Phase II, Noida.

4. Possession Certificate bearing Registration No PH II/88/012/1988 issued by Office of the PE(GN)

Noida vide letter No Noida/Spl/698/94 dated June 17, 1989, for taking possession of Plot No. C-55 A & B, Phase II, Noida.

5. Possession Certificate bearing Registration No NOIDA/SPL/698/94 dated December 23, 1994, issued

by Office of the Project Engineer –IV, Noida vide letter No NOIDA/PR-IV/1491/IX dated July 7, 1995, for taking possession of Plot No. C-55 A & B, Phase II, Noida.

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6. Consent order/ authorisation dated March 13, 2007, issued by the Regional Officer, Uttar Pradesh Pollution Control Board to our Company under Section 25 & 26 of the Water (Prevention and Control of Pollution) Act, 1974, for our Company’s factory premises situated at C-55 A & B, Phase II, Noida. This consent is valid upto December 31, 2007.

7. Consent No 81/C/D-91/07 dated April 5, 2007, issued by Regional Officer, Uttar Pradesh Pollution

Control Board, to our Company under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, for our Company’s factory premises situated at C-55 A & B, Phase II, Noida. This consent is valid upto December 31, 2007.

8. Authorization No NH-131/Haz order 13 GJ/06 dated November 15, 2006, under the Hazardous Waste

(Management and Handling) Rules, 1989 framed under the Environmental (Protection) Act, 1986, for our Company’s factory premises situated at C-55 A & B, Phase II, Noida. This consent is valid upto November 14, 2007.

9. License No. P/HQ/UP/15/1072(P8476) dated January 17, 2007 issued by Controller of Explosives

issued to our Company for importation and storage of 460 KL petroleum of classes A & B at our Company’s factory premises situated at C-55 A & B, Phase II, Noida.

10. Letter No 4826 N/ A.R/Generator dated March 3, 1990, from the Chief Engineer, Electric Safety,

Uttar Pradesh granting consent to our Company for installation of DG Sets of 250 KVA capacity, at our Company's factory premises situated at C-55 A & B, Phase II, Noida.

11. Letter No 4826 N/ A.R/Generator dated March 3, 1990, from the Chief Engineer, Electric Safety,

Uttar Pradesh granting consent to our Company for installation of DG Sets of 250 KVA capacity, at our Company's factory premises situated at C-55 A & B, Phase II, Noida.

12. Letter No 1572/V.S.N/GBD Region/Section 30/Generator/N dated December 23, 2002, from the Chief

Engineer, Electric Safety, Uttar Pradesh, granting consent to our Company for installation of DG Sets of 500 KVA capacity, at our Company's factory premises situated at C-55 A & B, Phase II, Noida.

13. Letter No 1546/V.S.N/ GBD Region/Section 30/Generator/N dated November 1, 2006, from the Chief

Engineer, Electric Safety, Uttar Pradesh granting consent to our Company for installation of DG Sets of 750 KVA capacity, at our Company's factory premises situated at C-55 A & B, Phase II, Noida.

14. Approval of the factory layout plans, situated at C-55 A & B, Phase II, Noida, by the Fire Station

Officer, Noida dated April 10, 1990.

15. Central Excise Registration Certificate bearing Registration No.AABCC0703CXM006 dated August 13, 2004, issued by the Assistant Commissioner of Central Excise, Gaziabad/ Noida, under Rule 9 of the Central Excise Rules, 2002 to our Company for manufacturing of excisable goods for our Company’s factory premises situated at C-55 A & B, Phase II, Noida.


13, 2004, issued by the Assistant Commissioner of Central Excise, Gaziabad/ Noida, under Rule 9 of the Central Excise Rules, 2002 to our Company for operating a manufacturer’s depot at Company’s factory premises situated at C-55 A & B, Phase II, Noida.

17. Certificate of Registration under Section 69 of the Finance Act, 1994 (32 of 1994) No

590407/ST/DIC/GTA/12/04 dated February 4, 2005, by the Central Excise Officer, and letter dated April 28, 2005, from the Deputy Commissioner of Central Excise allotting Service Tax allotting service tax number AABCC0773CST1001, to our Company for payment of service tax on services of Goods Transport Agency for our Company’s premises at C-55 A & B, Phase II, Noida.

18. Certificate of Registration bearing No. CST 5036522 dated November 16, 1989 issued by the Central

Sales Tax Office, Noida, Uttar Pradesh for our Company’s factory premises at C-55 A & B, Phase II, Noida.

19. Certificate of Registration bearing No. ND 0035449 dated November 29, 1989, as Manufacturer /

Reseller, issued by the Sales Tax Department, Noida, Uttar Pradesh under Rule 57 of the Uttar Pradesh

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Sales Tax Rules, 1948, to our Company for our Company’s factory premises situated at C-55 A & B, Phase II, Noida.

20. Certificate of Registration dated July 9, 2002 bearing No. 239/2002, granted by the Registering Officer

pursuant to section 7(2) of the Contract Labour (Regulation and Abolition) Act, 1970 to our Company for our Company’s factory premises situated at C-55 A & B, Phase II, Noida, for employment of 93 workers per contractor.

21. Certificate of Registration dated June 13, 2005 bearing 400/05 , granted by the Registering Officer

pursuant to section 12(2) of the Contract Labour (Regulation and Abolition) Act, 1970 to hire the following contractors at our Company’s factory premises situated at C-55 A & B, Phase II, Noida

22. Letter No E-1 4290/Noida/90 dated May 30, 1990, issued under Section 1(5) of the ESI Act 1948, by

Assistant Regional Officer, Noida, allotting ESIC Code No. 21-18585-83 to our Company for its factory premises situated at Plot No. C-55 A & B, Phase II, Noida.

23. Letter from the Office of the Regional Provident Fund Commissioner, No

34883/SRO/MRT/COVERAGE/UP/15793 dated March 22, 1993, intimating that our Company has been exempted under Section 17(1A) of the E.P.F and M.P. Act, 1952 from the provisions of the Act (H.O. Code No WB/1188) and for allotment of exemption code No. UP /15793 for the unit of our Company situated at Plot No. C-55 A & B, Phase II, Noida, for purposes of identification and verification.

Banglore Licenses

1. Licence for working a factory under the Factories Act, 1948 bearing Licence No. 14851 dated March

29, 2006, issued by the Chief Superintendent, Factories, Karnataka valid upto December 31, 2008 issued to our Company for our Company’s factory premises situated at Plot No 66A, Bomasandra Industrial Area, Anekal Taluk, Bangalore – 560 099 and to employ not more than 20 persons.

2. Central Excise Registration Certificate bearing Registration No.AABCC0703CXM014 dated March 7,

2006, issued by the Assistant Commissioner of Central Excise, Banglore, under Rule 9 of the Central Excise Rules, 2002 to our Company for manufacturing of Excisable Goods for our Company’s factory premises situated at Plot No 66A, Bomasandra Industrial Area, Anekal Taluk, Bangalore – 560 099.

3. Consent order dated June 7, 2007, issued by the Regional Officer, Karnataka State Pollution Control

Board to our Company under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, for our Company’s factory premises situated at Plot No 66A, Bomasandra Industrial Area, Anekal Taluk, Bangalore – 560 099. This consent is valid upto June 30, 2008.

4. Registration Certificate No.0764/2006 dated February 27, 2006, issued by Office of the Inspector,

under Karnataka Shops and Commercial Establishment Act, 1961, for our factory premises situated at Plot No 66A, Bomasandra Industrial Area, Anekal Taluk, Bangalore – 560 099. This consent is valid upto December 31, 2010.

5. Provisional VAT Registration bearing Tax Identification Number 29920080210 dated March 27, 2003,

to be effective from April 1, 2003, issued by the Registering Authority of the Commercial Tax Department of Karnataka for our factory premises situated at Plot No 66A, Bomasandra Industrial Area, Anekal Taluk, Bangalore – 560 099.

6. Certificate of Registration under Section 69 of the Finance Act, 1994 (32 of 1994) No

590407/ST/DIC/GTA/12/04 dated February 4, 2005, by the Central Excise Officer, from the Deputy Commissioner of Central Excise allotting Service Tax allotting service tax number AABCC0703CST008, to our Company for payment of service tax on services of Goods Transport Agency for our Company’s premises at Plot No 66A, Bomasandra Industrial Area, Anekal Taluk, Bangalore – 560 099.

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Research and Development Permission The Government of India, Ministry of Science and Technology, Department of Scientific & Industrial Research, Delhi, has vide letter No TU/IV-RD/434/2007 dated May 7, 2007, granted recognition to DIC India Limited for in-house research and development unit of our Company situated at Transport Depot Road, Kolkata The recognition is valid upto March 31, 2010. Renewals applied for but not received Ahmedabad Unit 1. Certificate of Registration dated June 13, 2005 bearing 400/05, granted by the Licensing Officer and Assistant Labour Commissioner, Ahmedabad, pursuant to section 12(2) of the Contract Labour (Regulation and Abolition) Act, 1970 to hire Shri Amarsingh Rathod as contractor for gardening and provide casual work force for packing, labeling, loading and unloading of materials at our Company’s factory premises situated at Plot No 634/A, G.I.D.C Phase-IV, Vatva, Ahmedabad. He is licensed to employ not more than 25 workmen and his license is valid upto September 30, 2007. An application for renewal of the aforesaid certificate of registration license has been made by the contractor on August 16, 2007. Delhi Unit 1. Consent order/ authorisation No.DPCC/CMC//2003-04/9502 dated January 30, 2004, issued by the

Assistant Environment Engineer, Delhi Pollution Control Committee to our Company under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974, under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 for manufacturing of printing ink (non-flexo-graphic) at our Company’s premises situated at 7-DLE Industrial Area, Najafgarh Road, Shivaji Nagar, New Delhi – 110 015. This consolidated consent was valid upto July 11, 2006. Common application dated August 21, 2006, for renewal of the aforesaid Consent order has been made to the Delhi Pollution Control Committee.

Kolkata Unit 1. Consent order/ authorisation dated December 26, 2006, issued by the Regional Officer, West Bengal

Pollution Control Board to our Company under Section 25 & 26 of the Water (Prevention and Control of Pollution) Act, 1974, and under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, for our Company’s factory premises situated at Transport Depot Road, Kolkata – 700 088. This consent is valid upto September 29, 2007. An application dated August 1, 2007 for further renewal has been submitted to the Environmental Engineer, West Bengal Pollution Control Board, Kolkata

Noida Unit 1. Report of examination or test or pressure vessel or plant, dated July 31, 2006, issued by Meenal

Engineers & Consultants, an agency approved by Director of Factories Approval, (Approval No 46-F/GEN/Comp.Person/U.P/2006 dated January 2, 2006) that the Pressure Vessels of 500 Litres Compressor Air Receiver, installed in our Company’s factory premises at C-55 A & B, Phase II, Noida, are functioning safely and satisfactorily at the time of inspection. The certificate was valid upto January 30, 2007. An application dated January 10, 2007 has been made to Meenal Engineers & Consultants to arrange for testing and approval certificate of Pressure Vessels of 500 Litres Compressor Air Receiver installed in the factory.

Pending approvals We have not applied for the following licenses, consents and authorisations : Sr. No.

Approval / Consent Authority Status

1. Consent to establish and operate under Section 25 & 26of Water (Prevention and Control of Pollution) Act1974, for our Chennai unit.

Regional Officer, Tamil Nadu State Pollution Control

Will be applied in due course

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Board, Tamil Nadu 2. Consent under section 21 of the Air (Prevention and

Control of Pollution) Act 1981, for our Chennai unit. Regional Officer, Tamil Nadu State Pollution Control Board, Tamil Nadu


3. Authorization under rule 3(c) and 5(5) of the HazardousWaste (Management and Handling) Rules, 1989 framedunder the Environmental (Protection) Act, 1986, for ourChennai unit.



Intellectual Property For details on Intellectual Property please refer to section titlted ‘Business Overview” beginning on page no. 43 of the Letter of Offer. Approvals arising out of Objects of the Issue : The commissioning of the Mother Plant at Noida, would require additional power requirements totalling to 1050 KVA, which our Company proposes to meet by installation of D.G. Sets for which consent would have to be obtained from the Chief Engineer, Electric Safety, Uttar Pradesh. In addition to the above, any further approvals, if applicable, due to any changes/amendments to existing laws or regulations will also have to be obtained. Presently, we have neither applied nor obtained any approvals arising out of our Objects of the Issue as stated in the paragraph hereinabove.

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue Pursuant to the resolution passed by the Board of Directors of our Company at its meeting held on April 18, 2007 and the resolution passed by the shareholders at the Annual General Meeting held on May 29, 2007, it has been decided to make this offer to the Equity Shareholders of our Company with a right of renunciation exercisable by the Shareholders in the manner as set out in the Letter of Offer in the section titled “Issue Related Information. Consent of Lenders The agreements in respect of some of the loan taken by our Company contain certain covenants inter-alia for altering our Company’s share capital and for our Company’s expansions and diversifications plans, including the expansion proposed to be funded out of the proceeds of this Issue. Our Company has taken the consents from such lenders. For further details please refer to section titled “Capital Structure” beginning on page 15 of the Letter of Offer. Prohibition by SEBI

Neither our Company, nor its Directors or the Promoter Group Companies, or companies withwhich our 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) has been prohibited from accessing the capital market under any order or direction passed by SEBI. Further the promoters, their relatives (as per Companies Act, 1956), our Company, group companies, associate companies are not detained as willful defaulters by RBI/Government authorities and there are no violations of securities laws committed by them in the past or pending against them.

Eligibility for the Issue

DIC India Limited is an existing listed Company undertaking a rights issue of its Equity Shares. It is exempted from eligiblility norms as set out in Clause 2.3.1of the SEBI DIP Guidelines in terms of Clause 2.4.1(iv) of the SEBI DIP Guidelines.

Disclaimer Clause

AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE LETTER OF OFFER TO SECURITIES AND EXCHANGE BOARD OF INDIA (‘SEBI’) SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. THE LEAD MANAGER TO THE ISSUE, SBI CAPITAL MARKETS LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE 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 MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT OUR COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, SBI CAPITAL MARKETS LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE

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DATED JUNE 29, 2007 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS 1992 WHICH READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIALS 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 OUR COMPANY, IT’S DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY OUR COMPANY,

WE CONFIRM THAT:

a) THE DRAFT LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

b) 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; AND

c) THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE.

3. WE CONFIRM THAT BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID.

4. IF UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS NOT APPLIACBLE

The filing of Letter of Offer does not, however, absolve our Company from any liabilities under Section 63 or Section 68 of the Act or from the requirement of obtaining such statutory and other clearances as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take up, at any point of time, with the Lead Manager any irregularities or lapses in the Letter of Offer. In addition to the Lead Manager, the issuer is also obligated to update the offer document and keep the public informed of any material changes till the date of listing and commencement of trading of the securities offered under the Letter of Offer.

Caution

Our Company and Lead Manager accept no responsibility for statements made otherwise than in the Letter of Offer or in the advertisements or any other material issued by or at the instance of our Company and that anyone placing reliance on any other source of information, incuding our website, www.dicindialtd.com, would be doing so at his/her/their own risk.

All information shall be made available by the Lead Manager and the Issuer to the shareholders and no selective or additional information would be made available for a section of the shareholders or investors in any manner whatsoever including at presentations, research or sales reports etc.

Disclaimer in Respect of Jurisdiction

The Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations thereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Kolkata, India only.

The Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations thereunder. The distribution of the Letter of Offer and the Issue of Equity Shares on a Rights basis to

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persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons in whose possession the Letter of Offer may come are required to inform themselves about and observe such restrictions. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer has been filed with SEBI for observations and SEBI has given its observations. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and the 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 the Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in our Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date.

Disclaimer clauses of Stock Exchanges

The Calcutta Stock Exchange Association Limited (CSE), the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE)(hereinafter referred to as the “Stock Exchanges”) have given their permission to our Company to use their respective names in the Letter of Offer as the Stock Exchanges on which our Company’s shares issued in terms of this Issue are proposed to be listed. The Stock Exchanges have scrutinized the Draft Letter of Offer for their limited internal purpose of deciding on the matter of granting the aforesaid permission to our Company. The Stock Exchanges, who have given their Disclaimer clauses are mentioned below:

The CSE, the BSE and the NSE have vide their letters dated August 9, 2007, July 19, 2007 and July 26, 2007, respectively, given their permission to our Company to use their respective names in the Letter of Offer as the stock exchanges on which our Company’s securities are proposed to be listed.

Disclaimer clause of the BSE

Our Company has applied for listing the securities on the Bombay Stock Exchange Limited. As required, a copy of the draft Letter of Offer has been submitted to The Bombay Stock Exchange Limited, (hereinafter referred to as “BSE” or the “Exchange”).

BSE has given vide its letter dated July 19, 2007 permission to our Company to use the Exchange’s name in this Letter of Offer as one of the stock exchanges on which this Company’s securities are proposed to be listed. The Exchange has scrutinized this Letter of Offer for its limited internal purpose on deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Disclaimer clause of the NSE

Our Company has applied for listing the securities on the National Stock Exchange of India Limited. As required, a copy of the draft Letter of Offer has been submitted to National Stock Exchange of India Limited (hereinafter referred to as “NSE”).

NSE has given vide its letter Ref. No. NSE/LIST/51865-S dated July 26, 2007, permission to the Issuer to use its name in the draft Letter of Offer as one of the Stock Exchanges on which this Issuer’s securities are proposed to be listed. The Exchange has scrutinized this Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to be distinctly understood that the aforesaid permission, given by NSE, should not in any way be deemed or construed that the Letter of Offer has been cleared or approved by NSE; nor does it in any manner warrant, certify, or endorse the correctness or completeness of any of the contents of this Letter of Offer; nor does it warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of this Issuer, its promoters, its management, or any scheme or project of this Issuer. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent

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inquiry, investigation and analysis and shall not have any claim against NSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription / acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

Disclaimer clause of the CSE

Our Company has applied for listing the securities on the Calcutta Stock Exchange Association Limited. As required, a copy of the draft Letter of Offer has been submitted to The Calcutta Stock Exchange Association Limited. The Calcutta Stock Exchange Asociation Ltd (the Exchange) has given vide its letter dated August 9, 2007 permission to our Company to use the Exchange’s name in the Offer document as one of the Stock Exchanges on which this Company’s securities are proposed to be listed. The Exchange has scrutinized this Offer document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Offer document; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that this Offer document has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated in the Offer document or for any other reason whatsoever.

Filing

The draft Letter of Offer has been filed with Securities Exchange Board of India, SEBI Bhavan, Plot No C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051, for its observations and also with all the Stock Exchanges where the securities to be issued in terms of the Letter of Offer are proposed to be listed.

Listing

The existing Equity Shares of our Company are listed on the CSE, the BSE and the NSE, under International Securities Indentification Number INE303A01010. The fully paid up Equity Shares proposed to be issued on a rights basis shall be listed and admitted for trading on the CSE, the BSE and the NSE under the existing ISIN for fully paid Equity Shares of our Company. The fully paid up Equity Shares allotted pursuant to this Issue will be listed as soon as practicable but in no case later than 7 days from the finalization of the basis of allotment.

Our Company has applied for in-principle approvals to the CSE, the BSE and the NSE for the securities proposed to be issued through the Letter of Offer. If the permission to deal in and for an official quotation of the securities is not granted by the stock exchanges mentioned above, our Company shall forthwith repay, without interest, all monies received from the applicants in pursuance of the Letter of Offer. If such money is not repaid within eight days after our Company becomes liable to repay it (i.e. 42 days after closure of the Issue), then our Company and every director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money, with interest as prescribed under sub-sections (2) and (2A) of Section 73 of the Act.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Act, which is reproduced below:

“Any person who

(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or

(b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”

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Consent

Consent in writing of the Auditors, Lead Manager, Legal Advisor, Registrar to the Issue and Banker to the Issue to act in their respective capacity have been obtained and such consents have not been withdrawn up to the time of delivery of the Letter of Offer for registration with the stock exchanges. Consents of all the lenders for this rights issue have been obtained.

The Auditors of our Company have given their written consent for the inclusion of their Report in the form and content as appearing the Letter of Offer and such consents and Reports have not been withdrawn upto the time of delivery of the Letter of Offer for registration with the stock exchanges.

M/s Doshi Chatterjee & Bagri, Chartered Accountants have given their written consent for inclusion of income tax benefits in the form and content as appearing in the Letter of Offer accruing to our Company and its members. To the best of our Company’s knowledge there are no other consents required for making this Issue. However, should the need arise, necessary consents shall be obtained by our Company. Expert Opinion, if any. We have not obtained any expert opinions, except for the Statement of Tax Benefits obtained from M/s Doshi Chatterjee & Bagri, Chartered Accountants. Fees Payable to the Lead Manager to the Issue The fees payable to the Lead Manager to the Issue and reimbursement of their out of pocket expenses will be as stated in the Engagement Letter dated April 18, 2007, entered into by our Company with SBI Capital Markets Limited, copy of which is available for inspection at the Registered Office of our Company . Fees Payable to the Registrar to the Issue The fee payable to the Registrar to the Issue and reimbursement of their out of pocket expenses is as set out in Memorandum of Understanding dated May 22,2007 entered between our Company and the Registrar, copy of which are kept open for inspection at the Registered Office of our Company.

Underwriting Commision, Brokerage and Selling Commission. No Underwriting Commision, Brokerage and Selling Commission will be paid for the Issue. Previous Rights and Public Issue, if any in the last five years

We have not made any Rights Issue and Public Issue in the last five years.. Previous Issue of shares otherwise than for Cash: Except as stated in the section titled “Capital Structure” beginning on page 15 of the Letter of Offer, we have not issued any Equity Shares for consideration otherwise than for cash. Commission or brokerage on previous issues We have not paid any commission or brokerage on any previous issues in the last five years. Particulars in regard to the Issuer company and other listed companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956 which have made any capital issue during the last three years There are no listed companies under the same management as per provision of Section 370(1B) of the Companies Act, 1956. Promise versus Performance

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Our Company Our Company has not made any public issue except the Rights Issue in the year 1993 Promoter Group companies None of our Promoter Group companies have made any public issues. Outstanding debentures, bonds, redeemable preference shares and other instruments issued by our Company, outstanding as on the date of the Letter of Offer and terms of issue Our Company has no outstanding debentures or bonds and redeemable preference shares and other instruments as on the date of the Letter of Offer.

Stock Market Data for our Equity Shares

The Equity Shares of our Company are actively traded on NSE and BSE.

(i) The following is the movement in the share price of our Company on the BSE:

Year High Low Average Price (Rs.)

Date Rs. Volume Date Rs. Volume 2006 05-Apr 267.6 3092 21-Jul 152.1 275 202.56 2005 19-Sep 209.45 14403 30-Mar 141.1 853 172.78 2004 13-Dec 184.95 14336 24-Jun 96.95 222 124.42

The closing market price of the equity share of our Company on the BSE on the day after the Board approved the Issue i.e.on April 18, 2007 was Rs. 171.25 per share. (Source: BSE Website) (ii) The following is the movement in the share price of our Company on the NSE:

Year

High Low Average Price (Rs.)

Date Rs. Volume Date Rs. Volume 2006 03-Apr 267.8 10353 08-Jun 151.55 1168 202.67 2005 30-Dec 210.2 14851 29-Mar 141.60 5947 172.75 2004 13-Dec 184.8 22480 23-Jun 95.00 525 124.2

(iii) The following is the movement in the share price of our Company on the CSE: In the last three years, trading on CSE has been negligible. There has been no trade from 14.05.2004 till 26.06.2007 except for the following 2 trades.

Year

High Low

Date Rs. Volume Date Rs. Volume 2006 13.01.2006 232.00 9450 13.01.2006 210.75 9450 15.02.2006 244.50 15930 15.02.2006 216.20 15930

(iv) The total volume of securities traded in each month during the preceding six months on the BSE and NSE is as follows:

BSE Details of High Price Details of Low Price

Month Rs. Date Volume Rs. Date Volume Total

Volume

Apr-07 181 12-Apr 5244 158 02-Apr 692 54483 May-07 193.6 31-May 2426 174.05 07-May 986 47180 June- 07 198.85 19-June 25173 185.90 18-June 690 97568 July- 07 208.75 23-July 8650 186.5 5- July 938 84254

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Aug – 07 182.85 3-Aug 1135 175.65 28-Aug 1005 45268 Sept -07 182.80 24-Sept 1808 176.00 12-Sept 981 32414

NSE Details of High Price Details of Low Price

Month Rs. Date Volume Rs. Date Volume Total Volume Apr-07 181.05 12-Apr 1856 155.65 03-Apr 383 36247 May-07 174.85 08-May 2570 193 31-May 2568 78383 June- 07 200.05 19-June 11053 187.25 15- June 2523 56531 July- 07 207.75 23-July 8350 187.00 5-July 578 72477 Aug – 07 192.05 1-Aug 12863 176.90 28-Aug 10878 43740 Sept -07 182.05 21-Sept 362 175.20 18-Sept 100 22140

Mechanism evolved for redressal of Investor Grievances The transfer and other related work is handled by C.B.Management Service (P) Ltd., share transfer agents. The secretarial department actively interacts with C.B.Management Service (P) Ltd. for expeditious redressal of investor grievances and addresses complaints received from statutory bodies such as SEBI, Stock Exchanges, Ministry of Corporate Affairs, etc. The name of our Company has never appeared in fortnightly press release on investor complaints of SEBI. Our Company’s investor grievances arising out of the issue will be handled by C.B.Management Service (P) Ltd., Registrar to the Issue. The Registrars will have a separate team of personnel handling only the post issue correspondence of our Company. Our Company settles investor grievances expeditiously and satisfactorily. The agreement between our Company and the Registrars will provide for retention of records with the Registrars for a period of atleast one year from the last date of dispatch of letter of allotment/share/ certificate/refund order to enable the Registrars to redress grievances of investors. All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details such as folio No., name and address of the first applicant, Equity Shares, Application Form serial number, amount paid on application and the Bank Branch where the application was deposited, alongwith a photocopy of the acknowledgement slip. In case of renunciation, the same details of the renouncee should be furnished. The average time taken by the Registrars 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 Registrars to attend to them as expeditiously as possible. Our Company undertakes to resolve its investor grievances in a time bound manner. Disposal of Investor Grievances by our Company We estimate that the average time required by us or the Registrar to the Issue for the redressal of routine investor grievances shall be seven working days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, we will seek to redress these complaints as expeditiously as possible. Our Company has appointed Mr. T.B.Chatterjee as the Compliance Officer and he may be contacted at: DIC India Limited Transport Depot Road, Kolkata – 700 088, West Bengal Tel: (033) 2449 6591 Fax: (033) 2449 5267 Email: [email protected] Website: www.dicindialtd.com

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Investors can contact him or the Registrar to the Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allocation, credit of allotted Equity Shares in the respective beneficiary account or refund orders, etc. Changes, if any, in the Auditors in the last three years, and reasons, thereof There have been no changes in the Auditors of our Company in the last three years. Capitalisation of Reserves or Profits, during the last five years Our Company has not capitalized its reserves during the last five years Revaluation of Assets, if any, during the last five years: Our Company has not revalued its assets in the past five years.

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ISSUE RELATED INFORMATION TERMS OF THE ISSUE Ranking of Equity Shares The Equity Shares being issued shall be subject to the provisions of our Memorandum and Articles and shall rank pari passu in all respects with the existing Equity Shares including rights in respect of dividend. The Allottees will be entitled to dividend or any other corporate benefits (including dividend) if any, declared by our Company after the date of allotment of Equity Shares pursuant to the Issue. See the section titled “Main Provisions of the Articles of Association of our Company” beginning on page no. 273 of the Letter of Offer for a description of the Articles of Association. Mode of Payment of Dividend We shall pay dividend to the shareholders as per the provisions of the Companies Act, 1956. Face Value Each Equity Share shall have a face value of Rs. 10. Issue Price Each Equity Share is being offered at a price of Rs. 225/- per Equity Share for cash. Rights of the Equity Shares 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; • Right to receive offers for rights shares and be allotted bonus shares, if announced; • Right to receive surplus on liquidation; • Right to free transferability; and • Such other rights, as may be available to a shareholder of a listed public Company under the

Companies Act and our Company’s Memorandum and Articles. 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 our Articles of Association" on page no. 273 of the Letter of Offer

Market lot Since trading of our Company’s Equity Shares is in dematerialized form, the tradable lot is one equity share. In case of physical certificates our Company would issue one certificate for the Equity shares allotted to one person (“Consolidated Certificate”). In respect of the Consolidated Certificate, our Company will only upon receipt of a request from the Equity shareholders, split such Consolidated Certificate into smaller denomination with in week’s time from the date of the request from the Equity shareholders. Our Company will not charge any fee for splitting the Consolidated Certificate.

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Nomination facility In accordance with Section 109A of the Companies Act, only individuals applying as sole applicants/ joint applicants can nominate, non-individuals including society, trust, body corporate, partnership firm, holder of power of attorney cannot nominate. In accordance with Section 109A of the Companies Act, the sole or first holder, along with other joint holders, may nominate any one person in whom, in the event of the death of sole holder or in case of joint holders, death of all the holders, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at our Company’s Registered / Corporate Office or to our Company’s Registrar and Transfer Agents. The Applicant can make the nomination by filling in the relevant portion of the CAF. In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, 1956, shall upon the production of such evidence as may be required by the Board, elect either:

a. to register himself or herself as the holder of the Equity Shares; or b. to make such transfer of the Equity Shares, as the deceased holder could have made

Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registered the nomination with our 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 changing the nomination, they are requested to inform their respective DP. Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the issue size, 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 our Company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), our 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.

Undersubscription of the issue will be determined after considering the number of shares applied as per the entitlement plus additional shares applied by existing shareholders and the renouncees. The undersubscribed portion can be applied for only after the close of the Issue. Our Promoter, DIC Asia Pacific Pte Ltd, Singapore, has undertaken to subscribe to such unsubscribed portion if the issue does not have subscription to the extent of 90% of the Issue size, after considering the above allotment, to ensure that the Issue is successful. This acquisition of additional Equity Shares, if allotted to DIC Asia Pacific Pte Ltd, Singapore, shall be in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of Regulations 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of our Company. For further details please refer to section titled “Issue Related Information” beginning on page 253 of the Letter of Offer.

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Arrangements for disposal of Odd Lots The Equity Shares would be traded in dematerialised form and the minimum trading lot for Equity Shares will be one Equity Share. Therefore there would not be any odd lots generated at the time of allotment.

Restrictions, if any, on transfer/transmission of Shares/Debentures and on their Consolidation / Splitting The restrictions, if any, on the transfer/transmission of our Equity Shares and their consolidation / splitting are contained in the sections titled “Main provisions of Articles of Association of our Company” and “Capital Structure” beginning on pages 273 and 15 of the Letter of Offer.

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ISSUE PROCEDURE Procedure for Application The CAF would be printed in black ink for all Equity Shareholders. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrar to the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. Non-resident shareholders may obtain a copy of the CAF from the Registrar to the Issue, from their office located at C.B.Management Service (P) Ltd., P-22, Bondel Road, Kolkata – 700 019, by furnishing the registered folio number, DP ID number, Client ID number and their full name and address. Equity Shares offered to you pursuant to this Issue may be renounced, 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 the 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 of Directors of our Company in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the cheque /demand draft payable at Kolkata 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. 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 favour 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 made at the sole discretion of the Board, in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under the paragraph entitled ‘Basis of Allotment’ beginning on page no. 268 of the Letter of Offer. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares.

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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. 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 the 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 our 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 our Company shall not allot and/or register any Equity Shares in favour of:

• More than three persons in case of 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 the Trusts Act, 1882, as applicable, and is authorized under its constitution to hold shares of a company);

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 our Company of the person(s) applying for Equity Shares in Part ‘C’ of the CAF 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’ of the CAF must not be used by the renouncee(s) as this will render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour of any other person.

Procedure for renunciation To renounce all the Equity Shares offered to a shareholder in favour of one renouncee If you wish to renounce the Equity Shares offered pursuant to this Issue and as indicated in Part ‘A’ of the CAF, in whole, please complete Part ‘B’ of the CAF. In case of joint holding, all joint holders must sign Part ‘B’ of the CAF. The person in whose favour renunciation has been made should complete and sign Part ‘C’ of the CAF. In case of joint renouncees, all joint renouncees must sign Part ‘C’ of the CAF.

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To renounce in part or to renounce the whole to more than one person(s) If you wish to either accept the Equity Shares offered pursuant to this Issue in part and renounce the balance Equity Shares or renounce all the Equity Shares offered pursuant to this Issue in favour of two or more renouncees, the CAF must be first split into the 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 our 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 in full. 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 the Equity Shareholder to whom the

Letter of Offer has been addressed. If used, this will render the application invalid.

• Request by the applicant for the split application form should reach our Company on or before [•], 2007.

• Only the Equity Shareholder to whom the Letter of Offer has been addressed shall be entitled to renounce and to apply for split application forms. Forms once split cannot be split further.

• Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

How to Apply Resident Equity Shareholders Applications should be made by filling in the enclosed CAF provided by our 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 Manager or by the Registrar to the Issue or by our Company at any offices except for postal applications as per instructions given elsewhere in the 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 pursuant to this Issue shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the

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matter of refund of application moneys, allotment of Equity Shares, issue of letters of allotment/ certificates/ payment of dividends etc. The Letter of Offer and the enclosed 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). (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 Shares should be made only by way of the CAF, which is provided by our 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 [•]. Non-resident shareholders/renouncees should forward their applications to the Banker to the Issue as mentioned in the CAF for non-resident Equity Shareholders. 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.

(i) Applicants residing at places other than the cities where the collection centres have been opened should send their completed CAF by registered post/speed post to the Registrar to the Issue, C.B.Management Service (P) Ltd., alongwith bank drafts payable at Kolkata net of demand draft and

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postal charges in favour of “DIC India Ltd.-Rights Issue” crossed “A/c Payee only” so that the same are received on or before closure of the Issue (i.e. [•], 2007).

(ii) Our 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.

(iii) 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 our Company or the Lead Manager to the Issue or the Registrar to the Issue except as mentioned above.

(iv) 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 our 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 CAF for any purpose including renunciation, even if it is received/ found subsequently. Thus, in case the original 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 a demand draft payable at Kolkata or account payee cheque drawn on local bank at Kolkata net of bank and postal charges, which should be drawn in favour of “DIC India Ltd. –Rights Issue” in case of resident shareholders and non-resident shareholders applying on non-repatriable basis and in favour of “DIC India Ltd.-Rights Issue-NR” 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 the Issue. The envelope should be superscribed “DIC India Limited – Rights Issue” The application on plain paper, duly signed by the applicants including joint holders, in the same form as per specimen recorded with our 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 “DIC India Limited”

• 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 the 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 out of entitlement

• 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. 225/- per Equity Share

• Allotment option either in physical or demat mode with Client ID number,

• Particulars of cheque/demand draft

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• Savings/Current Account Number and name and address of the bank where the Equity Shareholder will be depositing the refund order. In case of depository the bank account details shall be obtained from the information available with the Depositories.

• PAN/GIR number, Income Tax Circle/Ward/District, photocopy of the PAN card/ PAN communication / 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 our Company

• In case of Non Resident Shareholders, NRE/ FCNR/ NRO A/c No. Name and Address of the Bank and Branch;

• If payment is made by a draft purchased from NRE/ FCNR/ NRO A/c No., as the case may be, an Account debit certificate from the bank issuing the draft, confirming that the draft has been issued by debiting NRE/FCNR/ NRO Account.

Payments in such cases, should be through a demand draft, net of bank charges and postal charges payable at Kolkata drawn in favor of DIC India Ltd.- Rights Issue in case of resident shareholders, nonresident shareholders applying on non repatriable basis and in favor of “DIC India Ltd.- Rights Issue-NR” non-resident shareholders applying on repatriable basis and marked “A/c Payee Only”. Attention of the shareholders is drawn to the fact that those shareholders making the application otherwise than on the CAF (i.e. on a plain paper as stated above) shall not be entitled to renounce their rights and should not utilise the CAF for any purpose including renunciation even if it is received subsequently. In case the original and duplicate CAFs and application on the plain paper or any two of these applications are lodged or if any shareholder violates any of these requirements, our Company will have the absolute right to reject any one or both of his/her/their application and refund the application money received. However, our Company is not liable to pay any interest whatsoever on money so refunded. Mutual Funds A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the application is being made. 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 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 existing Equity Shares against which the new Equity Shares are issued pursuant to this Issue. 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. Further, the RBI in its Master Circular dated July 1, 2005 has stated that OCBs are not permitted to subscribe to equity shares of Indian companies on rights basis under the automatic route. OCBs shall not be eligible to subscribe to the Equity Shares pursuant to the Letter of Offer unless they obtain the prior approval of the RBI in this regard. Thus, OCBs desirous of participating in this Issue must obtain prior approval from the RBI. On providing such approval to our Company at its registered office, the OCB shall be entitled to receive the Letter of Offer and the CAF. Letter of offer and CAF shall be dispatched to non-resident Equity Shareholders in India only.

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No Offer in the United States The Equity Shares of our Company are not registered under the United States Securities Act of 1933, as amended. The rights referred to in the Letter of Offer are being offered in India but not in the United States of America. The offering to which the 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, the Letter of Offer should not be forwarded to or transmitted in or into the United States of America at any time. Our Company will not accept subscriptions from any person, or his agent, who appears to be, or who our 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 the Letter of Offer with the United States Securities and Exchange Commission. Last date of Application The last date for submission of the duly filled in CAF is December 19, 2007. The Issue will be kept open for a minimum of 30 (thirty) days and 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 the Letter of Offer shall be deemed to have been declined and the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the section “Basis of Allotment”. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR 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 “DIC India Ltd.- Rights Issue”

and marked ‘A/c Payee only’ � Applicants residing at places other than places where the bank collection centres have been opened by our

Company for collecting applications, are requested to send their applications together with a demand draft of an amount net of bank and postal charges, equivalent to the full amount of the applicable money favouring “DIC India Ltd. –Rights Issue” and marked ‘A/c Payee only’ payable at Kolkata directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our 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 Kolkata 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 Kolkata 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

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� 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 “DIC India Ltd.- Rights Issue” payable at Kolkata 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 non-residents 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. Our 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

As far as non-residents holding shares on non-repatriation basis are concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in 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 “DIC India Ltd. –Rights Issue-NR” payable at Kolkata 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. Hence, payment through Stockinvest would not be accepted in this Issue

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Notices All notices to the Equity Shareholder(s) required to be given by our 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 with wide circulation and/or, will be sent by ordinary post / registered post / speed post to the registered holders of the Equity Share from time to time. General instructions for applicants (a) Please read the instructions printed on the enclosed CAF carefully. (b) Application should be made on the printed CAF, provided by our 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 the 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 our 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 our Company for collecting applications, will have to make payment by Demand Draft payable at Mumbai 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 of 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.

(e) Bank Account Details: It is mandatory for applicants to provide information as to their savings/current

account number and the name of our 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. 20,000 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 our 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 our 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.

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(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 our 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.

(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 of our Company, 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.

Permanent Account Number or PAN

SEBI vide circular No. MRD/DoP/Cir- 05/2007 dated April 27, 2007, has made PAN the sole identification number for all participants in the securities market, irrespective of the amount of transaction. The photocopy of the PAN card(s) or PAN Communication is required to be submitted with the Application Form. Applications without this information and documents will be considered incomplete and are liable to be rejected. It is to be specifically noted that Applicants should not submit the GIR number instead of the PAN as the Application is liable to be rejected on this ground. Application Number on the Cheque/Demand Draft To avoid any misuse of instruments, the applicants are advised to write the CAF number and name of the first application on the reverse of the cheque/demand draft. Grounds For Technical Rejections

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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 by the applicant;

• In case of physical shareholders, bank account details (for refund) are not given;

• Age of first applicant not given;

• PAN photocopy/ PAN Communication not given;

• In case of application under power of attorney or by limited companies, corporate, trust, etc., relevant authority documents are not submitted;

• If the signature of the existing Equity Shareholder does not match with the one given on the application form and in case of renounces, if the signature does not match with the records available with their depositories;

• If the applicant desires to receive the Equity Shares in electronic form and the application form does not have the applicant’s depository account details;

• Application forms are not submitted by the applicant within the time prescribed as per the application form and the 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 participate 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 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.

• Multiple Applications

Option to receive Equity Shares in Dematerialized Form Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialised (electronic) form at the option of the applicant. Our Company has entered into an agreement dated February 28, 2000 with CDSL and an agreement dated January 1, 1999, with 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 to receive 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 dematerialised or physical form or both. Applicants will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applicants, who do not furnish this information, will be issued the Equity Shares in physical form. No separate applications for Equity Shares in physical and/or dematerialized form should be made. If such applications are made, the application for Equity Shares in physical form will be treated as a multiple application and rejected. The Equity Shares of our Company will be listed on the CSE, the BSE and the NSE. Procedure for availing the facility for allotment of Equity Shares in this Issue in dematerialized 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 our 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 our Company). In case of applicants having various folios in our Company with different joint holders, the applicant will have to open separate accounts for such holdings.

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Those Equity Shareholders who have already opened such beneficiary account (s) with depositary participants need not comply with this step.

• For Equity Shareholders already holding Equity Shares of our 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 our 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 our 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 be issued the Equity Shares in physical form. The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to 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 Equity Shares pursuant to this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected. Disposal of application and application money

(i) The Board reserves the right to reject applications in case the application concerned is not made in terms of the Letter of Offer. In case an application is rejected in full the whole of the application money received will be refunded to the first named applicant and where an application is rejected in part, the excess application money will be refunded to the first named applicant within 6 weeks from the date of closure of the subscription list in accordance with Section 73 of the Act. If there is delay of refund of application money by more than 8 days after our Company becomes liable to pay (i.e. forty-two days after the closure of Issue), our Company will pay interest for the delayed period at the rate prescribed under sub-Section (2) and (2A) of Section 73 of the Act.

(ii) The subscription monies received in respect of this Issue will be kept in a separate bank account

and our Company will not have access to nor appropriate the funds until it has satisfied the Designated Stock Exchange with suitable documentary evidence that minimum subscription of 90% of the application money for the Issue has been received.

(iii) No acknowledgment will be issued for the application monies received by our Company.

However, the Bankers to the Issue at its collection branches to the Issue receiving the CAF as applicable as per the terms of the Letter of Offer, will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. Except for the reasons stated under paragraph titled “Grounds for Technical Rejections” beginning on page no. 265 of the Letter of Offer and subject to valid application, acknowledgement of receipt of application money given by the collection agent shall be valid and binding on Issuer and other persons connected with the Issue.

Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies Act, which is reproduced below: “Any person who:

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(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any

shares therein, or (b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any

other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.” Interest in case of delay in dispatch of Allotment Letters/ Refund Orders in case of Rights Issues Our Company will issue and dispatch letters of allotment/ share certificates 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 date of closure of the Issue. If such money is not repaid within 8 days from the day our Company becomes liable to pay it, our Company shall pay that money with interest at the rate of 15% per annum as stipulated under Section 73 of the Act. Basis of Allotment Subject to the provisions contained in the Letter of Offer, the Articles of Association of our Company and the approval of the Designated Stock Exchange, the Board or a Committee of Directors authorized by 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, either in full or in part. (subject to other provisions contained under the paragraph titled “Renunciation”).

(b) Where fractional entitlement is ignored, preferential allotment of one additional equity share to

shareholders whose fractional entitlement is ignored and have applied for additional equity share.. (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 Equity Shares will be made as far as possible on an equitable basis with reference to the number of Equity Shares held on the Record Date as part of the Issue and not preferential allotment, provided there is an undersubscribed 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.

(d) Allotment to the renouncees who having applied for all the Equity Shares renounced in their favour

have also applied for additional Equity Shares, provided there is surplus remaining after (a), (b) and (c) 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 part of the Issue and not preferential allotment

(e) Equity Shares remaining unsubscribed after making full allotment under (a), (b) and (c) above, shall be

disposed of by the Board in manner as it in its sole discretion deems fit and the decision of the Board in this regard shall be final and binding.

(f) The Basis of Allotment shall be approved by the BSE, which is the Designated Stock Exchange for the

Issue.

(g) Our Company undertakes to complete the allotment within a period of 42 days from the date of closure of the Issue in accordance with the listing agreement with the BSE, NSE and CSE.

(h) Our Company shall retain no oversubscription.

After taking into account allotment to be made , if there is any unsubscribed portion, the same shall be deemed to be ‘undersubscribed’ for the purpose of regulation 3(1)(b) of the Takeover Code which would be available for allocation under (c), (d) and (e) above. The undersubscribed portion can be applied for only after the close of the

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Issue. Our Promoter, DIC Asia Pacific Pte Ltd., Singapore, undertakes to subscribe, to such unsubscribed portion if the Issue does not have subscription to the extent of 90% of the Issue size, after considering the above allotment, to ensure that the Issue is successful. This acquisition of additional Equity Shares, due to undersubscription, if allotted to DIC Asia Pacific Pte Ltd., Singapore, shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 10, 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition of additional Equity Shares will not result in change of control of management of our Company. Further, such application for subscription to the undersubscribed portion, if made by existing shareholders, is not liable to be treated as multiple applications. Allotment to the Promoters of any unsubscribed portion of the Issue, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time. Letters of Allotment / Share Certificates / Demat Credit Letter(s) of allotment/ share certificates/ demat credit or letters of regret along with refund order 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 our 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. Allotment / Refund Our 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 (6) weeks from the Issue Closing Date. If such money is not repaid within eight days from the day our Company becomes liable to pay it, our Company shall pay that money with interest as stipulated under Section 73 of the Act. Applicants residing at 15 centers where clearing houses are managed by the Reserve Bank of India (RBI), will get refunds through ECS only (Electronic Clearing Service) except where applicants are otherwise disclosed as applicable/eligible to get refunds through direct credit and RTGS. In case of those applicants who have opted to receive their Rights Entitlement in dematerialized form using electronic credit under the depository system, an advice regarding their credit of the Equity Shares shall be given separately. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within a period of six (6) weeks from the Issue Closing Date. In case of those Applicants who have opted to receive their Rights Entitlement in physical form and our Company issues letter of allotment, the corresponding share certificates will be kept ready within three months from the date of allotment thereof or such extended time as may be approved by the companies Law Board under Section 113 of the Companies 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 paragraph titled ‘Letters of Allotment/ Share Certificates/ Demat Credit’ beginning on page 269 of the Letter of Offer. The letter of allotment / refund order exceeding Rs.1,500 would be sent by registered post/speed post to the sole/first applicant's registered address. Refund orders up to the value of Rs.1,500 would be sent under certificate of posting. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole/first applicant. Adequate funds would be made available to the Registrar to the Issue for this purpose. 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

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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 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. Our 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. Refund Payment

Applicants should note that on the basis of name of the applicants, Depository Participant’s name, Depository Participant- Identification (DP ID) number and Beneficiary Account Number provided by them in the Composite Application Form, the Registrar to the Issue will obtain from the Depository, the Shareholders bank account details including the nine digit Magnetic Ink Character Recognition (MICR) code as appearing on a cheque leaf. Hence, applicants are advised to immediately update their bank account details as appearing on the records of the depository participant. Please note that failure to do so could result in delays in credit of refunds to shareholders at the shareholders sole risk and neither the Lead Manager nor the Company nor the Refund Banker nor the Registrar shall have any responsibility and undertake any liability for the same.

Investors must ensure that the name given in the CAF is exactly the same as the name in which the Depository Account is held. In case the CAF is submitted in joint name(s) it should be ensured that the Depository Acount is also held in the same joint name(s) and are in the same sequence in which they appear in the CAF.

In case of applicants applying for physical shares, refunds will be made on the basis of the bank account details provided by them in the Composite Application Form.

Payment / Mode of making refunds The payment of refund, if any, would be done through various modes in the following order of preference: (a) ECS: Payment of refund would be done through ECS for applicants having an account at one of the 15

centres, where clearing houses for ECS are managed by Reserve Bank of India namely 1) Ahmedabad 2) Bangalore 3) Bhubaneshwar 4) Kolkata 5) Chandigarh 6) Chennai 7) Guwahati 8) Hyderabad 9) Jaipur 10) Kanpur 11) Mumbai 12) Nagpur 13) New Delhi 14) Patna and 15) Thiruvanthapuram. This would be subject to availability of complete Bank Account Details including MICR code from the depository. The payment of refund through ECS is mandatory for applicants having bank account at any of the 15 centres named herein above, except where applicant is otherwise disclosed as eligible to get refunds through direct credit or RTGS or NEFT.

(b) Direct Credit: Investors having their bank account with the Refund Bank, i.e. Axis Bank Ltd., shall be eligible to receive funds, if any, through Direct Credit. The refund amount, if any, would be credited directly to their bank account with the Refund Banker.

(c) RTGS: Applicants having a bank account at any of the 15 centres detailed above, and whose Application amount exceeds Rs. 10 Lacs, shall be eligible to exercise the option to receive refunds, if any, through RTGS. All applicants eligible to exercise this option shall mandatorily provide the IFSC code in the ApplicationForm. In the event of failure to provide IFSC code in the ApplicationForm, the refund shall be made through ECS or Direct Credit, if eligibility is disclosed;

(d) 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. The process flow in respect of refunds by way of NEFT is at an evolving stage and hence use of NEFT is subject to operational feasibility, cost, and process efficiency.

(e) For all the other applicants, including applicants who have not updated their bank particulars alongwith the nine digit MICR Code, the refund orders would be dispatched “Under Certificate of Posting” for refund orders of value up to Rs. 1500 and through Speed Post / Registered Post for refund orders of Rs. 1500 and above.

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Please note that only applicants having a bank account at any of the 15 centres where clearing houses for ECS are managed by RBI are eligible to receive refunds through the modes detailed in (a), (b) and (c) hereinabove. Interest in case of delay in dispatch of Allotment Letters/ Refund Orders in case of Rights Issue Our Company will issue and dispatch letters of allotment/ share certificates 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 date of closure of the Issue. If such money is not repaid within 8 days from the day our Company becomes liable to pay it, our Company shall pay that money with interest at the rate of 15% per annum as stipulated under Section 73 of the Act. 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. Our Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Undertakings by our Company 1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and

satisfactorily. 2. All steps for completion of the necessary formalities for listing and commencement of trading at all

stock exchanges where the Equity Shares to be issued pursuant to this Issue are to be listed will be taken within seven (7) working days of finalization of basis of allotment.

3. The funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be

made available to the Registrar to the Issue. 4. Where refunds are made through electronic transfer of funds, a suitable communication shall be sent to

the applicant within 30 days or 15 days of closure of the Issue, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund.

5. The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within

the specified time. 6. No further issue of securities affecting equity capital of our 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.

Note • Our Company accepts full responsibility for the accuracy of information given in the 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 the Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

• 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.

• The Issuer and Lead Manager shall update the Letter of Offer and keep the investors informed of any material changes till the listing and trading commences.

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Important • Please read the Letter of Offer carefully before taking any action. The instructions contained in the

accompanying CAF are an integral part of the conditions of the Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.

• All enquiries in connection with the 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 DIC-Rights Issue on the envelope) to the Registrar to the Issue at the following address:

C.B.Management Service (P) Ltd., P-22, Bondel Road, Kolkata – 700 019 Tel : + 91-33-2280 6692 Fax : +91-33- 2287 0263 Email : [email protected]

• 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 the Letter of Offer.

The Issue will be kept open for a minimum of 30 days unless extended, in which case it will be kept open for a maximum of 60 days. 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 in 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 our Company indicating the purpose for which such moneys have 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 our 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. Our Company would have no 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.

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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OUR COMPANY SHARE CAPITAL AND VARIATION OF RIGHTS Issue/Allotment/Disposal of Shares Shares under the control of the Directors – Article 7

Subject to the provisions of these Articles, the shares shall be under the control of the Directors, who may allot or otherwise dispose of the same to such persons on such terms and conditions and at such times, as the Directors think fit and to give any person the call of any shares either at par or at a premium and for such time and for such consideration as the Directors think fit, provided that where at any time (subsequent to the first allotment of shares) it is proposed to increase the subscribed capital of the Company by the issue of new shares, then, subject to any directions to the contrary which may be given by the Company in General Meeting, the Directors shall issue such shares in the manner set out in Section 81 of the Act.

Option or right to Call of shares shall not be given to any person or person except with sanction of the Company in General Meeting.

Increase of capital – Article 56 & 57

The Company may from time to time by Ordinary Resolution increase the capital by the creation of new shares of such amount as may be deemed expedient subject to the provisions of Section 94 of the Act.

The new shares shall be issued upon such terms and conditions and with such rights and privileges annexed thereto as the resolution creating the same shall direct and if no direction be given, as the Directors shall determine and in particular such shares may be issued with a preferential or qualified right to dividends and in the distribution of assets of the Company and with a special or without any right of voting

Buy Back of Shares – Article 65A

The Company shall have power, subject to the provisions of Sections 77A, 77AA and 77B and other applicable provisions of the Act, to purchase any of its own fully paid shares or other specified securities, whether or not they are redeemable and may make a payment out of its free reserves or securities premium account of the Company or proceeds of any shares or other specified securities or from such other sources as may be permitted by law on such terms, conditions and in such manner as may be prescribed by law from time to time in respect of such purchase provided that no buy back of any kind of shares or other specified securities shall be made out of the proceeds of an earlier issue of the same kind of shares or same kind of other specified securities.

Reduction of capital – Article 61

The Company may (subject to the provisions of Sections 94 and 100 to 104 inclusive of the Act) from time to time by Special Resolutions cancel shares, which at the date of the resolution in that behalf, have not been taken or agreed to be taken by any person or, reduce its capital by paying off capital or cancelling capital, which has been lost or is unrepresentated by available assets or reducing the liability on the shares or otherwise as may seem expedient and capital may be paid off upon the footing that it may be called up again or otherwise.

Consolidation, division and sub-division – Article 62 & 63

The Company may, by Special Resolution, subdivide or by Ordinary Resolution, consolidate its shares or any of them.

The Special Resolution, whereby any share is sub-divided may determine that as between the holders of the shares, resulting from such sub-division, one or more of such shares shall have some preference or special advantage as regards dividend, capital, voting or otherwise over or as compare with the others or other subject, nevertheless, to the provisions of Section 94 of the Act.

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Power to modify class rights – Article 65

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 in writing of the holders of three fourths of the issued shares of that class or with the sanction of a Special Resolution passed at a separate General Meeting of the holder of the shares of that class and all the provision of these Articles relating to General Meetings shall, mutatis mutandis, apply to every such meeting. This Article is not by implication to curtail the power of modification which the Company would have if this Article were omitted.

Issue of Shares without voting rights – Article 57

The new shares shall be issued upon such terms and conditions and with such rights and privileges annexed thereto as the resolution creating the same shall direct and if no direction be given, as the Directors shall determine and in particular such shares may be issued with a preferential or qualified right to dividends and in the distribution of assets of the Company and with a special or without any right of voting.

Directors may allot shares as fully paid-up – Article 135(3)

At the discretion of the Directors, to pay for any property, rights, privileges acquired by or services rendered to the Company either wholly or partially in cash or in shares, bonds, debentures or other securities of the Company and any such shares may be issued either as fully paid up or with such amount credited as paid up thereon as may agreed upon; and any such bonds, debentures or other securities may be either specifically charged upon all or any part of the property of the Company and its uncalled capital or not so charged.

Underwriting and Brokerage

Commission for placing Shares, Debentures etc. – Article 10

The Company may at any time pay a commission to any person for subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares, debentures or debenture stock in the Company or procuring or agreeing to procure subscriptions (whether absolute or conditional) for any shares, debenture or debenture stock in the Company, but so that if the commission in respect of shares shall be paid or payable out of capital, the statutory conditions and requirements shall be observed and complied with and the amount or rate of commission shall not exceed in the case of shares; five per cent of the price at which the shares are issued and in the case of debenture two and a half per cent of the price at which the debentures are issued. The commission may be paid or satisfied in cash or in shares, debentures or debenture stock. In case any commission shall be paid, the Company shall comply with the requirements of Section 76 of the Act.

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Calls Calls on Shares of some class to be made on uniform basis – Article 8

Where after the first day of April, 1956, any calls for further share capital are made on shares, such calls shall be made on a uniform basis on all shares falling under the same class in accordance with the provisions of Section 91 of the Act.

When interest on call or installment payable – Article25

If the sum payable in respect of any call or instalment be not paid on or before the day appointed for payment thereof, the holder for the time being of the share in respect of which the call shall have been made or the instalment shall be due shall pay interest for the same at the rate of 12 per cent per annum, from the day appointed for the payment thereof to the time of the actual payment or at such other rate as the Directors may determine.

Payment in anticipation of calls may carry interest – Article 28

The Directors may, if they think fit, receive from any member willing to advance the same, all or any part of the money due upon the shares held by him beyond the sums actually called for and upon the money so paid in advance or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advances has been made, the Company may pay interest at such rate not exceeding 6 per cent per annum as the member paying such sum in advance and the Directors agree upon. Money so paid in excess of the amount of call shall not rank for dividends or participate in the profits of the Company. The Directors may at any time repay the amount so advanced upon giving to such member three month’s notice in writing.

Forfeiture, Surrender and Lien If call or installment not paid notice must be given – Article 29

If any member fails to pay any call or instalment 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 remains unpaid, serve a notice on such member requiring him to pay the same, together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment.

In default of payment shares to be forfeited – Article 31

The notice shall name a day (not being less than twenty-one days from the date of the notice) and a place or places on and at which such call or instalment and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event of non-payment at or before the time and at the place appointed, the shares in respect of which such call was made or instalment is payable will be liable to be forfeited.

If the requisitions of any such notice as aforesaid be not complied with any shares in respect of which such notice has been given, may at any time thereafter before payment of all calls of instalments, 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 in respect of the forfeited shares and not actually paid before the forfeiture.

Effect of forfeiture – Article 36

The forfeiture of a share shall involve the extinction of all interest in and also of all claims and demands against the Company in respect of the share and all other rights incident to the share, except only such of those rights as by these Articles are expressly saved.

Surrender of Shares – Article 64

Subject to the provisions of Section 77 and 100 to 105 inclusive of the Act, the Directors may accept from any member the surrender on such terms and conditions as shall be agreed of all or any of his shares.

Company’s lien on shares –

The Company shall have a first and paramount lien upon all the shares (other than fully paid shares) registered in the name of each member (whether solely or jointly with

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Article 38

others) and upon the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares and no equitable interest in any shares shall be created except upon the footing and conditions that Article 14 hereof will have full effect. And such lien shall extend to all dividends and bonuses from time to time declared in respect of such shares. 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.

As to enforcing lien by sale – Article 39

For the purpose of enforcing such lien, the Directors may sell the shares subject thereto in such manner as they think fit, but no sale shall be made until such period as aforesaid shall have arrived and until notice in writing of the intention to sell shall have been served on such member, his executors or administrators or his committee, curator bonis or other legal curator, and default shall have been made by him or them in the payment, fulfillment, or discharge of such debts, liabilities or engagements for twenty one days after such notice.

Application of proceeds of sale – Article 41

The net proceeds of any such sale shall be applied in or towards satisfaction of the debts, liabilities or engagements of such member, and the residue (if any), paid to such member his executors, administrators, committee, curator or other representatives.

Transfer and Transmission of Shares

Transfer not to be registered except on production of instrument of transfer – Article 45

The instrument of transfer of any share shall be signed both by the transferor and transferee, and shall contain the name and address both of the transferor and transferee, and the transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register in respect thereof. Each signature to such transfer shall be duly attested by the signature of one credible witness who shall add his address and occupation. The Company shall not register a transfer of shares unless the provisions of Section 108 of the Act have been complied with.

Directors may refuse to register transfer – Article 53

The Directors may, subject to the right of appeal conferred by Section 111 of the Act, decline to register any transfer of shares to a person of whom they shall not approve and they may also decline to register any transfer of shares on which the Company has a lien provided that registration of transfer of a share shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever. If the Directors decline to register a transfer of any shares, they shall, within two months after the date on which the transfer was lodged with the Company, send to the transferee notice of the refusal. Without prejudice to the genaralityof the foregoing Article 53, the Directors shall be entitled to refuse an application for transfer of shares numbering below the prescribed limit as per law and regulations in force when such application is received by the Company subject, however, to the exception that in case of transfer of equity shares made in pursuance of any statutory order or an order of a competent Court of Law.

Title to shares of deceased holder – Article 52

The executors or administrators or nominee of a deceased member (not being one of several joint-holders) shall be the only person recognized by the Company as having any title to the shares registered in the name of such member and in case of the death of any one or more of the joint-holders of any registered shares, the survivors and in the case of death of all joint-holders, the nominee shall be the only persons recognized by the Company as having any title to or interest in such shares, but nothing herein contained shall be taken to release the estate of a deceased joint holder from any liability on shares held by him jointly with any other person. Before recognizing any executor or administrator, the Directors may require him to obtain a Grant of Probate or Letter of Administration or other legal representation, as the case may be, from some competent Court in India having effect in Calcutta. Provided nevertheless that in any case where the Board in their absolute discretion think fit, it shall be lawful for the Directors to dispense with the production of Probate or Letters of Administration or such other legal representation upon such terms as to indemnify or otherwise as the Directors, in their absolute discretion, may consider necessary.”

Registration of Any Committee of a lunatic member and any person becoming entitled to or to transfer

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persons entitled to shares otherwise than by transfer (Transmission clause) – Article 55

shares in consequence of the death or bankruptcy or insolvency of any member upon producing such evidence that he sustains the character in respect of which he proposes to act under this Clause or of his title as the Directors think sufficient, may, with the consent of the Directors (which the Directors shall not be under any obligation to give) and shall if the Directors so require be registered subject to the provision of these Articles as a member in respect of such shares or may subject to the regulations as to transfer hereinbefore contained transfer such shares. This Clause is in these Articles called and referred to as “The Transmission Article”.

Refusal to register nominee – Article 53

The Directors may, subject to the right of appeal conferred by Section 111 of the Act, decline to register any transfer of shares to a person of whom they shall not approve and they may also decline to register any transfer of shares on which the Company has a lien provided that registration of transfer of a share shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever.

Board may require evidence of transmission – Article 48

Every instrument of transfer shall be left at the Office for registration, accompanied by the certificate of the shares to be transferred and such other evidence as the Directors may require to prove the title of transferor or his right to transfer the shares, the transferee shall (subject to the Directors’ right to decline to register in accordance with the provision of Section 111 of the Act) be registered as a member in respect of such shares. The Directors may waive the production of any certificate upon evidence satisfactory to them of its loss or destruction.

Conversion of shares into stock Conversion of shares into stock and re-conversion – Article 15A

The Company may convert its shares into stock or reconvert its stock into shares and the provisions of Regulations 36, 37, 38, & 39 of Table A in the First Schedule to the Act shall apply mutates mutandis

General Meetings Directors may call Extra-Ordinary General Meetings - Article 80

The Directors or any Director may, whenever they or he think or thinks fit, and shall, on the requisition of the holders of not less than one-tenth of such of the paid-up capital of the Company as at the date of the deposit of the requisition carries the right of voting in regard to that matter forthwith proceed to convene an Extraordinary General Meeting of the Company

Proceedings at General Meetings Quorum at General Meeting - Article 84

Five members personally present shall be a quorum for a General Meeting for all purposes.

Business at adjourned meetings-Article85

No business shall be transacted at any General Meeting unless the quorum requisite shall be present at the commencement of the business.

Chairman of Directors or a Director to be Chairman of General Meeting - Article 86

The Chairman of the Board of Directors shall be entitled to take the chair at every General Meeting or if there be no such Chairman or if at any meeting he shall not be present within fifteen minutes after the time appointed for holding such meeting or is unwilling to act, the members present shall choose another Director as Chairman and if no Director be present, or if all the Directors present decline to the take the chair then the members present shall choose one of their number being a member entitled to vote to be Chairman.

Demand for Poll- Article 89 At any General Meeting before or on the declaration of the result of the voting on any resolution on a show of hands, a poll may be ordered to be taken by the Chairman of the meeting of his own motion and shall be ordered to be taken by him on a demand made in that behalf by any member or members present in person or by proxy and holding shares in the Company which confer a power to vote on the resolution not being less than one tenth of the total voting power in respect of the resolution or on which as aggregate sum of not less than fifty thousand rupees has been paid up.

Time and manner of taking If a poll be demanded as aforesaid, it shall be taken in such manner and at such

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Poll – Article 90 time and place as the Chairman of the Meeting directs and either at once or after an interval or adjournment or otherwise, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand of a poll may be withdrawn. In case of any dispute as to the admission or rejection of a vote, the Chairman shall determine the same and such determination made in good faith shall be final and conclusive.

Votes of Members Votes may be given by proxy or attorney – Article 98.

Votes may be given either personally or by proxy, or, in the case of a Company, by a representative duly authorized as aforesaid but a proxy shall not have a right to speak at the meeting. A proxy shall not be entitled to vote except on a poll.

Instrument appointing proxy- Article 100

The instrument appointing a proxy and the Power of Attorney (if any), under which it is signed shall be deposited at the Office not less than seventy-two hours before the time for holding the meeting or adjourned meeting as the case may be at which the person named in such instrument proposes to vote, but no instrument appointing a Special Proxy shall be valid after the expiration of twelve months from the date of its execution.

Directors Number of Directors – Article 104

Until otherwise determined by the Company in General Meeting, the number of the Directors shall not be less than three nor more than twelve

Remuneration to Directors – Article 106(1)

Subject to the provision of the Act, the Resident Indian Directors, other than a Managing Director or a Wholetime Director, shall receive remuneration by way of commission not exceeding 1 (one) per cent of the net profits of the Company determined in the manner laid down in the Act, such commission being divided among the Directors entitled thereto, in such proportion and manner as the Board may from time to time determine, and in default of such determinations, equally.

Special remuneration to Directors on Company’s business or otherwise performing extra services – Article 132

If any Director being willing shall be called upon to perform extra services or to make any special exertions in going or residing away from Calcutta for any of the purposes of the Company or in giving special attention to the business of the Company as a member of a Committee of Directors, the Company may, subject to the provisions of the Act, remunerate the Director so doing either by a fixed sum or by a percentage of profits or otherwise as may be determined to or in substitution for his or their share in the remuneration above provided for the Directors.

Retirement and Rotation of Directors Retirement by Rotation – Article 114

At each Annual General Meeting, one-third of the Directors who, for the time being, are liable to retire by rotation or, if their number is not three or a multiple of three, then the number nearest to one-third shall retire from office. Provided that a Managing Director or Managing Directors appointed under Article 137 shall not be liable to retire by rotation unless the number of Directors other than the aforesaid Managing Director or Managing Directors are, for the time being, less than two-thirds of the total number of Directors exclusive of any additional Director appointed under Article 120 when such of the Managing Directors as the Board shall decide shall be liable to retirement by rotation for the time being.

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Proceedings of Board of Directors Meetings of Directors – Article 124

The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings and proceedings as they think fit, provided that a meeting of the Board of Directors shall be held at least once in every three calendar months. The quorum for a meeting of the Board shall be one-third of its total strength (any fraction contained in that one-third being rounded off as one) or two Directors whichever is higher. Provided that where at any time the number of interested Directors exceeds or is equal to two-thirds of the total strength, the number of the remaining Directors, that is to say, the number of the Directors who are not interested, present at the meeting being not less than two shall be the quorum during such time.

Powers of Directors General power of Directors – Article 168

Subject to the provision of the Act, the Board of Directors of the Company shall be entitled to exercise all such powers and to do all such act and things, as the Company is authorized to exercise and do.

Provided that the Board shall not exercise any power or do any act or thing which is directed or required, whether by this or any other Act or by the Memorandum or Articles of the Company or otherwise, to be exercised or done by the Company in General Meeting.

Provided further that in exercising any such power or doing any such act or thing, the Board shall be subject to the provision contained in that behalf in the Act or any other Act, or in the Memorandum or Articles of the Company, or in any regulations not inconsistent therewith and duly made thereunder, including regulations made by the Company in General Meeting

No regulation made by the Company in General Meeting shall, however, invalidate any prior act of the Board which would have been valid if that regulation had not been made.

Registers, books and Documents Registers, Books and Documents- Article 70 & 71

Every Register of Shareholders and Debenture holders and transfer books may be closed during such time or times as the Directors think fit not exceeding in the whole forty-five days in any year but not exceeding thirty days at any one time provided that not less than seven days’ previous notice by advertisement in some newspapers circulating in Calcutta has been given. Subject as aforesaid, every such Register shall be open to the inspection of the registered holder of any such debentures and of any member; but the Company may in General Meeting impose any reasonable restrictions so that at least two hours in each day when such Register is open are appointed for inspection.

The Company shall keep at its Office Register of its Directors, Managing Agents, Secretaries & Treasurers, Manager, Managing Director and Secretary pursuant to Section 303 of the Act

The Company may exercise the powers conferred by Section 50 of the Act and such powers shall accordingly be vested in the Directors and the Company may cause to be kept in the United Kingdom, a Branch Register of Members resident in the United Kingdom and the Directors may from time to time make such regulations as they may think fit respecting the keeping of any such Branch Register, such regulations not being inconsistent with the provisions of Sections 157 and 158 of the Act.

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Managing Director and Whole-time Director Remuneration of Managing Director, Whole-time Director – Article 106(1)

Subject to the provisions of the Act, the Directors other than a Managing Director or a Wholetime Director shall receive such remuneration within the ceiling prescribed by the Central Government from time to time, for each meeting of the Board or Committee of the Board attended.

The Seal The Seal – Article 145 The Directors shall provide for the safe custody of the Seal of the Company

and the Seal shall never be used except by the authority of the Directors or a Committee of the Directors previously given and any two Directors or any one Director and the Secretary or any one Director and such other person as the Board or the Committee of Directors may appoint for the purpose shall sign every Instrument, other than Share Certificates, to which the Seal is affixed. Provided, nevertheless, that any Instrument bearing the Seal of Company and issued for valuable consideration shall be binding on the Company notwithstanding any irregularity touching the authority of Directors to issue the same.

Seals abroad – Article 136(6) The Company may exercise the powers conferred by Section 50 of the Act and such powers shall accordingly be vested in the Directors and the Company may cause to be kept in the United Kingdom.

Dividends Division of profits – Article 147

Subject to the rights of members entitled to shares (if any) with preferential or special rights attached thereto, the profits of the Company which it shall from time to time be determined to divide in respect of any year or other period shall be applied in payment of a dividend on the Equity Shares of the Company but so that a partly paid-up share shall only entitle the holder with respect thereto to such a proportion of the distribution upon a fully paid-up share as the amount paid thereon bears to the nominal amount of such share and so that where capital is paid up in advance of calls, upon the footing that the same shall carry interest, such capital shall not, whilst carrying interest, confer a right to participate in profits.

Capital paid-up in advance at interest not to earn dividend – Article 147

Subject to the rights of members entitled to shares (if any) with preferential or special rights attached thereto, the profits of the Company which it shall from time to time be determined to divide in respect of any year or other period shall be applied in payment of a dividend on the Equity Shares of the Company but so that a partly paid-up share shall only entitle the holder with respect thereto to such a proportion of the distribution upon a fully paid-up share as the amount paid thereon bears to the nominal amount of such share and so that where capital is paid up in advance of calls, upon the footing that the same shall carry interest, such capital shall not, whilst carrying interest, confer a right to participate in profits.

Dividends in proportion to the rights – Article 182

The Company in General Meeting may declare a dividend to be paid to the members according to their rights and interest in the profits and may fix the time for payment.

Power of Directors to limit Dividend – Article 149

No larger dividend shall be declared than is recommended by the Directors, but the Company in General Meeting may declare a smaller dividend.

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Interim Dividend- Article 152 The Directors may from time to time pay to the members such interim dividends as in their judgment the position of the Company justifies.

Dividends, how remitted – Article 161

Unless otherwise directed any dividend may be paid by cheque or warrant sent through the post to the registered address of the member entitled, or in the case of joint-holders to the registered address of that one whose name stands first on the register in respect of the joint-holding and every cheque or warrant so sent shall be made payable to the order of the person to whom it is sent. The Company shall comply with the provisions of Sections 206 and 207 of the Act for payment of dividend.

Unclaimed dividends – Article 162

Any dividend, unclaimed or unpaid shall be dealt with in the manner referred to in Section 205A and 205B of the Act.

Dividend and call together set off allowed – Article 154

Any General Meeting declaring a dividend may make a call on the members of such amount as the meeting fixes, but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may, if so arranged between the Company and the member, be set off against the call

Accounts Books of Account to be kept – Article 164&165

The books of account shall be kept at the Registered Office of the Company or at such other place as the Directors think fit. The Company shall comply with the provisions of Section 209 of the Act as regards keeping of proper books of account for the Company.

The Directors shall from time to time determine whether and to what extent and at what time and places and under what conditions or regulations the account books and documents of the Company or any of them shall be open to the inspection of the members, and no member shall have any right of inspecting any account or book or document of the Company except as conferred by Statute or authorized by the Directors or in terms of any agreement between the Company and the Consultants or by a resolution of the Company in General Meeting.

Winding up Distribution of assets -Article 184

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 proportion to 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-up the assets available for distribution among the members shall be more than sufficient to repay the whole of the capital paid up 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, paid up or which ought to have been paid up on the shares held by them respectively.

Distribution in specie or kind - Article 184(1), (2) & (3) If thought expedient any such division may be otherwise than in accordance

with the legal rights of the contributories (except where unalterable 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 contributories shall be determined on any contributory who 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

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the Act.

In case any of the 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 Ordinary resolution, by notice in writing direct the Liquidator to sell his proportion and pay him the net proceeds and the Liquidator shall, if practicable, act accordingly.

Indemnity Directors and other rights of Indemnity - Article 185

Every Director, Secretary or officer of the Company or any person (whether an officer of the Company or not) employed by the Company and any person appointed Auditor shall be indemnified out of the funds of the Company against all liability incurred by him as such Director, Secretary, officer, employee or Auditor in defending any proceedings, whether civil or criminal, in which judgment is given in his favour, or in which he is acquitted, or in connection with any application under Section 633 of the Act in which relief is granted to him by the Court.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contract (not being contracts entered into in the ordinary course of business carried on by our Company or entered into more than two years before the date of the Letter of Offer) which are or may be deemed material have been entered or are to be entered in to by our Company. These Contracts and also the documents for inspection referred to hereunder, may be inspected at the office of our Company situated at Transport Depot Road, Kolkata – 700 088 from [●] a.m. to [●] p.m., from the date of the Letter of Offer until the date of closure of the Issue. Material Contracts to the Issue

1. Enagagement Letter dated April 18, 2007, issued for appointment of SBI Capital Markets Limited as Lead Managers to the Issue.

2. Memorandum of Understanding dated June 4, 2007, entered into with the Lead Managers to the Issue.

3. Memorandum of Understanding dated May 22, 2007, entered into with the Registrar to the Issue Material Documents

1. Certified true copies of the Memorandum and Articles of Association as amended from time to time. 2. Certificate of Incorporation dated April 2, 1947. 3. Certificates in relation to change of name from Coates of India Limited to DIC India Limited dated

August 6, 2004. 4. Copy of the resolution passed at the Board meeting held on April 18, 2007 and copy of the resolution

passed by the shareholders of our Company at the Annual General meeting passed under Section 81 (1) dated May 29, 2007, for the Issue.

5. Report of the Statutory Auditors, M/s.Lovelock & Lewes dated October 15, 2007, containing Restated Financial Statements for the years ended December 31, 2006, 2005, 2004, 2003 and 2002 and for six months ended on June 30, 2007, prepared as per Indian GAAP and mentioned in the Letter of Offer.

6. Copies of annual reports of our Company for the years ended December 31, 2006, 2005, 2004, 2003 and 2002

7. Copy of the audited accounts for the year ended December 31, 2006, 2005, 2004, 2003 and 2002 and for the six months ended June 30, 2007

8. Consent of the Statutory Auditors, M/s Lovelock & Lewes for inclusion of their report dated October 15, 2007.

9. License Agreement dated April 1, 2007, entered into by our Company with Dainippon Ink & Chemicals Inc., Japan

10. Technical Collaboration Agreement dated December 5, 2000 between our Company and DIC Asia Pacific Pte Ltd., Singapore.

11. Technical Service and Support Agreement dated August 11, 2003 between our Company and Tusons Chemical Industries Limited, Bangladesh

12. Consents of our Statutory Auditors, Bankers to our Company, Lead Manager of the Issue, Registrar to the Issue, Banker to the Issue, Legal counsel to the Issue, Directors of our Company, Company Secretary and Compliance Officer, as referred to, in their respective capacities

13. Initial listing applications dated June 29, 2007 filed with the CSE, the BSE and the NSE respectively. 14. In-principle listing approval dated August 09, 2007; July 19, 2007 and July 26, 2007 from the CSE,

the BSE and the NSE respectively. 15. Tripartite Agreement between NSDL, our Company and the Registrar to the Issue dated January 6,

1999. 16. Tripartite Agreement between CDSL, our Company and the Registrar to the Issue dated February 28,

2000. 17. Due diligence certificate dated June 29, 2007 to SEBI from SBI Capital Markets Limited. 18. Copy of the letters dated June 27, 2007, from M/s Doshi, Chatterjee, Bagri & Co., Chartered

Accountants, tax consultants to our Company, confirming tax benefits as mentioned in the Offer Document

19. SEBI observation letter No. CFD/DIL/ISSUES/PB/PN/105157/2007 dated October 03, 2007 Any of the contracts or documents mentioned in the Letter of Offer may be amended or modified at any time if so required in the interest of our Company or if required by the other parties, without reference to the shareholders, subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION No statement made in the Letter of Offer contravenes any of the provisions of the Companies Act and the rules made thereunder, and all 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. Since the date of the last financial statement disclosed in the Letter of Offer, there have been no circumstances that materially and adversely affect or are likely to affect the trading or profitability of our Company or the value of its assets or its ability to pay its liabilities within the next 12 months except as stated under the paragraph Management Discussions and Analysis beginning on page no. 206 of the Letter of Offer. Our Company accepts no responsibility for statements made otherwise than in the Letter of Offer or in the advertisement or any other material issued by or at the instance of our Company and that anyone placing reliance on any other source of information would be doing so at their own risk. We hereby certify to our knowledge that all the disclosures contained in the Letter of Offer are true and correct in all material respects. For DIC India Limited Sd/- Dr. Prabir Kumar Dutt Chairman And Managing Director

Sd/- Mr. Dipak Banerjee Director

Sd/- Mr. Rasendu Putatunda Director

Sd/- Mr Paul Koek Director

Sd/- Mr. Mitsunobu Miyasaka Director

Sd/- Mr Subir Bose Director

Sd/- Prof. Ranjan Das Director

Sd/- Mr. Sandip Chatterjee Chief Financial Officer Kolkata October 15, 2007

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