INFORMATION MEMORANDUM

KEC INTERNATIONAL LIMITED (formerly KEC Infrastructures Limited)

Originally incorporated as KEC Infrastructures Limited (formerly KEC International Limited) on 18th March 2005 under the Companies Act, 1956 and obtained the certificate of commencement of business on 21st March 2005. In terms of the Scheme of Arrangement, as approved by the Hon’ble High Court of Judicature at Bombay, the Company has taken over the Power Transmission Business of KEC Infrastructures Limited (formerly KEC International Limited) and the name of the Company has been changed to KEC International Limited on 9th January 2006 pursuant to a fresh Certificate of Incorporation consequent to change of name obtained from the Registrar of Companies, Maharashtra, Mumbai.

Registered Office : 1st floor, CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai – 400030. Tel: (91-22) 56670200, Fax: (91-22) 56670260. Website: www.kecrpg.com; email: investorpoint@kecrpg.com Contact Person: Mr. Ch. V. Jagannadha Rao, Company Secretary

INFORMATION MEMORANDUM FOR LISTING OF 3,76,85,854 EQUITY SHARES OF RS. 10 EACH

NO EQUITY SHARES ARE PROPOSED TO BE SOLD OR OFFERED PURSUANT TO THIS INFORMATION MEMORANDUM

GENERAL RISKS

Investment in Equity and Equity related securities involve a degree of risk and investors should not invest any funds in the equity shares of KEC International Limited (formerly KEC Infrastructures Limited) unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in the shares of KEC International Limited. For taking an investment decision, investors must rely on their own examination of the Company including the risks involved.

ABSOLUTE RESPONSIBILITY OF KEC INTERNATIONAL LIMITED

KEC International Limited (formerly KEC Infrastructures Limited) having made all reasonable inquiries, accepts responsibility for, and confirms that this Information Memorandum contains all information with regard to KEC International Limited (formerly KEC Infrastructures Limited), which is material, that the information contained in this Information Memorandum is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions, expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The Equity Shares of KEC International Limited (formerly KEC Infrastructures Limited) are proposed to be listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company has submitted this Information Memorandum with BSE and NSE and the same has been made available on the Company’s website viz. www.kecrpg.com. The Information Memorandum would also be made available in the website of BSE (www.bseindia.com/ipo/schemea.asp) and in the website of NSE (www.nseindia.com).LISTING

REGISTRAR AND SHARE TRANSFER AGENT

Intime Spectrum Registry Limited C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai – 400078. Tel: (022) 25963838 Fax: (022) 25946969 E-mail: helpline@intimespectrum.com Contact person: Mr. N. Mahadevan Iyer

1

2

TABLE OF CONTENTS

Sr. No.

Particulars

Page No.

I Definitions, Abbreviations and Industry related terms

4

II Use of market data, Forward looking statements and Risk Factors

6

III Summary

8

IV General Information

9

V Capital Structure

12

VI Scheme of Arrangement

16

VII Statement of Tax benefits

18

VIII Business

24

IX History of the Company

26

X Management

28

XI Promoters

37

XII Group Companies

54

XIII Management Discussion and Analysis of operations and Financial Condition

64

XIV Financial Information

66

XV Outstanding Litigation and Material Developments

69

XVI Government Approvals

105

XVII Regulatory and Statutory Disclosures

106

XVIII Rights of Members and Miscellaneous

111

XIX Main Provisions of Articles of Association

112

XX Documents for inspection

127

XXI Declaration

128

3

I. DEFINITIONS, ABBREVIATIONS AND INDUSTRY RELATED TERMS Act The Companies Act, 1956 and subsequent amendments thereto AGM Annual General Meeting Articles/ AOA Articles of Association of KEC International Limited Bankers to the Company Bankers of KEC International Limited Board Board of Directors of KEC International Limited BSE Bombay Stock Exchange Limited CDSL Central Depository Services (India) Limited Company/KEC KEC International Limited (formerly KEC Infrastructures

Limited) CSE Calcutta Stock Exchange Association Limited DCA Department of Company Affairs Depositories Act The Depositories Act, 1996 as amended from time to time Depository A Depository registered with SEBI under the SEBI

(Depositories & Participants) Regulations, 1996 as amended from time to time

Directors Directors on the Board of KEC International Limited DP Depository Participant EPC Engineering Procurement and Construction EPS Earnings Per Share {EPS = Profit After Tax/No. of Equity

Shares} Equity Shares Fully paid-up shares of Rs. 10/- each of the Company Equity Shareholders Equity Shareholders of the Company FEMA Foreign Exchange Management Act, 1999 read with rules and

regulations there under and amendments thereto FI Financial Institution FII (s) Foreign Institutional Investor(s) registered with SEBI under

applicable laws Holdings/Invest Co KEC Holdings Limited Information Memorandum This Information Memorandum Infra KEC Infrastructures Limited (formerly KEC International

Limited) I T Act Income Tax Act, 1961 and subsequent amendments thereto MOA Memorandum of Association of KEC International Limited NA Not Applicable NAV Net Asset Value {NAV=Net worth/ No. of equity shares} NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited P/E Ratio Price/Earnings Ratio PAT Profit After Tax RBI Reserve Bank of India Record Date Record date of KEC Infrastructures Limited (formerly KEC

International Limited), 15th February 2006

4

Registrar and Share Transfer Agent/ Registrars/ Intime

Intime Spectrum Registry Limited C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai – 400078

ROC Registrar of Companies, Maharashtra, Mumbai Scheme/ Scheme of Arrangement

Composite Scheme of Arrangement (“the Scheme”) entered between KEC International Limited (formerly known as KEC Infrastructures Limited) and KEC Infrastructures Limited (formerly known as KEC International Limited) and KEC Holdings Limited and Bespoke Finvest Limited and Their Respective Shareholders. The Hon’ble High Court of Bombay has approved the Scheme vide its Order dated 27th September 2005 which was received by the Company on 23rd December 2005 and was filed with the Registrar of Companies, Maharashtra on 26th December 2005.

SEBI Securities and Exchange Board of India SEBI Act Securities and Exchange Board of India Act, 1992 SEBI Guidelines Extant Guidelines for Disclosure and Investor Protection issued

by Securities and Exchange Board of India, constituted under the Securities and Exchange Board of India Act, 1992 (as amended), called Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000, as amended, including instructions and clarifications issued by SEBI from time to time.

Security (ies) Equity Share(s) Share Certificate(s) Equity Share Certificate(s) Stock Exchanges BSE and NSE

5

II. USE OF MARKET DATA, FORWARD LOOKING STATEMENTS AND RISK

FACTORS A. USE OF MARKET DATA AND FORWARD LOOKING STATEMENTS Unless stated otherwise, industry data used throughout this Information Memorandum has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but their accuracy and completeness is not guaranteed and their reliability cannot be assured. Although we believe that industry data used in this Information Memorandum is reliable, it has not been independently verified. The information included in this Information Memorandum about the various other companies is based on their respective Annual Reports and information made available by the respective companies. Any projections, forecasts and estimates contained herein are forward looking statements that involve risks and uncertainties. Such statements use forward looking terminology like “may”, “believe”, “will”, “expect”, “anticipate”, “estimate”, “plan” or other similar words. The Company’s actual results could differ from those anticipated in these forward looking statements as a result of certain factors including those which are set forth in the “Risk Factors” below. All forward looking statements are subject to risks, uncertainties and assumptions 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, among others:

• General economic and business conditions in India and other countries; • Our ability to successfully implement our strategy, our growth and expansion plans and

technological changes; • Changes in the value of the Indian Rupee and other currency changes; • Changes in laws and regulations in India; • Changes in political conditions in India; • Changes in the foreign exchange control regulations in India.

For further discussion of factors that could cause our actual results to differ, see the section titled “Risk Factors”. By their nature, certain risk disclosures are only estimates and could be materially different from what actually occur in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. We do not have any obligation to and do not intend 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. B. RISK FACTORS An investment in equity shares involves a high degree of risk. You should carefully consider all of the information in this Information Memorandum, including the risks and uncertainties

6

described below. If any of the following risks actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline, and you may loose all or part of your investment. Internal:

1. Prices of major inputs such as Steel, Zinc & Aluminium are highly volatile. This could impact the profitability, as the overseas contracts are Fixed Price Contracts. There is no formal ‘futures’ mechanism to enable hedging against Steel price volatility. However, the Company is considering various options like widening the suppliers’ base and entering into term contracts for procuring the material.

2. The Company is exposed to foreign currency risk because the currency of invoicing may

be different from the currency of payment of costs. Fluctuations in the currency cannot be anticipated at the tendering stage and hence the currency risk in each contract continues for considerable period. To hedge this risk to some extent, the Company is entering into need based hedging contracts.

External:

1. Vulnerability to business cycles could affect the Company’s capacity to sustain a growth in income, profits and shareholders value.

2. Terrorist attacks and other acts of violence or war, including those involving India or other

countries could adversely affect operations of the Company resulting in a loss of business confidence.

3. There has been no public market for the Company’s equity shares till now and the prices

of the Company’s equity shares may fluctuate after listing. The Company’s share price could be volatile.

This section should also be read in conjunction with the section titled “Outstanding Litigations and Material Developments.” CURRENCY OF PRESENTATION In this Information Memorandum all references to “Rupees” or “Rs.” are to Indian Rupees, the legal currency of the Republic of India.

7

III. SUMMARY

INDUSTRY SUMMARY Electricity is the prime mover of growth and a critical infrastructure for economic development and sustenance of a modern economy. The Government of India has appreciated this fact and its goal to provide “Power for All”, which includes electrifying all our villages by 2007 and all households by 2012, gives an impetus to the power sector business. The Accelerated Power Development and Reforms Programme (“APDRP”) has been put in place by the Government and projects worth over Rs.170 billion have already been approved under this scheme. The Government has also announced plans to add around 1,07,000 MW of additional power generation capacity by the year 2012 and evolved a transmission plan for strengthening regional grids as well as creating a national grid, which can support this target. An investment of about Rs. 71,000 crores is envisaged in power transmission under central sector and Transmission and Distribution of electricity generated is being accorded a high national priority in view of the significant capacity additions. The Government has launched Rajiv Gandhi Grameen Vidyutikiran Yojana (“RGGVY”), a Rural Electrification Scheme involving an expenditure of Rs. 16,000 crores. The RGGVY Scheme aims at electrifying all villages, providing electricity access to below poverty line families free of charge in five years. The RGGVY Scheme and APDRP are expected to accelerate investment in the Transmission and Distribution Sectors.

BUSINESS SUMMARY

The Company is one of the largest Power Transmission EPC companies in the world.

The Company is engaged in Power Transmission Business, which includes design, fabrication, galvanising and testing of transmission line towers; all types of masts; erection of complete transmission lines; supply and erection of tower materials, sub-station structures and overhead equipment for railway electrification in India and several other countries.

The Company’s strengths lie in the areas of Design, Manufacture, Supply and Construction of Turnkey Projects of Power Transmission lines of voltages upto 800 KV and in the execution of Railway Electrification projects, setting up Sub-stations and Power Distribution Networks, Optical Fibre Cable (OPGW) installations, Turnkey Telecom Infrastructure Services and maintenance of Power Transmission Lines.

The Company has an increasingly strong presence in the Middle East and Africa and to ensure reliable service, the Company is supported by multi-locational manufacturing facilities and a workforce spread out over several countries.

8

IV. GENERAL INFORMATION Name of the Company

: KEC INTERNATIONAL LIMITED (formerly KEC Infrastructures Limited)

Registered Office : 1st floor, CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai – 400030. Tel: (91-22) 56670200, Fax: (91-22) 56670260. Website: www.kecrpg.com

Plants : Jhotwara, Jaipur 302012, Rajasthan B-190, Industrial Area, Butibori 441108, Maharashtra

Registration No.

: 11 – 152061

Registrar of Companies

: The Registrar of Companies, Mumbai, Maharashtra 100, Everest Building, Marine Lines, Mumbai- 400002

Board of Directors as on the date of Information Memorandum

Sr. No. Name Designation

1 Mr. H. V. Goenka Chairman 2 Mr. Ramesh D. Chandak Managing Director 3 Mr. S. S. Thakur Director 4 Mr. G. L. Mirchandani Director 5 Mr. Dilip G. Piramal Director 6 Mr. S. M. Kulkarni Director 7 Mr. A. T. Vaswani Director 8 Mr. J. M. Kothary Director 9 Mr. M. Ramachandran Director 10 Ms. Neeta Mukerji (Nominee of ICICI

Bank Limited) Director

Compliance Officer Mr. Vimal Kejriwal Chief Financial Officer 1st floor, CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai – 400030. Tel. No.: (91-22) 56670200 Fax. No.: (91-22) 56670299 E-mail: kejriwalv@kecrpg.com

Company Secretary Mr. Ch. V. Jagannadha Rao 1st floor, CEAT Mahal, 463,Dr. Annie Besant Road, Worli, Mumbai – 400030. Tel. No.: (91-22) 56670200 Fax. No.: (91-22) 56670260 E-mail: raoj@kecrpg.com

9

Registrar and Share Transfer Agent Intime Spectrum Registry Limited C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai – 400078. Tel: (022) 25963838 Fax: (022) 25946969 E-mail: helpline@intimespectrum.com Contact person: Mr. N. Mahadevan Iyer

Auditors A.F. Ferguson & Co. Chartered Accountants Allahabad Bank Building Bombay Samachar Marg, Mumbai 400001. Tel: (022) 22663313 Fax: (022) 22661395

Disposal of Investors Grievances The complaints received in respect of the shares shall be attended to by the Company expeditiously and satisfactorily. Intime Spectrum Registry Limited are the Registrar and Transfer Agent of the Company and they deal with all Investors Grievances in co-ordination with the Company. Stock Market Data for Equity Shares of the Company Equity Shares of the Company are not listed on any stock exchanges. The Company is seeking approval for listing of its shares in BSE and NSE. Bankers/ Financial Institutions

Bank of India Mumbai Corporate Banking Branch, 4th Floor, 70-80, M.G.Road, Mumbai – 400023

ICICI Bank Limited Free Press House, 215, Nariman Point, Mumbai 400021.

Central Bank of India Central Bank Building M. G. Road, Fort, Mumbai 400023

Punjab National Bank PNB House, Mumbai – 400023.

Canara Bank Mittal Court, Sir P. M. Road, C Wing, Nariman Point, Mumbai – 400001.

Dena Bank IFB, E/9, Maker Tower, Cuffe Parade, Mumbai 400005.

UCO Bank 1st floor, Mafatlal Centre, Nariman Point, Mumbai 400021

Allahabad Bank Manish Commercial Centre, Dr. Annie Besant Road, Worli, Mumbai 400030.

10

State Bank of Hyderabad 11-C, Mittal Tower, 210, Nariman Point, Mumbai – 400021.

Syndicate Bank 3rd Floor, Homji Street, Fort, Mumbai

Bank of Baroda CFB, 3, Walachand Hirachand Marg, Ballard Pier, Mumbai- 400 001.

State Bank of Bikaner and Jaipur Industrial Finance Branch, 239, P.D’Mello Road, Opp. G.P.O., Mumbai – 400001.

Andhra Bank CFB, 33, 3rd floor, Atlanta Building, Nariman Point Branch, Mumbai 400021

Standard Chartered Bank 90 M. G. Road, Fort, Mumbai 400001.

The Hongkong and Shanghai Banking Corporation Limited 52-60 M. G. Road, Fort, Mumbai 400 001.

YES Bank Limited Nehru Centre, Discovery of India Building, Dr Annie Besant Road, Worli, Mumbai – 400 018

Abu Dhabi Commercial Bank Limited 75-B Rehmat Manzil, Veer Nariman Road, Mumbai – 400020.

Export-Import Bank of India Centre One Building, Floor 21, WTC Complex, Cuffe Parade, Mumbai - 400005

Industrial Development Bank of India Limited IDBI Tower, WTC Complex, Cuffe Parade, Mumbai - 400005

11

V. CAPITAL STRUCTURE OF THE COMPANY

PRE SCHEME OF ARRANGEMENT

No. of Shares

Aggregate Value (Rs. in Lacs)

Authorized, Issued, Subscribed and Paid-up Capital 50,000 Equity Shares of Rs. 10/- each

5.00 Total 5.00 Share Premium Account NIL

POST SCHEME OF ARRANGEMENT

No. of Shares

Aggregate Value (Rs. in Lacs)

Authorized Capital 6,00,00,000 Equity Shares of Rs. 10/- each 15,00,000 Redeemable Preference Shares of Rs.100/- each

6000.00 1500.00

Total 7500.00 Issued, Subscribed and Paid-up Capital

3,76,85,854 Equity Shares of Rs. 10/- each 12,99,966 Redeemable Preference Shares of Rs.100/- each

3768.59 1299.97

Total 5068.56 Share Premium Account 9236.45

Share Capital History of the Company:

1. The Authorized, issued, subscribed and paid up Share Capital of the Company at the time of incorporation was Rs. 5,00,000/- divided into 50,000 equity shares of Rs. 10/- each.

2. The Authorized Share Capital of the Company was increased to Rs. 75 Crores divided into

6 Crores Equity Shares of Rs. 10/- each and 15 Lacs Preference shares of Rs. 100/- each vide an ordinary resolution passed at the extraordinary general meeting held on 2nd January 2006.

3. Pursuant to the Scheme, on 20th February 2006, the Company has issued and allotted

12,99,966fully paid redeemable preference shares of Rs. 100/- each aggregating to Rs. 12,99,96,600/-.

4. Pursuant to the Scheme, on 23rd February 2006 the Company has issued and allotted

3,76,35,854 fully paid equity shares of Rs. 10 each at a total premium of Rs. 92,36,44,860 aggregating to Rs. 130,00,03,400/- .

12

Pre & Post Scheme of Arrangement Shareholding Pattern of the Company is given below: - Pre Scheme of

Arrangement Post Scheme of Arrangement

Category No. of Shares

held % of

ShareholdingNo. of Shares

held % of

ShareholdingA. Promoters holding

Promoters -Indian Promoters 50000 100.00 12916000 34.27

1

-Foreign Promoters 0 0.00 0 0.002 Persons acting in Concert 0 0.00 0 0.00 Sub-Total 50000 100.00 12916000 34.27B. Non – Promoters Holding 3 Institutional Investors a Mutual Funds and UTI 0.00 8977162 23.82 b Banks, Financial Institutions,

Insurance Companies (Central/State Gov.Institutions / Non-government Institutions) 0.00 3814780 10.12

c FIIs, Foreign Mutual Fund andForeign company

0.005351933

14.20

Sub-Total 0 0.00 18143875 48.154 Others a Private Corporate Bodies 0.00 1399723 3.71 b Indian Public 0.00 5020962 13.32 c NRIs / OCBs 0.00 131720 0.35 d Any other Clearing Member 0.00 40748 0.11 Directors and Relatives 0.00 32826 0.09 Sub-Total 0 0.00 6625979 17.58 GRAND TOTAL 50000 100.00 37685854 100.00 Total Foreign Holding 0 0.00 5484027 14.55 The Shareholding of the Promoters of the Company (as on the date of Information Memorandum) Name No. of shares

held % of Share

Holding Adapt Investments Limited 921500 2.45Adorn Investments Limited 7500 0.02B N Elias & Co. Pvt. Limited 100 0.00

13

Blue Niles Holdings Limited 207000 0.55Brabourne Investments Limited 886125 2.35Brentwood Investments Limited 100 0.00Canal Investments & Industries Pvt. Limited 65050 0.17CEAT Holdings Limited 2500 0.01CEAT Limited 2075647 5.51CEAT Ventures Limited 1050151 2.79Chattarpati Investments Limited 94435 0.25Eastern Aviation & Industries Pvt. Limited 1450 0.00Harrisons Malayalam Financial Services Limited 447254 1.19Hilltop Holdings India Limited 1128148 2.99Instant Trading & Investment Limited 132967 0.35Jubilee Investments & Industries Limited 3520851 9.34Off Shore India Limited 20250 0.05Organised Investments Limited 6150 0.02PCBL Industrial Finance Limited 20250 0.05Petrochem International Limited 990646 2.63Phillip Carbon Black Limited 850 0.00RPG Cellular Investments and Holdings Pvt Limited 1336651 3.54RPG Transmission Limited 100 0.00Saregama India Limited 100 0.00Trade Apartments Limited 125 0.00Yield Investments Private Limited 100 0.00TOTAL (A) + (B) 12916000 34.27

Top 10 Shareholders of the Company (other than Promoters) (as on the date of Information Memorandum)

Name(s) of Shareholder No. of Shares held

% of Shareholding

Life Insurance Corporation Of India 2750720 7.3088FID Funds (Mauritius) Ltd. 1873825 4.9788HDFC Trustee Company Limited – HDFC 1255396 3.3356HSBC Global Investment Funds A/C HSBC GL 932831 2.4786UBS Securities Asia Limited. A/C Swiss 843307 2.2407HSBC Midcap Equity Fund 600000 1.5942HDFC Trustee Company Ltd - Hdfc Premier 557011 1.4800SBIMF-Magnum Sector Funds Umbrella-Emerging

532063 1.4137

SBIMF Magnum Sector Fund Umbrella Contra 531779 1.4130Tata Trustee Co. Pvt Ltd A/C Tata Mutual 520164 1.3821

Top 10 Shareholders of the Company (as on the date of Incorporation and 10 days prior to the date of Information Memorandum)

14

Name of Equity Shareholder No. of Shares held

RPG Cellular Investments and Holdings Private Limited 49993Mr. Imtiaz Iqbal Khan 1Mr. Suresh Mathew 1Mr. Subramanian Balasubramaniam 1Mr. Tehmtan M Elavia 1Ms. Nina Trivedi 1Mr. Pulak Banerjee 1Mr. Ashok Menon 1

• As on date of this Information Memorandum, there are no outstanding warrants, options

or rights to convert debentures, loans or other instruments into equity shares of the Company.

• There will be no further issue of capital whether by way of issue of bonus shares,

preferential allotment, rights issue or in any other manner during the period commencing from the date of approval of the Scheme by the Hon’ble High Court till listing of the Equity Shares allotted as per the Scheme.

• The face value of the equity shares is Rs. 10/- and there shall be only one denomination

for the Equity Shares of the Company, subject to applicable regulations the Company shall comply with such disclosure and accounting norms specified by SEBI, from time to time.

• The Company has around thirty six thousand members as on the date of filing of this

Information Memorandum.

• 17,50,000 Equity shares of the Company are subject to lock-in uptil 19/09/2007.

• The Company presently does not have an Employee Stock Option Scheme.

• There are no outstanding debentures or bonds and other instruments issued by the Company.

15

VI. SCHEME OF ARRANGEMENT

Objects of the Scheme: KEC Infrastructures Limited (formerly KEC International Limited) engaged mainly in Power Transmission Business, had proposed a scheme for restructuring itself by delinking the Power Transmission Business from Investments and other non-business assets, which would enable emergence of a focused Company with strong financials that could lead to further enhancement of all stakeholders’ value. Accordingly a Scheme of Arrangement (“ the scheme”) between KEC International Limited and KEC Infrastructures Limited and KEC Holdings Limited and Bespoke Finvest Limited and Their Respective Shareholders was proposed, which after all the necessary statutory approvals and compliances has become effective on 26th December 2005. The Main Features of the Scheme

The Power Transmission Business (as more specifically defined in the Scheme) shall be hived off and sold by KEC Infrastructures Limited (formerly KEC International Limited) on a going concern basis to KEC International Limited (formerly KEC Infrastructures Limited) at a fair value of Rs. 143 crores.

KEC International Limited (formerly KEC Infrastructures Limited) shall discharge the

total consideration of Rs. 143 crores by issuance and allotment of 3,76,35,854 fully paid up equity shares of Rs. 10 each at a total premium of Rs. 92,36,44,860 aggregating to Rs. 130,00,03,400/- and 12,99,966 fully paid up preference shares of Rs. 100 each aggregating to Rs. 12,99,96,600/- to KEC Infrastructures Limited (formerly KEC International Limited) and the equity shares and preference shares in turn shall be distributed to the respective shareholders of KEC Infrastructures Limited (formerly KEC International Limited) in the same proportion of their shareholding in KEC Infrastructures Limited (formerly KEC International Limited), i.e. in the ratio of 1:1.

The equity shares of KEC International Limited (formerly KEC Infrastructures

Limited) are to be listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

The Investments / Loans / Advances shall be transferred by KEC Infrastructures

Limited (formerly KEC International Limited) to KEC Holdings Limited at a fair value of Rs. 115 crores and KEC Holdings Limited shall discharge the consideration by issuing and allotting 20 lacs fully paid up equity shares of Rs. 10 each at a premium of Rs. 113 crores aggregating to Rs. 115 crores to KEC Infrastructures Limited (formerly KEC International Limited).

Bespoke Finvest Limited, a subsidiary of KEC Infrastructures Limited (formerly KEC

International Limited) shall be merged with KEC Holdings Limited.

16

All the employees of KEC Infrastructures Limited (formerly KEC International Limited) shall be transferred to KEC International Limited (formerly KEC Infrastructures Limited) without any break in their service and on the terms and conditions of their employment, which shall not be less favourable to their existing terms and conditions.

The name of KEC International Limited shall be changed to KEC Infrastructures

Limited and the name of KEC Infrastructures Limited shall be changed to KEC International Limited, with the approval of the Registrar of Companies.

The appointed date of the Scheme is 31st March 2005 and effective date of the Scheme

is 26th December 2005, i.e. the date of filing of the Order of Hon’ble High Court of Bombay with the Registrar of Companies, Maharashtra, Mumbai.

Tax Implication The equity shares of the KEC International Limited (formerly KEC Infrastructures Limited) being distributed to the shareholders would be treated as fresh acquisition and its cost would be Nil in the hands of the shareholders.

17

VII. STATEMENT OF TAX BENEFITS

The following benefits are available under the Income Tax Act, 1961 and other Direct Tax Laws to the Company and its Shareholders, (Indian Residents, NRI’s, FII’s, etc.) The tax benefits are available under the current provisions of the Income tax Act, 1961 and other applicable tax laws for the time being in force subject to fulfillment of respective provision of law. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which is based on business imperatives the Company faces in the future, which the Company may or may not choose to fulfill. BENEFITS UNDER THE INCOME TAX ACT, 1961 (hereinafter referred to as the ‘IT Act’) TO THE COMPANY 1. The Company will be entitled to claim depreciation allowance at the prescribed rates on Fixed

Assets under section 32 of the IT Act, 1961. 2. The Company will be entitled to claim expenditure incurred in respect of Voluntary

Retirement Scheme under Section 35DDA of the IT Act in five equal annual installments. 3. Under Section 35 of the IT Act and subject to the provisions therein, the Company would be

entitled for deduction in respect of scientific research expenditure relating to its business. 4. In accordance with the provisions of section 10(38) of the IT Act the long-term capital gains

arising on the transfer of securities/units in a transaction entered into in a recognized stock exchange in India (such transaction is chargeable to Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004), shall be exempt from income tax.

5. The long-term capital gains accruing to the Company otherwise than as mentioned in 4 above,

shall be chargeable to tax in accordance with and subject to the provisions of section 112 of the IT Act as follows:

If long term capital gain is computed after indexation @ 20% (plus applicable surcharge

and education cess) In the case of other securities/units in a transaction not entered into in a recognised stock

exchange, if long term capital gain is computed without indexation @ 10% (plus applicable surcharge and education cess)

6. The short-term capital gains accruing to the Company, from the transfer of a short-term

capital asset, being securities, in a transaction entered into in a recognized stock exchange in India (such transaction is chargeable to Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004) shall be chargeable to tax at the rate of 10% (plus applicable surcharge and education cess) as per the provisions of section 111A of the IT Act.

18

7. The Company is eligible to claim exemption in respect of tax on long term capital gains under sections 54EC and 54ED of the 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.

8. The Company is eligible to exemption under section 10(34) of the IT Act in respect of income

by way of dividend received from other Domestic Companies. 9. The Company is eligible to exemption under section 10(35) of the IT Act in respect of income

by way of dividend received from mutual funds specified under Section 10(23D) of the IT Act and other specified undertakings/companies.

TO THE MEMBERS OF THE COMPANY I – RESIDENTS

1. Members will be entitled to exemption, under section 10(34) of the IT Act in respect of the income by way of dividend received from the Company.

2. 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 (such transaction is chargeable to Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004) shall be exempt from tax as per the provisions of section 10(38) of the IT Act.

3. The long term capital gains otherwise than as mentioned into above, shall be chargeable to

tax in accordance with and subject to the provisions of Section 112 of the IT Act as follows: If long term capital gain is computed after indexation @ 20% (plus applicable

surcharge and education cess). In the case of other securities/units in a transaction not entered into in a recognised

stock exchange, if long term capital gain is computed without indexation @ 10% (plus applicable surcharge and education cess)

4. 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 (such transaction is chargeable to Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004) shall be chargeable to tax @ 10% (plus applicable surcharge and education cess) as per the provisions of section 111A of the IT Act.

5. The members are entitled to claim exemption in respect of tax on long term capital gains

under sections 54EC and 54ED 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.

6. Individuals or HUF members can avail exemption under section 54F of the IT Act by

utilization of the sales consideration for purchase/construction of a residential house

19

within the specified time period and subject to the fulfillment of the conditions specified therein.

7. Any sum of money not exceeding Rs. 25,000 received without consideration (i.e gift) by

an individual or a H.U.F from any person is not chargeable to income tax. II – NON-RESIDENTS

1. Non-resident members will be entitled to exemption, under section 10(34) of the IT Act in respect of the income by way of dividend received from the Company.

2. 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 (such transaction is chargeable to Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004) shall be exempt from tax as per the provisions of section 10(38) of the IT Act.

3. The long term capital gains accruing otherwise than as mentioned in 2 above shall be

chargeable to tax in accordance with and subject the provisions of Section 112 of the IT Act as follows: If long term capital gains is computed after indexation @ 20% (plus applicable

surcharge and education cess) In the case of other securities/units in a transaction not entered into in a recognised

stock exchange, if long term capital gain is computed without indexation @ 10% (plus applicable surcharge and education cess).

4. Under the first proviso to Section 48 of the IT Act, in the case of a non-resident, in

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

5. 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 (such transaction is chargeable to Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004) shall be chargeable to tax @ 10% (plus applicable surcharge and education cess) as per the provisions of section 111A of the IT Act.

6. The members are entitled to claim exemption in respect of tax on long term capital gains

under sections 54EC and 54ED 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.

7. Individuals or HUF members can avail exemption under section 54F of the IT Act 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.

20

8. 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 than the provisions of Income Tax IT Act, 1961, then the provisions of the DTAA shall be applicable.

9. 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 115E 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 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 assets 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 three years from the date of acquisition thereof as specified in the said section.

As per the provisions of section 115G of the IT Act, Non-resident Indians are not

obliged to file a return of income under section 139(1) of the IT 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-A of the IT Act.

Under section 115H of the IT Act, where a Non-Resident Indian, in relation to any

previous year, becomes assessable as a resident in India in respect of the total income of any subsequent year, he/she may furnish to the assessing Officer a declaration in writing, along with his/her return of income under section 139 of the IT Act for the assessment year for which he/she is so assessable, to the effect that the provisions of the Chapter XII-A shall continue to apply to him/her in relation to investment income derived from any foreign exchange asset, being an asset of the nature referred to in sub-clause (ii) to clause (v) of clause (f) of section 115C, in which case, the provisions of Chapter XII-A shall continue to apply to him/her in relation to such income for that assessment year until the transfer or conversion (otherwise than by transfer) into money of such assets.

As per the provision of section 115-I of the IT Act, when a Non Resident Indian,

elects not to be governed by the provision of Chapter XII-A of the IT Act, then his/her total income shall be computed and charged in accordance with other provisions of the IT Act.

21

III – FOREIGN INSTITUTIONAL INVESTORS

1. Income by way of dividend received on shares of the Company is exempt under section 10(34) of the IT Act.

2. 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, would be exempt from tax as per the provisions of section 10(38).

3. 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, would be chargeable to tax @ 10% (plus applicable surcharge and education cess) as per the provisions of section 111A.

4. Under section 115AD(1)(b)(ii) of the IT Act, Income by way of Short Term Capital

Gain arising from the transfer of shares (otherwise than as mentioned in 3 above) held in the Company for a period of less than 12 months will be taxable @ 30% (plus applicable surcharge and education cess).

5. Under section 115AD(1)(b)(iii) of the IT Act, Income by way of long term capital gain

arising from the transfer of shares (otherwise than as mentioned in 2 above) held in the Company will be taxable @ 10% (plus applicable surcharge and education cess). It is to be noted here that the benefits of indexation and foreign currency fluctuation protection as provided by section 48 of the IT Act are not available to Foreign Institutional Investors.

6. Long term capital gains on sale of shares of the Company by the members shall be

exempt from Income tax if such gains are invested in bonds/equity shares specified in section 54EC or section 54ED of the IT Act respectively subject to the fulfillment of the conditions specified in those sections.

7. 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 than the provision of Income Tax Act, 1961, then the provisions of the DTAA shall be applicable.

IV – MUTUAL FUNDS Income by way of dividend received on shares of the Company is exempt under Section 10(34) of the IT Act. V – VENTURE CAPITAL COMPANIES/FUNDS Income by way of dividend received on shares of the Company is exempt under Section 10(34) of the IT Act.

22

BENEFITS UNDER THE WEALTH TAX ACT, 1957 ‘Asset’ as defined under section 2(ea) of the Wealth Tax Act, 1957, does not include shares in companies and hence, shares are not liable to wealth tax. NOTES 1. All the above benefits are as per the current tax law as amended by the provisions of Finance

Act, 2005 and will be available only to the first holder in case the shares are jointly held. 2. In the case of non-resident, the tax rate and the consequent taxation mentioned above shall be

further subject to any benefits available under the Double Taxation Avoidance Agreement (DTAA) and amendments thereon, if any.

23

VIII. BUSINESS

The Company is engaged in Power Transmission business, which includes design, fabrication, galvanising and testing of transmission line towers; all types of masts; erection of complete transmission lines; supply and erection of tower materials, sub-station structures and overhead equipment for railway electrification in India and several other countries. The details of Company’s capabilities and expertise in its business are briefed as follows: Design Capabilities

To maintain its leadership in the market, the Company is equipped with the latest in technology and is constantly upgrading its facilities and factory units.

The Company has very modern design facilities at Mumbai where over 50 highly qualified and experienced Design Personnel have been deployed. This Design Division is fully equipped to perform a plethora of computerized design and engineering activities that design Transmission Towers of various kinds to meet specific client requirements. The tower testing station at Vashi is recognized as an in-house R&D Unit by the Ministry of Science and Technology, Government of India.

Manufacturing Skills

State-of-the-art Infrastructure

The Company has two manufacturing plants at Jaipur and Nagpur in India. In these two plants, the Company has capacity to manufacture 60,000 tons of towers annually.

The Company meets the world's most stringent quality standards. Its plants are certified as per ISO 9001 and 14001 for Quality and Environmental Standards.

Fabrication Technology

All tower parts go through multi-purpose CNC machines that are programmed to carry out various operations such as punching, stamping, drilling and cutting.

Hydraulic presses along with matching tools, jigs and fixtures ensure that bent items are handled without distortion. Strategically positioned cranes simplify material handling without any strain on employees.

All machines are equipped to process steel conforming to various specifications e.g. BSEN, ASTM, JIS, DIN.

24

Galvanizing Technology

The pretreatment of steel is effectively handled with special chemicals to minimize effluents. The controlled treatment includes degreasing, pickling and fluxing for an ideal reaction between steel and Zinc.

The pre-heating chamber ensures uniform drying & preheating of steel to give an excellent surface finish and uniform coating of zinc. The temperature of Galvanizing Furnace is accurately controlled by microprocessors.

The waste acids and chemicals are treated as per all applicable environment Standards.

Quality

Quality is an integral part of manufacturing process wherein each operator ensures the quality of work he performs. Specially trained inspectors, computerized testing equipments and well-planned quality assurance infrastructure back all quality efforts. Monitoring of quality is done at every stage ensuring the highest quality standards.

Maintenance and back up systems ensure that process capability of machines is maintained at the planned performance standards. Construction Expertise

Besides having many teams of highly skilled surveyors, the Company has several Total Stations (comprising Electronic Distance Meters, theodolite and software for recording survey data like levels, angles and distance. In addition the Company has the capability and experience of conducting surveys via Geo-positioned satellite.

The Company has teams of expert engineers & technicians who erect transmission towers by conventional methods like cranes for towers that are up to 45 meters high and advanced methods like use of helicopters, whenever required.

The Company's battery of sophisticated lightweight tension stringing machines and hydraulic mobile cranes (to handle the conductors at erection sites and at stores) give the Company a distinct edge when it comes to installation of transmission lines.

25

IX. HISTORY OF THE COMPANY

Brief History

The Company was incorporated under the Companies Act, 1956 as a public limited Company on 18th day of March 2005 with the minimum capital of Rs. 5,00,000 (Rupees Five Lacs only) divided into 50,000 equity shares of Rs. 10/- each and obtained the certificate of commencement of business on 21st March 2005. The Registered office of the Company is at 1st Floor, CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai - 400030. The Company entered into a Scheme of Arrangement (“the Scheme”) with KEC Infrastructures Limited (formerly KEC International Limited) and KEC Holdings Limited and Bespoke Finvest Limited and Their Respective Shareholders, which became effective on 26th December 2005. In terms of the Scheme, the Company has taken over the Power Transmission Business (as more specifically defined in the Scheme) of KEC Infrastructures Limited (formerly KEC International Limited) which includes design, fabrication, galvanising and testing of transmission line towers; all types of masts; erection of complete transmission lines; supply and erection of tower materials, sub-station structures and overhead equipment for railway electrification in India and several other countries. In terms of the Scheme and pursuant to the approval received from ROC, the name of the Company was changed to KEC International Limited with effect from 9th January 2006. MAIN OBJECTS OF THE COMPANY 1. To manufacture, deal in, build, erect, construct, operate, advise on, to undertake research and development, test, undertake, execute projects related to power transmission lines and install power houses and sub-stations, undertake and operate on Build – Operate – Transfer (BOT) or Build – Own – Lease – Transfer (BOLT) basis, Build – Own – Operate – Transfer (BOOT) basis, or on any other basis as per the various rules and regulations prevalent at the moment, repair, execute, develop infrastructural project including roadways, bridges, dams, docks, harbours, canals or any kind of work for and behalf of Government, Semi-government, Non-government organisations or bodies corporate or individuals. 2. To carry on the business of building, setting up, erection, construction, developing, commissioning, maintaining, operating, hiring, letting on hire, lease of all types and natures of Infrastructure Projects including roads, highways, bridges, flyovers, canals, hydro power projects, thermal power projects, wind power projects, water supply facilities, waste management systems, facilities for alternative energy sources, renewable energy systems, pollution control devices on Build – Operate – Transfer (BOT) basis or any other basis. CHANGES IN MEMORANDUM OF ASSOCIATION Change of Name

26

The Company was originally incorporated as KEC Infrastructures Limited on 18th March 2005. The name of the Company was changed to KEC International Limited and the Company obtained fresh certificate consequent to change of name on 9/01/2006 from the Registrar of Companies, Maharashtra, Mumbai. Change in Authorised Capital The Company was incorporated with authorized capital of Rs. 5 Lacs divided into 50,000 equity shares of Rs. 10/- each. The authorized capital of the Company was increased to Rs. 75 crores divided into 15,00,000 Redeemable Preference Shares of Rs. 100/- each and Rs. 6,00,00,000 equity shares of Rs. 10/- each. SUBSIDIARIES OF THE COMPANY The Company has no subsidiaries. SHAREHOLDERS AGREEMENT

There is no separate agreement executed between any shareholder and the Company.

STRATEGIC/ FINANCIAL PARTNERS AND OTHER MATERIAL CONTRACTS

The Company does not have any strategic/financial partners or has not entered any material contracts other than in ordinary course of business.

27

X. MANAGEMENT OF THE COMPANY

The overall management is vested in the Board of Directors, comprised of qualified and experienced persons. The Managing Director is responsible for the overall supervision and control of the affairs of the Company and carries out such duties and exercises such powers as are entrusted to him from time to time by the Board. The Managing Director looks after the day to day working of the Company. Brief details of Chairman and Managing Director: Chairman: Mr. H.V. Goenka (48) is the Chairman of the Board of Directors of KEC International Limited. Mr. H. V. Goenka is the Chairman of RPG Enterprises, one of the leading business groups in India with a turnover of over Rs. 8,45,000 Lacs. RPG Enterprises has interests in Power, Tyres, Retail, Information Technology, Life Sciences and Entertainment. He is the Chairman of RPG Life Sciences Limited, RPG Cables Limited, Zensar Technologies and Vice Chairman of CEAT Limited. He is also a Board Member of IMD, Lausanne, Switzerland. He is a qualified MBA from IMD, Switzerland. He has about 25 years of experience. Managing Director: Mr. Ramesh D.Chandak (59) has over 34 years of experience of working with Textile, Edible Oil and engineering industries. He has been associated with the RPG Group since several years. He is a graduate in commerce and fellow member of Institute of Chartered Accountants of India. Prior to joining the RPG Group, he was associated with Nalin Industries, Malaysia & Universal edible Oil Inc, USA. BOARD OF DIRECTORS

Name, Age, Designation, Qualifications, Address,

Occupation

Date of expiration of current term

Other Directorships

Mr. H. V. Goenka (48), Chairman - (Non-independent/ Promoter) Grad. In Eco, MBA (Switzerland) 14/15A, II- Palazzo, B.G.Kher Marg, Mumbai – 400006. Industrialist

Rotational

Bajaj Electricals Limited Zensar Technologies Limited RPG Enterprises Limited Raychem RPG Limited RPG Life Sciences Limited The State Industrial & Investment

Corporation of Maharashtra Limited (SICOM)

CEAT Limited Spencer International Hotels

Limited Zensar Technologies Inc.

Mr. Ramesh D. Chandak (59), Managing Director- (Non-independent/ Executive)

28.09.2010 RPG Itochu Finance Limited Spencer International Hotels

Limited Raychem RPG Limited

28

M. Com, F.C.A. 1202, Shrusti Apartment, Old Prabhadevi Road, Worli, Mumbai 400030. Service

KEC Infrastructures Limited

Mr. S. S. Thakur (76) Director – (Independent) M. Com, CAIIB 1161, Abdul Court, Flat No.20, 7th floor, Suryavanshi Marg, Dadar, Mumbai – 400 028. Banking Professional

Rotational

Kamat Hotels India Limited HDFC Securities Limited Shrenuj & Co.Limited Quantum Information Services

Limited Central Depository Services

(India) Limited Kotak Mahindra Old Mutual Life

Insurance Co. Limited KEC Infrastructures Limited DSP Merrill Trustee Co. Pvt.

Limited Quantum Trustee Company

Private Limited Urban Infrastructures Venture

Capital Limited

Mr. G. L. Mirchandani (62), Director- (Independent) B.E. (Mech) 131, Tahnee Heights, D Block, Petit Hall, Napean Sea Road, Mumbai – 400006. Industrialist

Rotational

MIRC Electronics Limited Ador Welding Limited Adino Research Foundation Guviso Holdings Limited Adino Telecom Limited Shoppers' Stop Limited Gulita Securities Limited Akasaka Electronics Limited Blow Plast Limited Imercius Technologies (India)

Limited

Mr. Dilip G. Piramal (56) Director- (Independent) B.Com. 501-502, Palm Beach, 67 A, Worli Estate, Pochkhanwala Road, Worli, Mumbai - 400 025. Industrialist

Rotational

Blow Plast Limited V.I.P.Industries Limited DGP Hinoday Industries Limited Alkyl Amines Chemicals Limited Kemp & Company Limited DGP Securities Limited Kiddy Plast Limted Universal Luggage Manufacturing

Co. Limited Quality Plastics Limited Organisation of plastic Processors

29

of India Limited DGP Capital Management Limted B P Ergo Limted Gazelle Travels Pvt Limited DGP Enterprises Private Limited

Mr. S. M. Kulkarni (66), Director- (Independent) B.E. 161 Twin Towers, Prabhadevi, Veer Savarkar Marg, Mumbai 400025. Business Advisor and Company Consultant

Rotational

Lanxess ABS Limited Bayer CropScience Limited Hindustan Construction Co.

Limited Raychem RPG Limited RPG Enterprises Limited Global Procurement Consultants

Limited Hilltop Holdings India Limited IndiacoVentures Limited Hincon Realty Limited J. M. Financial Trustee Company

Pvt Limited Protect Insurance Services Limited Travel Voyages (P) Limited

Mr. A. T. Vaswani (68), Director- (Independent) C.A., C.S. 502, Solitaire, Hiranandani Gardens, Powai, Mumbai – 400 076. Company Director

Rotational

Zensar Technologies Limited ICIM Systems and Engineering

Services Limited Vulcan Engineers Limited Emmellen Biotech

Pharmaceuticals Limited Zensar Technologies, Inc. Zensar Technologies (Singapore)

Pte Limited P. J. Margo Private Limited W.R. Grace & Co. India Private

Limited Margo Biocontrols Pvt. Limited

Mr. J. M. Kothary (71), Director- (Independent) B.Com, LLB, MBA (USA), 16 A, Thakur Niwas, 3rd Floor, 173 J.N.Tata Road, Churchgate, Mumbai – 400020. Company Director

Rotational

Hemat Processing Co. Limited Indian Card Clothing Co. Limited RPG Enterprises Limited Malabar Hill Club Limited KEC Infrastructures Limited

Mr. M. Ramachandran (44)

Rotational

RPG Life Sciences Limited

30

Director- (Non-independent/ Promoter) B.E.(HONS) MECH.ENGG, MMS, MS-IND.ENGG. A-3/301, Vikas Complex, Castle Mill Compound, L.B.S.Marg, Thane (W)- 400601 Service Mrs. Neeta Mukerji (40) Nominee Director- (Independent) BA (HONS) ECO, PGDM (IIM Kolkata). 801, Radhika Apartment, Off Sayani Road, Prabhadevi, Mumbai 400025. Banking Professional

Non-rotational

Kesoram Industries Limited

QUALIFICATION SHARES As per the Articles of Association of the Company, no qualification share is prescribed for being a director. INTEREST OF DIRECTORS Other than their respective shareholding in the Company and re-imbursement of expenses incurred and remuneration/sitting fee, as the case may be, received from the Company the directors of the Company have no interest in the Company. SHAREHOLDING OF DIRECTORS None of the Directors of the Company are holding any shares in the Company except Mr. Ramesh D. Chandak (1 equity share) and Mr. G. L. Mirchandani (3,875 equity shares). BORROWING POWERS Subject to the provisions of the Act and the Articles and without prejudice to the other powers conferred by the Articles, the Board may, from time to time at its discretion by a resolution passed at a meeting of the Board accept deposits from members either in advance of calls or otherwise and generally raise or borrow or secure the payment of any sum or sums of money for the purpose of the Company. Provided however, where the moneys to be borrowed together with the moneys already borrowed (apart from temporary loan(s) obtained from the Company's bankers in the ordinary course of business) exceed the aggregate of the paid up capital of the Company and its free reserves (not being reserves set apart for any specific purpose) the Board

31

shall not borrow such moneys without the consent of the Company in General Meeting. At present the Board of Directors have power to borrow up to Rs. 1000 crores. COMPENSATION AND BENEFITS IN KIND GRANTED TO THE DIRECTORS Mr. Ramesh D. Chandak has been appointed by the Board of Directors as the Managing Director of the Company with effect from 2nd January 2006 upto 28th September 2010, which has been approved by the shareholders in their Extraordinary General Meeting held on 2nd January 2006. The principal terms and conditions of appointment of Mr. Ramesh D. Chandak as the Managing Director of the Company are:

1. Period of Appointment: from 2nd January 2006 to 28th September 2010 2. Remuneration:

(a) i) Monthly basic salary of Rs. 2,70,000/- p.m. (Rupees Two Lacs Seventy

Thousand Only) with the authority to the Board to determine and approve the amount of annual increments every year.

ii) Company house (furnished or otherwise) or House Rent Allowance in lieu thereof subject to a ceiling of 60 % of his basic salary.

iii) Reimbursement of gas, electricity, water, furnishing, repairs, servants’ salaries, security, society charges and property tax; medical expenses; payment of leave travel allowance for himself and family, medical/ accident insurance, club fees, management allowances and performance bonus in accordance with the rules of the Company or as may be agreed to by the Board of Directors and Mr. Ramesh D. Chandak, subject to an overall ceiling of 150 % of his basic salary.

(b) Commission: Such remuneration by way of commission in addition to the salary, allowances and perquisites, calculated with reference to the net profits in a particular financial year, as recommended by the Remuneration Committee and approved by the Board of directors within limits stipulated under Sections 198 and 309 of the Companies Act, 1956.

(c) Minimum remuneration: In the event of inadequacy of profits or absence of profits in financial year during the tenure of appointment of Mr. Ramesh D. Chandak, he will be entitled to the aforesaid remuneration including salary, perquisites and allowances, however, subject to the limits and compliance of conditions as specified in Schedule XIII and other applicable provisions of the Companies Act, 1956, including any statutory modification or re-enactment thereof.

(d) Company’s contribution to Provident Fund and Superannuation Fund as per rules of the Company to the extent these either singly or put together are not taxable under the Income Tax Act, 1961, Gratuity payable as per rules of the Company (at a rate not exceeding half a month’s salary for each completed year of service), and encashment of leave at the end of the tenure shall not be included in the computation of the ceiling on remuneration.

32

(e) Provision of Company’s cars and driver for official duties, telephone at residence and mobile phone, as per rules of the Company shall not be included in the computation of perquisites and allowances for the purpose of calculating the ceiling under the Companies Act, 1956.

The aggregate of salary, perquisites, allowances and commission as specified above shall be subject to overall ceiling stipulated under Sections 198 and 309 of the Companies Act, 1956.

3. Severance: The Agreement can be terminated by either party giving the other party four months’ notice or the Company paying four months’ remuneration in lieu of the notice period.

Non-Executive Directors are being paid sitting fees and conveyance for attending Meetings of Board of Directors and Committees thereof. CORPORATE GOVERNANCE The Company is fully compliant with the provisions of Clause 49 of the Listing Agreement and the details are as follows:

The Board of Directors of the Company consists of Ten Members and the Company has one ‘Executive’ and nine ‘Non-Executive’ Directors of which seven are Independent and two are Promoter Directors. Mr. H.V. Goenka (Chairman) and Mr. Murli Ramacandran are the Promoter Directors. Mr. Ramesh D.Chandak is the Managing Director. Ms. Neeta Mukerji is the Nominee Director of ICICI Bank Limited.

The independent directors of the Company include Mr. S. S. Thakur, Mr. G. L. Mirchandani, Mr. Dilip Piramal, Mr. S. M. Kulkarni, Mr. A. T. Vaswani, Mr. J. M. Kothary and Ms. Neeta Mukerji. The Board has also constituted the Audit Committee, Shareholders/Investors’ Grievance Committee and Remuneration Committee as required under Clause 49 of the Listing Agreement as under:

COMMITTEE NAME OF DIRECTOR CATEGORY Audit Committee 1. Mr. A. T. Vaswani

(Chairman) 2. Mr. S. S. Thakur 3. Mr. S. M. Kulkarni

Non-Executive and Independent Non-Executive and Independent Non-Executive and Independent

Share Transfer and Investors’ Grievance Committee

1. Mr. S. M. Kulkarni (Chairman)

2. Mr. Ramesh D. Chandak 3. Mr. M. Ramachandran

Non-Executive and Independent Executive and Non-Independent Non-Executive and Promoter

33

Remuneration Committee 1. Mr. J. M. Kothary (Chairman)

2. Mr. A. T. Vaswani 3. Mr. S. M. Kulkarni

Non-Executive and Independent Non-Executive and Independent Non-Executive and Independent

The role, powers, scope of functions and duties of the Audit Committee, Share Transfer and Investor’s Grievance Committee and Remuneration Committee of the Board are as per the applicable provisions of the Companies Act, 1956, Clause 49 of the Listing Agreement and the RPG Group-Corporate Governance Policies and Code of Conduct of the Company. Compliance Report on Corporate Governance

Particulars Clause of Listing

Agreement Compliance status

(Yes/No/N.A.) I. Board of Directors 49 I - (A) Composition of Board 49 (IA) Yes

(B) Non-executive Directors compensation & disclosures

49 (IB) Yes

(C) Other provisions as to Board and Committees 49 (IC) Yes (D) Code of Conduct 49 (ID) Yes II. Audit Committee 49 (II) - (A) Qualified & Independent Audit Committee 49 (IIA) Yes (B) Meeting of Audit Committee Yes (C) Powers of Audit Committee 49 (IIB) Yes (D) Role of Audit Committee 49 (IIC) Yes (E) Review of Information by Audit Committee 49 (IID) Yes III. Subsidiary Companies 49 (IIE) NA IV. Disclosures 49 (III) - (A) Basis of related party transactions 49 (IV) N.A.

(Will be complied on the same becoming applicable)

(B)Disclosure of Accounting Treatment 49 (IVA) N.A.

(Will be complied on the same becoming applicable)

(C) Board Disclosures – Risk management 49 (IV B) N.A. (Will be complied on the same becoming applicable)

34

(D) Proceeds from public issues, rights issues, preferential issues etc.

49 (IV C) N.A. (Will be complied on the same becoming applicable)

(E) Remuneration of Directors 49 (IV D) Yes (F) Management 49 (IV E) Yes (G) Shareholders 49 (IV F) Yes V.CEO/CFO certification 49 (V) (Will be complied

on the same becoming applicable)

VI. Report on Corporate Governance 49 (VI) Yes VII. Compliance 49 (VII) Yes

Change in Board of Directors since inception of the Company

Name Date of appointment

Date of Cessation

Reasons

Mr. Mahesh Gupta 18.3.2005 1.6.2005 Resigned Mr. T. M. Elavia 18.3.2005 12.1.2006 Resigned Mr. Suresh Mathew 18.3.2005 12.1.2006 Resigned Mr. S. Balasubramaniam 1.6.2005 12.1.2006 Resigned Mr. Ramesh D. Chandak 26.12.2005 - Appointed as Director and

Managing Director (w.e.f 2nd January 2006)

Mr. M. Ramachandran 26.12.2005 - Appointed as Additional Director Mr. H. V. Goenka 12.1.2006 - Appointed to fill casual vacancy

caused by the resignation of Mr. T. M. Elavia

Mr. S. M. Kulkarni 12.1.2006 - Appointed to fill casual vacancy caused by the resignation of Mr. Suresh Mathew

Mr. G. L. Mirchandani 12.1.2006 - Appointed to fill casual vacancy caused by the resignation of Mr. S. Balasubramaniam

Mr. S. S. Thakur 12.1.2006 - Appointed as Additional Director Mr. Dilip G. Piramal 12.1.2006 - Appointed as Additional Director Mr. A. T. Vaswani 12.1.2006 - Appointed as Additional Director Mr. J. M. Kothary 12.1.2006 - Appointed as Additional Director Ms. Neeta Mukerji 12.1.2006 - Appointed as Nominee Director

of ICICI Bank Limited

35

DETAILS OF KEY MANAGERIAL PERSONNEL The Managing Director and the Company’s Management team is accountable to the Board of Directors. The management team consists of qualified professionals, with vast experience in various fields. Following are the key functionaries in the different functional areas of the Company:

Sr. No

Name, Age and Designation of the

Person

Date of joining*

Qualification and

Experience

Particulars of last

employment and position

held.

Shareholding in the Company

1 Mr. Ashok Goyal, (54), President - International Business.

26.12.2005 B.Tech, MBA 26 years

KEC Infrastructures Limited

560

2 Mr. Ajit Singh Chouhan, (44), Executive Director (Domestic Business)

26.12.2005 B.E. (Mech.), MBA 23 years

KEC Infrastructures Limited

NIL

3 Mr. Vimal Kejriwal (44), Chief Financial Officer

26.12.2005 B.Com., F.C.A.., F.C.S., D.T.M. 23 years

KEC Infrastructures Limited

NIL

4 Mr. N. Dharmarajan, (50), Vice President (Human Resources)

26.12.2005 M.A. (PM & IR), TISS 26 years

KEC Infrastructures Limited

NIL

5 Mr. K. Ramkumar (56), Vice President (Supply Chain)

26.12.2005 B.E. (Mech), M. Tech (Mech) 31 years

KEC Infrastructures Limited

NIL

*As per the Scheme, the employees of KEC Infrastructures Limited (formerly KEC International Limited) have been transferred to KEC International Limited (formerly KEC Infrastructures Limited) without any break in their service and on the terms and conditions of their employment, which shall not be less favourable to their existing terms and conditions w.e.f. 26th December 2005. EMPLOYEES AND EMPLOYEE STOCK OPTION SCHEME

Presently the Company has strength of about 1735 personnel. There is no Employee Stock Option Scheme/ Employee Stock Purchase Scheme in existence as on date, neither there are any other payments or benefits to officers of the Company other than the salary.

36

XI. PROMOTERS

Before the Scheme becoming effectve, the Company was a subsidiary of RPG Cellular Investments and Holdings Limited. In terms of the Scheme, 3,76,35,854 equity shares of the Company have been distributed to the shareholders of KEC Infrastructures Limited (formerly KEC International Limited) consequent upon which the promoters of KEC Infrastructures Limited (formerly KEC International Limited) have become promoters of the Company. The details of the Promoters are given below:

1. Adapt Investments Limited Adapt Investments Limited was incorporated in Kolkata on 21st August 1979. Its main object is to carry on business of an investment company and undertake all kinds of trust, investment agency and financial business. The registered office of Adapt Investments Limited is situated at 31, Netaji Subhas Road, Kolkata – 700 001.

The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Shareholder

No. of shares held

% of shareholding

Promoters 128772 75.28Non-Promoters 42282 24.72Total 171054 100.00 Board of Directors:

Mr. O. P. Malhotra Mr. B. C. Malu Mr. L. K. Mohta Mr. G. S. Asopa

2. Adorn Investments Limited

Adorn Investments Limited was incorporated in Kolkata on 21st August 1979. Its main object is to carry on business of an investment company and undertake all kinds of trust, investment agency and financial business. Adorn Investments Limited’s registered office is situated at 31, Netaji Subhas Road, Kolkata – 700 001.

37

The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 128696 75.24Non Promoters 42358 24.76Total 171054 100.00 Board of Directors:

Mr O. P. Malhotra Mr. B. C. Malu Mr. A. Krishna Mr. M. S. Mukherji Mr. R. C. Tapuriah Mr. R.S. Khandelwal

3. B. N. Elias and company Private Limited B. N. Elias and company Private Limited was incorporated in Kolkata on 30th September 1926. Its main object is to carry on the business of general merchants and agents. The registered office of B. N. Elias and company Private Limited is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata – 700 001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 1001669 100.00Non Promoters 0 0.00Total 1001669 100.00 Board of Directors:

Mr. H. C. Mathur Mr. B. L. Chandak Mr. Manab Chaudhuri Mr. A. K. Sanganeria

4. Blue Niles Holdings Limited Blue Niles Holdings Limited was originally incorporated in Mumbai on 24th December 1969 as Duncan Lawrie Investments Limited. The name was changed to Duncan Investments Limited and now to Blue Niles Holdings Limited. Its main object is to carry on business of an

38

investment company or an investment trust company and undertake all kinds of trust, investment agency and financial business. The registered office of Blue Niles Holdings Limited is situated at CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai – 400030. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of Shares

held % of

shareholding Promoters 1720000 80.00Non Promoters 430000 20.00Total 2150000 100.00 Board of Directors: Mr. Suresh Mathew Mr. R.C. Agarwala Mr. A.S. Sanganeria

5. Brabourne Investments Limited Brabourne Investments Limited was incorporated in Kolkata on 27th June 1979. Its main object is to carry on business of an investment company. Brabourne Investments Limited’s registered office is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata- 700001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 2504174 100.00Non Promoters 0 0.00Total 2504174 100.00 Board of Directors: Mr. Manab Chaudhuri Mr. Shree Nath Kapoor Mr. A.K. Sanganeria

6. Brentwood Investments Limited Brentwood Investments Limited was incorporated in Kolkata on 14th June 1982. Its main object is to carry on business of an investment company.

39

Brentwood Investments Limited’s registered office is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata- 700001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 3472788 94.55Non Promoters 200000 5.45Total 3672788 100.00 Board of Directors: Mr. Manab Chaudhuri Mr. Shiv Kumar Mohta Mr. A.K. Sanganeria Mr. Alok Banerjee

7. Canal Investments and Industries Private Limited Canal Investments and Industries Private Limited was incorporated in Kolkata on 10th January 1985. Its main object is to carry on business of an investment company and undertake all kinds if trust, investment agency and financial business. The registered office of Canal Investments and Industries Private Limited is situated at 31, Netaji Subhas Road, Kolkata- 700001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 9876694 98.60Non Promoters 140000 1.40Total 10016694 100.00 Board of Directors: Mr. S. Bhandari Mr. A.K. Sanganeria Mr. Alok Banerjee

8. CEAT Holdings Limited

40

CEAT Holdings Limited was originally incorporated as Murphy Investments Limited in Mumbai on 12th July 1979. The name of the company was changed to CEAT Securities Limited and now to CEAT Holdings Limited. Its main object is to carry on business of an investment company or an investment trust company and to undertake and transact all kind of trust and agency investment and financial business. The registered office of CEAT Holdings Limited is situated at CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai - 400030. CEAT Holdings Limited is a wholly owned subsidiary of CEAT Limited. Board of Directors:

Mr. T. M. Elavia Mr. A. J. Menon Mr. P. Banerjee Mr. Prem Kapil Mr. I. I. Khan Mr. H.N. Singh Rajpoot Mr. U. Banerjee

9. CEAT Limited CEAT Limited was originally incorporated as CEAT Tyres of India Limited in Mumbai on 10th March 1958. The name of the company was changed to CEAT Limited. It is one of India’s leading tyre manufacturers. It manufactures and markets “CEAT” branded automotive tyres, tubes and flaps. It has a strong presence in the domestic and export market. CEAT has the widest range of tyres for all user segments in India. The registered office of CEAT Limited is situated at CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai - 400030. CEAT Limited is listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of shares held

% of shareholding

Indian Promoters 12328694 35.10Foreign Promoters 2376465 6.77Mutual Funds And UTI 2267765 6.46Banks, Financial Institutions, Insurance Co’s 5058622 14.40FII 271533 0.77Private Corporate Bodies 2814281 8.02Indian Public 9899011 28.18NRI/ OCBs 105908 0.30TOTAL 35122279 100.00

41

Quotes for last six months at NSE:

Month NSE High (Rs) Low (Rs) August 2005 97.00 73.50September 2005 103.80 85.50October 2005 93.00 65.00November 2005 91.00 63.70December 2005 85.30 59.00January 2006 76.00 67.20

Board of Directors:

Mr. Ram Prasad Goenka Mr. Haigreve Khaitan Mr. Hari L. Mundra Mr. H. V. Goenka Mr. S. Doreswamy Mr. Kantikumar R. Podar Mr. Paras K. Chowdhary Mr. Atul C. Choksey Mr. N. Srinivasan Mr. Madhukar A. Bakre Mr. Mahesh S. Gupta Mr. Jamshed N. Guzder Mr. Bansi S. Mehta

10. CEAT Ventures Limited

CEAT Ventures Limited was originally incorporated as CEAT Finance company Limited in Mumbai on 7th June 1982. The name of the company was changed to CEAT Ventures Limited. Its main object is to carry on business of an investment company or an Investment Trust company. The registered office of CEAT Ventures Limited is situated at CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai -400030. CEAT Ventures Limited is a wholly owned subsidiary of CEAT Limited. Board of Directors:

Mr. T. M. Elavia Mr. A. J. Menon Mr. Prem Kapil Mr. I. I. Khan Mr. H.N. Singh Rajpoot Mr. U. Banerjee

11. Chattarpati Investments Limited

Chattarpati Investments Limited was incorporated in Kolkata on 5th March 1982. Its main object is to carry on business of an investment company. The registered office of Chattarpati Investments Limited is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata- 700001.

42

The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 3672788 100.00Non Promoters 0 0.00Total 3672788 100.00 Board of Directors:

Mr. S. K. Bagla Mr. Manab Chaudhuri Mr. S. Bhandari Mr. A. K. Sanganeria

12. Eastern Aviation & Industries Private Limited

Eastern Aviation & Industries Private Limited was incorporated in Kolkata on 3rd April 1966 as a Deemed Public company. The company was re-converted into a Private Limited company pursuant to Section 43A(2A) of the Companies Act, 1956. Its main object is to carry on the business of manufacturing, operating and dealing in aeroplanes and hovercrafts. The registered office of Eastern Aviation & Industries Private Limited is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata- 700001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 10016694 100.00Non Promoters 0 0.00Total 10016694 100.00 Board of Directors:

Mr. L. K. Mohta Mr. Manab Chaudhuri Mr. Shree Nath Kapoor Mr. A. K. Sanganeria 13. Harrisons Malayalam Limited Harrisons Malayalam Limited was originally incorporated in Cochin on 5th January 1978 as Malayalam Plantations (India) Limited. The name was subsequently changed to Harrisons Malayalam Limited. HML is one of the largest plantation company based in South India. Its business activities are spread over a wide filed of activities like agriculture (principally Tea

43

and Rubber), Biotechnology (Tissue culture), Travel and tourism, Shipping & cargo, Clearing & forwarding, Engineering and Consumer marketing. HML is a well diversified single largest producer of Natural Rubber in the country and the second largest producer of Tea in South India. The registered office of Harrisons Malayalam Limited is situated at 24/1624,Bristow Road, Willington Island, Cochin – 682003. Harrisons Malayalam Limited is listed on the Cochin Stock Exchange, Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

Category No. of shares held

% of Share Holding

5379005 29.15Foreign Promoters 3640000 19.72Mutual Funds and UTI 175325 0.95Banks, Financial Institutions, Insurance Companies 530169 2.87FIIs 1.01Private Corporate Bodies 1422763 7.71Indian Public

The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Indian Promoters

186002

7071144 38.31NRIs/ OCBs 50997 0.28TOTAL 18455405 100.00Total Foreign Shareholding 3876999 21.01

Quotes for last six months at NSE:

Month NSE High (Rs) Low (Rs) August 2005 136.70 101.85September 2005 153.95 104.50October 2005 132.50 88.00November 2005 107.90 88.00December 2005 115.00 90.00January 2006 123.90 99.50

Board of Directors:

Mr. Sanjiv Goenka Mr. P. K. Chowdhary Mr. Haigreve Khaitan Mr. Prabhakar Dev Mr. S. Samuel Mr. G. Momen Mr. P. K. Kurian Mr. Umang Kanoria

14. Harrisons Malayalam Financial Services Limited Harrisons Malayalam Financial Services Limited was originally incorporated in Cochin on 23rd March 1989 as Cherambadi Leasing and Finance company Limited. The name was subsequently changed to Harrisons Malayalam Financial Services Limited. Its main object is to carry on the business of hire purchase, leasing, financing lease operations, purchasing, selling, hiring or letting on hire all kinds of plant and machinery and equipments.

44

The registered office of Harrisons Malayalam Financial Services Limited is situated at 24/1624,Bristow Road, Willington Island, Cochin – 682003. Harrisons Malayalam Financial Services Limited is a wholly owned subsidiary of Harrisons Malayalam Limited. Board of Directors:

Mr. K. N. Mathew Mr. V. Venugopal Mr. T. K. Benjamin

15. Hilltop Holdings India Limited Hilltop Holdings India Limited was incorporated in Kolkata on 28th December 1984. Its main object is to carry on the business of acquiring and holding shares, stocks, debentures, etc. The registered office of Hilltop Holding India Limited is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata- 700001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 15616014 100.00Non Promoters 0 0.00Total 15616014 100.00 Boar

d of Directors:

Mr. R. P. Goenka Mr. S. M. Kulkarni Mr. Sumantra Banerjee Mr. B. C. Malu Mr. S. Samuel Mr. R. S. Baid Mr. D. H. Pai Panandiker

The company has not made any Public or Rights issue of equity shares during the preceding 3 years.

16. Instant Trading & Investments Limited

Instant Trading & Investment Limited was incorporated at Mumbai as a Private Limited company on 16th February 1987. The word private was deleted pursuant to Section 43A of the Companies Act, 1956. Its main object is to carry on the business of acquiring and holding shares, stocks, debentures, etc.

45

The registered office of Instant Trading and Investment Limited is situated at CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai – 400030. Instant Trading & Investments Limited is a wholly owned subsidiary of RPG Life Sciences Limited.

Board of Directors: Mr. R. R. Dalvi Mr. Melorkode H. Narasimhan Mr. G. Srinivas Mr. M. V. Lotlikar Mr. C. L. Jain. The company has not made any Public or Rights issue of equity shares during the preceding 3 years.

17. Jubilee Investments and Industries Limited Jubilee Investments and Industries Limited was incorporated in New Delhi on 22nd February 1995 as RPG Mobile Limited. The name was subsequently changed to Jubilee Investments and Industries Limited. Its main object is to carry on the business of acquiring and holding shares, stocks, debentures, etc. The registered office of Jubilee Investments and Industries Limited is situated at K-13/A, South Extn., Part 1, New Delhi – 110049 The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

ShareholdingPromoters 73698497 100.00Non Promoters 0 0.00Total 73698497 100.00 Board of Directors:

Mr. R. P. Goenka Mr. D. R. Mehta Capt. S. Vasudeva Mr. S. Banerjee Mr. A. K. Dhawan Mr. Paras Chowdhary Mr. R.S. Baid

18. Off- Shore India Limited

Off- Shore India Limited was incorporated in Kolkata on 9th September 1976. Its main object is to explore minerals etc., carry on business of exploration, development and protection of mineral deposits and also to carry on business of oil, gas petroleum etc.

46

The registered office of Off-Shore India Limited is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata- 700001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 28380634 100.00Non Promoters 0 0.00Total 28380634 100.00 Board of Directors:

Mr. K. Bhattacharjee Mr. R. Mohta Mr. A. K. Sanganeria

19. Organised Investments Limited

Organised Investments Limited was incorporated in Kolkata on 29th August 1979. Its main object is to carry on business of an investment company and undertake all kinds of trust, investment agency and financial business. The registered office of Organised Investments Limited is situated at 11, Camac Street, Kolkata- 700017. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 5008347 100.00Non Promoters 0 0.00Total 5008347 100.00 Board of Directors:

Mr. R. S. Baid Mr. B. L. Chandak Mr. A. K. Sanganeria

20. Petrochem International Limited

Petrochem International Limited was incorporated in Kolkata on 8th December 1989. Its main object is to carry on business of manufacturing, producing etc. of all types of Hydrocarbons

47

and particularly petrochemicals like Methane and its derivatives, Ethane/ ethylene and its derivatives and Propylene and its derivatives. The registered office of Petrochem International Limited is situated at 31, Netaji Subhas Road, Kolkata- 700001. Petrochem International Limited is a wholly owned subsidiary of Jubilee Investments and Industries Limited. Board of Directors:

Mr. S. Bhandari Mr. Manab Chaudhuri Mr. G. S. Asopa 21. Phillip Carbon Black Limited Phillips Carbon Black Limited was incorporated in Kolkata on 31st March 1960. Phillips Carbon Black Limited pioneered the carbon black industry in India. It is now the leading producer of carbon black in the country. The company is not only the largest exporter of Carbon Black from India but also one of the largest in Asia. The registered office of Phillips Carbon Black Limited is situated at 31, Netaji Subhas Road, Kolkata- 700001. Phillips Carbon Black Limited is listed on the Calcutta Stock Exchange Association Limited, Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of shares held

% of shareholding

Indian Promoters 9348702 52.66

Mutual Funds & UTI 926386 5.22Banks, Financial Institutions, Insurance Companies (Central/ State Govt. Institutions/ Non-Government Institutions)

2012433 11.34

FIIs 101225 0.57Private Corporate Bodies 1457451 8.21Indian Public 3762211 21.19NRIs/ OCBs 144588 0.81Director 200 0.00Total 17753196 100.00

Quotes for last six months at NSE:

Month NSE High (Rs) Low (Rs) August 2005 113.75 88.10

48

September 2005 121.10 92.00October 2005 101.00 75.25November 2005 92.30 79.50December 2005 83.50 70.00January 2006 78.95 64.50

Board of Directors:

Mr. Sanjiv Goenka Mr. C. R. Paul Mr. K.S.B. Sanyal Mr. Brij Mohan Khaitan Dr. Ram S. Tarneja Mr. Paras K. Chowdhury Mr.Amiya Gooptu Mr. S. K. Bajoria Mr.O. P. Malhotra Mr. Sudhir Sahgal

The company has not made any Public or Rights issue of equity shares during the preceding 3 years.

22. PCBL Industrial Finance Limited

PCBL Industrial Finance Limited was incorporated as a Private Limited company in Kolkata on 22nd April 1988 and the word Private was deleted pursuant to Section 43A of the Companies Act, 1956. Its main object is to carry on business of an investment company or an Investment Trust company and to undertake and transact trust, agency investment and financial business. The registered office of PCBL Industrial Finance Limited is situated Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata- 700001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 13700340 80.59Non Promoters 3300000 19.41Total 17000340 100.00 Board of Directors:

Mr. O. P. Malhotra Mr. Alok Banerjee Mr. A. K. Sanganeria

23. Saregama India Limited The company was originally incorporated in the State of West Bengal on 13th August 1946 as The Gramophone company of India Limited. It was popularly known as HMV (His Master’s Voice). The name was subsequently changed to Saregama India Limited. It is India’s largest and best-known recording company. The main business of the company has been acquiring,

49

marketing and selling of music in both physical and non-physical formats. Saregama has now diversified into the growing television software industry and is providing quality content to regional and national entertainment networks. The registered office of Saregama India Limited is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Calcutta – 700001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of shares held

% of shreholding

Indian Promoters 7450621 50.82Mutual Funds and UTI 625 0.00Banks, Financial Institutions, Insurance Companies 13363 0.09FIIs 2398007 16.36Private Corporate Bodies 2539033 17.32Indian Public 2211758 15.09NRIs/ OCBs 47585 0.32TOTAL 14660992 100.00Total Foreign Shareholding 2445592 16.68

Quotes for last six months at NSE:

Month NSE High (Rs) Low (Rs) August 2005 210.15 172.00September 2005 202.85 163.80October 2005 197.60 160.20November 2005 201.00 170.00December 2005 245.00 182.50January 2006 372.00 221.00

Board of Directors:

Mr. R.P.Goenka Mr. Sanjiv Goenka Mr.D.R.Mehta Mr. P.K.Mohapatra Mr. H. Neotia Mr. J.N. Sapru Mr. D. Basu Mr. S. Banerjee Mrs. Sushila Goenka

24. RPG Cellular Investments and Holdings Private Limited

RPG Cellular Investments and Holdings Private Limited was incorporated in Kolkata on 14th December 2000. Its main object is to carry on business of an investment company and to undertake and transact trust, investment agency and financial business. It is enagaged in the business of mobile and cellular services, wave communications and satellite. The registered office of RPG Cellular Investments and Holdings Private Limited is situated at 31, Netaji Subhas Road, Kolkata – 700 001.

50

The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 50204566 100.00Non Promoters 0 0.00Total 50204566 100.00 Board of Directors:

Mr. R. K. Jha Mr. Paras Chowdhary Mr. Manab Chaudhuri Mr. A. K. Sanganeria

25. RPG Transmission Limited

RPG Transmission Limited was originally incorporated in Tamil Nadu on 21st August 1973 as SAE (India) Limited. The name of the company was changed to RPG Transmission Limited at New Delhi on 11th March 1997. RPG Transmission Limited is a prominent player in Power Transmission, Railway Electrification and Telecommunication Tower market and has vast experience in design, construction and erection of high voltage AC and DC Transmission Lines. The registered office of RPG Transmission Limited is situated at Deori, P.O. Panagarh, Jabalpur – 483220 (MP). RPG Transmission Limited is listed on the National Stock Exchange of India Limited. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of shares held

% of shareholding

Promoters 5857020 37.49IDBI 459641 2.94LIC 271352 1.74United India Insurance Co. 62025 0.40UTI 1850 0.02Nationalised Banks 1197 0.01Mutual Funds 1142615 7.31Non-Residents 16267 0.10Foreign Companies 50 0.00Employees Welfare Trust 705000 4.51Public 4064117 26.02Body Corporate 3039665 19.46Total 15620799 100.00

51

Quotes for last six months at NSE:

Month NSE High (Rs) Low (Rs) August 2005 149.90 112.10September 2005 183.95 130.10October 2005 166.00 113.85November 2005 164.30 126.00December 2005 163.00 127.05January 2006 157.80 138.00

Board of Directors:

Mr. S N Kuckreja Mr. V K Hajela Mr. Debabrata Datta Mr. Jai Mangharam Mukhi Mr. D H Pai Panandiker Mr. Aditya Atal Mr. Kidar Nath Malhotra Mr. Rajeev Goenka

26. Trade Apartments Limited

Trade Apartments Limited was incorporated in Kolkata on 15th June 1984. Its main object is to carry on the business as dealers, owners and investors in land, building and factories. The registered office of Trade Apartments Limited is situated at 31, Netaji Subhas Road, Kolkata – 700 001. The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Shareholder

No. of Shares

held % of

shareholdingPromoters 21702838 100.00Non Promoters 0 0.00Total 21702838 100.00 Board of Directors:

Mr. S. Bhandari Mr. S. Chakrabarti Mr. Manab Chaudhuri

27.Yield Investments Limited

Yield Investments Limited was incorporated in Kolkata on 14th April 1981 as a Private Limited company. The word Private was deleted pursuant to Section 43A of the Companies Act, 1956. Its main object is to carry on business of an investment company. The registered office of Yield Investments Limited is situated at 31, Netaji Subhas Road, Kolkata – 700 001.

52

The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Shareholder

No. of Shares

held % of

shareholdingPromoters 28380634 100.00Non Promoters 0 0.00Total 28380634 100.00 Board of Directors:

Mr. R. S. Baid Mr. B. L. Chandak Mr. M.S. Mukherji We confirm that the Permanent Account Number, Bank Account Number, the company Registration Numbers and the address of the Registrar of Companies where our Promoters are registered have been submitted to the Stock Exchange at the time of filing of the Information Memorandum.

53

II. GROUP COMPANIES

The details of top five listed group companies are as follows: 1. CESC Limited CESC Limited (CESC) was incorporated in Calcutta on 30th March 1978. The company is engaged in the generation and distribution of electric power in the cities of Calcutta and Howrah and adjoining areas. CESC is currently the sole distributor of electricity within an area of 567 square kilometers. Sales of electricity are made by the company directly to over 19.49 Lacs end-users including domestic consumers as well as commercial and industrial entities. The registered office of CESC is situated at CESC House, Chowringhee Square, Kolkata – 700001. CESC is listed on the CSE, BSE, NSE and London Stock Exchange. Financial Details: (Rs in lacs)

Particulars (As at 31st March) 2004-05 2003-04 2002-03 Sales 232,115 234,843 218,525Other Income 6,594 6,806 5,806PAT/(Loss) 14,720 8,229 702Equity Share Capital 7,504 6,670 5,839Net Reserves 119,744 99,870 42,485Book Value (Rs.) 171.06 161.04 83.66EPS (Rs.) 20.48 10.49 (1.01)

(Source: Annual Accounts) The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of shares held % of Share Holding

Indian Promoters 31581623 38.37Mutual Funds and UTI 4486544 5.45Banks, Financial Institutions, Insurance Companies

8467255 10.29

FIIs 14157489 17.20Private Corporate Bodies 5628160 6.84Indian Public 7029362 8.54NRIs/ OCBs 2918973 3.55Any other 8048105 9.77Grand Total 82317511 100.00Total Foreign Shareholding 254124567 30.52

54

Quotes for last six months at NSE:

Month NSE High (Rs) Low (Rs) August 2005 234.90 204.00September 2005 248.75 202.00October 2005 235.95 179.00November 2005 242.40 187.45December 2005 231.65 209.00January 2006 277.20 226.80

Board of Directors:

Mr. R P Goenka Mr. Sanjiv Goenka Mr. Pradip Khaitan Mr. Brij Mohan Khaitan Mr. Bhagwati Prasad Bajoria Mr. Sudhin Roy Chowdhury Mr. Pradip Roy Mr. K M Jaya Rao Mr. Sumantra Banerjee Mr. Priya Brata Ghosh Mr. Birenjit Kumar Paul

2. Zensar Technologies Limited Zensar Technologies Limited (ZTL) (earlier known as International Computers Indian Manufacture Limited) was incorporated as International Computers and Tabulators Indian Manufacturing company Limited on 29th March 1963 to carry on the business of manufacturing and dealing in computers and tabulators of all kind.

ZTL’s registered office is situated at Mile Post No. 4, Pune Nagar Road, Pune. ZTL is listed on the BSE, NSE and the Pune Stock Exchange. Financial Details:

(Rs. in Lacs)

Particulars (As at 31st March) 2004-05 2003-04 2002-03 Sales (Incl. Service Income) 17,631 12,675 9,665Other Income 413 701 342PAT 3,759 1,400 816Equity Capital 2,334 2,329 2,329Net Reserves 9,926 6,651 5,590Book Value 52.54 38.56 34.00EPS 16.14 6.01 3.50

(Source: Annual Accounts)

The shareholding pattern of the company, as on 31/12/2005 is as follows:

Category

No. of shares held % of Share Holding

Indian Promoters 6914791 29.51Foreign Promoters 6914791 29.51Mutual Funds and UTI 301493 1.29

55

Banks, Financial Institutions, Insurance Companies

63041 0.27

FIIs 1700 0.01Private Corporate Bodies 1133588 4.84Indian Public 2874234 12.27NRIs/ OCBs 5226838 22.31TOTAL 23430476 100.00Total Foreign Shareholding 12143329 51.83

Quotes for last six months at NSE: Month NSE High (Rs) Low (Rs) August 2005 196.00 162.00September 2005 203.00 180.00October 2005 198.70 157.00November 2005 206.00 158.20December 2005 199.50 172.00January 2006 223.80 184.00

Board of Directors:

Mr. H. V. Goenka Mr. P. K. Choksey Dr. Ganesh Natarajan Mr. Arvind N. Agarwal Mr. P. K. Mohapatra Dr. Nirmalya Kumar Mr. John Levack Mr. Jack Noble Mr. A.T. Vaswani Mr. Daniel Jones

3. Saregama India Limited The company was originally incorporated in the State of West Bengal on 13th August 1946 as The Gramophone company of India Limited. It was popularly known as HMV (His Master’s Voice). The name was subsequently changed to Saregama India Limited. It is India’s largest and best-known recording company. The main business of the company has been acquiring, marketing and selling of music in both physical and non-physical formats. Saregama has now diversified into the growing television software industry and is providing quality content to regional and national entertainment networks. The registered office of Saregama India Limited is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Calcutta – 700001. Saregama Limited is listed on the BSE, NSE and the CSE. Financial Details:

(Rs in lacs)

Particulars 2004-05 Apr 04 – Mar 05

2003-04 Jul 03 – Mar 04

2002-03 Apr 02 – Jun 03

Sales (incl. License fees) 9,820 6,918 11,474Other Income 267 189 877

56

PAT/(Loss) 521 (2,110) (4,809)Equity Share Capital 934 934 934Net Reserves 3,744 3,223 5,333Book Value (Rs) 50.08 44.50 67.08EPS (Rs) 5.58 (22.59) (51.48)

(Source: Annual Accounts)

The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of shares held % of shareholding Indian Promoters 7450621 50.82Mutual Funds and UTI 625 0.00Banks, Financial Institutions, Insurance Companies

13363 0.09

FIIs 2398007 16.36Private Corporate Bodies 2539033 17.32Indian Public 2211758 15.09NRIs/ OCBs 47585 0.32TOTAL 14660992 100.00Total Foreign Shareholding 2445592 16.68

Quotes for last six months at NSE:

Month NSE High (Rs) Low (Rs) August 2005 210.15 172.00September 2005 202.85 163.80October 2005 197.60 160.20November 2005 201.00 170.00December 2005 245.00 182.50January 2006 372.00 221.00

Board of Directors:

Mr. R.P.Goenka Mr. S.Goenka Mr.D.R.Mehta Mr. P.K.Mohapatra Mr. H. Neotia Mr. J.N. Sapru Mr. D. Basu Mr. S. Banerjee Mrs. S. Goenka

4. CEAT Limited CEAT Limited was originally incorporated as CEAT Tyres of India Limited in Mumbai on 10th March 1958. It is one of India’s leading tyre manufacturers. It manufactures and markets “CEAT” branded automotive tyres, tubes and flaps. It has a strong presence in the domestic and export market. CEAT has the widest range of tyres for all user segments in India. The registered office of CEAT Limited is situated at CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai -400030. CEAT Limited is listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

57

Financial Details: (Rs. In lacs)

Particulars (As at 31st March) 2004-05 2003-04 2002-03 Sales 178,030.67 164,794.79 147,897.75Other Income 3,898.42 10,099.64 6,020.13PAT/ (Loss) (187.42) 1405.79 1,841.02Equity Share Capital 3,509.81 3,509.20 3,509.20Net Reserves 26,181.48 29,993.91 28,925.37Book value 84.32 95.14 92.11EPS (Rs) (0.53) 4.01 5.23

(Source: Annual Accounts) The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of shares held % of shareholding Indian Promoters 12328694 35.10Foreign Promoters 2376465 6.77Mutual Funds And UTI 2267765 6.46Banks, Financial Institutions, Insurance Co’s 5058622 14.40FII 271533 0.77Private Corporate Bodies 2814281 8.02Indian Public 9899011 28.18NRI/ OCBs 105908 0.30Any others 0 0.00TOTAL 35122279 100.00

Quotes for last six months at NSE:

Month NSE High (Rs) Low (Rs) August 2005 97.00 73.50September 2005 103.80 85.50October 2005 93.00 65.00November 2005 91.00 63.70December 2005 85.30 59.00January 2006 76.00 67.20

Board of Directors:

Mr. Ram Prasad Goenka Mr. Haigreve Khaitan Mr. Hari L. Mundra Mr. H. V. Goenka Mr. S. Doreswamy Mr. Kantikumar R. Podar Mr. Paras K. Choudhary Mr. Atul C. Choksey Mr. N. Srinivasan Mr. Madhukar A. Bakre Mr. Mahesh S. Gupta Mr. Jamshed N. Guzder Mr. Bansi S. Mehta

58

5. Harrisons Malayalam Limited Harrisons Malayalam Limited was originally incorporated in Cochin on 5th January 1978 as Malayalam Plantations (India) Limited. The name was subsequently changed to Harrisons Malayalam Limited. HML is one of the largest plantation companies based in South India. Its business activities are spread over a wide field of activities like agriculture (principally Tea and Rubber), Biotechnology (Tissue culture), Travel and tourism, Shipping & cargo, Clearing & forwarding, Engineering and Consumer marketing. HML is a well diversified single largest producer of Natural Rubber in the country and the second largest producer of Tea in South India. The registered office of Harrisons Malayalam Limited is situated at 24/1624,Bristow Road, Willington Island, Cochin – 682003. Harrisons Malayalam Limited is listed on the Cochin Stock Exchange, Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Financial Details:

(Rs. in lacs)

Particulars (As at 31st March) 2004-05 2003-04 2002-03 Sales (incl. Service Income) 14,275 13,602 11,962Other income 381 252 242PAT /(Loss) 4,766 523 (991)Equity Share Capital 1,845 1,845 1,845Net Reserves 7,575 3,199 2,656Book Value (Rs) 51.05 27.33 24.39EPS (Rs) 25.82 2.84 (5.37)

(Source: Annual Accounts) The Shareholding pattern of the company (as on 31st December 2005) is as follows:

Category No. of shares held % of Share Holding

Indian Promoters 5379005 29.15Foreign Promoters 3640000 19.72Mutual Funds and UTI 175325 0.95Banks, Financial Institutions, Insurance Companies

530169 2.87

FIIs 186002 1.01Private Corporate Bodies 1422763 7.71Indian Public 7071144 38.31NRIs/ OCBs 50997 0.28TOTAL 18455405 100.00Total Foreign Shareholding 3876999 21.01

Quotes for last six months at NSE

Month NSE High (Rs) Low (Rs) August 2005 136.70 101.85September 2005 153.95 104.50

59

October 2005 132.50 88.00November 2005 107.90 88.00December 2005 115.00 90.00January 2006 123.90 99.50

Board of Directors

Mr. Sanjiv Goenka Mr. P. K. Chowdhary Mr. Haigreve Khaitan Mr. Prabhakar Dev Mr. S. Samuel Mr. G. Momen Mr. P. K. Kurian Mr. Umang Kanoria

The details of top five unlisted group companies are as follows: 1. Jubilee Investments and Industries Limited Jubilee Investments and Industries Limited was incorporated in New Delhi on 22nd February 1995 as RPG Mobile Limited. The name was subsequently changed to Jubilee Investments and Industries Limited. Its main object is to carry on the business of acquiring and holding shares, stocks, debentures, etc. The registered office of Jubilee Investments and Industries Limited is situated at K-13/A, South Extn., Part 1, New Delhi – 110049. Financial details: Particulars (As at 31st March) 2004-05 2003-04 Income 657,647,313 559,450,310 PAT/ (Loss) 6,557,518 (64,893) Equity Share Capital 736,984,970 736,984,970 Net Reserves 660,826,740 604,269,222 Book value 18.97 18.20 EPS (Rs) 0.08 0.00

(Source: Annual Accounts) The Shareholding pattern of the company (as on 31/12/2005) is as follows:

Category

No. of Shares

held % of

ShareholdingPromoters 73698497 100.00Non Promoters 0 0.00Total 73698497 100.00 Board of Directors: Mr. R. P. Goenka Mr. D. R. Mehta Capt. S. Vasudeva Mr. S. Banerjee Mr. A. K. Dhawan Mr. Paras Chowdhary Mr. R.S. Baid

60

2. RPG Cellular Investments and Holdings Private Ltd. RPG Cellular Investments and Holdings Private Limited was incorporated in Kolkata on 14th December 2000. Its main object is to carry on business of an Investment Company and to undertake and transact trust, investment agency and financial business. It is enagaged in the business of mobile and cellular services, wave communications and satellite. The registered office of RPG Cellular Investments and Holdings Private Limited is situated at 31, Netaji Subhas Road, Kolkata – 700 001. Financial details: Particulars (As at 31st March) 2004-05 2003-04 Income 10,669,210 1,321,631,968 PAT/ (Loss) (1,321,183) 1,230,684,242 Equity Share Capital 502,045,660 502,045,660 Net Reserves 1,227,786,249 1,229,108,682 Book value 34.46 34.48 EPS (Rs) (0.03) 24.51

(Source: Annual Accounts) The Shareholding pattern of the company (as on 31/12/2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 50204566 100.00Non Promoters 0 0.00Total 50204566 100.00

Board of Directors: Mr. R. K. Jha Mr. Paras Chowdhary Mr. Manab Chaudhuri Mr. A. K. Sanganeria 3. Hilltop Holdings India Limited Hilltop Holdings India Limited was incorporated in Kolkata on 28th December 1984. Its main object is to carry on the business of acquiring and holding shares, stocks, debentures, etc. The registered office of Hilltop Holding India Limited is situated at Duncan House, Ground floor, 31, Netaji Subhas Road, Kolkata- 700001.

61

Financial details: Particulars (As at 31st March) 2004-05 2003-04 Income 500,780,629 341,882,109 PAT/ (Loss) (13,794,701) (20,923,123) Equity Share Capital 156,160,140 131,366,140 Net Reserves 99,176,000 0 Book value (27.73) (41.35) EPS (Rs) (1.05) (1.59)

(Source: Annual Accounts) The Shareholding pattern of the company (as on 31/12/2005) is as follows:

Category

No. of Shares

held % of

shareholdingPromoters 15616014 100.00Non Promoters 0 0.00Total 15616014 100.00 Boar

d of Directors:

Mr. R. P. Goenka Mr. S. M. Kulkarni Mr. Sumantra Banerjee Mr. B. C. Malu Mr. S. Samuel Mr. R. S. Baid Mr. D. H. Pai Panandiker

4. CEAT Ventures Ltd. CEAT Ventures Limited was originally incorporated as CEAT Finance Company Limited in Mumbai on 7th June 1982. The name of the Company was changed to CEAT Ventures Limited. Its main object is to carry on business of an Investment Company or an Investment Trust Company. The registered office of CEAT Ventures Limited is situated at CEAT Mahal, 463, Dr. Annie Besant Road, Worli, Mumbai -400030. Financial details: Particulars (As at 31st March) 2004-05 2003-04 Income 3,005,712 14,229,117 PAT/ (Loss) (23,217,614) (27,964,704) Equity Share Capital 399,995,000 399,995,000 Net Reserves 1,316,600 16,105,109 Book value 7.22 7.84 EPS (Rs) (0.58) (0.70)

(Source: Annual Accounts)

62

CEAT Ventures Limited is a wholly owned subsidiary of CEAT Limited. Board of Directors:

Mr. T. M. Elavia Mr. A. J. Menon Mr. Prem Kapil Mr. I. I. Khan Mr. H.N. Singh Rajpoot Mr. U. Banerjee

5. Petrochem International Ltd. Petrochem International Limited was incorporated in Kolkata on 8th December 1989. Its main object is to carry on business of manufacturing, producing etc. of all types of Hydrocarbons and particularly petrochemicals like Methane and its derivatives, Ethane/ ethylene and its derivatives and Propylene and its derivatives. The registered office of Petrochem International Limited is situated at 31, Netaji Subhas Road, Kolkata- 700001. Financial details:

Particulars (As at 31st March) 2004-05 2003-04 Income 52,701,321 5,275,192 PAT/ (Loss) (602,889) (2,615,538) Equity Share Capital 225,177,800 225,177,800 Net Reserves 12,043,558 12,646,447 Book value 10.53 10.56 EPS (Rs) (0.03) (0.12)

(Source: Annual Accounts) Petrochem International Limited is a wholly owned subsidiary of Jubilee Investments and Industries Limited. Board of Directors:

Mr. S. Bhandari Mr. Manab Chaudhuri Mr. G. S. Asopa COMMON PURSUITS None of the Promoter companies is engaged in the business of Power transmission other than RPG Tansmission Limited. There are no common pursuits between the Company & its promoters and group companies.

63

XIII. MANAGEMENT DISCUSSION AND ANALYSIS

(A) INTRODUCTION

The Company is one of the largest Power Transmission EPC companies in the world. The clientele of the Company is spread across numerous countries in the world, with a strong presence in Middle East, and Africa. The work force of the Company is about 1735 employees spread over several countries. (B) INDUSTRY OVERVIEW Electricity is the prime mover of growth and a critical infrastructure for economic development and sustenance of a modern economy. It is pertinent to achieve advancement in power sector in order to achieve the country’s overall advancement. The Government of India has appreciated this fact and its goal to provide "Power for all" by 2012, which includes electrifying all our villages by 2007 and all households by 2012, gives an impetus to the power sector business. The Accelerated Power Development and Reforms Programme (“APDRP”) has been put in place by the Government and projects worth over Rs.170 billion have already been approved under this scheme. The Government has also announced plans to add around 1,07,000 MW of additional Power Generation capacity by the year 2012 and evolved a Transmission plan for strengthening regional grids as well as creating a national grid, which can support this target. An investment of about Rs. 71,000 crores is envisaged in power transmission under central sector and Transmission and Distribution of electricity generated is being accorded a high national priority in view of the significant capacity additions. The Government has launched Rajiv Gandhi Grameen Vidyutikaran Yojana [“RGGVY”], a Rural Electrication Scheme involving an expenditure of Rs. 16000 crores. The RGGVY Scheme aims at electrifying all villages, providing electricity access to all households and giving electricity connection to below poverty line families free of charge in five years. The RGGVY Scheme and APDRP are expected to accelerate investment in the distribution sector by State Electricity Boards. (C) PERFORMANCE The Company is focusing on quicker execution, improving margins, reducing costs, release of additional banking limits and reduction in finance costs to result in growth in order book and maintaining an upward trend in the Company’s performance. (D) RISKS & CONCERNS Prices of major inputs such as Steel, Zinc & Aluminum are highly volatile. This could impact the profitability, as the overseas contracts are Fixed Price Contracts. There is no formal ‘futures’ mechanism to enable hedging against Steel price volatility. However, the Company is considering various options like widening the suppliers’ base and entering into term contracts for procuring the material.

64

The Company is exposed to foreign currency risk, because the currency of invoicing may be different from the currency of payment of costs. Fluctuations in the currency cannot be anticipated at the tendering stage and hence the currency risk in each contract continues for considerable period. To hedge this risk to some extent, the Company is entering into need based forward contracts. (E) OUTLOOK AND OPPORTUNITIES As per the National Electricity Policy approved by the Cabinet, an investment of Rs. 9 lakh crores would be required to finance Generation, Transmission, Sub-Transmission, Distribution and Rural Electrification projects. The Government’s objective of ‘power to all’ and the emphasis on rural electrification under the Bharat Nirman Programme and reforms envisaged and provisions made in the Electricity Act augurs the growth in overall requirement of Transmission Lines. To capture opportunities in Transmission, Distribution and across the Value Chain, in India and overseas, the Company has decided to enter into new markets, new products and services and expanding across the Infrastructure / Energy Value chain industry. (F) ADEQUACY OF INTERNAL CONTROL The Company maintains a system of strict internal control, including suitable monitoring procedures. The internal audit department as part of its audit programme, audits domestic as well as international sites. Implementation of ERP package has enhanced the internal control mechanisms. The Company has a good internal control system for tendering and pricing, contract management and finalisation of purchases and sub-contracts, and other important functional areas. Significant issues are brought to the attention of the Audit Committee of the Directors. The internal controls existing in the Company are considered to be adequate vis-à-vis the business requirements. (G) HUMAN RESOURCES AND INDUSTRIAL RELATIONS The relations between the Company and the employees are generally cordial. (H) CAUTIONARY STATEMENT Statements in the Management Discussion and Analysis describing the Company’s objectives, expectations, predictions and assumptions may be ‘forward looking’ within the meaning of applicable Securities Laws and Regulations. Actual results may differ materially from those expressed herein. Important factors that could influence the Company’s operations include global and domestic economic conditions affecting demand, supply, price conditions, change in Government’s regulations, tax regimes, other statutes and other factors such as litigation and industrial relations.

65

XIV. FINANCIAL INFORMATION As the first financial year ends on 31st March 2006, no audited accounts of the Company are available. FINANCIAL STATEMENTS The Company was incorporated on 18th March 2005 and the first Financial Year will close on 31st March 2006, as such no Audited Financial Statements are available. The Un-audited Financial Results of the Company for the Quarter ended 31st December 2005 as published in the newspapers are as follows: Unaudited Financial Results for the Quarter ended 31st December 2005

(Rs. in Crores)

Quarter ended

31.12.2005 (Unaudited)

31.12.2004 (Unaudited)

Period ended 31.12.2005

(Unaudited)

Nine month ended

31.12.2004 (Unaudited)

Year ended 31.03.2005 (Unaudited)

Particulars

(1) (2) (3) (4) (5) 1. Sales/Income from Operations - Gross Sales/Income from

Operations 466.36 276.53 1,276.85

791.92 1,249.37

- Excise Duty 8.83 6.50 27.98

12.56 19.10 - Net Sales/Income from

Operations 457.53 270.03 1,248.87

779.36 1,230.27

2. Other Income 0.34 (0.50) 0.69

6.60 6.36

3. Total Income 457.87 269.53 1,249.56

785.96 1,236.63

4. Total Expenditure 413.48 239.10 1,131.76

693.90 1,110.43 a) (Increase)/Decrease in

Stock in Trade (8.27) (6.34) (25.75)

(26.37) (5.54)b) Consumption of Raw

Materials 251.51 151.76 681.63

352.45 592.00 c) Erection &

Subcontracting Expenses 93.29 57.55 278.80

203.76 293.56

d) Staff Costs 24.03 18.12 60.22

56.04 75.97

e) Other Expenditure 52.92 18.01 136.86

108.02 154.44 5. Interest (Net)

66

15.49 11.44 44.89 36.04 47.76 6. Depreciation/Amortisation 6.38 2.47 18.11

8.00 10.04

7. Profit/(Loss) before Tax (3-4-5-6) 22.52 16.52 54.80

48.02 68.40

8. Provision for Taxation a) Current Tax (2.13) 1.14 4.62

2.61 3.48

b) Deferred Tax Charge/(Credit) 6.75 5.57 16.43

15.62 21.90

c) Fringe Benefit Tax 0.23 - 0.48

- -

Sub-Total 4.85 6.71 21.53

18.23 25.38

9. Net Profit/(Loss) (7-8) 17.67 9.81 33.27

29.79 43.02 10. Paid up Equity Share Capital (Face Value Rs. 10) 0.05 37.64 0.05

37.64 37.64

11. Reserves Excluding Revaluation Reserve 187.33 12. Basic & diluted EPS (Rs.) (not annualised) 4.69 2.61 8.83

8.28 11.82

Figures of the previous periods relating to the Power Transmission Business in column (2), (4) and (5) have been obtained from KEC Infrastructures Limited. to facilitate comparison. Notes: 1. The above results were reviewed by the Audit Committee in its meeting held on 30th January

2006 and approved by the Board of Directors at its meeting held on 31st January 2006. 2. The Statutory Auditors of the Company have conducted a "Limited Review" of the above

unaudited financial results for the quarter ended 31st December 2005. 3. Scheme of Arrangement:

(a) The Hon'ble High Court, Bombay had sanctioned the Scheme of Arrangement ("Scheme") between KEC International Limited, KEC Infrastructures Limited, KEC Holdings Limited, Bespoke Finvest Limited and their Respective Shareholders on 27th September 2005. The Scheme has become operative from 26th December 2005 on filing of the certified copy of the Court Order with the Registrar of Companies. (b) Pursuant to the Scheme, with effect from the closure of business hours as at 31st March 2005, the Power Transmission Business of KEC Infrastructures Limited (formerly KEC International Limited) has been acquired by the Company.

67

(c) In terms of the Scheme, the Company, as part consideration for acquisition of Power Transmission Business, will allot 3,76,35,854 Equity Shares of Rs.10/- each fully paid up to KEC Infrastructures Ltd., who in turn will distribute the equity shares in the ratio of 1:1 to their equity shareholders whose names appear in their Register of Members as on 15th February, 2006, being the record date for determining the shareholders entitled to receive these equity shares. (d) The Company is applying to the NSE and BSE for listing of Equity Shares. (e) As a part of the Scheme, the name of the Company has been changed to KEC International Ltd. by obtaining a fresh Certificate of Incorporation from the Registrar of Companies.

4. The EPS shown above is after considering the issuance of equity shares referred to in 3 (c) above.

5. The Company is primarily engaged in the Transmission Lines Business. As such there is no

separate reportable segment as defined by Accounting Standard 17 issued by the Institute of Chartered Accountants of India.

By Order of the Board

For KEC International Limited

Ramesh D. Chandak Managing Director

68

XV. OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS OUTSTANDING LITIGATIONS AGAINST THE COMPANY The Company, has not defaulted in meeting any of its statutory or institutional dues or no proceedings have been initiated against the Company, for any of the offences specified in Paragraph 1 of Part I of Schedule XIII of the Companies Act, 1956. There are no pending proceedings initiated for economic offences against the Company. No disciplinary action/ investigation has been taken by the SEBI against the Company. Sales Tax Cases Pending Before Appellate Authorities

BST/CST/ WCT

Demand (Rs Lacs)

Brief description of the Order Present status

WCT 34.63 AC has not full credit of TDS amount

Pending before M S Tribunal, Mumbai

Central Excise Cases

Sl No. Ref. Issue involved Total

Amount (Rs Lacs)

Present status

1 2449/90 Writ : Excise duty on Zinc scrap (refund of excess paid)

5.77 Pending for disposal in Mumbai High Court

2 2823/91 Writ : Excise duty on Zinc scrap (refund of excess paid)

2.16 Pending for disposal in Mumbai High Court

3 SCN 192/02

25.07.02

Appeal : Availment of deemedcredit of 12% on the inputswhich were later cleared forexport on payment of 15% ad-valorem on additional value andlater claimed the refund.

42.97 Finally heard by Commissioner of C.E. (A) Order is reserved.

4 Civil appeal

No. 4059 of 2003.

Levy of Central Excise on supply of Cantilever - Rly. Electrification project Ambala.

108.2 An appeal filed before CEGAT, New Delhi. Matter finally decided in the Company’s favour. Rs5.00 Lacs deposited in the appeal also refunded.However now Excise Department has filed Civil appeal in the Supreme Court against the order of the CEGAT. Appeal is admitted & pending for disposal.

69

OUTSTANDING LITIGATIONS OF THE DIRECTORS OF THE COMPANY There are no pending litigations against the Directors of the Company during the last 3 years except in respect of Mr. H. V. Goenka and Mr. G. L. Mirchandani as briefed below: Litigation against Mr. H. V. Goenka There is one case pending against Mr. H. V. Goenka and others before the Delhi High Court, filed by an ex-employee of CEAT Limited claiming compensation of Rs. 23 Lacs plus interest at the rate of 18% per annum. The matter is pending for hearing of the application for disposal of the plaint.

Litigations against Mr. G. L. Mirchandani There are few petty cases filed by consumer/dealer/employee against Mr. G. L. Mirchandani and others. The amount involved in those cases is either not quantifiable or negligible. OUTSTANDING LITIGATIONS AGAINST THE PROMOTER COMPANIES 1. ADAPT INVESTMENTS LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 11.21 Lacs, Rs. 5.79 Lacs and Rs. 5.79 Lacs respectively. 2. ADORN INVESTMENTS LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 3.14 Lacs, Rs. 3.14 Lacs and Rs. 17.15 Lacs respectively. 3. B. N. ELIAS AND COMPANY PRIVATE LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters: Rs. 9.19 Lacs. 4. BLUE NILES HOLDINGS LIMITED There are no pending litigations against the company. 5. BRABOURNE INVESTMENTS LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 205.46 Lacs, Rs. 226.32 Lacs and Rs. 175.37 Lacs respectively.

70

6. BRENTWOOD INVESTMENTS LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 62.65 Lacs, Rs. 88.06 Lacs and Rs. 78.87 Lacs respectively. 7. CANAL INVESTMENT &INDUSTRIES PVT. LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 113.46 Lacs, Rs. 113.46 Lacs and Rs.134.81 Lacs respectively. 8. CHATTARPATI INVESTMENTS LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 272.01 Lacs, Rs. 309.11 Lacs and Rs. 295.12 Lacs respectively. 9. CEAT HOLDINGS LIMITED

Litigations pending before Appellate Authorities relating to Income Tax matters – Rs. 33.58 lacs. 10. CEAT LIMITED Criminal Cases

There is one criminal case pending against the company and its former legal advisor Mr. P. S. Mani details of which are given below:

Complaint No.58 of 2001 (P.C. No.361/99-2000) filed by the Inspector of Legal Metrology, Vijayawada before the First Class Magistrate, Venketagiri, Tamil Nadu. Grounds: The complaint is filed on the ground of non declaration of price on package (containing tubes) as per the requirements of the Standards of weights and measures Act, 1976. The complaint is filed against Mypol, (manufacturer/packer) and the company (for whom the goods were manufactured/packed). Status of the case: The company has filed its reply to Show Cause Notice pointing out that tubes were spurious. The matter is pending for further hearing.

Civil Cases There are 10 cases against the company filed by different parties in various Courts and 1 appeal filed by the company. The monetary claims/disputed amounts in these cases are not expected to exceed Rs. 1802.16 lacs.

71

a) Case No. 49/1997 filed by LIC against the company & Mr. Anil Agarwal, an ex-employee of M/s. Lakhanpal Limited before the Estate Officer under public premises eviction of unauthorised occupants.

Grounds: Premises were originally let by LIC to erstwhile Murphy India Limited (MIL), which was amalgamated with the company. In reply to the notice, the then occupant of the premises Mr. Anil Agarwal, has denied any liability and claimed to be a representative of Lakhanpal Pvt. Limited, who were the distributors of MIL (the ‘Lessees”). The premises were handed over to LIC by Lakhanpal. The application filed by the company for dropping proceedings against it as the company was neither the occupant nor the lessee is pending disposal. Claims: Rs. 26.04 lacs as the claim for damages with interest thereon at the rate of 18% per annum from 1st July 1997 onwards. Status of the case: Parties are considering a settlement.

b) Suit No. 1524/92 - (August, 1991 to March, 1992) No. 974/99 (April 1996 to March, 1999); and No. 1801/01 (April 1999 to July 2001) filed by Mr. Harpeet Singh Chawla & Anr against the company before the Delhi High Court.

Grounds: Claim for damages, against the company for unauthorised occupation of premises by the landlords Harpeet Singh Chawla & Anr, since termination of tenancy by notices all dated 5.7.1991. Possession has been handed over and now the claim is only for damages. Claims: The following amounts aggregating to Rs. 81.30 lacs have been claimed in the 3 cases (i). Rs.5.60 and Rs 70,000 per month from 5.7. 1991 to 1.8.1991 and interest @ 24%from April 1992 (ii) Rs. 36.00 lacs and interest @18% from April 99 (iii) Rs. 39.69 lacs with interest @18% from April 1999 to July 2001 Status of the case: Evidence is completed and now the case is pending for final arguments.

c) Suit No. 1301/2004 filed by Mr. U.S. Mamick against the company & Others, before the

Delhi High Court.

Grounds: Compensation claim by Mr. U. S. Mamick an ex employee of the company alleging fraud, cheating and manipulation in evaluating and appraising his performance as a result of which he was forced to resign prior to superannuation. Compensation has also been claimed as alleged promise of C&F Agency given by the company was not fulfilled by it. Claim: Rs. 23 lacs with future interest at the rate of 18 % per annum. Status of the case: The matter is pending for further hearing.

72

d) First Appeal No. 624/2004 filed by the company (Original Defendant) against R. K.

Enterprises (Original Plaintiff), before the Rajasthan Court – Jaipur Bench, Jaipur.

Grounds: company has preferred an Appeal against the decree of the Addl. District Judge, Dholpur- dated 18.5.2004 granting part claim of Dealer for outstanding discounts etc. against company since termination of dealership. Contention of company is that the Court has ignored the plea inter alia that the Respondent-Plaintiff had failed to prove that the amounts claimed were due and payable and that the learned trial judge had failed to appreciate the evidence of Appellant/original defendant witness and that therefore the decreetal claim made is not substantiated. Application for stay of the judgment has been filed by the company. Claim: Rs. 0.78 lacs with interest @12% from December 2000 onwards. Status of the case: Appeal admitted. To be listed in normal course.

e) Suit No. 1765/92 (now case No. 1226/95) filed by Indian Overseas Bank (IOB), New Delhi Vs. Magnavision Limited and Others, before DRT, New Delhi.

Grounds: Claim of IOB against Magnavision and the company for the recovery of outstandings in respect of bills drawn by Magnavision on M/S. Murphy India Limited (MIL) which were discounted by it but remained unpaid. MIL has been amalgamated with the company pursuant to the order dated 31.8.1990 passed by BIFR and hence claim against the company in respect of the alleged liability of MIL. The company has filed a written statement contending that MIL has made direct payments to Magnavision as required under the invoices and as such no amounts are due and payable. The company has also contended that bills were never accepted by MIL and its books also confirm this and that amount in respect of bills is only Rs.15 lacs and interest at the rate of 26% p. a. is not permissible. Claim: Rs. 26.06 lacs with interest at the rate of 26% from the date of the suit. Status of the case: Magnavision has filed an appeal in the DRAT against DRT Order not allowing to cross the witness of plaintiff. Appeal is pending for disposal. Hearing of the case stayed till disposal of the Appeal.

f) RCS No. 656/2000 filed by the company against Mr Virendra Misra, Proprietor, M/s. Dhirendra Enterprises, Nagpur (The Divisional Despatch Centre), before 5th Joint Civil Judge, Sr. Divn. Nagpur and the counter claim has been filed by the company.

Grounds: The suit was originally filed for release of detained goods of the company. The claim is of approximately Rs. 170 lacs towards damages/compensation. The defendants filed their written statement and a Counter claim on 9th January 2001 alleging non-payment of revised Divisional Dispatch Centre charges. The company filed its reply written statement to this counter claim and written statement, denying the claim of the defendant.

73

Claims: Rs. 61.50 lacs (counter claim) along with (interest at the rate of 18% until the realization of the claim (decreed) amount). Status of the case: Cross Examination in the matter is going on.

g) Case No.298/2004 filed by M. B. Tyres, C&F Agent against the company before Civil Judge Sr. Divisional, Sangrur.

Grounds: Dispute on Statement of Accounts in respect of amounts payable to the company. Invoice amounts not collected by CFA, therefore, adjusted against commission payable to CFA. Claim filed for recovery of amounts. Claims: Rs. 1.48 lacs. Status of the case: The Application for rejection of plaint on the grounds of jurisdiction filed by the company has been dismissed. The company is proposing to file a Revision application against the dismissal order in the High Court.

h) Case No. 8/2004 filed by Sardar Enterprises against the company before the Sr. Civil Judge, Lahore.

Grounds: A legal notice was received from the advocates for the plaintiffs by the company on 16th June 2003 demanding for the Compensation and Damages of US$ 2 Million for breach of contract to supply tyres in terms of purchase order. The plaintiff claims in this legal notice that proper LC was issued in favour of the company. The company replied to the said notice, denying any such breach of contract as alleged. According to the company after placing of Purchase Order the plaintiff did not furnish the LC as per terms and conditions. Claims: Rs. 1200.00 lacs. Status of the case: As per legal opinion dated 29th December 2003, of Mr. R. F. Virji, Advocate, Supreme Court of Pakistan, Karachi, the Lahore Court has no jurisdiction to entertain and try the suit filed against the company. The company has forwarded a letter to the Registrar of Court, Lahore stating that the company does not have any place of business subsidiary or sales office or establishment in Pakistan nor carrying out any business in Pakistan, and hence, the Court has no jurisdiction to entertain and try the suit. Cases filed by statutory authorities

i) F. No T4/190/D/2002 filed by Enforcement Directorate against the company before the Directorate of Enforcement, New Delhi.

Grounds: Directorate of Enforcement had alleged the non submission of documents relating to import of caprolactum for tyre cord plant, Gwalior in the year 1994/95 by the company. Subsequent to the imports the company had in 1995, sold the nylon tyre cord

74

plant at Gwalior, to SRF. According to the company, the requisite documents had been submitted to RBI through Bank of India. Both original as well as alternate set of documents according to the company were submitted and the show cause notice dated 25th May 2002 was served at the old address of the company. Since the company could not attend the hearing for want of service, Ex Parte Order came to be passed imposing penalty Rs. 315 lacs. company preferred an appeal to Appellate Tribunal for Foreign Exchange, New Delhi, being Appeal No. 330/2004 against order NO. SDE/SKP/III/52/2003 dated 17th July 2003 which has been decided in favor of the company. By the order dated 10th March 2005passed by the Appellate Tribunal for Foreign Exchange the Order imposing penalty has been set aside, and the company has been given opportunity to be heard and liberty to produce alternate documents. Claims: Rs. 315 lacs. Status of the case: The appellate tribunal has remanded the matter back to the adjudication authority for arriving at the fresh decision. The order records that the imports can be proved by filing of bill of entry and exchange control copy or other sufficient evidence. In view of the liberty given to the company to produce alternate documents, RBI has by its letter dated 19th September 2005 confirmed the acceptance of alternate import documents as earlier submitted by the company.

j) Case No. 383/2004 filed by the Joint Director General Foreign Trade against the company before the Bombay High Court.

Grounds: For the non-submission of documents evidencing fulfillment of export obligation in the year 1980 by erstwhile MIL the Joint Director General Foreign Trade (“DGFT”) passed Orders on 28th July, 2003 and 31st July, 2003 imposing penalty. The company has filed a petition No. 383 challenging these orders on the ground of inordinate delay in raising the issue of non – submission and thereby frustrating production of any evidence in support of case. The company has prayed for the writ of certiorari or any other appropriate writ to call for the records of the case and quash and set aside all the aforesaid three orders and for a writ of mandamus to withdraw or cancel the orders. The said petition has been admitted. Claims: (approx) Rs. 67.00 lacs (15.00+50.00+2.00). Status of the case: Petition filed in the High Court, which is pending final hearing. Stay Order passed on 9th March, 2004.

k) RTP No.147/92 filed by the UOI against the company before the MRTP Commission, New Delhi. Grounds: MRTPC issued a notice under section 10 (a) (ii) of MRTP Act (price fixing and collusive behaviour), for a restrictive trade practice against 4 tyre manufacturing companies including CEAT and automotive tyre manufacturing association. The enquiry is initiated by the UOI ministry on the basis of reports of BICP on automotive tyres industry (1988), report of the consultant by the name D. B. N. Mukharjee engaged by the

75

director general (investigation & registration).. The company also filed its reply on 6th December 1993, praying for the discharge of the notice. The UOI filed its rejoinder. Arguments are led. Claims: Cease and desist order. Status of the case:. The matter is part heard.

Labour Cases A Following Cases have been filed by the following parties against the company in the

labour courts at various places, claiming the reinstatement, continuity of service and back wages. The aggregate claim amount is not expected to exceed Rs. 192.18 lacs.

Sr. No

Court Parties Reasons Claim Rs.in Lacs

1. 3rd L.C.-Thane.

Ref. (IDA) No. 1/04, D. M. Lopez Vs the company

Dismissed for Continued Ill- Health

5.40

2. 1st L.C.-M. Ref. (IDA) No. 863/90, P. Panimayam Vs the company

Dismissed for absence without leave

4.00

3. 4th Labour Court

(ULP) No.367/00 H. A. Raut Vs. the company

Absence without leave 7.53

4. 4th L.C.-T. Compl. (ULP) No. 289/02, S. V. Sawant Vs. the company

Dismissed for continuous ill health ground

5.31

5. 1st L.C.-T. M.A. (ULP) No. 57/04, R L Rodrigues Vs. the company

Dismissed for fraud in using the CEAT rubber stamp and fraudulently signing docs on behalf of CEAT

2.80

6. I.C.-T. Rev. Appl. (ULP)No.6/03 in ULP67/99 B. L. Sahu Vs. the company

Dismissed for making false declaration

15.46

7. LC-T (ULP)No. 405/00, B. B. Babar Vs. the company

Suspended for ritious & disorderly behaviour in company canteen during society meeting by the complainant

6.40

8. 3rd. LC Ref.(IDA)No.251/04, T. G. Bhosale Vs. the company

Dismissed for fabricating/giving false certificates with an application for employment of the son of the complainants sister.

2.40

9. 3rd. LC-T (ULP)No. 172/02, D. B. Continuous ill health 5.40

76

Chavan Vs. the company 10. 2nd. LC Ref.(IDA)No.548/92,

Miss. Y. Furtado Vs. the company

Dismissed from the services due to Dis-obeyance of the order of superior to work on computer and to get trained in computers.

14.50

11. 2nd LC-T (ULP)No. 285/02, B.V.Ghadge Vs. the company

Dismissed for continuous ill health.

5.40

12. LC-N Rev. No.---in (ULP) No. 167/94, A. J. Shahane Vs. the company

Dismissed for overwriting of the logbooks

16.58

13. LC-N (ULP)No. 5/95, G. M. Kulkarni Vs. the company

misconduct under standing orders (24) (d) – dishonesty with the employer and 24 (1) – comm. Of an act subversive of discipline (submission of fake medical bills to claim medical benefits)

15.84

14. LC-N (ULP) No. 332/94, N. B. Nemade Vs. the company

Misconduct under standing orders (24) (d) – dishonesty with the employer and 24 (1) – comm. Of an act subversive of discipline (submission of fake medical bills to claim medical benefits)

15.84

15. Bombay HighCourt

Appeal No.191/01 in WP.No. 1824/97, B. P. Bagual Vs. company

Claiming a higher post and consequential back wages since 1992

0.50

16. Bombay High Court

Writ petition, No. 1763/98,MUMBAI SRAMIK SANGH (D.M.PUN) vs the company

Being aggrieved by the Award dt. 28.1.97, in RefIDA.741/86 passed by the labour Court for claiming reinstatement

14.96

17. I.C.-M. and Bombay HighCourt

Compl. (ULP) No.695/01 AND Appeal No. 274/2002 in WP.1263/97 S. N. Kedare Vs. company

ULP complaint claiming reinstatement and Appeal against the judgement of the BHC date 12.7.01 directing company to pay 50% amount

7.07

18. High court W.P. No.1282/05 company Vs. S.R.Deshmukh

Dismissed for will full dropping in production.

15.79

19. High court Appeal filed by the Slowing down of production 21.00

77

company in W.P.5831/95 Vs. P. Bhanusali

High court W. P. 4537 of 96 K. R. Sonar

Dismissed for using abusive language against factory manager

B. The Labour Union, has filed the following cases alleging paper arrangement with the

Contractors through whom 76 workers were deployed in place of permanent employees who were absent. The Labour Union has claimed permanency benefits and facilities in respect of 76 workers. According to the company, on account of the violation by the Contractors of the terms of their respective contract, the company terminated the contract.

10.00 20.

The company has claimed that all the workmen being the employee of the Contractors, the company is not the employer and as such not liable. In any event, according to the company, the principal liability is that of the Contractor and the company is not liable. The aggregate claim amount is not expected to exceed Rs. 120 lacs.

C. Civil Appeal No. 9442/2003 filed by the company against Anna Abasahib Hawaldar and

Others before the Supreme Court.

Claims: RS. 473.00 lacs.

D. Special Leave Petition (Civil) No. 6897/05 filed by the company against Murphy India

Employees Union before the Supreme Court.

Grounds: The Respondents/original complainants factory workers of erstwhile MIL filed a complaint alleging unfair labour practice under items 5,9,10 of schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971, and contending that the company had assured that it would not indulge in any indiscrimination with the workers who did not accept VRS. It was contended that the benefits given to employees who had accepted the second VRS in 1994 was not extended to the workers who opted for the VRS in 1992. 337 factory workers who opted for VRS in 1992 are claiming the additional amount of Rs.90, 000/- each with interest as benefits given to workers who opted for VRS in 1994. The company has contended that each settlement is distinct and the benefit given to VRS-1994 was as per inter se understanding.

Status of the case: Civil appeal is pending for hearing and final disposal.

Grounds: Industrial Court passed an order dated 29. 3. 2001 on complaint (ULP) 1290/92 allowing the complaint and holding that the company had engaged in unfair labour practices under items 6 and 9 of Sch. IV of MRTU and PULP and directed the company to confer benefits of permanent employees to certain employees and to extend the benefits of settlement dated 29.4.91 from the respective dates of permanency status with along with compound interest at the rate of 12% per annum. The company preferred a Writ Petition No. 1785/2001 to the High Court, Mumbai which was disposed of by an Order dated

78

11/01/2005 of the High Court confirming the order of the Industrial Court save and except confining the interest to simple interest instead of compounding. SLP for leave to appeal against the judgement and order dated 11.01.2005 has been filed. Erstwhile MIL employees who were on probation and thereafter retrenched claimed reinstatement/benefit of wages similar to the permanent workers. The company has preferred an appeal on the ground as to and whether the Trial Court can grant benefits and wages applicable to a particular undertaking owned by the company to an altogether different undertaking which was taken over by it when the Settlement stipulated a cut –off period of the workers on the rolls of the company. Claims: Rs. 66.00 Lacs Status of the case: SC issued Notice for admission and Interim relief hearing by its order dated 11/04/2005.

E. There are [11] cases filed against the company wherein the liability is not expected to

exceed Rs. 248.76 lacs. The following are the details of two cases where the monetary claims/disputed amounts may exceed Rs. 50 lacs in each case. a) ULP No. 432/1996 filed by Mr. M. L. Patel and Others b) before the Labour Court, Bandra.

Grounds: 45 Workmen of Parel Office of MIL were retrenched in 1996 as the undertaking was closed. Workmen challenged the retrenchment as illegal and filed complaint in Labour Court Bandra under Item No 1(a), (b) and (d) of Schedule IV of MRTU and PULP Act. It is contented by the company that the termination was legal and as per law in the bonafide exercise of the power to retrench in law.

Claim: Rs.143 Lacs. Status of the case: The Labour Court, Bandra, has directed reinstatement of 43 workers with full back wages and continuity of service by its order dated 8.7.2005 received by the company on 9.9.05. The company has been advised to prefer an appeal before the industrial court and has instructed its attorneys to file an appeal.

c) The Industrial Court, Thane ULP No. 144/05 (by 30 workers against the company)

and 2/05 (by 7 workers against the company).

Grounds: Engineering and General Mazdoor Sangh on behalf of 239 workmen who opted for VRS in 1988 filed a complaint in the Industrial Court being ULP No. 716/1995 claiming the same benefit be given to the workers, as was given under the VRS in 1994. The Industrial Court Thane, rejected the complaint by its order dated 7.10.04 filed as the union had lost its recognition. Thereafter, till date only 47 workers out of the 239 workers have preferred this complaint in their individual capacity.

Claim: Rs. 47 Lacs.

79

Consumer cases There are in all 57 cases pending in several Consumer Courts against the company wherein the reliefs claimed in these cases varies from Rs. 3000/- to Rs. 1,50,000/-. Assuming that all the cases are decided against the company, the claim amounts in all these cases are not likely to exceed Rs.25 lacs, and it is unlikely that it will adversely affect the financial position of the company. Income Tax Particulars Claim amount

(Rs. In lacs) Departments appeals pending before Income Tax Appellate Tribunal 239.58 Department appeal pending before Bombay High Court 42.29

The Income Tax Department has filed 5 appeals against the company before the Income Tax Appellate Tribunal (ITAT) with claims aggregating to Rs. 189.82 lacs, which are as follows: 1. The Department has filed appeals against the company on the grounds of non –

allowability of deduction of an amount of Rs.347 lacs in relation to the provision for doubtful debts and advances for arriving at the book profits for determining the Minimum Alternate Tax [MAT] liability and claiming Rs. 38.95 lacs towards income tax dues. [Appeal No. ITA 3570/M/2004]

2. The Department has filed 4 appeals against the company for the assessment year 1985-86

and 1986-87 alleging that the commission payment claimed as a deduction was on account of wrong estimate of advance tax liability and claiming Rs. 150.87 lacs in the aggregate in all these 4 appeals as the dues towards income tax. [Appeal Nos. ITA 1694-97/1994]

Further the Income Tax Department had filed the following appeal against the company: a) before ITAT:

The Department has filed appeals against the company for the Assessment years 1987-88 and 1988-89 on the grounds of non admissibility of certain expenses as deductions in those assessment years and claiming Rs.49.76 lacs towards income tax dues. By an order dated 11th April 2003 the ITAT allowed the appeals partly. The IT department has yet not passed its order for recovery of the amount towards expenses disallowed by the tribunal. [Appeal Nos. 5237/1992 and 5238/1992]

b) before Bombay High Court The Department has filed an appeal before the Bombay High Court against the order dated

23 April 2002 passed by ITAT challenging the deductibility of expenses towards presentation articles, payment towards London office salaries, club fees, and debenture issue expenses for the assessment years 1989-90 under rule 6B, Sec 40a, Sec 35D of the Income Tax Act and claiming Rs. 42.29/- lacs as the income tax dues. [Income Tax Appeal (Ldg.) No. 540/03]

80

Wealth Tax related matters

The Deputy Commissioner of Income Tax Circle 6 (2) has filed 2 appeals being WT As. No 191to 192 /MUM/03 before the Income Tax Appellate Tribunal WT Bench Mumbai in relation to the AY-1997-98 and 1998-99 claiming Rs.3.20 lacs in the aggregate being 1% of the disputed amount of the reduction in the value of CEAT Mahal. Disputed demands of Excise Duty Department appeals In all 13 appeals have been filed by the department challenging the order passed by the appellate authority/Tribunal in favour of the company disallowing the departments claim for excise duty for a sum of Rs. 4030.62 lacs in the aggregate. The table below provides 7 such cases in which the claim of the department exceeds Rs. 50 lacs. Impugned Order

Location Excise duty claim (in lacs)

Appellate Forum

Relevant facts of the case

Comm. Of Central Excise Appeals by its order dated 23.10.2003 bearing no RJB/M-III/468/2003

Bhandup 98.00 CESTAT Appeal No. E/579/2004 Comm. Of Central Excise Mum. III Vs CEAT

The department is claiming recovery of CENVAT credit of Rs. 98.43 lacs. Cross objections No.E/CO/137/2004 – Mum have been filed by the company on the ground that the demand notices have not been issued within the stipulated time and such demand raised more than 7 years after taking credit is ex-facie time barred.

Comm. Central Excise OIONO. 14 KKS/ 2003-04 DT 31.10.2003

Bhandup 29.38 Tribunal Appeal No.E/3581/2004-Mum Comm. Of Central Excise Vs CEAT

The matter is pending before the Tribunal for a determination as to whether the impugned order is legal and proper. The matter was earlier remanded to the adjudicating authority for a finding on the demand of 2938 lacs. A Committee was constituted to examine the claims of the assessee and submit a detailed report which was submitted on 23.10.03. Based on this report the impugned order dated 31.10.03 was passed by the Comm.. Dropping the demand. According to the Central Board of Excise & Customs, the Comm. Ought

81

not to have relied on the findings of the Committee and should have given due regards to the facts and figures available on record.

Common order No. CEX.XI/JMJ/169/916/NSK/ APPEAL/2004 dated 29th April 2004

Nashik 73.72 CESTAT E/2326/04-Mum /1930 CESTAT E/2327/04-Mum /1930

The assistant Comm.. Granted the refund by his orders Nos. 02/03 and 03/03 both dated 30th May 2003. By the impugned common order the Comm.. (appeals) confirmed the order dated 30th May 2003. The department has therefore preferred this appeal.

OIA No. A/NK-1036/99DT.31.12.99

Sourcing unit – SATL

149.33 CEGAT E/2641/2000-mum

Asst. Comm. Central Excise had levied AED on Cal. Fabric used captively in the manufacture of tyres by SATL. The impugned order set aside the OIO dated 26.6.98 confirming the demand. The Dept has therefore filed this appeal.

Order dated 28.5.02 of CEGAT

Sourcing unit - SATL

519.00 Int under 11AB and penalty under 11AC

Supreme Court Civil Appeal No.D1258/2003

The Dept had claimed the differential amount of penalty holding that SATL had cleared their finished excisable goods from their factory to their sole and exclusive buyers, the company and Goodyear who according to the Dept were related to SATL. SCN dated 25.01.99 was issued demanding excise duty. OIO Dated 11.5.2000 No.12/CEX/2000 confirmed the demand. By the final order dated 12.9.02 of CEGAT the OIO was set aside holding that SATL is not related to Goodyear and company. The Dept has therefore filed this Appeal to the Supreme Court.

OIA dated 29.8.02 sdk (1839-1843)501-505/AUR/ 2002

TRIL Outsourcing unit

86.36 17.50 PENALTY

CEGAT. Mum E-137-140/2003

According to the Dept, the correct transaction value in terms of rule 11 of CEX Valuation rules should be depot sale price of the company for the said goods. By OIO No.106/2002 dated 30.4.2002 the demand was confirmed. The impugned OIA dated 29.8.02 sdk (1839-1843)501-505/AUR/2002 quashed the OIO relying on the assessable value based on the comparable prices for the goods at the depot of the company. The Dept has

82

filed 4 appeals before CEGAT Mum against OIA

Company Appeals In all 7 appeals have been filed by the company challenging excise duty claimed by the department for a sum of Rs. 543.08 lacs in the aggregate. In one case in addition to the claim for excise duty a penalty of 7.67 lacs has been imposed. The table below provides 3 such cases in which the demand exceeds Rs. 50 lacs. Impugned order

Location Excise duty claim (in lacs)

Stage of proceeding

Relevant facts of the case

OIO. No. 79/98/99

Bhandup 208.22 162.93

Bom High Court 1967/99

Interim orders in favour of the company restraining the department from taking coercive steps. Relief sought by the company: a) cancellation of the demand pursuant to the impugned order for AY 1997 -98 on account of cost of transportation and interest on receivables And b) the demand for duty reworked on account of turnover tax and prompt payment /cash discount and product discount as per Exhibit K-to the petition being letter dated 20.10.99 of the Supt. Of Central Excise.

OIO No 02/MM/2005-06DT.21.4.2005

Bhandup 78.86 + Penalty of 78.86

Before Commissioner Central Excise and Customs (Appeals) Mumbai.

According to the department the company has contravened rule 3 read within rule 7 (2) of CENVAT credit rules, i.e. taken wrong CENVAT credit on tyre bead wire without ensuring that those goods were liable for excise credit and utilized the same for payment of duty on their own products. According to the Supreme court judgement, in the case of central excise Vs Vishwaman, the drawing of ms wire from rod does not amount to manufacture, the question of duty payment does not arise and whatever was paid before the Supreme Court decision cannot be treated as duty payment. This according to the dept is because duty paid by CEAT of their own volition on non- excisable goods is

83

to be treated as deposit in view of a circular dated 4.1.91. Therefore, CEAT cannot avail of credit on deposit as no excise duty was paid. According to CEAT (i)no violation of CENVAT credit rules as alleged (ii)the amendment to rule 16 to the Central Excise Rules the duty paid shall be allowed as CENVAT credit (iii)the duty paid under rue 3(4) is available as CENVAT credit under rule 3 (5). Application for waiver of pre deposit of penalty made along with appeal.

Order No. 2/KKS/2005-06 BY THE Comm. of Central EXCISE MUM IIIDT.30.8.05

Bhandup 66.62 Tribunal CEAT has instructed its Attorneys to file appeal before CESTAT

The impugned order held that the company has wrongly taken credit of the amount of Rs.66.62 on a wrong appreciation of law under mistaken belief and therefore penal provisions are not applicable. The order therefore confirms the demand for Rs 66.62 under Sec 11A rule 12 of CENVAT Credit rules and confirmed demand for interest @15%from 15.2.03 on Rs. 66.62 and penalty of Rs. 5 lacs was imposed. The Supreme Court by its order dated 22.11.01 passed in civil appeal no. 5374/92 allowed CEAT to claim the benefit of the notification dated 1.3.79 as amended by notification dated 28.2.82 in respect of synthetic rubber used by the company in the ultimate manufacture of tyre. Accordingly a claim for refund was made on 8.5.02. According to the company since the Dept did not sanction the claim for refund for about a year the company took credit in the personal ledger account on 15.2.03. The Dept issued a SCN dated 5.2.04 and the matter was disposed by the order OIO 2/KKS/2005-06 confirming the demand of 66.62 dated 30.8.05.

84

Disputed demands of Custom Duty Location Particulars Excise

duty claim (in lacs)

Stage of proceeding

Order if any

Current status

Cochin (purchase department)

Additional customs duty equivalent to rubber cess on the imported rubber

5.64 Tribunal C/86-87/04

66-67/2003 dated 6th October 2003

company has filed an appeal against the department in the tribunal Bangalore.

Disputed demands of Sales Tax There are in all 46 cases pertaining to sales tax liability of the company, pending at the various locations all over India. The total liability in all these cases is Rs. 399. 82 lacs (approx). The cases in which the liability exceeds Rs. 50 lacs are: 1. By an assessment order No. 02/CD-106/1999-2000 dated 12th June 2003 for the

assessment year 1990-91 the department has disallowed the concessional forms under the West Bengal Sales Tax Act, 1954 and demanded Rs 41, 59,020 towards tax liability and Rs. 16, 39, 548 towards interest liability from the company. The company has filed an appeal against this order on 11th August 2003 vise appeal No A-323/AW/03-04.

2. By an assessment order No. 03/CD-106/1999-2000 dated 12th June 2003 for the

assessment year 1991-92 the department disallowed the concessional forms under the West Bengal Sales Tax Act, 1954 and demanded of Rs 36, 28, 816 towards tax liability and Rs. 37, 77, 836 towards interest liability, from the company. The company has filed an appeal against this order on 11th August 2003 wise appeal No A-322/AW/03-04.

Disputed demands of Octroi Location Particulars Excise

duty claim (Rs.in lacs)

Stage of proceeding

Relevant facts of the case

Nashik Demand on zink oxide

85.00

Bombay High Court for reclassification of Zink Oxide Municipal

Since 1990 CEAT classified imported zinc oxide under sr no 40b of class III of Sch I to the octroi rules and the assessment was accepted by the Nasik Municipal Corporation Subsequently CEAT was orally informed to reclassify it under entry 48As part of settlement discussions CEAT commenced payment at a higher rate of

85

appeal no 104/2004 In the court of sr. Div Nasik. Demand for Octroi

3% under entry 48 during July O September 2003 which was later readjusted by CEAT. CEAT later recd notice for alleged short payment of octroi of Rs 49.43 and a differential duty of Rs 26.56 for payment under entry 40 instead of 48from April 93 to March 98 was raised by demand notice dt 16.10.2003 was made. Therefore a writ petition No 4004 /2004 was filed in which by order dt 12.7.04 stayed the retrospective levy until final disposal of the petition. Municipal appeal no 104/2004 has also been filed on 26.7.04 against Municipal Corp City of Nasik and others for quashing the notices seeking to reclassify zinc oxide under entry 48and for appropriate order for levy of octroi prospectively from june 2003 . All the respondents have filed their written statements. Nashik Municipal Corporation has issued Demand Notice dated 25.05.2004 for differential amount.

Claims against the company not acknowledged as yet

A. Excise Claims

The Excise Department has issued show cause notices in 32 cases, against the company alleging evasion of excise duty of about Rs. 6238.41 lacs in the aggregate. However, in case of five show cause notices, pursuant to the AED Scheme the claims aggregating to Rs. 5544.31 lacs therein have been agreed to be paid in 36 equal installments.

B. Customs Claims

The customs department has issued 16 show cause notices against the company demanding the customs duty, penalty and interest etc. from the company of Rs. 8368.86 lacs in aggregate.

The show cause notices are issued by the customs department demanding the duty, penalty, interest etc. from the company for various grounds such as Wrongful declaration about the customs documents, availing undue duty benefits, wrongful availment of duty free benefits against the import license, wrongful availment of the input stage credit in violation of the customs rule, in respect of the goods exported towards fulfillment of the export obligation.

86

11. CEAT VENTURES LIMITED

Litigations pending before appellate authorities relating to Income Tax matters - Rs. 56.63 Lacs. 12. EASTERN AVIATION & INDUSTRIES PRIVATE LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 44.55 Lacs, Rs. 44.49 Lacs and Rs. 33.21 Lacs respectively. 13. HARRISONS MALAYALAM LIMITED

1. Income Tax matters Assessment Year Amount of

demand/ Refund by the dept. concerned (Rs. in lacs)

Brief description of the case/ order against which case is pending

Present status

A.Y: 1994-95, 1996-97 to 1998-99

335.66 Income tax and interest thereon

Dispute is still pending

A.Y: 1984-85 and 1985-86

29.30 Surtax and interest thereon

-do-

A.Y. 1991-92, 1993-94,1994-95,1996-97 and 1998-99

823.65 Tax on Agriculture Income

-do-

A.Y: 1988-89,1992-93,1996-97,1999-00

4.64 Tax on Agriculture Income

-do-

2. Sales Tax matters Assessment Year Amount of

demand/ Refund by the dept. concerned (Rs. in lacs)

Brief description of the case/ order against which case is pending

Present status

A.Y. 1984-85, 1986-87 to 2000-01

503.40 Sales Tax -do-

A.Y. 1984-85 to 2000-01, 2002-03

812.79 Central Sales Tax -do-

87

14. HARRISONS MALAYALAM FINANCIAL SERVICES LIMITED Income Tax matters Assessment Year Amount of

demand/ Refund by the dept. concerned (Rs. in lacs)

Brief description of the case/ order against which case is pending

Present status

A.Y: 1997-98 and 2001-2002

5.00 Various Appellate Authorities

Dispute is still pending

A.Y: 1993-94 0.18 Income Tax Appellate Tribunal

-do-

15. HILLTOP HOLDINGS INDIA LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 918.81 Lacs, Rs. 918.81 Lacs and Rs.1032.74 Lacs respectively. 16. INSTANT TRADING & INVESTMENT LIMITED There are no litigations pending against the company. 17. JUBILEE INVESTMENTS & INDUSTRIES LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 346.56 Lacs, Rs. 346.56 Lacs and Rs. 760.96 Lacs respectively. 18. OFF-SHORE INDIA LIMITED There are no litigations pending against the company. 19. ORGANISED INVESTMENTS LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 27.94 Lacs, Rs. 37.10 Lacs and Rs. 29.30 Lacs respectively.

88

20. PHILLIP CARBON BLACK LIMITED Sales Tax cases pending before Appellate Authorities Name of statute Amount (Rs. In lacs) Forum where dispute is

pending Kerala Sales Tax Act,1963 193.27 High Court Kerala Sales Tax Act,1963 6.15 Appellate Tribunal West Bengal Sales Tax Act 98.00 Appeal pending under W.B.

Revisional Board on Account of discount on sale.

West Bengal Sales Tax Act 120.00 Appeal pending under Deputy Commissioner on account of discount on sale.

Excise duty cases pending before Appellate Authorities Name of statute Amount (Rs. In lacs) Forum where dispute is

pending Central Excise Act, 1944 116.88 Customs, Excise and Service

Tax Appellate Tribunal Central Excise Act, 1944 113.50 Commissioner Central Excise Act, 1944 20.00 Show Cause Notice of Rs. 20

lacs issued by Excise Authorities not acknowledged as debt by the company.

Income Tax cases pending before Appellate Authorities Name of statute Amount (Rs. In lacs) Forum where dispute is

pending Income Tax Act, 1961 142.02 Commissioner of Income

Tax (Appeals) Income Tax Act, 1961 24.06 Income Tax Appellate

Tribunal 21. PCBL INDUSTRIAL FINANCE LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 760.44 Lacs, Rs. 760.51 Lacs and Rs. 760.51 Lacs respectively. 22. PETROCHEM INTERNATIONAL LIMITED Litigations pending before Appellate Authorities relating to Income Tax : Rs.1.83 Lacs.

89

23. RPG CELLULAR & INVESTMENTS HOLDINGS PVT. LIMITED There are no litigations pending against the company. 24. RPG TRANSMISSION LIMITED Civil cases filed against the company

No

Suit Title Particulars Pending at (Court)

Status

1 2 3 4 6 1 Special Suit

No. 47 of 1995 R R Murarka Vs SAE (India) Limited (Bhuj)

Claiming Balance Amount (Rs. 2.70 Lac +Interest) for supply of ACSR Conductors

Sub-Judge (Senior Division) Gandhidham

Award pronounced. Application filed by Plaintiff for setting aside the Award of the Arbitrator

2 RFA in Suit No. 21/9 Murarka Cables & Conductors Vs SAE

Suit filed for setting aside decree dated 6-12-89 passed in favour of SAE towards encashment of Bank Guarantee of C.B.I. against the Plaintiff for Rs. 6.95 Lacs

High Court -Suit decreed in favour of RPGT at Tis Hazari (Lower) Courts. -Appeal filed.

3 Anwar Hussain Vs. RPGT

Suit filed by Mr. Anwar Hussain claiming a sum of Rs. 5,95,673/- towards amount due and interest in respect of foundation work done for the company (Suit decreed in favour of Anwar Hussain)

Delhi High Court

-Appeal filed in Delhi High Court against adverse Order of Lower Court.

4 Mukesh Kumar Gupta Vs. RPGT & Others

Suit filed for recovery of Rs. 3.30 Lacs

Civil Judge Ghaziabad

-RPGT to file W/S -Fixing of issues -Application filed asking for stay on grounds of arbitration

90

Income Tax matters A.Y.

Amount of Demand /(Refund) by the Deptt.Concerned (Rs. in Lac.)

Brief Description of the Case / Order against which the Case is pending

Amount of demand Deposited

Present Status

1997-98 63.59 Order u/s 147 challenged. Disallowance 80M, Licence Fees, CIT (A) confirmed demand. Appeal filed before ITAT.

58.76 Case pending before ITAT

Sales Tax matters A.Y

Amount of Demand /(Refund) by the Deptt.Concerned (Rs. in Lac.)

Brief Description of the Case / Order against which the Case is pending

1990-91 1.08 Order dtd. 1.6.93 STO, Jammu. Demand of tax on Fright

1993-94 14.57 Sales Tax assessment BF (ST) Act. Appeal disposed off ex-parte. Appeal filed before Tribunal. Pending forms & dispute on WCT.

1993-94 28.95 Sales Tax assessment CST Act, Appeal disposed off ex-parte. Stay & Appeal filed before Tribunal. Pending forms.

1994-95 31.47 Sales Tax assessment WBST & CST Act,. Appeal Filed. Pending forms.

1989-90- to 1992-93

40.94 Sales Tax assessment for Deoghar under Jharkand. Ex-parte assessment disputed.

1998-99 4.46 Sales Tax assessment under CST and DST Act. Delhi on a/c of pending forms. Appeal filed. Stay Granted.

2001-02 0.77 Delhi Sales Tax assessment initial demand Rs. 263.41 Lac for non submission of forms. Stay granted on payment of 43 Lacs.

2002-03 17.30 Sales Tax assessment under CST and DST Act. Delhi on a/c of pending Forms. Appeal filed.

2003-04 41.36 Sales Tax assessment under CST and DST Act. Delhi on a/c of pending Forms. Appeal filed.

2000-01 1.59 Sales Tax assessment under CST and DST Act.

91

Jabalpur a/c of pending Forms. Appeal filed. 2001-02 12.06 Sales Tax assessment under CST and DST Act.

Jabalpur a/c of pending Forms. Appeal filed. 1998-99 16.72 Sales Tax assessment under CST and DST Act.

Jabalpur a/c of pending Forms. Appeal filed. Total 211.27

Central Excise matters Brief details of the litigation

Amount involved (Rs. in lacs)

Pending before authority

Present status

Modvat availed on steel supplied from SAIL/ IISCO disallowed

8.08 CESTAT Stay granted. Pending for hearing.

Total 8.08

Cases relating to labour/ employee issues Sr. no.

Name of the case

Brief History of the Case

Name of the Court – Filed on

Current Status

1 Case for deduction of wages filed by SAE(HO) Employees Union (by 53 Employees)

Employees went on lightning strike without notice on 13.02.2001. 53 employees have moved the Labour Court. The matter is pending before the Court

Labour Tribunal Karkardooma, New Delhi 2002

Cross examination by workmen

2 Charter of Demand

Demands before the conciliation officer in the year 1998. On failure of conciliation proceedings the matter was referred to Industrial Tribunal for adjudication.

Industrial Tribunal Karkardooma, New Delhi 1998

For evidence of the management

3 Reg. I.D. Case No. 456/04 in respect of Mr. A. P. Sharma

L.C. No. II Karkardooma 2004

Written statement

4 ESI Regular The company stopped payment

Sr. Civil Judge, Civil Court,

Evidence of the union

92

of Medical reimbursement from April ’97, to those employees who were covered under ESI. The employees moved an appeal before the civil court. The court issued an interim order for continuing the medical reimbursement till the disposal of the case.

Tis Hazari Delhi 1997-98

5 Complaint filed by Vinod Kumar & Mr. Shiv Dutt of Bilaspur Filed Office Retrenched workers (Case ID 357/03)

Re-instatement with all facilities as per Law.

Room no. 56 LC-3- N L Goel Karkardooma, New Delhi

Rejoinder document and issue

6 Complaint against CD Case No. 95

Karkardooma, New Delhi

7 Claim arrears: Fresh appeal filed by Mr. A.P. Sharma for claiming various benefits and arrear out of settlement (Case No. 876/02)- u/s 33(c)(2)

The dismissed employee Mr. A. P. Sharma was reinstated from 24.04.01 without back wages as per the Court order dated 16.04.01. He has appealed for vacating the stay granted regarding payment of back wages.

High Court 2002

Court yet to take decision on objection raised by us

8 Case filed by Mr. S. Samuel & 14 others by dismissed employees (Case No. 495/03)

Labour 2003

Cross argument

9 ESI appeal The company Sr. Civil Judge, For order

93

went for an appeal & obtained the stay against the order. The company was asked to make a Fixed Deposit of Rs. 1 lac with the bank till the disposal of the case.

Judge: Lokesh Pd. Civil Court, Tis Hazari Delhi

10 Ex- Gratia case: -Mr. K.S. Panicker- Ch. Res. Manager -Mr. C.K. Shankaranarayan Res. Manager -Mr. L. Rangarajan- Ch. Res. Manager -Mr. G.T. Nair- Dy. Res. Manager

SAE India in the past used to pay 15 days wages for each year of completed service as Ex-gratia (apart from Gratuity) to Employees on resignation/ retirement for their long years of dedicated service. This practice was stopped after RPG’s taking over. The employees concerned who had appealed for such ex-gratia payment citing the past practice before the Civil Court.

Sr. Civil Judge, Civil Court, Tis Hazari Delhi

Evidence of the management

11 Dismissed employees case: Writ petition in the High Court by 16 dismissed employees against the final order of the approval application u/s 33(2b) by the Industrial appr.

16 Employees have been dismissed on 3.12.01 for participating in illegal strike and for the incident that took place on 13.02.02 after conducting proper domestic enquiry under the principle

High Court 2003

Argument for both sides

94

(Case no. 2813 to 2828)

of natural justice. Simultaneously approval application u/s 33(2b) was filed on before the I.T. under the abundant caution.

12 Case appearance before Asst. Labour Commissioner, Kirbi Palace, complaint filed by workmen. Case appearance before Asstt.

Unfair Labour case

2004 Order

Defaults in creation of security for Secured Debts: IDBI loan of Rs. 30 crores (under process). 25. SAREGAMA INDIA LIMITED Criminal cases

Case No./ Date

In the Court of

Filed against Particulars Status

Cr. Comp 447 of 1996 (new No.2809 of 1999)

ACJM, Gautam Budh Nagar, Ghaziabad

Super Cassette Inds & another –vs- Sri S. Goenka, Sri RP Goenka, other Directors & SIL

Alleged defamation against Super Cassettes. In view of pendency of matters before Allahabad High Court, the Trial Court proceedings are adjourned. The Monetary claim cannot be quantifiable at this juncture as the matter is subjudice.

Proceedings adjourned

Cases filed against the Company relating to:

Copyright issues 1. 3740 of

2000 Mumbai High Court

Mahal Pictures –vs- East is East, Star Entertainment, Saregama India

Seeking Court’s declaration of Saregama’s rights in Agreement re: Film “Pakeezah”

Pending

95

Ltd. 2. CS. 1830

of 2003 Chennai High Court

Meta Audio –vs- Saregama India Ltd & IMI

Alleged interference in Meta's business.

Pending

3. CS.139 of 2004

Calcutta High Court

Hamin Ahmed & others –vs- SIL, Anu Malik, Mukesh & Mahesh Bhatt, A. Jamal, RPG Global, Saregama plc

Alleged unauthorized usage of their musical work in one song in Film 'Murder'

Pending

4. 2005 – not yet numbered

Copyright Board

Devki Chitra –vs- SIL

For revocation of assignment re: music of film “Katha”.

Notice not yet served

5. CS No 280/05

Calcutta High Court

Nariman Films – Vs- Saregama India Ltd. And Anr

Producers claim rights assigned to SIL have expired.

Pending

6. CS (OS) No 1743/05

Delhi High Court

Javed Akhtar – Vs- Magic Mantra Vision & Saregama India Ltd.

Claimed Producer/SIL has no right to mfg. & sell songs of the film 'Pyar Ki Dhun' in physical &/or non- physical format, as the lyrics was only to be used for cinematograph film. Also claimed royalty on such exploitation by SIL.

Pending

Version Recordings 7. TS 640

of 1996 City Civil Court, Calcutta

Asha Audio–vs- SIL

SIL permitted Asha to make versions of some Bengali songs, but withdrew permission, as Asha did not comply with norms. Asha filed suit for non-interference in their business. Asha’s Injunction application dismissed

Main suit pending

8. 124 of 1996 & 506 of 1998

Calcutta High Court

Hindusthan Musical Products –vs- SIL

HMP entered into License Agts for SIL to manufacture and sell HMP repertoire. HMP filed suit on various grounds – viz. repertoire not utilized, royalty not paid. Claimed Rs.50 lacs in damages.

Pending.

9. OS City Mars Recording Version recording made Pending

96

4255/2000

Court, Bangalore

P Ltd –vs- SIL & IMI

without SIL’s consent by Mars. Suit filed by Mars to preempt any legal action/ seizure etc. by SIL / IMI.

10 RFA 534/ 2004 RFA 535/ 2004

Bangalore High Court

Mars Recording P Ltd –vs- SIL & IMI

Mars’ Appeal against Bangalore City Court order of 2004 dismissing Mars’ case 4792/ 1998 and decreeing SIL’s case CS 265/ 1998 in SIL’s favour.

Pending

11 OS. No.336/ 2005

City Civil Court, Hyderabad

Harsha Audio –vs- SIL (2nd Def) & Lahari Recording

Claimed their ‘new’ re-mix of old Telugu songs does not infringe works of SIL and others.

Pending

Royalty related 12 978 of

1983 Mumbai High Court

Sudhaban Shah –vs- SIL & Charu Harish Pandya

Alleged claim for royalty by financier of film “Chhalia”.

Pending

13 CS(OS) 1300 of 2004

Delhi High Court

BMG Music Publishing International Ltd. & Deep Emotions Publishing Pvt. Ltd. –vs- SIL

Alleged claim of additional publishing royalties from SIL, arising out of license to SIL to sell Zomba Records Ltd.’s repertoire in India. Claimed Rs.45 lacs in damages.

Pending

Suppliers 14 232 of

1996 & 647 of 1999

Calcutta High Court

Antartica Graphics Ltd. -vs- SIL

Antartica Filed Winding Up Prtition For Alleged Non-Payment Of Rs. 19.47 Lacs. Winding Up Prtition Relegated To Money Suit.

Pending

Others 15 1220/

2005 Rajasthan High Court

A. S. Rathore –vs- Central Board of Film Censors, Discovery Video & SIL

Alleged that certain scenes in VCDs “Bond No.1” and “Van Helsigh” insults religious sentiments and thus CFCB and others liable for prosecution.

Pending

97

Sales Tax Disputes Assessment Year

Amount of Demand/Refund (Rs Lacs)

Brief Description of thecase/order against which the caseis pending

Present Status

BIHAR 1981-82 BST 0.13 Excess assessed Appeal filed before

JCCT 2002-03 BST 20.03 Sales return amount disallowed,

considered as sales Appeal Filed hearing awaited

WEST BENGAL

1989-90 WBST 101.01 Pending Registered Dealer Forms Appeal filed before DCCT

1994-95 WBST 135.66 Pending Registered Dealer Forms,Purchase Tax

Appeal filed before DCCT

CST 1.82 F-Forms pending Appeal filed before DCCT

1999-2000 CST 578.23 F- Form pending Appeal filed before DCCT

2000-01 CST 24.05 F-Forms pending Appeal filed before DCCT

-do- WBST 977.99 Pending Registered Dealer Forms Appeal filed before DCCT

2001-02 CST 31.56 Shortfall on assessment Appeal filed before DCCT

-do- WBST 208.20 Pending Registered Dealer Forms Appeal filed before DCCT

2002-03 WBST 169.56 Export Sales Disallowed andpending Dealer Forms

Appeal filed before DCCT

-do- CST 18.83 F-Forms pending Appeal filed before DCCT

1998-99

Name of the Act under which the case is pending

NORTH REGION Assessment Year and order date

Name of the Act under which the case is pending

Brief Description of the case/order against which the case is pending

Delhi Sales Tax Act 1975

Central Sales tax Act1957

254,381 135,727 Appeal pending with DC ( Appeal)

1988-89 321,830 34,290 Appeal pending with DC ( Appeal)

1989-90 - 64,926 Appeal pending with DC ( Appeal)

1987-88

98

1990-91 - 60,706 Appeal pending with DC ( Appeal)

260,275 104,833 Appeal pending with DC ( Appeal)

1993-94 - 68,937 Appeal pending with DC ( Appeal) 2000-01 - 332058 Appeal admitted case remanded back 2001-02 - 71962 Appeal Pending and stay granted

- 2437150 Appeal Pending and stay granted

UP Trade Tax Act , 1948

Central Sales Tax Act,1957

1996-97 61175 - Appeal pending in High Court,LKN 1997-98 294149 - Appeal pending in High Court,LKN 1998-99 214873 - Appeal pending in High Court,LKN 1999-00 230392 - Appeal pending before J.C.(appeal) 2000-01 62459 - Appeal pending before J.C.(appeal) 2001-02 64562 7276 Appeal pending before J.C.(appeal)

1991-92

2002-03

SOUTH REGION A.Y and order date

Name of the Act under which the case is pending

Amount of Demand /Refund by the Department Concerned (Rs.)

Brief Description of the case/order against which the case is pending

Present Status

1986 -1992

Tamil Nadu General Sales Tax Act 1959

674637 Dispute on Rate of Taxes of LP Records

Pending before the Tamilnadu taxation Sepcial Tribunal, Chennai

2000-2001

Andhra Pradesh General Sales Tax Act 1959

3364925 Dispute on Rate of Taxes of Cassettes and CDs

Pending before the Tribunal against the order dismissed by Adl. Commissioner Commercial ,Taxes Legal

Andhra Pradesh General Sales Tax Act 1959

875258 Dispute on Rate of Taxes of Cassettes and CDs

Pending before the Appellate Dy. Commissioner(CT), Secunderabad Div. Hyderabad.

2004-2005

99

1997-98

Kerala General Sales Tax Act 1963

489888 Dispute on Rate of Taxes of CDs

Revised order pending from the STO based on order obtained from The Appel.Asst.Commissioner Commercial taxes, Ernakulam, issued letter to the dept, order awaited.

1998-1999

Kerala General Sales Tax Act 1963

119302 Dispute on Rate of Taxes of CDs

Second appeal filed before the sales tax appl.Tribunal, Earnakulam on12.05.05against the order of the Appel.Asst.Commn,EKM. The appeal is pending for hearing.

1999-2000

Kerala General Sales Tax Act 1963

123915 Dispute on Rate of Taxes of CDs

Favourable order obtained from the sales tax appel.tribuna,EKM issued letter to th Asst.comm,Special circleIII,EKM for obtaining the revised order as per the appeallate order.

Total 5647925 Si. No.

Assessment Year and order date

Name of the Act under which the case is pending

Amount of Demand/Refund by the Department Concerned (Rs.)

Brief Description of the case/order against which the case is pending

Amount of Demand deposited (Rs.)

Present Status as on 31/2/2006

Demand Rs. 1,04,362/- Comp. Money with Stay Petition Paid Rs.21,500/- Amt. In Dispute Rs. 82,862/-

1 AY 2002-03 ( Dt.10-5-04)

Bihar Sales Tax (Appellate)

Sales Return Amt. Rs. 536902/- disallowed & GT diff. worth Rs.154440/- with the return fig & submitted

Comp. Money with Stay Petition Paid Rs.21,500/

Ld. Dy. Comm. Set Aside the case and kept it open for re-assessment

100

accounts fig considered as sales, (as per the order Tax liability ascertained Rs. 20,02,815-less Saregama actually paid Rs.18,98,453=Short Pmt. Rs.104362)

LEGAL CASES NORTH Name of Court Filed by Case Details Claim

(Rs Lacs)

Current Status of Case

Court of Civil Judge

Sethi Radios & Anr.

Rendition of accounts - -

(senior Division), Amritsar SOUTH

Case No. Name of Court

Filed by Case Details Claim (Rs Lacs)

Current Status of Case

HARASSMENT CASES

CS 319/1999

Chennai High Court

Mr. P. B. Balaji Copyright violation of Kandtha sasti kavacham

The above suit is pending on the file of High Court, Madras. The suits of the years 1993 - 1994 are being taken up for final disposal. Even those matters are not presently taken up because of the shortage of Judges. Hence, it will take few years for the above to take up the trial

101

CS 1830/2003

Chennai High Court

Mr. P. B. Balaji Interference of SIL in the business of Meta Audio filed by the owner KAJA MOHIDEEN

- We have filed our written statement and the suit is posted for trial and the next hearing date us 30.09.2005. Actual trial will take place once the matter is posted in the special list.

CS 925/1994

Chennai High Court

Mr. P. B. Balaji Infringement of his certain films by SIL

- The suit has been dismissed in our favour on 2.2.05.

OS 4/2002

Adl.Dist. Court Erna-kulam

Mr. Raghunath suit for injunction restraining the defendants and those claiming under them from infringing the copyrights of plaintiff

- Case dismissed in our favour

OS 28/2001

Adl.Dist. Court Erna-kulam

- Mr. Raghunath Case against Johny Sagarika wherin SIL has been impleaded as additional defendant seeking for identical relief

Case dismissed in our favour

OS 336 of 2005

I Jr.Cicil Judge, CCC Hyderabad

Case dismissed due to wrong representation of plaintiff

Mr. Sunil B Ganu

Case against remix rights of telegu songs

-

Cc no.5480/2003

Chennai Metropolitan Majistrate court XIV

Mr. Amizdhu Dealer Cheque bounce against payment

5.15 Next hearing date 04.04.06.

Rcop no.1151/1994, RC 938/97, RCA 339/98

Chennai Highcourt

Mr.N.S.Varadachari

Fair rent in respect of the premises 604,605 Annasalai

84.3 To be taken up. Pending in High Court

102

Excise related issues

Brief details of the Litigation

Amount Involved

(Rs. Lakhs)

Pending Before Authority Present Status as on 31.01.06

Excise Dept. has issued show cause cum demand notice not accepting the deduction of discount to customers from assessable value for the sale of audio cassettes during March 97 to May 98.

56.54

The Comm

Case heard, order awaited. No impact on P&L as required provision has already been made in the Accounts. ( Legal Consel - Khaitan & Co.)

Cissioner of

entral Excise(Adjudication), KolkataIII Commissionerate

Service Tax

Brief details of the Litigation

Amount Involved

(Rs. Lakhs)

Pending Before Authority Present Status

Nil Nil Return submitted upto 31.03.05 Nil 26. TRADE APARTMENTS LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters for the Financial Year ended March 2003, March 2004 and March 2005 are Rs. 162.48 Lacs, Rs.132.44 Lacs and Rs.162.61 Lacs respectively. 27. YIELD INVESTMENTS PRIVATE LIMITED Litigations pending before Appellate Authorities relating to Income Tax matters: Rs. 3.04 Lacs. None of the above litigations pertaining to the Directors of the company/ Promoter companies/ has/ will have any adverse impact on the financial performance of the company.

103

XVI. GOVERNMENT APPROVALS

Pursuant to the Scheme, all the permissions, approvals, licenses etc. granted by the Government and Government agencies in connection with or relating to the Power Transmission Business have been transferred to and vested in and/or deemed to be transferred to and vested in the Company.

104

XVII. REGULATORY AND STATUTORY DISCLOSURES

Authority for Listing The Honourable High Court of Judicature at Bombay, vide its Order dated 27 ber 2005 has approved the Scheme of Arrangement between the Company and KEC Infrastructures Limited (formerly KEC International Limited) and KEC Holdings Limited and Bespoke Finvest Limited and Their Respective Shareholders which was filed with the Registrar of Companies, Maharashtra, Mumbai on 26 rdingly the Scheme became effective from the appointed date i.e. 31 Transmission Business of KEC Infrastructures Limited (formerly KEC International Limited) has been transferred to and vested with the Company w.e.f. 31st March 2005 (i.e. the Appointed Date under the Scheme) under the provisions of Sections 391 to 394 of the Companies Act, 1956. In accordance with the said Scheme, the Equity Shares of the Company, subject to applicable regulations, are to be listed and admitted to trading on BSE and NSE. Such listing and admission for trading is not automatic and will be subject to fulfillment by the Company of listing criteria of NSE and BSE for such issues and also subject to such other terms and conditions as may be prescribed by NSE and BSE at the time of the application by the Company seeking listing.

Eligibility Criterion

th Septem

th December 2005 and accost March 2005 whereby the Power

The aforesaid Order of the Honorable High Court of Mumbai was filed with the Registrar of Companies, Maharashtra, Mumbai.

There being no Initial Public Offering or Rights Issue, the eligibility criteria in terms of Clause 2.2.1 of SEBI (DIP) Guidelines, 2000 does not become applicable. SEBI has relaxed the applicability of provisions of Regulation 19(2)(b) of Securities Contract (Regulations) Rules, 1957. The Company has submitted this Information Memorandum, containing information about itself, making disclosures in line with the disclosure requirement for public issues, as applicable, to BSE and NSE for making the said Information Memorandum available to public through their websites viz. www.bseindia.com and www.nseindia.com. The Company has made the said Information Memorandum available on its website viz. www.kecrpg.com. The Company will publish an advertisement in the newspapers containing the details in line with the details required as per clause 8.3.5.4 of SEBI (DIP) Guidelines, 2000. The advertisement will draw a specific reference to the availability of aforesaid Information Memorandum on the Company’s website. Prohibition by SEBI The Company and its directors have not been prohibited from accessing the capital markets under any order or direction passed by SEBI.

105

Caution The Company accepts no responsibility for statements made otherwise than in the Information Memorandum or in the advertisements to be published in terms of Clause 8.3.5.4 of SEBI (DIP) Guidelines, 2000 or any other material issued by or at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his or her own risk. All information shall be made available by the Company to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner.

Disclaimer Clause of BSE

A copy of this Information Memorandum has been submitted to BSE. BSE vide its letter dated 16th June 2005 has approved the Scheme of Arrangement under clause 24 (f) of the Listing Agreement and by virtue of that approval BSE’s name in this Information Memorandum as one of the Stock Exchanges on which the Company’s securities are proposed to be listed is appearing. BSE does not in any manner:

o Warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; or o warrant that this Company’s securities will be listed or will be continue to be listed

on the BSE; or o 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 to mean that this Information Memorandum has been cleared or approved by BSE. Every person who acquire any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against BSE 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

A copy of the Information Memorandum has been submitted to NSE. NSE has vide its letter dated 10th August 2005, approved the Scheme of Arrangement under clause 24(f) of the Listing Arrangement and by virtue of that approval NSE’s name in this Information Memorandum as one of the stock exchanges on which this Company’s securities are proposed to be listed is appearing. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed to mean that this Information Memorandum 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 Information Memorandum; nor does it warrant that this Company’s securities will be listed or will continue to be listed on the NSE; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company. Every person who acquires any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the NSE whatsoever by reason of any loss which may be suffered by such

106

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. Listing Applications have been made to BSE and NSE for permission to deal in and for an official quotation of the Equity Shares of the Company. The Company has already taken steps for the completion of necessary formalities for listing and commencement of trading at the Stock Exchanges mentioned above. Demat Credit

Expert Opinions

The Company has executed Agreements with NSDL and CDSL for admitting its securities in demat form. The ISIN No: INE389H01014 was allotted to the Company’s equity shares. On 23rd February 2006 the Company made allotment of the equity shares to KEC Infrastructures Limited (formerly KEC International Limited) who shall distribute the same in demat form to their shareholders who are holding shares of KEC Infrastructures Limited (formerly KEC International Limited) in demat form and in physical form to their shareholders holding shares in physical form, as on the Record Date i.e. 15th February 2006.

Save as stated elsewhere in this Information Memorandum, we have not obtained any expert opinions. Previous rights and public issues The Company has not made any public or rights issue since incorporation. Commission and brokerage on previous issues Since the Company has not issued shares to the public in the past, no sum has been paid or has become payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Share since its inception. Companies under the Same Management There are no companies under the same management within the meaning of erstwhile Section 370(1B) of the Companies Act, 1956.

Capital Issues by Group Companies: Particulars with regards to capital issues made by listed group companies during the last 3 years are as follows: 1. CESC Limited

107

The company had made a Rights issue in the year 2004. The issue consists of 82,65,203 equity shares of Rs.10/- each at a price of Rs.60/- per share aggregating to Rs.4959.12 Lacs. The issue was opened on 29th September 2004 and closed on 29th October 2004. The Company has completed dispatch of all share certificates in respect of said issue on 22th November 2004. The funds have been deployed on working capital requirements as per the said letter of offer. The company has paid 25% dividend on shares issued through the said issue.

The company has issued 79,30,685 Global Depository Receipts (GDR) representing 79,30,685 equity shares, at par value of Rs.10/- each at US$5.0437 per GDR vide Offering Memorandum dated 27th September 2005. The company has also issued convertible warrants to Indian promoters at a price of Rs. 216.68 per share on 13th September 2005 on preferential basis. 2. Saregama India Limited

The company had made a Rights issue in the year 2005. The issue consists of 53,38,628 equity shares of Rs.10/- each at a price of Rs.45/- per share aggregating to Rs.2402.00 Lacs. The issue was opened on 24th March 2005 & closed on 22nd April 2005. The company has completed dispatch of all share certificates in respect of said issue on 12th May 2005. The funds have been deployed on working capital requirements as per the said letter of offer. The company has not paid any dividend on shares issued through the said issue.

3. CEAT Limited

The company had made a Rights issue in the year 2005. The issue consists of 1,05,36,684 equity shares of Rs.10/- each at a price of Rs.50/- per share aggregating to Rs.5268.34 Lacs. The Issue was opened on 29th December 2005 & closed on 27th January 2006. The object of the issue is to meet long term working capital requirements as per the said letter of offer. The company has not paid any dividend on shares issued through the said issue.

Promise vis-à-vis performance of the group companies: Particulars with regards to “promise vis-à-vis performance” mentioned in the Offer documents by the group companies are as follows:

1. CESC Limited The company had made a Rights issue of 82,65,203 equity shares of Rs.10/- each at a price of Rs.60/- per share. The issue was opened on 29th September 2004 & closed on 29th October 2004. The requirement of funds in terms of the letter of offer dated 13th September 2004 is Rs. 4959.12 Lacs. The funds have been deployed on working capital requirements as per the said letter of offer. The said Letter of Offer did not contain the promised future performance of the company.

2. CEAT Limited

The company had made a Rights issue in the year 2005. The issue consists of 1,05,36,684 equity shares of Rs.10/- each at a price of Rs.50/- per share aggregating to Rs.5268.34 Lacs. The issue was opened on 29th December 2005 & closed on 27th January 2006. The object of the issue is to meet long term working capital requirements as per the said letter of offer.

108

3. Zensar Technologies Limited

1994-95

Zensar Technologies Limited (“ZTL”) came out with a rights offer of 50,35,505 equity shares of Rs. 10 each for cash at a premium of Rs. 6 per share aggregating Rs. 805.68 Lacs. The issue opened on 16th November 1993 and closed on 15th December 1993. The object of the issue was to raise funds for normal capital expenditure and for augmenting long tem resources for working capital. Thus, the objects of the issue were not to finance any project. ZTL has confirmed that the funds were utilised for the objects as stated above.

The promise-v/s-performance (Rs. in Lacs) in respect of the rights issue was as under: (Rs. in Lacs)

1993-94 1995-96 Proj Actual Proj Actual Proj Actual Revenue 13,508 14,048 18,222 16,016 21,574 13,154 PBT 155 102 420 (318) 600 (2,288) PAT 155 102 368 (318) 546 (2,288)

4. Saregama India Limited

The company had made a Rights issue of 53,38,628 equity shares of Rs.10/- each at a price of Rs.45/- per share. The Issue was opened on 24th March 2005 & closed on 22th April 2005. There has been no change in the capital structure of the company since date of this issue. The requirement of funds in term of the letter of offer dated 14th March 2005 is Rs.2402.00 Lacs. The funds have been deployed on working capital requirements as per the said letter of offer. The offering Letter of Offer did not contain the promised future performance of the company. 5. Harrisons Malayalam Limited

Harrisons Malayalam Limited (HML) came out with a rights offer of 92,30,000 equity shares of Rs.10/- each for cash at a premium of Rs. 55/- per share aggregating Rs. 5999.50 Lacs. The issue opened on 18th October 1992. The object of the issue was to part finance the expenditure to be incurred towards the company’s expansion and diversification projects (Rs. 3136 Lacs), normal capital expenditure (Rs. 529 Lacs) and working capital requirements (Rs. 2335 Lacs). The expansion and diversification projects were scheduled to be completed in the year 1994. There was a delay and cost over-run in completion of the projects. The actual cost which was incurred on the capital expenditure projects by the above time frame was Rs.1744 Lacs with reduction of borrowings level by Rs.1197 Lacs.

(Rs. in Lacs) Promise

Jul 92- Jun 93

Actual Jul92-Jun93

Promise Jul 93-Jun 94

Actual Jul93-Jun94 (9 months)

Promise Jul 94 - Jun 95

Actual Jul 94 - Jun95

Total Income 15386 12418 17481 9195 18678 11998 PBDIT 2732 2383 3202 1723 3501 1786 PBT 1191 1089 1610 1004 1914 735

489 678 604 806 420 PAT 499

109

VIII. RIGHTS OF MEMBERS & MISCELLANEOUS

Rights of Equity Shareholders The Shareholders are entitled to receive dividend, as and when declared and bonus and rights shares, as and when issued. Further, the rights of the above and other holders of shares are subject to the provisions of the Companies Act, 1956 the Memorandum and the Articles of Association of the Company and other laws as applicable from time to time. Ranking of Equity Shares The new equity shares shall rank in all respects pari-passu with existing fully paid up Equity Shares. Face Value The Face Value of Equity Shares of the Company is Rs.10/-. Dividend policy Since Incorporation, the Company has not declared any dividend. The declaration, recommendation and payment of dividend by the Board of Directors and the shareholders, would be in their discretion, which will depend on a number of factors, including but not limited to the Company’s earnings, capital requirements and overall financial condition.

110

XVIII. MAIN PROVISIONS OF ARTICLES OF ASSOCIATION

The main provisions of Articles of Association of the Company are as follows: SHARE CERTIFICATES

22. (a) Every member or allottee of shares shall be entitled, without payment, to receive one or more certificates in marketable lots for the shares of each class or denomination registered in his name, or if the Directors so approve (upon paying such fee as the Directors may, from time to time determine), to several certificates, each for one or more of such shares; specifying the name of the person in whose favour it is issued, number and distinctive numbers of the shares to which it relates and the amount paid thereon and shall be in such form as the directors may prescribe or approve, provided, however, no share certificate(s) shall be issued for shares held in a Depository. Such certificate shall be issued only in pursuance of a resolution passed by the Board and on surrender to the Company of its letter of allotment or its fractional coupons of requisite value, save in case of issue against letters of advice or acceptance or of renunciation or in case of issue of bonus shares. Every such certificate shall be issued under the seal of the Company which shall be affixed in the presence of two Directors or persons acting on behalf of the Directors under a duly registered power of attorney and the Secretary or some other person appointed by the Board for the purpose, and two Directors or their attorneys and the Secretary or other person shall sign the share certificate provided that if the composition of the Board permits of it, at least one of the aforesaid two Directors shall be a person other than a Managing or a whole time Director. Particulars of every share certificate issued shall be entered in the Register of Members against the name of the person to whom it has been issued, indicating the date of the issue and the amount paid thereon.

(b)The Company shall complete and have ready for delivery such certificates within three months from the date of allotment, unless condition of issue thereof otherwise provide, or within one month of receipt of application of registration of transfer, transmission, sub-division, consolidation or renewal of any of its shares, as the case may be.

(c)Any two or more joint allottees of share(s) shall, for the purpose of this Article, be treated as a single member and the Company shall not be borne to issue more than one certificate, and the certificate of share(s), which may be the subject of joint ownership may be delivered to anyone of such joint owners on behalf of all of them which shall be sufficient delivery to all such holders. For any further certificate the Board shall be entitled, but shall not be bound, to prescribe a charge not exceeding Rupees One Hundred. The Company shall comply with the provisions of Section 113 of the Act. (d)A Director may sign a share certificate by affixing his signature thereon by means of any machine, equipment or other mechanical means, such as engraving in metal or lithography; but not by means of a rubber stamp provided that the Director shall be responsible for the safe custody of such machine, equipment or other material used for the purpose.

111

Renewal of Shares Certificate.

23. (a) No certificate of any share or shares shall be issued either in exchange for those which are sub-divided or consolidated or in replacement of those which are defaced, torn, old, decrepit, worn out, or where the cages on the reverse for recording transfers have been fully utilised, unless the certificate in lieu of which it is issued is surrendered to the Company for cancellation.

(b)When a new share certificate has been issued in pursuance of clause (a) of this Article, it shall state on the face of it and against the stub or counterfoil to the effect that it is “issued in lieu of share certificate No.... sub-divided/replaced/ or consolidation of shares.” (c)If a share certificate is lost or destroyed, a new certificate in lieu thereof shall be issued to the party entitled to such lost or destroyed share certificate only with the prior consent of the Board and on such terms, if any, as to evidence and indemnity and on payment of out-of-pocket expenses incurred by the Company in investigating the evidence and such fees, as the Board thinks fit. (d)When a new share certificate has been issued in pursuance of clause (c) of this Article, it shall state on the face of it and against the stub or counter foil to the effect that it is “duplicate issued in lieu of share certificate No...”. (e)Every Certificate under this Article shall be issued without payment of fees if the Directors so decide, or on payment of such fees (not exceeding Rs. 2/- for each certificate) as the Directors shall prescribe. Provided that no fee shall be charged for issue of new certificates in replacement of those which are old, defaced or worn out or where there is no further space on the back thereof for endorsement of transfer. (f)Where a new share certificate has been issued in pursuance of clause (a) or clause (c) of this Article, particulars of every such share certificate shall be entered in a Register of Renewed and duplicate certificate indicating against the names of the persons to whom the certificate is issued, the number and date of issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the Register of Members by suitable cross reference in “Remarks” column. (g)All blank forms to be issued for issue of share certificate shall be printed and the printing shall be done only on the authority of a resolution of the Board. The blank forms shall be consecutively machine-numbered and the forms and the blocks, engravings, facsimiles and hues relating to the printing of such forms shall be kept in the custody of the Secretary or of such other persons as the Board may appoint for the purpose; and the Secretary or the other person aforesaid shall be responsible for rendering an account of these forms to the Board. (h)The Managing Director of the Company for the time being or if the Company has no Managing Director, every Director of the Company shall be responsible for the maintenance, preservation and safe custody of all books, and documents relating to the issue of share certificate except the blank forms of share certificates referred to in sub-Article (g).

112

(i)All books referred to in sub-Article (h) shall be preserved in good order permanently. (j)Provide that notwithstanding what is stated above the Directors shall comply with such Rules or Regulation or requirements of any Stock Exchange or the Rules made under the Act or the rules made under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules applicable in this behalf.

The first named of joint-holders deemed sole holder.

(k)The provisions of this Article shall mutatis mutandis apply to debentures of the Company

Power of Board of Directors to Regulate sub-division or consolidation.

24. Notwithstanding anything contained in Article 23, the Board of Directors or any committee thereof shall be entitled to refuse any application for sub-division or consolidation of shares into denominations of less than ten except when such sub-division or consolidation is required to be made to comply with a statutory order or an order or a decree of a Competent Court of Law or a request from a member to convert his holding of odd lots of shares into transferable/marketable lots, subject, however, to necessary verification by the Company.

25. If any share stands in the names of two or more persons, the person first named in the

Register of Members shall, as regards receipts of dividends or bonus or service of notices and all or any other matter connected with the Company, except voting at meetings, and the transfer of the shares, be deemed the sole holder thereof but the other joint-holders of a share shall be severally as well as jointly liable for the payment of all installments and calls due in respect of share and for all incidents thereof according to the Company's regulations.

Company not bound to recognise any interest in share other than that of registered holder.

26. Except as ordered by a Court of competent jurisdiction or as by law required, the Company shall be entitled to treat the person whose name appears on the Register of Members as the holder of any share or whose name appears as the beneficial owner of shares in the records of the Depository, as the absolute owner thereof and accordingly shall not be bound to recognise any benami trust, equity, equitable, contingent or other claim to or interest in such share on the part of any other person whether or not it shall have express or implied notice thereof. The Board shall be entitled at their sole discretion to register any shares in the joint names of any two or more persons or the survivor or survivors of them.

Provision for Employees' Stock Option

27. (a) Subject to the provisions of section 81(1A) and other applicable provisions, if any, of the Companies Act, 1956, and subject to the Articles of Association, the Board may, from time to time, create, offer and issue to or for the benefit of the Company's employees including the Executive Chairman, Vice-Chairman, the Managing Directors and the Whole time Directors such number of equity shares of the Company, in one or more trenches on such terms as may be determined by the Board prior to the issue and offer, in

113

consultation with the authorities concerned and in accordance with such guidelines or other provisions of law as may be prevalent at that time but ranking pari passu with the existing equity shares of the Company.

(b) The issue price of such shares shall be determined by the Board in accordance with the laws prevalent at the time of the issue.

(c) In the alternative to equity shares, mentioned hereinabove, the Board may also issue bonds, equity warrants or other securities as may be permitted in law, from time to time. All such issues as above are to be made in pursuance of Employees' Stock Option (ESOP) scheme to be drawn up and approved by the Board.

FORFEITURE OF SHARES Notice to be given to members, if money payable on share not paid.

43. If any member fails to pay any call or instalment of a call on or before the day appointed for the payment of the same or any such extension thereof as aforesaid, the Board may at any time thereafter, during such time as the call or instalment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued by the Company by reason of such non-payment.

Form of notice.

44. The notice shall name a day (not being less than fourteen days from the date of the notice) and a place or places on and at which such call or instalment and such interest thereon at such rate not exceeding 9 per cent per annum as the Directors shall determine from the day on which such call or instalment ought to have been paid and expenses as aforesaid are to be paid. The notice shall also state that, in the event of the non-payment before the time and at the place appointed the shares in respect of which the call was made or instalment is payable, will be liable to be forfeited.

In default of payment, shares to be forfeited.

45. If the requirements of any such notice as aforesaid shall not be complied with, every or any share in respect of which such notice has been given, may at time thereafter before payment of all calls or instalments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared or any other moneys payable in respect of the forfeited share and not actually paid before the forfeiture.

Notice of forfeiture to a member.

46. When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it stood immediately prior to the forfeiture, and an entry of the forfeiture, with the date thereof shall forthwith be made in the Register of Members but no

114

forfeiture shall be in any manner invalidated by any omission or neglect to make any such entry as aforesaid.

Forfeited share to be property of the Company and may be sold, etc.

47. Any share so forfeited shall be deemed to be the property of the Company, and may be sold, reallotted, or otherwise disposed off, either to the original holder thereof or to any other person, upon such terms and in such manner as the Board shall think fit.

Member still liable to pay money owing at the time of forfeiture and interest.

48. Any member whose shares have been forfeited shall notwithstanding the forfeiture, be liable to pay and shall forthwith pay to the Company on demand all calls, instalments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture, together with interest thereon from the time of the forfeiture until payment, at such rate not exceeding nine percent per annum as the Board may determine and the Board may enforce the payment thereof, if it thinks fit.

Effect of forfeiture.

49. The forfeiture of a share shall involve extinction at the time of the forfeiture, of all interest in and all claims and demands against the Company, in respect of the share and all other rights incidental to the share, except only such of those rights as by these articles are expressly saved.

Evidence of forfeiture.

50. A declaration in writing that the declarant is a Director or Secretary of the Company and that a share in the Company has been duly forfeited in accordance with these Articles on the date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share.

Validity of sale under Articles 41 and 47 .

51. Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers hereinbefore given, the Board may appoint some person to execute an instrument of transfer of the shares sold and cause the purchaser's name to be entered in the Register in respect of the shares sold, and the purchaser shall not to be bound to see the regularity of the proceedings, or to the application of the purchase money and after his name has been entered in the Register in respect of such shares, the validity of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sales shall be in damages only and against the Company exclusively.

Cancellation of share certificates in respect of forfeited shares.

52. Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate of shares originally issued in respect of the relative share shall

115

(unless the same shall on demand by the Company have been previously surrendered to it by the defaulting member) stand cancelled and become null and void and of no effect, and the Directors shall be entitled to issue a duplicate certificate or certificates in respect of the said shares to the person or persons entitled thereto.

Power to annul forfeiture

53. The Board may at any time before any share so forfeited shall have been sold, re-allotted or otherwise disposed off, annul the forfeiture thereof upon such conditions as it thinks fit.

TRANSFER AND TRANSMISSION OF SECURITIES Transfer or transmission of securities

54. a) All provision of Section 108 of the Companies Act, 1956 and statutory modification thereof for the time being shall be duly complied with in respect of all transfer of shares/debentures and registration thereof.

b) The provisions of Section 111 of the Companies Act, 1956, regarding power to refuse Registration of Transfer and appeal against such refusal should be adhered to. Provided that registration of transfer 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 except when the Company has a lien on the shares. Transfer of shares/debentures in whatever lot shall not be refused.

c) No fee shall be charged for registration of transmission, Probate, Sucession Certicate and Letters of administration, Certificate of Death or Marriage, Power of Attorney or similar other document.

d) In the case of transfer or transmission of shares or other marketable securities where the Company has not issued any certificates and where such shares or securities are being held in an electronic and fungible form in a Depository, the provisions of the Depositories Act, 1996 shall apply.

Register of Transfer

55. The Company shall keep a `Register of Transfer' and therein shall be fairly and distinctly entered particulars of every transfer or transmission of any share held in material form.

Form of transfer.

56. Shares in the Company may be transferred by an instrument in writing in the usual common form or in such other form as shall from time to time be approved by the Directors, subject to provisions of Section 108 of the Act, and shall be duly stamped and delivered to Company within the prescribed period.

116

Transfer form to be completed to and presented to the Company.

57. The Instrument of Transfer duly stamped and executed by the Transferor and the Transferee shall be delivered to the Company in accordance with the provisions of the Act. The Instrument of Transfer shall be accompanied by such evidence as the Board may require to prove the title of Transferor and his right to transfer the shares and every registered instrument of transfer shall remain in custody of the Company until destroyed by order of the Board. The transferor of shares shall be deemed to be the holder of such shares until the name of the Transferee shall have been entered in the Register of Members in respect thereof. Before the registration of a certificate or certificates the shares must have been delivered to the Company.

Transfer Books and Register of Members when closed.

58. The Board shall have power on giving not less than seven days previous notice by advertisement in some newspaper circulating in the district in which the office of the Company is situated to close the Transfer Books, the Register of Members or Register of Debenture-holders at such time or times and for such period or periods not exceeding thirty days at a time and not exceeding in the aggregate forty-five days in each year.

Notice of application - to the transferee.

(ii) Notwithstanding anything contained in these Articles, the Company shall be entitled to dematerialise its existing securities, dematerialise its securities held in the Depository and/or offer its fresh securities in the dematerialised form pursuant to the Depositories Act and the rules framed thereunder, if any.

59. Where, in the case of partly paid shares, an application for registration is made by the transferor, the Company shall give notice of the application to the transferee in accordance with the provisions of Section 110 of the Act.

Dematerialisation of Securities

60. Company to recognise interest in dematerialised securities under Depositories Act.

(i) Either the Company or the investor may exercise an option to issue, deal in, hold the securities (including shares) with a Depository in electronic form and the certificates in respect thereof shall be dematerialised, in which event the rights and obligations of the parties concerned and matters connected therewith or incidental thereof, shall be governed by the provisions of the Depositories Act, as amended from time to time or any statutory modification thereto or re-enactment thereof.

(iii) Every person subscribing to or holding securities of the Company shall have the

option to receive security certificate or to hold the security with a Depository. The Company shall intimate such Depository the details of allotment of the security, and on receipt of the Information, the Depository shall enter in its record the name of the allottee as the Beneficial Owner of the security.

117

(iv)All securities held by a Depository shall be dematerialised and be in fungible form.

Nothing contained in Sections 153, 153A, 187C and 372A of the Act shall apply to a Depository in respect of the securities held by it on behalf of the Beneficial Owners.

(v) (a) Notwithstanding anything to the contrary contained in the Act or the Articles, a

Depository shall be deemed to be the registered owner for the purpose of effecting transfer of ownership of security on behalf of the Beneficial Owner.

(b)Save as otherwise provided in (a) above, the Depository as the registered owner

of the securities shall not have any voting rights or any other rights in respect of the securities held by it.

(c) Every person holding securities of the Company and whose name is entered as

Beneficial Owner in the records of the Depository shall be deemed to be the member of the Company. The Beneficial Owner of securities shall be entitled to all the rights and benefits subject to all the liabilities in respect of his securities which are held by a Depository.

(vi) Except as ordered by a Court of competent jurisdiction or as required by law, the Company shall be entitled to treat the person whose name appears on the register of members as holder(s) of any share or where the name appears as Beneficial Owner of shares in the records of the Depository as the absolute owner thereof and accordingly shall not be bound to recognise any benami trust or equitable, contingent, future or partial interest in any share, or (except only as is by these Articles, otherwise expressly provided) any right in respect of a share other than an absolute right thereto in accordance with these Articles, on the part of any other person whether or not it has express or implied notice thereof, but the Board shall be at their sole discretion to register any share in the joint names of any two or more persons or the survivor or survivors of them.

(vii)Every Depository shall furnish to the Company about the transfer of securities in the name of the Beneficial Owner at such intervals and in such manner as may be specified by the bye-laws and the Company in that behalf.

(viii)Upon receipt of certificate of securities of surrender by a person who has entered into an agreement with the Depository through a Participant, the Company shall cancel such certificate and substitute in its records the name of Depository as the registered owner in respect of the said securities and shall also inform the Depository accordingly.

(ix)If a Beneficial Owner seeks to opt out of a Depository in respect of any security, the

Beneficial Owner shall inform the Depository accordingly. The Depository shall on receipt of information as above make appropriate entries in its records and shall inform the Company. The Company shall, within thirty (30) days of the receipt of intimation from the Depository and on fulfilment of such conditions and on payment of such fees as may be specified by the regulations, issue the certificate of securities to the Beneficial Owner or the transferee as the case may be.

118

(x)Notwithstanding anything in the Act or these Articles to the contrary, if the securities

are held in a Depository, the records of the beneficial ownership of securities held in a Depository may be served by such Depository on the Company by means of electronic mode or by delivery of floppies or discs.

(xii) Notwithstanding anything in the Act or these Articles, where securities are dealt with by a Depository, the Company shall intimate the details thereof to the Depository immediately on allotment of such securities.

61. (a) In accordance with and subject to the provisions of Section 109A of the Act, every holder of shares in or holder of debentures of, a Company may, at any time nominate, in the prescribed manner, a person to whom his shares in or debentures of the Company shall vest in the event of his death.

62. Notwithstanding anything contained in these article any person who became a nominee by virtue of the provision of Article 61 upon the production of such evidence as may be required by the Board and subject as hereinafter provided may elect either.

(xi)Except as specifically provided in these Articles, the provisions relating to joint

holders of shares, calls, lien on shares, forfeiture of shares and transfer and transmission of shares shall be applicable to shares held in Depository so far as they apply to shares held in physical form subject to the provisions of the Depository Act.

Nomination

(b)Where the shares in or debentures of, the Company are held by more than one person jointly, the joint holders may together nominate, in the prescribed manner, a person to whom all the rights in the shares or debentures of the Company shall vest in the event of death of all the joint holders.

(c) Notwithstanding anything contained in any other law for the time being in force or in these articles or in any disposition, whether testamentary or otherwise, in respect of such share(s) in and/or debenture(s) of the Company, where a nomination made in the manner prescribed under the Act purports to confer on any person the right to vest the share[s] in or debenture[s] of the Company, the nominee shall, on the death of the shareholder and/or debenture holder concerned or as the case may be, on the death of all the joint holders become entitled to all the rights in relation to such shares in or debentures of the Company to the exclusion of all other persons, unless the nomination is varied or cancelled in the manner prescribed under the Act.

(d)Where the nominee is a minor, the holder of the share(s) in and/or debenture(s) of the Company, can make a nomination in the manner prescribed under the Act to appoint any person to become entitled to the share(s) in and/or debentures(s) of the Company in the event of his death during the minority.

119

a. To be registered himself as holder of the share(s) and/or debenture(s) as the case may be or

b. To make such transfer of the share(s) and/ or debenture(s) as the case may be as the deceased shareholder and debenture holder as the case may be could have made.

If the person being a nominee so becoming entitled elects to be registered as holder of the share(s) and/or debenture(s) himself he shall deliver or send to the Company, notice in writing duly signed by him stating that he so elects and such notice shall be accompanied with the death certificate of the deceased shareholder and/or debenture holder , as the case may be. All the limitation, restriction and provision of the Act relating to the right to transfer and the registration of transfer -of share(s) and/or debenture (s) shall be applicable to any such notice or transfer as aforesaid as if the death of the share holder/debenture holder had not occurred and the notice or transfer were a transfer signed by that shareholder and/or debenture holder as the case may be.

63. A person being nominee becoming entitled to the share(s) and/or debenture(s) by reason

of the death of the shareholder shall be entitled to the same dividend and other advantages to which he would be entitled if he were a registered member in respect of the share(s) and/or debenture(s), except that he shall not, before being registered a member in respect of the share(s) or debenture(s) be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company.

Provided that the Board may, at any time give notice requiring any such person to elect either to be registered himself or to transfer the share(s) and/ or debenture(s) and if the notice is not complied with within ninety days, the Board may hereinafter withhold payment of all dividend, bonus or other moneys payable in respect of the share(s) and/or debenture(s) until the requirement of the notice have been complied with.

No transfer to infant, etc.

64. No share(s) and/or debenture(s) shall in any circumstances be transferred to any infant, insolvent or person of unsound mind.

Registration of persons entitled to share otherwise than by transfer.

65. Subject to the provisions of the Act and Articles 61 any person becoming entitled to shares in consequences of the death, lunacy, bankruptcy or insolvency of any member or by any lawful means other than by transfer in accordance with these articles may with the consent of the Board (which it shall not be under any obligation to give), upon producing such evidence that he sustains the character in respect of which he proposes to act under this Article or of such title as the Board thinks sufficient, either be registered himself as the holder of the shares or elect to have some person nominated by him and approved by the Board registered as such holder provided nevertheless, that if such person shall elect to have his nominee registered, he shall testify the election by executing in favour of his

120

nominee an instrument of transfer in accordance with the provisions herein contained and until he does so, he shall not be freed from any liability in respect of the shares.

Persons entitled may receive dividend.

66. A person entitled to a share by transmission shall, subject to the right of the Directors to retain such dividends or money as hereinafter provided, be entitled to receive and may be given a discharge for, any dividends or other moneys payable in respect of the share.

Fee on transfer or transmission.

67. There shall be paid to the Company, in respect of the transfer or transmission of any number

of shares to the same party, such fee, if any, as the Directors may require. Company not liable for disregard of a notice prohibiting registration of a transfer.

68.

The Company shall incur no liability or responsibility whatsoever in consequence of its registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown on appearing in Register of Members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the said shares, notwithstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer, and may have entered such notice or referred thereto, in any book of the Company and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right, title or interest, or be under any liability whatsoever for refusing or neglecting so to do, though it may have been entered or referred to in some book of the Company but the Company shall nevertheless be at liberty to regard and attend to any such notice and give effect thereto if the Board shall so think fit.

Chairman of General Meeting.

91. The Chairman of the Board shall be entitled to take the chair at every General Meeting whether Annual or Extra Ordinary. If the Chairman is unable or unwilling to take the chair or if he is not present within fifteen minutes of the time appointed for holding such meeting then the Vice Chairman shall be entitled to take the chair at such meeting. If there be no such Chairman and/or Vice Chairman or if he/they are unable/unwilling to take the chair, or if he/they are not present within fifteen minutes of the time appointed for holding such meeting, then the Directors present shall elect another Director as Chairman, and if no Director is present, or if all the Directors present decline to take the chair, then the members present shall elect one of their number to be the Chairman.

DIVIDENDS Division profits.

171.The profits of the Company, subject to any special rights relating thereto created or authorised to be created by these Articles and subject to the provisions of these Articles, shall be divisible among the members, in proportion to the amount of capital paid-up or

121

credited as paid-up on the shares held by them respectively at the date of declaration of the dividend, in respect whereof, the dividend is paid.

The Company in General Meeting may declare a dividend.

172.The Company in General Meeting may declare dividends to be paid to members according to their respective rights, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

Dividends only to be paid out of profits.

173. No dividends shall be declared or paid otherwise than out of profits of the financial year

arrived at after providing for depreciation in accordance with the provisions of Section 205 of the Act or out of the profits of the Company for any previous financial year or years arrived at after providing for depreciation in accordance with these provisions and remaining undistributed or out of both provided that: (a) If the Company has not provided for depreciation for any previous financial year or years it shall, before declaring or paying a dividend for any financial year, provide for such depreciation out of the profits of the financial year or out of the profits of any other previous financial year or years; (b) if the Company has incurred any loss in any previous financial year or years the amount of the loss or an amount which is equal to the amount provided for depreciation for that year or those years whichever is less, shall be set off against the profits of the Company for the year for which the dividend is proposed to be declared or paid or against the profits of the Company for any previous financial year or years arrived at in both cases after providing for depreciation in accordance with the provisions of sub-section (2) of Section 205 of the Act or against both.

Interim dividend.

174.The Board may from time to time, pay to the Members such interim dividends as in their judgement, the position of the Company justifies.

Capital paid up in advance to carry interest but not to earn dividend.

175.Where Capital is paid in advance of calls such capital may carry interest but shall not in respect thereof confer a right to dividend or participate in profits.

Dividends in proportion to amount paid-up.

176.All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but if any share is issued on terms providing that it shall rank for dividend as from a particular date, such share shall rank for dividend accordingly.

122

Retention of dividends until completion of transfer under Article 63.

177.The Board may retain the dividends payable upon shares in respect of which any person

is, under Article 63 entitled to become a Member or which any person under that Article is entitled to transfer, until such person shall become a member, in respect of such shares or shall duly transfer the same.

Dividend etc. to joint-holders.

178.Any one of several persons who are registered as the joint-holders of any share may give effectual receipts for all dividends or bonus and payments on account of dividends or bonus or other moneys payable in respect of such shares.

No member to receive dividend whilst indebted to the Company, and Company's right of reimbursement thereat.

179.No member shall be entitled to receive payment of any interest or dividend in respect of

his share or shares whilst any moneys may be due or owing from him to the Company in respect of such share or shares or otherwise howsoever, either alone or jointly with any other person or persons; and the Board may deduct from the interest or dividend payable to any member all sums of moneys so due from him to the Company.

Right to Dividend, rights shares and bonus shares to be held in abeyance pending registration of transfer of shares.

180. Where any instrument of transfer of shares has been delivered to the Company for

registration and the transfer of such shares has not been registered by the Company, it shall. (a) transfer the dividend in relation to such shares to the special account referred to in Section 205A of the Act, unless the Company is authorised by the registered holder of such shares in writing to pay such dividend to the transferee specified in such instrument of transfer; and (b) keep in abeyance in relation to such shares any offer of rights shares under clause (a) of subsection (1) of Section 81 and any issue of fully paid up bonus shares in pursuance of sub-section (3) of Section 205 of the Act.

Dividends how remitted.

181.Unless otherwise directed any dividend may be paid by cheque or warrant or by a payslip or receipt having the force of a cheque or warrant sent through the post to the registered address of the member or person entitled or in case of joint-holders to that one of them first named in Register in respect of the joint-holdings. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. The Company shall not be liable or responsible for any cheque or warrant or payslip or receipt lost in transmission, or for any dividend lost to the member or person entitled thereto by the

123

forged endorsement of any cheque or warrant or the forged signature of any payslip or receipt or the fraudulent recovery of the dividend by any other means. If directed, by a person authorised to receive dividend as aforesaid, the dividend may be remitted by way of transfer through electronic clearing system to the designated bank Account Number, as provided to the Company by the person authorised to receive the dividend as above and the date of transfer through eletronic clearing system, shall be the date of payment of dividend and shall be considered an effective discharge of Company’s liability to pay dividend.

Unclaimed dividend

182.No unclaimed dividend shall be forfeited and the same shall be dealt with in accordance with the provisions of Section 205A, 205B, 205C and 206A or other provisions, if any, of the Act as may be applicable, from time to time.

No interest on dividends.

183.No unpaid dividend shall bear interest as against the Company.

Dividend and call together.

184.Any General Meeting declaring a dividend may on the recommendation of the Directors

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 calls.

185.The Board may before recommending any dividend, set aside out of the profits of the Company such sums as they may think proper as a Reserve or reserves which shall, at the discretion of the Board, be applicable, for any purpose to which the profits of the Company may be properly applied, including provision for meeting contingencies or for equalising dividends; and pending such application, may , at the like discretion, either be employed in the business of the Company or be invested in such investment (other than shares of the Company) as the Board may, from time to time, think fit. The Board may also carry forward any profits which it may think prudent not to utilise for dividend, without setting them aside as a reserve.

Capitalisation.

186.(a) The Company in General Meeting may by a special resolution resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of the Reserve Account or Fund, or any Capital Redemption Reserve Account, or in the hands of the Company and available for dividend (or representing premium received on the issue of shares and standing to the credit of the Shares Premium Account) be capitalised and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportions on the footing that they become entitled thereto as capital

124

and that all or any part of such capitalised value or sum or fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide, any unissued shares of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares and that such distribution or payment shall be accepted by such shareholders in full satisfaction of their interest in the said capitalised sum, provided that a Share Premium account and a Capital Redemption Reserve Account may, for the purpose of this Article, only be applied in the paying of any unissued shares to be issued to members of the Company as fully paid bonus shares. (b) A General Meeting may resolve that any surplus moneys arising from the realisation of any capital assets of the Company, or any investments representing the same, or any other undistributed profits of the Company not subject to charge may be distributed among the members on the footing that they receive the same as capital. (c) For the purpose of giving effect to any resolution under the preceding paragraphs of this article, the Board may settle any difficulty which may arise in regard to the distribution as it thinks expedient and in particular may issue fractional certificates and may fix the value for distribution of any specific assets, and may determine that such cash payments shall be made to any members upon the footing of the value so fixed or that fraction of less value than Rs. 10/- may be disregarded in order to adjust the rights of all parties and may vest any such cash or the specific assets in trustees upon such trusts for the person entitled to the dividends or capitalised funds as may seem expedient to the Board. Where requisite, a proper contract shall be delivered to the Registrar for registration in accordance with Section 75 of the Act, and the Board may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalised fund, and such appointment shall be effective.

WINDING UP Liquidator may divide assets in specie.

201.The Liquidator on any winding-up (whether voluntary, under supervision or compulsory) may with the sanction of a Special Resolution, but subject to the rights attached to any preference shares capital, divide among the contributors in specie any part of the assets of the Company and may with the like sanction, vest any part of the assets of the Company in trustees upon such trust for the benefit of the contributors as the liquidator, with the like sanction, shall think fit.

125

XIX. DOCUMENTS FOR INSPECTION

Copies of the following documents will be available for inspection at the registered office of the Company on any working day (i.e. Monday to Friday and not being a bank holiday in Mumbai) between 11:00 a.m. and 1:00 p.m. upto seven days from the date of filing of this Information Memorandum with the Stock Exchanges.

1. Memorandum and Articles of Association, as amended till date. 2. Certificate of Incorporation, Certificate of Commencement of Business and Fresh

Certificate of Incorporation issued by the Registrar of Companies, Maharashtra, Mumbai.

3. Copy of the Scheme of Arrangement between the Company and KEC Infrastructures Limited (formerly KEC International Limited) and KEC Holdings Limited and Bespoke Finvest Limited and their respective shareholders.

4. Copy of Order of the Hon’ble High Court of Judicature of Bombay, dated 27th September, 2005 sanctioning the Scheme of Arrangement under Section 394 of the Companies Act, 1956.

5. Letter under Clause 24(f) of Listing Agreement dated 16th June 2005 of BSE approving the Scheme.

6. Letter under Clause 24(f) of Listing Agreement dated 10th August 2005 of NSE approving the Scheme.

7. Tripartite agreement between the Company, Registrar and NSDL dated 14th February 2006.

8. Tripartite agreement between the Company, Registrar and CDSL dated 21st February 2006.

9. SEBI letter CFD/DIL/SC/58121/2006 dated 21st February 2006 granting relaxation from applicability of Rule 19(2)(b) of the Securities Contract Regulation (Rules), 1957.

8. Agreement dated 6th January 2006 executed with the Managing Director.

126

127

XX. DECLARATION

To the best of the knowledge and belief of the Board of Directors of the Company, all statements made in this Information Memorandum are true and correct. Signed on behalf of the Board of Directors For KEC International Limited Ramesh D. Chandak Managing Director Place: Mumbai Date: 3rd March 2006