DRAFT RED HERRING PROSPECTUS Dated April 10, 2008

Please read section 60B of the Companies Act, 1956

The Draft Red Herring Prospectus shall be

updated upon filing with the RoC 100% Book Building Issue

AJANTA MANUFACTURING LIMITED (Our Company was originally incorporated as Ajanta Electronics Private Limited on November 9, 1994 under the Companies Act, 1956. For details of changes in the name and registered office of the Company, please refer to “History and Certain Corporate Matters” on page 87 of this Draft Red Herring Prospectus.)

Registered Office: Ajanta Corporate House, 8-A, National Highway, Morbi, District Rajkot, Gujarat 363 642 Email: aml@oreva.com; Tel: (91 2822) 304 444; Fax: (91 2822) 304 430

Company Secretary and Compliance Officer: Rajendra Patel; Email: ajantaipo@oreva.com; Tel: (91 2822) 304 444

PUBLIC ISSUE OF 10,064,900 EQUITY SHARES OF Rs. 10 EACH OF AJANTA MANUFACTURING LIMITED (“AML” OR THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF Rs. [����] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs. [●]

PER EQUITY SHARE) AGGREGATING Rs. [����] MILLION (THE “ISSUE”). THE ISSUE WOULD CONSTITUTE 19.50% OF THE POST ISSUE

PAID UP CAPITAL OF THE COMPANY. # # The Company is considering a Pre-IPO Placement of Equity Shares with certain investors (“Pre-IPO Placement”). The Pre-IPO placement is at the discretion of

the Company. The Company will complete the issuance of such Equity Shares prior to the filing the Red Herring Prospectus with the RoC. If the Pre-IPO Placement

is completed, the Issue size offered to the public would be reduced to the extent of such Pre-IPO Placement, subject to a minimum Issue size of 10% of the post Issue

paid-up capital being offered to the public.

PRICE BAND: Rs. [����] TO Rs. [����] PER EQUITY SHARE OF FACE VALUE OF RS. 10 EACH

THE FACE VALUE OF THE EQUITY SHARES IS RS. 10 EACH. THE ISSUE PRICE IS [●] TIMES THE FACE VALUE AT THE LOWER END

OF THE PRICE BAND AND [●] TIMES THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND.

In case of revision in the Price Band, the Bidding/Issue Period will be extended for three additional working days after revision of the Price Band subject to the Bidding/Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to National Stock Exchange of India Limited (“NSE”) and Bombay Stock Exchange Limited (“BSE”), by issuing a press release, and also by indicating the change on the websites of the BRLMs and at the terminals of the Syndicate Members. In terms of Rule 19(2)(b) of the Securities Contracts Regulations Rules, 1957, (“SCRR”) this being an issue for less than 25% of the post-Issue capital, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (QIB) Bidders. 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 10% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. If at least 60% of the Issue cannot be allotted to QIBs, then the entire application money shall be refunded forthwith.

RISK IN RELATION TO FIRST ISSUE This being the first issue of Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the shares is Rs. 10 each and the Floor Price is [•] times of the face value and the Cap Price is [•] times of the face value. The Issue Price (as determined by the Company in consultation with the Book Running Lead Managers on the basis of assessment of market demand for the Equity Shares by way of the book building process) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of our Company or regarding the price at which the Equity Shares will be traded after listing.

IPO GRADING This Issue has been graded by [●] as [●] indicating [●]. For details see the section titled “General Information” on page 10 of this Draft Red Herring Prospectus and refer to “Annexures” on page [●] of this Draft Red Herring Prospectus.

GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Draft Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page x of this Draft Red Herring Prospectus.

ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer having made all reasonable inquiries, accepts responsibility for and confirm that this Draft Red Herring Prospectus contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING ARRANGEMENT The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the NSE and BSE. We have received an ‘in-principle’ approval from the NSE and the BSE, for the listing of the Equity Shares pursuant to their letters dated [●] and [●], respectively. For the purposes of the Issue, the Designated Stock Exchange shall be [●].

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE

ENAM SECURITIES PRIVTE LIMITED 801/ 802, Dalamal Towers Nariman Point Mumbai 400 021 Tel: (91 22) 6638 1800 Fax: (91 22) 2284 6824 E-mail: ajantaipo@enam.com Investor Grievance Email: complaints@enam.com Website: www.enam.com Contact Person: Pranav Mahajani SEBI Reg. No. : INM000006856

JM FINANCIAL CONSULTANTS PRIVATE LIMITED 141, Maker Chambers III Nariman Point Mumbai 400 021 Tel: (91 22) 6630 3030 Fax: (91 22) 2202 8224 Email: aml.ipo@jminancial.in Investor Grievance Email: grievance.ibd@jmfinancial.com Website: www.jmfinancial.in Contact Person: Rohit Pareek SEBI Registration No. : INM000010361

INTIME SPECTRUM REGISTRY LIMITED C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West) Mumbai 400 078 Tel: (91 22) 2596 0320/ 1800 22 0320 Fax: (91 22) 2596 0328 Email: aml.ipo@intimespectrum.com Website: www.intimespectrum.com Contact Person: Sachin Achar SEBI Registration No. : INR000003761

BID/ ISSUE PROGRAMME

BID/ISSUE OPENS ON: [●] BID/ISSUE CLOSES ON: [●]

TABLE OF CONTENTS

SECTION I: GENERAL ....................................................................................................................... I

DEFINITIONS AND ABBREVIATIONS ........................................................................................... I CERTAIN CONVENTIONS; USE OF MARKET DATA .............................................................. VIII FORWARD-LOOKING STATEMENTS ..........................................................................................IX

SECTION II: RISK FACTORS.......................................................................................................... X

SECTION III: INTRODUCTION ........................................................................................................1

SUMMARY OF OUR BUSINESS, STRENGTHS AND STRATEGY ..............................................1 SUMMARY FINANCIAL INFORMATION......................................................................................6 THE ISSUE..........................................................................................................................................9 GENERAL INFORMATION............................................................................................................10 CAPITAL STRUCTURE ..................................................................................................................18 OBJECTS OF THE ISSUE ................................................................................................................26 BASIS FOR ISSUE PRICE ...............................................................................................................43 STATEMENT OF TAX BENEFITS .................................................................................................45

SECTION IV: ABOUT THE COMPANY.........................................................................................56

INDUSTRY.......................................................................................................................................56 OUR BUSINESS ...............................................................................................................................65 REGULATIONS AND POLICIES....................................................................................................84 HISTORY AND CERTAIN CORPORATE MATTERS...................................................................87 OUR MANAGEMENT .....................................................................................................................95 OUR PROMOTER ..........................................................................................................................106 OUR PROMOTER GROUP ............................................................................................................108 RELATED PARTY TRANSACTIONS ..........................................................................................119 DIVIDEND POLICY.......................................................................................................................122 FINANCIAL INDEBTEDNESS .....................................................................................................123

SECTION V - FINANCIAL INFORMATION................................................................................125

FINANCIAL STATEMENTS .........................................................................................................125 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS ON A CONSOLIDATED BASIS...................................................162

SECTION VI: LEGAL AND OTHER INFORMATION...............................................................187

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ......................................187 GOVERNMENT APPROVALS .....................................................................................................195 OTHER REGULATORY AND STATUTORY DISCLOSURES...................................................213

SECTION VII: ISSUE RELATED INFORMATION ....................................................................223

TERMS OF THE ISSUE..................................................................................................................223 ISSUE STRUCTURE ......................................................................................................................226 ISSUE PROCEDURE......................................................................................................................229 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES.................................256

SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ....................257

SECTION IX: OTHER INFORMATION .......................................................................................313

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION.........................................313 DECLARATION.............................................................................................................................315

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SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

Term Description

“AML”, “our Company”, the “Company”, the “Issuer”, “We”, “Us”, “Our”

Unless the context otherwise requires, refers to Ajanta Manufacturing Limited, a company incorporated under the Companies Act, 1956 and having its registered office at Ajanta Corporate House, 8-A, National Highway, Morbi, District Rajkot, Gujarat 363 642.

Company Related Terms

Term Description

Ajanta Group means AML and the Promoter Group

Articles/Articles of Association

means the Articles of Association of the Company, as amended from time to time

Auditors means the statutory auditors of the Company; Finava & Associates, Chartered Accountants

Board of Directors/Board means the board of directors of the Company or a committee of the Board of Directors constituted thereof

Directors means the Directors of the Company, unless otherwise specified

Memorandum/ Memorandum of Association/ MoA

means the Memorandum of Association of the Company, as amended from time to time

Promoter Mr. Jaysukhbhai O. Patel

Promoter Group Unless the context otherwise requires, refers to those companies/ entities mentioned in the section titled “Our Promoters Group” on page 108 of this Draft Red Herring Prospectus

Registered Office of the Company

Ajanta Corporate House, 8-A, National Highway, Morbi, District Rajkot, Gujarat 363 642.

Issue Related Terms

Term Description

Allotment/Allot/Allotted Unless the context otherwise requires, means the allotment of Equity Shares pursuant to this Issue to the successful Bidders

Allottee means a successful Bidder to whom the Equity Shares are Allotted

Banker(s) to the Issue [●]

Basis of Allotment means the basis on which Equity Shares will be allotted to the Bidders under the Issue and which is described in “Issue Procedure – Basis of Allotment” on page 247 of this Draft Red Herring Prospectus

Bid means an indication to make an offer during the Bidding Period by a prospective investor to subscribe to the Company’s Equity Shares at a price within the Price Band, including all revisions and modifications thereto

Bid Amount means the highest value of the optional Bids indicated in the Bid cum Application Form and payable by the Bidder on submission of the Bid in the Issue

Bid cum Application Form means the form used by a Bidder to make a bid and which will be considered as application for allotment for the purposes of this Red Herring Prospectus and Prospectus

Bid /Issue Closing Date means the date after which the Syndicate will not accept any Bids for this Issue, which shall be notified in an English national newspaper, a Hindi national newspaper and a Gujarati newspaper each with wide circulation, including any revisions.

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Term Description

Bidder means any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and the Bid cum Application Form

Bidding/Issue Period means the period between the Bid /Issue Opening Date and the Bid /Issue Closing Date inclusive of both days and during which prospective Bidders can submit their Bids

Bid/Issue Opening Date means the date on which the Syndicate shall start accepting Bids for the Issue, which shall be the date notified in a widely circulated English national newspaper, a Hindi national newspaper, and a Gujarati newspaper each with wide circulation

Book Building Process means the book building process as provided under Chapter XI of the SEBI DIP Guidelines, in terms of which the Issue is being made

BRLMs/Book Running Lead Managers

means the Book Running Lead Managers to the Issue, in this case being Enam Securities Private Limited and JM Financial Consultants Private Limited

Business Day Any day other than Saturday or Sunday on which commercial banks in Mumbai are open for business

CAN/Confirmation of Allocation Note

means the note or advice or intimation of allocation of Equity Shares sent to the Bidders who have been allocated Equity Shares after discovery of the Issue Price in accordance with the Book Building Process

Cap Price means the higher end of the Price Band, above which the Issue Price will not be finalized and above which no Bids will be accepted

Cut-off Price means any price within the Price Band finalized by the Company in consultation with the BRLMs. A Bid submitted at Cut-off Price is a valid Bid at all price levels within the Price Band. Retail Bidders are entitled to bid at cut-off price for an amount not exceeding Rs 100,000. QIB and Non-Institutional bidders cannot bid at cut-off

Designated Date means the date on which the Escrow Collection Banks transfer funds from the Escrow Account(s) to the Public Issue Account after the Prospectus is filed with the RoC, following which the Board of Directors shall allot Equity Shares to successful Bidders

Designated Stock Exchange

[●]

DP ID Means Depository Participant’s Identity

Draft Red Herring Prospectus/ DRHP

means this Draft Red Herring Prospectus issued in accordance with Section 60B of the Companies Act, which does not contain complete particulars on the price at which the Equity Shares are offered and the size (in terms of value) of the Issue

Eligible NRI means NRIs from such jurisdictions outside India where it is not unlawful to make an Issue or invitation under the Issue and in relation to whom the Draft Red Herring Prospectus constitutes an offer to sell or an invitation to subscribe to the Equity Shares Allotted herein

Enam Enam means Enam Securities Private Limited having its registered office as indicated on the cover page of this Draft Red Herring Prospectus

Equity Shares means Equity shares of the Company of face value of Rs. 10 each fully paid up, unless otherwise specified in the context thereof

Escrow Account means an account opened with an Escrow Collection Bank(s) and in whose favour the Bidder will issue cheques or drafts in respect of the Bid Amount when submitting a bid

Escrow Agreement means an Agreement entered into amongst the Company, the Registrar, the Escrow Collection Bank(s), the BRLMs, and the Syndicate Members for collection of the Bid Amounts and where applicable refunds, of the amounts collected, to the Bidders on the terms and conditions thereof

Escrow Collection Bank(s) means the banks, which are clearing members and registered with SEBI

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Term Description

as Banker(s) to the Issue, at which the Escrow Account will be opened

First Bidder means the Bidder whose name appears first in the Bid cum Application Form or Revision Form

Floor Price means the lower end of the Price Band, at or above which the Issue Price will be finalized and below which no Bids will be accepted

JM means JM Financial Consultants Private Limited having its registered office as indicated on the cover page of this Draft Red Herring Prospectus

IPO means Initial Public Offering

Issue means Public Issue of 10,064,900 Equity Shares of Rs. 10 each of the Issuer for cash at a price of Rs. [●] per Equity Share (including a share premium of Rs. [●] per Equity Share) aggregating Rs. [●] million. The Company is considering a Pre-IPO Placement of Equity Shares with certain investors (“Pre-IPO Placement”). The Pre-IPO placement is at the discretion of the Company. The Company will complete the issuance of such Equity Shares prior to filing the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the Issue size offered to the public would be reduced to the extent of such Pre-IPO Placement, subject to a minimum Issue size of 10% of the post Issue paid up capital being offered to the public

Issue Price means the final price at which Equity Shares will be issued and allotted in terms of the Red Herring Prospectus. The Issue Price will be determined by the Company in consultation with the BRLMs on the Pricing Date

Issue Proceeds means the proceeds from the Issue that are available to the Company

Margin Amount means the amount paid by the Bidder at the time of submission of his/her Bid, which may range from 10% to 100% of the Bid Amount

Mutual Funds means a mutual fund registered with SEBI pursuant to the SEBI (Mutual Funds) Regulations, 1996, as amended from time to time

Mutual Funds Portion means 5% of the QIB Portion or 301,947 Equity Shares aggregating to Rs. [●] million available for allocation to Mutual Funds only out of the QIB portion

Net Proceeds means the Issue Proceeds less the Issue Expenses. For further information about use of Issue Proceeds and Issue Expenses, see ‘Objects of the Issue’ on page 26 of this Draft Red Herring Prospectus

Non-Institutional Bidders means all Bidders that are not QIBs or Retail Individual Bidders and who have Bid for Equity Shares for an amount more than Rs 100,000 (but not including NRIs other than Eligible NRIs)

Non-Institutional Portion means the portion of this Issue being not less than 1,006,490 Equity Shares available for allocation to Non Institutional Bidders

Pay-in-Date means the Bid/Issue Closing Date or the last date specified in the CAN sent to Bidders, as applicable

Pay-in-Period means with respect to Bidders whose Margin Amount is 100% of the Bid Amount, the period commencing on the Bid/Issue Opening Date and extending until the Bid/Issue Closing Date; and With respect to Bidders whose Margin Amount is less than 100% of the Bid Amount, the period commencing on the Bid Opening Date and extending until the closure of the Pay – in Date

Price Band means the price band with a minimum price (floor of the Price Band) of

Rs. [•] and the maximum price (cap of the Price Band) of Rs. [•], including any revisions thereof

Pricing Date

means the date on which the Company in consultation with the BRLMs finalize the Issue Price

Prospectus means the Prospectus, to be filed with the RoC in accordance with

iv

Term Description

Section 60 of the Companies Act containing, inter alia, the Issue Price that is determined at the end of the Book Building Process, the size of the Issue and certain other information

Public Issue Account means an account opened with the Banker(s) to the Issue to receive monies from the Escrow Account on the Designated Date

Qualified Institutional Buyers or QIBs

means Public financial institutions as defined in Section 4A of the Companies Act, FIIs, scheduled commercial banks, mutual funds registered with SEBI, venture capital funds registered with SEBI, foreign venture capital investors registered with SEBI, state industrial development corporations, insurance companies registered with the Insurance Regulatory and Development Authority, provident funds (subject to applicable law) with a minimum corpus of Rs. 250 million, pension funds with a minimum corpus of Rs. 250 million, National Investment Fund set up by the Government of India and multilateral and bilateral development financial institutions.

QIB Margin Amount means an amount representing at least 10% of the Bid Amount.

QIB Portion means the portion of the Issue to public being at least 6,038,940 Equity Shares each at the Issue Price, aggregating to [●] million required to be allocated to QIBs

Refund Account(s) means Account(s) opened with an Escrow Collection Bank from which refunds if any, of the whole or part of the Bid Amount shall be made

Registrar /Registrar to the Issue

means Registrar to the Issue, in this case being Intime Spectrum Registry Limited having its registered office as indicated on the cover page of this Draft Red Herring Prospectus

Retail Individual Bidders means individual bidders (including HUFs applying through their Karta and Eligible NRIs and does not include NRIs other then Eligible NRIs) who have Bid for Equity Shares for an amount less than or equal to Rs. 100,000 in any of the bidding options in the Issue

Retail Portion means the portion of the Issue to the public being not less than 3,019,470 Equity Shares aggregating to [●] million available for allocation to Retail Individual Bidder(s)

Revision Form means the form used by the Bidders to modify the quantity of Equity Shares or the Bid Price in any of their Bid cum Application Forms or any previous Revision Form(s)

RHP or Red Herring Prospectus

means the red herring prospectus issued in accordance with Section 60B of the Companies Act, which does not have complete particulars on the price at which the Equity Shares are offered and the size of the Issue. The Red Herring Prospectus which will be filed with the RoC at least three days before the Bid Opening Date and will become a Prospectus upon filing with the RoC after the Pricing Date

Stock Exchanges means the NSE and the BSE

Syndicate/ Syndicate Members

means the BRLMs and the Syndicate Members

Syndicate Agreement means the agreement to be entered into among the Company and the Syndicate in relation to the collection of Bids in this Issue

Syndicate Members [●]

TRS or Transaction Registration Slip

means the slip or document issued by the Syndicate Members to the Bidder as proof of registration of the Bid

Underwriters means the BRLMs and the Syndicate Members

Underwriting Agreement means the agreement among the members of the Syndicate and the Company to be entered into on or after the Pricing Date

v

Technical and Industry Terms

Term Description

ACP Aluminium Composite Panels

ARAI Automotive Research Association of India

Central Manufacturing Facility/ Manufacturing Facility

Plant located at Samakhayali village in Bhachau taluka in the district of Kutch in Gujarat

CFL Compact Fluorescent Lamps

CNC Technology Computer Numerical Control Technology

E-Bikes ElectromotiveBikes

LDPE Low-Density Polyethylene

PVDF Polyvinylidene Fluoride

RTO Road Transport Office

Vitrification A process of converting a material into a glass-like amorphous solid that is free of any crystalline structure, either by the quick removal or addition of heat or by mixing with an additive

VRLA Valve Regulated Lead Acid

Conventional/General Terms

Term Description

AGM means Annual General Meeting

AS means Accounting Standards issued by the Institute of Chartered Accountants of India

AY means Assessment Year

BIFR means Board for Industrial and Financial Reconstruction.

BSE means Bombay Stock Exchange Limited

CAGR means Compounded Annual Growth Rate

CDSL means Central Depository Services (India) Limited

CIN means Corporate Identification Number

Act or Companies Act means the Companies Act, 1956, as amendments thereto

Depositories Act means the Depositaries Act, 1996, as amended from time to time

Depository means a body corporate registered under the SEBI (Depositaries and Participant) Regulations, 1996, as amended from time to time

Depository Participant means a depository participant as defined under the Depositories Act, 1996

DIN means Director Identification Number

DGFT means the Director General of Foreign Trade

EBITDA means Earnings Before Interest, Tax, Depreciation & Ammortisation

ECS means Electronic Clearing System

EGM means Extraordinary General Meeting

EPS means Earning Per Share i.e. profit after tax for a fiscal year divided by the weighted average outstanding number of equity shares at the end of that fiscal year

FDI means Foreign Direct Investment

FEMA means Foreign Exchange Management Act, 1999, as amended from time to time and the regulations framed thereunder

FEMA Regulations FEMA Regulations means FEMA (Transfer or Issue of Security by a Person Outside India) Regulations 2000 and amendments thereto

FII means Foreign Institutional Investor (as defined under Foreign Institutional Investor Regulations,1995) registered with SEBI under applicable laws in India

FIPB means Foreign Investment Promotion Board

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Term Description

FVCI means a Foreign Venture Capital Investor registered with SEBI under SEBI (Foreign Venture Capital Investors) Regulations, 2000

Financial Year /fiscal year/FY/ fiscal

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

GDP Means Gross Domestic Product

Government/ GOI means the Government of India

HNI means High Net worth Individual

HUF means Hindu Undivided Family

I.T. Act means the Income Tax Act, 1961, as amended from time to time

Indian GAAP means Generally Accepted Accounting Principles in India

Indian Partnership Act means Indian Partnership Act 1932, as amended from time to time

Mn/ mn means Million

MoU means Memorandum of Understanding

MICR means Magnetic Ink Character Recognition

NAV means Net Asset Value being paid up equity share capital plus free reserves (excluding reserves created out of revaluation) less deferred expenditure not written off (including miscellaneous expenses not written off) and debit balance of Profit and Loss account divided by number of issued equity

NEFT means National Electronic Funds Transfer

NOC means No Objection Certificate

Non Residents/NR means a person resident outside India, as defined under FEMA and includes a Non-Resident Indian

NRE Account Non-Resident External Account

NRI/Non-Resident Indian means a person resident outside India, in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000

NRO Account means Non-Resident Ordinary Account

NSDL means National Securities Depository Limited

NSE means the National Stock Exchange of India Limited

OCB/ Overseas Corporate Body

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

p.a/P.A means Per Annum

PAT means Profit after tax

PBT means Profit before tax

P/E Ratio means Price/Earnings Ratio

PAN means Permanent Account Number

Person/Persons means any individual, sole proprietorship, unincorporated association, unincorporated organization, body corporate, corporation, company, partnership, limited liability company, joint venture, or trust or any other entity or organization validly constituted and/or incorporated in the jurisdiction in which it exists and operates, as the context requires

PIO Means Persons of India Origin

PLR means the Prime Lending Rate

Re. means One Indian Rupee

RBI means the Reserve Bank Of India

Reserve Bank of India Act/RBI Act

means the Reserve Bank of India Act, 1934, as amended from time to time

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Term Description

RoC/Registrar of Companies

means the Registrar of Companies, Gujarat, Dadra and Nagar Haveli located at ROC Bhavan, Opposite Rupal Park, Near Ankur Bus Stand, Naranpura, Ahmedabad – 380 013

RoNW means Return on Net Worth

Rs. means Indian Rupees

RTGS means Real Time Gross Settlement Process

SCRA means Securities Contract (Regulation) Act, 1956, as amended from time to time

SCRR means Securities Contract (Regulation) Rules, 1957, as amended from time to time

SEBI means the Securities and Exchange Board of India constituted under the SEBI Act, 1992

SEBI Guidelines means SEBI (Disclosure and Investor Protection) Guidelines, 2000, as amended from time to time

SEBI Takeover Regulations

means Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, as amended from time to time

SICA means Sick Industrial Companies (Special Provisions) Act, 1985

State Government means the government of a state of Union of India

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CERTAIN CONVENTIONS; USE OF MARKET DATA Unless stated otherwise, the financial data in this Draft Red Herring Prospectus is derived from our financial statements prepared in accordance with Indian GAAP and included in this Draft Red Herring Prospectus. Our current fiscal year commences on April 1 and ends on March 31 of next year. In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off. There are significant differences between Indian GAAP, IFRS and U.S. GAAP. Accordingly, the degree to which the Indian GAAP financial statements included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reliance by Persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. Any percentage amounts, as set forth in “Risk Factors”, “Business”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations on a Consolidated Basis” and elsewhere in this Draft Red Herring Prospectus, unless otherwise indicated, have been calculated on the basis of our restated consolidated and unconsolidated financial statements prepared in accordance with Indian GAAP. All references to “India” contained in this Draft Red Herring Prospectus are to the Republic of India, all references to the “US”, “USA”, or the “United States” are to the United States of America, and all references to “UK” are to the United Kingdom. For definitions, please see the section titled “Definitions and Abbreviations” on page i of this Draft Red Herring Prospectus. In the section titled “Main Provisions of Articles of Association” on page 257 of this Draft Red Herring Prospectus, defined terms have the meaning given to such terms in the Articles.

Use of Market data Unless stated otherwise, industry data used throughout this Draft Red Herring Prospectus has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that industry data used in this Draft Red Herring Prospectus is reliable, it has not been independently verified. Currency of Presentation

In this Draft Red Herring Prospectus, all references to “Rupees” and “Rs.” are to the legal currency of India, all references to “U.S. Dollars”, and “US$” are to the legal currency of the United States of America.

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FORWARD-LOOKING STATEMENTS

All statements contained in this Draft Red Herring Prospectus that are not statements of historical fact constitute “forward-looking statements.” All statements regarding our expected financial condition and results of operations, business, plans and prospects are forward-looking statements. These forward-looking statements include statements as to our business strategy, our revenue and profitability, planned projects and other matters discussed in this Draft Red Herring Prospectus regarding matters that are not historical facts. These forward-looking statements and any other projections contained in this Draft Red Herring Prospectus (whether made by us or any third party) are predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. Investors can generally identify forward-looking statements by terminology such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or other words or phrases of similar import. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include, among others:

• If there are any changes in the market for electric vehicles, it could cause our products to become obsolete or lose popularity;

• As we depend heavily on our CFL business, any factor adversely affecting CFL product will negatively impact our profitability;

• We use the word “Ajanta” in our corporate name which has been challenged and is currently under litigation;

• We have only one manufacturing facility for all of our current products. The loss of or shutdown of operations at our manufacturing facility would have a material adverse effect on our business, financial condition and results of operations;

• If we are unable to claim excise exemptions, sales tax incentives and electricity duty exemptions and deductions;

• If we are unable to obtain, renew or maintain the statutory and regulatory permits and approvals required to operate our business;

• If the suppliers, distributors or large customers with whom we have informal understanding renege on their commitments, our production capabilities and revenues could be adversely affected;

• If we are unable to get an adequate and timely supply of key materials; and

• If we are unable to attract, recruit and retain skilled personnel. For further discussion of factors that could cause our actual results to differ, see the section titled “Risk Factors” beginning on page x of this Draft Red Herring Prospectus. By their nature, certain risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. We, the members of the Syndicate and their respective affiliates 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. In accordance with SEBI requirements, we and the BRLMs will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges.

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SECTION II: RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the

information in this Draft Red Herring Prospectus, including the risks and uncertainties described

below, before making an investment in our Equity Shares. If any of the following risks, or other risks

that are not currently known or are now deemed immaterial, actually occur, our business, results of

operations and financial condition could suffer, the price of our Equity Shares could decline, and you

may lose all or part of your investment. The financial and other related implications of risks concerned,

wherever quantifiable, have been disclosed in the risk factors mentioned below. However, there are risk

factors where the impact is not quantifiable and hence the same has not been disclosed in such risk

factors. Investors are advised to read the risk factors carefully before taking an investment decision in

this offering. Before making an investment decision, investors must rely on their own examination of the

offer and us.

Unless otherwise stated, the financial information used in this section is derived from our consolidated

audited financial statements under Indian GAAP, as restated.

Risks in Relation to Our Business and Internal Risks

1. Our growth strategy to expand into E-Bikes area poses special risks.

We are a new entrant in the manufacturing of E-Bikes, which is a relatively new product in India with no proven market. If the E-Bikes market fails to fully develop in India, our strategy to diversify and grow our business through the development and sale of E-Bikes will be significantly hindered.

We plan on devoting substantial resources to developing our E-Bikes business and marketing E-Bikes in our target markets. Because E-Bikes are a relatively new product, we do not know if we will be successful in penetrating our target market. We are also not aware of the level of competition we will face from existing competitors and new entrants, including competitors based in China. As a result, we may not generate a sufficient amount of revenue from the sales of our E-Bikes to offset the costs necessary to bring them to market.

Our gross margins and operating results will suffer if our E-Bikes are not accepted in India, and the degree of acceptance of our E-bike offering can be verified only after this product is launched. Certain factors may affect the level of acceptance of our E-bikes, including:

• Willingness of third parties to provide financing for the purchase of E-bikes;

• Availability of charging points in urban multi-storied apartments and public areas;

• Limited resale market; and

• Availability of spare parts and servicing centres.

We have no prior experience in this business segment. We have had to develop the manufacturing processes involved in-house and through consultants, and we may have to purchase certain raw materials from new suppliers that we have not transacted business with previously. These factors may hinder our ability to expand the capacity of our E-Bikes plant and manufacture E-Bikes in a commercially successful manner, which would in turn adversely affect our results of operations and financial condition.

2. Changes in the market for electric vehicles could cause our products to become obsolete or

lose popularity.

The electric vehicle industry is in its infancy in India and has experienced substantial growth and change in the last few years. Demand for and interest in electric vehicles appears to be increasing. However, growth in the electric vehicle industry may depend on many factors, including:

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• continued development of product technology;

• the environmental consciousness of customers;

• the ability of electric vehicles to successfully compete with vehicles powered by internal combustion engines;

• widespread electricity shortages and the resultant increase in electricity prices, especially in our primary market in India could derail our past and present efforts to promote electric vehicle as a practical solution to vehicles which require gasoline; and

• future regulation and legislation with respect to nonpolluting vehicles.

We cannot assure you that growth in the electric vehicle industry will continue. Our business may suffer if growth in the electric vehicle industry ceases. One of our principal challenges is to continue to develop and market products which keep pace with the rapid changes in the market. If we are unable to introduce new products and create and maintain market share, we will likely be unable to increase revenue or begin to operate profitably.

3. We depend heavily on our CFL business. Any factor adversely affecting this product will

negatively impact our profitability.

For the nine months ended December 31, 2007 and the fiscal years ended March 31, 2007 and 2006, our CFL business contributed 53.74%, 57.53% and 89.35% to our income from operations, respectively. In addition, our CFL business contributes significantly to our operating profit. We expect to depend heavily on our CFL business in the foreseeable future. Any decline in the sales of our CFL products or any other factor that negatively affects these products will adversely affect our market share, business, financial performance and results of operations.

4. The use of the word “Ajanta” by us as a brand name and in our corporate name has been

challenged and is currently under litigation.

Ajanta India Limited, a company not forming part of the Promoter Group (for more information, see “History and Other Corporate Matters” and “Our Promoter Group” on page 87 and page 108, respectively, of this Draft Red Herring prospectus), has filed a suit against the Company in the High Court of Delhi seeking a permanent injunction restraining the Company from using the trademark “Ajanta” as a brand name as well as part of our corporate name. For further details, please refer to section titled “Outstanding Litigation and Material Developments” on page 187 of this Draft Red Herring Prospectus. In the event the litigation is decided against us, we may be required to change the name of our Company. In the event we are required to change the name of our Company, we may lose considerable goodwill that we have built up over the years under our corporate name “Ajanta Manufacturing Limited”, which may have an impact on our business, financial condition and results of operations. In addition, we may lose our right to use the phrase “a product of Ajanta Quartz” in connection with our products.

5. The development and commercialization of other energy efficient light sources like LEDs

could create competition for CFLs.

In recent years, significant research efforts have been devoted to the development of light-emitting diodes (“LEDs”) and other efficient light sources. While these efforts have not yet produced a commercial light source that is competitive to CFLs, LEDs are very energy efficient. If the development and commercialisation of LEDs or other energy efficient light forms are successful, they could have the potential to create competition for CFLs in the lighting market.

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6. CFLs have certain disadvantages compared to alternative lighting sources which may limit its

market growth.

Although CFLs have significant power saving attributes, CFLs also have certain disadvantages compared to alternative lighting sources. These disadvantages include:

• CFLs are not generally suitable for use as spotlights;

• CFLs produce a bluish-white light that may adversely affect the appearance of people and interiors because of the lack of red spectrum colours;

• CFLs contain mercury which has been identified as health hazard to humans; and

• the amount and quality of light produced by CFLs deteriorates over time.

If CFL manufacturers are unable to improve CFLs to address these issues, such characteristics could limit the growth of the market for CFLs and may have a negative impact on consumers’ desire to switch from alternative lighting sources to CFLs, despite the energy cost advantages of CFLs.

7. The recognition of our OREVA brands and our sales could be adversely impacted if we

become associated with negative publicity. The availability of spurious, look-alike and

counterfeit products, primarily in our domestic market, could lead to losses in revenues and

harm the reputation of our products.

Our success depends on our ability to maintain the brand image of our existing products and effectively build up brand image for new products and brand extensions. This is particularly relevant for our OREVA CFL products. Product quality issues, real or imagined, or allegations of product defects, even when false or unfounded, could tarnish the image of the affected brands and may cause consumers to choose other products.

We are also exposed to the risk that entities in India and elsewhere could pass off their products as ours, including spurious or pirated products. For example, certain entities could imitate our brand name, packaging material or attempt to create look-alike products. This would not only reduce our market share due to replacement of demand for our products, whereby we may not be able to recover our initial development costs or experience loss in revenues, but could also harm the reputation of our brands. The proliferation of unauthorised copies of our products, and the time and cost of defending claims and responding to complaints about spurious products, could have a material adverse effect on our reputation, business, financial condition and results of operations.

Further, because of changing government regulations or implementation thereof, allegations of product contamination or lack of consumer interest in certain products, we may be required recall products entirely or from specific markets. Any negative publicity regarding our company, our brands or our products, including those arising from concerns regarding quality, or any other event affecting product or service quality, could adversely affect our reputation, results of operations and financial condition.

8. We have not placed orders for the machinery and equipment for which funds are being raised

through this Issue. Any delay in procuring the necessary machinery and equipment may

delay the implementation of our expansion plans.

A portion of the net proceeds of the Issue are proposed to be deployed for setting up facilities for manufacturing glass tubes for the CFL business unit as part of our backward integration plan and for Phase II of our E-Bikes production plans. We have yet to place orders for all of the machinery and equipment required for manufacturing glass tubes for our CFL business unit or for Phase II upgrading of our E-Bikes unit. We intend to place the orders as and when they are required in accordance with our implementation schedule. However, any delay in placing orders or in procuring the necessary machinery and equipment will delay our backward integration plan for our CFL manufacturing unit and Phase II production of our E-Bikes.

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Additionally for the in-house production of glass tubes we would be using mercury based products for which we shall require separate environmental and pollution related approvals. There may be delays in obtaining the same.

Such delays may lead to increases in prices of the equipment, which may affect our cost and profit estimates. For further details, see the section titled “Objects of the Issue” on page 26.

9. We have not obtained any third-party appraisals for our projects.

Our funding requirements and the deployment of the proceeds of the Issue are based on management estimates and have not been appraised by any bank or financial institution. These are based on current conditions and are subject to changes in external circumstances or costs, or in other financial or business conditions. Based on the competitive nature of the environment, we may have to revise our management estimates from time to time and consequently, our funding requirements may also be changed. For example, our management estimates of the cost of the new glass tube plant may be less than the costs we actually incur, which may require us to reschedule or reallocate our project expenditures and may have an adverse impact on our business, financial conditions and results of operations.

10. We rely on the success of our distribution network and dealers. Our E-Bikes will require an

entirely new distribution and dealer service network.

We rely on our distribution network and dealers to distribute market and sell our manufactured products. Competition for dealers in India is intense. Hence, our business is dependent on maintaining good relations with our distribution network. Further, our growth as a business depends on our ability to attract additional dealers to our distribution network and to build a new distribution, dealer and service network for our E-Bikes, which will require different distribution channels than our other products and will also require creation of local service capacity for the E-Bikes sold by us. While we believe that we have good relations with our dealers, there is no assurance that our current dealers will continue to do business with us, that we can continue to attract additional dealers to our network or that we can create the new network needed to distribute and service our E-Bikes. If we do not succeed in maintaining the stability of our distribution network and attracting additional dealers to our existing distribution network our market share for our products may decline, which could materially adversely affect our results of operations and financial condition. In the event we are unable to build an adequate E-Bikes dealer service network, our ability to increase sales of our E-Bikes will be adversely affected.

11. If the suppliers, distributors or large customers with whom we have informal understanding

renege on their commitments, our production capabilities and revenues could be adversely

affected.

While we have long term relationships with many of our customers, suppliers and distributors, we do not have any long term contracts with these parties. In some instances we do not have formal written agreements with our customers, suppliers or distributors and instead operate on the basis of informal understandings with these parties. In addition, sales to customers generally occur on an order-by-order basis. As a result, customers can terminate their relationships with us at any time or under certain circumstances cancel or delay orders. Any change in the buying pattern of our customers can thus adversely affect our business. Further, in the absence of long term or formal contracts there can be no assurance that a particular customer would continue to purchase products from us in the future, or that we would continue to receive supplies from suppliers or utilise the services of certain distributors. While we believe that our relationship with our major customers, suppliers and distributors are stable, these parties can terminate their relationships with us or seek a change in the terms on which they deal with us at any time. If any of these suppliers or distributors or customers reneges on any of their commitments, our production capabilities or revenues could be adversely affected, and our business and results of operations could be adversely affected.

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12. We have only one manufacturing facility for all of our current products. The loss of or

shutdown of operations at our manufacturing facility would have a material adverse effect on

our business, financial condition and results of operations.

We have only one manufacturing facility in Gujarat where we manufacture all our products. Our manufacturing facility is subject to operating risks, such as breakdown or failure of equipment, interruption in power supply or processes, performance below expected levels of output, raw material shortage or unsuitability, obsolescence, labour disputes, strikes, lock-outs, severe weather, non-availability of the services of our external contractors and our inability to respond to technological advances and emerging industry standards and practices in the industries we operate and propose to operate on a cost-effective and timely basis. The occurrence of any of these risks could significantly affect our operating results, and the loss or shutdown of operations at our manufacturing facility will have a material adverse effect on our business, financial condition and results of operations.

13. We have only one manufacturing facility which is located in an earthquake-prone area.

Our manufacturing facility is located at Samakhiyali village, Bachau Taluka, in the Kutch District of Gujarat, an area which has encountered earthquakes in the past and is in a seismic zone – an earthquake prone area. In the future, if the Kutch District is affected by seismic activity, our business, financial condition and results of operations may be adversely affected.

14. Costs associated with warranty, recall and liability due to defects in our products could

adversely affect the Company’s business, results of operations and financial condition and

could also lead to adverse publicity.

Warranty claims can reduce our profitability. Our CFLs are subject to a one year warranty against manufacturing defects. In the event of claimed defects or nonperformance of our CFLs, our practice is to replace the product.

Defects in the Company’s products that may arise from defective components supplied by external suppliers may or may not be covered under warranties provided by such suppliers. Because E-Bikes are a new product for the Company, the risk of defects is higher than for the Company’s CFLs and vitrified tile products. In addition, our proposed CFL glass tube manufacturing plant is also a new venture for us and there is no assurance that we will be able to reduce the level of defective glass tubes below that of glass tubes purchased from other suppliers.

Any defects in the Company’s products could adversely affect demand for our products and designs and could also result in customer claims for damages. In defending such claims, the Company could incur substantial costs and be subject to adverse publicity. Defects in our products or designs may also result in product recalls.

We have not experienced recalls or a material number of warranty claims with respect to CFLs or vitrified tiles to date. However, we expect that warranty claims on sales of E-Bikes could be significantly higher than for CFLs or vitrified tiles due to the complexity of the product. In the event that product recalls or warranty claims on E-Bikes or our other products become substantial, there may be a material adverse effect on our operating results and financial condition.

15. A shortage of key raw materials, water, components and spares used in our manufacturing

processes could adversely affect our business.

We are dependent on a few distributors for the supply of a majority of certain raw materials that are integral to our manufacturing processes, including furnace oil, Ukraine clay, plastics, colour pigments, sized steam coal, abrasive stone and aluminum balls. Further, a shortage in supply of water may affect the production of vitrified tiles. In addition, we import certain electronic components, glass tubes and spare parts for our machinery. The failure of our existing distributors to supply us with the necessary raw materials, components and spare parts, or any delay in the supply of these materials, could adversely affect our business and results of operations. Further, there is no assurance that we will be able to acquire these items from alternative sources.

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16. Our business could be adversely affected by economic, political and social developments in

China.

Our performance and growth have been and are linked to economic, political and social developments within China. We purchase a large portion of our materials, supplies and components from China. Any material adverse change in the economy or political or social conditions within China could adversely affect our business, financial performance and price of our Equity Shares.

17. Our Company is a party to a number of legal proceedings.

We are involved in legal proceedings and claims in relation to certain matters. These legal proceedings are pending at different levels of adjudication before various courts and tribunals in India. Should any new developments arise, such as a change in Indian law or rulings against us by appellate courts or tribunals, we may need to make provisions therefore in our financial statements, which could increase our expenses and current liabilities. We can give no assurance that these legal proceedings will be decided in favour. Further, we also may not be able to quantify all the claims in which we or any of our group companies are involved. Any adverse decision may have a significant effect on our business, financial condition and results of operations.

A summary of claims filed against us and against our Promoter, our Promoter Group and our Directors are summarized in the table below:

Litigation against the Company

The Company is involved in two civil cases for an amount aggregating approximately Rs. 2 million.

The Company is involved in 14 tax related matters for an amount aggregating approximately Rs. 181.94 million.

The Company is involved in 4 trademark related matters. The Company has also been issued with 12 legal notices which include consumer and legal metrology related notices.

Litigation against our Directors (the following summary includes outstanding litigation against our

Promoter, Mr. Jaysukhbhai Patel):

There are two civil cases pending against our Directors for an amount aggregating approximately Rs. 2 million.

There are five consumer related notices and three legal metrology notices pending against our Directors.

Litigation against our Promoter Group

There is one criminal matter pending against one of our Promoter Group companies

There are 18 tax related matters pending against the Company for an amount aggregating approximately Rs. 83.83 million.

For further information regarding all of the above litigation matters, see section titled “Outstanding Litigation and Material Developments” on page 187 of this Draft Red Herring Prospectus.

18. We may not be able to keep pace with technological changes and develop new products and as

a result, our competitive position may suffer.

The markets in which our businesses operate can experience significant changes due to the introduction of innovative technologies. To remain competitive and to meet our customers’ needs in these businesses, we must continuously design new, and update existing, products and invest in and develop new technologies or manufacturing processes. Our sales and profits would suffer if we invest in

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technologies or manufacturing processes that do not function as expected or are not accepted in the marketplace as anticipated, or if our products become obsolete.

19. We face significant competition from domestic and international players that may adversely

affect our competitive position and financial performance.

We operate in a competitive environment in India. Our competitors have adopted several strategies to increase their market shares through advertising, pricing, channel discounts, quality, service, multi-location operations, new product introductions and distribution reach, among others.

In addition, we compete against a number of global manufacturers and marketers, some of which have substantially greater resources, can spend more aggressively on advertising and marketing and have more flexibility to respond to changing business and economic conditions than us.

In the event we are unable to keep pace with our current or future competition, our business and financial performance would be adversely affected.

Any inability to cope with these challenges could lead to a decrease in our market share that would negatively affect our business and results of our operations.

20. The price of furnace oil and coal are subject to price volatility which could adversely affect

our results of operations.

We use furnace oil as fuel in our captive power plant and sized steam coal for our coal gasification plant. Furnace oil and coal are commodities, the prices of which are subject to volatility in world markets. Higher prices for furnace oil and sized steam coal will adversely affect our results of operations and profitability.

21. As a manufacturing business, our success depends on the smooth supply and transportation of

our products from our plants to our distributors and customers. Supply and transportation

are subject to various uncertainties and risks, and delays in delivery or delivery of non-

conforming shipments may result in rejected or discounted deliveries.

We depend on sea-bourne freight, rail and trucking to deliver our products from our manufacturing facilities to our customers. We rely on third parties to provide such services. Disruptions of transportation services because of weather-related problems, strikes, lock-outs, inadequacies in road infrastructure and port facilities or other events could impair our procurement of raw materials and our ability to supply our products to our customers. For example, in August 2004, a nationwide strike by truck drivers in India adversely affected our distribution channels. There is no assurance that such disruptions will not again occur in the future. Any such disruptions could materially adversely affect our business, financial condition and results of operations.

In addition, in the case of a delayed shipment, the customer would have the right to reject the shipment or demand significant pricing discounts. Non-conforming shipments could also give rise to order rejections, discounts or other claims.

22. We are dependent on a number of key personnel and the loss of, or our inability to attract or

retain such persons could adversely affect us.

Our success depends on the continued services and performance of the members of our management team and other key employees, including Odhavjibhai R. Patel, our founder, and Jaysukhbhai O. Patel, our Promoter and Managing Director. Competition for senior management personnel in the industries in which we engage or expect to engage is intense, and we may not be able to retain our existing senior management personnel or attract and retain new senior management personnel in the future.

Further, the loss of the services of our Promoter or other key personnel could adversely affect our business and our results of operations and financial condition. We do not maintain ‘key man’ insurance for our Promoter, senior members of our management team or other key personnel.

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Further, if we fail to hire and retain sufficient numbers of additional qualified personnel, our results of operations and financial condition could be adversely affected. The success of our business will depend on our ability to identify, attract, hire, train, retain and motivate skilled personnel. Demand for qualified professional personnel is high and such personnel are in limited supply. Our professionals are highly sought after by our competitors as well as other Indian companies, particularly as India’s economy continues to grow and mature.

23. We require certain approvals or licenses in the ordinary course of business, and the failure to

obtain them in a timely manner, or at all, could adversely affect our operations.

We require certain approvals, licenses, registrations and permissions for operating our business, some of which may have expired and for which we may have either made or are in the process of making an application for obtaining the approval or its renewal.

Additionally we may be required to obtain certain government approvals for our businesses in the future. There may be delays in obtaining the same.

See “Government Approvals” on page 195 of this Draft Red Herring Prospectus. If we fail to obtain any of these approvals, licenses or renewals in a timely manner, or at all, our business could be adversely affected.

24. Our business plan may require us to obtain substantial financing, which we may not be able to

obtain.

We anticipate that our expansion plans as set forth in our current business plan will be funded from the net proceeds of the offering made pursuant to this Draft Red Herring Prospectus. However, we cannot assure you that our current business plan covers all of our expansion costs. Our current plans may therefore require us to obtain substantial additional financing, which may be in the form of additional debt, new equity securities or both. There is no assurance that we will be successful in obtaining such financing when needed. Any failure or delay in obtaining such financing when needed could significantly hinder our ability to execute our current business plans.

Further, to the extent that we are able to obtain financing when needed, certain agreements governing debt financing will likely contain restrictive covenants that will limit our ability to enter into certain business transactions and restrict our management’s ability to conduct our business. Any financing obtained by the issuance of additional equity securities would also dilute the pro rata ownership interest of investors in our Equity Shares and could contain provisions that would give the holders of such additional equity securities preferences over the holders of our Equity Shares, such as preferences in dividend and distribution payments.

25. We take advantage of certain excise exemptions, sales tax incentives and electricity duty

exemptions and deductions, which, if found inapplicable or withdrawn or reduced, could

adversely affect our results of operations.

We take advantage of certain excise exemptions and sales tax incentives in respect of our manufacturing facility located in Kutch district as well as electricity duty exemptions and deductions in respect of our captive power plant, which we believe are applicable to us. Any adverse decision by applicable government authorities as to our ability to utilise these benefits or to withdraw or reduce these benefits could adversely affect our results of operations.

26. If we fail to meet our export obligations under the Export Promotion Capital Goods Scheme,

we may have additional customs obligations to the Government of India.

We have imported capital goods under the Export Promotion Capital Goods Scheme. Under this scheme, we are required to fulfill certain export obligations in a particular block of years, failing which, we have to make payment of the customs duty payable on the imported capital goods for the unfulfilled portion of the export obligation along with interest. Failure to meet our export obligations under this scheme therefore could adversely affect our results of operations. For further details, please refer to section titled “Financial Statements” on page 125 of this Draft Red Herring Prospectus.

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27. Our contingent liabilities which have not been provided for could adversely affect our

financial condition.

As of December 31, 2007, we had contingent liabilities of Rs. 442.45 million, which includes letters of credit and disputed income tax demands. In the event we are called upon to pay some or all of such liabilities, our financial position and results of operations could be adversely affected, which could in turn impact our business. Set forth below is a table that summarizes our contingent liabilities as at December 31, 2007:

Particulars Amount (in Rs. million)

Letters of credit opened and outstanding 436.21

Disputed demand in relation to income tax assessment order dated December 12, 2006 for assessment year 2000-2001

6.24

Total 442.45

For more details of our contingent liabilities as of March 31, 2003, 2004, 2005, 2006 and 2007, and as of December 31, 2007, see the section titled “Financial Statements”, beginning on page 125 of this Draft Red Herring Prospectus. 28. We have applied for, but have not yet received, trademark registrations for some of our brand

names in certain classes.

We have applied for trademark registrations under certain classes for our brands “OREVA Power Savers” and “OREVA Grantile Forever”, and brands under which we sell CFLs and Vitrified Tiles, respectively. Further, we intend to market E-bikes under the brand name “OREVA E-bike Mileage Masti”, for which we have filed an application for trademark registration in certain classes. For details regarding our applications for trademarks and copyrights and trademarks which we own, please refer to section titled “Government Approvals” on page 195 of the Draft Red Herring Prospectus.

The registration of any trademark is a time-consuming process, and there can be no assurance that any such registration will be granted. Our applications may not be allowed or our competitors may challenge the validity or scope of our intellectual property. Unless our trademarks are registered, we cannot prohibit other persons from using the same, which may materially and adversely affect our goodwill and business. Nor can we provide any assurance that third parties will not infringe upon our trademark, trade names logos or brand names, and thereby cause damage to our business prospects, reputation or goodwill.

We have entered into an agreement dated March 20, 2008 with ATCM, a Promoter Group entity and our Promoter pursuant to which ATCM and our Promoter are authorized to use the “OREVA” brand for products other than those manufactured by us. Any breach of this agreement or if there is any adverse publicity in relation to their products, it may adversely affect our goodwill and business. For further details please see section titled “History and Certain Corporate Matters” on page 87 of this Draft Red Herring Prospectus.

29. Our operations are subject to environmental laws and regulations and potential

environmental liabilities, which could result in costs and liabilities.

Our operations, and anticipated future operations (particularly the in-house manufacture of batteries for our E-bikes), are and will be subject to certain laws and regulations with regard to the environment imposed by government authorities. Possible future developments, including the promulgation of more stringent environmental laws and regulations and the timing of future enforcement proceedings that

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may be taken by environmental authorities could affect the costs and the manner in which we conduct our business and could require us to make additional capital expenditures.

Many of these environmental laws and regulations create permit and license requirements and provide for civil and criminal fines which, if imposed, could result in material costs or liabilities. We cannot predict with certainty the occurrence of public or private claims for damages associated with specific environmental conditions. We may be required to make expenditures in connection with the investigation and remediation of alleged or actual environmental damage, personal injury or property damage claims, and the repair, upgrade or expansion of our facilities in order to meet future requirements and obligations under environmental laws.

Environmental laws and regulations may require us to incur certain costs, which could be substantial, to operate existing facilities, construct and operate new facilities, and mitigate or remove the effect of past operations on the environment. Governmental regulations establishing environmental protection standards are continually evolving, and, therefore, the character, scope, cost and availability of the measures we may be required to take to ensure compliance with evolving laws or regulations cannot be predicted. To the extent that environmental liabilities are greater than our insurance coverage or we are unsuccessful in recovering anticipated insurance proceeds under the relevant policies, our results of operations and financial condition could be materially and adversely affected.

30. Our insurance coverage may not adequately protect us against all material hazards.

We have insured against a majority of the risks associated with our business. Our significant insurance policies provide cover for risks relating to product liability claims, physical loss or damage to our assets, as well as business interruption losses. In addition, we have obtained separate insurance coverage for personnel-related risks, motor vehicle risks and loss of movable assets risks. While we believe that the policies we maintain would reasonably be adequate to cover all normal risks associated with the operation of our business, there can be no assurance that any claim under the insurance policies maintained by us will be honoured fully, in part or on time, or that we have obtained sufficient insurance (either in amount or in terms of risks covered) to fund all material losses. To the extent that we suffer loss or damage for events for which we are not insured or for which our insurance is inadequate, the loss would have to be bourne by us, and, as a result, our results of operations and financial condition could be adversely affected.

31. We may face labour disruptions that would interfere with our operations.

We are exposed to the risk of strikes and other industrial actions. As of January 31, 2008, we employed 3,479 full-time employees in India. None of our employees belongs to a Company-specific trade union. While we believe our relationship with our employees is generally good, we cannot guarantee that we will not experience any strike, work stoppage or other such industrial action in the future. Also, we cannot guarantee you that significant suppliers or transportation providers which we use will not also experience any strikes, work stoppages or other such industrial action in the future. Any such event could disrupt our operations, possibly for a significant period of time, result in increased wages and other costs and otherwise have a material adverse effect on our business, results of operations or financial condition. See “Business — Employees.”

32. If we are unable to predict market demand for our products and unable to focus our

inventories and development efforts to meet such market demand, we could lose sales

opportunities and experience a decline in sales.

In order to arrange for the manufacture of sufficient quantities of products and avoid excess inventory, we need to accurately predict market demand for each of our products. Significant unanticipated fluctuations in demand could cause problems in our operations. We may not be able to accurately predict market demand in order to properly allocate our manufacturing and distribution resources among our products. This is particularly true for our newer products, such as E-Bikes and ACPs. As a result, we may experience declines in sales and lose, or fail to gain, market share.

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33. Wage increases in India may reduce our profit margin.

One of our significant costs is in relation to payment of salaries and related benefits to our operations staff and other employees. Wage costs in India have historically been significantly lower than wage costs in the USA and Europe for comparably skilled professionals, which has been one of our competitive advantages. However, because of rapid economic growth in India, increased demand for services from India and increased competition for skilled employees in India, wages for comparably skilled employees in India are increasing at a faster rate than in the U.S.A and Europe, which may reduce this competitive advantage. We may need to increase the levels of employee compensation more rapidly than in the past to remain competitive in attracting and retaining the quality and number of skilled employees that our businesses require. Wage increases in the long term may reduce our competitiveness and our profitability.

34. We have entered into, and will continue to enter into, related party transactions.

We have in the course of our business entered into transactions with related parties that include our Promoter and entities affiliated with our Promoter, including other members of the Promoter Group. While we believe that all such transactions have been conducted on an arm’s length basis, there can be no assurance that we could not have achieved more favourable terms has such transactions not been entered into with related parties. Furthermore, it is likely that we may enter into related party transactions in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and results of operations. For further details, see the section titled “Related Party Transactions” on page 119 of this Draft Red Herring Prospectus.

35. Our business is subject to extensive statutory or governmental regulations.

We are subject to extensive local, state and central laws and regulations that govern the manufacturing of our products and the operation of our facilities. Although we believe that we are in material compliance with such laws and regulations, government authorities may allege non-compliance, and we cannot assure you that we will not be subjected to any adverse regulatory action in the future. Further, the laws and regulations under which we operate, and our obligation to comply with them, may result in delays in the development and production of our products, cause us to incur increased costs by reason of the need to comply with such regulations and prohibit or severely restrict our businesses.

36. Certain of the entities forming part of our Promoter Group have incurred losses in the past.

Certain entities forming part of our Promoter Group have incurred losses in the last three fiscal years. The profit/ (loss) figures for these companies are set out below:

(In Rs. million)

As of March 31,

Promoter Group 2007 2006 2005

Companies

Jaipur Distributer Private Limited (0.59) 0.03 0.01

Partnership Firms

Angel Manufacturing Company (0.10) (0.74) (0.98)

37. Our Promoter will continue to hold a substantial equity stake in our Company after this Issue.

After the completion of this Issue, our Promoter will own approximately 36.31% of our outstanding post Issue Equity Shares. So long as our Promoter owns a majority of our Equity Shares, he will be able to elect our entire Board of Directors and control most matters affecting us, including the appointment and removal of our officers, our business strategies and policies, any decisions with respect to mergers, business combinations and acquisitions or dispositions of assets, our dividend policies and our capital structure and financings. Further, to the extent that he holds the majority of our Equity

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Shares, he could delay or prevent a change of management or control of our company, even if such a transaction may be beneficial to our other shareholders. The interests of our Promoter, as our controlling shareholder, could also conflict with our interests or the interests of our other shareholders. As a result, our Promoter may take actions with respect to our business that may conflict with our interests or the interests of our other shareholders.

38. We have in the last 12 months issued equity shares to Mr. Jayesh Sheth, our wholetime

Director at a price which may be different than the Issue Price

We issued 1,800,000 equity shares of Rs. 10 each on February 18, 2008 at a price of Rs. 10 each to Mr. Jayesh Sheth, our wholetime Director. For further details, please see the section titled “Capital Structure” on page 18 of this Draft Red Herring Prospectus.

39. We have availed of loans from our Promoter and certain Promoter Group individuals/entities

which are currently outstanding and are repayable on demand.

As of December 31, 2007, we had outstanding unsecured loans totaling, in principal amount, Rs. 298.39 million, which were held by our Promoter and certain Promoter Group individuals/entities, including certain of our Directors and which are repayable on demand. For further details summarizing the principal amount of each loan and the names of our Promoter and Promoter Group Individuals/entities, please refer to the section titled “Financial Indebtedness” on page 123 of this Draft Red Herring Prospectus.

40. Our registered office and other premises from which we operate are not owned by us.

We do not own the premises on which our registered office and other offices are located. All our offices operate from leased premises. If any of the owners of these premises do not renew the agreements under which we occupy the premises, or if they renew such agreements on terms and conditions unfavourable to us, we may suffer a disruption in our operations, which may adversely affect our business and results of operations. For further details, see the section titled “Business-Properties” on page 82 of this Draft Red Herring Prospectus.

External Risks in relation to the Industry and to India

1. A slowdown in economic growth in India could cause our business to suffer.

Our performance and the growth of our business are necessarily dependent on the health of the overall Indian economy. A slowdown in the Indian economy could adversely affect our business. India’s economy could be adversely affected by a general rise in interest rates, weather conditions adversely affecting agriculture, commodity and energy prices, and protectionist efforts in other countries or various other factors. In addition, the Indian economy is in a state of transition. It is difficult to gauge the impact of these fundamental economic changes on our business. Any slowdown in the Indian economy or future volatility in global commodity prices could adversely affect our business.

2. A downturn in the real estate industry will negatively affect our vitrified tiles business and our

results of operations.

We have been experiencing growth in our vitrified tile business, mainly as a result of an upward trend in the real estate market and increasing levels of disposable income. In the future, if the real estate industry experiences or the general economy experiences a downturn, it could negatively affect our vitrified tiles business and our results of operations.

3. Fluctuation in the value of the Rupee against other currencies could adversely affect the cost of

our raw materials and revenues from exports.

Imported raw materials accounted for approximately 57% of our raw material cost in the case of vitrified tiles and 58% in case of CFLs during the nine-month period ended December 31, 2007. A devaluation or depreciation in the value of the Rupee increases our total costs of such imports in Rupee terms and, depending on the timing of the currency fluctuation, we may be unable to recover these costs

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through cost-saving measures elsewhere or by passing on these increased costs to our customers and distributors through higher prices. Similarly, we source certain types of equipment from overseas. A devaluation or depreciation in the value of the Rupee increases the cost of such equipment in Rupee terms.

4. Any downgrading of India’s debt rating by an international rating agency could have a negative

impact on our business.

Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing may be available. This could have an adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures and the trading price of our Equity Shares.

5. Financial instability in Indian financial markets could materially and adversely affect our results

of operations and financial condition.

The Indian financial market and the Indian economy are influenced by economic and market conditions in other countries, particularly in Asian emerging market countries. Financial turmoil in Asia, Russia and elsewhere in the world in recent years and more recently in the USA has affected the Indian economy. Although economic conditions are different in each country, investors’ reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss in investor confidence in the financial systems of other emerging markets may cause increased volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy. Financial disruptions may occur again and could harm our results of operations and financial condition.

6. Our business could be adversely impacted by economic, political and social developments in

India.

Our performance and growth are dependent on the health of the Indian economy. The economy could be adversely affected by various factors, such as political and regulatory action including adverse changes in liberalisation policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, commodity and energy prices and various other factors. Any slowdown in the economy could adversely affect our prospective customers, which in turn would adversely affect our business, financial performance and the price of our Equity Shares.

7. The extent and reliability of Indian infrastructure could adversely impact our results of

operations and financial condition.

India’s physical infrastructure is less developed than that of many developed nations. Any congestion or disruption with its port, rail and road networks, electricity grid, communication systems or any other public facility could disrupt our normal business activity. Any deterioration of India’s physical infrastructure would harm the national economy, disrupt the transportation of goods and supplies, and add costs to doing business in India. These problems could interrupt our business operations, which could have a material adverse effect on our results of operations and financial condition.

8. Natural calamities could have a negative impact on the Indian economy and cause our business

to suffer.

India has experienced natural calamities, such as earthquakes, a tsunami, floods and drought in the past few years. The extent and severity of these natural disasters determines their impact on the Indian economy. For example, as a result of drought conditions in the country during fiscal 2003, the agricultural sector recorded a negative growth of 5.2%. Further prolonged spells of below normal rainfall or other natural calamities could have a negative impact on the Indian economy that may materially adversely affect our ability to generate export sales and our results of operations.

9. We face risks and uncertainties associated with our export business.

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Our export business is subject to the regulations enacted by the governments of countries where we export our products, including requirements for obtaining licences and other approvals to establish and maintain a subsidiary or a sales agency, conduct sales and marketing activities, and otherwise related to the sale of our products in such countries. Failure to comply with such regulations or our inability to maintain or obtain any necessary licences and approvals may materially adversely affect our ability to generate export sales and our results of operations.

The importation of our products may be subject to tariff and non-tariff barriers in the countries of destination. We cannot provide any assurance that the importation of our products will not be subjected to similar regulatory actions in the future.

10. Terrorist attacks, civil unrest and other acts of violence or war could adversely affect the

financial markets and our business.

Terrorist attacks and other acts of violence or war may negatively affect the Indian markets on which our Equity Shares trade and also adversely affect the worldwide financial markets. These acts may also result in a loss of business confidence, making travel and other services more difficult and ultimately, adversely affecting our business.

Acts of violence or war, including those involving the United States, the United Kingdom or other countries, may adversely affect worldwide financial markets and could adversely affect the world economic environment, which could adversely affect our business, results of operations, financial condition and cash flows, and more generally, any of these events could lower investor confidence.

11. An outbreak of an infectious disease or any other serious public health concerns in Asia or

elsewhere could have a material adverse effect on our business and results of operations.

The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concern could have a negative impact on the economies, financial markets and business activities in the countries in which our markets are located, which could have a material adverse effect on our business. Although we have not been adversely impacted by these outbreaks, we can give no assurance that a future outbreak of an infectious disease among humans or animals or any other serious public health concern will not have a material adverse effect on our business.

12. Our ability to raise foreign capital may be constrained by Indian law.

As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our financing sources could constrain our ability to obtain financing on competitive terms and refinance existing indebtedness. In addition, we cannot assure you that the required approvals will be granted to us without onerous conditions, or at all. Limitations on foreign debt may have a material adverse impact on our business growth, financial condition and results of operations.

Risks in Relation to an Investment in our Equity Shares

1. After this Issue, the price of Equity Shares may be highly volatile, or an active trading market

for the Equity Shares may not develop.

The price of our Equity Shares on the Indian stock exchanges may fluctuate after this Issue as a result of several factors, including: volatility in the Indian and global securities market; our operations and performance; performance of our competitors; the perception of the market with respect to investments in the real estate sector; adverse media reports about us or the Indian real estate sector; changes in the estimates of our performance or recommendations by financial analysts; significant developments in India’s economic liberalisation and deregulation policies; and significant developments in India’s fiscal regulations. There has been no public market for the Equity Shares and the prices of the Equity Shares may fluctuate after this Issue. There can be no assurance that an active trading market for the Equity Shares will develop or be sustained after this Issue, or that the prices at which the Equity Shares are

xxiv

initially traded will correspond to the prices at which the Equity Shares will trade in the market subsequent to this Issue.

2. There are restrictions on daily movements in the price of the Equity Shares, which may

adversely affect a shareholder’s ability to sell, or the price at which it can sell, Equity Shares

at a particular point in time.

Following the Issue, we will be subject to a daily “circuit breaker” imposed by all stock exchanges in India, which does not allow transactions beyond specified increases or decreases in the price of our Equity Shares. This circuit breaker operates independently of the index-based, market-wide circuit breakers generally imposed by SEBI on Indian stock exchanges. The percentage limit on our circuit breakers will be set by the stock exchanges based on the historical volatility in the price and trading volume of our Equity Shares.

The stock exchanges will not inform us of the percentage limit of the circuit breaker in effect from time to time and may change it without our knowledge. This circuit breaker will limit the upward and downward movements in the price of the Equity Shares. As a result of this circuit breaker, no assurance may be given regarding your ability to sell your Equity Shares or the price at which you may be able to sell your Equity Shares at any particular time.

3. There is no guarantee that our Equity Shares will be listed on the BSE and the NSE in a

timely manner or at all, and any trading closures at the BSE and the NSE may adversely

affect the trading price of our Equity Shares.

In accordance with Indian law and practice, permission for listing of the Equity Shares will not be granted until after those Equity Shares have been issued and allotted. Approval will require all other relevant documents authorizing the issuing of our Equity Shares to be submitted. There could be a failure or delay in listing our Equity Shares on the BSE and the NSE. Any failure or delay in obtaining the approval would restrict your ability to dispose of your Equity Shares.

The BSE and the NSE have in the past experienced problems, including temporary exchange closures, broker defaults, settlements delays and strikes by brokerage firm employees, which, if continuing or recurring, could affect the market price and liquidity of the securities of Indian companies, including the Equity Shares, in both domestic and international markets. A closure of, or trading stoppage on, either of the BSE and the NSE could adversely affect the trading price of our Equity Shares.

4. Conditions in the Indian securities market may affect the price or liquidity of our Equity

Shares.

Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. In addition, the governing bodies of the Indian stock exchanges may from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Indian stock exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If such problems occur in the future, the market price and liquidity of the Equity Shares could be adversely affected.

5. Any future issuance of Equity Shares may dilute your shareholdings, and sales of our Equity

Shares by our Promoter or other major shareholders may adversely affect the trading price of

the Equity Shares.

Any future equity issuances by us, including a primary offering, may lead to the dilution of investors’ shareholdings in our Company. Any future equity issuances by us or sales of our Equity Shares by our Promoter or other major shareholders may adversely affect the trading price of the Equity Shares. In addition, any perception by potential investors that such issuances or sales might occur could also affect the trading price of our Equity Shares.

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Notes to Risk Factors:

• Public Issue of 10,064,900 equity shares of Rs. 10 each for cash at a price of Rs. [�] per equity

share (including a share premium of Rs. [●] per equity share) aggregating Rs. [�] million. The Issue would constitute 19.50% of the post issue paid up capital of the Company.

• In accordance with Rule 19(2) (b) of the SCRR, this being an Issue for less than 25% of the post–Issue capital, the Issue is being made through the 100% Book Building Process whereby at least 60% of the Issue will be allocated on a proportionate basis to QIBs, out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. If at least 60% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, at least 10% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and 30% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.

• On February 15, 2007 the face value of the equity shares of Rs. 1,000 each were sub-divided into equity shares with a face value of Rs. 10 each.

• The Company’s net worth as at March 31, 2007 and December 31, 2007 was Rs. 2,305.99 million and Rs. 2,810.55 million respectively as per our restated financial statements under Indian GAAP.

• The net asset value per Equity Share as at March 31, 2007 and December 31, 2007 was Rs. 53.95 and Rs. 66.64 respectively as per our restated financial statements under Indian GAAP.

• The average cost of acquisition of per Equity Share by our Promoters, which has been calculated by taking the average amount paid by them to acquire our Equity Shares, is Rs. 1.28.

• Refer to the notes to our financial statements relating to related party transactions in the section titled “Related Party Transactions” on page 119 of this Draft Red Herring Prospectus.

• For details of transactions in Equity Shares undertaken by our Promoter and Promoter Group, see the section titled “Capital Structure” on page 18 of this Draft Red Herring Prospectus

• For details of the interests of our Directors and Key Managerial Personnel, please refer to the section titled “Our Management” on page 95 of this Draft Red Herring Prospectus. For details of the interests of our Promoters and Promoter Group, please refer to the section titled “Our Promoters and Our Promoter Group” on pages 106 and 108 respectively of this Draft Red Herring Prospectus.

• Except as disclosed on page 19 of this Draft Red Herring Prospectus, we have not issued any Equity Shares for consideration other than cash. See the section titled “Capital Structure” on page 18 of this Draft Red Herring Prospectus

• Investors may contact the BRLMs and Syndicate Members for any complaints, information or clarifications pertaining to the Issue. The BRLMs and Syndicate Members are obliged to provide the same to investors.

• Investors are advised to refer to the section titled “Basis for Issue Price” on page 43 of this Draft Red Herring Prospectus before making an investment.

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• Investors may note that in case of over-subscription in the Issue, Allotment to Bidders in all of the categories shall be on a proportionate basis. Under-subscription, if any, in any category, except the QIB Portion, would be met with spill over from other categories at our discretion, in consultation with the BRLMs. For more information, please refer to the section titled “Basis of Allotment” on page 247 of this Draft Red Herring Prospectus.

• All information shall be made available by the BRLMs, Syndicate Members and 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 whatsoever.

• Trading in the Equity Shares shall be in dematerialised form only.

• We began our operations as an exporter of clocks in May 1992 as a partnership between Odhavjibhai Patel, Pravin O. Patel, Manubhai U. Patel, Raghavjibhai B. Patel, Jaysukhbhai O. Patel, Ashok O. Patel, Parvinkumar U. Patel, Ramesh B. Patel and Prabhubhai U. Patel. We were reorganized as a company called Ajanta Electronics Private Limited on November 9, 1994 and engaged in the business of distributorship of trading and domestic marketing of electronic products. We changed our name from Ajanta Electronics Private Limited to Ajanta Manufacturing Private Limited with effect from January 23, 2004. We became a public company on January 23, 2004 and changed the name of our Company from Ajanta Manufacturing Private Limited to Ajanta Manufacturing Limited with effect from January 23, 2004 pursuant to a special resolution of the shareholders passed at an EGM dated January 15, 2004. The fresh certificate of incorporation consequent on change of name was granted by the RoC to our Company on January 23, 2004.

1

SECTION III: INTRODUCTION

SUMMARY OF OUR BUSINESS, STRENGTHS AND STRATEGY

In this section the terms “we”, “our” and “us” are used to refer to our Company. The

information in this section relating to CFL market leadership is derived from the Market Information

Report ACNielsen ORG-MARG Pvt. Ltd dated February 4, 2008 by AC Nielsen. AC Nielsen information

reflects estimates of market conditions based on samples, and is prepared primarily as a marketing

research tool for consumer packaged goods manufacturers and others in the consumer goods industry. The

information should not be viewed as a basis for investments and references to AC Nielsen should not be

considered AC Nielsen’s opinion as to the value of any security or the advisability of investing in our

Company.

Overview

We are one of India’s leading manufacturers of compact fluorescent lamps (“CFLs”) and vitrified tiles. We also manufacture aluminum composite panels (“ACPs”) and have recently commenced the production of battery operated electromotive bikes (“E-Bikes”). We manufacture all our products in a single integrated facility located on approximately 181 acres in Samakhayali village in Bhachau taluka in the district of Kutch in Gujarat. We market our products under the “OREVA” brand name. Our company philosophy is to provide quality products at affordable prices for the mass market.

Our Company was founded in 1994 by Shri. Odhavji Bhai R Patel, founder of Ajanta Transistor Clock Manufacturing Company, which was established in 1971 and engaged in the manufacturing of wall clocks under the “Ajanta” brand name. Our Promoter Group Companies are based in Morbi, Gujarat (approximately 50 kilometers from our manufacturing facility). Our Promoter Group Companies manufacture and sell a broad range of products, including consumer and electronic products and home appliances.

CFL Division: According to AC Nielsen in its Market Information Report of ACNielsen ORG-MARG Pvt. Ltd dated February 4, 2008, we ranked second in sales volume of CFLs in India in twelve months ended December 2007. We launched our CFL division in Fiscal 2006 and our CFL plant has a current daily production capacity of approximately 200,000 units. We believe that we played a role in raising the consumer awareness about CFLs in the Indian consumer market by introducing CFLs at competitive prices. During fiscal 2009, we expect to complete our backward integration of CFL production by building a manufacturing facility that will allow us to produce, rather than purchase, glass tubes for CFLs. Glass tubes are approximately 45% of CFL component costs, and we believe that manufacturing glass tubes in-house will enable us to reduce our production costs and improve our price competitiveness.

Vitrified Tiles Division: Our vitrified tile products provide a low-cost, better quality flooring alternative for the Indian consumer market. We produce vitrified tiles in a number of colours and designs. We launched our vitrified tile division in Fiscal 2006, and we have five production lines capable of producing approximately 30,000 square meters of vitrified tiles per day. Our vitrified tiles plant is the largest in India in terms of installed manufacturing capacity (Source: GITCO, January 2008) and contains continuous ball mills, kilns that each measure approximately 205 meters, 48-head polishing machines and 5,000 metric tonne hydraulic presses. In addition, we also have our own coal gasification facility within the plant.

ACP Division: We launched our ACP division in April 2007. ACPs are used in the building industry for interior and exterior paneling. Our ACP division has the capacity to produce 400,000 square meters of ACP per year.

E-Bikes Division: We have a manufacturing facility to produce our own E-Bikes which are specifically designed and adapted for the Indian market. We had assembled a small number of E-bikes on a trial basis. These E-bikes were assembled by us from parts manufactured by third parties. We determined that going forward it would be in our best interests to manufacture E-bikes in-house. Production will take

2

place in two phases. The first phase of our E-Bike facility will have a capacity of 400 bikes per day (“Phase I”). In phase two, we propose to scale up our production capacity to 2,000 bikes per day (“Phase II”). Phase I production of E-Bikes recently commenced in late March 2008. First production from Phase II is expected to commence by June 30, 2009. Unlike the majority of E-Bike manufacturers in India, who we believe are primarily product assemblers, by the end of Phase II, we plan to manufacture approximately 85% of the components necessary to produce E-Bikes in our own integrated, in-house facility in Gujarat. Batteries constitute approximately 40% of E-Bike component costs. While we currently import batteries, we intend to manufacture batteries in-house with full scale battery production expected by the end of Phase II.

We have an India-wide distribution network for each of our products. We export our CFLs to the United Arab Emirates and our vitrified tiles to the United Arab Emirates, Qatar, Iraq and the West Indies. Similarly, we procure our materials directly from manufacturers and producers, principally in China, Korea, Taiwan and Thailand. We believe that our distribution expertise will assist us in creating and growing a nationwide distribution network for E-Bikes. We plan to sell our E-Bikes under the “OREVA” brand name through our dealer network, initially in western India and gradually all over India.

Our total revenues for the nine months ended December 31, 2007 and the fiscal years ended March 31, 2007 and March 31, 2006 were Rs. 3,654.14 million, Rs. 3,306.57 millions and Rs. 897.50 million, respectively. Export sales for the nine months ended December 31, 2007 and the fiscal year ended March 31, 2007 were Rs. 775.24 million and Rs. 448.97 million, respectively. Our profit after tax for the nine months ended December 31, 2007 and the fiscal years ended March 31, 2007 and March 31, 2006 were Rs. 504.56 million, Rs. 276.31 millions and Rs. 13.38 millions, respectively. Our revenues and EBIDTA by operating division are set forth in the table below.

Nine months ended

December 31, 2007

Fiscal 2007 Fiscal 2006

Rs. Millions

Operating Division Revenue

CFL Division 1,770.22 1,814.91 594.86

Vitrified Tiles Division 1,461.91 1,339.61 70.87

ACP Division 31.98 0.09 --

E-Bike – trial production 29.66 0.26 --

Total Income from Operations

3,293.77 3,154.88 665.74

EBIDTA Nine months ended

December 31, 2007

Fiscal 2007 Fiscal 2006

Amount

(In Million)

% to income

from

operations

Amount

(In million)

% to income

from

operations

Amount

(In Million)

% to income

from

operations

CFL 659.51 37.26 514.15 28.33 60.4 10.15

Vitrified Tiles 217.43 14.87 196.98 14.70 22.99 32.44

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ACP 7.56 23.64 (0.16) - - -

E-bikes – trial production

4.34 14.63 0.26 100 - -

Competitive Strengths

Philosophy, Values and Indian Consumer Focus

Our products are developed to meet the needs of mass market consumers in India. Our core philosophy is to maximize “value for money” by offering quality products at affordable prices. Our primary focus has remained on the Indian middle income consumer, which constitutes a majority of the total market for any consumer product in India. We believe that this philosophy has been instrumental in the success of our businesses.

Strong Brands

All of our products are sold primarily under the brand name “OREVA”. Our “OREVA Power Savers” brand is well recognized both in city centers and small villages and is associated with products of value and quality. According to AC Nielsen in Market Information Report of ACNielsen ORG-MARG Pvt. Limited dated February 4, 2008, we ranked second in sales volume of CFLs in India in twelve months ending December 2007. In fiscal 2007, we sold 17.81 million units of CFLs. Similarly, our vitrified tiles brand “OREVA Grantile Forever” is well recognized in the market. In fiscal 2007, we sold 4.29 million square meters of vitrified tiles.

We believe that we will be able to leverage the strength of our brand to market and sell new products. For example, our new E-Bike product will be marketed under the “OREVA E-Bike” brand. The use of the “OREVA” name enables us to tap into a consumer base that has had experience with our products and is comfortable with them.

Central Manufacturing Facility with Backward Integration

We own and operate a large integrated manufacturing facility in Samakhayali village in Bhachau taluka in the district of Kutch in Gujarat where we manufacture products for each of our divisions. Our fully integrated manufacturing facilities allow us to benefit from economies of scale. For example, we process and manufacture a variety of plastic components and parts, electronic products and components and metal mould components which we use in each of our divisions. We seek to backward integrate our manufacturing chain whenever possible in order to reduce input costs and increase customer value. For example, we manufacture critical components like plastic parts, eecores transformers, beed rings and printed circuit boards for our CFLs. We plan to build a glass tube manufacturing plant during fiscal year 2009 in order to further integrate our CFL division.

Leveraging our Promoter Group’s Complementary Technologies and Processes

We leverage our Promoter Group’s experience in technologies and processes to manufacture, backward integrate and scale-up our existing and proposed products. For example, in our CFL manufacturing process, we used our Promoter Group’s knowledge of, and experience with, plastics processing, metalworking and electronic component manufacturing and assembling. We intend to use complementary technologies and skill sets in the manufacture of our E-Bikes.

Strong Sourcing Capabilities

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We benefit from a procurement network with international and domestic manufacturers and suppliers, which was developed through our management’s and Promoter Group’s efforts over a number of years in related businesses. Further, in many cases, our management and Promoter Group have developed relationships directly with parts and components manufacturers in China, instead of relying upon distributors and middlemen. These relationships have inured to our benefit by having provided us with important access to raw materials, suppliers and component manufacturers and resulting lower costs than would otherwise be available to us.

Nationwide sales and Distribution Network

We have a nationwide sales and distribution network in our own offices, showrooms and depots. For CFLs, at January 31, 2008, we had 142 stockists, 1,750 distributors, 15,319 retailers and one company owned depot in Bhiwandi, one depot managed by a clearing and forwarding agent in Guwahati and 59 exclusive showrooms. For vitrified tiles, at January 31, 2008, we had 41 distributors, 350 dealers, five branches managed by a clearing and forwarding agent, one Company owned branch in Bangalore and two exclusive showrooms, one in each of Ahmedabad and Morbi. For our ACPs, at January 31, 2008, we had 10 dealers, three depots managed by a clearing and forwarding agent, two Company owned depots in Bhiwandi and two exclusive showrooms in each of Ahmedabad and Morbi.

We began marketing our CFLs in villages, small towns and district level cities through a network of distributors. Also, we made our CFLs available in a wide variety of retail outlets, including general stores, grocery stores, novelty stores, medical supply stores, newspaper shops, watch showrooms and seasonal stores. Using this method, we achieved nationwide distribution in a relatively short period of time. We believe that our distribution expertise will assist us in creating and growing a nationwide distribution network for our E-Bikes. At January 31, 2008, we had eight exclusive retail showrooms and 10 dealers for our E-Bikes.

Strong In-house Research and Development

Before we determine to introduce a new product, such as our E-Bikes, we undertake research from both the marketing and manufacturing perspectives. We employ an in-house research and development team whose main objective is to work out cost-effective manufacturing processes and maintain quality standards for our products and to develop economical and efficient manufacturing solutions. As of January 31, 2008, we had five new CFL products and four new tile products under development.

Experienced and Proven Management Team

Our Promoter has extensive experience in manufacturing and marketing a wide range of consumer products. Members of our management team also have years of experience in the consumer product business, and have been chosen for their ability to effectively execute plans and policies.

Our Strategy

We intend to grow our business by implementing the following key strategies.

Become a major player in the domestic E-Bikes market

We see a significant opportunity in the developing Indian market for domestically manufactured E-Bikes. We intend to leverage our existing manufacturing strengths and our Promoter Group’s experience in complementary technologies and processes as well as our strong procurement capabilities in China to emulate the success of CFLs and Vitrified tiles for our E-Bikes.

We have initiated development of a manufacturing facility to produce our own E-Bikes which are specifically designed for the Indian market. We have produced a small number of E-bikes on a trial basis. These E-bikes were assembled by us from parts manufactured by third parties. We determined that going

5

forward it would be in our best interests to manufacture E-bikes in-house. Production will take place in two phases. Phase I of our E-Bike facility will have a capacity of 400 bikes per day. In Phase II, we propose to scale up our production capacity to 2,000 bikes per day. Phase I production of E-Bikes recently commenced in late March 2008. First production from Phase II is expected to commence by June 30, 2009. Unlike the majority of E-Bike manufacturers in India, who we believe are primarily product assemblers, in Phase II we plan to manufacture approximately 85% of the components necessary to produce E-Bikes in our own integrated, in-house facility in Gujarat. Batteries constitute approximately 40% of E-Bike component costs. While we currently import batteries, we intend to manufacture batteries in-house with full scale battery production expected in Phase II. Those components that we are unable to manufacture in-house, we will obtain on a cost-effective basis by leveraging our procurement network in key countries such as China, Korea and Taiwan. We believe that this will enable us to produce E-Bikes at lower costs than our competitors and to ultimately sell a more affordable product. In addition, we believe that our E-Bike design is more rugged and better suited for Indian road conditions than products based on Chinese design.

We plan to sell our E-Bikes under the “OREVA” brand name through our dealer network, initially in western India and gradually all over India. We have trained a core group of approximately 50 employees for the E-Bike marketing effort. These employees will spearhead our E-Bike promotional efforts and will be deployed to our service centers and showrooms. We also plan to offer after sales services for E-Bikes through a dealer service network that will provide consumers with replacement parts, including batteries that are both functional and affordable. Since we ultimately plan to produce all the important components, including batteries, ourselves, we expect to be able to provide more cost-competitive servicing options.

Improve our market share in CFLs through reduced costs due to backward integration

We intend to improve our market position in CFLs and build on our OREVA brands by continuing to produce quality, high-value products at low cost in large volumes.

We plan to cut production costs associated with our CFL products and increase our production capacity by building the proposed glass tube manufacturing facility at our Gujarat facility. The proposed glass tube facility is expected to have an installed capacity to produce 250,000 glass tubes per day or 75,000,000 glass tubes per year. The cost of this facility is currently estimated at Rs. 950 million and completion is currently scheduled for fiscal 2009. For more details please refer to the section titled “Objects of the Issue” on page 26 of this Draft Red Herring Prospectus.

Glass tubes are a significant component of our CFL products, constituting approximately 45% of CFL component costs. The in-house production of glass tubes would reduce our production costs significantly as well as reduce transportation and breakage costs, which should enable us to reduce our prices and make our CFLs even more cost-competitive.

Increase Sales of CFLs

We currently export our CFLs to the United Arab Emirates. In fiscal 2007 and in the nine months ended December 31, 2007, our sales from exports of CFLs were Rs. 434.48 million and Rs. 761.89 million, respectively. We believe our CFL business presents an opportunity to increase our export sales.

We are also expanding our sales of CFLs of 30W and above. We believe that manufacturing CFLs in these higher wattages presents an opportunity for us as we believe this is a growth area.

Continue to grow our vitrified tiles and ACP business

We plan to continue to grow our vitrified tiles and ACP businesses to utilize our existing capacity. We will continue to explore cost efficiencies and implement process improvements across our integrated production facility.

6

SUMMARY FINANCIAL INFORMATION

The following tables set forth summary financial information derived from our restated financial statements as of and for the years ended March 31, 2007, 2006, 2005, 2004, 2003 and for the nine months period ended December 31, 2007. These financal statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Guidelines and presented under the sections titled “Financial Statements” beginning on page 125 of this Draft Red Herring Prospectus. The summary financial information presented below should be read in conjunction with our restated financial statements, the notes thereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 162 of this Draft Red Herring Prospectus. Indian GAAP differs in certain respect from US GAAP and IFRS.

SUMMARY STATEMENT OF RESTATED ASSETS & LIABILITIES

(Rs in Million)

Particular

As at

December

31, 2007

As at

March

31, 2007

As at

March

31, 2006

As at

March

31, 2005

As at

March

31, 2004

As at

March

31, 2003

Fixed Assets

Gross Block (Including WIP) 2582.86 2449.39 2078.83 1476.57 21.64 -

Less : Depreciation 217.99 131.54 33.11 - - -

Net Block 2364.86 2317.85 2045.72 1476.57 21.64 -

Capital Advances + Incidental Exp. 4.29 62.96 71.61 162.59 315.73 -

Total Net Block (A) 2369.16 2380.81 2117.33 1639.16 337.37 -

Investments (B) 10.02 115.02 0.02 - - -

Deferred Tax Assets (Net) (C) - - - - - -

Current assets, loans and advances

Sundry Debtors 930.74 115.20 26.13 - - -

Cash and Bank Balance 49.13 128.72 34.36 7.78 11.77 0.44

Inventories 1414.08 930.89 670.19 111.83 - -

Loans & Advance 511.33 266.97 110.73 64.65 96.16 126.12

TOTAL (D) 2905.28 1441.77 841.40 184.25 107.93 126.56

TOTAL (A)+(B)+(C)+(D) (E) 5284.45 3937.60 2958.75 1823.41 445.30 126.56

Liabilities And Provisions

Secured Loans 1252.23 897.88 1224.16 750.00 - -

Unsecured Loans 298.39 312.65 375.85 445.56 - -

Current Liabilities 513.10 160.75 722.33 37.91 4.62 0.08

Deferred Tax Liability (Net) 145.65 106.78 7.73 - - -

Provisions 264.54 153.56 29.85 1.51 0.60 0.60

TOTAL (F) 2473.90 1631.62 2359.91 1234.98 5.22 0.68

Net Worth (E) - (F) (G) 2810.55 2305.99 598.84 588.44 440.08 125.88

Net Worth Represented by

Share Capital (H) 559.15 559.15 500.00 500.00 50.00 50.00

Share application money pending

allotment (I) - - - - 302.05 -

7

Particular

As at

December

31, 2007

As at

March

31, 2007

As at

March

31, 2006

As at

March

31, 2005

As at

March

31, 2004

As at

March

31, 2003

Reserves and Surplus (J) 2251.40 1746.84 98.84 91.16 90.75 75.90

Miscellaneous Expenditure (K) - - - 2.73 2.73 0.02

Net Worth (H)+(I)+(J)-(K) (L) 2810.55 2305.99 598.84 588.44 440.08 125.88

8

SUMMARY STATEMENT OF RESTATED PROFITS & LOSSES

(Rs in Million)

Particular As at

December

31, 2007

As at

March

31, 2007

As at

March

31,

2006

As at

March

31,

2005

As at

March

31,

2004

As at

March

31,

2003

Income

Income From Operation 3293.77 3154.88 665.74 - 42.35 -

Trading Activity - - - 28.82 - -

Other Income 52.75 79.63 1.71 1.83 2.11 0.29

Increase/(Decrease) in Stock 307.62 72.06 230.05 - - -

TOTAL (A) 3654.14 3306.57 897.50 30.65 44.46 0.29

Expenditure

Cost Of Production

Raw Material Consumed 1993.11 1786.09 510.95 28.94 17.80 -

Employee Cost 137.43 132.62 16.81 - 1.48 -

Power & Fuel 190.47 172.95 36.67 - 1.95 -

Manufacturing Cost 79.80 78.50 79.44 - 4.47 -

Administration Expenses 72.60 70.67 4.84 0.49 0.72 0.98

Selling Expenses 278.97 354.51 162.52 0.09 17.13 0.55

Depreciation 86.46 98.42 33.11 - 0.07 -

Financial Expenses 71.03 100.15 27.49 - 0.02 0.02

Preliminary Expenses Written Off - - 2.73 - 0.02 0.02

TOTAL (B) 2909.87 2793.91 874.55 29.52 43.67 1.57

Profit before tax & Extra Ordinary Items :

(A) - (B) (C) 744.27 512.66 22.96 1.13 0.80 (1.28)

Provision for Taxes

Current Tax 200.00 77.50 2.00 0.30 0.07 -

Deferred Tax 38.87 99.05 7.73 - - -

Fringe Benefit Tax 0.80 0.40 0.60 - - -

TOTAL (D) 239.67 176.95 10.33 0.30 0.07 -

Profit after Tax before Adjustments(C) - (D) (E) 504.60 335.71 12.63 0.83 0.73 (1.28)

Adjustments [as per Annexure 4] (F) (0.04) (59.39) 0.75 0.14 14.12 -

Profit After Tax, As Restated (E) - (F) (G) 504.56 276.31 13.38 0.98 14.85 (1.28)

9

THE ISSUE

Equity Shares offered by the Company 10,064,900 Equity Shares

Issue to the Public# 10,064,900 Equity Shares

Of which A) Qualified Institutional Buyers (QIB) portion* Of which

At least 6,038,940 Equity Shares

Available for allocation to Mutual

Funds only 301,947 Equity Shares

Balance for all QIBs including Mutual Funds 5,736,993 Equity Shares

B) Non-Institutional Portion* Not less than 3,019,470 Equity Shares C) Retail Portion* Not less than 1,006,490 Equity Shares

Equity Shares outstanding prior to the Issue 41,550,000 Equity Shares

Equity Shares outstanding after the Issue

51,614,900 Equity Shares

Use of Proceeds by the Company See the section titled “Objects of the Issue” on page 26 of this Draft Red Herring Prospectus.

# The Company is considering a Pre-IPO Placement of Equity Shares with certain investors (“Pre-IPO

Placement”). The Pre-IPO placement is at the discretion of the Company. The Company will complete

the issuance of such Equity Shares prior to the filing of the Red Herring Prospectus with the RoC. If

the Pre-IPO Placement is completed, the Issue size offered to the public would be reduced to the extent

of such Pre-IPO Placement, subject to a minimum Issue size of 10% of the post Issue paid up capital

being offered to the public.

* Undersubscription, if any, in any portion, except in QIB portion, would be met with spill over from any

other category or combination of categories at the discretion of the Company, in consultation with the

BRLMs. If atleast 60% of the Issue cannot be Allotted to QIBs, then the entire application money will

be refunded.

10

GENERAL INFORMATION Registered and Corporate Office of our Company

Ajanta Manufacturing Limited Ajanta Corporate House 8-A, National Highway Morbi, District Rajkot Gujarat 363 642 Tel: (91 2822) 304 444 Fax: (91 2822) 304 430 Registration No: No. 04 – 23531 of 1994-95 CIN: U29308GJ1994PLC023531 Address of the ROC We are registered with the RoC situated at ROC Bhavan, opposite Rupal Park, Near Ankur Bus Stand, Naranpura, Ahmedabad 380 013.

Board of Directors of the Company Our Board of Directors consists of:

S. No Name and Designation

Age Address

1. Odhavjibhai Patel, Chairman and Non-Executive Director

82 “Ajanta”, New Adarsh Society Near Sardar Baug Sanala Road Morbi 363 641

2. Jaysukhbhai O. Patel, Managing Director

48 Rewa Villa, GIDC Salana Road Morbi 363 641

3. Jayesh Sheth, Executive Director

47 302/A, Parijat Building LalLubhai Park Road Ville Parle (West) Mumbai 400 056

4. Chintan J. Bhalodia, Non-Executive Director

22 Rewa Villa, GIDC Salana Road Morbi 363 641

5. Nemi C Jain, Independent Director

68 601, Sanskruti Building Plot No. 21 Sector-42, Nerul Navi Mumbai 400 001

6. Jitendra T. Patel, Independent Director

47 11, Manekbaug Society Satellite Road Ahmedabad 380 015

7. Tushar D. Udani, 53 605/606, Mahavir II, Bonbon Lane

11

S. No Name and Designation

Age Address

Independent Director Off J. P. Road, Seven Bunglows Andheri (W) Mumbai 400 053

8. Jitendra Kumar Jain, Independent Director

61 Flat No. A-405, 4th Floor, Prerna Society, Plot No. 13 Sector-10, Dwarka New Delhi 110 075

For further details of our Directors, see section titled “Our Management” on page 95 of this Draft Red Herring Prospectus.

Company Secretary and Compliance Officer Mr. Rajendra Patel Ajanta Manufacturing Limited Ajanta Corporate House 8-A, National Highway Morbi, District Rajkot Gujarat 363642 Tel: (91 2822) 304 444 Fax: (91 2822) 304 430 Email: investors@oreva.com Investors can contact the Compliance Officer or the Registrar in case of any pre-Issue or post-Issue

related problems such as non-receipt of letters of allocation, credit of allotted Equity Shares in the

respective beneficiary account or refund orders, etc. Book Running Lead Managers

Enam Securities Private Limited 801/ 802, Dalamal Towers Nariman Point Mumbai 400 021 India Tel: (91 22) 6638 1800 Fax: (91 22) 2284 6824 E-mail: ajantaipo@enam.com Investor Grievance Email: complaints@enam.com Website: www.enam.com Contact Person: Pranav Mahajani SEBI Reg. No. INM000006856 JM Financial Consultants Private Limited 141, Maker Chambers III Nariman Point Mumbai 400 021 Tel: (91 22) 6630 3030 Fax: (91 22) 2202 8224 Email: aml.ipo@jminancial.in Investor Grievance Email: grievance.ibd@jmfinancial.com Website: www.jmfinancial.in

12

Contact Person: Rohit Pareek SEBI Registration No. : INM000010361

Syndicate Members [●]

Legal Advisors to the Issue

Domestic Legal Counsel to the Issue Amarchand Mangaldas & Suresh A. Shroff & Co. 5th Floor, Peninsula Chambers Peninsula Corporate Park Ganpatrao Kadam Marg, Lower Parel Mumbai 400 013 India Tel: (91 22) 2496 4455 Fax: (91 22) 2496 3666 International Legal Counsel to the Underwriters Dorsey & Whitney 21, Wilson Street London EC2M 2TD England United Kingdom Tel: (044) (0) 20 7588 0800 Fax: (044) (0) 20 7588 0555

Statutory Auditors

Finava & Associates Chartered Accountants 34, IInd Floor, Stat Shopping Centre, 20- New Jagnath, Dr. Yagnik Road, Rajkot 360 001 Tel: (91 281) 2462988 Fax: (91 281) 2463088 Contact Person: Manoj Finava Email: mfinava@yahoo.com

Registrar to the Issue Intime Spectrum Registry Limited C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West) Mumbai 400 078 Tel: (91 22) 2596 0320/ 1800 22 0320 Fax: (91 22) 2596 0328 Bankers to the Issue and Escrow Collection Banks [●]

13

Bankers to the Company State Bank of India Corporate Accounts Group Branch 58, Shrimali Society, Navrangpura, Ahmedabad - 380 009 Gujarat Tel: (91 079) 26561395 / 26426563 Fax: (91 079) 26561128 / 26561178 Contact Person: N. Sundar Email: sundar.n@sbi.co.in

State Bank of Saurashtra Morvi Main Branch Opp. Gandhi Baug P.B. No.3, Morvi - 363641 Dist. Rajkot Gujarat Tel: (91 2822) 224850 / 221636 Fax: (91 2822) 230296 Contact Person: M. B. Mandavia Email: mrv.main@sbs.co.in

HDFC Bank Limited Om Shopping Complex, Ravapar Main Road, Morvi – 363641 Gujarat Tel: (91 2822) 221315 / 650176 Fax: (91 2822) 221314 Contact Person: Satyam Pandya Email: satyam.pandya@hdfcbank.com

ICICI Bank Limited Jai Hind Press Annexe, Opp. Shardabaug, Babubhai Shah Marg, Rajkot - 360001 Gujarat Tel: (91 281) 2459502 / 2459503 Fax: (91 281) 2443398 Contact Person: Nikunj Shah Email: nikunj.sh@icicibank.com

IDBI Bank Limited Shiv Darshan, Jagnath Plot Corner, Dr. Radhakrishna Road, Near Trikon Bagh, Off Yagnik Road, Rajkot – 360001 Gujarat Tel: (91 281) 2461552 / 2461553 Fax: (91 281) 2467001 Contact Person: Mirtunjay Kumar Email: mirtunjay.kumar@idbi.co.in

Axis Bank Limited Aradhana, Nr. Bank Of Baroda, Kalawad Road, Rajkot - 360 001 Gujarat Tel: (91 281) 2467808 / 2467809 Fax: (91 281) 2464499 Contact Person: Prakash Shroff Email: prakash.shroff@axisbank.com

IndusInd Bank Parmanand Complex, Sanala Road, Morvi - 363 641 District – Rajkot Gujarat. Tel: (91 281) 251760 / 251260 Fax: (91 281) 231461 Contact Person: Gajanan Bhatt Email: morbi@indusind.com

IPO Grading Agency

[●]

Statement of inter se allocation of Responsibilities for the Issue The following table sets forth the distribution of responsibility and co-ordination for various activities amongst the BRLMs:

Activity Responsibility Co-ordinator

14

Capital Structuring with relative components and formalities such as type of instruments, etc.

ENAM & JM ENAM

Due-diligence of the company including its operations/management/business plans/legal, etc. Drafting and design of the Draft RHP and of statutory advertisement including memorandum containing salient features of the Prospectus. The BRLMs shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges, the RoC and SEBI, including finalisation of Prospectus and the RoC filing

ENAM & JM ENAM

Drafting and approving all statutory advertisements ENAM & JM ENAM

� Approval of all non-statutory advertisements including corporate advertisements

� Preparation and finalization of the road-show presentation � Preparation of FAQs for the road-show team

ENAM & JM JM

Appointment of intermediaries viz. Printer(s), and advertising agency to the Issue.

ENAM & JM ENAM

Appointment of Registrar & Banker to the Issue(s) ENAM & JM JM

Non-Institutional and Retail Marketing of the Issue, which will cover, inter alia,

• Formulating marketing strategies, preparation of publicity budget

• Finalize Media & PR strategy

• Finalizing centers for holding conferences for brokers, etc.

• Follow-up on distribution of publicity and Issuer material including form, prospectus and deciding on the quantum of the Issue material

• Finalize collection centers

ENAM & JM JM

Institutional marketing of the Issue, which will cover, inter alia,

• Institutional marketing strategy

• Finalizing the list and division of investors for one to one meetings, and

• Finalizing road show schedule and investor meeting schedules

ENAM & JM ENAM

Co-ordination with Stock Exchanges for Book Building software, bidding terminals and mock trading

ENAM & JM JM

Managing the Book and finalisation of pricing in consultation with the company

ENAM & JM ENAM

Post bidding activities including management of escrow accounts, co-ordination of allocation, intimation of allocation and dispatch of refunds to bidders, etc. The post issue activities for the Issue will involve essential follow-up steps including finalisation of trading and dealing of instruments and dispatch of certificates and demat and delivery of shares with the various agencies connected with the work such as the Registrar(s) to the Issue and the bank handling refund business. The merchant banker shall be responsible for ensuring that these agencies fulfill their functions and enable it to discharge this responsibility through suitable agreements with our company

ENAM & JM JM

Credit Rating

As this is an offer of Equity Shares, there is no credit rating for this Issue.

15

Trustees

As this is an issue of Equity Shares, the appointment of Trustees is not required.

IPO Grading This Issue has been rated by [●] as [●] indicating [●]. For further details please refer to disclaimer appearing on page [●] and “Annexures” appearing on page [●]. Pursuant to Clauses 5.6B.1 and 6.17.3A of the SEBI Guidelines, the rationale/description furnished by the credit rating agency will be updated at the time of filing the Red Herring Prospectus with the Designated Stock Exchange.

Experts

Except the report of [●] in respect of the IPO grading of this Issue annexed herewith and except as stated elsewhere in this Draft Red Herring Prospectus, the Company has not obtained any expert opinions.

Monitoring Agency There is no requirement to appoint a Monitoring Agency for the Issue in terms of clause 8.17.1 of the SEBI DIP Guidelines as the Issue size is less than Rs. 500 crores (Rs. 5,000 million). Withdrawal of the Issue

Our Company in consultation with the BRLMs, reserves the right not to proceed with the Issue at any time, including after the Bid/Issue Opening Date, without assigning any reason. Notwithstanding the foregoing, the Issue is also subject to obtaining final listing and trading approvals of the Stock Exchanges, which the Company shall apply for after Allotment.

Book Building Process

Book building, with reference to the Issue, refers to the process of collection of Bids on the basis of the Red Herring Prospectus within the Price Band. The Issue Price is finalized after the Bid/ Issue Closing Date. The principal parties involved in the Book Building Process are: 1. The Company; 2. BRLMs; 3. Syndicate Member who is an intermediary registered with SEBI or registered as brokers with

BSE/NSE and eligible to act as Underwriters. The Syndicate Member is appointed by the BRLMs; 4. Escrow Collection Bank(s); and 5. Registrar to the Issue. This being an issue for less than 25% of post issue equity capital of the Company, the SEBI Guidelines read with rule 19(2) (b) of the SCRR, have permitted an issue of securities to the public through the 100% Book Building Process, wherein at least 60% of the Issue shall be allocated on a proportionate basis to QIBs, out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBs including the Mutual Funds subject to valid bids being received at or above the Issue Price. If at least 60% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, not less than 10% of the Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 30% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. We will comply with the SEBI

16

Guidelines and any other ancillary directions issued by SEBI for this Issue. In this regard, we have appointed the BRLMs to manage the Issue and to procure subscriptions to the Issue.

Pursuant to amendments to the SEBI Guidelines, QIB Bidders are not allowed to withdraw their Bid(s) after the Bid /Issue Closing Date and for further details see the section titled “Terms of the Issue” on page 223 of this Draft Red Herring Prospectus.

The process of Book Building under SEBI Guidelines is subject to change from time to time and

investors are advised to make their own judgment about investment through this process prior to making a Bid or Application in the Issue.

Illustration of Book Building Process and Price Discovery Process (Investors should note that this

example is solely for illustrative purposes and is not specific to the Issue) Bidders can bid at any price within the price band. For instance, assume a price band of Rs. 20 to Rs. 24 per share, offer size of 3,000 equity shares and receipt of five bids from bidders out which one bidder has bid for 500 shares at Rs. 24 per share while another has bid for 1,500 shares at Rs. 22 per share. A graphical representation of consolidated demand and price would be made available at the bidding centers during the bidding period. The illustrative book given below shows the demand for the shares of the Company at various prices and is collated from bids from various investors.

The price discovery is a function of demand at various prices. The highest price at which the Company is able to offer the desired number of shares is the price at which the book cuts off i.e. Rs. 22 in the above example. The Company in consultation with BRLMs will finalise the Issue Price at or below such cut off price, i.e. at or below Rs. 22. All bids at or above the Issue Price and cut off bids are valid bids and are considered for allocation in the respective categories. Steps to be taken by the Bidders for bidding:

• Check eligibility for bidding (please refer to the section titled “Issue Procedure - Who Can Bid” on page 229 of this Draft Red Herring Prospectus);

• Ensure that the Bidder has an active demat account and the demat account details are correctly mentioned in the Bid cum Application Form;

• For Bids of all values, ensure that you have mentioned your PAN in the Bid Cum Application Form (see section titled “Issue Procedure” on page 229 of this Draft Red Herring Prospectus; and

• Ensure that the Bid cum Application Form is duly completed as per instructions given in this Draft Red Herring Prospectus and in the Bid Cum Application Form.

Underwriting Agreement After the determination of the Issue Price but prior to filing of the Prospectus with the RoC, we will enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be offered through this Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the BRLMs shall be responsible for bringing in the amount devolved in the event that their respective Syndicate Members do not fulfill their underwriting obligations.

Bid Quantity Bid Price (Rs.) Cumulative Quantity Subscription

500 24 500 16.67%

1,000 23 1,500 50%

1,500 22 3,000 100%

2,000 21 5,000 166.67%

2,500 20 7,500 250%

17

The Underwriters have indicated their intention to underwrite the following number of Equity

Shares: (This portion has been intentionally left blank and will be filled in before the filing of the Prospectus with

the RoC)

Name and Address of the

Underwriter

Indicative Number of Equity Shares to be

Underwritten

Amount

Underwritten (Rs. in Million)

Enam Securities Private Limited [●] [●]

JM Financial Consultants Private Limited

[●] [●]

The above mentioned amount is indicative underwriting and this would be finalized after the pricing and actual allocation. Further, the above mentioned Underwriting Agreement is dated [●]. In the opinion of our Board of Directors (based on a certificate given by the Underwriters), the resources of the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The above-mentioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the Stock Exchange(s). Our Board of Directors, at its meeting held on [●], has accepted and entered into the Underwriting Agreement mentioned above on behalf of the Company. Allocation among Underwriters may not necessarily be in proportion to their underwriting commitments. Notwithstanding the above table, the BRLMs and the Syndicate Member shall be responsible for ensuring payment with respect to Equity Shares allocated to investors procured by them. In the event of any default in payment, the respective Underwriter, in addition to other obligations defined in the Underwriting Agreement, will also be required to procure subscriptions for/subscribe to Equity Shares to the extent of the defaulted amount.

18

CAPITAL STRUCTURE

Our Equity Share capital before the Issue and after giving effect to the Issue, as at the date of filing of this Draft Red Herring Prospectus with SEBI, is set forth below:

Aggregate Value

at Face Value

(Rs.)

Aggregate Value

at Issue Price

(Rs.)

A Authorized Capital

[●]

55,000,000 Equity Shares of Rs. 10 each fully paid-up 17,000,000 Preference Shares of Rs. 10 each fully paid-up

550,000,000

170,000,000

[●]

B. Issued, Subscribed And Paid-Up Equity Capital

before the Issue

[●]

41,550,000 Equity Shares of Rs. 10 each fully paid-up before the Issue

415,500,000 [●]

C. Issued, Subscribed And Paid-Up Preference Capital before the Issue

16,165,000 10% Redeemable Cumulative Preference Shares of Rs. 10 each

161,650,000 [●]

D. Present Issue in terms of this Draft Red Herring

Prospectus#

10,064,900 Equity Shares * 100,649,000 [●]

E. Equity Capital after the Issue 51,614,900 Equity Shares

516,149,000 [●]

F. Share Premium Account

Before the Issue 1,413,850,000

After the Issue [●]

# The Company is considering a Pre-IPO Placement of Equity Shares with certain investors (“Pre-

IPO Placement”). The Pre-IPO placement is at the discretion of the Company. The Company will

complete the issuance of such Equity Shares prior to filing the Red Herring Prospectus with the

RoC pursuant to this Issue. If the Pre-IPO Placement is completed, the Issue size offered to the

public would be reduced to the extent of such Pre-IPO Placement, subject to a minimum Issue size

of 10% of the post Issue paid up capital being offered to the public.

* The Issue in terms of this Draft Red Herring Prospectus has been authorized pursuant to a resolution passed at the resolution of the Board dated February 21, 2008 and the EGM resolution dated February 25, 2008.

Details in relation to the change in authorized capital of the Company:

Date Details of change

March 2, 2004 Increase in authorised capital from Rs. 50 million to Rs. 500 million

July 1, 2006 Increase in authorised capital from Rs. 500 million to Rs. 550 million.

February 15, 2007 Increase in authorised capital from Rs. 550 million to Rs. 720 million.

19

Notes to Capital Structure 1. (a) Equity Share Capital History of the Company

Date of

Allotment

No. of

Equity Shares

Issued

Cumulative

no. of Equity

Shares

Face

Value (Rs.)

Issue

Price/Sale Price

(Rs.)

Nature of

Payment of Consideration

Reasons

for

Allotment

Cumulative

Paid-Up Equity

Capital (Rs.)

Cumulative

Equity Share Premium (Rs.)

November 10, 1994

50,000 50,000 1,000 1,000 Cash Subscription to the

Memorandum of

Association*

5,00,00,000 -

August 10, 2004

450,000 500,000 1,000 1,000 Cash Allotment to Odhavjibhai

R. Patel, Jaysukhbahi O. Patel and Ellora Time

Limited (now

known as

Ajanta

Limited)

50,00,00,000 -

August 12, 2006

25,000 525,000 1,000 49,000 Cash Allotment to Jayesh Sheth and Pallavi Sheth (joint

holding)

52,50,00,000 1,20,00,00,000

November 18, 2006

5,000 530,000 1,000 49,600 Cash Allotment to Vijesh Sheth

53,00,00,000 1,44,30,00,000

February 15, 2007

- 53,000,000 10 - - Sub-division of face value

of equity shares of our

Company from Rs.

1,000 to Rs. 10 each

53,00,00,000 1,44,30,00,000

February 15, 2007

(13,250,000) 39,750,000 10 12.20 - Buy back of equity shares

by the Company

39,75,00,000 1,41,38,50,000

February 18, 2008

18,00,000 41,550,000 10 10 Cash Allotment to Jayesh Sheth

415,500,000 1,413,850,000

* Subscribers to the Memorandum being Odhavjibhai R. Patel, Pravinbhai O. Patel, Manubhai U. Patel, Raghavjibhai B. Patel, Jaisukhbhai O. Patel, Ashokkumar O. Patel, Pravinkum U. Patel, Ramesh B. Patel and Prabhulal B. Patel

(b) Preference Share Capital History of the Company

Date of

Allotment

No. of

Preference Shares

Cumulative

No. of Preference

Shares

Face

Value (Rs.)

Issue

Price (Rs.)

Nature of

Payment of Consideration

Reasons for

Allotment

Cumulative

Paid-Up Preference

Share Capital

(Rs.)

February 19, 2007

16,165,000* 16,165,000 10 10 Cash Allotment of 10% redeemable cumulative

preference shares to Jaysukhbhai O. Patel, Mrudilaben J. Patel, Chintan J. Patel and

Alis J. Patel

161,650,000

20

*The Company issued 16,165,000 10% redeemable, cumulative, preference shares (Preference Shares) which are redeemable in three equal tranches on the date following the end of the 6th, 7th and 8th year from the date of allotment or any other earlier date, two years from the date of allotment in one or more tranches which the Board of Directors may deem fit subject to a special resolution passed at a meeting of the Board of Directors. The terms and conditions of these Preference Shares are as follows:

• The Preference Shares allotted carry a right to a cumulative preference dividend of 10% per annum in relation to the capital paid up on such shares;

• The Preference Shares holders have a right to attend the general meetings of the Company and vote on resolutions directly affecting their interest or where the dividends as on the date of the meeting are outstanding for at least two years; and

• On winding up of the Company, the Preference Shares holders shall be entitled to a preferential right of return on the amount paid up on the Preference Shares together with arrears of cumulative preferential dividend due on the date of winding up but shall not have any further right or claim over the surplus assets of the Company.

2. Promoter Contribution and Lock-in

All Equity Shares, which are being locked-in are eligible for computation of Promoters’ contribution and are being locked in under Clauses 4.6 and 4.11.1 of the SEBI Guidelines. (a) History of Equity Share Capital held by the Promoter

Date of

Allotment /

Transfer

No. of

Equity

Shares Issued

Cumulative

No. of

Equity Shares

Face

Value

(Rs.)

Issue/

Acquisition/Sale

Price (Rs.)

Nature of

Consideration

Nature of

Transaction

Jaysukhbhai O. Patel November 10,

1994 7,500 7,500 1,000 7,500,000 Cash Subscribers to

Memorandum

February 17, 2004

(3,000) 4,500 1,000 - Gift Transfer

August 10, 2004

99,000 103,500 1,000 99,000,000 Cash Allotment

May 9, 2006 151,500 255,000 1,000 - Gift Transfer

February 15, 2007

- 25,500,000 10 - - Sub-division of equity shares of

Rs. 1,000 each to Rs. 10 each

February 15, 2007

(6,757,500) 18,742,500 10 (82,441,500) Cash Buy back of equity shares by the

Company

(b) Details of Promoter contribution locked in for three years

Pursuant to the SEBI Guidelines, an aggregate of 20% of the post issue capital of the Company held by the Promoter shall be locked-in for a period of three years from the date of Allotment in the Issue. The details of such lock-in are given below:

Name Number

of Equity

Shares

Face Value

(Rs.)

Nature of

Consideration

Issue Price per

Equity Share (Rs.)

Date of

Allotment/Acquisition

Reasons for

Allotment

Percentage of post-

Issue paid-up capital

(in %)

Lock – in

period

21

Name Number of Equity

Shares

Face Value (Rs.)

Nature of

Considerati

on

Issue Price per

Equity

Share (Rs.)

Date of

Allotment/Acq

uisition

Reasons for

Allotment

Percentage of post-

Issue paid-

up capital (in %)

Lock – in perio

d

Jaysukhbhai O. Patel

450,000* 10 Cash 1,000 November 10, 1994

Subscribers to

Memorandum of

Association

0.87 3 years

Jaysukhbhai O. Patel

9,872,980* 10 Cash 1,000 August 10, 2004

Allotment 19.13 3 years

TOTAL 10,322,980 10 20 3 years

*The equity shares of the Company having a face value of Rs. 1000 per equity share were sub-divided into equity shares having a face value of Rs. 10 per equity share on February 15, 2007

In terms of Clause 4.14.1 of the SEBI Guidelines, in addition to 20% of the post-Issue shareholding of the Company held by the Promoter and locked in for three years as specified above, the entire pre-Issue share capital of the Company including Promoter Contribution will be locked in for a period of one year from the date of Allotment in this Issue. In terms of Clause 4.16.1(a) of the SEBI Guidelines, the Equity Shares held by persons other than the Promoter prior to the Issue may be transferred to any other person holding the Equity Shares which are locked-in as per Clause 4.14 of the SEBI Guidelines, subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as applicable. Further, in terms of Clause 4.16.1(b) of the SEBI Guidelines, Equity Shares held by the Promoter may be transferred to and among the Promoter Group or to a new promoter or persons in control of the Company subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as applicable. In addition, the Equity Shares subject to lock-in will be transferable subject to compliance with the SEBI Guidelines, as amended from time to time. As per clause 4.15.1 of the SEBI Guidelines, the locked in Equity Shares held by the Promoters can be pledged only with banks or financial institutions as collateral security for loans granted by such banks or financial institutions, provided that the pledge of the Equity Shares one of the terms of the sanction of the loan. Further the Equity Shares constituting 20 % of the fully diluted post- Issue capital of the Company held by the Promoters that are locked in for a period of three years from the date of the Allotment of Equity Shares may be pledged only if, in addition to complying with the aforesaid conditions, is when the loan has been granted by such banks or financial institutions for the purpose of financing one or more of the objects of the Issue.

3. Details of transactions in Equity Shares by the Promoters and Promoter Group Companies The following are the Equity Shares that have been sold or purchased by the Promoter and the Promoter Group Companies, during the period of six months preceding the date on which the Draft Red Herring Prospectus is filed with SEBI.

Promoter/

Promoter

Group

Nature of

Transaction

Date of

transfer

Transfered

to

Purchased

from

Number of

Equity Shares

transferred (each of Rs. 10)

Aggregate

Price

Pravinbhai O. Patel

Gift November 27, 2007

Navil Patel - 1,377,875 -

22

4. Details of transactions in Preference Shares by the Promoters and Promoter Group

Companies

No Preference Shares have been sold or purchased by the Promoter and the Promoter Group Companies, during the period of six months preceding the date on which the Draft Red Herring Prospectus is filed with SEBI.

5. Shareholding Pattern of our Company The shareholding pattern of the Company before and after the Issue is as under:

Category Pre-Issue Post Issue**

No of Equity

Shares Percentage No of Equity

Shares Percentage

(in %)

Promoter (A)

Jaysukhbhai O. Patel

18,742,500

45.11

18,742,500

[●]

Total (A)

18,742,500

45.11

18,742,500

[●]

Promoter Group (B)

Mrudulaben Patel

5,512,500 13.27

[●]

[●]

Chaintan J. Bhalodia

4,042,500 9.73

[●]

[●]

Pravinbhai O. Patel

1,378,125 3.32

[●]

[●]

Alis J. Patel (through father and natural guardian Jaysukhbhai O. Patel)

1,837,500 4.42

[●]

[●]

Jaysukhbhai O. Patel (HUF)

735,000 1.77

[●]

[●]

Odhavjibhai Patel

367,500 0.88

[●]

[●]

Total (B)

13,873,125

33.39

[●]

[●]

Others (C)

Vanitaben P. Patel

1,378,125 3.32

[●]

[●]

Jayesh Sheth (Director) and Pallavi J. Sheth

1,800,000

4.33

Jayesh Sheth (Director)

1,800,000 4.33

[●]

[●]

Navil Patel

1,378,125 3.32 [●]

[●]

Himanshu Patel

1,378,125

3.32

[●]

[●]

Siddharth Chitalia and Charu Chitalia

50,000 0.12

[●]

[●]

23

Category Pre-Issue Post Issue**

No of Equity

Shares

Percentage No of Equity

Shares

Percentage

(in %)

Anuj Chitalia and Charu Chitalia

50,000

0.12

[●]

[●]

Nilesh Maniar and Rupa Maniar

100,000

0.24

[●]

[●]

Mehul Shah and Niti Shah

100,000 0.24

[●]

[●]

Madhusudan Shah and Chandra Shah

100,000 0.24

[●]

[●]

Enam Securities Private Limited

800,000

1.92

[●]

[●]

Total (C) 8,934,375

21.50 [●]

[●]

Public (D) Nil

Nil 10,064,900

[●]

Total (A+B+C+D) 41,550,000

100 51,614,900

100

6. Equity Shares held by top ten shareholders

The details of the top ten shareholders of the Company and the number of Equity Shares held by them are as under:

a) As on the date of, and ten days prior to filing of this Draft Red Herring Prospectus:

S.

No.

Shareholder(s) Number of

Equity Shares

Percentage (%)

1. Jaysukhbhai O. Patel 18,742,500 45.11

2. Mrudulaben Patel 5,512,500 13.27

3. Chaintan J. Bhalodia 4,042,500 9.73

4. Alis J. Patel (through father and natural guardian Jaysukhbhai O. Patel)

1,837,500

4.42

5. Jayesh Sheth and Pallavi J. Sheth

1,800,000 4.33

6. Jayesh Sheth 1,800,000 4.33

7. Pravinbhai O. Patel 1,378,125 3.32

8. Vanitaben P. Patel 1,378,125 3.32

9. Navil Patel 1,378,125 3.32

10. Himanshu Patel 1,378,125 3.32

TOTAL 39,24,7500 94.47

b) Two years prior to filing of this Draft Red Herring Prospectus:

S. No. Shareholder(s) Number of Equity Shares Percentage (%)

1. Odhavjibhai Patel 351,000 70.2

24

S. No. Shareholder(s) Number of Equity Shares Percentage (%)

2. Jaysukhbhai O. Patel 103,500 20.7

3. Chaintan J. Bhalodia 11,500 2.3

4. Alish J. Patel 11,500 2.3

5. Jaysukhbhai O. Patel (HUF) 9,000 1.8

6. Mrudulaben J. Patel 4,500 0.9

7. Vanitaben P. Patel 4,500 0.9

8. PravinbhaiO. Patel 4,500 0.9

TOTAL 500,000 100

7. Our Company, our Promoter, our Directors and the BRLMs have not entered into any buy-back

and/or standby arrangements for purchase of the Equity Shares from any person. 8. Except as stated in the section titled “Our Management” on page 95 of this Draft Red Herring

Prospectus, none of our Directors or Key Managerial Personnel hold any Equity Shares in the Company.

9. The Company has not raised any bridge loan against the proceeds of the Issue. For details on use

of proceeds, see the section titled “Objects of the Issue” on page 26 of this Draft Red Herring Prospectus.

10. Except as stated above, Our Promoter, Directors, and our Promoter Group have not purchased or

sold any Equity Shares within the six months preceding the date of filing this Draft Red Herring Prospectus.

11. This Issue is being made through a 100% Book Building Process wherein at least 60% of the Issue

shall be allocated to QIBs on a proportionate basis. 5% of the QIB Portion shall be available for allocation to Mutual Funds only and the remaining QIB Portion shall be available for allocation on a proportionate basis to the QIB Bidders including Mutual Funds subject to valid Bids being received at or above the Issue Price. Further, not less than 10% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Issue will be available for allocation to Retail Individual Bidders, subject to valid Bids being received from them at or above the Issue Price. Under-subscription, if any, in any category, except the QIB portion would be allowed to be met with spill over from other categories at the discretion of the Company in consulatation with the BRLMs.

12. A Bidder cannot make a Bid for more than the number of Equity Shares offered in this Issue,

subject to the maximum limit of investment prescribed under relevant laws applicable to each category of investor.

13. There are no outstanding warrants, options or rights to convert debentures, loans or other financial

instruments into our Equity Shares. 14. There would be no further issue of capital whether by way of issue of bonus shares, preferential

allotment, and rights issue or in any other manner during the period commencing from submission of the Draft Red Herring Prospectus with SEBI until the equity shares offered hereby have been listed.

15. The Company presently does not have any intention or proposal to alter capital structure for a

period of six months commencing from the date of filing this Draft Red Herring Prospectus, by way of split/ consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares) whether on a preferential basis or otherwise or if we enter into acquisitions or joint

25

ventures, we may subject to necessary approvals, consider raising additional capital to fund such activity or use Equity Shares for participation in such acquisitions or joint ventures.

16. We have not issued any Equity Shares out of revaluation reserves or for consideration other than

cash except as stated in the Equity Share Capital History table above. 17. The Equity Shares being offered in this Issue will be fully paid up at the time of Allotment. 18. There will be only one denomination of the Equity Shares of the Company unless otherwise

permitted by law and the Company shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time.

19. Equity Shares being issued in this Issue will be fully paid up at the time of Allotment. 21. The Company, Directors, Promoter or Promoter Group shall not make any payments, direct or

indirect, discounts, commissions, allowances or otherwise under this Issue, except as disclosed in this Draft Red Herring Prospectus.

22. The Equity Shares held by the Promoter are not subject to any pledge. 23. As of March 31, 2008 we had 18 members.

26

OBJECTS OF THE ISSUE

The objects of the Issue are to:

• to make investments in our “E-Bikes” project;

• to make investments in establishing our CFL glass tubes manufacturing facility;

• meet working capital requirements;

• fund expenditure for general corporate purposes; and

• achieve the benefits of listing.

The main objects set out in our Memorandum of Association enable us to undertake our existing activities and the activities for which funds are being raised by us through this Issue. Requirement of Funds and Means of Finance The details of proceeds of the Issue are summarised in the following table: (In Rs. million)

S.No Description Amount

1. Gross proceeds of the Issue* [●]

2. Issue Expenses* [●]

3. Net proceeds of the Issue* [●]

* To be finalized upon determination of Issue Price The stated objects of the Issue are proposed to be financed entirely out of the proceeds of this Issue. The net proceeds of the Issue after deducting all Issue related expenses are estimated to be Rs. [●] million. The details of the utilisation of Net Proceeds will be as per the table set forth below:

S.

No.

Particulars

1. Investment in our “E-Bikes” project:

Status Phase I - Project

Cost (In Rs.

million)

(i) Phase I of the E-Bikes Project Production under Phase I of the E-Bikes Project commenced in March, 2008

250*

Amount to be utilized (In Rs. Million) April 1, 2008 to

March 31, 2009

April 1, 2009 to

March 31, 2010

Total

(ii) Phase II of the E-Bikes Project 685.00 945.00 1,630.00

2. Investment in establishing our CFL glass tubes manufacturing facility

399.00 551.00 950.00

3. Augment Working Capital Requirements

Nil 700 700

4. General Corporate Purposes [●] [●] [●]

27

*The total project cost for Phase I is estimated to be approximately Rs. 250 million out which the Company

has funded Rs. 116.21 million as on February 29, 2008. The net proceeds of the Issue will not be utilised to

defray or meet the balance fund requirement of the the project cost for Phase I of our E-Bikes Project.

Our Company has not incurred any expenditure in relation to the above stated objects. Our Company’s funding requirement and deployment are based on internal management estimates, vendor quotations and have not been appraised by any bank or financial institution. We may have to revise our expenditure and fund requirements as a result of variations in cost estimates on account of variety of factors such as changes in strategy, financial condition and business as well as external factors which may not be within the control of our management and may entail rescheduling and revising the planned expenditure and funding requirement and increasing or decreasing the expenditure for a particular purpose from the planned expenditure at the discretion of our management. In case of any surplus after utilization of the proceeds from the Issue for the stated objects, we may use such surplus towards general corporate purposes. In the event of a shortfall in raising the requisite capital from the proceeds of the Issue towards meeting the objects of the Issue, the extent of the shortfall will be met by way of such means available to our Company, including by way of debt or cash available with us.

Details of the Objects 1. Investments in our “E-Bike” Project We have initiated development of a manufacturing facility to produce our own E-Bikes which are specifically designed and adapted for the Indian market. Production will take place in two phases. The first phase of our E-Bike facility was have a capacity of 400 bikes per day (“Phase I”) commenced production in March 2008. The total project cost for Phase I is estimated to be approximately Rs. 250 million out which the Company has funded Rs. 116.21 million as on February 29, 2008 through its internal accruals. The net proceeds of the Issue will not be utilised to defray or meet the balance fund requirement of the project cost for Phase I of our E-Bikes Project. In phase two, we propose to scale up our production capacity to 2,000 bikes per day (“Phase II”). First production from Phase II is expected to commence by June 30, 2009. Unlike the majority of E-Bike manufacturers in India, who are primarily product assemblers, in Phase II, we plan to manufacture approximately 85% of the components necessary to produce E-Bikes in our own integrated, in-house facility in Gujarat. We estimate to incur an expenditure of approximately Rs. 1,630 million towards Phase II, which we intend to fund by utilizing a portion of the Net Proceeds of the Issue. We have not incurred any cost on Phase II as on date of this Draft Red Herring Prospectus. The details of the proposed expenditure are set forth in the table below.

(In Rs. million)

S.

No.

Item Total Estimated

Cost

Deployment in Fiscal

2009

Deployment in Fiscal

2010

1. Machinery/Equipment 1,051.91 450.00 601.91

2. Factory building construction

401.10 160.00 241.10

3. Electrical fittings 25.13 10.00 15.13

4. Office furniture 15.00 5.00 10.00

5. Other miscellaneous expenses

55.36 25.00 30.36

6. Contingencies 81.50 35.00 46.50

TOTAL 1,630.00 685.00 945.00

Machinery/Equipment: We propose to install certain machinery/equipment for Phase II of our E-Bike project. We estimate that we shall incur approximately Rs. 1,051.91 million towards, procurement of

28

machinery/equipment. The table below sets forth the details of such machinery/equipment that are currently under consideration for placement of order. We will obtain fresh quotations at the time of actual placement of the order for the respective equipment. The following quotations which were received in US Dollars have been converted to Indian Rupees using the exchange rate of Rs. 40 per US Dollar. (i) Controller and Charger Manufacturing Plant

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1.

Wave solder and synchronizing machines

6 3.0 18.0

2. PCB mounting jigs and fixtures

6 2.0 12.0

Huang Dyi Industrial Co. Limited

3.

Assembly line for module in process and testing machines

6 6.24 37.4

4.

Material handling equipments, racks, jigs, fixtures etc.

- - 5.0

Wenling Foreign Trading Co. Limited

5. Soldering stations

700 0.005 3.5 Xytronic Industries Limited

6. Wire cutting machines

10 1.0 10.0

7. Wire stripping machines

8 0.4 3.2

8. Lead cutting machines

10 0.07 0.7

Teeming Machinery (Kushan) Co. Limited

9. Aluminum section cutting machines

3 0.50 1.5

10. Air vents 6 0.97 5.8

Nanjing Sunny Machinery & Electronics Co. Limited

TOTAL 97.1

29

(ii) Battery Manufacturing Plant

Sr. No.

Description Quantity Unit Cost (In Rs.

Million) Total Amount

(In Rs. Million) Quotation From

1. Assembly line for sealed lead acid batteries

2 2.58 5.17

2.

Charging stations and battery testing machines

500 0.005 2.55

Gaungzhou Palma Battery Limited

3. Acid filling machine with attachments

3 4.49 13.49

Zhejiang Changxing Tianneng Power Co. Limited

4. Exhaust fans 10 0.02 0.20

Nanjing Sunny Machinery & Electronics Co. Limited

TOTAL 21.41

(iii) Motor Production Line

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1.

Aluminum Furnace 1,250 kw, aluminum die casting press and cutter machine

8 2.25 18.0

2. Tapping machines and drill machines

10 0.06 0.60

3. Press and welding machines

4 0.09 0.36

4. CNC Lathe 10 1.49 15.0

Bengbu First Commercial & Trading Limited

5. Sand blasting machines

4 1.21 4.84

6. Exhaust fans 20 0.02 0.40

Nanjing Sunny Machinery & Electronic Co. Limited

7. Winding machines

10 0.22 2.27 Wujiyang Shengyuan I/E Co. Limited

30

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

8.

Moulds and tools for wheels, cover and brakes

10 3.51 35.14

9.

Jigs, fixtures and tools for assembly of motor

10 0.30 3.06

10. Wheel press 4 0.30 1.20

Taizhou Huangyan Wuxing Bicycle Co. Limited

11. Compressors 8 0.09 0.78 Puma Industrial Co. Limited

12.

Furniture and Material handling trolleys

- - 5.0 Wenling Foreign Trading Co. Limited

TOTAL 86.65

(iv) Plastic Related Components

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1.

Plastic injection molding machines (various models)

72 - 193.04

Ningbo Haitian Group Manufacturer Co. Limited

2.

Microprocessor control injection molding machines

6 5.04 30.25 Jon Wai Machinery Works Co. Limited

3. Dryer injection molding machines

9 2.49 22.49 Cincinnati Milacron Marketing Co.

4. Moulds for various plastic parts

8 20.62 164.97 Taizhou Target Mould Co. Limited

5. Grinders 10 0.005 0.05

6. Plastic mixers 6 0.002 0.01

Pimco Machines Private Limited

7. Cooling towers 42 0.04 1.97 Maheshware Refrigeration

31

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

8. EOT Cranes (7 ton)

4 2.96 11.85

9. EOT Cranes (3 ton)

4 1.19 4.78

Vishwakarma Industries

10. Exhaust fans 20 0.02 0.40

Nanjing Sunny Machinery & Electronic Co. Limited

11. Material handling equipments

- - 4.0 Wenling Foreign Trading Co. Limited

TOTAL 433.81

(v) Colour Production Line

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1. I.R. oven line 15 1.19 17.98 Wenling Decent Automation Co. Limited

2. U.V. colour line 8 2.47 19.80

3. Spray booth with spray guns

30 0.34 10.42

4. Paint mixture equipments

16 0.04 0.79

5. Exhaust fans 10 0.02 0.20

Wenling Decent Automation Co. Limited

6. Air compressors

8 0.20 1.65 Puma Industrial Co. Limited

7.

Furniture, jigs, fixtures and material handling equipments

- - 9.0 Wenling Foreign Trading Co. Limited

TOTAL 59.84

32

(vi) Metal Parts Production Line

Sr. No.

Description Quantity Unit Cost (In Rs.

Million) Total Amount

(In Rs. Million) Quotation From

1. Metal parts tools

3 1.55 4.66

2. Jigs and fixtures for metal parts

9 0.97 8.78

Taizhou Huihai Import & Export Co. Limited

3. Press machines 3 1.65 4.96

4. Saw cutter grinding machines

3 1.002 3.0

5. CNC tube bending machines

3 4.02 12.06

6. Tube cutting machines

3 0.39 1.19

7. Welding machines

20 0.13 2.76

Nanjing Sunny Machinery & Electronics Co. Limited

8. Powder coating line

3 10.08 30.25

9. Compressor 3 0.20 0.62

10. Other miscellaneous machinery

- - 2.51

Nanjing Sunny Machinery & Electronics Co. Limited

TOTAL 70.79

(vii) Assembly Line Equipments

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1. Assembly lines 21 1.40 29.40

2. Tools, jigs and other accessories

3 1.70 5.10

3. Tyre fitting machines

15 0.20 3.0

Wenling Foreign Trading Co. Limited

33

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

4. Bearings fitting press

15 0.19 2.89

5. Air operated mark printers

21 0.03 0.83

6. Padding machines

11 0.03 0.38

7. Press machines 21 0.06 1.28

8. Various spanners and hammers

205 - 0.30

9. Various testing instruments

159 - 11.25

10.

Various scales, gauges, calipers and micrometers

98 - 1.85

11. Air compressors

15 0.10 1.50 Wenling Foreign Trading Co. Limited

12. Air Compressors

21 0.20 4.34 Puma Industrial Co. Limited

TOTAL 62.12

(viii) Printed Circuit Board Production Line

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1. Auto-sawing machines

2 0.99 1.99

2. Various ovens 27 - 7.96

3. Solder mask scrubbing line

1 1.57 1.57

4. Three headed etching machine

1 2.18 2.18

5. Two up one bottom brushing

1 0.57 0.57

Nanjing Sunny Machinery & Electronics Co. Limited

34

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

machine

6. Lacquer coating machines

2 0.64 1.28

7. High precision presses

20 1.15 23.00 Sanes Presses Co. Limited

8. Auto single wave soldering machine

4 0.48 1.93

9. Buffer conveyor

1 0.06 0.06

10. Auto flux controller

3 0.08 0.24

11. Auto lead cutter 1 0.09 0.09

Huang Dyi Industries Co. Limited

12. Air compressors

8 0.09 0.78 Puma Industrial Co. Limited

13.

Furniture and material handling equipments

- - 2.5 Wenling Foreign Trading Co. Limited

TOTAL 44.15

(ix) Mould Maintenance/Tool Repair Equipments

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1. Various milling machines

12 - 16.95

Bengbu First Commercial & Trading Co. Limited

2. Various lathe machines

13 - 5.68 Yuhuan Huafeng Machine Tools Factory

3. Various drilling machines

15 - 1.53

4. Various CNC wire cutting machines

5 - 9.72

Nanjing Sunny Machinery & Electronics Co. Limited

35

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

5. Battery profile projector

1 0.30 0.30

6. Microprocess measuring machine

1 0.23 0.23

7. Various grinding machines

6 - 9.58

8. Universal cutter and tool grinder

1 0.17 0.17

9. Carbit tip grinder

1 0.21 0.21

Wenling City Kangnan Shu Song Shebei Chang

10. Electro discharge machines

8 - 12.88

11. Polishing machines

10 0.11 1.19

12. Electronic data processing machine

1 2.50 2.50

13. Various CNC milling machines

8 - 52.38

Changzhou Pooking Foreign Trade Co. Limited

14. EOT Crane 1 2.28 2.28 Vishwakarma Industries

15. Furniture, jigs, fixtures, stacks and racks

- - 1.12 Wenling Foreign Trading Co. Limited

TOTAL 116.72

(x) Plastic Components Metalizing Plant

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1. Vacuum Machine with accessories

4 5.49 21.99

2. Cooling towers 4 0.39 1.59

3. Colour booth 6 0.30 1.80

Zhen Hua Vacuum Machinery Co. Limited

36

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

4. Air compressors

4 0.25 1.00 Puma Industrial Co. Limited

5. Furniture, jigs, fixtures, stacks and racks

- - 1.2 Wenling Foreign Trading Co. Limited

TOTAL 27.58

(xi) Wire Harness Manufacturing Plant

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1. Various wire cutting machines

18 - 6.61 Ho Tien Precision Industry Co. Limited

2. Furniture, jigs, fixtures, stacks and racks

- - 0.60 Wenling Foreign Trading Co. Limited

TOTAL 7.21

(xii) Brass Components

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1.

Automatic late machines (various models)

6 - 11.8 Bengbu First Commercial & Trading Limited

2. Manual lathe machines

6 0.08 0.49

3. Hand press machines

8 0.03 0.25

4. Automatic shearing machines

2 1.56 3.12

5. Drill machines 5 0.03 0.15

6. Central grinding machines

3 0.82 2.48

Kawa Press System Private Limited

37

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

7.

Hand operated hydraulic press (various tonnage)

12 - 1.82

8. Power press 2 0.72 1.45

9. Furniture, jigs, fixtures, stacks and racks

2 - 0.4

TOTAL 21.96

(xiii) Packing Equipments

Sr. No.

Description Quantity Unit Cost (In Rs.

Million) Total Amount

(In Rs. Million) Quotation From

1. Strapping machine

12 0.10 1.30

Taizhou China-Extra International Trading Co. Limited

2. Air compressors

2 0.25 0.50 Puma Industrial Co. Limited

3. Furniture, jigs, fixtures, stacks and racks

- - 0.80 Wenling Foreign Trading Co. Limited

TOTAL 2.6

Factory Building Construction: We propose to utilise a portion of the Net Proceeds of the Issue aggregating to Rs. 401.10 million to construct a factory building for Phase II of our E-Bikes Project at our manufacturing complex at Taluka Bhachau in the Kutch district in the State of Gujarat. The factory building will be constructed over an area of 84,212.72 sq. meters and will house various workshops/plants for various manufacturing processes including assembling plant, controller manufacturing plant, PCB manufacturing plant, metalizing plant and plastic parts molding sections. The expected date of completion of construction for the factory building is twelve months from the date of commencement of construction. We have appointed Messrs. Design House, Architects by a letter dated March 12, 2008 in relation to the construction of the factory building which has been accepted by a letter to the Company dated March 17, 2008. Electrical Fittings: We propose to incur a cost of Rs. 25.13 million towards installation of electrical infrastructure in the factory building. This estimate is based on various quotations and estimates provided to us. Office Furniture: We propose to incur a cost of Rs. 15.00 million towards procurement of office furniture for the factory building. This estimate is based on various quotations and estimates provided to us.

38

Other Miscellaneous Expenses: For operationalizing the proposed factory building we will be required to incur expenditure towards equipment, furniture, interior fit outs and other related expenses. We estimate an expenditure of Rs. 55.36 million. Contingencies: We have provided Rs. 81.50 million towards any contingencies that may arise in the implementation and operationalisation of Phase II of the E-Bikes Project including increase in cost of equipment, construction materials and fluctuations in exchange rates.

We do not propose to utilise the Net Proceeds of the Issue to procure any “second-hand” equipment/machinery for Phase II of the E-Bikes Project. The Promoter or the Directors or Promoter Group entities do not have any interest in the proposed procurement of any equipment/machinery as stated above or in any of the entities from whom we have obtained quotations for such equipment/machinery. 2. Investment in establishment of our CFL glass tube manufacturing facility We plan to reduce production costs associated with our CFL products and increase our production capacity by establishing a glass tube manufacturing facility at our manufacturing complex in Taluka Bhachau in the Kutch District in Gujarat. We expect to have an installed capacity to produce 250,000 glass tubes per day or 75,000,000 glass tubes per year. The scheduled date for completion of this glass tube facility is during December 2009. However, we expect to commence production of glass tubes from March 2009. We estimate to incur an expenditure of approximately Rs. 950 million towards establishing the glass tube manufacturing facility which we intend to fund by utilizing a portion of the Net Proceeds of the Issue. We have not incurred any cost on the glass tube manufacturing as on date of this Draft Red Herring Prospectus. The details of such expenditure are set forth in the table below:

(In Rs. million)

S. No.

Item Total Estimated Cost

Deployment in Fiscal 2009

Deployment in Fiscal 2010

1. Machinery/Equipment 754.26 315.00 439.26

2. Factory Building Construction

126.53 55.00 71.53

3. Electrical fittings 13.00 5.00 8.00

4. Other miscellaneous expenses

8.71 4.00 4.71

5. Contingencies 47.50 20.00 27.50

TOTAL 950.00 399.00 551.00

Machinery/Equipment: We propose to install certain machinery/equipment for our glass tube manufacturing facility. We estimate that we shall incur approximately Rs. 754.26 million towards, procurement of machinery/equipment. The table below sets forth the details of such machinery/equipment that are currently under consideration for placement of order. We will obtain fresh quotations at the time of actual placement of the order for the respective equipment. The following quotations which were received in US Dollars have been converted to Indian Rupees using the exchange rate of Rs. 40 per US Dollar.

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

1. 12 head flare machines

11 0.55 6.05

2.

24 head automatic stem making machines

12 2.10 25.24

Shanghai Chifong Precision Machinery Co., Ltd

39

Sr.

No. Description Quantity

Unit Cost (In Rs.

Million)

Total Amount

(In Rs. Million) Quotation From

3.

24 head automatic mount mill machines

12 0.65 7.8

4. 60 head washing machines

8 3.00 24.03

5.

United 24 head blanking and 32 head sealing machines

10 3.23 32.35

6. 32 head 2U fusion machines

9 5.5 49.5

7. 32 head 3U fusion machines

10 5.7 57.00

8. 32 head 4U fusion machines

4 5.99 23.99

9. Spiral fusion machines

1 7.50 7.50

10. 48 head rotary exhaust machines

21 15.00 315.00

11. Coating and baking machines

8 9.49 75.99

12. Aging machines 20 5.50 110.0

Federal Machinery Co. Limited

13. Cutting and sorting machines

7 0.47 3.32

14. 12 head tube bending machines

20 0.52 10.50

15. Various jigs and fixtures

20 0.29 5.99

Wuxi Ruidong International Corp. Wuxi

TOTAL 754.26

Factory Building Construction: We propose to utilise a portion of the Net Proceeds of the Issue aggregating to Rs. 126.53 million to construct a factory building for our glass tube manufacturing facility at our manufacturing complex at Taluka Bhachau in the Kutch district in the State of Gujarat. The factory building will be constructed over an area of 30,416.40 sq. meters. The expected date of completion of construction for the factory building is twelve months from the date of commencement of construction. We have appointed Messrs. Design House, Architects by a letter dated March 12, 2008 in relation to the

40

construction of the factory building which has been accepted by a letter to the Company dated March 17, 2008. Electrical Fittings: We propose to incur a cost of Rs. 13 million towards installation of electrical infrastructure in the factory building. This estimate is based on various quotations and estimates provided to us. Other Miscellaneous Expenses: For operationalizing the proposed factory building we will be required to incur expenditure towards equipment, furniture, interior fit outs and other related expenses. We estimate an expenditure of Rs. 8.71 million. Contingencies: We have provided Rs. 47.50 million towards any contingencies that may arise in the implementation and operationalisation of the glass tube manufacturing facility including increase in cost of equipment, construction materials and fluctuations in exchange rates.

We do not propose to utilise the Net Proceeds of the Issue to procure any “second-hand” equipment/machinery for the glass tube manufacturing facility. The Promoter or the Directors or Promoter Group entities do not have any interest in the proposed procurement of any equipment/machinery as stated above or in any of the entities from whom we have obtained quotations for such equipment/machinery. 3. Augment Working Capital Requirements Our business is working capital intensive and requires significant amount of working capital. We avail a major portion of working capital in the ordinary course of our business from our banks as loans. As of the date of this Draft Red Herring Prospectus, the Company’s working capital facility consists of aggregate fund based limits of Rs. 500 million and non-fund based limits of Rs. 600 million. The working capital requirements set forth below are our estimates based on past experience and projections for the future. We propose to utilise Rs. 700 million towards our working capital requirements. The basis of our estimates of working capital requirements are set forth in the table below:

(In Rs. million)

S. No.

Particulars As at March 31,

2007

As at December 31,

2007

As at March 31, 2008 (Estimates)

As at March 31, 2009 (Estimates)

1. Current Assets

(i) Inventories:

Raw Materials 628.15 804.37 662.61 1,250.56

Work –in –progress 47.54 110.12 179.21 257.56

Finished Goods 255.19 499.60 309.62 761.38

(ii) Receivables 115.20 930.74 379.50 709.99

(iii) Other Current Assets 395.69 560.46 720.26 770.26

Total Current Assets

(A) 1,441.77 2,905.28 2,251.20 3,749.75

2. Current Liabilities

(i) Creditors 70.18 413.29 82.41 183.37

(ii) Other Current Liabilities

244.13 364.34 137.50 163.00

Total Current

Liabilities (B)

314.31 777.63 219.91 346.37

3. Working Capital Requirements (A-B)

1,127.46 2,127.65 2,031.28 3,403.37

Financed By:

Banks* 194.91 554.74 553.21 1259.65

Own Funds 932.55 1,572.91 1,478.07 1,443.72

41

S.

No.

Particulars As at

March 31,

2007

As at

December 31,

2007

As at March 31,

2008 (Estimates)

As at March 31,

2009 (Estimates)

Part proceeds of the Issue

- - - 700.00

TOTAL 1,127.46 2,127.65 2,031.28 3,403.37

*For details in relation to our working capital funding arrangements with the State Bank of India see the

section titled “Financial Indebtedness” on page 123 of this Draft Red Herring Prospectus. Assumptions for Working Capital Requirements:

Holding Levels

S. No. Particulars No. of Days

1. Inventories

(i) Raw Materials 101

(ii) Work –in – progress 190

(iii) Finished Goods 35

2. Receivables 30

3. Creditors 16

4. General Corporate Purposes

Our Company in accordance with the policies set up by the Board, will have flexibility in applying the remaining Net Proceeds of this Issue, for general corporate purposes towards strategic initiatives and acquisitions, brand building exercises, strengthening of marketing capabilities, research and development of existing products of the Company, human resource development initiative and training facilities and market development. Our management in response to the competitive and dynamic nature of the industries that it is involved in will have the discretion to revise its business plan from time to time and consequently our funding requirement and deployment of funds may also change. This may also include rescheduling the proposed utilisation of Net Proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilisation of Net Proceeds. In case of a shortfall in the Net Proceeds of the Issue, the management may explore a range of options including utilizing our internal accruals or seeking debt from future lenders. The management expects that such alternate arrangements would be available to fund any such shortfall. 5. Issue Related Expenses The Issue related expenses consist of underwriting fees, selling commission, fees payable to BRLMs to the Issue, legal counsels, Bankers to the Issue, Escrow Bankers and Registrars to the Issue, printing and stationery expenses, advertising and marketing expenses and all other incidental and miscellaneous expenses for listing the Equity Shares on the Stock Exchanges. We intend to use about Rs. [●] million towards these expenses for the Issue. All expenses with respect to the Issue will be borne out of Issue proceeds. The break-up for the Issue expenses is as follows:

(In Rs. million)

Particulars Amount

Lead Management, Underwriting and Selling Commission [●]

Advertising and marketing expenses [●] Printing and stationery (including courier, transportation charges) [●] Others (Registrar fees, legal fees, listing costs etc) [●] Fees paid to rating agency [●] Total [●]

42

Benefits of Listing

We believe that the listing of Equity Shares will inter alia, enhance our visibility and brand name among our existing and potential customers.

Interim Use of Proceeds

Our management, in accordance with the policies established by the Board, will have flexibility in deploying the proceeds received from the Issue. Pending utilization of the proceeds out of the Issue for the purposes described above, we intend to temporarily invest the funds in high quality interest bearing liquid instruments including money market mutual funds, deposits with banks or temporarily deploy the funds in investment grade interest bearing securities as may be approved by the Board. Such investments would be in accordance with the investment policies approved by the Board from time to time. Monitoring of Utilization of Funds There is no requirement for a monitoring agency in terms of clause 8.17 of the SEBI DIP Guidelines. Our Board shall monitor the utilization of the proceeds of the Issue. We will disclose the utilization of the proceeds of the Issue under a separate head along with details, if any in relation to all such proceeds of the Issue that have not been utilised thereby also indicating investments, if any, of such unutilized proceeds of the Issue in our Balance Sheet for the relevant Financial Years commencing from Financial Year 2009. Pursuant to clause 49 of the Listing Agreement, the Company shall on a quarterly basis disclose to the Audit Committee the uses and applications of the proceeds of the Issue. On an annual basis, the Company shall prepare a statement of funds utilised for purposes other than those stated in this Draft Red Herring Prospectus and place it before the Audit Committee. Such disclosure shall be made only until such time that all the proceeds of the Issue have been utilised in full. The statement shall be certified by the statutory auditors of the Company. Furthermore, in accordance with clause 43A of the Listing Agreement the Company shall furnish to the stock exchanges on a quarterly basis, a statement including material deviations if any, in the utilisation of the process of the Issue from the objects of the Issue as stated above. This information will also be published newspapers simultaneously with the interim or annual financial results, after placing the same before the Audit Committee. No part of the Issue proceeds will be paid by the Company as consideration to the Promoters, the Directors, the Company’s key management personnel or companies promoted by the Promoters except in the usual course of business.

43

BASIS FOR ISSUE PRICE

The Issue Price will be determined by our Company in consultation with the BRLMs on the basis of assessment of market demand for the offered Equity Shares by the Book Building Process. The face value of the Equity Shares is Rs. 10 and the Issue Price is [•] times the face value at the lower end of the Price Band and [•] times the face value at the higher end of the Price Band. Qualitative Factors

We believe that the following are our business strengths

• Strong Brands

• Central Manufacturing Facility with Backward Integration

• Leveraging our Promoter Group’s Complementary Technologies and Processes

• Strong Sourcing Capabilities

• Nationwide sales and Distribution Network

• Strong In-house Research and Development

• Experienced and Proven Management Team

Quantitative Factors

1. Earning Per Share (EPS) (of face value of Rs.10/- each)

Year EPS Weight

FY 2005 0.02 1

FY 2006 0.27 2 FY 2007 6.48 3

Weighted Average 3.33 Period ended December 31, 20071 12.69

1

Not annualized

2. Price/Earning (P/E) ratio in relation to Issue Price of Rs. [•]

���� Based on the EPS for the 12 months ended March 31, 2007, the P/E ratio is [•] at the Floor price and [•] at the Cap price.

���� Industry P/E: NA *

Note: *There are no listed companies in India which undertake all the business that we undertake,

accordingly we cannot provide the comprehensive Industry P/E.

The companies listed below under peer comparison are particular to a single stream of business and hence

not strictly comparable with our Company

3. Return on Net Worth (RoNW)

Fiscal Year RONW(%)

Weight

FY 2005 0.17 1 FY 2006 2.23 2 FY 2007 12.0 3

Weighted Average 6.77 Period ended December 31, 20071 19.05

44

1 Not annualized

Note: RoNW has been calculated as the ratio of Net profit after tax to Net Worth where:

a) Net Profit after tax is the Net Profit after tax and preference dividend attributable to the equity

shareholders; and b) Net worth is the equity shareholders fund

4. Minimum return on increased Net Worth required to maintain pre-Issue EPS of Rs. [•] is [•]

5. Net Asset Value per Equity Share

NAV (Rs.) Particulars

FY 2007 66.64 NAV per equity share has been calculated as net worth, as restated, at the end of the year divided by number of equity shares outstanding at the end of the year / period 6. Comparison with other listed companies

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

Ajanta Manufacturing Limited 6.48 [●] 12.0 66.64

Peer Group

CFL

Phoenix Lamps India Limited 10.3 9.1 35.2 41.9

Surya Roshni Limited 5.3 10.6 9.3 63.2

Havells India Limited * 17.4 17.4 46.7 90.2

Vitrified Tiles

Asian Granito india Limited 10 3.6 38.3 63.4

Euro Ceramics Limited 16.4 6.8 23.6 104.9

Murudeshwar Ceramics Limited 15.1 3.6 12.9 139.4

Nitco Tiles Limited 11.5 15.2 13.9 143.4

E-Bikes

Electortherm India Limited 46.2 5.2 36.7 220.1

ACP

NA

Source: Capital Market, Volume: XXII/02 March 24-April 06, 2008

Note: The EPS, RONW and NAV figures are based on the latest audited results for the year ended

March 31, 2007 and P/E is based on trailing twelve months (TTM) and Market data

*Face Value of Havells is Rs 5/- per share

7. The face value of Equity Shares of the Company is Rs. 10 and the Issue Price is [●] times of

the Face Value The Issue Price of Rs. [•] has been determined by the in consultation with the BRLMs, on the basis of assessment of market demand for the Equity Shares by way of Book Building.

45

STATEMENT OF TAX BENEFITS

April 4, 2008 To, The Board of Directors, Ajanta Manufacturing Limited, Corporate House, Trajpar Circle, Morbi – Kandla Highway, Morbi – 363641.

Dear Sir, Re. : Statement of Possible Direct Tax Benefits & Indirect Tax Benefits

We hereby report that the enclosed annexure states the possible tax benefits available to Ajanta

Manufacturing Limited (“Company”) and its shareholders under the current tax laws in India. Several of these benefits are dependent on the Company of its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill. The benefits discussed below are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue. We do not express any opinion or provide any assurance:

• The Company or its shareholder will continue to obtain these benefits in future; or

• The conditions prescribed for availing the benefits have been or would be met with. The contents of this annexure are based on information, explanations and representation obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. We have no objection if the attached annexure i.e. Tax Benefits Available to the company is incorporated in the information memorandum to be submitted to the concerned stock exchange. Our views expressed herein are based on the facts and assumptions indicated by you. No assurance is

given that the revenue authorities / courts will concur with the views expressed herein. Our views are based

on the existing provision of law and its interpretation, which are subject to change from time to time. We do

not assume responsibility to update the views consequent to such changes. The views are exclusively for the

use of Ajanta Manufacturing Limited. FINAVA & ASSOCIATES, for any claims, liabilities or expenses

relating to this assignment except to the extent of fess relating to this assignment, as finally judicially

determined to have resulted primarily from bad faith or intentional misconduct. FINAVA &

ASSOCIATES will not be liable to any other person in respect of this statement.

Thanking you, Yours faithfully, FOR FINAVA & ASSOCIATES,

Chartered Accountants

46

MANOJ FINAVA

PROPRIETOR

Membership Number: 44511

Place: Rajkot.

AJANTA MANUFACTURING LIMITED

Annexure

Statements of Possible Tax Benefits Available to

Ajanta Manufacturing Limited and to its Shareholders

SPECIAL TAX BENEFITS:-

I. BENEFITS AVAILABLE TO THE COMPANY These are the special tax benefits available to Ajanta Manufacturing Limited, subject to compliance

with relevant provisions. A. UNDER THE INCOME TAX ACT, 1961 (“THE ACT”)

The Company has a Power Plant at Samakhiali, Taluka – Bhachau, District – Kutch, Gujarat. The

entire profit of the Power Plant would be eligible for 100% deduction under section 80 IA of the Act for the period of ten consecutive assessment year out of fifteen years beginning from the year in which undertaking generates power. The profits of the division for the purposes of Section 80 IA shall be computed on stand alone basis. The benefits are available subject to the compliance of the conditions prescribed by this section.

During the period when deduction is admissible as above, as per section 115JB, while calculating “book profits” the Company will not be able to reduce the profits of Power Generation Unit to which the provisions of section 80 IA apply and will be required to pay Minimum Alternate Tax @ 10% (plus applicable surcharge and deduction cess) of the book profits.

B. BENEFIT TO THE COMPANY UNDER THE CENTRAL EXCISE ACT. 1944 1. The Company is inter alia engaged in the manufacturer of Vitrified Flooring Tiles, etc, the unit

being located At Samakhiali, Taluka – Bhachau, District – Kutch, Gujarat. 2. In accordance with and subject to the powers conferred by sub section (1) of section 5A of the

Central Excise Act, 1944 (1 of 1944), read with sub section (3) of section 3 of the Additional Duties of excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub section (3) of section 3 of the Additional duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978 ), and vide Notification No. 39/2001 dated 31st July, 2001, as amended vide Notification No. 55/2004 dated 09/11/2004), act of the Central Government has exempted the eligible goods which are cleared from a unit located in Kutch district of Gujarat from so much of the duty of excise or the additional duty of excise, as the case may be, leviable thereon under any of the said Acts as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duly paid by utilization of CENVAT as per CENVAT credit Rules, 2001 for a period of five years commencing from 15th September, 2005.

47

C. BENEFIT TO THE COMPANY UNDER THE GUJARAT SALES TAX ACT and THE

CENTRAL SALES TAX ACT, 1956. 1. The Company has its manufacturing unit located at Samakhiali, Taluka – Bhachau, District – Kutch,

Gujarat. 2. In accordance with and subject to the provisions of the Government of Gujarat in Industries & Mines

Department vide Government Resolution No. INC – 10200 – 903 – 1 dated 9.11.2001, dated 13.09.2004 and dated 07.01.2005 and as amended vide corrigendum dated 12.11.2001, the company shall be entitled for sales tax exemption on sales of finished goods, intermediates, by-products, waste & scrap produced by it at the rate of 100% for a period of ten years from 15th September, 2005 upto the eligible fixed capital investment.

II. BENEFITS AVAILABLE TO THE SHAREHOLDERS OF THE COMPANY There are no special tax benefits available to Shareholders of Ajanta Manufacturing Limited

GENERAL TAX BENEFITS

Theses are the general tax benefits available to the all companies and shareholders, subject to compliance with relevant provisions.

A. Under the Income Tax Act, 1961 (“the Act”)

I. Benefits available to the Company

1. As per section 10(34) of the Act, any income by way of dividends referred to in section 115–O (i.e.

dividends declared, distributed or paid on or after 1st April, 2003 by domestic companies) received on the shares of any company is exempt from tax.

2. As per section 10(35) of the Act, the following income will be exempt in the hands of the Company : a. Income received in respect of the units of a Mutual Fund specified under clause (23D) of section

10 : or b. Income received in respect of units from the Administrator of the specified undertaking: or c. Income received in respect of units from the specified company: However, this exemption does not apply to any income arising from transfer of units of the

Administrator of the specified undertaking or of the specified Company or of a mutual fund, as the case may be.

For the purpose (i) “Administrator” means the Administrator as referred to in section 2 (a) of the

Unit Trust of India (Transfer of Undertaking and Repeat) Act, 2002 and (ii) “Specified Company” means a Company as refereed to in section 2(h) of the said Act.

3. As per section 2(29A) read with section 2(42A), shares held in a company or a Unit of a Mutual

Fund specified under clause (23D) of section 10 are treated as long term capital assets if the same are held by the assessee for enumerated below in respect of long term capital assts would be available if the shares in a company or a Unit of a Mutual Fund specified under clause (23D) of section 10 are

48

held for more than twelve months. 4. As per section 10(38) of the Act, Long term capital gains arising to the company from the transfer of

long term capital asset being an equity share in a company or a unit of an equity oriented fund where such transaction is chargeable to securities transaction tax will be exempt in the hands of the Company.

For this purpose, “Equity Oriented Fund” means a fund:- (i) where the ingestible funds are invested by way of equity shares in domestic companies to the

extent of more than sixty five percent of the total proceeds of such funds; and (ii) Which has been set up under a scheme of a Mutual Fund specified under section 10(23D) of the

Act. As per section 115JB, while calculating “book profits” the Company will not be able to reduce the

long term capital gains to which the provisions of section 10(38) of the Act apply and will be required to pay Minimum Alternate Tax @ 10% (plus applicable surcharge and education cess) of the book profits.

5. The company is entitled to claim additional deprecation @ 20% (10% if the assts are used for less

than 182 days) in accordance with provisions of section 32(1)(iia) for the purchase of new plant and machinery acquired and installed after 31st March, 2005.

6. In accordance with and subject to the provisions of Section 35, the Company would be entitled to

deduction in respect of expenditure laid out of expended on scientific research related to the business.

7. The company will be entitled to amortize preliminary, being expenditure incurred on public issue of

shares, under section 35D(2)(c)(iv) of the Act, subject to the limit specified in section 35D(3). 8. As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long

– term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of long – term capital assets will be exempt from capital gains tax to the extent such capital gains tax to the extent such capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed Rs. 50 Lacs.

However, if the assessee transfer or converts the long term specified asset into money within a

period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.

A “long term specified asset” for making investment under this section on or after 1st April 2007

means any bond, redeemable after three years and issued on or after the 1st April 2007 by: (i) National Highways Authority of India constituted under section 3 of the National Highways

Authority of India Act, 1988; or (ii) Rural Electrification Corporation Limited, a company formed and registered under the

Companies Act, 1956. 9. As per Section 74 Short – term capital loss suffered during the year is allowed to be set-off against

short – term as well as long – term capital gains of the said year. Balance loss, could be carried forward for eight years of claiming set-off against subsequent years’ short – term capital gains. Long

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– term capital loss suffered during the year is allowed to be set – off against long – term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ long - term capital gains.

10. As per Section 80JJAA, and subject to the conditions laid down therein, of the Act further deduction

is allowable is equal to thirty per cent of additional wages paid to the new regular workmen employed by it is the previous year for three assessment years including the assessment year relevant year relevant to the previous year in which such employment is provided.

For this purpose, “additional wages” means the wages paid to the new regular workmen in excess of one hundred workmen employed during the pervious year. However, in the case of an existing undertaking, the additional wages shall be ‘nil’ if the increase in the number of regular workmen employed during the year is less than ten per cent of existing number of workmen employed in such undertaking as on the last day of the preceding year.

11. As per section 111A of the Act, short term capital gains arising to the Company from the sale of

equity shears or a unit of an equity oriented fund transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of 10% (plus applicable surcharge and education cess).

12. As per section 112 of the Act, taxable long – term capital gains, if nay, on sale of listed securities or

units or zero coupon bonds will be charges to tax at the concessional rate of 20% (plus applicable surcharge and education cess) after considering indexation benefits in accordance with and subject to the provisions of section 48 of the act or at 10% (plus applicable surcharges and education cess) without indexation benefits, at the option of the Company. Under section 48 of the Act, the long term capital gains arising out of sale of capital assets excluding bonds and debentures (except Capital Indexed Bonds issued by the Government) will be computed after indexing the cost of acquisition / improvement.

13. Under section 115JAA(1A) of the Act, credit is allowed in respect of any Minimum Alternate Tax

(‘MAT’) paid under section 115JB of the Act, for any assessment year commencing on or after April 1, 2006. Tax credit eligible to be carried forward will be the difference between MAT paid and the tax computed as per the normal provisions of the Act for the assessment year. Such MAT credit is allowed to be carried forward for set off purposes for up to 7 years succeeding the year in which the MAT credit is allowed.

II. Benefits available to Resident Shareholders. 1. As per section 10(34) of the Act, any income by way of dividends referred to in section 115-O (i.e.

dividends declared, distributed or paid on or after 1 April, 2003 by the domestic companies) received on the shares of the Company is exempt from tax.

2. As per section 2(29A) read with section 2(42A), shares held in a company are treated as long term

capital asset if the same are held by the assessee for more than twelve months period immediately preceding the date of its transfer, Accordingly, the benefits enumerated below in respect of long term capital assets would be available if the shares are held for more than twelve months.

3. As per section 10(38) of the Act, long term capital gains arising from the transfer of a long term

capital asset being an equity share of the Company, where such transaction is chargeable to securities transaction tax, will be exempt in the hands of the shareholders.

4. As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long

– term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long – term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during may financial year cannot exceed Rs. 50 Lacs.

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However, if the assessee transfer or converts the long term specified asset into money within a

period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.

A “long term specified asset” means any bond, redeemable after three years and issued on or after

the 1st day of April 2007: (i) By the National Highways Authority of India constituted under section 3 of the National

Highways Authority of India Act, 1988: or (ii) By the Rural Electrification Corporation Limited, a company formed and registered under the

Companies Act, 1956. 5. As per section 54F of the act, long term capital gains (in cases not covered under section 10(38))

arising on the transfer of the shares of the Company held by an individual or Hindu Undivided Family (HUF) will be exempt from capital gains tax if the net consideration is utilized, within a period of one year before, or two years after the date or transfer, in the purchase of a residential house, or for construction of a residential house within three years. Such benefit will not be available.

(a) If the individual or Hindu Undivided Family - - owns more than one residential house, other than the new residential house, on the date of

transfer of the shares; or - purchases another residential house within a period of one year after the date of transfer of

the shares ; of - constructs another residential house within a period of three years after the date of transfer

of the shares; and (b) The income from such residential house, other than the one residential house owned on the date

of transfer of the original asset, is chargeable under the head “income from house property”.

If only a part of the net consideration is so invested, so much of the capital gain as bears to the whole of the capital gain, the same proportion as the cost of the new residential house to the net consideration, will be exempt.

If the new residential house is transferred within a period of three years from the date of purchase or

construction, the amount of capital gains on which tax was not charged earlier, will be deemed to be income chargeable under the head “Capital Gains” of the year in which the residential house is transferred.

6. As per Section 74 Short-term capital loss suffered during the year is allowed to be set-of against

short-term as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ short-term as well as long-term capital gains. Long – term capital loss suffered during the year is allowed to be set-off against long-term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ long-term capital gains.

7. As per section 88E of the Act, securities transaction tax paid by the shareholders in respect of taxable securities transactions entered into in the course of the business will be eligible for deduction from the amount of income tax on the incomes chargeable under the head “Profits and Gains of Business or Profession” arising from taxable securities transaction, subject to certain limit specified in the section.

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8. As per section 111A if the Act, short term capital gains arising from the sale of equity shares of the

Company transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of 10% (plus applicable surcharged and education cess).

9. As per section 112 of the Act, taxable long – term capital gains, if any, on sale of listed securities

will be charged to tax at the rate of 20%(plus applicable surcharge and education cess) without indexation benefits, whichever is less. Under section 48 of the Act, the long term capital gains arising out of sale of capital assets excluding bonds and debentures (except Capital Indexed Bonds issued by the Government) will be computed after indexing the cost of acquisition / improvement.

III. Benefits available to Non – Resident Indians/ Non – Resident Shareholders (Other than FIIs)

1. As per section 10(34) of the Act, any income by way of dividends referred to in section 115-O (i.e.

dividends declared, distributed or paid on or after 1 April 2003 by the Company) received on the shares of the Company is exempt from tax.

2. As per section 2(29A) read with section 2(42A), shares held in a company are treated as long term

capital asset if the same are held by the assessee for more than twelve months period immediately preceding the date of its transfer. Accordingly, the benefits enumerated below in respect of long term capital assets would be available if the shares are held for more than twelve months.

3. As per section 10(38) of the Act, long tern capital gains arising from the transfer of long term capital

asset being an equity share of Company, where such transaction is chargeable to securities transaction tax, will be exempt in the hands of the shareholders.

4. As per first proviso section 48 of the Act, in the case of a non resident shareholder, the capital gain /

loss arising from transfer of shares of the Company, acquired in convertible foreign exchange, is to be computed by converting the cost of acquisition, sales consideration and expenditure incurred wholly and exclusively incurred in connection with such transfer, into the same foreign currency which was initially utilized in the purchase of shares, Cost Indexation benefit will not be available in such a case. As per section 112 of the Act, taxable long – term capital gains, if any, on sale of shares of the company will be charged to tax at the rate 20% (plus applicable surcharge and education cess).

5. As per section 54EC of the Act and subject to the conditions and to the extent specified therein,

long-term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a “long-term specified asset” within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed Rs. 50 Lacs.

However, if the assessee transfer or coverts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.

A “long term specified asset” for making investment under this section on or after 1st April 2007

means any bond, redeemable after three years and issued on or after the 1st April 2007 by: (i) National Highways Authority of India constituted under section 3 of the National Highway

Authority of India Act, 1988; or (ii) Rural Electrification Corporation Limited, a company formed and registered under the

Companies Act, 1956. 6. As per section 54F of the Act, long tem capital gains (in cases not covered under section 10(38))

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arising on the transfer of the shares of the Company held by an individual or Hindu Undivided Family (HUF) will be exempt from capital gains tax if net consideration is utilized, within a period of one year before, or two years after the date of transfer in the purchase of a residential house, or for construction of a residential house within three years. Such benefit will not be available.

(a) If the Individual or Hindu Undivided Family - - owns more than one residential house, other than the new residential house, on the date of

transfer of the shares; or - purchases another residential house within a period of one year after the date of transfer of

the shares; or - constructs another residential house within a period of three years after the date of transfer

of the shares; and (b) The income from such residential house, other than the one residential house owned on the date

of transfer of the original asset, is chargeable under the head “income from house property”.

If only a part of the net consideration is so invested, so much of the capital gain as bears to the whole of the capital gain, the same proportion as the cost of the new residential house bears to the net consideration, will be exempt.

If the new residential house is transferred within a period of three years from the date of purchase or

construction, the amount of capital gains on which tax was not charged earlier, will be deemed to be income chargeable under the head “Capital Gains” of the year in which the residential house is transferred.

7. As per Section 74 Short – term capital loss suffered during the year is allowed to be set-off against

short-term as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ short-term as well as long-term capital gains. Long-term capital loss suffered during the year is allowed to be set-off against long-term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ long-term capital gains.

8. As per section 88E of the Act, securities transactions tax paid by the shareholders in respect of taxable securities transactions entered into in the course of the business will be eligible for deduction from the amount of income tax on the income chargeable under the head “Profits & Gains of Business or Profession” arising from taxable securities transactions subject to certain limit specified in the section.

9. As per section 111A of the Act, short term capital gains arising from the sale of equity shares of the

Company transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of 10% (plus applicable surcharge and deduction cess).

10. As per section 115E of the Act, in the case of shareholder being a Non – Resident Indian, and

subscribing to the shares of the Company in convertible foreign exchange, in accordance with and subject to the prescribed conditions, long term capital gains arising on transfer of the shares of the Company (in cases not covered under section 10(38) of the Act) will be subject to tax at the rate of 10% (plus applicable surcharge and education cess). Without any indexation benefit.

11. As per section 115F of the Act and subject to the conditions specified therein, in the case of

shareholder being a Non – Resident Indian, gains arising on transfer of long term capital asset being shares of the Company will not be chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period of six months in any specified asset or savings certificate refereed to in section 10(4B) of the Act, if part of such net consideration is invested within

53

the prescribed period of six months in any specified asset or savings certificates referred to in section 10(4B) of the Act then such gains would not be chargeable to tax on a proportionate basis. Further, if the specified asset or savings certificate in which the investment has been made is transferred within a period of three years from the date of investment, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such specified assets or savings certificates are transferred.

12. As per section 115G of the Act, Non – Resident Indians are not obliged to file a return of income

under section 139(1) of the Act, if their source of income is income from specified investments or long tem capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII – B of the Act.

13. As per section 115H of the Act, where Non – Resident Indian becomes assessable at a resident in

India, he may furnish a declaration is writing to the assessing Officer, along with his return of income for that year under section 139 of the Act to the effect that the provisions of Chapter XII-A shall continue to apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

14. As per section 115I of the Act, Non – Resident Indian may elect not to be governed by the

provisions of Chapter XII – A for any assessment year by furnishing a declaration along with his return of income for that assessment year under section 139 of the Act, that the provisions of Chapter XII – A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act.

For the purpose of aforesaid clause “Non – Resident Indian” means an individual, being a citizen of

India or a person of Indian origin who is not a “resident” A person shall be deemed to be of Indian origin if he, or either of his parent or any of his grand – parents, was born in undivided India.

Provisions of the Act vis-à-vis provisions of the Tax Treaty

15. In respect of non – resident, the tax rates and consequent taxation mentioned above will be further

subject to any benefits available under the Tax Treaty, if any, between Indian and the country in which the non – resident if resident. As per the provisions of section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the Tax Treaty to the extent they are more beneficial to the non – resident.

IV. Benefits available to Foreign Institutional Investors (‘FIIs’)

1. As per section 10(34) of the Act, any income by way of dividends refereed to in section 115-O (i.e.

dividends declared, distributed or paid on or after 1 April 2003 by the Company) received on the shares of the Company is exempt from tax.

2. As per section 2(29A) read with section 2(42A), shares held in a company are treated as long term

capital asset if the same are held by the assessee for more than twelve months period immediately preceding the date of its transfer. Accordingly, the benefits enumerated below in respect of long term capital assets would be available if the shares are held for more than twelve months.

3. As per section 10(38) of the Act, long term capital gains arising from the transfer of long term

capital assets being an equity share of the Company, where such transaction is chargeable to securities transaction tax, will be exempt to tax in the hands of the FIIs.

4. As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long

– term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of long-term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an

54

assessee during any financial year cannot exceed Rs. 50 Lacs. However, if the assess transfer or converts the long term specified asset into money within a period

of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax long – term capital gains in the year in which the long term specified asset is transferred or converted into money.

A “long term specified asset” for making investment under this section on or after 1st April 2007

means any bond, redeemable after three years and issued on or after the 1st April 2007 by: (i) National Highways Authority of India constituted under section 3 of the National Highways

Authority of India Act, 1988; or (ii) Rural Electrification Corporation Limited, a company formed and registered under the

Companies Act, 1956. 5. As per Section 74 Short-term capital loss suffered during the year is allowed to be set-off against

short-term as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ short-term as well as long-term capital gains. Long-term capital loss suffered during the year is allowed to be set-off against long-term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ long-term capital gains.

6. The tax rates and consequent taxation mentioned above will be further subject to any benefits

available under the Tax Treaty, if any, between Indian and to country in which the FII is resident. As per the provisions of section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the Tax to the extent they are more beneficial to the FII.

7. As per section 111A of the Act, short term capital gains arising from the sale of equity shares of the

Company transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of 10% (plus surcharge and education cess).

8. As per section 115AD of the Act, FIIs will be taxed to the capital gains that are not exempt the

provision of section 10(38) of the Act, at the flowing rates:

Nature of Income Rate of Tax (%)

Long term capital gains 10

Short term capital gains (other than referred to in section 111A) 30

The above tax rates have to be increased by the applicable surcharge and education cess. In case of long term capital gains, (in cases not covered under section 10(38) of the Act), the tax is

levied on the capital gains computed without considering the cost indexation and without considering foreign exchange fluctuation.

9. As per section 196D, no tax is to be deducted from any income, by way of capital gains arising from

the transfer of shares payable to Foreign Institutional Investor. VI. Benefits available to Mutual Funds As per section 10(23D) of the Act, any income of Mutual Funds registered under the Securities and

Exchange Board of India act, 1992 or Regulation made there under, Mutual Funds set up by public section banks or public bank or public financial institutions and Mutual Funds authorized by the Reserve Bank of India will be exempt from Income tax, subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf.

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B. Benefits available 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 of the Company are not liable to wealth tax in the hands of shareholders.

C. Benefits available under the Gift Tax Act.

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

of shares of the Company will not attract gift tax. The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary

manner only and is not a complete analysis or listing of all potential tax consequence of the purchase, ownership and disposal of shares.

Notes

1. All the above possible benefits are as per the current tax laws as amended by the Finance Act,

2007.

2. All the stated possible benefits are as per the current tax law and will be available only to the sole / first named holder in case the shares are held by joint holders.

3. In respect of non – residents, the tax rates and the consequent taxation mentioned above shall be

further subject to any benefits available under the double taxation avoidance agreements, if any, between India and the country in which the non – resident has fiscal domicile.

4. In view of the individual nature of tax consequences, each investor is advised to consult his / her

/ its own tax advisor with respect to specific tax consequences of his / her / its participation in the scheme. The shareholders is also advised to consider in his / her / its own case, the tax implications of an investment in the Equity Shares, particularly in view of the fact that certain recently enacted legislations may not have direct legal precedent or may have a different interpretation on his benefits which an investor can avail.

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SECTION IV: ABOUT THE COMPANY

INDUSTRY

The information in this section is derived from various government publications and other industry sources.

Neither the Company nor the BRLMs nor any other person connected with the Issue has verified this

information.

The information in this section relating to E-bikes is derived from the “Market Potential Assessment for E

Bikes in India, 2007” conducted by AC Nielson Org Marg Private Limited. Nielsen Information reflects

estimates of market conditions based on samples, and is prepared primarily as a marketing research tool

for consumer packaged goods manufactures and others in the consumer goods industry. This information

should not be viewed as a basis for investments and references to ACNielsen should not be considered as

ACNielsen’s opinion as to the value of any security or the advisability of investing in the company.

Industry sources and publications generally state that the information contained therein has been obtained

from sources generally believed to be reliable, but their accuracy, completeness and underlying

assumptions are not guaranteed and their reliability cannot be assured, and, accordingly, investment

decisions should not be based on such information. Industry sources and publications are also prepared

based on information as of specific dates and may no longer be current.

Compact Fluorescent Lamps (“CFLs”)

Multiple lighting technologies have evolved to address a variety of lighting requirements. These technologies include incandescent lamps, fluorescent lamps, solid state lighting, high-intensity discharge, and fibre optic lighting. Each of these technologies has characteristics and limitations that affect their utility for a particular application. In the Indian consumer market, incandescent lamps, fluorescent lamps and CFLs (an energy efficient type of fluorescent lamp) are the main lighting options.

Due to its simplicity and low initial cost, the incandescent bulb is a popular light source. Incandescent bulbs produce high-quality white light, but also emit significant heat that can damage perishable goods and increase room temperature, which adds to cooling costs. Incandescent bulbs also require significant electricity and frequent replacement due to short bulb life.

The fluorescent lamp is an energy efficient alternative to the incandescent lamp. Some general characteristics of fluorescent lamps include:

High energy efficiency;

Produce a non-directional beam of light;

Colour is limited to the blue spectrum;

Contain mercury content;

Not suitable for use with dimmers; and

Weak light emission and shorter lifespan in colder temperatures.

A compact fluorescent lamp (CFL) is a type of fluorescent lamp. CFLs are designed to replace incandescent lamps and can fit in the existing light fixtures formerly used for incandescents.

CFLs are distinguished from other type of fluorescent lights in that they have a compact glass tube rather than a long glass tube. CFLs are generally manufactured in a “U” shape and are available in convenient and attractive sizes.

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Comparison with Incandescent Lamps

Lifespan. CFLs typically have a lifespan of between 6000 and 15000 hours, whereas incandescent lamps are usually manufactured to have a lifespan of between 750 hours and 1000 hours.

Energy Consumption and Efficiency. CFLs use between one fifth and one quarter of the power of an equivalent incandescent lamp.

Cost. In addition to the above savings on energy costs, CFLs’ average life is between 8 and 15 times that of incandescents. While the purchase price of a CFL is typically 3 to 10 times greater than that of an equivalent incandescent, the extended lifetime (fewer lamps to replace and reduced labour) and lower energy use more than compensate for the higher initial cost in many applications. (Source: International

Journal of Energy Technology and Policy, Vol. 1, No. 3, 2003.)

Environmental Issues. Since CFLs use less power to supply the same amount of light as an incandescent lamp of the same lumen rating, they can be used to decrease energy consumption at the location in which they are used. In countries where electricity is largely produced from burning fossil fuels, the savings reduces emissions of greenhouse gases and other pollutants; in other countries the reduction may help reduce negative impacts from radioactive waste, hydroelectric plants or other sources.

Types of CFLs

Integrated lamps combine a tube, electronic ballast and either a screw or bayonet fitting in a single CFL unit. These lamps allow consumers to easily replace incandescent lamps with CFLs. Integrated CFLs work in standard incandescent light fixtures.

CFLs are produced for both alternating current (“AC”) and direct current (“DC”) input. DC CFLs are popular for use in recreational vehicles and off-the-grid housing. Low-income families in developing countries are using DC CFLs (with car batteries and small solar panels) and/or wind generators, to replace kerosene lanterns. CFLs can also be operated with solar-powered street lights, using solar panels located on the top or sides of a pole and luminaries that are specially wired to use the lamps.

The components of CFLs are outlined below:

Lamp Holder. The lamp holder passes the electric power supply to the ballast of the lamp that contains the lamp’s electronic circuit. Typically, 230V/115V of power passes through the lamp holder to the ballast.

Electronic Ballast. The CFLs’ general electrical components, which include the resistor, capacitor, inductor, diode and transistor, are located in the ballast.

Fluorescent Glass Tube. The fluorescent glass tube contains the glass tube, filament wire (which connects the tube to the ballast), fluorescent powder (which coats the inside of the tube), mercury and a neutral gas, such as argon or captron.

In recent years, there has been a drive to popularize and implement the use of CFLs in India. CFL technology also has improved by adding new ballasts that ensure smooth, flicker-free light and are able to operate with low voltage input. (Source: Association of Electrical Lighting Manufacturers in India)

Vitrified Tiles

Overview

Vitrified tiles are basically ceramic tiles with a high percentage of vitrification and a low water absorption rate. The term “vitrification” refers to the development of a glass phase within the body of the ceramic tile during a firing process. Vitrification takes place due to the melting of elements within the ceramic tile.

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Vitrified tiles, typically made from kaolin clays, feldspar, silica and colouring oxides, are fired at about 1,200 degrees Celsius. Unlike porous bodied tiles, they shrink in the firing process and hence certain allowances are made for dimensional accuracy during the manufacturing process. The tiles can be used as both wall and floor tiles. The technology adopted by the Indian ceramic industry is equal to international standards.

The vitrified tile market is largely driven by the residential and commercial construction industry. Due to the strength, durability and prices of the tiles, they are an important factor in construction, particularly in high traffic areas. Appearance is also an important consideration. Vitrified tiles, for example, leave little space at the joints and therefore joints are barely visible, resulting in the appearance of more expensive marble or granite. Vitrified tiles are also used as industrial flooring because the tiles are acid resistant.

The following is a list of the major characteristics of vitrified tiles:

• They are as strong as granite or marble and also are slip resistant.

• They can be cleaned easily, are resistant to wear and are impervious to water acid and grease. They are stain resistant.

• They do not require separate coatings of glass or glaze. They are polished to get a smooth, flat and mirror- like surface.

• They are abrasion resistant.

• They resist a wide range of chemicals, including acids and alkalis except hydrofluoric acid.

• They can be manufactured in “gloss” as well as “matt” finishes and are easy to install as compared to marble.

The Indian Ceramic Industry

The Indian ceramic industry is almost 100 years old. India is currently the fifth largest global producer of vitrified tiles. In India, vitrified tiles are emerging as the next generation of flooring material. Until 2002, vitrified tiles were considered to be premium-flooring products. The tiles are now being used at major airports, restaurants, showrooms, malls and other public spaces across the country.

According to the Indian Ceramic Tiles Producers Association, domestic production totalled 340 million square meters in FY 2006 compared to 298 million square meters in FY 2006. Domestic consumption rose to 350 million square meters in FY 2006, up 15.5% over FY 2005. (Source: Gujarat Industrial and

Technical Consultancy Organization Ltd., Jan. 2008)

In early 2004, there were only four to five manufacturers of vitrified tiles, but over the last two years, about ten new companies have started production. (Source: Ceramic World Review n.6512006) Currently, there are six manufacturers in the organized sector of the industry with approximately 75% of domestic production. They are followed by about 45 to 50 other manufacturers in the organized sector.

The overall production capacity of all domestic manufacturers in the organized sector is about 370-380 million square meters per annum. The average capacity utilization in the organized sectors has been fluctuating in the range of 80-95%. (Source: Gujarat Industrial and Technical Consultancy Organization

Ltd., Jan. 2008) The unorganized sector has a variable capacity profile which cannot be accurately translated into fixed numbers.

The following table lists the top six domestic manufacturers in FY 2006:

Company Share in %

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1 Ajanta Manufacturing Limited 13.02%

2 H & R Johnson Limited 12.11%

3 Murudeshwara Ceramics Ltd 11.56%

4 Asian Granito India Ltd 10.41%

5 RAK Ceramics Pvt. Ltd 9.82%

6 Euro Ceramics Limited 9.55%

7 Remaining Companies 33.53%

Total 100.00%

(Source: Gujarat Industrial and Technical Consultancy Organization Ltd., Jan. 2008)

Of the total ceramic tiles sold in India in 2005-06, 53% were floor tiles and 35% were wall tiles. Vitrified tiles accounted for approximately 12% of the total. Although vitrified tile manufacturing is costlier than other ceramic tile manufacturing, profit margins are higher. (Source: Annual Report 2005-06; Government

of India, Ministry of Commerce & Industry)

Import and Export of Ceramic Tiles

Data available from the web site of the Department of Commerce, Government of India, Export Import Data Bank, indicates that both the import and export of ceramic tiles (Rs. in lacs) in the last three years are on the rise:

Import - Name of Products 2004-05 2005-06 2006-07

Vitrified tiles, whether polished or not 1289.88 4079.35 4863.78

Other unglazed vitrified tiles, polished or not 1210.20 2615..05 4487.85

Tiles other than vitrified tiles 858.83 499.05 111.20

Tiles other than vitrified tiles, polished or not 5501.52 8778.63 15128.55

Ceramic Mosaic cubes 1284.70 814.72 633.10

Ceramic Mosaic tiles 1169.71 1384.27 2907.20

Total 11314.90 18171.07 28131.68

Export - Name of Products 2004-05 2005-06 2006-07

Vitrified tiles, whether polished or not 728.85 772.09 1025.58

Other unglazed vitrified tiles, polished or not 338.94 214.54 385.15

Tiles other than vitrified tiles 192.91 60.04 62.23

Tiles other than vitrified tiles, polished or not 62.89 89.93 55.84

Ceramic Mosaic cubes 1052.71 812.95 8424.85

Ceramic Mosaic tiles 1657.32 1690.03 1809.37

Total 4033.62 3639.58 11763.03

(Source: Government of India, Ministry Of Commerce & Industry, Department Of Commerce)

According to one study, tile production is shifting from Western countries to Asian countries due to economies of production, including labour and energy costs, the availability of raw materials and beneficial government polices. However, there is growing competition in the tile industry among emerging Asian nations such as China, Malaysia, Indonesia and Vietnam. Further, due to the liberalization of India’s trade policies in line with international treaties, dumping of vitrified tiles by other Asian nations has been taking place in India. In response, the Indian government has imposed an anti-dumping duty which is aimed at

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providing a level playing field in the industry. (Source: Gujarat Industrial and Technical Consultancy

Organization Ltd., Jan. 2008)

Responding to competition, in the past two to three years, there has been an investment of more than Rs. 20,000 million in the domestic tile industry, aimed at increasing the capacities and the modernization of manufacturing plants. As a result, manufacturers have increased plant capacities, and with these increases in capacity, manufacturers are now able to purchase and store raw material in bulk from international exporters instead of purchasing raw materials from middlemen or wholesale traders. Due to this change alone, it is estimated that manufacturers have been able to dramatically decrease raw material costs and to compete more effectively with other Asian nations. (Source: Gujarat Industrial and Technical

Consultancy Organization Ltd., Jan. 2008)

Further, due to technological improvements, such as the use of single-fired technologies, domestic manufacturers have been able to reduce their fuel costs. For example, manufacturers in Morbi, Mehasana and Himatnagar in Gujarat have been able to switch to sources of cheap fuel in bio-gas plants. Further, the Government of Gujarat has also taken steps to provide gas through pipe lines which have resulted in a decrease in fuel costs of approximately 45-50%. (Source: Gujarat Industrial and Technical Consultancy

Organization Ltd., Jan. 2008)

It is estimated that vitrified tiles account for approximately 20-25% of the total tile production in India. It is further estimated that the growth will continue because vitrified tiles have application in three key aspects of India’s construction industry, that is, residential housing, commercial complexes, such as parks, airports and hotels, and retail complexes, such as shopping malls and multiplexes. (Source: Gujarat

Industrial and Technical Consultancy Organization Ltd., Jan. 2008)

Market Characteristics of the Vitrified Tile industry

At present, the Indian market for vitrified tiles is concentrated in urban areas, where large offices, commercial complexes, luxurious residential buildings, shopping malls and multi-storied buildings are being constructed, and where vitrified tiles are replacing natural products like marble and granite.

The market for ceramic tiles in India can be broadly divided into three categories:

Institutional Buyers – This segment consists of large construction firms, the corporate sector and government institutions. While this segment accounts for 60% of total sales, the gross operating margins for tile manufacturers are low and range between 10-20%.

Retail Buyers – This segment consists of homebuilders and homeowners. The gross operating margins in this segment are higher when compared to institutional buyers.

Replacements – The replacement market is growing rapidly as new tiling solutions are creating new options for existing facilities. A large replacement and maintenance market is expected to emerge as the Indian market matures, the quality of work improves and the time taken to fix the tiles is reduced. Increasing brand awareness among consumers is also benefiting manufacturers in the organized sector.

Success in these markets typically requires manufacturers to locate their plants close to the raw material sources since freight accounts for a significant component of the total cost. They also need to be able to offer customers a wide array of shades and designs and to have a large network of distribution and sales outlets to ensure that they can serve customers in all the major markets.

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E-Bikes

Overview

The Indian two-wheeler industry (comprised of motorcycles, mopeds and scooters) forms a part of the motorized vehicle industry. As of March 2007, the total number of two-wheelers stood at approximately 8.5 million units. The two-wheeler industry is growing at a CAGR of over 10%. It grew at a rate of 12% on a year-over-year basis during 2005-06 and 2006-07, with the motorized segment growing at around 15% during this period. (Source: Nielsen, Market Potential Assessment for E Bikes in India, 2007.)

The Indian domestic E-Bike industry, on the other hand, had total sales of approximately 60,000 E-Bikes in 2006-07 and is estimated will have sales of 121,000 E-Bikes in 2007-08. Total E-Bike production is expected to reach 269,700 units in 2007-08. The Indian E-Bike industry is expected by Nielsen to grow at an annual rate of approximately 50% through fiscal 2012. (Source: Nielsen, Market Potential Assessment

for E Bikes in India, 2007.)

Analysts believe the two-wheeler industry in India is poised for rapid economic growth. However, increasing fuel prices are prompting people to look at alternative modes of transportation, and we believe that battery-operated vehicles, such as E-Bikes, provide an attractive option. (Source: Nielsen, Market

Potential Assessment for E Bikes in India, 2007.)

In addition to a lower cost of operation than fuel-operated vehicles, E-Bikes also have the following advantages over conventional two-wheeler vehicles:

Licensing and registration with India’s Road Transport Authorities is not required for E-Bikes, but is required for petrol-powered motor bikes or E-Bikes capable of speeds above 25 km/hour. E-Bikes, which run on rechargeable batteries, use electricity as fuel in place of conventional petrol or diesel.

E-Bikes are more efficient in terms of generating usable energy from their electric engine’s battery in comparison to regular fuel conversion. We estimate that the total cost per km to operate an E-Bike is around Rs. 0.2. In contrast, the cost of an efficient petrol-driven two-wheeler is about Rs. 2.0 per km. Further, the battery lifetime (expected life) increased from 7 or 8 months in 1997-98 to 18-24 months in 2006, while motor efficiency increased from 50% in 1997-98 to 85% in 2006.

The low operating cost of E-Bikes is a prime reason for increased demand.

The cost of maintenance for E-Bikes is also much lower than for conventional fuel-powered vehicles.

E-Bikes are lighter in weight, which makes them attractive to young children and senior citizens.

The purchase price of E-Bikes has fallen each year as a percentage of annual disposable income.

E-Bike technology has improved, and the absence of gears and clutches in E-Bikes makes them easier to drive and manoeuvre on congested city roads and in start-and-stop traffic.

E-Bikes are environmentally friendly and do not emit harmful gases such as carbon dioxide or nitrogen dioxide.

(Source: Nielsen, Market Potential Assessment for E Bikes in India, 2007.)

The table below summarizes the attributes of E-Bikes in relation to fuel/gas-assisted vehicles:

Particulars

Fuel-Assisted

Vehicle

Gas-Assisted

Vehicle Electric Vehicle

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Particulars

Fuel-Assisted

Vehicle

Gas-Assisted

Vehicle Electric Vehicle

Cost of vehicle 36980 38480 23000

Vehicle weight (Kg.) 85-100 85-100 75

Mileage (Km.) 65 65 80-90

Max. Vehicle Speed limit (km/h.) 80 80 <25

Refuelling/Charging time (Full charge) 3 Minutes 3 Minutes 6-8 hours

Energy used Petroleum LPG Battery

Status of emission pollution More Less None

Safety Flammable Flammable Explosive

Safe

Cost/litre (petrol + Oil) (Rs.) 49.85 22.00 4.00

Power consumption kwa/unit 1 unit

Cost of Fuel (Rs. /km.) 0.77 0.34 0.05

Cost of fuel power over 30,000 Kms (Rs.) 23100 10200 1800

Service & maintenance over 30,000 Kms (Rs.)

9000 (Rs. 30/100 Kms)

9000 (Rs. 30/100 Kms)

1000 (Rs. 3.33/100

Kms)

Battery Replacement Over 30,000 Kms (Rs.)

6000

Total Running Cost of 30,000 Kms (Rs.) 32100 19200 8800

Helmet requirements Yes Yes No

Driving license requirements Yes Yes No

Age Limit Over 18 Years Over 18 Years No Limit

(Source: Nielsen, Market Potential Assessment for E Bikes in India, 2007.)

E-Bike Technology

E-Bikes run on electrical energy generated from a battery. E-Bikes have a DC micro motor powered by a lead acid sealed recharge battery, which can be charged approximately 400 times. The number of kilometres per charge of the battery is based on its capacity and is generally in the range of 50 to 70 kms per charge. The power of the micro motor affects the speed and weight-carry capacity of an E-Bike. For example, E-Bikes with a 250 watt motor can run at a speed of 25 km per hour and can carry a weight of up to 60 to 65 kilograms.

In India all E-Bike manufacturers use 250-watt motors which, as mentioned above, produce a speed of 25 km per hour. This is based on the norms established by the Automotive Research Association of India, because any vehicle with a higher speed than 25 km per hour requires registration, licensing of the owner and compliance with other safety standards. However, some Indian companies, including AML, have introduced or are planning to introduce E-Bikes with higher motor capacities, top speeds which would require license and registration for the E-Bike, and larger batteries.

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The table below illustrates various types of E-Bikes offered for sale in India.

Motor Power

(Watt)

Max. Speed

Km/Hr Km Range Weight (Kg)

Carrying

Capacity (Kg)

Average

Price (Rs.)

180 25 50-55 60 100 n/a

200 25 50-55 60 120 16,000

240 25 100 70 120 19,000

250 25 100 75 150 29,685

(Source: Nielsen, Market Potential Assessment for E Bikes in India, 2007.)

E-Bike Market

Mainland China has been the world’s largest market for E-Bikes since 2002. Topology Research Institute (TRI), a private IT research group, projects that demand for E-Bikes in China will increase to 17 million units in 2008, 20 million in 2009 and 22 million by 2010. TRI further estimates that China will continue to represent approximately 71% of the global market. (Source: Nielsen, Market Potential Assessment for E

Bikes in India, 2007.)

China in Early 1990’s can be compared with what Indian market experienced during 2004-06. During this phase due to low awareness of E Bikes the sales was low

The growth of the E-Bike market in China has happened during the last 7-8 years only, and has accelerated rapidly during the last 4-5 years. This, notwithstanding the fact that the Chinese vehicle industry is advanced and has a mix of two-wheelers, three-wheelers and four-wheelers of international quality. E-Bikes have not only co-existed with these larger, faster vehicles but have undergone tremendous growth, thanks to the evolution and stabilization of E-Bike technology and the developing market for E-Bikes. It is pertinent to note that China has a vast middle-class population which considers economy of operation of the vehicle as one of the single most important aspects in the vehicle purchase decision. E-Bikes have become very popular in this segment.

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Since 2001, the demand for E-Bikes has also been growing in India at an average annual rate of 8%. Sales volumes for E-Bikes in fiscal years 2005-06 and 2006-07 reached approximately 5,961,000 and 21,085,000 units, respectively, and is expected to exceed 8,700,000, 14,000,000 and 17,000,000 units in fiscal 2009-10, 2010-11 and 2011-12, respectively. (Source: Nielsen, Market Potential Assessment for E Bikes in India,

2007.)

To a large extent, the Indian economy is replicating changes that occurred in the Chinese market. While India is emerging as a popular market for small automobiles, at the same time there is a large middle-class population which finds it difficult to afford automobiles simply because of the high initial cost and operating and maintenance expenses.

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OUR BUSINESS

In this section the terms “we”, “our” and “us” are used to refer to our Company. The

information in this section relating to CFL market leadership is derived from the Market Information

Report ACNielsen ORG-MARG Pvt. Ltd dated February 4, 2008 by AC Nielsen. AC Nielsen information

reflects estimates of market conditions based on samples, and is prepared primarily as a marketing

research tool for consumer packaged goods manufacturers and others in the consumer goods industry. The

information should not be viewed as a basis for investments and references to AC Nielsen should not be

considered AC Nielsen’s opinion as to the value of any security or the advisability of investing in our

Company.

Overview

We are one of India’s leading manufacturers of compact fluorescent lamps (“CFLs”) and vitrified tiles. We also manufacture aluminum composite panels (“ACPs”) and have recently commenced the production of battery operated electromotive bikes (“E-Bikes”). We manufacture all our products in a single integrated facility located on approximately 181 acres in Samakhayali village in Bhachau taluka in the district of Kutch in Gujarat. We market our products under the “OREVA” brand name. Our company philosophy is to provide quality products at affordable prices for the mass market.

Our Company was founded in 1994 by Shri. Odhavji Bhai R Patel, founder of Ajanta Transistor Clock Manufacturing Company, which was established in 1971 and engaged in the manufacturing of wall clocks under the “Ajanta” brand name. Our Promoter Group Companies are based in Morbi, Gujarat (approximately 50 kilometers from our manufacturing facility). Our Promoter Group Companies manufacture and sell a broad range of products, including consumer and electronic products and home appliances.

CFL Division: According to AC Nielsen in its Market Information Report of ACNielsen ORG-MARG Pvt. Ltd dated February 4, 2008, we ranked second in sales volume of CFLs in India in twelve months ended December 2007. We launched our CFL division in Fiscal 2006 and our CFL plant has a current daily production capacity of approximately 200,000 units. We believe that we played a role in raising the consumer awareness about CFLs in the Indian consumer market by introducing CFLs at competitive prices. During fiscal 2009, we expect to complete our backward integration of CFL production by building a manufacturing facility that will allow us to produce, rather than purchase, glass tubes for CFLs. Glass tubes are approximately 45% of CFL component costs, and we believe that manufacturing glass tubes in-house will enable us to reduce our production costs and improve our price competitiveness.

Vitrified Tiles Division: Our vitrified tile products provide a low-cost, better quality flooring alternative for the Indian consumer market. We produce vitrified tiles in a number of colours and designs. We launched our vitrified tile division in Fiscal 2006, and we have five production lines capable of producing approximately 30,000 square meters of vitrified tiles per day. Our vitrified tiles plant is the largest in India in terms of installed manufacturing capacity (Source: GITCO, January 2008) and contains continuous ball mills, kilns that each measure approximately 205 meters, 48-head polishing machines and 5,000 metric tonne hydraulic presses. In addition, we also have our own coal gasification facility within the plant.

ACP Division: We launched our ACP division in April 2007. ACPs are used in the building industry for interior and exterior paneling. Our ACP division has the capacity to produce 400,000 square meters of ACP per year.

E-Bikes Division: We have a manufacturing facility to produce our own E-Bikes which are specifically designed and adapted for the Indian market. We had assembled a small number of E-bikes on a trial basis. These E-bikes were assembled by us from parts manufactured by third parties. We determined that going forward it would be in our best interests to manufacture E-bikes in-house. Production will take place in two phases. The first phase of our E-Bike facility will have a capacity of 400 bikes per day (“Phase I”). In phase two, we propose to scale up our production capacity to 2,000 bikes per day

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(“Phase II”). Phase I production of E-Bikes recently commenced in late March 2008. First production from Phase II is expected to commence by June 30, 2009. Unlike the majority of E-Bike manufacturers in India, who we believe are primarily product assemblers, by the end of Phase II, we plan to manufacture approximately 85% of the components necessary to produce E-Bikes in our own integrated, in-house facility in Gujarat. Batteries constitute approximately 40% of E-Bike component costs. While we currently import batteries, we intend to manufacture batteries in-house with full scale battery production expected by the end of Phase II.

We have an India-wide distribution network for each of our products. We export our CFLs to the United Arab Emirates and our vitrified tiles to the United Arab Emirates, Qatar, Iraq and the West Indies. Similarly, we procure our materials directly from manufacturers and producers, principally in China, Korea, Taiwan and Thailand. We believe that our distribution expertise will assist us in creating and growing a nationwide distribution network for E-Bikes. We plan to sell our E-Bikes under the “OREVA” brand name through our dealer network, initially in western India and gradually all over India.

Our total revenues for the nine months ended December 31, 2007 and the fiscal years ended March 31, 2007 and March 31, 2006 were Rs. 3,654.14 million, Rs. 3,306.57 millions and Rs. 897.50 million, respectively. Export sales for the nine months ended December 31, 2007 and the fiscal year ended March 31, 2007 were Rs. 775.24 million and Rs. 448.97 million, respectively. Our profit after tax for the nine months ended December 31, 2007 and the fiscal years ended March 31, 2007 and March 31, 2006 were Rs. 504.56 million, Rs. 276.31 millions and Rs. 13.38 millions, respectively. Our revenues and EBIDTA by operating division are set forth in the table below.

Nine months ended December 31, 2007

Fiscal 2007 Fiscal 2006

Rs. Millions

Operating Division Revenue

CFL Division 1,770.22 1,814.91 594.86

Vitrified Tiles Division 1,461.91 1,339.61 70.87

ACP Division 31.98 0.09 --

E-Bike – trial production 29.66 0.26 --

Total Income from Operations

3,293.77 3,154.88 665.74

EBIDTA Nine months ended

December 31, 2007

Fiscal 2007 Fiscal 2006

Amount

(In Million)

% to income from

operations

Amount

(In million)

% to income from

operations

Amount

(In Million)

% to income from

operations

CFL 659.51 37.26 514.15 28.33 60.4 10.15

Vitrified Tiles 217.43 14.87 196.98 14.70 22.99 32.44

ACP 7.56 23.64 (0.16) - - -

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E-bikes – trial production

4.34 14.63 0.26 100 - -

Competitive Strengths

Philosophy, Values and Indian Consumer Focus

Our products are developed to meet the needs of mass market consumers in India. Our core philosophy is to maximize “value for money” by offering quality products at affordable prices. Our primary focus has remained on the Indian middle income consumer, which constitutes a majority of the total market for any consumer product in India. We believe that this philosophy has been instrumental in the success of our businesses.

Strong Brands

All of our products are sold primarily under the brand name “OREVA”. Our “OREVA Power Savers” brand is well recognized both in city centers and small villages and is associated with products of value and quality. According to AC Nielsen in Market Information Report of ACNielsen ORG-MARG Pvt. Limited dated February 4, 2008, we ranked second in sales volume of CFLs in India in twelve months ending December 2007. In fiscal 2007, we sold 17.81 million units of CFLs. Similarly, our vitrified tiles brand “OREVA Grantile Forever” is well recognized in the market. In fiscal 2007, we sold 4.29 million square meters of vitrified tiles.

We believe that we will be able to leverage the strength of our brand to market and sell new products. For example, our new E-Bike product will be marketed under the “OREVA E-Bike” brand. The use of the “OREVA” name enables us to tap into a consumer base that has had experience with our products and is comfortable with them.

Central Manufacturing Facility with Backward Integration

We own and operate a large integrated manufacturing facility in Samakhayali village in Bhachau taluka in the district of Kutch in Gujarat where we manufacture products for each of our divisions. Our fully integrated manufacturing facilities allow us to benefit from economies of scale. For example, we process and manufacture a variety of plastic components and parts, electronic products and components and metal mould components which we use in each of our divisions. We seek to backward integrate our manufacturing chain whenever possible in order to reduce input costs and increase customer value. For example, we manufacture critical components like plastic parts, eecores transformers, beed rings and printed circuit boards for our CFLs. We plan to build a glass tube manufacturing plant during fiscal year 2009 in order to further integrate our CFL division.

Leveraging our Promoter Group’s Complementary Technologies and Processes

We leverage our Promoter Group’s experience in technologies and processes to manufacture, backward integrate and scale-up our existing and proposed products. For example, in our CFL manufacturing process, we used our Promoter Group’s knowledge of, and experience with, plastics processing, metalworking and electronic component manufacturing and assembling. We intend to use complementary technologies and skill sets in the manufacture of our E-Bikes.

Strong Sourcing Capabilities

We benefit from a procurement network with international and domestic manufacturers and suppliers, which was developed through our management’s and Promoter Group’s efforts over a number of years in related businesses. Further, in many cases, our management and Promoter Group have developed

68

relationships directly with parts and components manufacturers in China, instead of relying upon distributors and middlemen. These relationships have inured to our benefit by having provided us with important access to raw materials, suppliers and component manufacturers and resulting lower costs than would otherwise be available to us.

Nationwide sales and Distribution Network

We have a nationwide sales and distribution network in our own offices, showrooms and depots. For CFLs, at January 31, 2008, we had 142 stockists, 1,750 distributors, 15,319 retailers and one company owned depot in Bhiwandi, one depot managed by a clearing and forwarding agent in Guwahati and 59 exclusive showrooms. For vitrified tiles, at January 31, 2008, we had 41 distributors, 350 dealers, five branches managed by a clearing and forwarding agent, one Company owned branch in Bangalore and two exclusive showrooms, one in each of Ahmedabad and Morbi. For our ACPs, at January 31, 2008, we had 10 dealers, three depots managed by a clearing and forwarding agent, two Company owned depots in Bhiwandi and two exclusive showrooms in each of Ahmedabad and Morbi.

We began marketing our CFLs in villages, small towns and district level cities through a network of distributors. Also, we made our CFLs available in a wide variety of retail outlets, including general stores, grocery stores, novelty stores, medical supply stores, newspaper shops, watch showrooms and seasonal stores. Using this method, we achieved nationwide distribution in a relatively short period of time. We believe that our distribution expertise will assist us in creating and growing a nationwide distribution network for our E-Bikes. At January 31, 2008, we had eight exclusive retail showrooms and 10 dealers for our E-Bikes.

Strong In-house Research and Development

Before we determine to introduce a new product, such as our E-Bikes, we undertake research from both the marketing and manufacturing perspectives. We employ an in-house research and development team whose main objective is to work out cost-effective manufacturing processes and maintain quality standards for our products and to develop economical and efficient manufacturing solutions. As of January 31, 2008, we had five new CFL products and four new tile products under development.

Experienced and Proven Management Team

Our Promoter has extensive experience in manufacturing and marketing a wide range of consumer products. Members of our management team also have years of experience in the consumer product business, and have been chosen for their ability to effectively execute plans and policies.

Our Strategy

We intend to grow our business by implementing the following key strategies.

Become a major player in the domestic E-Bikes market

We see a significant opportunity in the developing Indian market for domestically manufactured E-Bikes. We intend to leverage our existing manufacturing strengths and our Promoter Group’s experience in complementary technologies and processes as well as our strong procurement capabilities in China to emulate the success of CFLs and Vitrified tiles for our E-Bikes.

We have initiated development of a manufacturing facility to produce our own E-Bikes which are specifically designed for the Indian market. We have produced a small number of E-bikes on a trial basis. These E-bikes were assembled by us from parts manufactured by third parties. We determined that going forward it would be in our best interests to manufacture E-bikes in-house. Production will take place in two phases. Phase I of our E-Bike facility will have a capacity of 400 bikes per day. In Phase II, we propose to scale up our production capacity to 2,000 bikes per day. Phase I production of E-Bikes recently

69

commenced in late March 2008. First production from Phase II is expected to commence by June 30, 2009. Unlike the majority of E-Bike manufacturers in India, who we believe are primarily product assemblers, in Phase II we plan to manufacture approximately 85% of the components necessary to produce E-Bikes in our own integrated, in-house facility in Gujarat. Batteries constitute approximately 40% of E-Bike component costs. While we currently import batteries, we intend to manufacture batteries in-house with full scale battery production expected in Phase II. Those components that we are unable to manufacture in-house, we will obtain on a cost-effective basis by leveraging our procurement network in key countries such as China, Korea and Taiwan. We believe that this will enable us to produce E-Bikes at lower costs than our competitors and to ultimately sell a more affordable product. In addition, we believe that our E-Bike design is more rugged and better suited for Indian road conditions than products based on Chinese design.

We plan to sell our E-Bikes under the “OREVA” brand name through our dealer network, initially in western India and gradually all over India. We have trained a core group of approximately 50 employees for the E-Bike marketing effort. These employees will spearhead our E-Bike promotional efforts and will be deployed to our service centers and showrooms. We also plan to offer after sales services for E-Bikes through a dealer service network that will provide consumers with replacement parts, including batteries that are both functional and affordable. Since we ultimately plan to produce all the important components, including batteries, ourselves, we expect to be able to provide more cost-competitive servicing options.

Improve our market share in CFLs through reduced costs due to backward integration

We intend to improve our market position in CFLs and build on our OREVA brands by continuing to produce quality, high-value products at low cost in large volumes.

We plan to cut production costs associated with our CFL products and increase our production capacity by building the proposed glass tube manufacturing facility at our Gujarat facility. The proposed glass tube facility is expected to have an installed capacity to produce 250,000 glass tubes per day or 75,000,000 glass tubes per year. The cost of this facility is currently estimated at Rs. 950 million and completion is currently scheduled for fiscal 2009. For more details please refer to the section titled “Objects of the Issue” on page 26 of this Draft Red Herring Prospectus.

Glass tubes are a significant component of our CFL products, constituting approximately 45% of CFL component costs. The in-house production of glass tubes would reduce our production costs significantly as well as reduce transportation and breakage costs, which should enable us to reduce our prices and make our CFLs even more cost-competitive.

Increase Sales of CFLs

We currently export our CFLs to the United Arab Emirates. In fiscal 2007 and in the nine months ended December 31, 2007, our sales from exports of CFLs were Rs. 434.48 million and Rs. 761.89 million, respectively. We believe our CFL business presents an opportunity to increase our export sales.

We are also expanding our sales of CFLs of 30W and above. We believe that manufacturing CFLs in these higher wattages presents an opportunity for us as we believe this is a growth area.

Continue to grow our vitrified tiles and ACP business

We plan to continue to grow our vitrified tiles and ACP businesses to utilize our existing capacity. We will continue to explore cost efficiencies and implement process improvements across our integrated production facility.

Our Business Divisions

Our business is divided into four business divisions: CFLs, vitrified tiles, ACPs and E-Bikes.

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CFL Division

We manufacture power-saving compact fluorescent lamps, or CFLs, in our CFL division.

Product Lines

CFLs save approximately 80% of the power used by traditional incandescent lamps and save approximately 50% of the power used by normal fluorescent tubes. Our CFLs are marketed under the “OREVA Power Savers” brand.

We manufacture over 30 models of CFLs, including both retrofit as well as non-retrofit types, which range from 2W to 90W. These models are further grouped into seven categories, viz., “Standard”, “Mini”, “Mini Twister”, Business Lighting”, “Decorative Product”, “Big Twister” and “Value Pack”. Further, we produce CFLs in high wattages. We also manufacture T-5 Tube lights under the name “J-5 models” in three different categories, i.e., “Classic”, “Premium” and “Diamond” with basic ranges of 14W, 21W and 28W with 2 ft., 3 ft. and 4 ft., respectively. Recently, we launched new models of tube lights with additional features, including an on-off switch and link cord to connect the tubelights in series. We also have series of decorative wall light models in which fluorescent tubes are used with power saver features. These decorative models are called “D Series” lights.

Manufacturing Process

We manufacture CFLs using established technology and standards, and we have tailored our technology and processes to become more cost competitive. Our CFL manufacturing process involves the production of certain components in-house and assembling these components with other parts sourced primarily from China, Thailand and India.

The CFL manufacturing process is comprised of four steps or sub-processes. In the first step, a lamp cover is made and fitted with an aluminum holder, thus making the lamp holder. In the second step, the electronic ballast is mounted and soldered onto a printed circuit board. In step three, a plastic tube case is made and fitted with a glass tube, and in the fourth and final step, all the three processed parts are electrically connected to each other.

The diagram below provides a detailed illustration of each step in the CFL manufacturing process.

CFL Manufacturing

Process 1 Process 2 Process 3 Process 4

FITTING

CFL

PACKING

STORAGE

DESPATCH

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Process 1 (Tube Manufacturing)

PBT PLASTICGRANULES

ALUMINUMHOLDER

PLASTIC MOULDOF COVER

INJECTION MOULDING

PROCESS

MOULDED

PLASTIC COVER

TUBE COVERRIVETTING

COVER WITH

HOLDER

HOLDER FITTED WITH COVER

PROCESS 2 (Electronic Module (Ballast) Manufacturing)

PCB PROCESS

SOLDER BAR

PVC WIRE

ELECTRONIC MODULE

(BALLAST)

EL

ECT

RON

IC

CO

MPO

NEN

T

COMPONENT MOUNTING ON PCB

PROCESS 3 (Glass Tube Manufacturing)

Main Glass Tube Cutting

Main Glass Tube Cutting

Main Glass Tube Cutting

Main Glass Tube Cutting

Fluorescent Coating

End Closing

Mount Making

Butt Sealing Tube Joining

Exhausting and Gas

filling

Mercury Dozzing

Aging

GLASS TUBE

PROCESS 4 (Tube Case Fitting)

PBT PLASTIC GRANULES

INJECTION MOULDING

PLASTIC MOULD OF CASE

MOULDED PLASTIC TUBE CASE

GLUEPUTTING &

DRYINGGLASS TUBE PVA GLUE

TUBE FITTED WITH CASE

Materials

The materials used to produce our CFLs are glass tubes, plastic, aluminum, and electrical components, such as resistors, capacitors and transistors, which are mounted on a printed circuit board. We manufacture critical components, like plastic parts, eecores transformers, beed rings and printed circuit

72

boards, for our CFLs. We plan to build a glass tube manufacturing plant during fiscal year 2009 in order to more fully integrate our CFL division. Other CFL components are procured from countries including China, Thailand as well as domestically.

Capacity and Production Capabilities

We have gradually enhanced our CFL production capacity over time. Our current capacity is 200,000 units per day. The details of production are below:

Year ended March 31, 2006 (1)

Year ended March 31, 2007

Nine months

ended December

31, 2007

CFL Capacity

17,500,000 30,000,000 60,000,000

Actual Production

8,262,502

17,591,699

18,127,550

Capacity Utilization

N/A 58.64% 40.28%(2)

(1) Actual production in this period reflects seven months of CFL production from September 15, 2005 to March 31, 2006. As a result, providing capacity utilization for the year ended March 31, 2006 is not meaningful.

(2) Annualised.

The installed capacity of our CFL plant is 200,000 units per day on single shift basis. The plant operates for 300 working days per year.

Machines and Equipment

As of January 31, 2008, our CFL plant is equipped with the following machinery and equipment:

o Plastic molding machines

o Sheet cutting machines

o Coil winding machines

o Screen printing machines

o Hooper loader

o Grinder machines

o PVC extruder machines

o Auto lead fixing machines

o High speed precision press

o Jumper bending machine

o Digital automatic cutting machines

o Various testing and lab equipment

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Vitrified Tiles Division

Our vitrified tiles division was established in December 2005 to provide a quality low-cost flooring alternative. Our tiles are produced in-house at our manufacturing complex in –Samakhayali village in Bhachau taluka in the Kutch district in the State of Gujarat.

Our customers include both end-users and on-sellers of our tiles. End-users include construction companies such as Sri Gayatri Constructions, United Constructions, Mak India Developers, Oceanus Dwelling Pvt. Limited, Olive Builders, Sowparnika Projects and Abad Builders along with engineering companies such as Warsaw Engineers. A significant proportion of our sales are made to building and construction companies and our main focus is on bulk sales to project managers.

Product Lines

We have five production lines for vitrified tiles in sizes of 600x600 mm and 800x800 mm. Our tiles currently come in 15 colors and 42 designs. We regularly introduce new tile designs and colors.

Vitrified tiles are widely used as floor tiles in residential complexes, commercial complexes and retail spaces. The market for these tiles has been traditionally driven by the construction industry; however, as lower cost tile alternatives have come into the Indian market, consumer interest in this product has grown. Vitrified tiles have become popular due to ease in installing the tiles, as well as their strength, durability and price.

Manufacturing Process

Vitrified tiles are ceramic tiles that have been subject to a higher degree of vitrification resulting in less absorption of water. Vitrification is a process of converting a material into a glass-like amorphous solid that is free of any crystalline structure, either by the quick removal or addition of heat or by mixing with an additive.

A vitrified tile is a homogenous body and does not have a separate coat of gloss, which differentiates it from a ceramic tile. Further, since vitrified tiles are subject to a higher degree of vitrification, they are less porous and have a low percentage (approximately 0.5%) of water absorption. For this reason, vitrified tiles are more durable and stain-resistant. Vitrified tiles are as sturdy as granite or marble, yet they are also elegant and slip resistant.

Our vitrified tiles are manufactured using single-firing technology. Various types of clay are mixed and placed into a weighing box in a pre-determined proportion. Pigments and other colorants are added and then the mixture is fed into a continuous ball mill. The ball mill contains water and grinder media, which liquefies and grinds the clay. The ground materials, in slurry form, are then placed into storage tanks fitted with agitators to keep the slurry in suspension for one to two days. The slurry is then sieved using magnets to remove iron contents and transferred to the final storage tank. From the final tank the sieved slurry is transferred to a spray dryer chamber. The output from the spray dryer is a powder. The powder is collected and stored in silos.

Once collected in silos, this powder is then passed through a press that exerts 5,000 tons of pressure on the powder. This pressure converts the powder into tiles. A mold that is attached to the press regulates the size and thickness of the tile. This tile is then dried in dryers at a temperature of around 200 degrees. Next the tile is colored with soluble salt and screen-printed with various designs. Thereafter, the tiles are fed into a fast single layer roller kiln, where they are fired. The kiln is fueled with coal gas, and the temperature of the kiln is approximately 1,200 degrees. It is in the kiln that vitrification takes place. Finally, the tiles are sized, cut and polished. The gas required for the spray drier and the kiln are generated using imported sized steam coal in our coal gasification plant. The coal gasification plant has five gasifier units that have the capacity to produce 800,000 cubic meters of gas per day. Coal gas is cheaper in cost than LPG, natural gas or low-density oil, so there is a built-in cost advantage to using this form of fuel.

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The diagram below provides a detailed illustration of the multi-step vitrification process.

Materials

The imported raw materials required in vitrified tile production are Ukraine clay, soluble salt and abrasives. The use of Ukraine clay provides our tiles with greater stability and a brighter look. The plastic content of Ukraine clay helps reduce the water absorption of the tile, thus enabling us to produce a high quality product. We maintain a three to four months inventory of Ukraine clay to allow natural drying and homogeneity, which improves the quality of the raw material. Further, Ukraine clay must be inventoried in large quantities prior to the winter season, since mining activity during the winter is generally reduced due to severe cold weather.

Other materials, like Bikaner clay, Felspar, China clay, quartz, glaze and frits adhesives, are available within India. These raw materials are procured from local vendors. We identify vendors based on several criteria, such as quality of raw material, price competitiveness and time for delivery. Once goods are delivered to our premises, they are subject to inspections to ensure quality.

We use sized steam non-coking coal with sizes from 20 to 50 mm in our coal gasification plant. The coal is imported from China and South Africa.

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Capacity and Production Capabilities

We have five vitrified tile production lines capable of producing 30,000 square meters of tile per day. During the quarter ended December 2007, our vitrified tiles plant achieved 84.12% capacity utilization. The plant produced 2,321,869 square meters of tiles.

Year ended March

31, 2006 (1)

Year ended March 31,

2007

Nine months ended

December 31, 2007

Installed capacity (sq. m.)

7,500,000 7,500,000 9,000,000

Actual production (1)(sq. m.)

482,753

4,050,558

4,954,853

Capacity Utilization

N/A 44.55% 73.40%(2)

(1) Actual production in this period reflects four months of vitrified tiles production from December 15, 2005 to March 31, 2006. As a result, providing capacity utilization for the year ended March 31, 2006 is not meaningful.

(2) Annualised.

The plant operates with double shifts and works for 300 days. The plant normally uses 60 work stoppage days for maintenance purposes. Maintenance work is carried out in various stages on a rotating basis so that the production downtime is minimized. However, capacity fluctuates during the maintenance period.

During the second quarter of Fiscal 2008, we undertook maintenance and upgradation of our polishing lines and installed certain machinery on these lines which resulted in reduction of production by about 50% for a period of 45 days. We have since increased our polishing lines from five to six lines, where the sixth line is a standby line.

Machines and Equipment

As of January 31, 2008, our vitrified tiles plant is equipped with the following machinery and equipment:

o a furnace oil based captive power plant which delivers 16 MW of power;

o a coal gasification plant with five gasifiers which produce 800,000 cubic meters of gas per day;

o a coal briqueting plant for making sized coal from coal fines;

o five kilns;

o six polishing lines;

o programmable logic controller weighing system for accurate batch mixture;

o three continuous ball mills;

o five channel horizontal dryers;

o six 5,000 metric tonne hydraulic presses; and

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o fully-equipped laboratories that are used by our research and development team and quality control staff.

Aluminum Composite Panels (ACP) Division

In April 2007 we launched our ACP division. ACPs are used in building construction for interior and exterior paneling. ACPs are considered a durable and cost-effective substitute for conventional products, such as paint or chip plasters.

Product Description

We market ACP with various thicknesses, ranging from 1 mm to 5 mm, in over 20 colour shades both for exterior as well as interior applications. We also manufacture standard sizes of 4 x 8 ft., 4 x 10 ft. and 4 x 12 ft. Other sizes are manufactured on custom order basis.

Manufacturing Process

ACPs are manufactured by lining one side of an aluminum sheet with a polymer PVDF coating and sandwiching a LDPE sheet between the aluminum sheets and applying pressure with heat, so that the aluminum becomes a strong composite panel. The technology and machinery used in our ACP plant was imported from China. Our plant features a design machine with CNC technology, which enables us to manufacture ACPs in a variety of shapes and sizes. Additionally, our plant has the capacity to manufacture panels in larger than standard sizes.

Materials

Coils of aluminum are cut into sheets and coated with special colours, low density polyethylene, with both sides coated. Adhesive films are used for the manufacture of ACPs. We import all our aluminum from China.

Capacity and Production Capabilities

The ACP division has the capacity to produce 400,000 square meters of ACP per year. Production commenced in fiscal 2007, and we produced 124,863 square meters of ACP in the nine months ended December 31, 2007.

E-Bike Division

We have a manufacturing facility to produce our own E-Bikes which are specifically designed for the Indian market. We have assembled a small number of E-bikes on a trial basis. These E-bikes were assembled by us from parts manufactured by third parties. We determined that going forward it would be in our best interests to manufacture E-bikes in-house. Production will take place in two phases. Phase I of our E-Bike facility will have a capacity of 400 bikes per day. In Phase II, we propose to scale up our production capacity to 2,000 bikes per day. Phase I production of E-Bikes recently commenced in late March 2008. First production from Phase II is expected to commence by June 30, 2009. Unlike the majority of E-Bike manufacturers in India, who we believe are primarily product assemblers, in Phase II we plan to manufacture approximately 85% of the components necessary to produce E-Bikes in our own integrated, in-house facility in Gujarat. Batteries constitute approximately 40% of E-Bike component costs. While we currently import batteries, we intend to manufacture batteries in-house with full scale battery production expected in Phase II.

Product Description

E-Bikes are environmentally friendly, zero emission and rechargeable battery operated gearless bikes. We have designed our own E-Bikes for the Indian market. We believe that our E-Bike design is

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more rugged and better suited for Indian road conditions than products based on Chinese designs. We will have two basic E-Bike models. Model A has a maximum speed of 25 km/h speed and is able to carry a single user. Model B when launched will have a maximum speed of 70 km/h and has dual user capacity. The basic features of the Model A and Model B E-Bike are outlined below:

E-Bike Model Specifications Model A Model B

Battery Capacity 48V/20Ah 48V/20-24 Ah

Battery location Below the seat Below the seat

Rated Power 250 W 500 -800 W

Maximum Speed 25km/h 45-50 km/h

Starting Current 18A max 20 A Max to 28 A Max

Running Current 4.1A @75 Kg 12 A to 15 A @ 125 kg

Water proofing of critical parts yes Yes

No load RPM 415 560

Under voltage protection 42 V 42 V

Over current protection 18 A 22 A

Ground Clearance 165 mm 165 mm

Suspension Rear 290 mm 290 mm

Braking System Electronic Auto Braking System Electronic Auto Braking

System

Mechanical Brake

Front

Rear

Drum

110 mm

110 mm

Drum

110 mm

110 mm

Customers who purchase Model B of our E-Bike will be subject to Road Transport Office (“RTO”) registration and licensing requirements.

Manufacturing Process

E-Bikes generally have a D.C. micro motor and run on a lead acid sealed rechargeable battery. Battery capacity ranges from 14AH to 20AH. The number of kilometers per charge is based on battery capacity and is generally in the range of 50 to 70 kilometers per charge.

Similarly, D.C. micro motors are available in varying capacities ranging from 250 watts to 1,000 watts. High motor capacity allows the E-Bike to reach higher speeds and carry heavier loads. Typically, E-Bikes produced in India, including our Model A Bike, contain a 250 watt motor, which will allow the bike to reach speeds of up to 25 km/h and carry a single person. This is a result of Automotive Research Association of India (ARAI), Pune standards which require RTO registration, licensure and further safety procedures for any vehicle with power exceeding 250 watts.

The motor, lights, horn, battery, accelerator and other components of the E-Bike are all controlled by a microchip-based controller which monitors and controls the bike’s mechanisms.

Our E-bike runs on electricity stored in VRLA (Valve Regulated Lead Acid) maintenance free, rechargeable batteries. The electrical energy is converted to mechanical energy that moves the E-Bike.

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This is achieved by hi-technology application of electrical and electronic engineering to give the bike high efficiency in terms of energy, precise control of speed and a noise free, smooth ride.

Our E-bikes are manufactured by injection molding of plastic parts and welding and mounting metal, wiring harness, which are painted and metallised in various stages. These are then sub-assembled with parts like the controller, motor, battery, lamps, levers, horn and speedometer. The frame is mounted on the final assembly line and stagewise sub assemblies are fitted to the frame to make the final product.

We have already established manufacturing capabilities for Phase I production of our E-bikes, including:

• an injection molding machine, a plastic paint shop, metalizing plant and equipment for hot stamping;

• a plant for manufacturing metal frames and components required for E-bikes such as main frame, handles, front wheel sockets and side and main stands; and

• a facility for manufacturing DC micro motors. In addition, believe we have a competitive advantage over other E-bike manufactures because we are able to leverage certain manufacturing technologies, processes and employee skill sets already used in our current operating divisions to manufacture our E-bikes during Phase I, such as:

• certain plastic parts for our E-bikes can be produced by utilising injection molding machines we operate as part of our CFL operations;

• certain components of our battery chargers can be manufactured by utilising manufacturing equipment used in our CFL division;

• we ultilise the facilities of our CFL division to produce printed circuit boards and other electronic parts that are used in the micro chip-based electronic controllers of our E-bikes; and

• a tool room in our vitrified tiles division that is being utilized in Phase-I for modification and maintenance of moulds for the production of E-Bikes.

Materials We manufacture our E-bikes by using various plastics such as polypropylene, acrylic-styrene, high

impact polystyrene, polycarbon, low-density polyethylene and polyvinyl components chloride. We also use steel pipe, steel sheets, coating powder, welding rods, electrodes, and ball bearings, motors, batteries, chargers and controllers.

In Phase II, we plan to manufacture approximately 85% of the components necessary to produce E-Bikes in our own integrated in-house facility. Currently we have the capacity to produce finished plastic parts, metal frames, motor and some electronic components.

Batteries constitute approximately 40% of E-Bike component costs. While we currently import batteries, we intend to manufacture batteries in-house with full scale battery production expected in Phase II.

We intend to purchase through our procurement network components not produced in-house directly from manufacturers located domestically as well as in China, Korea and Taiwan.

Capacity and Production Capabilities—Phase I and Phase II

We have set up a manufacturing facility to produce our own E-Bikes designed and adapted for the India market, in two phases.

In Phase I, we plan to reach production capacity of 400 bikes per day. In Phase I, we will manufacture critical parts, source other parts mainly from China and local suppliers and assemble the E-Bikes. Phase I production of E-Bikes commenced in late March 2008. We have identified, and have

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acquired or are in the process of acquiring, the required plant and machinery and other supporting infrastructure necessary for expansion of Phase I.

In Phase II, we propose to scale up our production capacity to 2,000 bikes per day. First production from Phase II is expected to commence by June 30, 2009. We have identified, and initiating the process of acquiring, the required plant and machinery and other supporting infrastructure necessary for Phase II. The use of net proceeds of this Offering will be used in part to finance Phase II. See “Objects of the Issue” on page 26 of this Draft Red Herring Prospectus.

Machines and Equipment

The major machines and equipment for manufacturing E-Bikes include:

o Micro processor controlled injection molding machines

o Paint booths, drying conveyors, UV line – paint shop

o Metalising line plant for plastic metalising

o Printed circuit board manufacturing line

o Automatic screen printing machine

o Wave solder machine

o Tyre mounting machine

o Powder coating line

o Micro processor controlled pipe being machine.

o Bike assembly line

o Welding and cutting machines

Marketing and Distribution

We have a nationwide sales and distribution network in the form of our own offices, showrooms and depots.

At January 31, 2008, we had 142 stockists, 1,750 distributors and 15,319 retailers for our CFL division. There are a total of 49 exclusive CFL showrooms. There is also a dedicated depot at Bhiwandi in Mumbai.

At January 31, 2008, we had had 41 distributors and 350 dealers for our vitrified tile division. There are three exclusive showrooms, at Ahmedabad, Morbi and Rajkot. We also have our own depot at Bangalore and five depots located at Calicut, Cochin, Tirur, Thrissur and Kolkata that are managed by clearing and forwarding agents.

At January 31, 2008, we had 10 dealers and one clearing and forwarding agent for our ACP division. There are two exclusive ACP showrooms in Ahmedabad and Morbi, a Company-owned godown at Bhiwandi (Mumbai), a Company-owned depot at Bangalore and, three depots managed by a clearing and forwarding Agent at Trivandrum, Calicut and Thrissur.

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We recently launched our E-Bike product and are testing the market by opening eight exclusive showrooms, including one each at Morbi and Ahmedabad. We have also initiated the process of appointing retailers and distributors for our E-Bikes and, as at January 31, 2008, we had appointed 10 dealers.

Payment terms for our products would typically range from 30-45 days, depending on the market and the season. No credit terms are extended to related parties.

Our Manufacturing Complex and Facilities

The manufacturing facilities for our four divisions are housed in one manufacturing complex located in Samakhayali village in Bhachau taluka in the district of Kutch in Gujarat. The complex is located on approximately 181 acres of property, and the total constructed area of the complex is approximately 22,000,000 square feet.

Utilities

The daily power requirement for our current manufacturing facilities is 180,000 kilowatt hours, which is sourced from our captive power plant. The plant is comprised of two diesel generator sets (each with a power capacity of 8 MW) for a total plant power capacity 16 MW. The captive power plant meets and exceeds our requirements for uninterrupted power, which is currently around 7 MW. Our diesel generator sets are run on furnace oil and meet Indian emissions standards.

Our total electricity requirement is expected to increase by another 5.5 MW as a result of the development of the glass tube plant (1.5 MW) and E-bike production (4 MW). We intend to meet these needs from our existing generator sets.

Water for use in production related activities as well as for daily use by our staff is supplied by Gujarat Water Infrastructure Limited (a Government of Gujarat Undertaking) pursuant to a long-term supply agreement that we entered into with Gujarat Water Infrastructure Limited on December 16, 2006. Under the agreement we are entitled to draw water up to 2,500,000 litres daily against our actual current usage of around 1,000,000 litres. The agreement is valid for five years initially, and will automatically renew at the end of the term for a further 10 year term unless either party gives notice in writing to the contrary. Pursuant to the agreement, water is supplied through the NC-9 pile line of Sardar Sarovar Narmada Nigam Limited.

Employee Housing, Facilities and Transportation

We have 213 family accommodation, single or double bed flats for our employees. Of the 213 flats, 115 flats were recently constructed in Orpat Nagar township near our plant and 98 flats were recently constructed in Reva township at Morbi.

We also have two hostels for employee accommodation. The Gent’s Hostel can accommodate up to 570 male employees. We also have a Special Exclusive Hostel that can accommodate over 900 female employees. Residents of this hostel are provided with all facilities, including boarding and lodging, free of cost. Residents are also provided with transportation to their homes on a biweekly basis.

We also have a subsidized canteen facility. The facility is equipped to serve up to 1,000 employees. A shopping center and a clinic for providing first aid are also available in the Plant Township.

Competition

We face significant competition from domestic and international players. In addition, we compete against a number of multi-national manufacturers and marketers, some of which are larger and have substantially greater resources than us.

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Our CFL division faces competition from a variety of domestic competitors, such as Philips Electronics, Bajaj Auto Limited, Osram India Pvt. Limited, Havells India Limited, Crompton Greaves, Anchor Electricals and Wipro Technologies Limited. We also face competition internationally from CFLs imported from China that are sold mainly through unorganized market channels.

In the vitrified tile business, we compete with companies in the marble and granite industries, in addition to companies in the vitrified tile sector. Among our competitors are Murudeshwar Ceramics Limited, H & R Johnson Limited, Asian Granito India Limited, Euro Ceramics Limited, Nitco Tiles Limited, Oracle Granito Limited, Varmora Granito Limited, Antique Granito Limited, Deco Light Ceramics Limited and Bell Granito India Limited. We also face competition in the vitrified tiles market from Chinese imported tiles. The vitrified tile industry has also seen the entry of a number of new manufacturers. New entrants in the industry may affect our market share and future prospects.

We have recently entered into the ACP market and face competition from Eurobond Industries Pvt. Limited, Aludecor Lamination Pvt. Limited, Alstrong India, Durabuild Technologies Pvt. Limited, Alupan Composite Panels (P) Limited and Alex Panels.

In the E-Bike market we will face competition from Electrotherm (India) Limited, Hero Cycle Limited, Ace Motors, Mark Batteries Pvt. Limited, Avon Cycles Ltd, TVS Motor Company Limited, Cynosure Enterprises Limited, and R. K. Rim Pvt Limited, Cynosure Enterprises Limited, Vijaya Value Electric Pvt. Limited, Eko Vehicles and Atlas Cycles (Haryana) Limited

Intellectual Property

The table below outlines the current status of our intellectual property:

Trademark Logo Status

“OREVA World of Granites”

We own this trademark in various classes and have applied for the same in certain other classes.

“OREVA Power Savers Power Savers To The Nation”

We own the copyright in and have applied for trademark in various classes.

“OREVA Taste Forever”

We have applied for trademark in various classes

“OREVA D’signer Panels Feel The Difference”

We have applied for trademark in class 19

“OREVA e-Bike”

We have applied for trademark in class 12

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“OREVA Granitile Forever”

We own the copyright in and have applied for trademark in various classes.

For further details, please refer to section titled “Government Approvals” on page 195 of the Draft Red Herring Prospectus.

Human Resources

As at January 31, 2008, we had 3,479 full time employees in India, of which 2,260 were women. The number of employees in each of our divisions is as follows:

Department CFL Tiles ACP E-bike

Admin

staff -

common

to all

divisions Total

Production 2,116 673 14 47 - 2,850

R & D and QC 84 32 1 14 - 131

Sales and Marketing

43 133 14 6 - 196

Workshop/machine Maintenance/ Fabrication

10 95 1 5 - 111

Administration/ Corporate Office

191 191

Total 2,253 933 30 72 191 3,479

We have a human resources department that monitors the needs of our employees. We believe that our relations with our employees are good. Our employees are not members of any trade unions.

Insurance

We are covered by insurance policies for loss caused by earthquakes, accident, fire, flood, riot, strike and malicious damage, for risk arising from import and export of goods, burglary, cash transit and marine and inland transit. The said insurance policies have been sought to cover our various products. Notwithstanding our insurance coverage, damage to our facilities, equipment, machinery, buildings or other properties as a result of occurrences such as fire, explosion, power loss, telecommunications failure, intentional unlawful act, human error or natural disaster or terrorism, or any decline in our business as a result of any threat of war, outbreak of disease or epidemic could nevertheless have a material adverse effect on the our financial condition and results of operations to the extent such occurrences disrupt the normal operation of our business. Property Our Registered and Corporate Office is located at “Corporate House”, 8A National Highway, Morbi – 363 642, Gujarat, India. The corporate office at Morbi is 55 kilometers from our manufacturing facility. Our properties and assets include leasehold land and rights and freehold property. We have entered into a lease agreement with our Promoter Jaysukhbhai O. Patel to lease the land in Morbi, Gujarat on which our registered office is located. For further details please refer to section titled “History and Other Corporate Matters – Summary of Key Agreements - Lease agreement entered into between Jaysukhbhai O.

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Patel and the Company” on page 94 of this Draft Red Herring Prospectus.

We own the land on which the manufacturing facility at Kutch, Gujarat is located and the land in Morbi on which our staff residential accommodations are located. Additionally, we own the property which houses our exclusive showroom in Ahmedabad. We have leased premises in Bangalore and New Delhi for operating our offices and godowns.

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REGULATIONS AND POLICIES The following description is a summary of the relevant regulations and policies as prescribed by the

Government of India. The information detailed in this chapter has been obtained from publications

available in the public domain. The regulations set out below are not exhaustive, and is only intended to

provide general information to the investors and is neither designed nor intended to be a substitute for

professional legal advice.

Introduction

The Company is engaged in the business of manufacturing vitrified tiles, aluminium composite panels, CFL bulbs and e-bikes.

Set forth below are certain significant legislations and regulations that generally govern this industry in India:

Environment Regulation

Infrastructure projects must also ensure compliance with environmental legislation such as the Water (Prevention and Control of Pollution) Act 1974 (Water Pollution Act), the Air (Prevention and Control of Pollution) Act, 1981 (Air Pollution Act) and the Environment Protection Act, 1986 (Environment Act). The Water Pollution Act aims to prevent and control water pollution. This legislation provides for the constitution of a Central Pollution Control Board and State Pollution Control Boards. The functions of the Central Board include coordination of activities of the State Boards, collecting data relating to water pollution and the measures for the prevention and control of water pollution and prescription of standards for streams or wells. The State Pollution Control Boards are responsible for the planning for programmes for prevention and control of pollution of streams and wells, collecting and disseminating information relating to water pollution and its prevention and control; inspection of sewage or trade effluents, works and plants for their treatment and to review the specifications and data relating to plants set up for treatment and purification of water; laying down or annulling the effluent standards for trade effluents and for the quality of the receiving waters; and laying down standards for treatment of trade effluents to be discharged. This legislation debars any person from establishing any industry, operation or process or any treatment and disposal system, which is likely to discharge trade effluent into a stream, well or sewer without taking prior consent of the State Pollution Control Board. The Central and State Pollution Control Boards constituted under the Water Pollution Act are also to perform functions as per the Air Pollution Act for the prevention and control of air pollution. The Air Pollution Act aims for the prevention, control and abatement of air pollution. It is mandated under this Act that no person can, without the previous consent of the State Board, establish or operate any industrial plant in an air pollution control area. The Environment Act has been enacted for the protection and improvement of the environment. The Act empowers the GOI to take measures to protect and improve the environment such as by laying down standards for emission or discharge of pollutants, providing for restrictions regarding areas where industries may operate and so on. The GOI may make rules for regulating environmental pollution. With respect to forest conservation, the Forest (Conservation) Act, 1980 prevents state governments from making any order directing that any forest land be used for a non-forest purpose or that any forest land is assigned through lease or otherwise to any private person or corporation not owned or controlled by the Government without the approval of the GOI. The Ministry of Environment and Forests mandates that Environment Impact Assessment (EIA) must be conducted for projects. In the process, the Ministry receives proposals for the setting up of projects and assesses their impact on the environment before granting clearances to the projects.

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Foreign Ownership

Under the Industrial Policy and FEMA, FDI up to 100% is permitted in manufacturing activities. Thus 100% FDI is allowed in the manufacture of vitrified tiles, CFL bulbs, aluminium composite panels and e-bikes. Power Generation through a Capitive Power Plant Currently, under Indian law, any generating company can establish, operate and maintain a generating station if it complies with the technical standards relating to connectivity with grid. Approvals from the Central Government, State Government and the techno-economic clearance from the CEA are no longer required, except for hydroelectric projects. Electricty Rules 2005 lays down the conditions for a power plant to be categorized as a captive power plant, as defined under the Electricity Act 2003. A Captive Power Plant (“CPP”) has been defined under the Electricity Act, 2003 (the “Act”) as “a power plant set up by any person to generate electricity primarily for his own use.” Under Section 9 of the Act, “a person may construct, maintain or operate a captive generating plant and dedicated transmission lines.” The Electricity Rules, 2005 (the “Rules”) in Section 3(a) have further clarified that no power plant would qualify as a CPP unless: (i) not less than 26 % (twenty six percent) of the ownership is held by the captive user(s); and (ii) not less than 51 % (fifty one percent) of the aggregate electricity generated in such plant,

determined on an annual basis, is consumed for the captive use. This 51% consumption is calculated on a yearly basis.

Therefore, the Rules envisage that if in a power plant, two or more companies together own 26% or more of the power plant and consume in aggregate, more than 51% of the electricity generated by the power plant, such power plant shall also be considered a captive power plant. No restriction is placed on setting up of captive power plant by any consumer or group of consumers for their own consumption. Under the Electricity Act 2003 and Electricty Rules 2005, no surcharge is required to be paid on wheeling of power from the captive plant to the destination of the use by the consumer. This provides financial incentive to large consumers of power to set up their own captive plants. Other Laws and Regulations Certain other laws and regulations that may be applicable to the Company include the following:

• Contract Labour (Regulation and Abolition) Act, 1970;

• Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996;

• Inter State Migrant Workers Act, 1979;

• Factories Act, 1948;

• Payment of Wages Act, 1936;

• Payment of Bonus Act, 1965;

• Employees’ State Insurance Act, 1948;

• Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;

• Equal Remuneration Act, 1976;

• Payment of Gratuity Act, 1972;

• Shops and Commercial Establishments Acts, where applicable;

• Minimum Wages Act 1948;

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• Hazardous Waste (Management and Handling) Rules, 1989;

• Hazardous Chemicals Rules, 1989;

• Industrial Disputes Act, 1947;

• Mines and Quarries Act, 1954;

• The Explosives Act, 1884; and

• Workmen’s Compensation Act, 1923.

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HISTORY AND CERTAIN CORPORATE MATTERS

Our History We began our operations as an exporter of clocks in May, 1992 as a partnership between Odhavjibhai Patel, Pravin O. Patel, Manubhai U. Patel, Raghavjibhai B. Patel, Jaysukhbahi O. Patel, Ashok O. Patel, Parvinkumar U. Patel, Ramesh B. Patel and Prabhubhai U. Patel. We were reorganized as a company by the name of Ajanta Electronics Private Limited on November 9, 1994 and engaged in the business of distributorship, trading and domestic marketing of electronic products. We changed our name from Ajanta Electronics Private Limited to Ajanta Manufacturing Private Limited with effect from January 23, 2004. We also became a public company on January 23, 2004 and changed the name of our Company from Ajanta Manufacturing Private Limited to Ajanta Manufacturing Limited with effect from January 23, 2004 pursuant to a special resolution of the shareholders passed at an EGM dated January 15, 2004. The fresh certificate of incorporation consequent on change of name was granted by the RoC to our Company on January 23, 2004. We manufacture vitrified tiles, CFL bulbs and ACPs. We started manufacturing vitrified tiles and CFL bulbs in 2005-2006 and ACPs in 2007-2008. Trademark arrangement Pursuant to a family separation arrangement in the erstwhile Ajanta Group in 2002, Jaysukhbhai O. Patel gained control of our Company, Pravibhai O. Patel gained control of the erstwhile Ellora Time Limited (now Ajanta Limited) and Ashokbhai O. Patel gained control of the erstwhile Ajanta Watch Limited (now Ajanta India Limited). At the time of the family separation arrangement, “Ajanta” was registered as a trademark by Ajanta Transistor Clock Manufacturing Company (“ATCM”), a partnership firm, in various classes. ATCM had also applied for the “Ajanta” trademark in various other classes. As a part of the separation arrangement, a Deed of Assignment was entered into between ATCM and Ajanta India Limited (“AIL”) on September 19, 2002 (“Deed of Assignment”). For a description of the Deed of Assignment please refer to the section on “Summary of Key Agreements – Other Agreements – Deed of Assignment” below on page 94 of this Draft Red Herring Prospectus. In accordance with the terms of the Deed of Assignment, ATCM sold and transferred its rights in the trademark “Ajanta” to AIL in all classes that it had trademarks in and in all classes it had applied for trademarks, subject to ATCM being granted such trademark, except for the trademark in clocks and time pieces under class 14. As a consideration for such sale and transfer, AIL paid a consideration of Rs. 3,400,000 to ATCM. Therefore, in accordance with the Deed of Assignment, AIL was granted an exclusive right to use, and all the title, interest, property and all benefits including goodwill in the trademark “Ajanta” under all classes of trademarks, except for clocks and time pieces. ATCM retained the trademark “Ajanta” in clocks and time pieces under class 14. Further, a Deed of Agreement was entered into between ATCM, the Company, Ajanta Limited (AL), and AIL on September 19, 2002 (“Deed of Agreement”) to specifically confirm the understanding under the Deed of Assignment. Further, the Deed of Agreement provides an undertaking by AIL not to directly or indirectly manufacture items as listed in the Deed of Agreement which are manufactured by ATCM, the Company and AL including their present or near future businesses. The Deed of Agreement also provides an undertaking by ATCM, the Company and AL not to directly or indirectly manufacture items as listed in the Deed of Agreement which are manufactured by AIL including its present or near future business. For a description of the Deed of Agreement please refer to the section on “Summary of Key Agreements – Deed of Agreement” below on page 91 of this Draft Red Herring Prospectus. ATCM has also granted a license to our Company for use of the phrase, “a product from Ajanta Quartz”, subject to certain terms and conditions. For further details, please refer to section on “Summary of Key Agreements – Trademark License Agreement” below on page 91 of this Draft Red Herring Prospectus.

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AIL has filed a suit against our Company in the High Court at New Delhi, in October 2007, seeking permanent injuction for inter alia restraining our Company from allegedly infringing the trademark “Ajanta” held by AIL. For further details please refer to section titled “Outstanding Litigations and Material Developments – Litigation against the Company – Civil Cases” on page 187 of the Draft Red Herring Prospectus. Milestones achieved by the Company since its incorporation are listed below:

Year Milestones

1992 Established as a partnership firm in the name of Ajanta Electronics Inc. to carry on export business

2003-2004 Manufacturing plant set up in Kutch

2005-2006 CFL manufacturing commenced at the manufacturing facility at Kutch and installation of the vitrified tiles plant

2007-2008 Commencement of the manufacture of ACPs and commencement of Phase I of the manufacture of E-bikes

Changes in our Registered Office The table below sets forth the details of changes in our Registered Office from the date of our incorporation till the date of this Draft Red Herring Prospectus:

Date of Board

approval

Change

September 25, 2007 Our Registered Office was shifted from its location at Orpat Industrial Estate, Rajkot, Highway, Morbi 363 641 to 8-A, National Highway, Morbi, District Rajkot, Gujarat 363 642

Objects of our Company:

The main objects as contained in our Memorandum of Association include: 1. To conduct, carry on and continue the Business and affairs of erstwhile partnership firm M/S.

Ajanta Electronics Inc., Orpat Industrial Estate, P.O. Box 115, Rajkot Highway, Morbi, with its all assets and liabilities as a running and going concern.

2. To manufacture, produce, design, fabricate, buy, sell, trade, test, processes, prepare, reform,

convert, make, print, publish, repair, import, export, store, distribute, transport, prepare for market of otherwise deal in all kinds of engineering, scientific, mechanical, electrical, electronic, solar, quarts, wall clock, wrist watch, alarm clock, table clock, time piece, quartz movement, spare part, cigarette lighter and accessories all type of time measuring instruments stop watch, toy watch, towers, time display boards, digital clock, ornamental and decorative watch and clock and calculator, dry and inert cell printed circuit boards, cabinets including plastic moulded wooden ferrous, non ferrous, thermoplast, synthetic material cabinets, body, cover, parts accessories, spare equipments all type of electronic components, device and appliance such as control panel, boards, timers, television and apparatus including radio receivers and transmitters, tape recorders, electro mechanical pneumatic controls, computers, and automatic, calculators all type of tapes, magnetic and otherwise photographic films, projectors and cameras and capacitors and other materials used in or in connection with electronic and electrical industries.

3. To establish & carry on all or any industry, trade or business of preparing, mining, cutting,

policing, processing, treating, importing, exporting, and dealing in of all types of:

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a. Ceramic granite or granimite or vitrified tiles of every description and type including setting, processing, trading or dealing in to waste and by-products arising from the mining or processing of such products.

b. Marble, granite, laterite, lime stone and stone, slabs, tiles & other building material & colour stones of every description & type, including setting, processing, trading or dealing into waste & by products arising from the mining or processing of marbles & colour stones

c. Ceramic parts used in machineries, commerce, medical, domestic appliances for electronics & electrical appliances.

d. Ceramic glaze wall, floor, decorative, ceiling and of every description and type.

e. Ceramic, China and porcelain wares such as insulator, glass and machinery parts,.

f. Porcelain wares, stealite, chinaware, and all other ceramic glazed and unglazed item in pottery wares.

g. Pottery wares, glassware, ceramic stains, and ceramic decorative, pottery articles drainage pipes, all types of bricks and pipes refractories, bauxite and their products.

h. Sanitary wares, wash basin, traps, tab, bathtub, and related items of sanitary wares and all type of ceramic wares.

i. Any type of Clay, Mineral, Powders, chemicals and other Raw Materials used in Ceramic Products.

4. To purchase, acquire, take on lease and work, establish any mines & process, treat or deal in the material including by-products of mining & establish factory for processing, finishing, treating or conversion of the dame into industrial & saleable material.

5. To manufacture, process, prepare, preserve, can, refine, bottle, pack, re-pack, buy, sell and deal

whether as wholesales or retailers or as exporters or importers or as principals or agents in food, vegetable, canned and tinned and processed foods, protein, health and instant foods of all kinds including baby dietetic foods, cereals, namkins, beverages, cordials, tonics, restoratives and aerated/non aerated minerals water, food stuff, pan-masala and gutkha and consumable provisions of every description for human or animal consumption and to carry on business in all natural, artificial, synthetic or chemical, edible food colours.

6. To carry on in India or elsewhere the business to manufacturer, fabricate, assemble, alter, brand,

convert, clean commercialize, dismantle design, develop, research, exhibit, display, hire, let on hire, export, import, exchange, equip, handle, install, job work, lease, laminate, manipulate, maintain, modify, machine, operate, sponsor, organize, prepare, produce, purchase, sell, resale, barter, protect, provide, promote, pack, repack, repair, service, renovate, recondition, remodel, contract, subcontract, service, supply, and to act as agent, broker, representative, marketing-man, concessionaires, consultant, advisor, collaborator, contractor, arbitrator or otherwise do deal in all shapes, sizes, capacities, varieties and kinds of domestic, industrial, appliances such as air conditioners, refrigerators, cooling and heating elements, electronics and electrical goods, fans, coolers, washing machines, water heaters, iron, mixies, wet grinders, ovens, hot plates, hot cases, gas stoves, pressure cookers, bottle coolers, water filter, tube light fitting, lamp fittings, voltage stabilizers, vacuum cleaners, cooking range, geysers, water coolers, dish washers and other similar products their components, parts, consumable, accessories, fitting and, instruments.

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7. To carry on the business as manufacturers, processors, dealers, contractors, agents, suppliers, stockiest, representatives, Engineers, Designers, Consultants for any or all of Plastics such as woven sacks, Monofilament Yarn, Ropes, Twines, Chair cane, House-hold articles, Industrial items and/or rubber goods including the business of resins and moulding compounds such as ABS, Acetal, Acrylic, Alkyd, Cellulose Acetate, Epoxy, Melamine, Nylon, Polyamide, Polycarbonate, Polyester, Polyethylene Low Density and High Density, Poly Propylene, Polystyrene, Polyurethane, PVC, Foamed plastics of all kinds, reinforced plastics and composites, Plastic Films, multi films, lamination films, foils, Sheeting and laminates, Additives, Fillers and other plastic materials.

8. To carry on business of manufactures, develop, importers, exporters, assemblers, hirers and repairs of and/or dealers in and marketing and distribution of all type of electronic equipments, their parts and accessories and spares thereof such as computers and computer peripherals, computer parts, data transmission circuit, audio visual equipments, and industrial machinery and consumer electronics including radio receivers, television receivers, television picture, tubes, tape-recorders, record changers, professional and defense electronics, test and measuring instruments, musical instruments, digital and analytical instruments electronic environmental and pollution measuring instruments, photocopying machines and other office equipments, electronic desk calculators, oscilloscopes and associated instruments, process control systems, industrial electronics, medical electronic equipments, electronic, devices, audio recorder/playback systems, closed circuit TV audio video C.D. and C.D. players and other electronic instrument and software used for industrial, agricultural, commercial or defense purpose.

9. To carry on the business of manufacturers of, dealers in hirers, repairers, cleaners, stores and

warehouses of automobiles, motor cars, lorries and vans, motor-cycles, cycle-cars, motors, scooters, carriages, amphibious vehicles and vehicles suitable for propulsion on land, sea, or in the air or in any combination thereof and vehicles of all descriptions.

10. To carry on business as buyers, sellers, and manufacturers of all or any of the building materials,

inclusive of lime stone related products, bricks, cement, cement products badarpur, pipes, pre-fabricating paving, lining, roofing, materials, iron, coal and coal burns and to buy, sell manufacture, prepare, mix formulate and deal in stones, limes, clays, cement, bricks, pozolanes.

Amendments to our Memorandum of Association

Date Details of change

September 27, 2003

Amendment in the main object clause of the MoA by way of deletion of existing sub-clause 2 of clause III (A) and insertion of sub-clause 2 and 3.

November 25, 2003

Amendment in the main object clause of the MoA (by way of addition of sub-clauses 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21 after existing sub-clause 3 of clause III (A).

January 15, 2004

Change in the name of the Company from Ajanta Electronics Private Limited to Ajanta Manufacturing Private Limited.

January 15, 2004

Conversion of the Company from a private limited company to public limited company upon which the name of the Company was changed from Ajanta Manufacturing Private Limited to Ajanta Manufacturing Limited

March 2, 2004

Increase in the authorised share capital from Rs. 50,000,000 divided in to 50,000 equity shares of Rs. 1,000 each to Rs. 500,000,000 divided in to 500,000 equity shares of Rs. 1000 each

September 30, 2004

Amendment in the main object clause of the MoA of the Company by way of deletion of existing sub-clause 2 to 5 of clause III (A) and insertion of new sub-clause 2 to 5.

July 1, 2006 Increase in the authorised share capital from Rs. 500,000,000 divided in to 500,000 equity

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Date Details of change

shares of Rs. 1,000 each in to Rs. 550,000,000 divided in to 550,000 equity shares of Rs. 1,000 each.

February 15, 2007

Sub division of equity shares of Rs. 1,000 each into equity shares of Rs. 10 each in the share capital of the Company.

February 15, 2007

Increase in the authorised share capital of from Rs. 550,000,000 divided into 55,000,000 equity shares of Rs. 10 each to Rs. 720,000,000 divided into 55,000,000 equity shares of Rs. 10 each and 17,000,000 redeemable preference shares of Rs. 10 each.

Summary of Key Agreements Deed of Agreement between our Company, ATCM, AL and AIL dated September 19, 2002 (“Deed of

Agreement”) Our Company, ATCM and AL entered into a Deed of Agreement with AIL to specifically confirm the understanding provided under the Deed of Assignment, as discussed below in the section titled “Summary of Key Agreements – Other Agreements” on page 94 of this Draft Red Herring Prospectus. Under the terms of the Deed of Assignment, ATCM, being the owner of the trademark and other rights including patents and design in “Ajanta”, in India and in other countries, assigned the trademark in “Ajanta” to AIL except under class 14 where only the right to manufacture wrist watches under the trademark “Ajanta” was assigned to AIL. Thus ATCM retained the trademark in “Ajanta” to the extent of selling wall clocks and time pieces under the brand name “Ajanta”. The Deed of Agreement provides an undertaking by AIL not to directly or indirectly manufacture items as listed in the Deed of Agreement which are manufactured by ATCM, the Company and AL including their present or near future businesses. Further, Deed of Agreement provides an undertaking by ATCM, the Company and AL not to directly or indirectly manufacture items as listed in the Deed of Agreement which are manufactured by AIL including its present or near future business. Trademark License Agreement between ATCM and our Company dated November 13, 2004 (“License

Agreement”)

Our Company entered into a License Agreement dated November 13, 2004 with ATCM to obtain the license for use of the trademark “Ajanta”. In accordance with the terms of the License Agreement, ATCM has granted our Company the license to use the trademark “Ajanta” in the form, manner and style of “a product from Ajanta Quartz”. Further, the License Agreement specifies that in the event the usage is in form of a sole brand name, then the same shall be used only for clocks and time pieces. For the usage of the phrase “a product from Ajanta Quartz” for products other than clocks and time pieces, the License Agreement provides that the same shall not be used as a sole brand name and the phrase “a product from Ajanta Quartz” shall only be allowed to be used in order to establish relationship and association between ATCM and our Company. Further, in accordance with the terms of the License Agreement, our Company cannot use the phrase, “a product from Ajanta Quartz” for products that are also manufactured by ATCM or for the products that ATCM also intends to manufacture in the future. The duration of this License Agreement is for 10 years. The License Agreement provides that ATCM shall not charge fees for the license granted to our Company for the initial period upto March 31, 2008 and with effect from April 1, 2008, a license fee of Rs. 100,000 shall be charged by ATCM. The License Agreement may be terminated by either party by giving a notice of three months, without assigning any reasons, to the other party. Trademark License Agreement dated March 20, 2008 entered into with ATCM and Jaysukhbhai O. Patel

(“Oreva License Agreement”)

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The Company is the adopter, prior user and lawful proprietor of the “Oreva” trademark and the Company has developed the Oreva brand for all products manufactured by it and is the registered owner of trademarks and copyrights, goodwill, specification in respect of products under the OREVA brand. Our Company entered into the Oreva License Agreement dated March 20, 2008 with ATCM through its partner Mrudulaben J. Patel and Jaysukhbhai O. Patel (together referred to as the “Licensees”). Under the terms of the Oreva License Agreement, the Company has granted the Licensees separate, non exclusive right to use the trademark, copyright, goodwill, specification with respect to the products manufactured by them and listed out in the schedule to the Oreva License Agreement, under the brand OREVA, for a period of 10 years, subject to extension as agreed upon the parties, commencing from March 1, 2005, subject to the following terms and conditions: 1) Licensee shall follow the ‘standards of quality’ that are laid down and provided by the Company

for the manufacture of the products, pertaining to the directions, standards, specifications and quality requirements of manufacture.

2) Licensee shall not use the brand OREVA to jeopardize the distinctiveness or validity of the same or impair any right, title or interest of the Company in the brand OREVA and wherever the brand OREVA is used by the Licensee, it shall be clearly indicated that the brand OREVA is a property of the Company and has been licensed to the Licensees.

3) Licensee shall not permit the use of brand OREVA directly or indirectly by any other person or entity or register or seek to register similar trademark, copyright, goodwill, artistic work and specification with respect to products mentioned in the schedule to the Oreva License Agreement.

4) Licensee shall use the brand OREVA only for products manufactured by it at its factory premises and under the instructions issued by the Company, which would include the intimation of the specifications, make-up, brand and packaging about the products, to the Company, mentioned in the schedule, using the brand name OREVA.

5) Licensee shall not engage in similar business as carried on by the Company and shall not manufacure same or similar products as manufactured by the Company.

6) Licensee shall not use the brand OREVA without the written permission of the Company. Under the terms of the Oreva License Agreement, the Licensees shall pay a license fee amounting to Rs. 1,00,000 per annum to the Company. This agreement may be terminated by the Company by giving a notice of 3 months in writing to the Licensees. Maintenance Agreement with Wartsila India Limited dated June 8, 2005 (the “Maintenance Agreement”)

A Maintenance Agreement was entered into between the Company and Wartsila India Limited (“WIL”) on June 8, 2005 for the purpose of appointing WIL as contractor for maintenance of a facility of 16.008 Mwe HFO fired generating station, comprising of two Wartsila DG Sets located at Orpat Nagar, 8-A, National Highway, Post-Samakhiyari-370150, Tal. Bhachau, Kutch, Gujarat (the “Facility”). The Maintenance Agreement came into effect on June 8, 2005. The term of the Maintenance Agreement is for a period of four years commencing on the date on which the Company took over the Facility and expires four years from such date, unless terminated earlier. Under the terms of the Maintenance Agreement, WIL is required to carry out all the day-to-day and periodic maintenance in accordance with the manufacturers’ and systems designers’ specification, the annual maintenance plan for the Facility and the maintenance instruction manuals, prudent utility practices and as authorised by the plant manager. WIL is required to provide routine maintenance services for the

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Facility, maintain insurance in relation to workmen’s compensation and motor vehicles and provide the Company with an annual maintenance plan at least 30 days before the end of each year. In the event of failure in performance of obligations under the Maintenance Agreement, due to force majeure, continuing beyond a period of 90 days, either party to the Maintenance Agreement may terminate the same after giving 30 days’ notice to the other party. The Company may terminate the Maintenance Agreement on the occurrence of a material default after the expiry of the cure period of 60 days to rectify the default, by giving notice not less than 90 days on expiry of the cure period. The Company may also terminate the Maintenance Agreement, by giving 90 days notice to WIL. If the notice is less than 90 days, maintenance fee for the shortfall period shall be payable by the Company to WIL, on a pro-rata basis. WIL may terminate the agreement by giving a 90 days notice, in the event of a material breach by the Company and failure to cure the same in 30 days. WIL may also terminate the Maintenance Agreement upon termination of the Operations Agreement, as discussed below, by the Company. Operations Agreement with Wartsila India Limited dated June 8, 2005 (the “Operations Agreement”)

The Operations Agreement was entered into between the Company and Wartsila India Limited (“WIL”) on June 8, 2005 for the purpose of appointing WIL as an operator for operation of a facility of 16.008 Mwe HFO fired generating station, comprising of two Wartsila DG Sets) located at Orpat Nagar, 8-A, National Highway, Post-Samakhiyari-370150, Tal. Bhachau, Kutch, Gujarat (the “Facility”). The term of the Operations Agreement is for a period of four years commencing on the the date on which the Company took over the Facility and expiring four years from such date, unless terminated earlier. Under the terms of the Operations Agreement, WIL is required to provide all the day-to-day activities for operation of the Facility, in accordance with the manufacturers’ and systems designers’ specification, the annual maintenance plan for the Facility, operation manuals and prudent utility practices. Further, WIL is required to carry out all such operation activities for the efficient running of the Facility including employment of well-trained personnel, maintain insurance in relation to workmen’s compensation and motor vehicles and provide the Company with an annual operating plan at least 30 days before the end of each year. Further, the Operations Agreement provides that in the event of failure in performance of obligations under this Agreement, due to force majeure, continuing beyond a period of 90 days, either party to the Agreement may terminate the same after giving 30 days’ notice to the other party. The Company may terminate the Operations Agreement on the occurrence of a material default after the expiry of the cure period of 60 days to rectify the default, by giving notice not less than 90 days on expiry of the cure period. The Company may also terminate the Operations Agreement, after the first operating year, by giving 90 days notice to WIL. Further, if the notice is less than 90 days, maintenance fee as contemplated under the Operations Agreement, for the shortfall period shall be payable by the Company to WIL, on a pro-rata basis. WIL may terminate the agreement by giving a 90 days notice, in the event of a material breach by the Company and failure to cure the same in 30 days. WIL may also terminate the Agreement upon termination of the Maintenance Agreement, as discussed above, by the Company.

Water Supply Agreement entered into with Gujarat Water Infrastructure Limited dated December 16, 2006

(the “Water Supply Agreement”) A Water Supply Agreement was entered into between the Company and Gujarat Water Infrastructure Limited (GWIL), a wholly owned subsidiary of the Government of Gujarat, for the supply of water.

The Water Supply Agreement came into force from December 16, 2006, and is to be in force for a period of five years, unless terminated earlier. The Water Supply Agreement shall be automatically renewed at the end of the term of five years, for an additional term of ten years, unless either of the parties communicates in writing its intention to terminate the Water Supply Agreement, twelve months prior to the end of the

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term of five years, in which event the parties may proceed to negotiate the terms of a mutually acceptable agreement as a replacement to the Water Supply Agreement.

The Company shall purchase from GWIL a monthly amount of water, in quantities and price as set out in the Water Supply Agreement. GWIL is to provide for the facilities to transport water from the source to the transfer point, and should inform the Company of any activity that might disrupt the supply of water. The Water Supply Agreement provides that the Company may not assign the Water Supply Agreement without the prior written consent of GWIL. The Assignee will have to provide a bank guarantee as security to GWIL on such assignment. In case any of the parties sub-contract its obligations under the Water Supply Agreement, the sub-contracting party will be held responsible for discharge of the same.

Under the terms of the Water Supply Agreement, GWIL may on written notice of not lesser than 7 days, disconnect the Company from the supply of water, on failure of the Company to pay the bill on three consecutive times and failure to maintain the interconnection facilities adequately or by not providing access to the authorised personnel of GWIL at the transfer point, or on tampering with the meter or on liquidation or insolvency of the Company. GWIL may terminate the agreement on the occurrence of any events of default on the part of the Company, and in the instance that such default is not cured within a period of 90 days; GWIL may serve written notice for termination.

Further, under the terms of the Water Supply Agreement, the Company may terminate the agreement on the occurrence of any events of default on the part of GWIL, and in the instance that such default is not cured within 30 days; the Company may serve written notice for termination. Additionally, the Company may terminate the agreement at its discretion, by giving six months’ notice, and shall accordingly pay GWIL early termination compensation and a penalty at the rate of SBI PLR over a period of ten years. In the event that a force majeure event continues for a period no lesser than 180 days, then either party shall be entitled to terminate the Water Supply Agreement on serving a written notice to the other.

Lease agreement entered into between Jaysukhbhai O. Patel and the Company dated October 2, 2007 (the

“Lease Agreement”)

The Company has entered into a Lease Agreement with Jaysukhbhai O. Patel (“Lessor”) with respect to the property on which the Registered Office of the Company is situated and the lease of the said property commences from October 1, 2007 and is for a period of thirty years. The terms of the Lease Agreement set forth that the rent for the lease of the property shall be Rs. 100,000 which shall include all taxes, cess etc payable with respect to the leased property. The Company is required to take consent of the Lessor for constructing any additional structures or for making any alterations to the premises built on the leased property.

Other Agreements

Deed of Assignment between ATCM and AIL dated September 19, 2002 (“Deed of Assignment”) A Deed of Assignment was entered into between ATCM and Ajanta India Limited (“AIL”) on September 19, 2002. In accordance with the terms of the Deed of Assignment, ATCM voluntarily assigned, sold and transferred its rights in the trademark “Ajanta” to AIL in all classes that it had trademarks in and in all classes it had applied for trademarks, subject to ATCM being granted such trademark, except for the trademark in clocks and time pieces under class 14. As a consideration for such sale and transfer, AIL paid a consideration of Rs. 3,400,000 to ATCM. Therefore, in accordance with the Deed of Assignment, AIL was granted an exclusive right to use whole rights, title and interest, property and all benefits including goodwill of whole of the business in the trademark “Ajanta” under all classes of trademarks, except for clocks and time pieces. ATCM retained the trademark “Ajanta” in clocks and time pieces under class 14.

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OUR MANAGEMENT

Board of Directors: We currently have eight directors. The following table sets forth details regarding our Board as of the date of filing the Draft Red Herring Prospectus with SEBI.

Name, Designation, Father’s Name, Address, Occupation and Term

Age Nationality Other Directorships/ Partnerships/ HUFs

Odhavjibhai Patel (S/o Ravjibhai Patel)

Chairman and Non-Executive Director

Address: “Ajanta”, New Adarsh Society Near Sardar Baug Sanala Road Morbi 363 641 Occupation: Entrepreneur Term: Retires by rotation. DIN: 00619583

82 Indian

Companies

• Ajanta Limited

• Orpat Industries Limited Trusts

• Orpat Charitable Trust

Jaysukhbhai O. Patel (S/o Odhavjibhai Patel)

Managing Director

Address: Rewa Villa, GIDC Salana Road Morbi 363 641 Occupation: Entrepreneur Term: 5 years. DIN: 01075622

48

Indian Companies

• Ajanta Limited

• Ajanta Energy Private Limited

• Ajanta Infra-Projects Private Limited Partnership

• Ajanta Transistor Clock Manufacturing Co.

• Ajanta Marketing Co.

• Ajanta Organisation Co.

Trusts

• Orpat Charitable Trust HUFs

• Jaysukhbhai O. Patel HUF

Jayesh Sheth (S/o Navalchand Sheth) Executive Director

Address: 302/A, Parijat Building LalLubhai Park Road Ville Parle (West) Mumbai 400 056

47 Indian Nil

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Name, Designation, Father’s Name,

Address, Occupation and Term

Age Nationality Other Directorships/ Partnerships/

HUFs

Occupation: Industrialist Term: Retires by rotation. DIN: 01716067

Chintan J. Bhalodia (S/o: Jaysukhbhai O. Patel)

Non Executive Director

Address: Rewa Villa, GIDC Salana Road Morbi 363 641 Occupation: Entrepreneur Term: Retires by rotation. DIN: 01169521

22 Indian

HUFs

• Jaysukhbhai Patel- HUF

Nemi C. Jain (S/o: Suraj Bhan Jain) Independent Director

Address: 601, Sanskruti Building Plot No. 21 Sector-42, Nerul Navi Mumbai 400 001 Occupation: Advocate

Term: Retires by rotation.

DIN: 00013163

68

Indian

Companies

• Zee Entertainment Enterprises Limited

• Superhouse Limited

• Lex Infotax (India) Private Limited

Jitendra T. Patel (S/o Tulsidas Patel)

Independent Director

Address: 11, Manekbaug Society, Satellite Road, Ahmedabad 380015 Occupation: Industrialist Term: Retires by rotation

47 Indian

Companies

• Olympic Laminates Private Limited

• Royal Touch Laminates Private Limited

Partnership

• Meghdev Enterprise

97

Name, Designation, Father’s Name,

Address, Occupation and Term

Age Nationality Other Directorships/ Partnerships/

HUFs

DIN: 00293753

Tushar D. Udani (S/o Dipchand Udani)

Independent Director

Address: 605/606, Mahavir II, Bonbon Lane Off J. P. Road, Seven Bunglows Andheri (W) Mumbai 400 053 Occupation: Chartered Accountant Term: Retires by rotation. DIN: 00293753

53 Indian

Companies

• Axiom Management Consultants Private Limited

• Axiom Management Training and Development Private Limited

Firm

• Udani Mehta & Co.

Jitendra K. Jain (S/o: Phool Chand Jain) Independent Director

Address: Flat No. A-405, 4th Floor, Prerna Society, Plot No. 13 Sector-10, Dwarka New Delhi-110075 Occupation: Service Term: Retires by rotation DIN: 01968637

61 Indian Nil

Brief Biographies

Odhavjibhai Patel, aged 82 years, is the Chairman and Non-Executive Director of the Company. He holds Bachelor of Science degree and started his career as a school teacher. He has experience in the clock, electronics and electrical industry. The business established by him in the year 1971 for manufacturing of mechanical clocks has grown into the Ajanta Group. He is well respected for his various social activities for development of rural areas and upliftment of less privileged segment of the society. Jaysukhbhai O. Patel, aged 48 years, is the Managing Director of the Company. He holds a bachelors in commerce degree and has more than twenty five years of experience in the manufacturing industry. He has been selected 12 times by the Government of India as a delegate to visit foreign countries. Jayesh Sheth, aged 47 years, is an Executive Director of the Company. He holds a bachelor of commerce degree and has more than 20 years of experience in the field of foreign trade, export, import and marketing of ceramic, CFL and ACP products. He has has been instrumental in setting up customer networks for our Company in Middle East, Africa and East Europe.

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Chintan J. Bhalodia, aged 22 years, is a Non-Executive Director of the Company. He is currently pursuing Bachelor of Arts in Economics, California Sate University, Fullerton, USA. He has been involved in technology upgradation of Company’s activities. Nemi C. Jain, aged 68 years, is an Independent Director of the Company. He holds a masters in commerce degree and a LLB degree. He is a former Chief Commissioner of Income Tax, Mumbai. Before joining the Indian Revenue Services, he served as a lecturer in commerce at St. John’s College, Agra. He has also served as the chairman at the Income Tax Settlement Commission and also as a Joint Secretary in the Department of Revenue, Central Board of Direct Taxes. Jitendra T. Patel, aged 47 years, is an Independent Director of the Company. He holds a bachelors degree in chemical engineering and has been involved in the business of plywoods and laminates. Tushar D. Udani, aged 53 years, is an Independent Director of the Company. He holds a bachelors degree in commerce, a LLB degree and is an FCA. He is a practicing chartered accountant and proprietor of Udani Mehta & Co. Jitendra K. Jain, aged 61 years, is an Independent Director of the Company. He holds a masters in science degree and a PhD degree in Soil Chemistry. He has previously served as an assistant general manager of Bank of Baroda. He has also served in the Bank of Baroda’s, Hong Kong office as deputy chief executive and director.

Remuneration of Directors The remuneration of the following executive Directors is as per the terms of appointment contained below: Mr. Jaysukhbhai O. Patel was reappointed as the Managing Director of the Company in a meeting of the Board of Directors of the Company held on July 7, 2007. Mr. Jaysukhbhai O. Patel was confirmed as the Managing Director of the Company on in the AGM of the Company held on September 27, 2007. Mr. Jaysukhbhai O. Patel has been reappointed as a Managing Director for a period of five years. The remuneration payable to Mr. Jaysukhbhai O. Patel for fiscal 2008 aggregates approximately to Rs. 20 million as the salary and perquisites in the nature of furnished accommodation, medical reimbursement up to Rs. 1,666,667, leave travel allowance, bonus as per rules of the Company, personal life/ accident insurance, superannuation fund/ annuity fund as per the Company’s rules and leave entitlement and encashment as per the Company rules. The remuneration is subject to overall ceilings in accordance with sections 198 and 309 of the Companies Act. Mr. Jayesh Sheth was appointed as an Executive Director of the Company on August 25, 2005 by a resolution of the Board of Directors. Mr. Jayesh Seth was confirmed as the Executive Director of the Company in the AGM of the Company held on September 29, 2005. Mr. Jayesh Sheth is not entitled for any remuneration. In relation to other Directors of the Company, apart from sitting fees and reimbursement of expenses, no remuneration is payable by the Company.

Interests of Directors

All of our Directors may be deemed to be interested to the extent of fees payable to them if any, for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration and reimbursement of expenses payable to them, if any under our Articles of Association, and to the extent of remuneration paid to them, if any for services rendered as an officer or employee of our Company. Our Directors may also be regarded as interested in the Equity Shares, if any, held by them or by the companies/firms/ventures promoted by them or that may be subscribed by or allotted to the companies, firms, trusts, in which they are interested as Directors, members, partners, trustees and Promoters, pursuant to this Issue and also be deemed to be interested to the extent of any dividend payable to them and other

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distributions in respect of the said Equity Shares. The Directors may also be deemed to be interested to the extent of fees and other payments that may be made to companies in which they are Directors. We have leased the property on which our Registered Office is situated from Jaysukhbhai O. Patel, the Managing Director of the Company. For details of the lease agreement, please refer to section titled “History and Certain Corporate Matters” on page 87 of this Draft Red Herring Prospectus. The Company has entered into a trademark license agreement with the Promoter of the Company, Jaysukhbhai O. Patel and ATCM, one of the partners of which is Jaysukhbhai O. Patel, where a consideration is paid by Jaysukhbhai O. Patel and ATCM to the Company for granting the license of the use the brand Oreva, subject to the terms and conditions as laid down in the agreement. For further details, please refer to section titled “History and Certain Corporate Matters – Summary of Key Agreements” on page 87 of this Draft Red Herring Prospectus. Except as stated in the section titled “Related Party Transactions” on page 119 of this Draft Red Herring Prospectus and to the extent of shareholding in our Company, our Directors do not have any other interest in our business. As of December 31, 2007 the Company has outstanding unsecured loans from our Promoter and some of our Promoter Group individuals/entities, including our Directors, namely, Odhavjibhai R. Patel, Jaysukhbhai O. Patel and Chintan Bhalodia. These loans have been obtained pursuant to a stipulation by the State Bank of India and in relation to the loan agreement dated October 16, 2004 entered with the State Bank of India. These loans are repayable on demand and are interest free. The limit of the loans is as amended from time to time. The Company has not entered into any formal arrangements/ agreements to record the terms and conditions on which such loans have been granted to the Company. Details of the loans granted by the Directors are as follows:

S. No. Name of the party Loan amount outstanding till December 31, 2007 (in Rs. million)

1 Odhavjibhai R. Patel 4.19

2 Jaysukhbhai O. Patel 81.45

3 Chintan Bhalodia 113.09

Borrowing Powers of our Board

In terms of our Articles, the Board may, from time to time, at its discretion by a resolution passed at its meeting raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. However, if the moneys sought to be borrowed together with the moneys already borrowed (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) should 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 is required to obtain the consent of the Company in general meeting prior to undertaking such borrowing. In this regard, our Company, in the EGM dated February 16, 2008 had resolved that pursuant to the provisions of Section 293(1)(d) of the Companies Act, 1956, the Board is authorised to borrow moneys (apart from temporary loans obtained from the bankers of the Company in ordinary course of business) from banks, financial institutions, NBFCs etc., from time to time, for the purpose of Company’s business in excess of the aggregate of the paid-up capital of the Company and its free reserves (not being reserves set apart for any specific purpose) provided that the total amount of such borrowings together with the amounts already borrowed and outstanding shall not exceed Rs. 1,000 crores or Rs. 10,000 million. Corporate Governance We have complied with the requirements of applicable regulations, including the listing agreements to be entered into with with the Stock Exchanges and the SEBI Guidelines, in respect of corporate governance including constitution of the Board and Committees thereof. The corporate governance framework is based

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on an effective independent Board, separation of the Board’s supervisory role from the executive management team and constitution of the Board Committees, as required under law. We have a Board constituted in compliance with the Companies Act and listing agreement with Stock Exchanges (Listing Agreement) and in accordance with best practices in corporate governance. The Board functions either as a full Board or through various committees constituted to oversee specific operational areas. Our executive management provides the Board detailed reports on its performance periodically. The Board has eight Directors, out of which four are Independent Directors. The Company has constituted the following Committees in accordance with the requirements of clause 49 of the Listing Agreement. Committees of the Board

Audit Committee

The members of the Audit Committee are: 1. Tushar Udani; 2. Jitendra Kumar Jain; and 3. Jayesh N. Sheth

The Chairman of the Audit Committee is Tushar Udani. The Audit Committee was re-constituted by a meeting of the Board of Directors held on February 21, 2008. The scope and function of the Audit Committee is in accordance with Section 292A of the Companies Act and Clause 49 of the Listing Agreement and its terms of reference include the following: 1. Overseeing the Company’s financial reporting process and disclosure of its financial

information;

2. Recommending to the Board the appointment, re-appointment, and replacement of the statutory

auditor and the fixation of audit fee;

3. Approval of payments to the statutory auditors for any other services rendered by them;

4. Reviewing, with the management, the annual financial statements before submission to the

Board for approval, with particular reference to:

(i) Matters required to be included in the Director’s Responsibility Statement to be included

in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956;

(ii) Changes, if any, in accounting policies and practices and reasons for the same;

(iii) Major accounting entries involving estimates based on the exercise of judgment by management;

(iv) Significant adjustments made in the financial statements arising out of audit findings;

(v) Compliance with listing and other legal requirements relating to financial statements;

(vi) Disclosure of any related party transactions; and

(vii) Qualifications in the draft audit report.

5. Reviewing, with the management, the quarterly, half-yearly and annual financial statements

before submission to the Board for approval;

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6. Reviewing, with the management, the performance of statutory and internal auditors, and

adequacy of the internal control systems;

7. Reviewing the adequacy of internal audit function, if any, including the structure of the internal

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

8. Discussion with internal auditors any significant findings and follow up there on;

9. Reviewing the findings of any internal investigations by the internal auditors into matters where

there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

10. Discussion with statutory auditors before the audit commences, about the nature and scope of

audit as well as post-audit discussion to ascertain any area of concern;

11. To look into the reasons for substantial defaults in the payment to the depositors, debenture

holders, shareholders (in case of non payment of declared dividends) and creditors;

12. Reviewing the functioning of the whistle blower mechanism, in case the same is existing;

13. Review of management discussion and analysis of financial condition and results of operations,

statements of significant related party transactions submitted by management, management letters/letters of internal control weaknesses issued by the statutory auditors, internal audit reports relating to internal control weaknesses, and the appointment, removal and terms of remuneration of the chief internal auditor; and

14. Carrying out any other function as is mentioned in the terms of reference of the Audit

Committee. Compensation Committee The members of the Compensation Committee are: 1. Jitendra Kumar Jain ; 2. Tushar Udani; and 3. Nemi Chand Jain. The Chairman of the Compensation Committee is Jitendra Kumar Jain. The Compensation Committee was constituted by a meeting of the Board of Directors held on February 21, 2008. This committee is responsible for: 1. Framing suitable policies and systems to ensure that there is no violation, by an employee of any

applicable laws in India or overseas, including:

(i) The Securities and Exchange Board of India (Insider Trading) Regulations, 1992; or (ii) The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade

Practices relating to the Securities Market) Regulations, 1995.

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2. Determine on behalf of the Board and the shareholders the Company’s policy on specific remuneration packages for executive directors including pension rights and any compensation payment.

3. Perform such functions as are required to be performed by the Compensation Committee under

the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (“ESOP Guidelines”), in particular, those stated in Clause 5 of the ESOP Guidelines.

4. Such other matters as may from time to time be required by any statutory, contractual or other

regulatory requirements to be attended to by such committee Shareholders/Investors’ Grievance cum Share Transfer Committee The members of the Shareholders/Investors’ Grievance Committee are: 1. Nemi Chand Jain; 2. Jitendra Kumar Jain; and 3. Jitendra Patel. The Chairman of the Investors’/Shareholders Grievance Committee is Nemi Chand Jain. The Investors’/Shareholders Grievance Committee was constituted by a meeting of the Board of Directors held on February 21, 2008. This Committee is responsible to carry out such functions for the redressal of shareholders’ and investors’ complaints, including but not limited to, transfer of shares, non-receipt of balance sheet, non-receipt of dividends, and any other grievance that a shareholder or investor of the Company may have against the Company.

Relationship between our Directors

The details of relationship between our Directors are as follows:

S.

No

Name of the Director Related to Nature of Relationship

Jaysukhbhai O. Patel

Odhavijibhai O. Patel is the father of Jaysukhbhai O. Patel

1. Odhavjibhai R. Patel

Chintan Bhalodia Odhavijibhai O. Patel is the grandfather of Chintan Bhalodia

Odhavjibhai R. Patel

Jaysukhbhai O. Patel is the son of Odhavjibhai R. Patel

2. Jaysukhbhai O. Patel

Chintan Bhalodia Jaysukhbhai O. Patel is the father of Chintan Bhalodia

Odhavjibhai R. Patel

Chintan Bhalodia is the grandson of Odhavjibhai R. Patel

3. Chintan Bhalodia

Jaysukhbhai O. Patel

Chintan Bhalodia is the son of Jaysukhbhai O. Patel

Shareholding of the Directors

In terms of the Articles of Association, the Directors are not required to hold any qualification shares. The list of Directors holding Equity Shares as of the date of filing this Draft Red Herring Prospectus is set forth below:

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Name of the Director No. of equity shares

Jaysukhbhai O. Patel 18,742,500

Odhavjibhai Patel 367,500

Chaintan J. Bhalodia 4,042,500

Jayesh Sheth* 1,800,000 * Jayesh Sheth additionally holds 1,800,000 shares jointly with Pallavi Sheth

Changes in our Board of Directors in the last three years

The following changes have occurred in Board of Directors of the Company in the last three years:

Name of the Director Date of Appointment /

Re-appointment / Resignation

Reasons

Navil Patel March 1, 2005 Appointment

Jayesh Sheth August 25 2005 Appointment

Chintan Bhalodia December 30, 2006 Appointment

Vanitaben Patel September 27, 2007 Resignation

Navil Patel September 27, 2007 Resignation

Mrudulaben J. Patel September 29, 2007 Resignation

Pravinbhai O. Patel September 29, 2007 Resignation

Nemi Chand Jain September 29, 2007 Appointment

Jitendra Patel January 1, 2008 Appointment

Tushar Udani January 1, 2008 Appointment

Jitendra Kumar Jain January 1, 2008 Appointment

Key Managerial Personnel of our Company For profile of Odhavjibhai Patel, the Non-Executive Non-Independent Chairman, Jaysukhbhai O. Patel, the Managing Director and Jayesh Sheth, the Executive Director, please refer to page 95 of this Draft Red Herring Prospectus under the section “Our Management – Brief Biographies”. All the key managerial personnel mentioned below are permanent employees of the Company. Jayantibhai Bhorania, aged 45 years is designated as ‘President – Vitrified Tiles Production’’. He joined the Company in April, 2007. He holds a bachelors degree in engineering and has more than 18 years experience in ceramic industry. Prior to the joining us, he was incharge of production in Vrundavan Group of Companies. His gross remuneration in fiscal 2008 was Rs. [●] only. Rameshbhai Bhorania, aged 40 years is designated as ‘President -Vitrified Tiles Marketing’. He joined the Company in April, 2007. He holds a bachelors degree in engineering and has more than 15 years experience in ceramic tiles. Prior to the joining us, he was the head of marketing in Vrundavan Group of Companies. His gross remuneration in fiscal 2008 was Rs. [●] only. Deepakbhai Chitaliya, aged 48 years is designated as ‘President - ACP Division’. He joined the Company in August, 2007. He holds bachelors in engineering degree in electronics engineering from Bombay University. He started his career as an entrepreneur in manufacturing of watch components. He was also associated with Titan Watch Company Limited. He has over 25 years of industry experience His gross remuneration in fiscal 2008 was Rs. [●] only. K.Kamraj, aged 52 years is designated as ‘–Chief Financial Officer’. He joined the Company in January, 2006. He holds a masters in commerce, an LLB degree, a CAIIB, and Diploma in Bank Management from Indian Institutes of Banksers and Diploma in Management from IGNOU. Prior to the joining the Company, he has worked with the Bank of Baroda as a chief manager. He has served for more than 28 years with the Bank of Baroda. His assignments included handling international and whole sale business and heading the planning division. His gross remuneration in fiscal 2008 was Rs. [●] only.

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V.H. Munshi, aged 57 years is designated as ‘Vice President - Accounts and Audit’ of the Company. He joined the Company in November, 2006. He is a qualified chartered accountant. Prior to joining us, he was the heading accounts and audit department of Arunoday Mills Limited. He has over 25 years of experience. His gross remuneration in fiscal 2008 was Rs. [●] only. Shashikant Talsaniya, aged 51 years is the head of Reasearch and Development - CFL Division. He holds a bachelors in engineering degree in electronics and communication. He joined the Company in April, 2006. His gross remuneration in fiscal 2008 was Rs. [●] only. Dhyanesh K. Rathod, aged 47 years is designated as ‘General Manager – Administration, Plant’. He joined the company in November, 2005. He holds a bachelors of science degree in physics from Gujarat University. Prior to joining us he has worked with Hindustan Lever Limited for 9 years, Emicos International, Dubai for 5 years and Meso India for more than 3 yeas. His gross remuneration in fiscal 2008 was Rs. [●] only. Ujwal Rameshrao Deshmukh, aged 36year is designated as ‘Manager Research and Development (E-bike Division)’. He joined the Company in December, 2007. He holds a bachelors in engineering degree in electronics from Nagpur University. Prior to joining us he has worked with Genus Electrotech Limited and Ellora Time Limited. His gross remuneration in fiscal 2008 was Rs. [●] only. Gautam Bhimani, aged 28 years is designated as ‘Marketing Manager - CFL Division’. He joined the Company in January, 2006. He has experience in sales and marketing of CFL. He holds a bachelor degree in industrial engineering and post graduate diploma in business administration. His gross remuneration in fiscal 2008 was Rs. [●] only. Tusharbhai Mavani, aged 44 years is designated as ‘Marketing Manager - CFL Division’. He joined the Company in June, 2007. He holds a bachelors in engineering in production engineering. Prior to joining the Company, he was self-employed. His gross remuneration in fiscal 2008 was Rs. [●] only. Rajendra Patel, aged 30 years is is designated as “Manager - Legal and Company Secretary”. He joined the Company in June, 2007. He holds a masters of commerce degree and an LLB degree from Gujarat University. He is an associate member of the Institute of Company Secretaries of India since 2004. Before joining the company he worked with Bisazza India Private Limited and Dintex Dyechem Limited as a Company Secretary where he was handling legal and secretarial matters. His gross remuneration in fiscal 2008 was Rs. [●] only. Sanjay Das, aged 33 years is designated as ‘General Manger E-bike Marketing’. He joined the Company inJanuary, 2006. He holds a bachelors of science degree from Burdwan University of West Bengal and a masters in business management degree in marketing. He has wide experience in sales and marketing of CFL, E-bikes etc. His key resources areas are business development, distribution, development of marketing network, leading sales force and business area administration etc. Before joining the company he worked with ATCM. His gross remuneration in fiscal 2008 was Rs. [●] only. Alkesh Prajapati aged 33 years is designated as ‘Manager – Import’. He joined the Company in January, 2006. He holds a masters of science degree in electronics from South Gujarat University, Surat. He has wide experience in sourcing of materials from overseas. Before joining the Company he had worked with Endeour Industries Private Limited and Astron Instrument Private Limited. His gross remuneration in fiscal 2008 was Rs. [●] only. Chinta Venkata Nagraju aged 32 year is designated as Head, Research and Development (Vitrified Tiles). He joined the Company in May, 2006. He holds a diploma degree in ceramic technology from Government Institute of Ceramic Technology, Andhra Pradesh. He has wide experience in the ceramic Research and Development line. Before joining the Company he has worked with Golul Ceramics Limited, Decolight Ceramics Limited, Regency Ceramics Limited and Raasi Ceramics Limited. His gross remuneration in fiscal 2008 was Rs. [●] only.

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Shareholding/ Interest of the Key Managerial Personnel of the Company Except the Chairman and Non-Executive Director, the Managing Director and the Executive Director of the Company, none of our Key Managerial Personnels hold Equity Shares of the Company. There is no bonus or profit sharing for our key managerial personnel. Except as stated in this Draft Red Herring Prospectus, no non-salary amount or benefit has been paid or given is intended to be paid or given to any of the Company’s employees including the key managerial personnel and our subsidiaries.

Changes in Key Managerial Personnel The following are the changes in our key managerial personnel over the last three years:

Name and designation of the Key Managerial Personnel Date of change Appointment/

Resignation

Jayantibhai Bhorania, President - Vitrified Tiles Production April 1, 2007 Appointment

Rameshbahi Bhoraniya, President -Vitrified Tiles Marketing April 1, 2007 Appointment

Deepakbhai Chitaliya, President - ACP Division August 1, 2007 Appointment

K. Kamraj, Chief Financial Officer January 31, 2006 Appointment

Bhavesh Sheth, V.P. Technical, Vitrified Tiles Division March 30, 2007 Resignation

V.H. Munshi, Vice President – Accounts and Audit November 2, 2006 Appointment

Shashikant Talsaniya, Head Reasearch and Development - CFL Division

April 1, 2006 Appointment

Sanjay Das, General Manger E-bike Marketing January 1, 2006 Appointment

Tusharbhai Mavani, General Manager CFL Marketing June 1, 2007 Appointment

Dhyanesh K. Rathod, General Manager -Administration, Plant November 26, 2005 Appointment

Shanmugam, Manager Research and Development, Vitrified Tiles March 16, 2006 Resignation

Chinta Venkata Nagraju, Head, Research and Development (Vitrified Tiles)

May 22, 2006 Appointment

Ujwal Rameshrao Deshmukh, Manager Research and Development (E-bike Division)

December 17, 2007 Appointment

Gautam Bhimani, Marketing Manager, CFL Division January 1, 2006 Appointment

Alkesh Prajapati, Manager – Import January 1, 2006 Appointment

Rajendra Patel, Manager - Legal and Company Secretary June 4, 2007 Appointment

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OUR PROMOTER Our Promoter is Jaysukhbhai O. Patel.

PAN - ABBPB3905D Passport Number - F4074171 Voter ID Number – GJ/04/013/408108 Driving License Number – Not Available Bank Account Number – 56071048194 with State Bank of Saurashtra, Morbi

We confirm that the Permanent Account Number, Bank Account Number and Passport Number of our our Promoter, Jaysukhbhai O. Patel, shall be submitted to the BSE and NSE at the time of filing the Draft Red Herring Prospectus with them. For biographic details of our Promoter, details please refer to section titled “Our Management – Board of Directors – Brief Biographies” on page 95 of this Draft Red Herring Prospectus.

Interests of Promoter and Common Pursuits The aforementioned Promoter of our Company is interested to the extent of his shareholding in us. Further, our Promoter who is also the Managing Director of our Company may be deemed to be interested to the extent of remuneration and reimbursement of expenses payable to him. Further, our Promoter is also a director on the boards of certain Promoter Group entities and they may be deemed to be interested to the extent of the payments made by our Company, if any, to these Promoter Group entities. For the payments that are made by our Company to certain Promoter Group entities, please refer to the section titled “Related Party Transactions” on page 119 of this Draft Red Herring Prospectus. We have leased the property on which our Registered Office is situated from Jaysukhbhai O. Patel, the Promoter of our Company. For details of the lease agreement, please refer to section titled “History and Certain Corporate Matters” on page 87 of this Draft Red Herring Prospectus. As of December 31, 2007 the Company has outstanding unsecured loan from our Promoter. These loans have been obtained pursuant to a stipulation by the State Bank of India and in relation to the loan agreement dated October 16, 2004 entered with the State Bank of India. These loans are repayable on demand and are interest free. The limit of the loans is as amended from time to time. The Company has not entered into any formal arrangements/ agreements to record the terms and conditions on which such loans have been granted to the Company. Detail of the loan granted by our Promoter is as follows:

Name of the party Loan amount outstanding till December 31, 2007 (in Rs. million)

Jaysukhbhai O. Patel 81.45

Except as stated otherwise in this Draft Red Herring Prospectus, we have not entered into any contract, agreements or arrangements during the preceding two years from the date of this Draft Red Herring Prospectus in which the Promoter is directly or indirectly interested and no payments have been made to him in respect of the contracts, agreements or arrangements which are proposed to be made with him including the properties purchased by our Company other than in the normal course of business. The Company has entered into a trademark license agreement with the Promoter of the Company, Jaysukhbhai O. Patel and ATCM, one of the partners of which is Jaysukhbhai O. Patel, where a consideration is paid by Jaysukhbhai O. Patel and ATCM to the Company for granting the license of the

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use the brand Oreva, subject to the terms and conditions as laid down in the agreement. For further details, please refer to section titled “History and Certain Corporate Matters – Summary of Key Agreements” on page 87 of this Draft Red Herring Prospectus. Further, except as disclosed below, our Promoter does not have any interest in any venture that is involved in any activities similar to those conducted by us. Confirmations

Further, our Promoter has not been declared as a willful defaulter by the RBI or any other governmental authority and there are no violations of securities laws committed by the Promoter in the past or are pending against him. Payment of benefits to our Promoters

Except as stated in the section titled “Financial Statements - Related Party Transactions” on pages 155 of this Draft Red Herring Prospectus, there has been no payment of benefits to our Promoter during the two years prior to the filing of this Draft Red Herring Prospectus.

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OUR PROMOTER GROUP In addition to the Promoter named in the Chapter “Our Promoter” on page 106 of this Draft Red Herring Prospectus, the following natural persons and companies are part of our Promoter group. Relatives of Promoters The natural persons who are part of our Promoter group (due to their relationship with our Promoter), other than the Promoter are as follows:-

Vasantbhai O. Patel, one of the brothers of Jaysukhbhai O. Patel, has never been associated with our Promoter, our Promoter Group or our Company. In view of this arrangement, we have not included the details of the companies/ entities, in which Vasantbhai O. Patel holds 10% or more shares/ is a member, as Promoter Group. Pursuant to the family separation arrangement, Ashokbhai O. Patel, one of the brothers of Jaysukhbhai O. Patel, dissociated and separated in 2002 from our Promoter, our Promoter Group and our Company. For further details please refer to section titled “History and Certain Corporate Matters – Trademark Arrangement”on page 87 of this Draft Red Herring Prospectus. In view of the separation, we have not included the details of the companies/ entities, in which Ashokbhai O. Patel holds 10% or more shares/ is a member, as Promoter Group. Companies/Partnership Firms/HUFs forming part of the Promoter Group: Companies forming part of the Promoter Group

1. Ajanta Limited 2. Ajanta Energy Private Limited 3. Ajanta Infra-Projects Private Limited 4. Orpat Industries Limited 5. Jaipur Distributor Private Limited Partnership firms forming part of the Promoter Group 1. Ajanta Transistor Clock Manufacturing Company 2. Ajanta Marketing Company 3. Ajanta Organization 4. Angel Manufacturing Company 5. Star Plast

Name of the Person Relationship with our Promoter

Odhavjibhai Patel Father

Mrudulaben Patel Wife

Chintan Bhalodia Son

Alish Patel (Minor) Daughter

Pravinbhai O. Patel Brother

Jaswantiben Ghodasara Sister

Sardaben Patel Sister

Naranbhai Dedania Spouse’s father

Jayaben Dedania Spouse’s mother

Rajnikant Dedania Spouse’s brother

Sanjay Dedania Spouse’s brother

Vijyaben Navinbhai Patel Spouse’s sister

Ilaben Girishbhai Patel Spouse’s sister

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HUFs forming part of the Promoter Group

1. Jaysukhbhai O. Patel HUF 2. Pravinbhai O. Patel HUF Companies forming part of the Promoter Group

Unless otherwise stated none of the companies forming part of the Promoter Group is a sick company under the meaning of SICA and none of them are under winding up. Further unless otherwise stated, all our Promoter group companies are unlisted companies and they not made any public issue of securities in the preceding three years. 1. Ajanta Limited (“AL”)

Corporate Information

AL was incorporated as Ellora Time Private Limited (“ETPL”) on December 4, 1989. ETPL then converted to a public limited company and re-named as Ellora Time Limited (“ETL”) vide fresh certificate of incorporation dated April 19, 2006. Further, the name of ETL was changed to Ajanta Limited vide a fresh certificate of incorporation consequent on change of name issued by RoC dated April 26, 2006. AL is currently engaged inter alia in the business of manufacture, import, export and sale of quartz clock, calculators, telephone and home appliances. Registered Office The registered office of AL is located at: Orpat Industrial Estate Rajkot Morbi Road Morbi Gujarat 363 641 Board of Directors The board of directors of AL comprises of the following: 1. Odhavjibhai Patel 2. Pravinbhai O. Patel 3. Jaysukhbhai O. Patel 4. Nevil Patel 5. Vanitaben Patel 6. Himansu Patel 7. Nikitaben Patel Shareholding Pattern The shareholding pattern of AL as on January 31, 2008 is as follows:

Name of Shareholders Number of shares Percentage of share capital (in

%) Odhavjibhai Patel 500 1.00

Pravinbhai O. Patel 19,200 38.40

Pravinbhai Patel (HUF)

5,875 11.75

Jaysukhbhai O. Patel 175 0.35

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Name of Shareholders Number of shares Percentage of share capital (in

%) Nevil Patel 8,750 17.50

Himansu Patel 8,750 17.50

Vanitaben Patel 5,750 11.50

Mrudulaben Patel 500 1.00

Chintan J. Patel 500 1.00

Total 50,000 100

Financial Information The summary audited financial statements of AL for the last three fiscal years are as follows:

(Amounts in Rs. million except the share data)

Particulars Year ended March

31, 2007

Year ended March

31, 2006

Year ended March

31, 2005

Total income* 1,848.02 1757.41 1411.71

Profit After Tax 119.47 80.35 26.94

Equity Share Capital

50.00 50.00 50.00

Reserves (excluding revaluation reserve

1,652.83 1664.80 1473.07

Net Worth 1,702.83 1714.80 1523.07

Earnings Per Share*

(face value of Rs. 1,000 each)

2,389.35 1607.06 538.80

Net Asset Value per Share

34,056.56 34295.93 30461.33

* Total income and earning per share includes income from extraordinary items, if any.

2. Ajanta Energy Private Limited (“AEPL”)

Corporate Information AEPL was incorporated on November 14, 2003. APEL is currently engaged inter alia in the business of establishing infrastructure relating to gas, power supply, electricity etc. The AEPL has not commenced commercial operations as of date. Registered Office The registered office of AEPL is located at: ORPAT Industrial Estate Morbi Rajkot highway Near Village: Virpar Tal: Morbi, Morbi Gujarat 363 641 Board of Directors The board of directors of AEPL comprises of the following: 1. Jaysukhbhai O. Patel

111

2. Mrudulaben Patel

Shareholding Pattern

The shareholding pattern of AEPL as on January 31, 2008 is as follows:

Name of Shareholders Number of shares Percentage of share capital (in %)

Jaysukhbhai O. Patel 5,000 50

Mrudulaben Patel 5,000 50

Total 10,000 100

Financial Information The summary audited financial statements of AEPL for the last three fiscal years are as follows:

Particulars Year ended March

31, 2007

Year ended March

31, 2006

Year ended March

31, 2005

Total income* N.A. N.A. N.A.

Profit After Tax N.A. N.A. N.A.

Equity Share Capital

0.1 0.1 0.1

Reserves (excluding revaluation reserve

0.0 0.0 0.0

Net Worth 0.1 0.1 0.1

Earnings Per Share (face value of Rs. 10 each)

N.A. N.A. N.A.

Net Asset Value per Share

10 10 10

* Total income and earning per share includes income from extraordinary items, if any.

3. Ajanta Infra-Projects Private Limited (“AIPPL”)

Corporate Information AIPPL was incorporated on August 10, 2006. AIPPL is currently engaged inter alia in the business of development of infrastructure work. The AIPPL has not commenced commercial operations as of date. Registered Office The registered office of AEPL is located at: ORPAT Industrial Estate Morbi Rajkot highway Near Village: Virpar Tal: Morbi, Morbi Gujarat 363 641

Board of Directors

The board of directors of AIPPL comprises of the following:

1. Mrudulaben J. Patel 2. Jaysukhbhai O. Patel

112

Shareholding Pattern

The shareholding pattern of AIPPL as on January 31, 2008 is as follows:

Name of Shareholders Number of shares Percentage of share capital (in

%) Pravinbhai O. Patel 5,000 50

Jaysukhbhai O. Patel 5,000 50

Total 10,000 100

Financial Information The summary audited financial statements of AIPPL for the last two fiscal years are as follows:

Particulars Year ended March 31,

2007

Year ended March 31,

2006

Total income* N.A. N.A.

Profit After Tax N.A. N.A.

Equity Share Capital 0.1 N.A.

Reserves (excluding revaluation reserve

0.0 N.A.

Net Worth 0.1 N.A.

Earnings Per Share (face value of Rs. 10 each)

N.A. N.A.

Net Asset Value per Share 10 N.A. * Total income and earning per share includes income from extraordinary items, if any.

4. Orpat Industries Limited (“OIL”)

Corporate Information

OIL was incorporated on November 9, 2005. OIL is currently engaged inter alia in the business of manufacture, import, export and sale of all kinds of engineering scientific, mechanical quartz clock, wall clock and related accessories, domestic and industrial appliances such as air conditioners, refrigerators, cooling and heating elements etc. all kinds of furniture, generators, meteres, transformers and related materinals. The OIL has not commenced commercial operations as of date. Registered Office The registered office of OIL is located at: Orpat Industrial Estate Rajkot Morbi Road Morbi Gujarat 363 641 Board of Directors The board of directors of OIL comprises of the following: 1. Pravinbhai O. Patel 2. Vanitaben Patel 3. Navil Patel

113

Shareholding Pattern The shareholding pattern of OIL as on January 31, 2008 is as follows:

Name of Shareholders Number of shares Percentage of share capital (in %) Pravinbhai O. Patel 25000 50.00

Vanitaben Bhalodia 15000 30.00

Navilkumar Patel 5000 10.00

Sandhyaben Patel 4850 9.70

Odhavjibhai Patel 50 0.10

Jaysukhbhai O. Patel 50 0.10

Mrudulaben Patel 50 0.10

Total 50,000 100.00

Financial Information The summary audited financial statements of OIL for the last three fiscal years are as follows:

Particulars Year ended March

31, 2007

Year ended March

31, 2006

Year ended March

31, 2005

Total income* N.A. N.A. N.A.

Profit After Tax N.A. N.A. N.A.

Equity Share Capital

0.5 0.5 N.A.

Reserves (excluding revaluation reserve

0.0 0.0 N.A.

Net Worth 0.5 0.5 N.A.

Earnings Per Share (face value of Rs. 10 each)

N.A. N.A. N.A.

Net Asset Value per Share

10.0 10.0 N.A.

* Total income and earning per share includes income from extraordinary items, if any.

5. Jaipur Distributer Private Limited (“JDPL”)

Corporate Information

JDPL was incorporated on March 18, 1999. JDPL is currently engaged inter alia in the business of manufacture, trade, assembly, import, export, buy and act as broker, commission agents, C and F agent and all kind of clocks, watches, time pieces, calculators, and all kind of electronic items and deals in all kinds of consumer, general items etc.. Registered Office The registered office of JDPL is located at: 509, Navjeevan Complex, Station Road, Jaipur

114

Rajasthan 302 006. Board of Directors The board of directors of JDPL comprises of the following: 1. Rajnikant Patel 2. Yasmita Patel Shareholding Pattern The shareholding pattern of JDPL as on January 31, 2008 is as follows:

Name of Shareholders Number of shares Percentage of share capital (in %) Rajnikant Patel 7400 49.33

Yasmita Patel 7600 50.67

Total 15000 100.00

Financial Information The summary audited financial statements of JDPL for the last three fiscal years are as follows:

(Amounts in Rs. million except the share data)

Particulars Year ended March

31, 2007

Year ended March

31, 2006

Year ended March

31, 2005

Total income* 24.84 24.93 14.33

Profit After Tax (0.59) 0.03 0.01

Equity Share Capital

0.15 0.15 0.15

Reserves (excluding revaluation reserve

0.00 0.12 0.09

Net Worth 0.15 0.27 0.24

Earnings Per Share*

(face value of Rs. 10 each)

0.00 1.80 0.57

Net Asset Value per Share

10.00 18.09 16.30

* Total income and earning per share includes income from extraordinary items, if any.

Partnership firms forming part of the Promoter Group

1. Ajanta Transistor Clock Manufacturing Company (“ATCM”)

Corporate Information

ATCM was formed as a partnership firm on July 15, 1971. The partnership deed forming ATCM was last modified on August 1, 2004. ATCM is a registered partnership firm under the Indian Partnership Act, 1932 with registration no. GUJ/RJT/8756. ATCM is engaged in the business of manufacturing digital transistor clocks, food product (Namkins) etc. Registered Office The registered office of ATCM is located at:

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Orpat Industrial Estate Rajkot Morbi Road Morbi Gujarat 363 641 The profit/loss sharing ratio of ATCM is as follows:

Name of the partner Profit/Loss (in %)

Jaysukhbhai O. Patel - HUF 70

Mrudulaben J. Patel 30

Financial Performance The audited financial results of ATCM for the last three fiscal years are as follows:

(Amounts in Rs. million except the share data)

Particulars Year ended March

31, 2007

Year ended March

31, 2006

Year ended March

31, 2005

Capital 44.17 93.50 89.68

Reserves and Surplus

0.00 0.00 0.00

Income 20.52 489.77 758.54

Expenditure 20.38 486.22 713.50

Profit/(Loss) After Tax

0.14 3.55 45.04

2. Ajanta Marketing Company (“AMC”)

Corporate Information

AMC was formed as a partnership firm on August 1, 2004. AMC is a registered partnership firm under the Indian Partnership Act, 1932. AMC is engaged in the business of manufacturing and dealing in all kinds of of electrical and other clocks, clock movements and clock spare parts.

Registered Office The registered office of AMC is located at: 78/A, Abdul Rehman Street Opp. State Bank of India Mumbai 400 003 The profit/loss sharing ratio of AMC is as follows:

Name of the partner Profit/Loss (in %)

Jaysukhbhai O. Patel (held on behalf of the HUF) 70

Mrudulaben J. Patel 30

Financial Performance The audited financial results of AMC for the last three fiscal years are as follows:

(Amounts in Rs. million except the share data)

Particulars Year ended March 31, 2007

Year ended March 31, 2006

Year ended March 31, 2005

Capital 8.59 8.59 1.57

116

Reserves and Surplus

0.00 0.00 0.00

Income 1.11 1.55 18.10

Expenditure 1.10 1.54 18.07

Profit/(Loss) After Tax

0.01 0.01 0.03

3. Ajanta Organisation (“AJO”)

Corporate Information

AJO was formed as a partnership firm on July 9, 1989. The partnership deed forming AJO was last modified on August 1, 2004. AJO is a registered partnership firm under the Indian Partnership Act with registration no. 42304. AJO is engaged in the business of import, export and sale of wall clocks, quartz movements, alarm pieces, and clock parts, telephones, calculators, home appliances etc.

Registered Office The registered office of AJO is located at: 113, Todi Chamber 2 Lal Bazar Street Kolkata-700 001 The profit/loss sharing ratio of AJO is as follows:

Name of the partner Profit/Loss (in %)

Jaysukhbhai O. Patel HUF 70

Mrudulaben Patel 30

Financial Performance The audited financial results of AJO for the last three fiscal years are as follows:

(Amounts in Rs. million except the share data)

Particulars Year ended March

31, 2007

Year ended March

31, 2006

Year ended March

31, 2005

Capital 2.47 2.47 2.46

Reserves and Surplus

0.00 0.00 0.00

Income 3.26 2.09 2.10

Expenditure 3.26 2.09 2.08

Profit/(Loss) After Tax

0.00 0.00 0.02

4. Angel Manufacturing Company (“AMC”)

Corporate Information

AMC was formed as a partnership firm on November 11, 2001. The partnership deed forming AMC was last modified on August 1, 2004. AMC is a registered partnership firm under the Indian Partnership Act, 1932 with registration no. GUJ/RJT-55829. AMC is engaged in the business of electrical and electrical items such as wall clocks, telephones, calculators etc. and home appliances.

117

The registered office of AMC is located at: 184, Special Economic Zone Kandla Gandhidham Kutch The profit/loss sharing ratio of AMC is as follows:

Name of the partner Profit/Loss (in %)

Pravinbhai O. Patel 70

Vanitaben Patel 30

Financial Performance The audited financial results of AMC for the last three fiscal years are as follows:

(Amounts in Rs. million except the share data)

Particulars Year ended March

31, 2007

Year ended March

31, 2006

Year ended March

31, 2005

Capital 11.31 11.41 12.58

Reserves and Surplus

0.00 0.00 0.00

Income 0.03 0.00 26.82

Expenditure 0.13 (0.74) 27.74

Profit/(Loss) After Tax

(0.10) (0.74) (0.98)

5. Star Plast (“SP”)

Corporate Information

SP was formed as a partnership firm on April 1, 2000. The partnership deed forming SP was last modified on August 11, 2006. SP is an unregistered partnership firm. SP is engaged in the business of manufacturing in all kinds of plastic molding as well as job working in plastic molding etc. The registered office of SP is located at: Veraval main road Veraval (Shapar) Taluka: Kotada Sangani Dist: Rajkot Gujarat The profit/loss sharing ratio of SP is as follows:

Name of the partner Profit/Loss (in %)

Sanjay Narandas Patel 20

Yasmitaben Patel 20

Purviben Patel 60

Financial Performance The audited financial results of SP for the last three fiscal years are as follows:

118

(Amounts in Rs. million except the share data)

Particulars Year ended March

31, 2007

Year ended March

31, 2006

Year ended March

31, 2005

Capital 0.82 1.35 1.30

Reserves and Surplus

0.00 0.00 0.00

Income 0.45 0.50 0.90

Expenditure 0.45 0.50 0.90

Profit/(Loss) After Tax

0.00 0.00 0.00

HUFs forming part of the Promoter Group

1. Jaysukhbhai O. Patel HUF

Jaysukhbhai O. Patel HUF was formed on October 1, 1985. PAN of Jaysukhbhai O. Patel HUF: AAFHB4822E The members of the Jaysukhbhai O. Patel HUF are as follows: Jaysukhbhai Patel Mrudulaben Patel Chintan J Patel Alish J Patel The Karta of Jaysukhbhai O. Patel HUF is Jaysukhbhai O. Patel.

2. Pravinbhai O. Patel HUF

Pravinbhai O. Patel HUF is ancestral. PAN of Jaysukhbhai O. Patel HUF: AABHB4525Q The members of the Pravinbhai O. Patel HUF are as follows: Pravinbhai Patel Vanitaben Patel Navil Patel Himanshu Patel Nikitaben Patel The Karta of Pravinbhai O. Patel HUF is Pravinbhai O. Patel.

Companies with which the Promoter has disassociated in the last three years

The Promoter has not disassociated himself from any company/ firm during preceding three years. No promoter group companies have been struck from the records of the registrar of companies during preceding three years. Common pursuits with the Issuer

We shall adopt the necessary procedures and practices as permitted by law to address any conflict situations as and when they may arise. For, further details on the related party transactions, to the extent of which our Company is involved, see the section titled “Related Party Transactions” on page 119 of this Draft Red Herring Prospectus.

119

RELATED PARTY TRANSACTIONS (a) Name of Related Parties and Description of Relationship:

Sr.

No. Nature of Relationship Name of Related Party

1 Subsidiary Companies No Subsidiary Company

2 Associates Companies / Enterprise M/s. Ajanta Transistor Clock Manufacturing Co.

M/s. Ajanta Infra Projects Pvt. Ltd.

M/s. Ajanta Limited

M/s. Orpat Industries Ltd.

M/s. Ajanta Energy Pvt. Ltd.

3 Key Management Personnel Mr. Odhavjibhai R. Patel (Chairman)

Mr. Jaysukh O. Patel (Managing Director)

Mr. Jayesh N. Sheth (Director)

Mr. Chitan J. Patel (Director)

Mrs. Mrudula J. Patel (Director) *

Mr. Pravinbhai O. Patel (Director)*

Mrs. Vanitaben P. Patel (Director)*

Mr. Navil P. Patel (Director)*

4 Relative of Key Management Personnel Mr. Ellis J. Patel (Shri JOP's Daughter)

Odhavjibhai R. Patel (Shri JOP's Father)

Pravinbhai O. Patel ((Shri JOP's Brother)

Mr. Vijesh N. Sheth (Shri JNS's Brother)

* The following Directors are resigned

Sr.

No. Name Date of Resignation

1 Mrs. Mrudula J. Patel September 29, 2007

2 Mr. Pravinbhai O. Patel September 29, 2007

3 Mrs. Vanitaben P. Patel September 27, 2007

4 Mr. Navil P. Patel September 27, 2007

*

The following person are appointed as a

Director

Sr.

No. Name Date of Appointment

1 Nemi Chand Jain September 29, 2007

2 Jitendra T. Patel January 01, 2008

3 Tushar Udani January 01, 2008

4 Jitendra Jain January 01, 2008

120

b) Details of transactions with related parties

(Rs. in Million)

Particular As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

A. Managerial Remuneration:

Mr. Jaysukh O. Patel 15.00 4.00 1.34 0.50 0.00 0.00

Mrs. Mrudula J. Patel 0.60 1.38 1.34 0.50 0.00 0.00

Mr. Odhavji R. Patel 0.50 1.38 1.34 0.50 0.00 0.00

B. Purchase of Goods( Incl. Capital Goods)

Ajanta Limited [Previous Known Ellora Time Ltd.] 0.00 0.39 0.49 3.94 0.00 0.00

Ajanta Transistor Clock Manufacturing Co. 0.00 0.00 0.00 12.50 0.00 0.00

C. Sales of Goods

Ajanta Transistor Clock Manufacturing Co. 1.29 0.26 0.00 0.00 0.00 0.00

Ajanta Limited [Previous Known Ellora Time Ltd.] 0.00 0.23 0.00 0.00 0.00 0.00

D. Service Received

Ajanta Transistor Clock Manufacturing Co. 0.00 0.00 51.11 0.00 0.00 0.00

E. Loans Taken/Repaid and Interest on Loan

(From Directors & Inter Company Deposit)

From Directors & Share Holders:

1. Mr. Jaysukh O. Patel

Opening Balance 107.81 164.90 201.65 0.00 0.00 0.00

Loan Taken 35.04 181.11 22.85 201.85 0.00 0.00

Loan Rapaid 61.40 238.20 59.60 0.20 0.00 0.00

Interest

Closing Balance 81.45 107.81 164.90 201.65 0.00 0.00

2. Mr. Chintan J. Patel

Opening Balance 108.59 91.62 51.37 0.00 0.00 0.00

Loan Taken 4.52 42.08 40.25 51.37 0.00 0.00

Loan Rapaid 0.03 25.10 0.00 0.00 0.00 0.00

Interest

Closing Balance 113.09 108.59 91.62 51.37 0.00 0.00

3. Mrs. Mrudula J. Patel

Opening Balance 66.65 67.63 68.16 0.00 0.00 0.00

Loan Taken 5.26 24.30 0.42 68.16 0.00 0.00

Loan Rapaid 2.90 25.27 0.96 0.00 0.00 0.00

Interest

Closing Balance 69.01 66.65 67.63 68.16 0.00 0.00

4. Mr. Odhavji R. Patel

Opening Balance 2.41 0.80 0.47 0.00 0.00 0.00

Loan Taken 1.79 1.62 0.87 0.47 0.00 0.00

Loan Rapaid 0.02 0.00 0.54 0.00 0.00 0.00

Interest

Closing Balance 4.19 2.41 0.80 0.47 0.00 0.00

5. Ms. Ellis J. Patel

Opening Balance 23.56 40.53 40.44 0.00 0.00 0.00

Loan Taken 3.42 8.08 0.09 40.44 0.00 0.00

Loan Rapaid 0.00 25.05 0.00 0.00 0.00 0.00

121

Interest

Closing Balance 26.98 23.56 40.53 40.44 0.00 0.00

6. Ms. Jaysukh O. Patel (HUF)

Opening Balance 3.46 10.23 23.04 0.00 0.00 0.00

Loan Taken 0.37 3.23 0.00 43.04 0.00 0.00

Loan Rapaid 0.30 10.00 12.81 20.00 0.00 0.00

Interest

Closing Balance 3.53 3.46 10.23 23.04 0.00 0.00

7. Ms. Odhavji R. Patel (HUF)

Opening Balance 0.15 0.15 0.15 0.00 0.00 0.00

Loan Taken 0.00 0.00 0.00 0.15 0.00 0.00

Loan Rapaid

Interest

Closing Balance 0.15 0.15 0.15 0.15 0.00 0.00

8. Mr. Pravin O. Patel

Opening Balance 0.00 0.00 40.00 0.00 0.00 0.00

Loan Taken 0.00 0.00 0.00 166.98 0.00 0.00

Loan Rapaid 0.00 0.00 40.00 126.98 0.00 0.00

Interest

Closing Balance 0.00 0.00 0.00 40.00 0.00 0.00

9. Ajanta Transistor Clock Mfg. Co.

Opening Balance 0.00 0.00 0.00 0.00 0.00 0.00

Loan Taken 0.00 0.00 0.00 716.90 0.00 0.00

Loan Rapaid 0.00 0.00 0.00 719.09 0.00 0.00

Interest 0.00 0.00 0.00 2.19 0.00 0.00

Closing Balance 0.00 0.00 0.00 0.00 0.00 0.00

F. Dividend Paid

On Equity Share:

Mr. Jaysukh O. Patel 0.00 9.37 2.55 0.10 0.00 0.00

Mrs. Mrudula J. Patel 0.00 2.76 0.75 0.00 0.00 0.00

Ms. Jaysukh O. Patel (HUF) 0.00 0.37 0.10 0.01 0.00 0.00

Mr. Chintan J. Patel 0.00 2.02 0.55 0.01 0.00 0.00

Ms. Ellis J. Patel 0.00 0.92 0.25 0.01 0.00 0.00

Mr. Pravin O. Patel 0.00 1.38 0.38 0.00 0.00 0.00

Mrs. Vanita P. Patel 0.00 1.38 0.38 0.00 0.00 0.00

Mr. Odhavji R. Patel 0.00 0.18 0.05 0.35 0.00 0.00

Mr. Jayesh N. Sheth 0.00 1.25 0.00 0.00 0.00 0.00

Mr. Vijesh N. Sheth 0.00 0.25 0.00 0.00 0.00 0.00

On Preference Share:

Mr. Jaysukh O. Patel 0.00 8.67 0.00 0.00 0.00 0.00

Mr. Chintan J. Patel 0.00 2.50 0.00 0.00 0.00 0.00

Mrs. Mrudula J. Patel 0.00 2.50 0.00 0.00 0.00 0.00

Ms. Ellis J. Patel 0.00 2.50 0.00 0.00 0.00 0.00

122

DIVIDEND POLICY The Company has been a dividend paying company and has paid dividends in each of the last three years. The following are the dividend pay outs in the last three years by the Company:

Fiscal Dividend per Equity Share

(Amount in Rs.)

Amount (In Rs. million)(1)

2005 1.00* 0.50

2006 10.00* 5.00

2007 0.50** 19.88

(1) We have paid a dividend distribution tax of Rs. 0.065 million for fiscal 2005, Rs. 0.70 million for fiscal 2006 and Rs. 3.38

million for fiscal 2007

*Face value of each equity share being Rs. 1000 each

** Face value of each equity share being Rs. 10 each

The Company does not have a formal dividend policy. Dividend amounts are determined from year to year in accordance with the Board’s assessment of the Company’s earnings, cash flow, financial conditions and other factors prevailing at the time. The amounts paid as dividends in the past are not necessarily indicative of the Company’s dividend policy or dividend amounts, if any, in the future. We have paid dividend at the rate of 10% per annum amounting to Rs. 16.165 million on the paid-up value of Preference Shares and we have paid dividend distribution tax of Rs. 2.75 million for fiscal 2007.

123

FINANCIAL INDEBTEDNESS We have a credit facility with the State Bank of India (“SBI”) for an amount aggregating approximately Rs. 2,325 million which includes a working capital component as well as term loan component. The details of this credit facility are as follows:

S. No Credit facility components Limit

sanctioned (in Rs. million)

Outstanding

as on December 31,

2007

Interest Rates

1. Term Loan* 691.60** 697.49 Compounded interest @ 2.75% below SBAR with monthly rests

2. Working capital – fund based limits*** 500 380.87 1.25% below SBAR (minimum 11.50% per annum) with monthly rests

3. Working capital – Buyer’s Credit*** - 173.87 50 basis point over LIBOR

4. Working capital - non fund based limits*** 600 436.21 -

Total Overall Limit 2,325 1688.44

* The term loan is repayable in 5 years in 18 quarterly installments. The repayment of the term loan commenced on May 31, 2006. The term loan is secured by (a) a mortgage in a form satisfactory to the State Bank of India of all the Company’s immovable properties both present and future; (b) a first charge by way of hypothecation and/or pledge of the Company’s entire goods, movable and other assets present and future including documents of title to the goods and other assets, such as book-debts, outstanding monies, receivables including receivables by way of cash assistance and/or cash incentive under the cash incentive scheme or any other scheme, claims, including claims by way of refund of customs/excise duties under the duty drawback credit scheme, bills, invoices, documents, contracts, insurance policies, guarantees, engagaments, securities, investments and rights uncalled capital and all machinery present and future of such form satisfactory to the Bank. ** The original over all sanction limit for the term loan as provided in the Agreement of Loan for Overall Limit entered into by the Company with State Bank of India, CAG Branch, 58, Shrimali Society, Navrangpura, Ahmedabad dated October 16, 2004 was Rs. 2,145 million. The term loan component of this sanction limit was Rs. 1,225 million. This limit was renewed to Rs. 691.60 million by the State Bank of India letter dated March 15, 2008. *** The working capital component is secured by: (a) Primary Security:

i) Cash Credit /Working Capital Demand Loan: Hypothecation of the entire inventory and receivables of the Company.

ii) Letter of Credit: Hypothecation charge on current assets and application-cum-indemnity.

(b) Collateral Security - Extension of 2nd charge on the fixed assets of the Company. (c) Guarantees - Personal guarantee of Jaysukhbhai O. Patel and Mrudulaben J. Patel. As of December 31, 2007 the Company has outstanding unsecured loans from the Promoter and certain Promoter Group individuals/entities, including certain Directors of the Company. These loans have been obtained pursuant to a stipulation by the State Bank of India and in relation to the loan agreement dated October 16, 2004 entered with the State Bank of India. These loans are repayable on demand and are interest free. The limit of the loans is as amended from time to time. The Company has not entered into any formal arrangements/ agreements to record the terms and conditions on which such loans have been granted to the Company.

124

Details of the loans obtained from the Promoter and certain of our Promoter Group individuals/ entities are as follows:

S. No. Name of the party Loan amount outstanding till December 31, 2007 (in Rs. million)

1 Odhavjibhai R. Patel 4.19

2 Jaysukhbhai O. Patel 81.45

3 Jaysukhbhai O. Patel – HUF 3.53

4 Mrudulaben J. Patel 69.01

5 Chintan Bhalodia 113.09

6 Alish J. Patel 26.98

7 Odhavjibhai R. Patel – HUF 0.15

Total 298.39

Corporate Actions

Some of the corporate actions for which the Company requires the prior written consent of the lenders include the following: 1. Effecting any change in its capital structure. 2. Formulating any scheme of amalgamation or reconstruction. 3. Undertaking any new project, implementation of any scheme of expansion or acquiring fixed assets

except those indicated in the funds flow statement submitted to SBI from time to time and approved by SBI.

4. Entering into borrowing arrangements either secured or unsecured with any other bank, financial

institution, company or otherwise or accepting deposits apart from the arrangement indicated in the funds slow statements submitted to SBI from time to time and approved by the Bank.

5. Undertaking guarantee obigations on behalf of any third party or any other company. 6. Declaring dividends for any year except out of the profits relating to that year or of the previous years. 7. Permitting any transfer of the controlling interest in the Company or any drastic change in the

management set-up of the Company. 8. SBI will have an option to appoint its nominee on the Baord who will be paid normal fees and expenses,

shall not be required to hold qualifications shares and would not be liable to retire so long as the credit facilities granted by SBI are outstanding.

9. SBI shall have an option to convert debt into equity at the discretion of SBI wherein the conversion shall

be based on a mutually acceptable formula.

125

SECTION V - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

(as required by Part II of Schedule II to the Companies Act, 1956) To, The Board of Directors Ajanta Manufacturing Limited “AJANTA CORPORATE HOUSE”, 8-A National Highway, Morbi – 363642. Dear Sirs, We have examined the financial information of Ajanta Manufacturing Limited (up to January 1, 2004 earlier known as Ajanta Electronics Private Limited) ('the Company') as at December 31, 2007, March 31, 2007, March 31, 2006, March 31, 2005, March 31, 2004 and March 31, 2003 annexed to this report and initialled by us for identification. The said financial information has been prepared by the Company and approved by the Board of Directors, in accordance with the requirements of: a. Paragraph B (1) of Part II of Schedule II of the Companies Act, 1956 ("the Act"); b. The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (the

'SEBI Guidelines') and the related clarifications thereto issued by the Securities and Exchange Board of India ('SEBI') pursuant to section 11 of the Securities and Exchange Board of India Act, 1992, as amended to date; and

c. The terms of our engagement agreed upon with you in accordance with our engagement letter dated

February 23, 2008 in connection with the offer document being issued by the Company for its proposed Initial Public Issue of Equity Shares.

A. Financial Information as per Audited Financial Statements:

The financial information of the Company has been extracted from the financial statements for the years ended March 31, 2007, March 31, 2006, March 31, 2005, March 31, 2004 and March 31, 2003 which have been approved by the Board of Directors and adopted by the Members of the Company at the respective Annual General Meetings and audited by us. The financial information for the nine months period ended December 31, 2007 has been extracted from the financial statements approved by the Board of Directors and audited by us. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines and terms of our engagement agreed with you, we further report that: a. The Summary Statement of Assets and Liabilities, as restated, as at December 31 ,2007, March 31,

2007, March 31, 2006, March 31, 2005, March 31, 2004 and March 31, 2003 examined by us, as set out in Annexure 1 to this report are after making adjustments and regroupings as in our opinion were appropriate and more fully described in Annexure 4 - Statement on adjustments to audited financial statements, and Annexure 7 - Notes to statement on adjustments to audited financial statements.

b. The Summary Statement of Profits and Losses, as restated, for the period/years then ended,

examined by us, set out in Annexure 2 to this report are after making adjustments and regroupings as in our opinion were appropriate and more fully described in Annexure 4 - Statement on adjustments to audited financial statements, and Annexure 7 - Notes to statement on adjustments to audited financial statements.

c. The Summary Statement of Cash Flows, as restated, for the period/years then ended, examined by

us, set out in Annexure 3 to this report are after making adjustments and regroupings as in our opinion were appropriate and more fully described in Annexure 4 - Statement on adjustments to

126

audited financial statements, and Annexure 7 - Notes to statement on adjustments to audited financial statements.

d. We are of the opinion that the restated financial information has been made after incorporating:

i. Adjustments for the changes in accounting policies retrospectively in respective financial years to reflect the same accounting treatment as per changed accounting policy for all the reporting periods.

ii. Adjustments for the material amounts in the respective financial years to which they relate. iii. The extra-ordinary items that need to be disclosed separately in the summary statements. iv. There are no qualifications in the Auditors' report, hence no adjustments are required.

B. Other Financial Information: At the Company's request, we have also examined the following other financial information relating to the Company set out in Annexure prepared by the management and approved by the Board of Directors for the nine months period ended December 31, 2007 and for the years ended March 31, 2007, March 31, 2006, March 31, 2005, March 31, 2004 and March 31, 2003. i. Statement of Changes in Share Capital, enclosed as Annexure 8; ii. Statement of Changes in Reserves and Surplus, as restated, enclosed as Annexure 9; iii. Statement of Secured Loans, as restated enclosed as Annexure 10; iv. Statement of Unsecured Loans, enclosed as Annexure 11; v. Statement of Investments, enclosed as Annexure 12; vi. Statement of Sundry Debtors, enclosed as Annexure 13; vii. Statement of Loans and Advances, as restated, enclosed as Annexure 14; viii. Statement of Current Liabilities and Provisions, as restated; enclosed as Annexure 15; ix. Statement of Other Income, as restated, enclosed as Annexure 16; x. Statement of Dividend Paid/Proposed, enclosed as Annexure 17; xi. Statement of Accounting Ratios, as restated, enclosed as Annexure 18; xii. Statement of Earning per Share, as restated, enclosed as Annexure 19; Xiii.Capitalisation Statement as at December 31, 2007, as restated, enclosed as Annexure 20; xiv. Commitments and Contingent Liabilities, as restated, enclosed as Annexure 21; xv. Tax Shelter Statement, enclosed as Annexure 22; xvi. Statement of Related Party Transactions, enclosed as Annexure 23; Xvii.Statement of segment report, as restated, enclosed as Annexure 24;

xviii. Statement of Fixed Assets, as restated, enclosed as Annexure 25; xix. Statement of Export Obligation, enclosed as Annexure 26;

In our opinion, the financial information contained in the Annexure to this report, read with the significant accounting policies and notes forming part of restated accounts disclosed in Annexure 5 and Annexure 6 respectively, and after making adjustments and regroupings as considered appropriate and disclosed in Annexure 4 - Statement on adjustments to audited financial statements read with Annexure 7 - Notes to statement on adjustments to audited financial statements, has been prepared in accordance with paragraph B of Part II of Schedule II of the Act and the SEBI Guidelines. This report should not be in any way construed as a reissuance or a redating of any of the previous audit reports issued by us nor should this report be construed as a new opinion on any of the financial statement referred to herein. This report is intended solely for use of the management and for inclusion in the Offer Document in connection with the proposed public offer of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For Finava & Associates

Chartered Accountants

PLACE: RAJKOT

DATE: April 4, 2008

(Manoj Finava) Proprietor

M.No.44511

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ANNEXURE: 1:

SUMMARY STATEMENT OF RESTATED ASSETS & LIABILITIES (Rs in Million)

Particular As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

Fixed Assets

Gross Block (Including WIP) 2582.86 2449.39 2078.83 1476.57 21.64 -

Less : Depreciation 217.99 131.54 33.11 - - -

Net Block 2364.86 2317.85 2045.72 1476.57 21.64 -

Capital Advances + Incidental Exp. 4.29 62.96 71.61 162.59 315.73 -

Total Net Block (A) 2369.16 2380.81 2117.33 1639.16 337.37 -

Investments (B) 10.02 115.02 0.02 - - -

Deferred Tax Assets (Net) (C) - - - - - -

Current assets, loans and advances

Sundry Debtors 930.74 115.20 26.13 - - -

Cash and Bank Balance 49.13 128.72 34.36 7.78 11.77 0.44

Inventories 1414.08 930.89 670.19 111.83 - -

Loans & Advance 511.33 266.97 110.73 64.65 96.16 126.12

TOTAL (D) 2905.28 1441.77 841.40 184.25 107.93 126.56

TOTAL (A)+(B)+(C)+(D) (E) 5284.45 3937.60 2958.75 1823.41 445.30 126.56

Liabilities And Provisions

Secured Loans 1252.23 897.88 1224.16 750.00 - -

Unsecured Loans 298.39 312.65 375.85 445.56 - -

Current Liabilities 513.10 160.75 722.33 37.91 4.62 0.08

Deferred Tax Liability (Net) 145.65 106.78 7.73 - - -

Provisions 264.54 153.56 29.85 1.51 0.60 0.60

TOTAL (F) 2473.90 1631.62 2359.91 1234.98 5.22 0.68

Net Worth (E) - (F) (G) 2810.55 2305.99 598.84 588.44 440.08 125.88

Net Worth Represented by

Share Capital (H) 559.15 559.15 500.00 500.00 50.00 50.00

Share application money pending

allotment (I) - - - - 302.05 -

Reserves and Surplus (J) 2251.40 1746.84 98.84 91.16 90.75 75.90

Miscellaneous Expenditure (K) - - - 2.73 2.73 0.02

Net Worth (H)+(I)+(J)-(K) (L) 2810.55 2305.99 598.84 588.44 440.08 125.88

1

The above statement should be read with The Statement on Adjustments to Audited Financial Statements appearing in Annexure – 4, Significant Accounting Policies appearing in Annexure – 5, Notes to Restated Financial Information appearing in Annexure – 6, and Notes to Statement on Adjustment to Audited Financial Statements, as restated, appearing in Annexure – 7

2 Allotment of shares against share application money has been made during the month of February 2005 and Hence, the same has been considered as a part of the net worth for the financial year 2003-04.

128

ANNEXURE: 2

SUMMARY STATEMENT OF RESTATED PROFITS & LOSSES (Rs in Million)

Particular As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

Income

Income From Operation 3293.77 3154.88 665.74 - 42.35 -

Trading Activity - - - 28.82 - -

Other Income 52.75 79.63 1.71 1.83 2.11 0.29

Increase/(Decrease) in Stock 307.62 72.06 230.05 - - -

TOTAL (A) 3654.14 3306.57 897.50 30.65 44.46 0.29

Expenditure

Cost Of Production

Raw Material Consumed 1993.11 1786.09 510.95 28.94 17.80 -

Employee Cost 137.43 132.62 16.81 - 1.48 -

Power & Fuel 190.47 172.95 36.67 - 1.95 -

Manufacturing Cost 79.80 78.50 79.44 - 4.47 -

Administration Expenses 72.60 70.67 4.84 0.49 0.72 0.98

Selling Expenses 278.97 354.51 162.52 0.09 17.13 0.55

Depreciation 86.46 98.42 33.11 - 0.07 -

Financial Expenses 71.03 100.15 27.49 - 0.02 0.02

Preliminary Expenses Written Off - - 2.73 - 0.02 0.02

TOTAL (B) 2909.87 2793.91 874.55 29.52 43.67 1.57

Profit before tax & Extra Ordinary Items :

(A) - (B) (C) 744.27 512.66 22.96 1.13 0.80 (1.28)

Provision for Taxes

Current Tax 200.00 77.50 2.00 0.30 0.07 -

Deferred Tax 38.87 99.05 7.73 - - -

Fringe Benefit Tax 0.80 0.40 0.60 - - -

TOTAL (D) 239.67 176.95 10.33 0.30 0.07 -

Profit after Tax before Adjustments(C) - (D) (E) 504.60 335.71 12.63 0.83 0.73 (1.28)

Adjustments [as per Annexure 4] (F) (0.04) (59.39) 0.75 0.14 14.12 -

Profit After Tax, As Restated (E) - (F) (G) 504.56 276.31 13.38 0.98 14.85 (1.28)

Balance brought forward from Previous Year (H) 311.84 84.89 78.71 78.45 63.60 64.88

Balance available for Appropriation (G+H) (I) 816.40 361.20 92.09 79.43 78.45 63.60

Particular

As at 31

December,

2007

As at 31

March,

2007

As at 31

March,

2006

As at 31

March,

2005

As at 31

March,

2004

As at 31

March,

2003

129

Appropriations

Dividend - 36.04 5.00 0.50 - -

Dividend Tax - 6.12 0.70 0.07 - -

General Reserve - 7.20 1.50 0.15 - -

TOTAL (K) - 49.36 7.20 0.72 - -

Balance Carried forward to Balance Sheet

(J) - (K) (L) 816.40 311.84 84.89 78.71 78.45 63.60

Note to the Profit & Loss Account: The above statement should be read with The Statement on Adjustments to Audited Financial Statements appearing in Annexure – 4, Significant Accounting Policies appearing in Annexure – 5, Notes to Restated Financial Information appearing in Annexure – 6, and Notes to Statement on Adjustment to Audited Financial Statements, as restated, appearing in Annexure – 7. Refund of earlier year i.e. for F.Y. 1996-97 and 1999-00 of Rs. 14.05 Million received during the F.Y. 2003-04 and the same is considered in Reserve and Surplus.

Refund of Financial Year 1995-96 of Rs. 0.19 Million was received during the F.Y. 2004-05.

Order of Income Tax Settlement Case for the F.Y. 1996-97 to 2001-02 is given by Income Tax Settlement Commision during F.Y. 2006-07 & same is accounted during the that year.

130

ANNEXURE: 3: STATEMENT OF CASH FLOW – RESTATED

(Rs. in Million)

Particular As at

December

31, 2007

As at March

31, 2007

As at March

31,

2006

As at March

31,

2005

As at March

31, 2004

As at March

31,

2003

CASH FLOW FORM OPERATING

ACTIVITIES

Net profit before taxation and extraordinary item and After adjusting Prior Period Expenses as per Annexure - 4 (A) 746.13 511.06 22.69 1.13 0.80 (1.28)

Adjustment for:

Addition:

Depreciation (a) 86.46 98.42 33.11 - 0.07 -

Financial Charge (Interest) (b) 71.03 100.15 27.49 - 0.02 0.02

TOTAL (a) + (b) (B) 157.49 198.57 60.61 - 0.09 0.02

Operating profit before Working Capital Change (A) + (B) (C) 903.62 709.64 83.29 1.13 0.89 (1.27)

(Increase)/Decrease to Sundry Debtor (c) (815.54) (89.07) (26.13) - - -

(Increase)/Decrease to Inventories (d) (483.19) (260.70) (558.36) (111.83) - 22.33

(Increase)/Decrease to Loan & Advance (e) (244.36) (156.24) (46.08) 31.51 29.96 (25.32)

Increase/(Decrease) in Current Liabilities (f) 462.12 (555.53) 706.04 33.54 18.60 (0.77)

TOTAL (c) + (d) + (e) + (f) (D) (1080.97) (1061.54) 75.48 (46.77) 48.56 (3.76)

Cash generated from Operation (C) + (D) (E) (177.34) (351.91) 158.77 (45.64) 49.45 (5.02)

Income Taxes Paid (g) 159.34 54.50 - 0.07 - -

Cash Flow before Extraordinary Item (E) - (g) (F) (336.68) (406.41) 158.77 (45.71) 49.45 (5.02)

W/o Preliminary Expenses (h) - - 2.73 - 0.02 0.02

Net Cash from Operating Activities (F)+(h) (G) (336.68) (406.41) 161.49 (45.71) 49.47 (5.00)

CASH FLOWS FROM INVESTING

ACTIVITIES

Other Income (i) - - - - - -

Preliminary Expenses (j) - - - - 2.73 -

Purchase of Fixed Assets (k) 74.81 361.90 511.28 1301.79 337.44 -

Net Cash form Investing Activities (i)-(j)-(k) (H) (74.81) (361.90) (511.28) (1301.79) (340.17) -

CASH FLOWS FROM FINANCING

ACTIVITES

Increase/Decrease to Share Capital (l) - 59.15 - 450.00 - -

Increase/Decrease to Secured Loan (m) 354.35 (326.28) 474.16 750.00 - -

Increase/Decrease to Share Premium Account (n) - 1413.85 - - - 1.50

Increase/Decrease to Share Application Money (o) - - - (302.05) 302.05 -

Increase/Decrease to Unsecured Loan (p) (14.25) (63.21) (69.70) 445.56 - -

TOTAL (l)+(m)+(n)+(o)+(p) (I) 340.09 1083.52 404.45 1343.51 302.05 1.50

Repayment of Long-term Borrowings

Financial Charge (q) 71.03 100.15 27.49 - 0.02 0.02

Investment (r) (105.00) 115.00 0.02 - - -

Dividend paid (s) 42.16 5.70 0.57 - - -

TOTAL (q)+(r)+(s) (J) 8.20 220.85 28.08 - 0.02 0.02

131

Particular As at

December

31, 2007

As at

March

31, 2007

As at

March

31, 2006

As at

March

31, 2005

As at

March

31, 2004

As at

March

31, 2003

Net Cash from Financing Activities (I) - (J) (K) 331.90 862.67 376.37 1343.51 302.03 1.48

NET INCREASE IN CASH & CASH

EQUIVALENTS (G +H +K) (79.59) 94.36 26.58 (3.99) 11.33 (3.52)

CASH & CASH EQUIVALENTS AT THE

BEGINNING OF PERIOD 128.72 34.36 7.78 11.77 0.44 3.96

CASH & CASH EQUIVALENTS AT THE END OF PERIOD 49.13 128.72 34.36 7.78 11.77 0.44

Notes to the Cash Flow Statement:

Cash and cash equivalents comprise cash at bank and in hand, highly liquid and short-term investments with an original maturity of three months or less. The Restated Cash Flow Statement has been prepared under Indirect Method as set out in Accounting Standard - 3 (AS-3) on Cash Flow Statement, issued by the Institute of Chartered Accountants of India

132

ANNEXURE: 4: STATEMENT ON ADJUSTMENTS TO AUDITED FINANCIAL STATEMENTS

(Rs in Million)

PARTICULARS

As at

December

31, 2007

As at

March

31, 2007

As at

March

31, 2006

As at

March

31, 2005

As at

March

31, 2004

As at

March

31, 2003

Profit After Tax and Before

Adjustment 504.60 335.71 12.63 0.83 0.73 (1.28) Adjustments: Impact of Change in accounting

policy & estimates Prior Period Expenses/Income 1.86 (1.59) (0.27) - - - Excess/Short fall in provision of Tax (2.35) 1.35 1.04 (0.04) 0.07 - Excess/Short fall in provision of Dividend Distribution Tax 0.02 - (0.02) - - - Excess/Short fall in provision of Tax of earlier year i.e. prior to F.Y. 2002-03 0.42 (59.15) - 0.19 14.05 - - - - - - - TOTAL Adjustments (0.04) (59.39) 0.75 0.14 14.12 -

Total 504.56 276.31 13.38 0.98 14.85 (1.28)

Vide Annexure 7 on notes to the statements of Adjustments

133

ANNEXURE: 5: SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF PREPARATION The Financial statements have been prepared to comply in all material respects with the Accounting

Standard (AS) 25, Interim Financial Reporting, issued by the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 1956 (Act), guidelines issued by Reserve Bank of India (RBI) to extent applicable to the Company. The financial statements have been prepared under the historical cost convention on an accrual basis.

2. FIXED ASSETS

a) Fixed assets are stated at cost of acquisition or construction less accumulated depreciation, including financial cost till such assets are ready for its intended use.

b) Fixed assets in the course of work-in-progress for production or administrative purposes are carried

at cost less any impairment loss. Cost includes land and building improvement costs, related acquisition expenses and construction

costs incurred during the period of construction. Depreciation of these assets, on the same basis as the other property assets, commences when the assets are ready for their intended use.

c) The Exchange rate gain or loss relating to acquisition of capital assets is adjusted to the cost of fixed

assets. d) The cost of self-constructed assets includes cost of materials plus any other directly attributable costs

of bringing the assets to working condition for its intended use. 3. IMPAIRMENT OF ASSETS

An Asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. So far company has not made any provision for impairment.

4. DEPRECIATION Except for Freehold Land and Capital work-in-progress, depreciation is charged on straight line method

(SLM) as per rate prescribed under schedule XIV of the Companies Act 1956. 5. INVESTMENTS

Long term investments are stated at cost. Interest on investment is accounted for on accrual basis for the

period it relates. At the time of maturity first amount adjust against accrued interest and balance recognise as profit on investment.

6. INVENTORIES

Inventories are stated at the lower of Cost or Net Realizable Value as per Accounting Standard – 2 & as

per valued and certified by Management of the Company.

i) Cost of Raw Material is valued at cost on FIFO basis. ii) Stores and consumables are valued at cost or net realizable value whichever is less. iii) Finished goods are valued at cost or net realizable value whichever is lower. Cost comprises

direct materials and, where applicable, direct labour costs, those overheads that have been incurred in bringing the inventories to their present location and condition and excise duty payable on finished goods.

134

iv) Work in progress is valued at cost or net realizable value whichever is less. Cost comprises direct materials and appropriate portion of direct labour costs, manufacturing overheads and depreciation.

7. REVENUE RECOGNITION

i. In appropriate circumstances, Revenue is recognised on accrual basis when no significant uncertainty as to determination or realization exists.

ii. Sales :

Domestic Sales are accounted exclusive of excise, net of sales tax, sales return and rate difference if

any. Exports sales are accounted on the basis of dates of Bill of Lading and including exchange rate differences arising in export sales transaction. Sales do not include Inter Division transfer of finished goods and other materials.

Sale of power is accounted on the basis of power units sold to other division of the Company.

iii. Accounting for claims :

Insurance claims are recognised on the basis of approval of claim by insurance company.

iv. Export Benefits :

Incomes in respect of Duty Drawback and Duty Entitlement Pass Book Scheme (DEPB) in respect

of exports made during the year are accounted on accrual basis. 8. FOREIGN CURRENCY TRANSACTION

i. Initial Recognition :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign

currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii. Conversion :

Foreign currency monetary items are reported using the closing rate. Non – monetary items

which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii. Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting company’s

monetary items at rates different from those at which they where initially recorded during the period, or reported in previous financial statements, are recognized as income or as expenses in the period in which they arise.

9. BORROWING COSTS

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised

as part of the cost of such assets, wherever applicable. A qualifying asset is one which is that necessarily takes substantial period to get ready for intended use. All other borrowing costs are charged to revenue account. Capitalisation of borrowing cost suspended when active development is interrupted.

10. PRIOR YEAR EXPENSES AND INCOME

135

Transactions pertaining to period prior to Current Accounting Year are adjusted through prior year adjustments, if any.

11. RESEARCH AND DEVELOPMENT EXPENSES

Revenue expenditure pertaining to Research and Development is normally charged to Profit and Loss

Account. 12. EMPLOYEES’S BENEFIT Company’s contribution paid / payable during the year to Provident Fund, ESI and Labour Welfare fund

are accounted on accrual basis and charged to Profit and Loss account. The gratuity is accounted for as and when paid on the retirement / resignation of the employee as per The

Payment of Gratuity Act. No provision for gratuity is made for a particular accounting year. Leave encashment is considered on payment basis. 13. EXCISE DUTY

Excise duty including (Education cess) on Finished Goods are shown separately in Manufacturing and

other expenses and included in the valuation of finished goods.

14. CENVAT CENVAT Credit on input is accounted at the time of purchase and the same is being adjusted to the cost

of raw materials and other consumables and CENVAT Credit on capital goods is not considered by the company.

15. TAXATION Income tax comprised of current, deferred and fringe benefit tax. Current income tax and fringe benefit

tax are measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act 1961. Deferred income taxes reflect the impact of current year timing differences of earlier years.

Deferred Tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the

balance sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the income statement in the period of enactment of the change. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the Company has carry forward unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profit.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises

unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised..

16. MISCELLANEOUS EXPENDITURE:

i) Preliminary Expenses are amortized in the year when production begins. ii) Share issue expenses incurred are amortized in the year in which it’s incurred.

17. EPS:

136

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to

equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

18. CONTINGENT LIABILITES AND ASSETS:

Provisions involving substantial degree of estimation in measurement are recognized when there is a

present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

137

ANNEXURE: 6: NOTES FORMING PART OF RESTATED FINANCIAL

INFORMATION

SHARE CAPITAL

For the Financial Year 2003-04

Authorised Share Capital The Company has raised its authorised Share Capital from 5000 equity Shares of Rs. 1,000/- each to 50,000 Equity Shares of Rs.1,000/- by way of addition of 45,000 Equity Shares of Rs. 1,000/-during the year 2003-04.

Share Application Money:

The Company has received Share Application money Rs. 30, 20, 50,222/- during the year 2003-04 & which is outstanding at the year ended on March 31, 2004. For the Financial Year 2004-05 Issued of Shares Capital: The Company has issued Share Capital of Rs.45, 00, 00,000/- i.e. 4, 50,000 equity Shares of Rs. 1000/- each to promoter applicant during the year 2004-05. For the Financial Year 2006-07

Sub Division of Shares The company has sub divided its equity share from Rs.1, 000/- each into Rs.10/- per Share each during the year 2006-07. Thus, consequently the numbers of shares issued and paid up increased from 5, 00,000 to 5, 00, 00,000. Buyback of Equity Shares: During the year in terms of resolution passed by the shareholders at the EOGM held on January 15, 2007 authorising the company to buy back its own Equity Shares under buyback programme, the company has bought back 1, 32, 50,000 equity shares of Rs.10/- fully paid representing 25% of its paid up Equity capital at a price of Rs. 12.20/- per Equity Share on proportionate basis. Issue of 10% Redeemable Cumulative Preference Shares: During the year the Company has issued 1,61,65,000 10% Redeemable Cumulative Preference Shares of Rs. 10 each aggregating to Rs. 16,16,50,000 to the existing promoters and others who have shown their willingness to invest on January 15, 2007. The proposed issue is on the following terms & conditions; a) The shares shall carry a right to a cumulative preference dividend of 10% per annum in relation to

the capital paid up on them. b) The holders of the said shares shall have a right to attend General Meeting of the Company and vote

on resolutions affecting their interest or where the dividends in respect thereof are in arrears for not less than two years on the date of the meeting, on all resolutions at every meeting of the company.

c) In winding up, the holders of the said shares shall be entitled to a preferential right of return of the amount paid up on the shares together with arrears of cumulative Preference dividend due on the date of winding up but shall not have further right or claim over the surplus assets of the company.

d) The shares will be redeemed in three equal instalments at the end of 6th, 7th and 8th year. However, the company will have option to redeem the said preference shares at any time after two years from the date of issue in one or more instalments as may be decided by the Board of Directors of the company.

2. CHANGE IN THE NAME OF THE COMPANY.

During the year 2003-04 Company has changed its name from Ajanta Electronics Private Limited to AJANTA MANUFACTURING LIMITED w.e.f. January 23, 2004 and also converted into Public Limited Company from Private Limited Company on the said date.

138

3. DISCONTINUE OF OLD BUSINESS AND ESTABLISHED A NEW UNIT:

During the year 2003-04 Company has decided to discontinue its existing manufacturing business and establish a new unit at Village: Vandhiya, Tal:Bhachau, Dist: Kutch for manufacturing of Vitrified Tiles and Electronic Products & accordingly all the new setup are made at new site.

4. COMMENCEMENT OF COMMERCIAL PRODUCTION

During the year ended on March 31, 2006, the Company commenced commercial production of Energy Saver Lamp, Digital Clock etc. as on September 15, 2005 & Vitrified Tiles as on December 15, 2005 as per information & explanation provided to us.

5. CAPITALISATION OF PRE - OPERATIVE/INCIDENTAL EXPENDITURE

Total Incidental Expenditure during the construction period up to September 15, 2005 of Energy Saver Lamp, Digital Clock & December 15, 2005 of vitrified tiles pending capitalization has been allocate to Building, Plant & Machinery and Electrification on the basis of direct cost, which is standard practice recommended by the Institute of Chartered Accountants of India and break up of the same is as follow: Total Expenditure Subject to Capitalisation

(Rs. In Million)

Sr. No. Particulars Amount Rs.

1 Opening Balance 40.48

2 Addition during the year 95.36

Total 135.85

Allocation of the same towards different assets

(Rs. In Million)

Sr. No. Asset Distributed Amount Rs.

1 Building 41.08

2 Plant & Machinery 89.28

3 Electrification 4.73

4 Others 0.76

Total 135.85

Managing Directors Remuneration The Following Managing Directors Remuneration is charged to Profit & Loss Account:

(Rs. In Million)

Particulars Period Ended

December 31, 2007

Year Ended

March 31, 2007

Year Ended

March 31, 2006

Year Ended

March 31, 2005

Year Ended

March 31, 2004

Year Ended

March 31, 2003

Directors Remuneration 18.80 6.76 4.01 1.50 0.00 0.00

Audit Remuneration The Following Managing Directors Remuneration is charged to Profit & Loss Account:

(Rs. In Million)

Particulars Period Ended

December 31, 2007

Year Ended

March 31, 2007

Year Ended

March 31, 2006

Year Ended

March 31, 2005

Year Ended

March 31, 2004

Year Ended

March 31, 2003

Statutory Audit Fee 0 0.20 0.10 0.03 0.03 0.03

139

Tax Audit Fee 0 0.08 0.03 0.01 0.01 0.01

Company Law Matters Fee 0 0.03 0.01 0.01 0.01 0.01

Certificates & Other Mis Matters Fee

0 0.10 0.04 0.06 0.06 0.03

Total -- 0.40 0.18 0.10 0.10 0.08

Auditor’s Remuneration has not been provided Up to the period December 31, 2007.

6. DEPRECIATION

Depreciation has not been claimed for F.Y. 2002-03 and 2004-05 as there was no any commercial production for the respective years. From the F.Y. 2005-06 companies has started providing depreciation on fixed assets and same has been provided on the basis of Straight Line Method at the rates prescribed in the Schedule XIV of the Companies Act, 1956 after adding the allocation of Incidental Expenditure as above and additions made during the year. The depreciation has been calculated for 198 days i.e. from September 15 , 2005 to March 31, 2006 (both days inclusive) for Electric Division and 107 days i.e. from December 15, 2005 to March 31, 2006 (both days inclusive) for ceramic division, and for the purchase made after respective dates depreciation have been calculated on pro-rata basis.

7. BRANCHES During the F.Y. 2005-06 Company has started new branch at Bangalore, Cochin, Chennai, Calicut and Tirur for carrying out trading activities of vitrified tiles only and Bombay branch for both CFL and vitrified tiles. During the F.Y. 2006-07 Company has started new branch at Kolkata, Madurai and Coimbator for carrying out trading activities of vitrified tiles only.

8. METHOD OF ACCOUNTING

The Company has adopted mercantile method of Accounting and so far as concerned to branch Accounting, the Company has treated their branch as dependent branch and maintained the branch accounting in the company as well as incorporating the profit, stocks and debtors of the branch accounting in H.O. at the end of the year. The company raised the invoice higher than the cost price to the branch and has given the effect of difference amount by way of adjustment entry to the goods sent to branch account and the company has regular practice to reverse it in the next year’s account so that the recorded matching with individual branch can be reconciled easily and the branch account are also maintained at H.O. level and audited by the existing statutory auditors of the company.

9. PRELIMINARY EXPENDITURE

The Preliminary Expenditure amounted to Rs. 2.726 Million incurred during the year 2003-04 on new Project of vitrified & Ceramic Tiles and CFL, which was not written off during the F.Y. 2003-04 & 2004-05 as commercial production was not started during the respective year and the same has been written off during the F.Y. 2005-06 as commercial production commenced in that year.

10. In some cases company has paid excise duty under protest due to protection against in favour of litigation. As informed by management to us, the company has filled a suit against the treatment of excise duty on a very conservative manner and accordingly the excise duty paid under protest after adjusting CENVAT etc. is detailed to Profit and Loss Account

11. Quantitative Details as required under clause 4C of Part II of Schedule of the Company Act, 1956.

(Qty. In figures)

Product Unit Year Ended

December 31, 2007

Year Ended

March 31, 2007

Year Ended

March 31, 2006

Vitrified Tiles Sq. Mtr. 9000000 7500000 7500000

Energy Saver Lamp (CFL) Nos. 60000000 30000000 17500000

Digital Clock Nos -- 500000 500000

140

Aluminum Control Panel Sq. Mtr 400000 - -

E-Bike Nos. 60000 - -

(As certified by Management of the Company and being technical matter accepted by the auditors

as correct)

Details of Finished Goods (Qty. In figures)

Product/Year Opening Production Turnover Closing

Quantity Quantity Quantity Quantity

1) Vitrified Tiles (in Square meter)

For 9 months period ended on December 31, 2007 514297 4954853 4807235 661915

For the year ended March 31, 2007 226512 4050558 3762773 514297

For the year ended March 31, 2006 0 482753 256241 226512

2) CFL (Nos)

For 9 months period ended on December 31, 2007 659161 18127550 15670496 3116215

For the year ended March 31, 2007 698363 17591693 17630895 659161

For the year ended March 31, 2006 0 8262502 7564139 698363

3) Digital Clock(nos)

For 9 months period ended on December 31, 2007 4550 100030 103457 1123

For the year ended March 31, 2007 16340 155628 167418 4550

For the year ended March 31, 2006 0 68300 51960 16340

4) Aluminums Control Panel(Sq. mtr)

For 9 months period ended on December 31, 2007 0 124863 36696 88167

5) E-Bike (in pcs)

For 9 months period ended on December 31, 2007 0 1445 1279 166

12. The Details of foreign Exchange earnings and outgo made by the company during the year under

review are as under: (Rs in Million)

Particulars Period Ended December 31, 2007

Year ended March 31,

2007

Year ended March 31,

2006

Year ended March 31,

2005

A. Earning in Foreign Currency 775.20 409.00 0.00 0.00

B. Expenditures in Foreign Currency

1063.60 1413.10 432.34 855.00

13. The Break – up of Net Deferred Tax Liability is as below: (Rs in Million)

Particulars As at December 31,

2007

As at March

31, 2007

As at March

31, 2006

A Deferred Tax Liabilities

Difference Between tax and book Depreciation 431.57 317.23 136.40

B Deferred Tax Assets

Disallowance under Income Tax Act 0.00 0.00 113.44

C Net Deferred Tax Liability 431.57 317.23 22.96

D Deferred Tax 145.65 106.78 7.73

Deferred Tax is calculated on Net Deferred Tax Liability as per Income Tax Rate prevailing in relevant year as per Income Tax Act 1956. There was not any timing difference of Assets & Liabilities during the year 2002-03, 2003-04, and 2004-05.

14. INCIDENTAL EXPENDITURE AND CAPITAL ADVANCES

Incidental Expenditure and capital advances for the construction period are shown under the head preliminary expenses in Annual report but here same are considered as part of fixed assets as they are subject to capitalization.

15. SECURED LOAN – TEMPORARY O.D.

141

Temporary O.D. from State Bank of Saurashtra in current A/c is shown under the head secured loan in Annual Report but same is classified under the head Cash/Bank for restated purpose.

16. CONTINGENT LIABILITES AND ASSETS:

1. Letter of Credit: Contingent Liabilities in respect on Letter of Credit opened and outstanding with bank

as per below is not provided for in the account. 2. Income Tax: The Income Tax Assessment up to the financial year 2003-04 is competed. For the

Financial year 1999-00, The Demand of Rs. 6.24 million is issued as per Assessment Order dated December 12, 2006 & the company has filed appeal against above order

3. Excise: The Company has paid excise duty under protest due to protection against in favour of litigation.

As informed by management to us, the company has filed a suit against the treatment of excise duty on a very conservative manner and accordingly the excise duty paid under protest after adjusting Cenvat

4. Gratuity: Gratuity liability is not defined benefit obligation and is actuarially determined after

considering discount rate, expected long term return on plant assets and increase in compensation levels. The company has not provided any provision for Gratuity. It will be recorded subject to payment of the same.

142

ANNEXURE 7: NOTES TO STATEMENT ON ADJUSTMENTS TO AUDITED

FINANCIAL STATEMENT, AS RESTATED

1. SHORT/ (EXCESS) PROVISION OF INCOME TAX OF THE RESPECTIVE YEAR

The provision for income tax made for the respective year is shown under the head PROVISIONS in the balance sheet of respective year and advance payment of tax shown under the head LOANS AND ADVANCES in the balance sheet till the completion of the assessment or appeal etc. Hence, the shortfall or excess arising out of assessments, appeals etc., which, for the purpose of this statement, have been adjusted in respective years.

2. PRIOR PERIOD EXPENSES/INCOME

Prior period expenses and incomes of the respective year are adjusted in the respective year and same have been disclosed in the Annexure – 4 on statement of Adjustments.

3. SHORT/ (EXCESS) PROVISION OF INCOME TAX OF THE EARLIER YEAR the provision for income tax made for the earlier year is written off in F.Y 2003-04, 2004-05, 2006-07 and for the period ending December 31st, 2007 which is related to F.Y. earlier then 2002-03.

143

ANNEXURE: 8: STATEMENT OF CHANGES IN SHARE CAPITAL

(Rs in Million)

Particular As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

SHARE CAPITAL IN THE FORM OF

EQUITY SHARES :

Authorised Share Capital

50000/- Eq. Sh. Of Rs. 1000/- each 50.00

500000/- Eq. Sh. Of Rs. 1000/- each - - 500.00 500.00 500.00 -

55000000/- Eq. Sh. Of Rs. 10/- each (Sub division of Equity Shares into Rs.10/- Per Shares from Rs.1000/- each)

550.00 550.00 - - - -

Issued Share Capital

50000/- Eq. Sh. Of Rs. 1000/- each - - - - 50.00 50.00

500000/- Eq. Sh. Of Rs. 1000/- each - - 500.00 500.00 - -

39750000/- Eq. Sh. Of Rs. 10/- each (Sub division of Equity Shares into Rs.10/- Per Shares from Rs.1000/- per Shares)

397.50 397.50 - - - -

Sub Total

397.50

397.50

500.00

500.00

50.00

50.00

SHARE CAPITAL IN THE FORM OF

PREFERENCE SHARES :

Authorised Preference Share Capital - - - -

17000000/- Red. Pref. Sh. Of Rs. 10/- each 170.00 170.00

Issued Preference Share Capital - - - -

16165000/- 10% Cumu. Red. Pref. Sh. Of Rs. 10/- each

161.65 161.65

Sub Total 161.65 161.65 - - - -

TOTAL CAPITAL 559.15 559.15 500.00 500.00 50.00 50.00

Vide Annexure 6 notes on accounts

144

ANNEXURE: 9: STATEMENT OF CHANGES IN RESERVES AND SURPLUS, RESTATED

(Rs. In Million)

Particular

As at

December

31, 2007

As at

March 31,

2007

As at

March 31,

2006

As at

March 31,

2005

As at

March 31,

2004

As at

March 31,

2003

SECURITIES PREMIUM

ACCOUNT

Securities Premium Account (See note Below) *

1413.85 1413.85 0.00 0.00 0.00 0.00

Total 1413.85 1413.85 0.00 0.00 0.00 0.00

GENERAL RESERVE

Opening Balance 19.65 12.45 10.95 10.80 10.80 10.80 Addition on payment of dividend 0.00 7.20 1.50 0.15 0.00 0.00

Total 19.65 19.65 12.45 10.95 10.80 10.80

CAPITAL RESERVE

As per Last Balance Sheet 1.50 1.50 1.50 1.50 1.50 1.50

Total 1.50 1.50 1.50 1.50 1.50 1.50

PROFIT & LOSS ACCOUNT Balance C/f. from Previous Year 816.40 311.84 84.89 78.71 78.45 63.60

Total 816.40 311.84 84.89 78.71 78.45 63.60

TOTAL RESERVE & SURPLUS 2251.40 1746.84 98.84 91.16 90.75 75.90

* Note: 1. Allotment of 25000 Equity shares, Face Value of Rs.1000/- each at Premium of Rs.48000/- Per Shares

during the year 2006-07 2. Allotment of 5000 Equity shares, Face Value of Rs.1000/- each at Premium of Rs.48600/- Per Shares

during the year 2006-07

3. Buy back of 13250000 Equity Shares, Face Value of Rs.10/- each at Premium of Rs.2.20 per Shares during the year 2006-07

145

ANNEXURE: 10 : STATEMENT OF SECURED LOANS - RESTATED

(Rs in Million)

Particulars As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

Interest Rate

Dec. 07

Security Repayment Schedule

TERM LOAN

Instalment

Amount

No. of

Instalm

ent

2006-07 Rs. 40.00 Million 4

2007-08 Rs. 75.00 Million 4

2008-09 Rs. 75.00 Million 4

2009-10 Rs. 75.00 Million 4

State Bank of India

697.49

702.98

1224.16

750.00

0.00

0.00

2.75% below SBAR

with monthly

rests

See Note 2010-11 Rs. 82.50 Million 2

WORKING CAPITAL

State Bank of India (C.C) 380.87 194.91 0.00 0.00 0.00 0.00

1.25% below SBAR

with monthly

rests See Note On

Demand

State Bank of India (Buyer's Credit) 173.87 0.00 0.00 0.00 0.00 0.00

Linked with

LIBOR See Note On

Demand

TOTAL 1252.23 897.88 1224.16 750.00 0.00 0.00

1. The above facility from State Bank of India, are secured by way of mortgage of immovable properties are located at Survey No 644 village: Vandhiya, tal: Bhachau, Dist: Kutchh, admeasuring 155 acres 29 Gs (ht.64-60-84) together with all buildings and structures constructed or erected thereon and all plant & machinery attached to the earth permanently fastened to anything attached to the earth both present and future and hypothecation of entire assets of the company.. 2. The above facilities are also secured by personal guarantee of Mr. J O. Patel and Mrs. M. J. Patel. 3. Temporary O.D. from State Bank of Saurashtra in current A/c is shown under the head secured loan in Annual Report but same is classified under the head Cash/Bank for restated purpose.

146

ANNEXURE: 11: DETAILS OF UNSECURED LOANS

(Rs. In Million)

Particulars As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

Loan From Directors 198.72 285.47 233.32 310.29 0.00 0.00

Loan From Share Holders * 99.67 27.18 142.53 115.01 0.00 0.00

Loan From Financial Institutions 0.00 0.00 0.00 20.26 0.00 0.00

TOTAL 298.39 312.65 375.85 445.56 0.00 0.00

* Vide Annexure 23 (b) on Related Party disclosure Note: The Unsecured loans from Directors and Shareholders are Interest free and same are payable on demand. ANNEXURE: 12: STATEMENT OF INVESTMENT

(Rs in Million)

Particular As at

December

31, 2007

As at

March

31, 2007

As at

March

31, 2006

As at

March

31, 2005

As at

March

31, 2004

As at

March

31, 2003

LONG TERM INVESTMENTS:

National Saving Certificate 0.02 0.02 0.02 0.00 0.00 0.00

SHORT TERM INVESTMENTS:

HDFC Fixed Deposit 10.00 10.00 0.00 0.00 0.00 0.00

SBS Fixed Deposit 0.00 105.00 0.00 0.00 0.00 0.00

TOTAL 10.02 115.02 0.02 0.00 0.00 0.00

ANNEXURE: 13: STATEMENT OF SUNDRY DEBTORS

(Rs in Million)

Particular

As at

December

31, 2007

As at

March

31, 2007

As at

March

31, 2006

As at

March

31, 2005

As at

March

31, 2004

As at

March

31, 2003

Outstanding for More than Six Months 227.31 - - - - -

Outstanding for Less than Six Months

Receivable from Promoter Group - - - - - -

Receivable from Others 703.43 115.20 26.13 - - -

TOTAL 930.74 115.20 26.13 - - -

147

ANNEXURE: 14: STATEMENT OF LOANS AND ADVANCES – RESTATED

(Rs In Million)

Particular As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

(Unsecured, Considered Good unless otherwise stated)

Advances to Suppliers for Goods & Expenses 72.58

29.63

36.00

10.47 - -

Advances recoverable in cash or kind or for value to be received - - 1.21 -

86.95

10.23

Deposits and Balance with Government and other Authorities 437.21

236.29

72.80

54.18 2.31 0.70

Other Deposits 1.53 1.04 0.71 - - 0.01

Advances to Promotor & Promoter Group Company/firm - - - - 6.90 -

a) Ajanta Transistor Clock Mfg. Co. - - - - - 115.18

TOTAL 511.33 266.97 110.73 64.65 96.16 126.12

Note : Advance for capital goods are shown under the head Fixed Assets (Vide Annexure – 25)

ANNEXURE: 15: STATEMENT OF CURRENT LIABILITIES AND PROVISIONS –

RESTATED

(Rs in Million)

Particular As at

December

31, 2007

As at

March

31,

2007

As at

March

31,

2006

As at

March

31,

2005

As at

March

31,

2004

As at

March

31,

2003

CURRENT LIABILITIES:

Sundry Creditors for Goods & Expenses 413.29 70.18 587.46 1.10 2.75 0.08

Sundry Creditors for Capital Goods & Expenditure 5.55 28.01 12.06 36.52 1.83 0.00

Advances from Customers 53.32 50.03 118.59 0.01 0.00 0.00

Statutory Liabilities 40.94 12.54 4.22 0.28 0.04 0.00

Sub Total 513.10 160.75 722.33 37.91 4.62 0.08

PROVISIONS:

Provision for Taxation 200.00 78.08 1.93 0.94 0.60 0.60

Proposed Dividend : Equity Shares 0.00 19.88 5.00 0.50 0.00 0.00

Preference Shares 0.00 16.17 0.00 0.00 0.00 0.00

Tax on Proposed Dividend 0.00 6.12 0.70 0.07 0.00 0.00

Provision for Fringe Benefit Tax 0.80 0.40 0.60 0.00 0.00 0.00

Provision of Excise Duty Included in FG 63.74 32.92 21.62 0.00 0.00 0.00

Sub Total 264.54 153.56 29.85 1.51 0.60 0.60

TOTAL 777.63 314.31 752.18 39.42 5.22 0.68

148

ANNEXURE: 16: STATEMENT OF OTHER INCOME AS RESTATED

(Rs. in Million)

Particular

As at December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

OTHER INCOME 52.75 79.63 1.71 1.83 2.11 0.29

PROFIT AFTER TAX 504.60 335.71 12.63 0.83 0.73 (1.28)

Source of Other Income As at

December 31,

2007

As at

March

31,

2007

As at

March

31,

2006

As at

March

31,

2005

As at

March

31,

2004

As at

March

31,

2003

Related/

Non

Related

to the

Business Activity

Nature

Interest on Unsecured Loan - - - - 0.25 0.26 Non

Related Non

Recurring

Interest on Fixed Deposit 2.18 4.49 0.18 0.25 0.06 - Non

Related Recurring

Rate Difference on Import 9.30 4.43 1.31 0.47 0.03 - Related Recurring

Rate Difference on Export 13.73 - - - - - Related Recurring

Interest on Income Tax Refund - - - - 1.77 0.03 Non

Related Non

Recurring

Export Incentives 16.84 68.47 - - - - Related Non

Recurring

Other Income - 0.16 0.23 1.11 0.00 0.00 Non

Related Non

Recurring

Misc. Income 0.00 0.88 - - - - Non

Related Non

Recurring

Power Generation Income(Net) 10.70 1.21 - - - - Related Recurring

TOTAL 52.75 79.63 1.71 1.83 2.11 0.29

Note to the Statement:

The Classification of recurring/non recurring and related/non-related is based on current operation and

business activity as determined by the management.

149

ANNEXURE: 17: STATEMENT OF DIVIDEND PAID/PROPOSED

Particular As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

Equity Share:

Number of Equity Shares (shares in Million) 39.75 39.75 0.50 0.50 - -

Face Value per Share Rs. 10 10 1000 1000 - -

Paid-up Value per Share Rs. 10 10 1000 1000 - -

Final Dividend Paid / Proposed (Rs in Million) 0.00 19.88 5.00 0.50 - -

Dividend Per Share in Rs. 0.00 0.50 10.00 1.00 - -

Dividend (%) 0.00 5.00 1.00 0.10 - -

Corporate Dividend Tax (Rs in Million) 0.00 3.38 0.70 0.07 - -

Preference Share:

Number of Equity Shares (Shares in Million) 16.17 16.17 0.00 0.00 - -

Face Value per Share Rs. 10 10 - - - -

Paid-up Value per Share Rs. 10 10 - - - -

Final Dividend Paid / Proposed (Rs in Million) 0.00 16.17 0.00 0.00 - -

Dividend Per Share Rs. 0.00 1.00 - - - -

Dividend (%) 0 10 - - - -

Corporate Dividend Tax (Rs in Million) 0.00 2.75 0.00 0.00 - -

ANNEXURE: 18: STATEMENT OF ACCOUNTING RATIO – RESTATED

(Rs. In Million)

Particular

As at December

31,

2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

RETURN OF NET WORTH

Net Profit available for equity shareholders A 504.56 257.40 13.38 0.98 14.85 (1.28)

Net Worth (Exclusive of Pref. Sh. Capital) B 2648.90 2144.34 598.84 588.44 440.08 125.88

Return on Net Worth (%) A/B C 19.05 12.00 2.23 0.17 3.38 (1.02)

NET ASSETS VALUE PER SHARE

Total Assets D 5284.45 3937.60 2958.75 1823.41 445.30 126.56

Total Liabilities * E 2635.55 1793.27 2359.91 1234.98 5.22 0.68

Assets Value (D) - (E) F 2648.90 2144.34 598.84 588.44 440.08 125.88

Less: Share Application Money G 0.00 0.00 0.00 0.00 302.05 0.00

Net Assets Value (F) - (G) H 2648.90 2144.34 598.84 588.44 138.03 125.88

Total No. of Shares (Face Value Rs. 1000 each) I 397500 397500 500000 500000 50000 50000

Net Assets Value Per Share Rs. J 6663.91 5394.56 1197.68 1176.88 2760.55 2517.59

Face Value of the share Rs. K 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00

Total No. of Shares (Face Value Rs. 10 each) L 39750000 39750000 50000000 50000000 5000000 5000000

Net Assets Value Per Share Rs. M 66.64 53.95 11.98 11.77 27.61 25.18

Face Value of the share Rs. N 10.00 10.00 10.00 10.00 10.00 10.00

* Preference share capital in terms of value is considered as a liability for the computation of net worth.

Return on net worth is computed based on following Formula:

Return on Net worth = Net Profit after tax (as restated)

Net Worth (as restated)

150

ANNEXURE: 19: STATEMENT OF EARNING PER SHARE– RESTATED

Particular

As at

December 31,

2007

As at

March 31,

2007

As at

March 31,

2006

As at

March 31,

2005

As at

March 31,

2004

As at

March 31,

2003

Face Value Per Share Rs 1000 1000 1000 1000 1000 1000 1000

Total No. of Shares for the Year 397500 397500 500000 500000 50000 50000

Computation of total Weighted Average Shares 397500 496250 500000 125000 50000 50000

Net Profit after adjustments (Rs. In Million) 504.56 276.31 13.38 0.98 14.85 (1.28)

Less: Preference Share Dividend & dividend Tax 0.00 18.91 0.00 0.00 0.00 0.00

Net Profit Available for Equity Share Holder 504.56 257.40 13.38 0.98 14.85 (1.28)

Earning Per Share (Rs. Per Shares) 1269.35 647.55 26.75 1.95 297.06 (25.65)

Diluted Earning Per Share (Rs. Per Shares) 1269.35 518.70 26.75 7.81 297.06 (25.65)

Face Value Per Share Rs 10 10 10 10 10 10 10

Total No. of Shares for the Year 39750000 39750000 50000000 50000000 5000000 5000000

Computation of total Weighted Average Shares 39750000 49625000 50000000 12500000 5000000 5000000

Net Profit after adjustments (Rs. In Million) 504.56 276.31 13.38 0.98 14.85 (1.28)

Less: Preference Share Dividend & dividend Tax 0.00 18.91 0.00 0.00 0.00 0.00

Net Profit Available for Equity Share Holder 504.56 257.40 13.38 0.98 14.85 (1.28)

Earning Per Share (Rs. Per Shares) 12.69 6.48 0.27 0.02 2.97 (0.26)

Diluted Earning Per Share (Rs. Per Shares) 12.69 5.19 0.27 0.08 2.97 (0.26)

Note to the Statement:

1. Earning per Share Calculation given on face value @ Rs.1000/- per share and

Face Value @ Rs.10/- per share.

2. EPS calculation is as per the Accounting Standard 20 on “Earning per Share” issued by the

institute of Chartered Accountant of India. 3. Ratios are computed based on the restated financial statement.

Formula:

EPS (Rs.) = Net Profit after tax (as restated) available to equity Shareholders

Total number of Equity Shares for the year

Diluted EPS (Rs.) = Net Profit after tax (as restated) available to Equity shareholders

Weighted average No. of Equity Shares outstanding during the year

151

ANNEXURE: 20: CAPITALISATION STATEMENT – RESTATED

(Rs. In Million)

PARTICULARS As at

December 31,

2007

As at March

31,

2007

Post Issue Estimates*

Short Term Debt 554.73 233.48 [ ● ]

Long Term Debt 697.49 702.98 [ ● ]

Total Debts (i) 1252.23 936.46 [ ● ]

Shareholder's Funds

Share Capital 559.15 559.15 [ ● ]

Reserve & Surplus 2251.40 1746.84 [ ● ]

Total Shareholder's Funds (ii) 2810.55 2305.99 [ ● ]

Total Capitalisation 4062.78 3242.45 [ ● ]

Short Term Debt / Shareholder's Funds 0.2: 1 0.1: 1

Long Term Debt / Shareholder's Funds 0.25: 1 0.3: 1

Note 1: the post issue Capitalisation can not be determined till the completion of the book building process.

Note 2: Short Term debts are repayable within next one year.

* The statement has been prepared as per the summary statement of Assets & Liabilities, as restated.

Notes to the Statement:

1. Long term Debt/short term debt to Equity ratio is calculated as per the following formula

= Long term Debt

Share holders fund

= Short term debt

Share holders fund

152

ANNEXURE: 21: STATEMENT OF CONTIGENT LIABILITIES

(Rs. in Million)

Particular

As at December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

Letter of Credit opened and outstanding

not provided for

LC in US$ 9.02 3.11 0.59 0.04 0.03 0.00

Conversion in to Indian Rupees * 359.56 138.44 26.46 1.61 1.41 0.00

LC in Euro 0.00 0.00 0.00 0.12 0.05 0.00

Conversion in to Indian Rupees * 0.00 0.00 0.00 6.72 2.89

LC in INR 76.65 143.13 0.00 0.00 0.00 0.00

Sub Total 436.21 281.56 26.46 8.33 4.30 0.00

Contingent liability nor Provided for in respect of Disputed demand of Income tax department, Assessment order dated December 12, 2006 for the A.Y. 2000-01. 6.24 6.24 0.00 0.00 0.00 0.00

Sub Total 6.24 6.24 0.00 0.00 0.00 0.00

TOTAL 442.45 287.80 26.46 8.33 4.30 0.00

* Conversion in to Indian Rupees @ Custom Rate prevailing as on 31st March and Period Ended on December 31, 2007

153

ANNEXURE: 22: TAX SHELTER STATEMENT

(Rs. in Million)

PARTICULARS

As at Decemb

er 31,

2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

Net Profit (loss) before Tax and Exceptional

A 744.27 512.66 22.96 1.13 0.80 -1.28

Income Tax Rates Applicable B 33.99% 33.66% 33.66% 36.59% 36.59% 36.59%

(Including Surcharges & Ed. Cess)

Adjustments

Permanent Differences

Expenses Disallowed/Exemptions 1.86 1.28 2.45 0.01 0.13 0.00

Donation u/s 80G 0.00 3.12 0.00 0.00 0.00 0.00

Weighted Deduction under chapter VI - A 0.00 -1.57 0.00 0.00 0.00 0.00

Total Permanent Differences C 1.86 2.83 2.45 0.01 0.13 0.00

Timing Differences

Difference between Book and Tax Depreciation

-114.35 -182.00 -138.40 0.00 -0.13 0.00

Adjustment of brought forward loss 0.00 -112.99 0.00 -0.28 -1.00 0.00

Total Timing Difference D -114.35 -294.99 -138.40 -0.28 -1.14 0.00

Net Adjustments (C+D) E -112.48 -292.16 -135.95 -0.27 -1.00 0.00

Net taxable Income (A+E) F 631.79 220.50 -112.99 0.86 -0.20 0.00

Tax At Normal Income Tax Rates G 189.54 66.15 0.00 0.30 0.00 0.00

Less: Tax Credit U/s 115 - JAA 0.00 1.10 0.00 0.00 0.00 0.00

Net Tax at Normal Income Tax Rates (a) 189.54 65.05 0.00 0.30 0.00 0.00

Surcharge There on (b) 18.95 6.50 0.00 0.01 0.00 0.00

Educational Cess on (Tax + Surcharge) (c) 6.25 1.43 0.00 0.01 0.00 0.00

Total Tax As per Normal Income Tax

Rates(a+b+c) H 214.74 72.98 0.00 0.32 0.00 0.00

Minimum Alternative Tax (MAT)

Book Profit (as per IT Return) 704.60 413.21 14.69 1.13 0.00 0.00

Rates Applicable U/s 115JA/JB(%) (Including Surcharge if Applicable)

10.00% 10.00% 8.42% 7.50% 7.50% 7.50%

Tax at MAT Rates I 79.83 46.36 1.24 0.10 0.00 0.00

154

Tax Payable (Higher of H or I) J 214.74 72.98 1.24 0.32 0.00 0.00

Add: Interest U/s. 234 0.00 3.41 0.17 0.03 0.00 0.00

Net Tax Payable K 214.74 76.39 1.40 0.34 0.00 0.00

Total Tax Provisions at normal income tax rates for the year (E)

L 214.74 76.39 1.40 0.34 0.00 0.00

Tax Provision as per Books M 200.00 77.50 2.00 0.30 0.07 0.00

Excess/(Shortfall) (M - L) N -14.74 1.11 0.60 -0.04 0.07 0.00

Computation of Fringe Benefits and

Tax Thereon

Total Value of Fringe Benefit Tax 1.74 0.46 0.47 0.00 0.00 0.00

Fringe Benefit Tax Payable (Including

Tax) O 0.59 0.16 0.16 0.00 0.00 0.00

Provision for Fringe Benefit Tax P 0.80 0.40 0.60 0.00 0.00 0.00

Excess/(Shortfall) (P - O) Q 0.21 0.24 0.44 0.00 0.00 0.00

Total Excess/(Shorfall) (Q+N) R -14.54 1.35 1.04 -0.04 0.07 0.00

* Due to loss incurred during the financial year 2002-03, no provision for the tax was Created by the

company.

155

ANNEXURE: 23: STATEMENT OF RELATED PARTY TRANSACTIONS

(a) Name of Related Parties and Description of Relationship:

Sr.

No. Nature of Relationship Name of Related Party

1 Subsidiary Companies No Subsidiary Company

2 Associates Companies / Enterprise M/s. Ajanta Transistor Clock Manufacturing Co.

M/s. Ajanta Infra Projects Pvt. Ltd.

M/s. Ajanta Limited

M/s. Orpat Industries Ltd.

M/s. Ajanta Energy Pvt. Ltd.

3 Key Management Personnel Mr. Odhavjibhai R. Patel (Chairman)

Mr. Jaysukh O. Patel (Managing Director)

Mr. Jayesh N. Sheth (Director)

Mr. Chitan J. Patel (Director)

Mrs. Mrudula J. Patel (Director) *

Mr. Pravinbhai O. Patel (Director)*

Mrs. Vanitaben P. Patel (Director)*

Mr. Navil P. Patel (Director)*

4 Relative of Key Management Personnel Mr. Ellis J. Patel (Shri JOP's Daughter)

Odhavjibhai R. Patel (Shri JOP's Father)

Pravinbhai O. Patel ((Shri JOP's Brother)

Mr. Vijesh N. Sheth (Shri JNS's Brother)

* The following Directors are resigned

Sr. No.

Name Date of Resignation

1 Mrs. Mrudula J. Patel September 29, 2007

2 Mr. Pravinbhai O. Patel September 29, 2007

3 Mrs. Vanitaben P. Patel September 27, 2007

4 Mr. Navil P. Patel September 27, 2007

*

The following person are appointed as a

Director

Sr.

No. Name Date of Appointment

1 Nemi Chand Jain September 29, 2007

2 Jitendra T. Patel January 01, 2008

3 Tushar Udani January 01, 2008

4 Jitendra Jain January 01, 2008

156

b) Details of transactions with related parties

(Rs. in Million)

Particular As at

December

31, 2007

As at March

31,

2007

As at March

31,

2006

As at March

31,

2005

As at March

31,

2004

As at March

31,

2003

A. Managerial Remuneration:

Mr. Jaysukh O. Patel 15.00 4.00 1.34 0.50 0.00 0.00

Mrs. Mrudula J. Patel 0.60 1.38 1.34 0.50 0.00 0.00

Mr. Odhavji R. Patel 0.50 1.38 1.34 0.50 0.00 0.00

B. Purchase of Goods( Incl. Capital Goods)

Ajanta Limited [Previous Known Ellora Time Ltd.] 0.00 0.39 0.49 3.94 0.00 0.00

Ajanta Transistor Clock Manufacturing Co. 0.00 0.00 0.00 12.50 0.00 0.00

C. Sales of Goods

Ajanta Transistor Clock Manufacturing Co. 1.29 0.26 0.00 0.00 0.00 0.00

Ajanta Limited [Previous Known Ellora Time Ltd.] 0.00 0.23 0.00 0.00 0.00 0.00

D. Service Received

Ajanta Transistor Clock Manufacturing Co. 0.00 0.00 51.11 0.00 0.00 0.00

E. Loans Taken/Repaid and Interest on Loan

(From Directors & Inter Company Deposit)

From Directors & Share Holders:

1. Mr. Jaysukh O. Patel

Opening Balance 107.81 164.90 201.65 0.00 0.00 0.00

Loan Taken 35.04 181.11 22.85 201.85 0.00 0.00

Loan Rapaid 61.40 238.20 59.60 0.20 0.00 0.00

Interest

Closing Balance 81.45 107.81 164.90 201.65 0.00 0.00

2. Mr. Chintan J. Patel

Opening Balance 108.59 91.62 51.37 0.00 0.00 0.00

Loan Taken 4.52 42.08 40.25 51.37 0.00 0.00

Loan Rapaid 0.03 25.10 0.00 0.00 0.00 0.00

Interest

Closing Balance 113.09 108.59 91.62 51.37 0.00 0.00

3. Mrs. Mrudula J. Patel

Opening Balance 66.65 67.63 68.16 0.00 0.00 0.00

Loan Taken 5.26 24.30 0.42 68.16 0.00 0.00

Loan Rapaid 2.90 25.27 0.96 0.00 0.00 0.00

Interest

Closing Balance 69.01 66.65 67.63 68.16 0.00 0.00

4. Mr. Odhavji R. Patel

Opening Balance 2.41 0.80 0.47 0.00 0.00 0.00

Loan Taken 1.79 1.62 0.87 0.47 0.00 0.00

Loan Rapaid 0.02 0.00 0.54 0.00 0.00 0.00

Interest

Closing Balance 4.19 2.41 0.80 0.47 0.00 0.00

5. Ms. Ellis J. Patel

Opening Balance 23.56 40.53 40.44 0.00 0.00 0.00

Loan Taken 3.42 8.08 0.09 40.44 0.00 0.00

Loan Rapaid 0.00 25.05 0.00 0.00 0.00 0.00

157

Interest

Closing Balance 26.98 23.56 40.53 40.44 0.00 0.00

6. Ms. Jaysukh O. Patel (HUF)

Opening Balance 3.46 10.23 23.04 0.00 0.00 0.00

Loan Taken 0.37 3.23 0.00 43.04 0.00 0.00

Loan Rapaid 0.30 10.00 12.81 20.00 0.00 0.00

Interest

Closing Balance 3.53 3.46 10.23 23.04 0.00 0.00

7. Ms. Odhavji R. Patel (HUF)

Opening Balance 0.15 0.15 0.15 0.00 0.00 0.00

Loan Taken 0.00 0.00 0.00 0.15 0.00 0.00

Loan Rapaid

Interest

Closing Balance 0.15 0.15 0.15 0.15 0.00 0.00

8. Mr. Pravin O. Patel

Opening Balance 0.00 0.00 40.00 0.00 0.00 0.00

Loan Taken 0.00 0.00 0.00 166.98 0.00 0.00

Loan Rapaid 0.00 0.00 40.00 126.98 0.00 0.00

Interest

Closing Balance 0.00 0.00 0.00 40.00 0.00 0.00

9. Ajanta Transistor Clock Mfg. Co.

Opening Balance 0.00 0.00 0.00 0.00 0.00 0.00

Loan Taken 0.00 0.00 0.00 716.90 0.00 0.00

Loan Rapaid 0.00 0.00 0.00 719.09 0.00 0.00

Interest 0.00 0.00 0.00 2.19 0.00 0.00

Closing Balance 0.00 0.00 0.00 0.00 0.00 0.00

F. Dividend Paid

On Equity Share:

Mr. Jaysukh O. Patel 0.00 9.37 2.55 0.10 0.00 0.00

Mrs. Mrudula J. Patel 0.00 2.76 0.75 0.00 0.00 0.00

Ms. Jaysukh O. Patel (HUF) 0.00 0.37 0.10 0.01 0.00 0.00

Mr. Chintan J. Patel 0.00 2.02 0.55 0.01 0.00 0.00

Ms. Ellis J. Patel 0.00 0.92 0.25 0.01 0.00 0.00

Mr. Pravin O. Patel 0.00 1.38 0.38 0.00 0.00 0.00

Mrs. Vanita P. Patel 0.00 1.38 0.38 0.00 0.00 0.00

Mr. Odhavji R. Patel 0.00 0.18 0.05 0.35 0.00 0.00

Mr. Jayesh N. Sheth 0.00 1.25 0.00 0.00 0.00 0.00

Mr. Vijesh N. Sheth 0.00 0.25 0.00 0.00 0.00 0.00

On Preference Share:

Mr. Jaysukh O. Patel 0.00 8.67 0.00 0.00 0.00 0.00

Mr. Chintan J. Patel 0.00 2.50 0.00 0.00 0.00 0.00

Mrs. Mrudula J. Patel 0.00 2.50 0.00 0.00 0.00 0.00

Ms. Ellis J. Patel 0.00 2.50 0.00 0.00 0.00 0.00

Note to the Statement: 1. Related party information is as per the Accounting Standard – 18 on “Related Party Disclosures”

issued by the Institute of Chartered Accountant of India.

158

ANNEXURE: 24: STATEMENT OF SEGMENT REPORTING AS RESTATED

(Rs. In Million)

As at

December

31,

2007

As at

March

31,

2007

As at

March

31,

2006

As at

March

31,

2005

As at

March

31,

2004

As at

March

31,

2003

Sr.

No PARTICULARS

Amount Rs. Amount

Rs.

Amount

Rs.

Amount

Rs.

Amount

Rs.

Amount

Rs.

I REVENUE

Net Sales

Ceramic Division 1461.91 1339.61 70.87 - - -

Electric Division 1770.22 1814.91 594.86 - - -

ACP Division 31.98 0.09 - - - -

E-Bike Division 29.66 0.26 - - - -

Head Office - - - - - -

Sub Total 3293.77 3154.88 665.74 - - -

Other Income

Ceramic Division 6.30 4.93 1.54 - - -

Electric Division 33.36 69.01 - - - -

ACP Division 0.18 0.00 - - - -

E-Bike Division 0.03 - - - - -

Head Office 12.88 5.69 0.18 - - -

Sub Total 52.75 79.63 1.71 - - -

Increase Decrease in Stock

Ceramic Division 119.06 94.79 163.06 - - -

Electric Division 135.42 (22.74) 66.99 - - -

ACP Division 50.05 - - - -

E-Bike Division 3.09 - - - -

Sub Total 307.62 72.06 230.05 - - -

Total Segment Revenue 3654.14 3306.57 897.50 - - -

II Expenditure

Ceramic Division

Cost of Production 1150.31 1033.69 196.16 - - -

Administrative & Selling Exp. 219.53 214.36 16.32 - - -

Financial Charges 50.37 74.10 23.65 - - -

Depreciation 63.67 88.86 29.80 - - -

Sub Total 1483.89 1411.01 265.93 - - -

159

As at

December

31, 2007

As at

March

31, 2007

As at

March

31, 2006

As at

March

31, 2005

As at

March

31, 2004

As at

March

31, 2003

Sr.

No PARTICULARS

Amount Rs. Amount

Rs.

Amount

Rs.

Amount

Rs.

Amount

Rs.

Amount

Rs.

Electric Division

Cost of Production 1159.57 1136.45 447.70 - - -

Administrative & Selling Exp. 119.88 210.58 153.76 - - -

Financial Charges 16.30 25.58 3.84 - - -

Depreciation 9.13 9.37 3.31 - - -

Sub Total 1304.88 1381.98 608.61 - - -

ACP Division

Cost of Production 66.60 0.02 - - - -

Administrative & Selling Exp. 8.05 0.23 - - - -

Financial Charges 2.23 0.46 - - - -

Depreciation 0.49 0.19 - - - -

Sub Total 77.37 0.90 - - - -

E-Bike Division

Cost of Production 24.32 (0.00) - - - -

Administrative & Selling Exp. 4.12 0.00 - - - -

Financial Charges 2.12 0.01 - - - -

Depreciation 0.29 - - - - -

Sub Total 30.85 0.01 - - - -

Head Office

Cost of Production - - - - - -

Administrative & Selling Exp. - - - - - -

Financial Charges - - - - - -

Depreciation 12.88 - - - - -

Sub Total 12.88 - - - - -

Total Segment Expenditure 2909.87 2793.91 874.55

III Segment Result - - -

Ceramic Division 103.39 28.32 (30.46) - - -

Electric Division 634.12 479.20 53.25 - - -

ACP Division 4.84 (0.81) - - - -

E-Bike Division 1.93 0.24 - - - -

Head Office - 5.69 0.18 - - -

Total Segment Result 744.27 512.66 22.96 - - -

Note to the Statement:

1. Segment Report is prepared as per the Accounting Standard 17 on “Segment Report “issued by

the Institute of Chartered Accountant of India.

160

ANNEXURE 25 :SUMMARY STATEMENT OF FIXED ASSETS AS RESTATED (Rs. in

Million)

Particular

As at

Decembe

r 31,

2007

As at

March

31,

2007

As at

March

31,

2006

As at

March

31,

2005

As at

March

31,

2004

As at

March

31,

2003

Opening Balance (A) 2444.44 2046.85 1113.98 7.22 0.00 0.00

Addition (B) 116.22 397.59 948.80 1106.76 9.96 0.00

Deduction (C) 0.00 0.00 15.92 0.00 2.74 0.00

Sub Total (A+B-C) (D) 2560.66 2444.44 2046.85 1113.98 7.22 0.00

Add: Work in Progress (E) 22.20 4.95 31.98 362.59 14.42 0.00

GROSS BLOCK (D+E) (G) 2582.86 2449.39 2078.83 1476.57 21.64 0.00

Less: Depreciation (H) 217.99 131.54 33.11 0.00 0.00 0.00

Net Block (G-H) (I) 2364.86 2317.85 2045.72 1476.57 21.64 0.00

Add: Incidental Expenditure (J) 0.00 0.00 0.00 40.48 2.00 0.00

Add: Capital Advances (K) 4.29 62.96 71.61 122.11 313.73 0.00

NET TOTAL ASSETS (I+J+K) (L) 2369.16 2380.81 2117.33 1639.16 337.37 0.00

161

ANNEXURE 26: EXPORT OBLIGATION

(Rs. in Million)

Sr.

N

o.

Licence No.

Date

CIF Valu

e as

per

Licen

ce (In

USD)

Duty Saved

Openin

g

Balance

(In Rs.)

Duty Saved

Utilised

for

Import

Closing Balance

(In Rs.)

Export Obligati

on

(Duty

Save x

8)

Export Obligati

on In

Rs.

Export Obligati

on In %

Port of Registrati

on

1 2430000

284 July 23,

2004 2.14 35.01 28.59 6.42 228.73 51.81 22.65 Mundra

2 2430000

260 May 07,

2004 5.87 92.55 42.17 50.38 337.32 1.44 0.43 Kandla

3 2430000

255 April 16,

2004 4.22 24.43 16.69 7.74 133.56 153.90 115.23 Kandla

4 2430000

427 May 16,

2004 0.04 0.54 0.52 0.02 4.19 2.16 51.50 Kandla

5 2430000

263 May 12,

2004 4.72 72.16 46.12 26.04 368.95 366.16 99.24 Kandla

6 2430000

258 April 24,

2004 4.20 69.52 69.52 0.00 556.13 562.43 101.13 Kandla

7 2430000

327 November 07, 2004

0.07 1.18 1.11 0.06 8.90 8.20 92.15 Kandla

8 2430000

362 December 29, 2004

0.06 0.98 0.95 0.02 7.61 6.22 81.81 Kandla

9 2430000

259 May 05,

2004 6.32 96.74 39.53 57.22 316.20 0.00 0.00 Kandla

10 2430000

529 February 17, 2006

0.57 7.62 7.38 0.24 59.06 56.88 96.31 Kandla

11 2430000

385 February 22, 2005

16.84 16.84 3.87 12.96 30.98 0.00 0.00 Kandla

12 2430000

277 September 09, 2004

2.29 36.31 15.73 20.58 125.82 0.00 0.00 Mundra

Total 47.34 453.86 272.18 181.68 2177.44 1209.20 55.53

162

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS ON A CONSOLIDATED BASIS

You should read the following discussion of our financial condition and results of operations together with

our audited consolidated financial statements as of and for the three years ended March 31, 2007, March

31, 2006 and March 31, 2005 and the nine-month period ended December 31, 2007, prepared and

presented in accordance with Indian GAAP and included elsewhere in this Draft Red Herring Prospectus.

Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the 12-

month period ended March 31 of that year.

Introduction

Overview

We are one of India’s leading manufacturers of compact fluorescent lamps (“CFLs”) and vitrified tiles. We also manufacture aluminum composite panels (“ACPs”) and have recently commenced the production of battery operated electromotive bikes (“E-Bikes”). We manufacture all our products in a single integrated facility located on approximately 181 acres in Samakhayali village in Bhachau taluka in the district of Kutch in Gujarat. We market our products under the “OREVA” brand name. Our company philosophy is to provide quality products at affordable prices for the mass market.

Our total revenues for the nine months ended December 31, 2007 and the fiscal years ended March 31, 2007 and March 31, 2006 were Rs. 3,654.14 million, Rs. 3,306.57 millions and Rs. 897.50 million, respectively. Export sales for the nine months ended December 31, 2007 and the fiscal year ended March 31, 2007 were Rs. 775.24 million and Rs. 448.97 million, respectively. Our profit after tax for the nine months ended December 31, 2007 and the fiscal years ended March 31, 2007 and March 31, 2006 were Rs. 504.56 million, Rs. 276.31 millions and Rs. 13.38 millions, respectively.

Factors Affecting Our Results of Operations

Various factors have affected our results of operations in the past and may continue to do so in the future, including:

Raw Materials Availability - Adequate availability of key raw materials such as clay, particularly Ukraine clay for our vitrified tiles, glass tubes and electrical components for our CFLs and coal for our gasification plant at the right prices and at the time required by us is crucial for our operations. Any disruption in the supply, or increase in the costs, of such materials could affect our ability to reach our consumers with a successful value proposition and satisfy existing demand.

Revenue mix - Our net revenue and gross profit are affected by our product sales mix. Over the last two years, CFL sales, which have higher profit margins than our other businesses, have increasingly constituted a significantly greater portion of our total net revenue.

Capacity and Capacity Utilization – We have an integrated manufacturing facility. We have built up capacities to manufacture our products. It becomes extremely important for us to optimally utilize the installed capacity. We will incur substantial losses in the event that we are not able to fully utilize the available capacity.

Our ability to achieve operational efficiency and low cost of production: Our cost of production is dependent on the efficiency of the operations of our various production divisions independently as well as jointly, which can improve specific consumption of energy, raw materials and manpower, each of which is a significant factor influencing the cost of production, and thereby affecting our operational and financial performance.

Establishment of new business - We have established a manufacturing facility to produce our own E-bikes which are specifically designed and adapted for the Indian market. In addition, during Fiscal 2009, we expect to complete our backward integration of CFL production by building a manufacturing facility that will allow us to produce, rather than purchase, glass tubes for CFLs. As we pursue business opportunities in new and existing markets, we anticipate that significant investments and costs will be

163

related to the development of such opportunities. We may incur or assume unanticipated liabilities, losses or costs associated with the establishment of such businesses acquired. Any failure by us to pursue and execute new business opportunities successfully, or any if our customers do not accept our proposed customized E-bike designs, our net sales will be adversely affected, which may result in financial losses, and could inhibit growth.

Taxation on our Products - Our products are subject to levy of taxes such as sales tax, value added tax, excise duty and service tax. Our current indirect taxation profile is based on current tariff classifications and the current tariff rates. Classifications or tariff rates or both may change. If such direction of change is adverse, our results of operations may be correspondingly affected. Any changes in government policies impacting such incentives could have a material adverse impact on our results of operations in the future.

Competition – There is increasing competitive pressure in most segments of the industry in which we operate, which makes it challenging for us to achieve our goal of increasing our market share and broadening our consumer base. Increasing competitive pressure may also impact our ability to improve realisations from our products and services. Our need to respond to competitive business strategies adopted by other players may increase and consequently our costs, including advertising and sales promotion expenses, may increase significantly.

Regulatory Changes - Regulatory changes can have a bearing on our business especially in respect of new business lines and new business opportunities. Changes in tax incentives in India or our other geographic markets could affect our results or operations.

Macroeconomic Factors - Macroeconomic factors such as a recession or any other economic instability, political uncertainty, social upheavals or acts of God affecting India or our other geographic markets could influence our performance. Further, fluctuations in crude oil prices, rising interest rates and inflation could affect our margins.

Significant Accounting Policies

Our financial statements prepared in accordance with Indian GAAP and the accompanying notes and significant accounting policies thereto included in this Draft Red Herring Prospectus include information that is relevant to this discussion and analysis of our financial condition and results of operations. The preparation of our financial statements in conformity with Indian GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenditures, and the related disclosure of cash flows and contingent liabilities, among others. Certain key accounting policies relevant to our business and operations have been described below. For a detailed description of our significant accounting policies, see Annexure 5 of the restated financial statements under Indian GAAP included in this Draft Red Herring Prospectus.

Basis of Preparation

The Financial statements have been prepared to comply in all material respects with the Accounting Standard (AS) 25, Interim Financial Reporting, issued by the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 1956 (Act), guidelines issued by Reserve Bank of India (RBI) to extent applicable to the Company. The financial statements have been prepared under the historical cost convention on an accrual basis.

Fixed Assets

1. Fixed assets are stated at cost of acquisition or construction less accumulated depreciation, including financial cost, until such assets are ready for their intended use.

2. Fixed assets in the course of work-in-progress for production or administrative purposes are carried at cost less any impairment loss.

Cost includes land and building improvement costs, related acquisition expenses and construction costs incurred during the period of construction. Depreciation of these assets, on the same basis as the other property assets, commences when the assets are ready for their intended use.

164

3. The exchange rate gain or loss relating to acquisition of capital assets is adjusted to the cost of fixed assets.

4. The cost of self-constructed assets includes cost of materials plus any other directly attributable costs of bringing the assets to working condition for its intended use.

Impairment of Assets

The Company evaluates impairment losses on its fixed assets whenever events or changes in circumstances indicate that carrying amounts on these losses may not be recoverable. If such assets are considered to be impaired the impairment loss is then recognized for the amount by which the carrying amount of the assets exceeds its recoverable amount, which is the higher of an asset’s net selling price and value is use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.

Depreciation

Except for freehold land and capital work-in-progress, depreciation is charged on a straight line basis as per rate prescribed under schedule XIV of the Companies Act 1956.

Investments

Long term investments are stated at cost. Interest on investment is accounted for on an accrual basis for the period to which it relates. At the time of maturity amounts are first adjusted against accrued interest and balance is recognised as profit on investment.

Inventories

Inventories are stated at the lower of cost or net realizable value as per Accounting Standard – 2 and as per values based on certifications by the Company's management.

1. Cost of raw material is valued at cost on a first-in-first-out basis.

2. Stores and consumables are valued at cost or net realizable value whichever is less.

3. Finished goods are valued at cost or net realizable value whichever is lower. Cost comprises direct materials and, where applicable, direct labour costs, those overheads that have been incurred in bringing the inventories to their present location and condition and excise duty payable on finished goods.

4. Work in progress is valued at cost or net realizable value whichever is less. Cost comprises direct materials and appropriate portion of direct labour costs, manufacturing overheads and depreciation.

Revenue Recognition

1. In appropriate circumstances, revenue is recognised on accrual basis when no significant uncertainty as to determination or realization exists.

2. Sales:

(a) Domestic Sales are accounted for exclusive of excise, net of sales tax, sales return and rate difference if any. Exports sales are accounted on the basis of dates of bills of lading for each sale and include exchange rate differences arising in the export sales transaction. Sales do not include inter-division transfers of finished goods and other materials.

(b) Sale of power is accounted on the basis of power units sold to other divisions of the Company.

3. Accounting for claims: Insurance claims are recognised on the basis of the approval of the claim by the appropriate insurance company.

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4. Export Benefits: Incomes in respect of the Duty Drawback and Duty Entitlement Pass Book Scheme in respect of exports made during the year are accounted on accrual basis.

Foreign Currency Transactions

1. Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

2. Conversion: Foreign currency monetary items are converted using the closing rate. Non – monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

3. Exchange Differences: Exchange differences arising on the settlement of monetary items rates different from those at which they where initially recorded during the period, or reported in previous financial statements, are recognized as income or as expenses in the period in which they arise.

Borrowing Costs

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets, wherever applicable. A qualifying asset is one that necessarily takes a substantial period of time to be prepared for its intended use. All other borrowing costs are charged to the revenue account. Capitalisation of borrowing cost is suspended when active development is interrupted.

Prior Year Expenses and Income

Transactions pertaining to periods prior to the current accounting year are accounted for through prior year adjustments, if any.

Research and Development Expenses

Revenue expenditure pertaining to research and development is normally charged to the profit and loss account.

Retirement Benefit

Company contributions paid / payable during the year to our provident fund, ESI and labour welfare funds are accounted on accrual basis and charged to the profit and loss account.

The gratuity is accounted for as and when paid on the retirement / resignation of the employee as per the Payment of Gratuity Act. No provision for gratuity is made for a particular accounting year.

Excise Duty

Excise duty including (education cess) on finished goods are shown separately in the manufacturing and other expenses account and included in the valuation of finished goods.

CENVAT

CENVAT Credit of raw materials and other consumables is accounted at the time of purchase and the same is being adjusted to the cost of raw materials and other consumables.

Taxation

Income tax is comprised of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax are measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act of 1961. Deferred income taxes reflect the impact of current year timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in

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the income statement in the period of enactment of the change. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the Company has carry-forward unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profit.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Miscellaneous Expenditure

1. Preliminary expenses are amortized in the year when production begins.

2. Share issue expenses incurred are amortized in the year in which such expense is incurred.

EPS

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

Contingent Liabilities and Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligator as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed below. Contingent assets are neither recognized nor disclosed in the financial statements.

Results of Operations

Total Income

Our total income consists of the following:

Income from Operations

We derive most of our income from the sale of manufactured products, primarily compact fluorescent lamps, vitrified tiles and aluminum composite panels. We began manufacturing CFLs and vitrified tiles in Fiscal 2006, with an increase in production in Fiscal 2007. We began manufacturing ACPs in the nine months ended December 31, 2007. In addition, in Fiscal 2007 and nine months ended December 31, 2007, we assembled a small number of E-bikes on a trial basis. These E-bikes were assembled by us from parts manufactured by third parties. We determined that going forward it would be in our best interests to manufacture E-bikes in-house. For Fiscal 2006 and 2007, and the nine months ended December 31, 2007, respectively, income from operations accounted for 74.18%, 95.41% and 90.14% of our total income, respectively.

In addition, income from operations also includes the excise duty refund granted to us under the Kutch Area Rehabilitation Package Scheme declared by the Central Government in order to boost the economy of the affected region after an earthquake in the Kutch area in 2001. Pursuant to this scheme, any eligible business units that are set up in the specified area in the Kutch region are entitled, to certain benefits including exemption from excise duty for goods manufactured in the region. Under this scheme, the net excise duty paid on the clearance of the goods after adjusting the MODVAT credit on inputs is refunded to the manufacturers by the excise department. The refunds pertain basically to unutilised input or input services credit that is available to exporters. Input or input services credit arise when excise duty or service

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tax paid on the inputs is in excess of any other levies payable by the exporter on finished product or services

We account for such excise duty refund as part of our income from operations and it constituted 0.90%, 6.48% and 6.55% of the total income from operations in Fiscal 2006, Fiscal 2007, and the nine months ended December 31, 2007 respectively.

Trading Activity

Between Fiscal 1998 and Fiscal 2005, we did not operate as a manufacturing company and instead earned our revenues from the sale of traded products, comprising mainly electronics products and components.

Trading accounted for 94.03% of our total income in Fiscal 2005. Since establishing our manufacturing businesses in Fiscal 2006, we no longer undertake any trading activity.

Other Income

Other income accounted for 0.19%, 2.41% and 1.44% of total income in Fiscal, 2006 and 2007, and the nine months ended December 31, 2007, respectively. Our other income mainly comprises of export incentives under the Duty Draw Back Refund Scheme. The Duty Drawback Scheme enables exporters to obtain a refund of customs duty paid on imported goods where those goods will be treated, processed or incorporated in other goods for export; or are exported unused since importation. The export incentives constituted 31.93% and 85.98% of our other income in Fiscal 2007 and the nine months ended December 31, 2007, respectively.

Other income also comprises interest on unsecured loans, interest on fixed deposits and interest on income tax refunds along with amounts relating to rate differences on imports, export incentives, refunds on excise duty paid and miscellaneous income.

Increase / Decrease in Stock

This comprises the change in our balance of stock of manufactured goods during the period.

Income from Operations by Division

The following table sets out the breakup of our total income from operations by operating division for the nine months ended December 31, 2007 and Fiscal 2007 and 2006:

Nine months ended

December 31, 2007

Fiscal 2007 Fiscal 2006

Rs. Millions

Operating Division Revenue

CFL Division 1,770.22 1,814.91 594.86

Vitrified Tiles Division 1,461.91 1,339.61 70.87

ACP Division 31.98 0.09 --

E-Bike – trial production 29.66 0.26 --

Total Income from Operations

3,293.77 3,154.87 665.74

We began manufacturing operations in Fiscal 2006, and as such the operating division discussion is not relevant to Fiscal 2005. The total income from operations in Fiscal 2005 was Rs. 28.82 million, representing revenues from our trading activities.

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Income from CFL division: We commenced our CFL Division operation in September 2005. Income from the CFL division accounted for 89.35%, 57.53% and 53.74%, of the income from operations of the Company for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively.

Income from vitrified tiles division: We established our vitrified tiles division in December 2005. Income from our vitrified tiles division accounted for 10.65%, 42.46%, and 44.38%, of the income from operations for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively. The growth of our vitrified tiles division in Fiscal 2007 appears exponential primarily because of the fact that the division only became operational in the last quarter of Fiscal 2006 and did not operate at full capacity in Fiscal 2006.

Income from ACP division: We commenced operations in our ACP Division in April 2007. Income from the ACP division accounted 0.97%, of the income from operations of the Company for the nine months ended December 31, 2007.

Total Income from Operations by Geographical Market

For Fiscal 2007, revenue from our domestic operations and our international operations contributed Rs. 2,705.9 million and Rs. 448.97 million, or 85.77% and 14.23%, of our Income from operations, respectively. Similarly, for the nine months ended December 31, 2007 the revenue from our domestic operations and our international operations contributed Rs. 2,518.53 million and 775.24 million or 76.46% and 23.54% of our income from operations respectively.

We commenced our international operations in Fiscal 2007. Our CFL division contributed a significant portion of our income from international operations; the balance was contributed by our vitrified tiles division. The export of CFL products constituted 96.77% and 98.28% of our total income from international operations based on FOB value of exports in Fiscal 2007, and in the nine months ended December 31, 2007 respectively. Export sales of CFLs are made mainly to the UAE.

Set forth below is a table showing our revenue from domestic operations and international operations and

total revenue the nine months ended December 31, 2007 and Fiscal 2007:

Nine months ended

December 31, 2007

As a % of income

from operations

Fiscal 2007 As a % of income

from operations

Geographic

Segment

Revenue(1)

Domestic 2,518.53 76.46% 2,705.90 85.77%

International 775.24 23.54% 448.97 14.23%

Total 3,293.77 100% 3,154.87 100%

Notes:

1. Segment revenue represents revenue from external customers.

The contribution of export revenues to our income from operations has been increasing. The share of export income was 14.23% in Fiscal 2007 and 23.54% in the nine months ended December 31, 2007. The steady increase in the share of overseas income from operations has been largely achieved through increase in the export sales of our CFL products. We anticipate that this trend will continue in the coming fiscal years.

Our income and expenses for the nine months ended December 31, 2007 and Fiscal year 2007, 2006 and 2005 are summarized below and provided as a percentage of income from operations:

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(Rs in Million)

Nine

months

ended Decembe

r 31,

2007

As a %

of income

from operation

s

Year

ended

March 31, 2007

As a %

of income

from operation

s

Year

ended

March 31, 2006

As a % of

income

from operation

s

Year

ended

March 31, 2005

As a %

of income

from operation

s

Total Income 3,654.14 3,306.57 897.50 30.65

Less: Other Income

52.75 79.63 1.71 1.83

(Inc)/Dec In Stock

307.62 72.06 230.05 0

Income from Operations

3,293.77 100 3,154.88 100 665.74 100 28.82 100

Raw Material Consumed

1,993.11 60.51 1,786.09 56.61 510.95 76.75 28.94 100.42

Employee Cost

137.43 4.17 132.62 4.20 16.81 2.53 0

Power & Fuel 190.47 5.78 172.95 5.48 36.67 5.51 0

Other Manufacturing Cost

79.8 2.42 78.5 2.49 79.44 11.93 0

Selling & Administrative Expenses

351.57 10.67 425.18 13.48 170.09 25.55 0.58 2.01

Total Expenses

2,752.38 83.56 2,595.34 82.26 813.96 122.26 29.52 102.43

EBIDTA (1) 901.76 27.38 711.23 22.54 83.54 12.55 1.13 3.92

EBIDTA as a % of Income From Operations

27.38 22.54 12.55 3.92

Notes:

(1) EBIDTA is defined as earnings before interest, depreciation, taxation and amortization. EBIDTA is

not a recognized measure under Indian generally accepted accounting principles (IGAAP). EBIDTA

is a useful supplementary measure as it provides an indication of cash available for distribution

prior to debt service, capital expenditures, cash income taxes, minority interest and changes in

working capital. EBIDTA should not be construed as an alternative to (i) net income determined in

accordance with IGAAP as an indicator of our performance or (ii) cash flow from operating,

investing and financing activities as a measure of liquidity and cash flow.

The other income together with the net effect of increase /decrease in stock has been taken into

consideration when calculating EBIDTA. For the sake of maintaining parity for comparison, the

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EBIDTA percentages have been computed with respect to the Income from operations. Further, all

the expenses have also been compared to as per percentages to “income from operations”.

The EBIDTA of our key operative segments for Fiscal 2006, Fiscal 2007 and in the nine months ended December 31, 2007 is as follows:

EBIDTA of

our key

operative

segments

Nine months ended

December 31, 2007

Year ended March 31, 2007 Year ended March 31,

2006

Division Amount

(In Million)

% to income from

operations

Amount (In million)

% to income from

operations

Amount (In Million)

% to income from

operations

CFL 659.55 37.26 514.15 28.33 60.4 10.15

Vitrified Tiles

217.43 14.87 196.98 14.70 22.99 32.44

ACP 7.56 23.64 (0.16) - - -

E-bikes 4.34 14.63 0.26 100 - -

Expenses

Cost of Production

Raw Materials Consumed: Cost of materials includes consumption of raw materials and packing material like various plastics and a variety of electronics and electric components in our CFL Division; a variety of clay and chemicals for our Vitrified Tiles Division; aluminium sheets and plastic for our ACP Division; and various plastics and a variety of electronics and electric components for our E-Bike Division. Raw material consumed was 76.75%, 56.61%, and 60.51%, of our income from operations for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively.

Employee Cost: Our employees’ costs include salaries, wages, bonus and gratuity, contribution to provident and other funds and staff welfare scheme expenses for both permanent and contract employees. Employee cost as a percentage of total income has shown an increasing trend over the years. This is attributable to an increase in the number of our employees as our business has grown. Employee costs were 2.52%, 4.20%, and 4.17%, of our income from operations for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively. Our higher staff costs, as a consequence of higher variable pay in Fiscal 2007, relates to our better performance that year. In addition, the costs of attracting and retaining the best talent are rising, and this may continue to push up our employees’ costs in the future.

Power and Fuel Cost: Power and fuel cost relate to the costs of power and fuel used in our manufacturing and other operations. We use coal gas as a fuel for firing our kilns in our vitrified tiles division. We use furnace oil and light diesel oil to power our captive power plant. This plant has a 16MW capacity and is the sole source of power for our entire plant. Power and fuel cost as a percentage of total income has shown an increasing trend over the years due to global increases in the cost of coal and oil. We use furnace oil as fuel in our captive power plant and sized steam coal for our coal gasification plant. Furnace oil and coal are commodities, the prices of which are subject to volatility on world markets. Higher prices for furnace oil and sized steam coal will adversely affect our results of operations and profitability. Power and fuel costs were 5.51%, 5.48%, and 5.78%, of our income from operations for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively.

Manufacturing Cost: Manufacturing costs consists of:

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• repairs and maintenance, which comprises the costs of repairs and maintenance of tools and machinery used in respect of our operations;

• other manufacturing expenses which comprises water charges, charges for freight and transportation, packing material and other miscellaneous factory overheads.

Manufacturing costs were 11.93%, 2.49%, and 2.42%, of our total income for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively. Manufacturing costs in Fiscal 2006 as a percentage of our income from operations were relatively higher since it was the initial period of operations.

Selling, Distribution & Administration Expenses

Administration Expenses: Administration expenses comprise costs associated with our administrative offices and our corporate office, including rent, repairs to buildings, other repairs and other miscellaneous expenses. Administration expenses were 0.73%, 2.24% and 2.20%, of our income from operations for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively.

Selling Expenses: Selling expenses comprises costs associated with the sales of our manufactured goods, mainly expenses such as freight, forwarding and distribution expenses, carrying and forwarding agents’ expenses, redistribution expenses, publicity expenses, sales incentives, sales commissions, storage charges, lease rentals rates and taxes, traveling, insurance, printing, stationary and communication expenses and all expenses relating to sales. Although in absolute terms, selling and distribution expenses have increased in line with the increase in the scale of our operations, in terms of percentage of our income from operations they have reduced due to increases in sales volume. Selling expenses were, 24.41%, 11.24% and 8.47%, of our income from operations for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively.

Depreciation/Amortisation

Generally, depreciation costs increase based on the capital expenditure we incur. For more information on our depreciation policies, please refer to our Significant Accounting Policies above. Depreciation expenses were 4.97%, 3.12%, and 2.62%, of our income from operations for Fiscal 2006 and 2007 and the nine months ended December 31, 2007, respectively.

Our depreciation expenses in the coming years are expected to increase due to ongoing fixed asset additions, such as normal incremental capital expenditure required to be incurred on the ongoing expansion and the capital expenditure that we will incur as per the details mentioned in the section “Objects of the Issue” on page 26 of this Draft Red Herring Prospectus.

Financial Expenses

Finance expenses include interest on loans and other financial charges. Our borrowings increased in Fiscal 2007 and the nine months ended December 31, 2007, primarily due to higher drawdowns of our working facilities with banks.

Preliminary Expenses Written Off

Preliminary expenses written off comprise of registration fees and stamp duty expenses. We wrote off Rs.2.73 million being the entire amount of such expenses in Fiscal. There were no such expenses in Fiscal 2007 and in the nine months ended December 31, 2007.

Taxes

Our Taxes include Income Tax, MAT credits, Deferred Taxes and Fringe Benefit Taxes. We take advantage of certain excise exemptions and sales tax incentives in respect of our manufacturing facility located in Kutch district and electricity duty exemptions and deductions in respect of our captive power plant under Section 80IA, which we believe are applicable to us. In recent years, we have had a low effective tax rate, close to the Minimum Alternative Tax (MAT) rate. During Fiscal 2007 and the nine months ended December 31, 2007, our effective income tax rate was 34.44% and 32.09%, respectively.

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Profit after tax, as restated

Our profit after tax, as restated is set forth in the table below.

Nine months

ended December

31, 2007

Year ended

March 31, 2007 Year ended

March 31, 2006 Year ended

March 31, 2005

Profit Before Tax 744.27 512.66 22.96 1.13

Provision for Taxes 239.67 176.95 10.33 0.30

Adjustments (0.04) (59.39) 0.75 0.14

Profit After Tax, as restated

504.56 276.31 13.38 0.98

The restatements made to our audited accounts primarily relate to adjustments for short/excess provision of income tax being adjusted in the respective years to which they relate.

Discussion of the financial condition and results of operation for the nine months ended December

31, 2007

Significant Developments

Some of the key developments during the nine months ended December 31, 2007 were:

• We commenced our ACP Division and E-bikes Division during the nine months ended December 31, 2007.

• Further, in the quarter ended September 2007 we also installed a new polishing line in our Vitrified Tiles Division as a part of de-bottlenecking exercise.

• In our CFL Division, during this period, we commercially launched CFLs in the range of 30 watts and above.

Income

Our total income was Rs. 3,654.14 million in the nine months ended December 31, 2007. In this nine month period, revenue benefited from a higher capacity utilization of our CFL Division and Vitrified Tiles Division.

Income from Operations

Our total income from operations was Rs. 3,293.77 million in the nine months ended December 31, 2007.

Income from CFL division: Income from the CFL division was Rs. 1,770.22 million in the nine months ended December 31, 2007 and accounted for 53.74% of our income from operations in that period. The CFL division revenue benefited from sale of higher wattage CFLs, (30 Watts and above) and better utilization of the available capacity through a better product mix.

Income from vitrified tiles division: Income from the vitrified tiles division was Rs. 1,461.91 million in the nine months ended December 31, 2007 and accounted for 44.38% of our income from operations in that period. The vitrified tiles division revenue benefited from increased finishing capacity upon installation of a new polishing line as a part of de-bottle necking exercise to improve capacity utilization.

Income from ACP division: Income from the ACP division was Rs. 31.98 million in the nine months ended December 31, 2007 and accounted for 0.97% of our income from operations in that period. Revenue from ACP Division is relatively insignificant since operation commenced during this period.

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Other Income

Other income was Rs. 52.75 million in the nine months ended December 31, 2007 and accounted for 1.60% of our income from operations in that period. Other income mainly relates to export incentives of Rs. 16.84 million, rate difference from exports of Rs. 13.73 million and net power generation income of Rs.10.70 million.

Increase/Decrease in Stock

Increases in stock was Rs. (307.62) million in the nine months ended December 31, 2007 and accounted for (9.34) % of our income from operations in that period.

Expenses

Raw Material Consumption Cost

Raw material consumption cost was Rs. 1,993.11 million in the nine months ended December 31, 2007 and represented 60.51% of our income from operations in that period. Raw material cost was affected in the nine months ended December 31, 2007 due to general increases in the cost of raw materials.

Staff Cost

Staff cost was Rs. 137.43 million in the nine months ended December 31, 2007 and represented 4.17% of our income from operations in that period. We had 3,514 employees at the end of the nine months ended December 31, 2007.

Power and Fuel

Power and fuel costs was Rs. 190.47 million in the nine months ended December 31, 2007 and represented 5.78% of our income from operations in that period. Expenditure on power and fuel was affected by increase in the cost of furnace oil and coal in the nine months ended December 31, 2007.

Manufacturing Cost

Manufacturing cost was Rs. 79.8 million in the nine months ended December 31, 2007 and represented 2.42% of our income from operations in that period

Administration & Selling Expenses

Administrative expenses were Rs. 72.60 million in the nine months ended December 31, 2007 and represented 2.20% of our income from operations in that period. Selling expenses were Rs. 278.97 million in the nine months ended December 31, 2007 and represented 8.47% of our income from operations in that period.

Depreciation/Amortisation

Depreciation charges were Rs. 86.46 million in the nine months ended December 31, 2007 and represented 2.62% of our income from operations in that period. The depreciation/amortization in this period was affected by increased capital expenditures.

Financial Expenses

Financial expenses were Rs. 71.03 million in the nine months ended December 31, 2007 and represented 2.16% of our income from operations in that period. Financial expenses were affected by increase in the utilization of bank limits matching with higher level of operations in the nine months ended December 31, 2007.

Provision for Taxes

Provision of taxes for the nine months ended December 31, 2007 comprised of current tax, deferred tax and Fringe Benefit Tax. Our effective income tax rate was 7.16% in the nine months ended December 31, 2007.

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Profit after tax, as restated

Profit after tax, as restated was Rs. 504.56 million in the nine months ended December 31, 2007 and represented 15.32% of our income from operations in that period.

Fiscal year ended March 31, 2007 compared with the Fiscal year ended March 31, 2006

Income

Total income increased to Rs. 3,306.57 million in Fiscal 2007 from Rs. 897.50 million in Fiscal 2006.

Income from Operations

Income from operations increased to Rs. 3,154.88 million in Fiscal 2007 from Rs. 665.74 million in Fiscal 2006. This increase was due to growth in income from our CFL division in Fiscal 2007 and a full year of production in vitrified tiles in Fiscal 2007.

Income from CFL division: Income from the CFL division increased to Rs. 1,814.91 million in Fiscal 2007 from Rs. 594.86 million in Fiscal 2006 and accounted for 57.53% of our income from operations in Fiscal 2007. The CFL division grew due to aggressive marketing strategy, increased sale of higher wattage CFLs and an increase in export sales.

Income from vitrified tiles division: Income from the vitrified tiles division increased to Rs. 1,339.61 million in Fiscal 2007 from Rs. 70.87 million in Fiscal 2006 and accounted for 42.46% of our income from operations in Fiscal 2007. The Vitrified Tiles Division operated only for a limited period in Fiscal 2006 and these operations were not at optimum levels. Full scale production only commenced in this division in the last quarter of Fiscal 2006. Accordingly, Fiscal 2007 benefited from the first full year of production. In addition, the vitrified tiles division grew due to better acceptability of our products in the market.

Income from ACP division: We had no income from this division as we had not commenced operations. Operations commenced during the nine months ended December 31, 2007.

Other Income

Other income increased to Rs. 79.64 million in Fiscal 2007 from Rs. 1.71 million in Fiscal 2006. This increase was primarily on account of the export incentives of Rs.68.47 million earned in Fiscal 2007 when we started our export business.

Increase/Decrease in Stock

Revenue increases in stock decreased by 68.68% to Rs. 72.06 million in Fiscal 2007 from Rs. 230.05 million in Fiscal 2006. This increase was primarily on account of increase in the level of operations in Fiscal 2007.

Expenses

Raw Material Consumption Cost

Raw material consumption cost increased by 249.56% to Rs. 1,786.09 million in Fiscal 2007 from Rs. 510.95 million in Fiscal 2006 mainly on account of increase in the level of our sales. As a percentage of income from operations, raw material consumption cost decreased to 56.61% in Fiscal 2007 from 77.69% in Fiscal 2006. This decrease as a percentage of income from operations was primarily on account of an improvement in operational efficiencies.

Staff Cost

Staff cost increased by 689.10% to Rs. 132.62 million in Fiscal 2007 from Rs. 16.81 million in Fiscal 2006. As a percentage of income from operations, staff cost increased to 4.2% in Fiscal 2007 from 2.52% in Fiscal 2006. The increase in staff cost was largely due to an increase in the number of employees, and general increases in salary and benefits. The number of employees increased from 389 at the end of Fiscal 2006 to 1,913 at the end of Fiscal 2007.

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Power and Fuel

Power and fuel costs increased by 371.64% to Rs. 172.95 million in Fiscal 2007 from Rs. 36.67 million in Fiscal 2006. This increase is mainly on account of higher levels of production and consumption in Fiscal 2007 and higher prices for furnace oil and sized steam coal. As a percentage of income from operations, power and fuel costs remained relatively stable at 5.48% in Fiscal 2007 and 5.51% in Fiscal 2006 to 56.61% in Fiscal 2007 from 77.69% in Fiscal 2006.

Other Manufacturing Cost

Manufacturing cost decreased by 1.18% to Rs. 78.50 million in Fiscal 2007 from Rs. 79.44 million in Fiscal 2006. This decrease was primarily due to the fixed elements of these other manufacturing costs spreading over a higher level of sales. As a percentage of income from operations, other manufacturing cost decreased to 2.49% in Fiscal 2007 from 11.93% in Fiscal 2006. This decrease as a percentage of income from operations was primarily on account of the fixed elements of these other manufacturing costs spreading over a higher level of sales.

Selling & Administration Expenses

Selling & administrative expenses increased by a significant amount to Rs. 425.18 million in Fiscal 2007 from Rs. 170.08 million in Fiscal 2006. The increase in administrative costs is as a result of increase level of operations and production, particularly in the vitrified tiles division. As a percentage of income from operations, selling & administration expenses decreased to 13.48% in Fiscal 2007 from 25.55% in Fiscal 2006. This decrease as a percentage of income from operations was primarily on account of the fixed elements of these selling and administrative costs spreading over a higher level of sales.

Depreciation/Amortisation

Depreciation charges increased by 197.24% to Rs. 98.42 million in Fiscal 2007 from Rs. 33.11 million in Fiscal 2006. The increase in depreciation was due to increased capital expenditure for certain buildings, plant and machinery and miscellaneous fixed assets capitalized in Fiscal 2007.

Financial Expenses

Interest charges increased by 264.26% to Rs. 100.15 million in Fiscal 2007 from Rs. 27.49 million in Fiscal 2006. This increase was due to increase in long term debt and working capital borrowings from banks and financial institutions.

Provision for Taxes

Our taxes increased substantially to Rs. 176.95 million in Fiscal 2007 from Rs. 10.33 million in Fiscal 2006. This increase was due to our higher profit before tax in Fiscal 2007 of Rs. 512.66 million as compared to Rs. 22.96 million in Fiscal 2006. During Fiscal 2007 and Fiscal 2006 our effective income tax rate was 34.44% and 44.99%, respectively.

Profit after tax, as restated

Our Profit after tax, as restated increased significantly to Rs. 276.31 million in Fiscal 2007 from Rs. 13.38 million in Fiscal 2006. Profit after tax, as restated, as restated, increased as a percentage of total income from 2.01% in Fiscal 2006 to 8.76% in Fiscal 2007.

Fiscal year ended March 31, 2006 compared with the Fiscal year ended March 31, 2005

The income statements for Fiscal 2005 and Fiscal 2006 have not been discussed at length below as the

nature of the business in Fiscal 2005 relates to the trading operations that have been discontinued in Fiscal

2006 and thus Fiscal 2005 is not comparable with later periods.

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Income

Total income increased significantly to Rs. 897.50 million in Fiscal 2006 from Rs. 30.65 million in Fiscal 2005. This was due to the commencement of manufacturing operations and the discontinuance of trading operations in Fiscal 2006.

Income from Operations

The Company’s total income from operations increased to Rs. 665.74 million in Fiscal 2006 from Rs. 28.82 million (income from trading activity) in Fiscal 2005. This was due to the commencement of operations in Fiscal 2006.

Income from Trading Activity

Income from trading activities was Rs. 28.82 million in Fiscal 2005. The Company had no income from trading activities in Fiscal 2006 as trading operations ceased and production operation commenced.

Other Income

Other income decreased to Rs. 1.71 million in Fiscal 2006 from Rs. 1.83 million in Fiscal 2005.

Increase/Decrease in Stock

Revenue increases in stock increased to Rs. 230.05 million in Fiscal 2006. There was no income from increases in stock in Fiscal 2005 as production had not yet commenced

Expenses

Raw Material Consumption Cost

Raw material consumption cost increased significantly to Rs. 510.95 million in Fiscal 2006 from Rs. 28.94 million in Fiscal 2005. This increase was primarily on account of commencing production in Fiscal 2006. Raw material consumption cost in Fiscal 2005 was the cost of goods traded.

Staff Cost

Staff cost increased to Rs. 16.81 million in Fiscal 2006. The Company had no staff costs in Fiscal 2005.

Power and Fuel

Power and fuel costs increased to Rs. 36.67 million in Fiscal 2006. The Company had no expenses for power and fuel in Fiscal 2005.

Manufacturing Cost

Manufacturing cost increased to Rs. 79.44 million in Fiscal 2006. The Company had no manufacturing costs in Fiscal 2005.

Selling & Administration Expenses

The Company’s administrative expenses increased significantly to Rs. 170.09 million in Fiscal 2006 from Rs. 0.58 million in Fiscal 2005. This increase was primarily on account of commencing production in Fiscal 2006.

Depreciation/Amortisation

Depreciation charges increased to Rs. 33.11 million in Fiscal 2006. The Company had no depreciation or amortization expenses in Fiscal 2005.

Financial Expenses

Financial expenses increased to Rs. 27.49 million in Fiscal 2006. The Company had no financial expenses in Fiscal 2005.

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Provision for Taxes

Our taxes increased substantially to Rs. 10.33 million in Fiscal 2006 from Rs. 0.3 million in Fiscal 2005. This increase was due to our higher profit before tax in Fiscal 2006 of Rs. 22.96 as compared to Rs. 1.13 million in Fiscal 2005. During Fiscal 2006 our effective income tax rate was 44.99%.

Profit after tax, as restated

Our Profit after tax, as restated increased substantially to Rs. 13.38 million in Fiscal 2006 from Rs. 0.98 million in Fiscal 2005. This increase was on account of commencing production in Fiscal 2006.

Review of Assets and Liabilities

Fixed Assets

Fixed assets comprise:

• gross block, which is mainly comprised of land and buildings, plant, machinery and equipment, and also includes vehicles and other fixed assets; and

• capital work in progress, including advances for capital expenditures, is mainly comprised of capital assets under manufacture or on order.

The following table illustrates our fixed assets for the nine months ended December 31, 2007 and Fiscal 2007, 2006 and 2005.

Nine months

ended December 31,

2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

Gross Block (including work in progress)

2,582.86 2,449.39 2,078.83 1,476.57

Less Depreciation 217.99 131.54 33.11 -

Net Block 2,364.86 2,317.85 2,045.72 1,476.57

Capital advances and incidental expenditure

4.29 62.96 71.61 162.59

Total Net Block 2,369.16 2,380.81 2,117.33 1,639.16

Investments

Our investments consisted primarily of national savings certificates and fixed deposits. .

Current Assets, Loans and Advances

Current assets, loans and advances are comprised mainly of:

• Sundry debtors, which primarily relates to debts owed to us in respect of the sale of manufactured products;

• Cash and bank balances;

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• Inventories, which relate to the stocks of raw materials, work in progress, finished goods and stores, spares, consumables and packing materials that are carried in respect of our manufacturing operations, and

• Loans and advances, which primarily relates to suppliers advances and employee advances; and

The following table sets forth details of our sundry debtors as at December 31, 2007, March 31, 2007, March 31, 2006 and March 31, 2005.

Nine

months

ended December

31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

Debts outstanding for a period Less than Six Months

Receivable from Promoter Group - - -

Receivable from Others 703.43 115.20 26.13 -

Total 703.43 115.20 26.13 -

Debts outstanding for a period exceeding six months

227.31

-

-

-

Total Debtors 930.74 115.20 26.13 -

The receivables in terms of the number of days’ net sales stood at 78.16 days, 13.33 days and 14.33 days at December 31, 2007 and at March 31, 2007 and March 31, 2006, respectively. We are required to give credit to our customers as per prevalent marketing practice. As at December 31, 2007, debts outstanding for a period exceeding six months comprised 24.42% of our total debtors. However, these debts are regarded as recoverable in the ordinary course of business.

The following table sets forth details of our loans and advances as at December 31, 2007, March 31, 2007, March 31, 2006 and March 31, 2005.

Nine

months

ended

December

31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

(Unsecured, Considered Good unless otherwise stated)

Advances to Suppliers for Goods and Expenses

72.58 29.63 36.00 10.47

Advances recoverable in cash or kind or 0.00 0.00 1.21 0.00

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Nine

months

ended December

31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

for value to be received

Deposits and Balance with Government and other Authorities

437.21 236.29 72.80 54.18

Other Deposits 1.53 1.04 0.71 0.00

Total Loans and Advances 511.32 266.96 110.72 64.65

We have to give advances to our suppliers in the ordinary course of business. Further, we are also required to deposits and advances to various authorities like excise, telephone deposit, security deposit etc. in the ordinary course of business.

Current Liabilities and Provisions

Current liabilities and provisions primarily consist of current liabilities to sundry creditors, advances from customers, statutory liabilities and provisions.

Nine

months

ended

December

31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

Current Liabilities

Sundry Creditors for Goods and Expenses

413.29 70.18 587.46 1.10

Sundry Creditors for Capital Goods and Expenditure

5.55 28.01 12.06 36.52

Advances from Customers 53.32 50.03 118.59 0.01

Statutory Liabilities 40.94 12.54 4.22 0.28

513.10 160.75 722.33 37.91

Provisions

Provision for Taxation 200 78.08 1.93 0.94

Proposed Dividend: Equity Shares 0 19.88 5.00 0.50

Preference Shares 0 16.17 0.00 0.00

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Nine

months

ended December

31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Tax on Proposed Dividend 0 6.12 0.70 0.07

Provision for Fringe Benefit Tax 0.80 0.40 0.60 0.00

Provision of Excise Duty Included in FG 63.74 32.92 21.62 0.00

264.54 153.56 29.85 1.51

Total 777.64 314.31 752.18 39.42

Secured Loans and Unsecured Loans

Secured loans are comprised of long-term debt relating to term loans and short-term debt for working capital loans. Unsecured loans are comprised of certain short-term debt.

The details of secured loans are given below:

Nine months

ended

December 31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

Term Loans 697.49 702.98 1,224.16 750.00

Working Capital loans 554.74 194.91 0 0

Total Secured loans 1,252.23 897.89 1,224.16 750.00

The details of our unsecured loans are given below:

Nine months

ended

December

31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

Loans from Directors 198.72 285.47 233.32 310.29

Loans from Share Holders 99.67 27.18 142.53 115.01

Loans from Financial Institutions 0 0 0 20.26

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Nine months

ended

December 31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

Total Unsecured Loans 298.39 312.65 375.85 445.56

Loans from Directors and Shareholders

To meet with our temporary/permanent requirements of funds, we have taken unsecured loans from our directors and shareholders from time to time as and when required. We do not have any formal arrangement with regard to repayment of such loans. We may take such loans in future, if required.

Long-Term and Short-Term Debt

Short-term debt comprises of debt having 365 days or less maturity, all of which is comprised of working capital liabilities. Long-term debt is debt with maturity of greater than one year. The following table sets forth our short-term, long-term and total indebtedness as at December 31, 2007, March 31, 2007, March 31, 2006 and March 31, 2005.

Nine months

ended

December

31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. millions

Short-term Debt 554.74 194.91 - -

Long-term Debt

State Bank of India 697.49

702.98 1,224.16 750.00

Total Debt 1,252.23 897.89 1,224.16 750.00

Our term loan facility from the State Bank of India is secured by way of a mortgage of immovable properties located at our Kutch plant. In addition, the terms of our borrowings contain certain restrictive covenants. As of the date of this Draft Red Herring Prospectus, we believe that we are in compliance with all the covenants and undertakings for the loan described above.

Liquidity and Capital Resources

We broadly define liquidity as our ability to generate sufficient funds from both internal and external sources to meet our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate equity and debt financing and loans and to convert into cash those assets that are no longer required to meet existing strategic and financial objectives. Therefore, liquidity cannot be considered as separate from capital resources that consist of current or potentially available funds for use in achieving long-range business objectives and meeting debt service and other commitments.

We have historically financed our working capital and capital expenditure primarily through funds generated from our operations and financing from banks and other financial institutions in the form of term loans and working capital facilities. Our business requires a significant amount of working capital. In many cases, significant amounts of our working capital are required to finance the purchase of materials. We

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believe that we will have sufficient capital resources from our operations, net proceeds of this Issue and other loans and borrowings to meet our capital requirements for at least the next 12 months.

Cash flows

The table below summarizes our cash flows for the nine months ended December 31, 2007 and Fiscal 2007, 2006 and 2005:

Nine months

ended December

31, 2007

Fiscal 2007 Fiscal 2006 Fiscal 2005

Rs. Millions

Net Cash Inflow/(Outflow) from Operating Activities (336.68) (406.41) 161.49 (45.71)

Net Cash Inflow/(Outflow) from Investing Activities

(74.81) (361.90) (511.28) (1,301.79)

Net Cash Inflow/(Outflow) from Financing Activities

331.9 862.67 376.37 1,343.51

Net Increase/(Decrease) in Cash and Cash equivalents

(79.59) 94.36 26.58 (3.99)

Cash and Cash Equivalents at the End of the Year

49.13 128.72 34.36 7.78

Operating Activities

Net cash generated from operating activities was Rs. (336.68) million in the nine month period ended December 31, 2007. Our operating profit was Rs. 903.62 million in the nine month period ended December 31, 2007. Our working capital change was Rs. (1,080.97) million in the nine month period ended December 31, 2007, due to an increase in the level of our net current assets consequent upon an increase in the level of operations during this period.

Net cash generated from operating activities was Rs. (406.41) million in Fiscal 2007 as compared to Rs. 161.49 million in Fiscal 2006. Our operating profit increased from Rs. 83.29 million in Fiscal 2006 to Rs. 709.64 million in Fiscal 2007. Our working capital change was an increase of Rs. 1,061.54 million in Fiscal 2007 compared to a decrease of Rs. 75.48 million in Fiscal 2006. This working capital change was due to an increase in the level of our net current assets consequent upon an increase in the level of operations during this period.

Net cash generated from operating activities was Rs. 161.49 million in Fiscal 2006 as compared to Rs. (45.71) million in Fiscal 2005. Our operating profit increased from Rs. 1.13 million in Fiscal 2005 to Rs. 83.29 million in Fiscal 2006. Our working capital change was a decrease of Rs. 75.48 million in Fiscal 2006 in comparison to an increase of Rs. 46.77 in Fiscal 2005. This working capital change was due to a decrease in our net current assets consequent upon an increase in the levels of current liabilities during this period.

Investing Activities

Net cash used in investing activities was Rs. (74.81) million in the nine month period ended December 31, 2007. Purchase of fixed assets was Rs. 74.81 million in the nine month period ended December 31, 2007

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due to capital expenditure incurred in establishing the Phase I of our the E- bikes unit and additional capital expenditure towards an upgrade of our polishing lines, the installation of an additional standby polishing line in our vitrified tiles division. In addition, further expenditure was incurred in respect of the addition of two production lines for our vitrified tiles division, construction of which began in Fiscal 2007 and was completed in April 2008.

Net cash used in investing activities was Rs. 361.90 million in Fiscal 2007 as compared to Rs. 511.28 million in Fiscal 2006. This was primarily due capital expenditure incurred in completion of two production lines in our vitrified tiles division, and expenditure connected with the ongoing installation of two further production lines.

Net cash used in investing activities was Rs. 511.28 million in Fiscal 2006 as compared to Rs. 1,301.79 million in Fiscal 2005. This was due a capital expenditure incurred in installing one production line in our vitrified tiles division and significant expansion of our ACL division.

Financing Activities

Net cash generated from financing activities was Rs. 331.9 million in the nine month period ended December 31, 2007. Our borrowings were Rs. 340.09 million in the nine month period ended December 31, 2007, mainly from an increase in secured loans of Rs. 354.35 million. Our finance charges were Rs. 71.03 million in the nine month period ended December 31, 2007 and our cost of dividends was Rs. 42.16 million in the same period.

Net cash generated from financing activities was Rs. 862.67 million in Fiscal 2007 as compared to Rs. 376.37 million in Fiscal 2006. Our cash from financing activities increased mainly due to an increase in our share premium account of Rs. 1,413.85 million, which was offset by repayments of secured loans of Rs. 326.28 million and repayments of unsecured loans of Rs. 63.21 million. Our finance charges were Rs. 100.15 million in Fiscal 2007 and our cost of dividends was Rs. 5.70 million in the same period.

Net cash generated from financing activities was Rs. 376.37 million in Fiscal 2006 as compared to Rs. 1,343.51 million in Fiscal 2005. Our borrowings were Rs. 404.45 million in Fiscal 2006, mainly from an increase in secured loans of Rs. 474.16 million, offset by payments of unsecured loans of Rs. 69.70 million. Our finance charges were Rs. 27.49 million Fiscal 2006.

Working Capital Needs

We require working capital for the purpose of financing our working capital requirements relating to our operations.

The Company has a fund based working capital facility from the State Bank of India of Rs. 554.74 million to manage day-to-day fluctuations in the working capital, which is secured by way of hypothecation of entire stock of raw material, work in progress, finished goods, stores and spares and receivables.

Capital Expenditures

The capital expenditure of the company includes the expenditure on setting up of our existing operating divisions namely the CFL division, Vitrified tiles division and ACP division. It includes the expenditure towards construction of civil works; acquisition of plant, machinery, equipments and utilities; erection and installation thereof, Pre-operative expenses require to be incurred towards the said projects and other miscellaneous fixed assets.

During Fiscal 2008 and 2009 we will be incurring additional capital expenditure for the implementation of Phase I and Phase II of our E-bikes project and also for the implementation of our CFL Glass Tube Project. For the details of our planned capital expenditure, please refer to the section “Objects of the Issue” in this Draft Red Herring Prospectus.

While the regular capital expenditure would be funded through internal cash accruals of the company, any major large size capital expenditure may involve funding the same through the mix of debt, and equity including preference shares.

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Contingent Obligations

As of December 31, 2007, we had the following contingent liabilities that have not been provided for:

Particulars Amount in Rs. million

Letter of Credit 436.21

Income Tax 1999/00 6.24

Total Contingent Liabilities 442.45

Quantitative and Qualitative Disclosure about Market Risk

We are exposed to market risk from changes in foreign exchange rates and interest rates. The following discussion is based on our financial statements under Indian GAAP.

Exchange Rate Risk

We face exchange rate risk to the extent that our income and expenses are denominated in currencies other than Indian rupees.

In Fiscal 2007 and Fiscal 2006 the Company received foreign exchange earnings equivalent to Rs. 449.00 million and nil, respectively, and the Company’s foreign exchange expenditure equivalent to Rs. 1,413.1 million and Rs. 432.34 million, respectively. In the nine months ended December 31, 2007, the Company received foreign exchange earnings equivalent to Rs. 775.24 million and the Company’s foreign exchange expenditure was equivalent to Rs. 1,063.6 million. Substantially all of our export sales are denominated in US dollars, while a portion of our capital expenditures and raw material is denominated in US dollars.

Appreciation or depreciation of the Indian rupee relative to the U.S. dollar can cause us to recognize foreign exchange losses or gains. As exports are principally denominated in U.S. dollars, our income from export sales is subject to changes in the Rupee/U.S. dollar exchange rate. If the Indian Rupee appreciates against the U.S. dollar between the time a sale is booked and the time payment is received, we recognize a foreign exchange loss. We face substantial risk on account of exchange rate risk and our results of operations may be affected on account of volatility relating to the same.

Since we import our raw materials/components in USD, there is a natural hedge against the possible adverse impact of the foreign currency fluctuations that can impact our export realization. Imported raw materials accounted for approximately 57% of our raw material cost in the case of vitrified tiles and 58% in case of CFLs during the nine-month period ended December 31, 2007. A devaluation or depreciation in the value of the Rupee increases our total costs of such imports in Rupee terms and, depending on the timing of the currency fluctuation, we may be unable to recover these costs through cost-saving measures elsewhere or by passing on these increased costs to our customers and distributors through higher prices. Similarly, we source certain types of equipment from overseas. A devaluation or depreciation in the value of the Rupee increases the cost of such equipment in Rupee terms.

Interest Rate Risk

We bear interest rate risk to the extent our indebtedness accrues interest at fluctuating rates. As of December 31, 2007, we had Rs. 697.49 million in floating rate long-term debt due and outstanding.

Analysis of Certain Changes

Unusual or Infrequent events or transactions

To our knowledge there have been no unusual or infrequent events or transactions that have taken place during the last three years.

Significant economic changes

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To the best of our knowledge, other than as described in this Draft Red Herring Prospectus in the sections “Our Industry” and “risk factors”, no significant economic changes have taken place that can materially impact our operations.

Known trends or uncertainties

Our business has been impacted and we expect will continue to be impacted by the trends identified above in “Factors Affecting our Financial Results” beginning on page 162 of this Draft Red Herring Prospectus and the uncertainties described in the section titled “Risk Factors” beginning on page x of this Draft Red Herring Prospectus. To our knowledge, except as we have described in this Draft Red Herring Prospectus, there are no known factors, which we expect to have a material adverse impact on our revenues or income from continuing operations.

Future relationship between expenditure and revenues

Except as described in “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages x, 65 and 162 of this Draft Red Herring Prospectus respectively, to the best of our knowledge, there is no future relationship between expenditure and income that will have a material adverse impact on the operations and finances of our Company.

Significant regulatory changes

Except as described in the section titled “Regulations and Policies” beginning on page 84, there have been no significant regulatory changes that could affect our income from continuing operations.

New products or business segments

We have established a manufacturing facility to produce our own E-Bikes which are specifically designed for the Indian market. Production will take place in two phases. Phase I of our E-Bike facility will have a capacity of 400 bikes per day and Phase I production commenced in late March 2008. In Phase II, we propose to scale up our production capacity to 2,000 bikes per day. First production from Phase II is expected to commence by June 30, 2009. In Phase II we plan to manufacture approximately 85% of the components necessary to produce E-Bikes in our own integrated, in-house facility in Gujarat. Batteries constitute approximately 40% of E-Bike component costs. While we currently import batteries, we intend to manufacture batteries in-house with full scale battery production expected in Phase II. Those components that we are unable to manufacture in-house, we will obtain on a cost-effective basis by leveraging our procurement network in key countries such as China, Korea and Taiwan. We plan to sell our E-Bikes under the “OREVA” brand name through our dealer network, initially in western India and gradually all over India.

Seasonality of Business

Our business is not seasonal in nature

Dependence on few customers

We are not dependent on a few customers. Thus the top 10 customers accounted for 64.97%, 34.59% and 21.17% of our total net sales in Fiscal 2006, Fiscal 2007 and in the nine months ended December 31, 2007.

Competitive conditions

Our business has been impacted and we expect will continue to be impacted by the competitive trends identified above in “Factors Affecting our Financial Results” beginning on page 162 of this Draft Red Herring Prospectus.

Significant Developments after December 31, 2007

We have commenced the implementation of Phase I of our E-Bike project, as described above in “Analysis of Certain Changes – New Products or Business Segments”. We have identified, and have acquired or are in the process of acquiring, the required plant and machinery and other supporting infrastructure necessary for Phase I.

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Except as stated elsewhere in this Draft Red Herring Prospectus, to our knowledge no circumstances have arisen since December 31, 2007, which is the date of the last financial statements as disclosed in this Draft Red Herring Prospectus which materially and adversely affect or are likely to affect, the trading and profitability of the Bank or the value of our assets or our ability to pay our liabilities.

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SECTION VI: LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

Save as stated below there are no outstanding litigation, suits, criminal or civil prosecutions, proceedings

or tax liabilities against our Company, our subsidiaries, our directors, our Promoter and Promoter Group

Companies and there are no defaults, non payment of statutory dues, over-dues to banks/financial

institutions/small scale undertaking(s), defaults against banks/financial institutions/small scale

undertaking(s), defaults in dues payable to holders of any debenture, bonds and fixed deposits and arrears

of preference shares issued by the Company, defaults in creation of full security as per terms of issue/other

liabilities, proceedings initiated for economic/civil/any other offences (including past cases where penalties

may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of

Part 1 of Schedule XIII of the Companies Act) other than unclaimed liabilities of the Company and no

disciplinary action has been taken by SEBI or any stock exchanges against our Company, our Promoter or

Directors.

Litigation involving the Directors

1) Inspector of Legal Metrology, Nagpur issued a notice dated August 17, 2007 against Jaysukhbhai O. Patel and all the directors of the Company; Odhavjibhai Patel, Pravinbhai Patel, Jaysukhbhai Patel, Jayesh N. Sheth, Vanitaben Patel, Mrudulaben Patel, Navil Patel, Chintan Bhalodia for non conformity with the provisions of the Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 regarding the packaging of Oreva granolite tiles and for not replying to the performa A notice regarding the above, dated July 9, 2007. The Jaysukhbhai O. Patel and the directors of the Company were directed to attend the court of the First Class Judicial Magistrate, Nagpur on August 28, 2007. The Company filed a reply dated August 23, 2007.

Jaysukhbhai O. Patel

1) S.M. Electricals issued a legal notice to Sanjay Das, CEO of Ajanta and Orpat Products, J. O. Patel, Director of Ajanta and Orpat Products and Elangovan, Super Stockist for Ajanta and Orpat Products dated October 23, 2007 for failing to provide M/s S.M. Electricals gifts as promised in the Company’s pamphlets. Further, M/s S.M Electricals has asked for compensation of Rs. 2,00,000, repurchase of the goods unsold as a result of termination of dealership by the Company and provide the benefits as promised in the pamphlet.

2) Complaint No. 27 of 2008 dated December 5, 2007 under Section 12 has been filed before the District Consumer Disputes Redressal Forum, Thane by Dinesh Jain against the Company, Jaisukhbhai O. Patel and Jayesh Sheth for failing to replace defective CFL bulbs and e-Bikes obtained from the Company under various schemes offered to the distributors of Oreva CFL bulbs and were sent back to the Company. Dinesh Jain has claimed a sum of Rs. 2 million from the Company. The Company filed a reply dated March 17, 2008.

3) Omprakash Mishra has issued a legal notice dated October 1, 2007 to Odhavjibhai R. Patel, Jaisukhbhai O. Patel and Jayesh Sheth claiming compensation of Rs. 208,773 for their failure to provide Omprakash Mishra with the employment benefits as promised under the terms of his appointment letter, for compensating him for the costs that he had to incur pursuant to such a failure and compensating him for the salary due to him for the untimely termination of his services. The Company has issued a reply dated October 29, 2007.

4) A petition was filed before the Distrcit Session court, Bharatpur, Rajasthan by Vinod Goyal for his claim for foreign trip (Bangkok) against sales performance scheme declared by the ATCM and he has sought conviction of Jaysukhbhai Patel as a Partner of ATCM, under section 420 of Indian Penal Code. Matter is pending for hearing.

188

Odhavjibhai Patel

1) N.B. Pandey issued a legal notice dated November 27, 2007 to the Chairman of the Company for the defect in CFL bulb purchased by him and requesting the Company to replace the defective CFL bulb.

2) Omprakash Mishra has issued a legal notice dated October 1, 2007 to Odhavjibhai R. Patel, Jaisukhbhai O. Patel and Jayesh Sheth claiming compensation of Rs. 208,773 for their failure to provide Omprakash Mishra with the employment benefits as promised under the terms of his appointment letter, for compensating him for the costs that he had to incur pursuant to such a failure and compensating him for the salary due to him for the untimely termination of his services. The Company has issued a reply dated October 29, 2007.

Jayesh Sheth

1) Omprakash Mishra has issued a legal notice dated October 1, 2007 to Odhavjibhai R. Patel, Jaisukhbhai O. Patel and Jayesh Sheth claiming compensation of Rs. 208,773 for their failure to provide Omprakash Mishra with the employment benefits as promised under the terms of his appointment letter, for compensating him for the costs that he had to incur pursuant to such a failure and compensating him for the salary due to him for the untimely termination of his services. The Company has issued a reply dated October 29, 2007.

2) Complaint No. 27 of 2008 dated December 5, 2007 under Section 12 has been filed before the District Consumer Disputes Redreessal Forum, Thane by Dinesh Jain against the Company, Jaisukhbhai O. Patel and Jayesh Sheth for failing to replace defective CFL bulbs and e-Bikes obtained from the Company under various schemes offered to the distributors of Oreva CFL bulbs and were sent back to the Company. Dinesh Jain has claimed a sum of Rs. 2 million from the Company. The Company filed a reply dated March 17, 2008.

Litigation against the Company

Civil Cases

1) An suit, CS (OS) No. 2013 of 2007, was filed by Ajanta India Limited (“AIL”) against our Company in the High Court at New Delhi on October, 2007 seeking permanent injuction for restraining our Company from using the trademark “Ajanta” as a brand and as a corporate name. AIL has contended that pursuant to the Deed of Assignment dated September 19, 2002, it owns the trademark “Ajanta” and our Company has allegedly infringed the same by using the pharse “a product of Ajanta Quartz” for branding its products. Further, AIL has contended that our Company, having been incorporated as “Ajanta Manufacturing Limited”, is trying to misappropriate AIL’s reputation by way of establishing a relationship due to the use of the word “Ajanta” in its name. AIL contends that it manufactures vitrified tiles and CFL bulbs, and our Company should not be allowed to sell vitrified tiles and CFL bulbs by branding them as “a product of Ajanta Quartz”. Our Company has filed a reply dated December 12, 2007 before the High Court of Delhi. The matter is pending for admissions and denials of documentary evidence for April 7, 2008 and for arguments for August 18, 2008.

2) Complaint No. 27 of 2008 dated December 5, 2007 under Section 12 has been filed before the District Consumer Disputes Redreessal Forum, Thane by Dinesh Jain against the Company, Jaisukhbhai O. Patel and Jayesh Sheth for failing to replace defective CFL bulbs and e-Bikes obtained from the Company under various schemes offered to the distributors of Oreva CFL bulbs and were sent back to the Company. Dinesh Jain has claimed a sum of Rs. 2 million from the Company. The Company filed a reply dated March 17, 2008.

3) A petition was filed before the Consumer Disputed Rederssal Forum of Palakkad by D.

189

Swaminathan for the defective vitrified tiles supplied to the petitioner on June 13, 2007 and has claimed damages amounting to Rs. 75,000. The matter is pending for hearing.

Legal Notices

Consumer Notices

1) CMK Murthy issued a legal notice to the Company dated July 27, 2007 for the 8 defective Oreva CFL bulbs bought by CMK Murthy and stating that the defective CFL bulbs be replaced withing 7 days of the receipt of notice.

3) Inspector of Legal Metrology, Government of Karnataka, issued a notice dated September 17, 2007 for the violation of the provisions of the Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 regarding the packaging of the tiles and CFL bulbs manufactured by the Company.

4) Mahavir Bhatnagar issued a legal notice dated September 5, 2007 was the variation in the colours of tiles laid down at his premises and has claimed an amount of Rs. 50,000 as compemsation for the loss in the get up and beauty of the floor due to variation in the colours of the tiles.

6) Sunil Sumermal Jain issued a legal notice dated December 24, 2007 to the Company and Sandeep Somnath Rane, a dealer of the Company for E-bikes, for failure in providing the sale letters and documents necessary for registration. The Company replied to the legal notice by a letter dated January 1, 2008.

7) Virjibhai Ranchhodbhai Sitapara, Lakhan Jagdishbahi Raja and Mayurbhai Gunvantibhai Mehta have, respectively, issued a legal notices to the Company dated January 11, 2008, for the defects in the e-Bikes bought for Rs. 25,700 by them each and for claiming Rs. 76,200 each in compensation as the cost of the respective e-Bikes and for the mental, physical and pecuniary damage caused to them due to the defects in the e-Bikes.

8) D. Mohan issued a notice to the Company for replacement of a CFL bulb which was bought with a one year warranty but fused in four months.

9) Gurdeep Singh has issued a legal notice dated March 20, 2008 to the Company for selling a defective model of E-Bike o him and has claimed a refund of an amount of Rs. 23,799, which he paid for the E-Bike bought by him and the legal cost amounting Rs. 1500 for issuing the legal notice.

10) A complaint has been filed before the Consumer Dispute Redressal Forum, Chikmaglur, No. CPA/CKM/15/07 has been filed by Katil Satish Rao for the sale of the CFL at a price less than marked retail price by some dealers and has claimed that the marked retail price is not mentioned on the cover of the CFL sold. He has claimed a compensation of Rs. 0.40 million from the Company. The Consumer Dispute Redressal Forum, Chikmaglur dismissed the complaint. The Karnataka State Consumer Disputes Redressal Commission, Bangalore has passed an order dated September 12, 2007 upholding the order of the Consumer Dispute Redressal Forum, Chikmaglur.

Legal Metrology

1) The Office of Senior Inspector, Legal Metrology (Weights and Measures), Ghazipur (Uttar Pradesh) issued a show cause notice, No. 168 dated October 23, 2007 regarding an advertising material issued by the Company in which the length of CFLs was mentioned in Feet, which is allegedly in violation of Section 11 of Standards of Weights and Measures (Enforcement) Act, 1985.

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2) The Inspector of Weights and Measures, Chamba, Circle of Chamba, Himachal Pradesh had issued a notice dated March 3, 2007 and issued an order for the representative of the Company to appear before the departmental court of the Inspector of Weights and Measures, Chamba.

3) Three notices have been issued by the Chief Inspecting Office, Department of Weights and Measurement, Etah for violations under Section 6(d) of the of Standards of Weights and Measures (Enforcement) Act, 1985.

Tax Cases

Direct Taxes

1. Notice sent by the Deputy Commissioner Income Tax (DCIT), Central Circle-I, Rajkot on February 1, 2008 to Ajanta Electronics Private Limited under Section 142(1) of the Income Tax Act for the assessment year 1998 – 1999. Set aside assessment proceedings have been initiated and are pending at present.

2. Notice No. ACIT/CC.1/AACCA3017E/2007-08 sent by the Assistant Commissioner of Income Tax (ACIT), Central Circle – I, Rajkot on May 14, 2007 to Ajanta Manufacturing Limited under Section 143(3) of the Income Tax Act for the assessment year 2005 – 2006 and subsequent order dated December 31, 2007 passed by the DCIT, Central Circle-I, Rajkot under Section. 143(3) of the Income Tax Act for payment of amount Rs. 58,090.

3. Order dated December 14, 2006 passed by the ACIT, Central Circle-I, Rajkot under Section 143(3) read with Section 254 of the Income Tax Act for the assessment year 2000 – 2001 for payment of amount Rs. 62,39,479. Appeal filed by Ajanta Manufacturing Limited on January 19, 2007 before the Commissioner of Income Tax (CIT), (Appeals)-IV, Ahmedabad which was dismissed vide order dated September 18, 2007.

4. Order dated March 31, 2005 passed by the DCIT, Central Circle-I, Rajkot under Section 143(3) read with Section 147 of the Income Tax Act for the assessment year 1997 – 1998 for payment of amount Rs. 6,33,18,965. Appeal filed by Ajanta Manufacturing Limited on April 19, 2005 before the CIT (Appeals)-IV, Ahmedabad which was partly allowed vide order dated February 24, 2006. The matter was further appealed by the Assistant Commissioner of Income Tax, Central Circle-I, Rajkot before the Income Tax Appellate Tribunal (ITAT), Rajkot.

5. Two appeals were filed by the ACIT, Circle 5, Rajkot against two different orders, both dated June 18, 2001 passed by the CIT (Appeals) for the assessment years 1996 – 1997 and 1997 – 1998 for the amount Rs. 7,62,77,051 and Rs. 3,73,98,235 respectively, before the ITAT, Rajkot. The matters were further appealed by the CIT, Central-II, Ahmedabad before the High Court of Gujarat, through Tax Appeal No. 1774 of 2005 and Tax Appeal No. 1775 of 2005, respectively.

6. Order dated June 3, 2003 passed by the CIT (Appeals)-IV, Ahmedabad under Section 143(3) of the Income Tax Act for the assessment year 1998 – 1999 for payment of amount Rs. 49,75,955. Appeal filed by Ajanta Manufacturing Limited on April 19, 2005 before the ITAT, Rajkot, which was partly allowed. The matter was further appealed by the CIT, Central-II, Ahmedabad before the High Court of Gujarat through Tax Appeal No. 1398 of 2005.

Indirect Taxes

Custom and Excise

1) The Company has filed 5 appeals before the Custom, Central Excise and Service Tax Appellate Tribunal, Ahmedabad and 3 appeals before the Office of Commissioner (Appeals), Rajkot for a refund amounting to Rs. 64.032 million. The refund was claimed due to the rebate granted to the

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Company under Notification No. 39/2001-CE dated July 31, 2001.2) The Office of the Deputy Commissioner of Customs, Mundra issued a notice for personal hearing with respect to the demand for short duty.

2) The Company has filed 7 appeals before the Custom, Central Excise and Service Tax Appellate Tribunal, Ahmedabad for a refund amounting to Rs. 5.24 million. The refund was claimed due to the rebate granted to the Company as the Company has paid CENVAT at the rate of 16% and has received a rebate of 8%.

3) 6 less charge demand notices were filed by the Office of the Joint Commissioner of Customs, Custome House, M.P.&S.E.Z., Mundra claiming a differential duty to be paid by the Company under Section 28 of the Customs Act, 1962. The aggregate of the amount claimed under the 6 less charge notices is Rs. 683,737 along with interest at the rate of 15% per annum.

Trademark

The following are the objections received for certain of our trademark applications filed with the Registrar of Trade Marks:

1) Sun Pharmaceuticals Industries Limited has filed an opposition dated June 28, 2007 to our trademark application number 1274411 filed with the Registrar of Trade Marks, Mumbai.

2) Ajanta India Limited has filed 4 oppositions dated September 18, 2007 to our trademark applications, with applications numbers being 226747, 226746, 1274435 and 1274424, filed with the Registrar of Trade Marks, Mumbai.

Litigation by the Company

Nil

Contingent Liability

The following table sets forth the principal components of our contingent liabilities as of December 31, 2007

Particulars Amount (in Rs. million)

Letters of credit opened and outstanding 436.21

Disputed demand in relation to income tax assessment order dated December 12, 2006 for assessment year 2000-2001

6.24

Total 442.45

Litigation involving Promoter

Please refer to the heading ‘Litigation against Directors – Jaysukhbhai O. Patel’ under section titled “Outstanding Litigations and Material Developments” on page 187 of this Draft Red Herring Prospectus.

Litigation involving Promoter Group

Ajanta Limited

1. Notice No. ACIT/CC.1/AAACE6102E/2007-08 sent by the ACIT, Central Circle – I, Rajkot on May 14, 2007 to Ellora Time Limited under Section 143(3) of the Income Tax Act for the assessment year 2005 – 2006 and subsequent order dated December 31, 2007 passed by the DCIT,

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Central Circle-I, Rajkot under Section 143(3) of the Income Tax Act for the assessment year 2005 – 2006 for payment of amount of Rs. 21,42,284. Appeal filed by Ellora Time Limited on January 30, 2008 before the CIT (A)-IV, Ahmedabad.

2. Notice No. ACIT/CC.1/AAACE6102E/2007-08 sent by the ACIT, Central Circle – I, Rajkot on May 14, 2007 to Ellora Time Limited under Section 16(3) of the Wealth Tax Act for the assessment year 2005 – 2006 and a subsequent order dated December 31, 2007 passed under Section 16(3) by the Deputy Commissioner of Wealth Tax, Central Circle-1, Rajkot.

3. Notice No. CIT(C)-II/ABD/263/ETL/2006-07 sent by the CIT, Central-II, Ahmedabad on January 22, 2007 to Ellora Time Limited under Section 263 of the Income Tax Act for the assessment year 1999 – 2000, the order for which is pending.

4. Order dated December 18, 2006 passed by the ACIT, Central Circle-I, Rajkot under Section 143(3) of the Income Tax Act for the assessment year 2004 – 2005 for payment of amount Rs. 21,842,895. Appeal filed by Ellora Time Limited in January, 2007 before the CIT (Appeals)-IV, Ahmedabad. The matter is pending for disposal.

5. Order dated January 12, 2006 passed by the ACIT, Central Circle-I, Rajkot under Section 143(3) read with Section 250 of the Income Tax Act for the assessment year 1996 – 1997. Appeal filed by Ellora Time Limited on March 13, 2006 before the CIT (Appeals)-IV, Ahmedabad which was partly allowed. The matter was further appealed by Ellora Time Limited and by the ACIT, Central Circle-I, Rajkot before the ITAT, Rajkot, respectively. The matter is pending for hearing.

6. Order dated March 30, 2006 passed by the ACIT, Central Circle-I, Rajkot under Section 143(3) read with Section 147 of the Income Tax Act for the assessment year 1998 – 1999 for payment of amount Rs. 45,85,858. Appeal filed by Ellora Time Limited on May 17, 2006 before the CIT (Appeals)-IV, Ahmedabad which was allowed. The matter was further appealed by the ACIT, Central Circle-I, Rajkot before the ITAT, Rajkot. The matter is pending for hearing.

7. Order dated March 30, 2006 passed by the ACIT, Central Circle-I, Rajkot under Section 143(3) read with Section 147 of the Income Tax Act for the assessment year 1999 – 2000 for payment of amount Rs. 2,73,03,987. Appeal filed by Ellora Time Limited on May 15, 2006 before the CIT (Appeals), which was partly allowed. The matter was further appealed by Ellora Time Limited and the ACIT, Central Circle-I, Rajkot before the ITAT, Rajkot, respectively. The matter is pending for hearing.

8. Order dated March 30, 2006 passed by the ACIT, Central Circle-I, Rajkot under Section 143(3) read with Section 147 of the Income Tax Act for the assessment year 2000 – 2001 for payment of amount Rs. 44,27,756. Appeal filed by Ellora Time Limited on May 15, 2006 before the CIT (Appeals)-IV, Ahmedabad which was allowed. The matter was further appealed by the ACIT, Central Circle-I, Rajkot before the ITAT, Rajkot. The matter is pending for hearing.

9. Order dated March 23, 1999 passed by the Joint Commissioner of Income Tax, Special Range-1, Rajkot under Section 143(3) of the Income Tax Act for the assessment year 1996 – 1997 for payment of amount Rs. 29,91,832. Appeal filed by Ellora Time Limited on April 21, 1999 before the CIT (Appeals)-I, Rajkot which was partly allowed. The matter was further appealed by Ellora Time Limited and the DCIT, Special Range-1, Rajkot before the ITAT, Rajkot, which was partly allowed. The matter was further appealed by the CIT, Ahmedabad before the High Court of Gujarat which was decided in favour of Ellora Time Limited vide order dated December 06, 2007.

10. Order dated December 30, 2000 passed by the ACIT, Special Range-1, Rajkot under Section 143(3) of the Income Tax Act for the assessment year 1998 – 1999 for payment of amount Rs. 3,78,293. Appeal filed by Ellora Time Limited on February 26, 2001 before the CIT (Appeals)-IV, Rajkot which was partly allowed. Cross appeals were filed by Ellora Time Limited and the DCIT,

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Rajkot before the ITAT, Rajkot, which was allowed in part in favour of Ellora Time Limited. The matter was further appealed by the CIT, Central-II, Ahmedabad before the High Court of Gujarat through Tax Appeal No. 1391 of 2005 which was allowed in favour of Ellora Time Limited vide order dated December 06, 2007.

11. Civil Appeal No. 2923 of 2007 filed by Ellora Time Limited before the Supreme Court on July 05, 2007 against the order of High Court of Gujarat on Tax Appeal No. 1265 of 2005, in relation to order dated December 30, 2000 under Section 143(3) passed by the Additional Commissioner of Income Tax, Special Range-1, Rajkot. The Supreme Court restored the matter to the High Court vide order dated July 09, 2007. The matter is pending for hearing before the High Court of Gujarat.

ATCM

1. Notice No. ACIT/CC.1/AADF3173F/2007-08 sent by the ACIT, Central Circle-I, Rajkot on May 14, 2007 to ATCM under Section 143(3) of the Income Tax Act for the assessment year 2005 – 2006 and a subsequent order dated December 31, 2007 passed by the DCIT, Central Circle-I, Rajkot under Section 143(3) of the Income Tax Act for the assessment year 2005 – 2006

2. Order dated March 30, 2006 passed by the ACIT, Central Circle-I, Rajkot under Section 143(3) read with Section 147 of the Income Tax Act for the assessment years 1998 – 1999, 1999 – 2000 and 2000 – 2001 for payment of total amount Rs. 14,842,810. Appeals filed by ATCM before the Commissioner of Income Tax (Appeals)-IV, Ahmedabad which were allowed. The matters were further appealed by the ACIT, Central Circle-I, Rajkot before the ITAT, Rajkot which are pending at present.

3. Order dated January 31, 2006 passed by the DCIT, Central Circle-I, Rajkot under Section 271(1) (c) of the Income Tax Act for the assessment year 1997 – 1998 for payment of amount Rs. 4,27,000. Appeal filed by ATCM before the CIT (Appeals)-IV, Ahmedabad on February 23, 2006, which was dismissed vide order dated February 07, 2007. The matter was further appealed by ATCM before the ITAT, Rajkot. The matter is pending for hearing.

4. Order dated February 09, 1999 passed by the CIT, Special Range-II, Rajkot under Section 143(1) (a) of the Income Tax Act for the assessment year 1998 – 1999 for payment of amount Rs. 55,33,227. Appeal filed by ATCM before the CIT (Appeals)-II, Rajkot on March 11, 1999 which was partly allowed vide order dated February 15, 2000. The matter was further appealed by ATCM and Joint CIT, Special Range-II, Rajkot before the ITAT, Rajkot which was dismissed vide order dated April 28, 2005. The matter was finally appealed by the CIT, Central-II, Ahmedabad before the High Court of Gujarat through Tax Appeal No. 1665 of 2005. The matter is pending for hearing.

5. A petition was filed before the Distrcit Session court, Bharatpur, Rajasthan by Vinod Goyal for his claim for foreign trip (Bangkok) against sales performance scheme declared by the ATCM and he has sought conviction of Jaysukhbhai Patel as a Partner of ATCM, under section 420 of Indian Penal Code. Matter is pending for hearing.

Jaysukhbhai O. Patel – HUF

1. Order dated October 28, 2004 passed by Deputy CIT, Central Circle-I, Rajkot under Section 158BC of the Income Tax Act for block assessment period from assessment years 1997 – 1998 to 2002 – 2003 for payment of amount Rs. 12,83,428. Appeal filed by Jaysukh O. Patel (HUF) before the Commissioner of Income Tax (Appeals)-IV, Ahmedabad on November 29, 2004, which was partly allowed. The matter was further appealed by the ACIT, Central Circle-I, Rajkot before the ITAT, Rajkot. The matter is pending for hearing.

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Mrudulaben J. Patel

1. Order dated October 28, 2004 passed by Deputy CIT, Central Circle-I, Rajkot under Section 158BC of the Income Tax Act for block assessment period from assessment years 1997 – 1998 to 2002 – 2003 for payment of amount Rs. 12,30,449. Appeal filed by Mrudulaben J. Patel before the Commissioner of Income Tax (Appeals)-IV, Ahmedabad on November 29, 2004, which was partly allowed. The matter was further appealed by the ACIT, Central Circle-I, Rajkot before the ITAT, Rajkot. The matter is pending for hearing.

Pravinbhai O. Patel – HUF

1. Order dated October 28, 2004 passed by Deputy CIT, Central Circle-I, Rajkot under Section 158BC of the Income Tax Act for block assessment period from assessment years 1997 – 1998 to 2002 – 2003 for payment of amount Rs. 21,26,132. Appeal filed by Pravin O. Patel (HUF) before the Commissioner of Income Tax (Appeals)-IV, Ahmedabad on November 29, 2004, which was partly allowed. The matter was further appealed by the ACIT, Central Circle-I, Rajkot before the ITAT, Rajkot. The matter is pending for hearing.

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GOVERNMENT APPROVALS We have received the necessary consents, licenses, permissions and approvals from the Government and various governmental agencies required for our present business and to undertake this Issue. No further major approvals from any governmental or regulatory authority or any other entity are required to undertake the Issue or continue our business activities. Unless otherwise stated, these approvals are all valid as of the date of this Draft Red Herring Prospectus. Approvals for the Issue 1. The Board of Directors has, pursuant to a resolution dated February 21, 2008, authorised the Issue; 2. The shareholders of our Company have, pursuant to a resolution dated February 25, 2008 under

Section 81(1A) of the Companies Act, authorised the Issue; 3. In-principle approval from the BSE dated [●]; and 4. In-principle approval from the NSE dated [●]. Approvals for the Business Tax Related Approvals 1. Permanent Account Number (PAN) issued by the Income Tax Department is AAECA6115B. 2. Tax Deduction Account Number (TAN) issued by National Securities Depository Limited is

RKTA01563C. Sales Tax

1. Certificate of registration, bearing registration number 24010300270, with respect to local sales tax, dated September 5, 2005 valid till cancelled, from the Sales Tax Department, Gandhidham, Kutch.

2. Certificate of registration, bearing registration number 24510300270, under the Central Sales Tax

(Registration & Turnover) Rules, 1957, dated September 5, 2005, from the Sales Tax Department, Gandhidham, Kutch. The certificate purports manufacture of electronic energy saving lamp, domestic air conditioner, toys, musical instruments, button telephone instruments, clocks, watches.

3. Certificate of registration and Tax payer Identification Number (TIN) 27510290910V, dated April

1, 2006 under the Maharashtra Value Added Tax Act, 2002, from the Department of Sales Tax, Maharashtra (Mumbai).

4. Certificate of registration and Tax payer Identification Number (TIN) 27510290910C, dated April

1, 2006 under the Central Sales Tax (Registration & Turnover) Rules, 1957, from the Department of Sales Tax, Maharashtra (Mumbai).

5. Certificate of registration bearing registration number CST No. 822165, dated December 26, 2005

valid till cancelled, under the Central Sales Tax Act, from the Commercial Tax Officer, Egmore-II, Assessment Circle, Chennai in Tamil Nadu.

6. Certificate of registration bearing registration number 29660462727, with respect to the local

value-added tax, dated December 5, 2005 valid till cancelled, from the Assistant Commissioner of Commercial Tax, Karnataka (Bangalore).

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7. Certificate of registration bearing registration number 29820463124, dated December 5, 2005 valid till cancelled, under the Central Sales Tax (Registration & Turnover) Rules, 1957 from the Assistant Commissioner of Commercial Tax, Karnataka (Bangalore).

8. Registration for Sales tax incentive for economic development of Kutch, bearing registration

number IC/INC/Kutch/Regn./T.5/31, dated May 15, 2004 from the Industries Commissionerate, Gujarat. This registration was only valid for 120 days from the date of commercial production. An application for the grant of Eligibility Certificate for Sales tax incentive before the expiry of 120 days from the date of commercial production to the sanctioning authority being DIC in case of SSI or IC in case of MSI/ LSI. The same was amended by letter number No. IC/INC/T.5/ST/Amendment/5499 dated December 27, 2005 and by letter number No:IC:INC/T-5/STR/Kutch/974 dated March 23, 2006. Further, the Industries Commissioner, Gandhinagar issued an eligibility certificate for sales tax incentive vide letter number NO./IC/INC/T.5/Kutch Package/ST/1192 dated May 24, 2007 for the new unit commercial production for which was commenced from September 15, 2005 for the manufacture CFL, other electro mechanical domestic appliances with motor, iron, fan, vitrified tiles, industrial accessories of plastic including electrical insulating fitting of plastics, telephone, VCD/DVD players, calculator, quartz clock (watches and clocks having MRP more than Rs. 500), grinding wheels, diamond wheel, abrasive stone, insulated wire and cable, aluminium composite panel, paint, colours and pigments and electrically operated bikes. The validity of this eligibility certificate is September 15, 2005 to September 14, 2015. Under the terms of the eligibility certificate, the new unit is entitled for sales tax exemption at the rate of 100% of its eligibile fixed capital investment. However, the eligibility certificate is issued provisionally at the rate of 25% of its entitlement for the upper limit of Rs. 275.22 million.

9. Certificate of exemption bearing registration number K.AA.V.YO-2001/24010300270/95/2007-

08, dated July 19, 2007, under Gujarat value-added tax and sales tax laws, from the Deputy Commercial Tax Commissioner, Gandhidham. The exemption is applicable till September 14, 2015 and the maximum limit of exemption is 275.22 million.

10. Certificate of registration bearing registration number P/RO/03000002, dated March 3, 2004,

under the Gujarat State Tax on Professions, Traders, Calling and Employment Act, 1976, from the Profession Tax Officer, Gandhidham.

Excise and Service Tax

1. Certificate of registration bearing registration number AR/GIM/GTA-467/2004-05, dated

February 21, 2005 valid till cancelled, for the payment of service tax on services of goods transport agency, from the Superintendent of Service Tax, Gandhidham, Kutch.

2. Certificate of registration bearing registration number AAECA6115BXM001, dated April 8, 2004

valid till cancelled, under the Central Excise Rules, 2002, from the Assistant Commissioner, Central Excise, Bhuj.

3. Certificate of incentive of Central Excise bearing registration number V/30-03/CCO/Kutch/2003-

04, dated February 13, 2006, for the units set up between July 31, 2001 and December 31, 2005 in terms of the notification 39/2001-CE on July 31, 2001 (as amended by Notification number 55/2004 – CE dated November 9, 2004), from the Office of the Chief Commissioner, Customs & Central Excise, Ahmedabad Zone.

4. Permission granted by the Office of the Suprintendent of Central Excise, Assessment Range,

Gandhidham dated February 4, 2004 for setting up of a new unit the Company’s site in Kutch for vitrified flooring, tiles and other products in terms of availing refund of excise duty under Notification No. 39/2001-CE on July 31, 2001.

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Import/Export Related Approvals

1. Certificate of Importer-Exporter Code (IEC) bearing IEC number 2403006009, dated February 17, 2004 issued by the Joint Director General of Foreign Trade, Rajkot.

Labour Related Approvals 1. Certificate of registration under the Contract Labour (Regulation & Abolition) Act, 1970 bearing

registration number 77/2007, dated August 16, 2007, issued by the Assistant Labour Inspector, Gandhidham, Kutch for ceramics and electric goods manufacturing.

2. Registration certificate of Establishment, registration number 2/VASA/1005 dated June 7, 2007

issued by Government of Karnataka, Department of Labour under the Karnataka Shops and Commercial Establishments Act, 1961 for the sale of vitrified tiles at the premises.

Environment Related Approvals 1. Letter No. GPCB/CCA-Kutch-335/3880 dated February 6, 2007 from the Gujarat Pollution

Control Board, Gujarat under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 and Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, granting consent for setting up an industrial plant for the manufacture of grinding wheels, diamond wheels, abrasive stone, insulated wire and cable, ACP extruders and artwares, paint, colour and pigment, valid for five years from the date of the order.

2. Letter No. GPCB/CCA-KUTCH-335/31319 dated November 2, 2006 from the Gujarat Pollution

Control Board, Gujarat granting consent under Consent Order Number: 8301 dated November 1, 2006 for the use of outlet for the discharge of trade effluent and emission due to operation of industrial plant for the manufacture of vitrified tiles, telephones, DVD/ VCD players, fan, CFL, calculators, quartz clock, iron and other electro-mechanical domestic appliances with motor. This consent was valid till October 12, 2007 and the Company has filed for the renewal of the same dated vide letter dated January 3, 2008. Further, the Company is authorized to operate a facility for the collection and storage of specific hazardous waste being, electronic waste, used oil and discarded container within the factory premises and transportation and ultimate disposal of the hazardous waste at the manufacturing facility at Kutch. The authorization is valid for a period of five years.

3. Letter No. GPCB/CCA-Kutch-335/7744 dated March 14, 2007 from the Gujarat Pollution Control

Board, Gandhinagar granting consent to establish industry for e-bikes and industrial accessories of plastics, under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 and Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 valid for five years from the date of the order.

4. Certificate of registration bearing registration number 23-17 (338)/2007-HSMD, dated February

22, 2007, for importers of new lead acid batteries, issued by the Ministry of Environment & Forests, India.

5. License No. 7/1(00471)/2005-PSU/LPRO/ZSL-00418, dated June 17, 2005 issued for handling

prescribed substances under Atomic Energy (Working of the Mines, Minerals & Handling of Prescribed Substances) Rules, 1984 read with the Department of Atomic Energy Notification No. AEA/27/1/95-ER-S.O. 212(E) dated March 15, 1995, by Department of Atomic Energy, Mumbai, which is valid till May 31, 2008.

6. Renewal of License No. P/HQ/GJ/15/4619(P119617) dated December 29, 2005, till December 31,

2008, issued for the purpose of import and storage of petroleum in installation, by the Petroleum and Explosives Safety Organisation (PESO), Ministry of Commerce and Industry, Baroda.

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Other Approvals 1. The Automative Research Association of India has conducted the test on our e-Bike and issued a

test report dated February 20, 2008 wherein it has been concluded that our electric two-wheeler without pedal assistance model of e-Bike, having power less than 250 Watt, cannot be deemed to be a motor vehicle for compliance to CMVR requirements as per the exemption critieria specified in GSR589 (E) dated September 16, 2005.

2. Certificate of exemption from payment of electricity duty under the Bombay Electricity Duty Act,

1958, bearing registration number Kutch/208 & 208/A, dated February 27, 2006, valid from September 15, 2005 to April 30, 2010, issued by the Office of the Collector of Electricity Duty, Gandhinagar.

3. Administrative approval No. RZ/Tech/AA/ND dated March 18, 2004 for the release of 25KW 3

Phase Commercial Lighting Connection at Vandiya, Taluka Bhachau, from the Gujarat Electricity Board, Rajkot. The sanction is valid for six months.

4. Calibration certificate No. 30/0097 dated April 4, 2007, issued under the Standard Weight and

Measure Rules, 1985 by the Junior Inspector of Legal Metrology, Adipur, Kutch and valid till April 4, 2008.

5. No Objection Certificate No. 3(41)/2006-D (Air-II) dated June 26, 2006 for the increase in height

of chimney up to 81 meters, issued by the Ministry of Defence, New Delhi. 6. Registration-cum-Membership Certificate No. CAPAXIL/WR/REG/CERAMIC/A-2/LM dated

July 3, 2007, issued by CAPEXIL, Western Region, Mumbai, valid till March 31, 2008. We have filed for a renewal of the certificate by our letter dated March 31, 2008.

7. The Company has received Acknowledgements from the Public Relation & Complaints Section,

Secretariat for Industrial Assistance, Ministry of Commerce & Industry for the following items for which the Company had filed the Industrial Entrepreneurs Memorandum with the Secretariat for Industrial Assistance under the Industries (Development and Regulation) Act, 1951.

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

1. 3639.00 Electronic Energy Saving Lamp 282/SIA/IMO/2004

7,500,000 pieces

2. 3552.00 Domestic Air Conditioner 282/SIA/IMO/2004 600,000 pieces

3. 3553.00 Domestic Refrigerators / Freezers

282/SIA/IMO/2004 600,000 pieces

4. 3649.00 Electro Thermic Domestic Appliances

282/SIA/IMO/2004 600,000 pieces

5. 3642.00 Vacuum Cleaners and other Electro Mechanical Domestic Appliances with Motor

282/SIA/IMO/2004 600,000 pieces

6. 3609.00 Water Geysers and Heaters, Hair Dryer Steam and Spray Iron, ELC and Electronic Cooking Appliances

282/SIA/IMO/2004 600,000 pieces

7. 3609.00 Dishwashers Electric Razors Parts and Accessories

282/SIA/IMO/2004 600,000 pieces

8. 3641.00 Electric Fans (Excluding Exhaust Fans)

282/SIA/IMO/2004 600,000 pieces

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S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

9. 3820.00 Clocks & Watches of all Kind 282/SIA/IMO/2004 600,000 pieces

10. 3860.00 Toys and Toy Musical Instruments

282/SIA/IMO/2004 600,000 pieces

11. 3206.00 Vitrified Tiles and Glaze Tiles 283/SIA/IMO/2004

7,500,000 Sq. Mt

12. 3231.00 Ceramic Sanitary Wares: Sink Baths Etc

283/SIA/IMO/2004

1,500,000 pieces

13. 3233.00 Ceramic Insulators and Insulating Fittings for Electrical Machines, Appliances and Equipment

283/SIA/IMO/2004

1,000,000 pieces

14. 3212.00 Vitrifiable Enamels and Glazes, Glass Frits

283/SIA/IMO/2004

60,000 Tons

15. 3201.00 Refractories, Bricks, Blocks, Tiles Thickness less than 10 mm and other Ceramic Constructional Goods

283/SIA/IMO/2004

2,500,000 pieces

16. 3655.00 Push Button Telephone Instruments

326/SIA/IMO/2004

2,500,000 pieces

17. 3667.00 VCD /DVD Players Audio/Video CD Players

327/SIA/IMO/2004

1,500,000 pieces

18. 3661.00 Television Receivers Including Video Monitors and Projectors

327/SIA/IMO/2004

1,200,000 pieces

19. 3583.00 Electronic Calculators Handheld or Desk Top Electronic Calculating Machines

327/SIA/IMO/2004

1,500,000 pieces

20. 3133.00 Bathing Tubs, Wash-Basins, Lavatory Pans and Covers, Flushing System of Plastic Excluding Items Reserved for SSI

329/SIA/IMO/2004

1,500,000 pieces

21. 3134.00 Travel Goods of Plastics Excluding Items Reserved for SSI Sector

329/SIA/IMO/2004

1,000,000 pieces

22. 3134.00 Furniture and Fixture of Plastics I.E Telephone Stand Etc

492/SIA/IMO/2004

2,000,000 pieces

23. 3132.00 Packing Products of Plastics (Except House Hold)

492/SIA/IMO/2004

50 Ton

24. 3137.00 Manufacture Of Moulded Industrial Accessories of Plastics Including Electrical Insulating Fitting of Plastics

492/SIA/IMO/2004

2,500,000 pieces

25. 3138.00 ICE Shaver of Plastics 492/SIA/IMO/2004

2,000,000 pieces

26. 3296.00 Manufacture of Grinding Wheels and Abrasives Stones

493/SIA/IMO/2004

5,000,000 pieces

27. 3297.00 Manufacture of Graphite Products I.E Diamond wheel and Rollers

493/SIA/IMO/2004

5,000,000 pieces

28. 3684.00 Manufacture of Printed Circuits Board (PCB)

494/SIA/IMO/2004 30,000,000 pieces

29. 3686.00 Manufacture of Electronics 494/SIA/IMO/2004 20,000 Kilo

200

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

Integrated Circuits and Micro Assemblies

30. 3689.00 Manufacture of Other Electronics Components NEC

494/SIA/IMO/2004 5,000,000 Kilo

31. 3683.00 Manufacture of Electrical Resistors (Except Heating Resistors)

494/SIA/IMO/2004 1,000,000 Kilo

32. 3682.00 Manufacture of Electrical Capacitors (Except Power Capacitors)

494/SIA/IMO/2004 500,000 Kilo

33. 3681.00 Manufacture of Thermionic, Cold Cathode or Photo-Cathode Valves and Tubes

494/SIA/IMO/2004 20,000 Kilo

34. 3655.00 Epabx and Mini Exchange 495/SIA/IMO/2004 1,000,000 pieces

35. 3652.00 Cellular & Radio Telephone 495/SIA/IMO/2004 1,000,000 pieces

36. 3655.00 Parts of Telephone Including Cellular Phones

495/SIA/IMO/2004 5,000,000 pieces

37. 3031.00 Zirconium Silicate 496/SIA/IMO/2004 50,000 MT

38. 3031.00 AL203 Pebbles 496/SIA/IMO/2004 50,000 MT

39. 3031.00 Manufacture of Prepared Pigment Sopacifiers & Colors Engoben & Similar Preparation a kind used in Ceramic

496/SIA/IMO/2004 550 Ton

40. 3643.00 Thermo wear and Cookwear (Other then Reserved for SSI)

497/SIA/IMO/2004

1,500,000 pieces

41. 3642.00 Hand blender Grinner Mixer Washing Machine (Other then Reserved for SSI)

497/SIA/IMO/2004

2,000,000 pieces

42. 3639.00 Emergency Light 497/SIA/IMO/2004 2,000,000 pieces

43. 3641.00 Exhaust Fan Kitchen / Fresh Air Fan Cook wear (Other then Reserved for SSI)

497/SIA/IMO/2004

2,000,000 pieces

44. 3549.00 Wind farm and other Energy Producing Machines and Equipment

497/SIA/IMO/2004

50,000 pieces

45. 3643.00 Sandwich Toaster, Hair Dryer and Styler Room Heater, Table Heater Geysers (other then Reserved for SSI)

497/SIA/IMO/2004

2,000,000 pieces

46. 3039.00 Manufacture of Glazier Putty Grafting Putty Resin Cement Caulking Compounds and other Mastics

716/SIA/IMO/2004

500 Ton

47. 3096.00 Manufacture of Chemical Elements and Compound Doped for Use in Electronics

716/SIA/IMO/2004

50 Ton

48. 3095.00 Manufacture of Glue 716/SIA/IMO/2004 50 Ton

49. 3672.00 Manufacture of Personal Computers Mini Computers

717/SIA/IMO/2004

100,000 pieces

201

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

50. 3673.00 Manufacture of Peripherals like Magnetic Disk/Floppy/Winchester Disk Drives

717/SIA/IMO/2004

5,000,000 pieces

51. 3676.00 Manufacture of Magnetic/Disk/Diskettes and Similar Data Storage Media

717/SIA/IMO/2004

100,000 pieces

52. 3678.00 Manufacture of Parts and Accessories for Computer and Computer Based System

717/SIA/IMO/2004

100,000 pieces

53. 2813.00 Manufacture of Fiber Board Containers

718/SIA/IMO/2004

5,000,000 pieces

54. 2819.00 Manufacture of other Containers and Boxes of Paper or Paper Board (Laminated)

718/SIA/IMO/2004

5,000,000 pieces

55. 2804.00 Manufacture of Packaging Paper, Machines Made Duplex Paper, Kraft Paper

718/SIA/IMO/2004

1000 Ton

56. 3210.00 Manufacture of Glass and Glass Products (Excluding Items Reserved for SSI Sector)

1296/SIA/IMO/2004

5,000,000 Sq. Mt

57. 3211.00 Manufacture of Glass in Primary or Semi-Manufactured Forms Including Mirror Sheets (Sheets & Plate Glass) Excluding Reserved for SSI Sector

1296/SIA/IMO/2004

1,00,000 Sheets

58. 3212.00 Manufacture of Glass Fibre (Including Glass wool) and Products therefrom

1296/SIA/IMO/2004

100,000 Pieces

59. 3217.00 Manufacture of Glass Decoration Pieces Excluding Reserved for SSI Sector

1296/SIA/IMO/2004

100,000 Pieces

60. 3219.00 Manufacture of other Glass Ware/Glass Products Including Glass Beads – Industrial, N.E.C.

1296/SIA/IMO/2004

100 Ton

61. 3601.00 Manufacture of Generators / Generating Sets

1297/SIA/IMO/2004

5000 pieces

62. 3604.00 Manufacture of Electric Motors Special Type

1297/SIA/IMO/2004

60,000 pieces

63. 3610.00 Manufacture of Insulated Wires and Cables, Including Manufacture of Optical Fiber Cables

1297/SIA/IMO/2004

60 Ton

64. 3639.00 Manufacture of other Electric Lamps N.E.C.

1297/SIA/IMO/2004

2,000,000 pieces

65. 3880.00 Manufacture of Items Based on Solar Energy like Solar Cells, Cookers, Air and Water Heating Systems and other Related Items

1298/SIA/IMO/2004

1,000,000 pieces

202

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

66. 3603.00 Manufacture of Electricity Distribution and Control Apparatus (Electrical Apparatus for Switching Protecting ELE Circuit Etc)

2199/SIA/IMO/2004

50,000,000 pieces

67. 3599.00 Manufacture of other Special Purpose Non-Electrical Machinery/ Equipments N.E.C.

2199/SIA/IMO/2004

50,000,000 pieces

68. 3603.00 Manufacture of Switches of all kinds for a Voltage not Exceeding 1000

2199/SIA/IMO/2004

50,000,000 pieces

69. 3603.00 Manufacture of Voltage Limiters / Stabilizers

2199/SIA/IMO/2004

4,000,000 pieces

70. 3621.00 Manufacture of Storage Batteries 2199/SIA/IMO/2004

5,000,000 pieces

71. 3620.00 Manufacture of Accumulators Primary Cells and Primary Batteries

2199/SIA/IMO/2004

10,000,000 pieces

72. 3605.00 Manufacture of Power Capacitors

2199/SIA/IMO/2004

4,000,000 pieces

73. 3603.00 Manufacture of Fuses 2199/SIA/IMO/2004

5,000,000 pieces

74. 2632.00 Manufacture of Blankets Shawls other than by Hand

3299/SIA/IMO/2004

30,000,000 pieces

75. 3301.00 Manufacture of Iron and Alloy Steel

4275/SAI/IMO/2005

90,000 Ton

76. 3301.00 Steel Billets and Round bar Excluding Bright bar

4275/SAI/IMO/2005

50,000 Ton

77. 3499.00 Manufacture of Aluminum Compact Panel and Art Work

5263/SIA/IMO/2005

800,000 Sq. Mt.

78. 3494.00 Manufacture of Articles of Alumina Coil and Extruders

5263/SIA/IMO/2005

500,000 Sq. Mt.

79. 3631.00 Electrical Filaments Lamp, Including Sealed Beam Lamp of Unit

6193/SIA/IMO/2005

2,500,000 pieces

80. 3632.00 Ultra Violet or Infra Red Lamp and Tube

6193/SIA/IMO/2005

2,500,000 pieces

81. 3633.00 Discharge Lamp, Tube Florescent, Hot Cathode or other Lamps

6193/SIA/IMO/2005

2,500,000 pieces

82. 3634.00 ARC Lamp and Tube 6193/SIA/IMO/2005

1,500,000 pieces

83. 3635.00 Flash Bulb Used In Photography 6193/SIA/IMO/200 2,500,000

203

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

5

pieces

84. 3638.00 Part of Tubes Fitting and Features and Accessories

6193/SIA/IMO/2005

5,000,000 pieces

85. 3638.00 Lamp and Lighting Fitting Including Search Spotlight and Parts Thereof

6193/SIA/IMO/2005

1,000,000 pieces

86. 3638.00 Electronic Ballast for Energy Saving and Other

6193/SIA/IMO/2005

15,000,000 pieces

87. 3639.00 Manufacture of other Electric Lamp NEC

6193/SIA/IMO/2005

5,000,000 pieces

88. 3823.00 Electronic / Quartz Clock and Table Time – Pieces and Watches

26/SIA/IMO/2006

5,000,000 pieces

89. 3828.00 Part and Accessories of all type of Clocks and Table Time Pieces and Watches I.E. Movements, Module, Cabinet, Dial, Case, Etc.

26/SIA/IMO/2006

5,000,000 Sets

90. 3056.00 Cosmetics and Toiletries includes Personal Deodorant and Respirants Perfumes Beauty or Make Up

1926/SIA/IMO/2006

500,000 pieces

91. 3056.00 Manufacture of Cosmetics Nail Polish, Lipstick, Cream, Talk Powder

1926/SIA/IMO/2006

500,000 pieces

92. 3057.00 Manufacture of use on the Hair includes Shampoos Hairspray Etc

1926/SIA/IMO/2006

500,000 pieces

93. 3748.00 Manufacturing of Motor Cycles Including Moped and Cycle Fitted with an Auxiliary Engine

5758/SIA/IMO/2006

500,000 pieces

S.No Item Code

Item Description Acknowledgment letter number

Annual Production Capacity

94. 3639.00 Electronics Energy Saving Lamp 282/SIA/IMO/2004

7500000 pieces

95. 3552.00 Domestic Air Conditioner 282/SIA/IMO/2004 600000 pieces

96. 3553.00 Domestic Refrigerators / Freezers

282/SIA/IMO/2004 600000 pieces

97. 3649.00 Electro Thermic Domestic Appliances

282/SIA/IMO/2004 600000 pieces

98. 3642.00 Vacuum Cleaners and other Electro Mechanical Domestic Appliances with self-contained electric motors such as food processors and juice extracts

282/SIA/IMO/2004 600000 pieces

99. 3609.00 Water Geysers and Heaters, Hair Dryer Steam and Spray Iron,

282/SIA/IMO/2004 600000 pieces

204

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

ELC and Electronic Cooking Appliances

100. 3609.00 Dishwashers Electric Razors Parts and Accessories

282/SIA/IMO/2004 600000 pieces

101. 3641.00 Electric Fans (Excluding Exhaust Fans)

282/SIA/IMO/2004 600000 pieces

102. 3820.00 Clocks & Watches of all Kind 282/SIA/IMO/2004 600000 pieces

103. 3860.00 Toys and Toy Musical Instruments

282/SIA/IMO/2004 600000 pieces

104. 3206.00 Vitrified Tiles and Glaze Tiles 283/SIA/IMO/2004

7500000 Sq. Mt

105. 3231.00 Ceramic Sanitary Wares: Sink Baths Etc

283/SIA/IMO/2004

1500000 pieces

106. 3233.00 Ceramic Insulators and Insulating Fittings for Electrical Machines, Appliances and Equipment

283/SIA/IMO/2004

1000000 pieces

107. 3212.00 Verifiable Enamels and Glazes, Glass Frits

283/SIA/IMO/2004

60000 Tons

108. 3201.00 Refractoriness Bricks, Blocks, Tiles Thickness less than 10 mm and other Ceramic Constructional Goods

283/SIA/IMO/2004

2500000 pieces

109. 3655.00 Push Button Telephone Instruments

326/SIA/IMO/2004

2500000 pieces

110. 3667.00 Vcd/Dvd Players Audio/Video cd Players

327/SIA/IMO/2004

1500000 pieces

111. 3661.00 Television Receivers Including Vidio Monitors and Projectors

327/SIA/IMO/2004

1200000 pieces

112. 3583.00 Electronic Calculators Handheld or Desk Top

327/SIA/IMO/2004

1500000 pieces

113. 3133.00 Bathing Tubs, Wash-Basins, Lavatory Pans and Covers, Flushing System of Plastic Excluding Items Reserved for SSI

329/SIA/IMO/2004

1500000 pieces

114. 3134.00 Travel Goods of Plastics Excluding Items Reserved for SSI Sector

329/SIA/IMO/2004

1000000 pieces

115. 3134.00 Furniture and Fixture of Plastics I.E Telephone Stand Etc

492/SIA/IMO/2004

2000000 pieces

116. 3132.00 Packing Products of Plastics (Except House Hold)

492/SIA/IMO/2004

50 Ton

117. 3137.00 Man. Of Molded Industrial Accessories of Plastics Including Electrical Insulating Fitting of Plastics

492/SIA/IMO/2004

2500000 pieces

118. 3138.00 ICE Shaver of Plastics 492/SIA/IMO/2004

2000000 pieces

119. 3296.00 Manufacture of Grinding Wheels and Abrasives Stones

493/SIA/IMO/2004

5000000 pieces

120. 3297.00 Man. Of Graphite Products I.E 493/SIA/IMO/2004 5000000 pieces

205

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

Diamond wheel and Rollers

121. 3684.00 Manufacture of Printed Circuits Board (PEB)

494/SIA/IMO/2004 30000000 pieces

122. 3686.00 Manufacture of Electronics Integrated Circuits and Micro Assemblies

494/SIA/IMO/2004 20000 Kilo

123. 3689.00 Manufacture of Other Electronics Components NEC

494/SIA/IMO/2004 5000000 Kilo

124. 3683.00 Manufacture of Electrical Resistors (Except Heating Resistors)

494/SIA/IMO/2004 1000000 Kilo

125. 3682.00 Manufacture of Electrical Capacitors (Except Heating Capacitors)

494/SIA/IMO/2004 500000 Kilo

126. 3681.00 Manufacture of Harmonic, Cold Cathode or Photo-Cathode Valves and Tubes

494/SIA/IMO/2004 20000 Kilo

127. 3655.00 Epabx and Mini Exchange 495/SIA/IMO/2004 1000000 pieces

128. 3652.00 Cellular & Radio Telephone 495/SIA/IMO/2004 1000000 pieces

129. 3655.00 Parts of Telephone Including Cellular Phones

495/SIA/IMO/2004 5000000 pieces

130. 3031.00 Zirconium Silicate 496/SIA/IMO/2004 50000 pieces

131. 3031.00 AL203 Pebbles 496/SIA/IMO/2004 50000 pieces

132. 3031.00 Manufacture of Prepared Pigment So pacifiers & Colors Engoben & Similar Preparation a kind Used in Ceramic

496/SIA/IMO/2004 550 Ton

133. 3643.00 Thermo wear and Cookwear (Other then Reserved for SSI)

497/SIA/IMO/2004

1500000 pieces

134. 3642.00 Hand blender Grinner Mixer Washing Machine (Other then Reserved for SSI)

497/SIA/IMO/2004

2000000 pieces

135. 3639.00 Emergency Light 497/SIA/IMO/2004 2000000 pieces

136. 3641.00 Exhaust Fan Kitchen / Fresh Air Fan Cook wear (Other then Reserved for SSI)

497/SIA/IMO/2004

2000000 pieces

137. 3549.00 Wind farm and other Energy Producing Machines and Equipment

497/SIA/IMO/2004

50000 pieces

138. 3643.00 Sandwich Toaster, Hair Dryer and Stiller Room Heater, Table Heater Geysers (other then Reserved for SSI)

497/SIA/IMO/2004

2000000 pieces

139. 3039.00 Manufacture of Glazier Putty Grafting Putty Resin Cement Caulking Compounds and other Mastics

716/SIA/IMO/2004

500 Ton

140. 3096.00 Manufacture of Chemical Elements and Compound Doped for Use in Electronics

716/SIA/IMO/2004

50 Ton

141. 3095.00 Manufacture of Glue 716/SIA/IMO/2004 50 Ton

142. 3672.00 Manufacture of Personal 717/SIA/IMO/2004 100000 pieces

206

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

Computers Mini Computers

143. 3673.00 Manufacture of Peripheral Like Magnetic Disk/Floppy/Winchester Disk Drives

717/SIA/IMO/2004

5000000 pieces

144. 3676.00 Manufacture of Magnetic/Disk/Diskettes and Similar Data Storage Media

717/SIA/IMO/2004

100000 pieces

145. 3678.00 Manufacture of Parts and Accessories for Computer and Computer Based System

717/SIA/IMO/2004

100000 pieces

146. 2813.00 Manufacture of Fiber Board Containers

718/SIA/IMO/2004

5000000 pieces

147. 2819.00 Manufacture of other Containers and Boxes of Paper or Paper Board (Laminated)

718/SIA/IMO/2004

5000000 pieces

148. 2804.00 Manufacture of Packaging Paper, Machines Made Duplex Paper, Kraft Paper

718/SIA/IMO/2004

1000 Ton

149. 3210.00 Manufacture of Glass and Glass Products (Excluding Items Reserved for SSI Sector)

1296/SIA/IMO/2004

5000000 Sq. Mt

150. 3211.00 Manufacture of Glass in Primary or Semi Manufacture Forms Including Mirror Sheets (Sheets & Plate Glass) Excluding Reserved for SSI Sector

1296/SIA/IMO/2004

100000 Sheets

151. 3212.00 Manufacture of Glass Fire (Including Glass wool) and Products There from

1296/SIA/IMO/2004

100000 Pieces

152. 3217.00 Manufacture of Glass Decoration Pieces Excluding Reserved for SSI Sector

1296/SIA/IMO/2004

100000 Pieces

153. 3219.00 Manufacture of other Glass Ware/Glass Products Including Glass Beads – Industrial, N.E.C.

1296/SIA/IMO/2004

100 Ton

154. 3601.00 Manufacture of Generators / Generating Sets

1297/SIA/IMO/2004

5000 pieces

155. 3604.00 Manufacture of Electric Motors Special Type

1297/SIA/IMO/2004

60000 pieces

156. 3610.00 Manufacture of Insulated Wires and Cables, Including Manufacture of Optical Fiber Cables

1297/SIA/IMO/2004

60 Ton

157. 3639.00 Manufacture of other Electric Lamps N.E.C.

1297/SIA/IMO/2004

2000000 pieces

158. 3880.00 Manufacture of Items Based on Solar Energy Like Solar Cells, Cookers, Air and Water Heating

1298/SIA/IMO/2004

1000000 pieces

207

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

Systems and other Related Items

159. 3603.00 Manufacture of Electricity Distribution and Control Apparatus (Electrical Apparatus for Switching Protecting ELE Circuit Etc)

2199/SIA/IMO/2004

50000000 pieces

160. 3603.00 Manufacture of other Special Purpose Non-Electrical Machinery/ Equipments N.E.C.

2199/SIA/IMO/2004

50000000 pieces

161. 3603.00 Manufacture of Switches all kinds for a Voltage not Exceeding 1000

2199/SIA/IMO/2004

50000000 pieces

162. 3603.00 Manufacture of Voltage Limiters / Stabilizers

2199/SIA/IMO/2004

4000000 pieces

163. 3621.00 Manufacture of Storage Batteries 2199/SIA/IMO/2004

5000000 pieces

164. 3620.00 Manufacture of Accumulators Primary Cells and Primary Batteries

2199/SIA/IMO/2004

10000000 pieces

165. 3605.00 Manufacture of Power Capacitors

2199/SIA/IMO/2004

4000000 pieces

166. 3603.00 Manufacture of Fuses 2199/SIA/IMO/2004

5000000 pieces

167. 2632.00 Manufacture of Blankets Shawls other than by Hand

3299/SIA/IMO/2004

30000000 pieces

168. 3301.00 Manufacture of Iron and Alloy Steel

4275/SAI/IMO/2005

90000 Ton

169. 3301.00 Steel Billets and Round bar Excluding bar

4275/SAI/IMO/2005

5000 Ton

170. 3499.00 Manufacture of Aluminum Compact Panel and Art Work

5263/SIA/IMO/2005

800000 Sq. Mt.

171. 3494.00 Manufacture of Articles of Alumina Coil and Extruders

5263/SIA/IMO/2005

500000 Sq. Mt.

172. 3631.00 Electrical Filaments Lamp, Including Sealed Beam Lamp of Unit

6193/SIA/IMO/2005

2500000 pieces

173. 3632.00 Ultra Violet or Infra Red Lamp and Tube

6193/SIA/IMO/2005

2500000 pieces

174. 3633.00 Discharge Lamp, Tube Florescent, Hot Cathode or other Lamps

6193/SIA/IMO/2005

2500000 pieces

175. 3634.00 ARC Lamp and Tube 6193/SIA/IMO/2005

1500000 pieces

208

S. No. Item

Code

Item Description Acknowledgment

letter number

Annual

Production

Capacity

176. 3635.00 Flash Bulb Used In Photography 6193/SIA/IMO/2005

2500000 pieces

177. 3638.00 Part of Tubes Fitting and Features and Accessories

6193/SIA/IMO/2005

5000000 pieces

178. 3638.00 Lamp and Lighting Fitting Including Search Spotlight and Parts Thereof

6193/SIA/IMO/2005

1000000 pieces

179. 3638.00 Electronic Ballast for Energy Saving and Other

6193/SIA/IMO/2005

15000000 pieces

180. 3639.00 Manufacture of other Electric Lamp NEC

6193/SIA/IMO/2005

5000000 pieces

181. 3823.00 Electronic / Quartz Clock and Table Time – Pieces and Watches

26/SIA/IMO/2006

5000000 pieces

182. 3828.00 Part and Accessories of all type of Clocks and Table Time Pieces and Watches I.E. Movements, Module, Cabinet, Dial, Case, Etc.

26/SIA/IMO/2006

5000000 Sets

183. 3056.00 Cosmetics and Toile tars Includes Personal Deodorant and Reprints Perfumes Beatty or Make Up

1926/SIA/IMO/2006

500000 pieces

184. 3056.00 Manufacture of use on the Hair Includes, Shampoos Hairspray Etc

1926/SIA/IMO/2006

500000 pieces

185. 3057.00 Manufacture of Cosmetics Nail Polish, Lipstick, Cream, Talk Powder

1926/SIA/IMO/2006

500000 pieces

186. 3748.00 Manufacturing of Motor Cycles Including Moped and Cycle Fitted with an Auxiliary Engine

5758/SIA/IMO/2006

500000 pieces

8. No Objection Certificate dated March 18, 2004, from Shree Vandhia Juth Gram Panchayat, Taluka

Bhachau, Kutch for availing the new electricity connection. 9. Application dated October 22, 2007 submitted to Bureau of India Standards (BIS) for getting

license for self ballasted lamp/ compact fluorescent lamp as per IS: 15111:1 and 2:2002. The application is under review.

Intellectual Property 1. Copyright for the “OREVA Power Savers” with device of stars, bearing copyright registration

number A-76582/2006 dated June 6, 2006. 2. Copyright for the Oreva Granitile Forever logo with device of tiles, bearing copyright registration

number A-74407/2005 dated September 28, 2005.

209

Trademark Registrations received

Pending Trademark Applications

S.No Trademark applied

for

Application

Number

Class applied

in

Date of the Application

1. OREVA World Of Granites

1274411 January 19, 2007

Class 5

2. OREVA World Of Granites

1274424 July 27, 2007 Class 18

3. OREVA World Of Granites

1274435 July 27, 2007 Class 29

4. OREVA Power Savers

Power Saver To The Nation

1413887 January 16, 2006

Class 1

5. OREVA Power Savers

1413888 January 16, 2006

Class 2

S. No Trademark Trademark

Number

Classes under which registration

received

1. OREVA World of Granites 1274407 Class 1

2. OREVA World of Granites 1274408 Class 2

3. OREVA World of Granites 1274409 Class 3

4. OREVA World of Granites 1274410 Class 4

5. OREVA World of Granites 1274412 Class 6

6. OREVA World of Granites 1274413 Class 7

7. OREVA World of Granites 1274414 Class 8

8. OREVA World of Granites 1274415 Class 9

9. OREVA World of Granites 1274416 Class 10

10. OREVA World of Granites 1274417 Class 11

11. OREVA World of Granites 1274418 Class 12

12. OREVA World of Granites 1274419 Class 13

13. OREVA World of Granites 1274420 Class 14

14. OREVA World of Granites 1274421 Class 15

15. OREVA World of Granites 1274422 Class 16

16. OREVA World of Granites 1274423 Class 17

17. OREVA World of Granites 1274425 Class 19

18. OREVA World of Granites 1274426 Class 20

19. OREVA World of Granites 1274427 Class 21

20. OREVA World of Granites 1274428 Class 22

21. OREVA World of Granites 1274429 Class 23

22. OREVA World of Granites 1274430 Class 24

23. OREVA World of Granites 1274431 Class 25

24. OREVA World of Granites 1274432 Class 26

25. OREVA World of Granites 1274433 Class 27

26. OREVA World of Granites 1274434 Class 28

27. OREVA World of Granites 1274436 Class 30

28. OREVA World of Granites 1274437 Class 31

29. OREVA World of Granites 1274438 Class 32

30. OREVA World of Granites 1274439 Class 33

31. OREVA World of Granites 1274440 Class 34

32. ORION World of Granite 1275226 Class 19

210

S.No Trademark applied

for

Application

Number

Class applied

in

Date of the Application

Power Saver To The Nation

6. OREVA Power Savers

Power Saver To The Nation

1413889 January 16, 2006

Class 3

7. OREVA Power Savers

Power Saver To The Nation

1413890 January 16, 2006

Class 4

8. OREVA Power Savers

Power Saver To The Nation

1413891 January 16, 2006

Class 5

9. OREVA Power Savers

Power Saver To The Nation

1413892 January 16, 2006

Class 6

10. OREVA Power Savers

Power Saver To The Nation

1413893 January 16, 2006

Class 7

11. OREVA Power Savers

Power Saver To The Nation

1413894 January 16, 2006

Class 8

12. OREVA Power Savers

Power Saver To The Nation

1413895 January 16, 2006

Class 9

13. OREVA Power Savers

Power Saver To The Nation

1413896 January 16, 2006

Class 10

14. OREVA Power Savers

Power Saver To The Nation

1413897 January 16, 2006

Class 11

15. OREVA Power Savers

Power Saver To The Nation

1413898 January 16, 2006

Class 12

16. OREVA Power Savers

Power Saver To The Nation

1413899 January 16, 2006

Class 13

17. OREVA Power Savers

Power Saver To The Nation

1413900 January 16, 2006

Class 14

18. OREVA Power Savers

Power Saver To The

1413901 January 16, 2006

Class 15

211

S.No Trademark applied

for

Application

Number

Class applied

in

Date of the Application

Nation

19. OREVA Power Savers

Power Saver To The Nation

1413902 January 16, 2006

Class 16

20. OREVA Power Savers

Power Saver To The Nation

1413903 January 16, 2006

Class 17

21. OREVA Power Savers

Power Saver To The Nation

1413904 January 16, 2006

Class 18

22. OREVA Power Savers

Power Saver To The Nation

1413905 January 16, 2006

Class 19

23. OREVA Power Savers

Power Saver To The Nation

1413906 January 16, 2006

Class 20

24. OREVA Power Savers

Power Saver To The Nation

1413907 January 16, 2006

Class 21

25. OREVA Power Savers

Power Saver To The Nation

1413908 January 16, 2006

Class 22

26. OREVA Power Savers

Power Saver To The Nation

1413909 January 16, 2006

Class 23

27. OREVA Power Savers

Power Saver To The Nation

1413910 January 16, 2006

Class 24

28. OREVA Power Savers

Power Saver To The Nation

1413911 January 16, 2006

Class 25

29. OREVA Power Savers

Power Saver To The Nation

1413912 January 16, 2006

Class 26

30. OREVA Power Savers

Power Saver To The Nation

1413913 January 16, 2006

Class 27

31. OREVA Power Savers

Power Saver To The Nation

1413914 January 16, 2006

Class 28

212

S.No Trademark applied

for

Application

Number

Class applied

in

Date of the Application

32. OREVA Power Savers

Power Saver To The Nation

1413915 January 16, 2006

Class 29

33. OREVA Power Savers

Power Saver To The Nation

1413916 January 16, 2006

Class 30

34. OREVA Power Savers

Power Saver To The Nation

1413917 January 16, 2006

Class 31

35. OREVA Power Savers

Power Saver To The Nation

1413918 January 16, 2006

Class 32

36. OREVA Power Savers

Power Saver To The Nation

1413919 January 16, 2006

Class 33

37. OREVA Power Savers

Power Saver To The Nation

1413920 January 16, 2006

Class 34

38. OREVA Taste Forever

01470292 July 14, 2006 Class 42

39. OREVA Taste Forever

01470293 July 14, 2006 Class 30

40. OREVA Taste Forever

01470294 July 10, 2006 Class 29

41. OREVA Taste Forever

01470295 July 14, 2006 Class 16

42. OREVA D’signer Panels

Feel The Difference

1514020 December 15, 2006

Class 19

43. OREVA E Bike 1514021 December 15, 2006

Class 12

44. OREVA E Bike Mileage Masti

1665449 March 17, 2008

Class 12

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue The issue of Equity Shares in the Issue by the Company has been authorized by the resolution of the Board of Directors passed at their meeting held on February 21, 2008. The shareholders have authorised the Issue by a special resolution in accordance with Section 81(1A) of the Companies Act, passed at the Extra-Ordinary General Meeting of the Company held on February 25, 2008 at Morbi.

Prohibition by SEBI and RBI

The Company, its Directors, the Promoters and Promoter group entities, Directors or the person(s) in control, the Company’s affiliates and the companies with which the Directors are associated with as directors or promoters have not been prohibited from accessing or operating in capital markets under any order or direction passed by SEBI. Further, the Company’s Directors, Promoter and Promoter group entities have confirmed that they have not been detained as wilful defaulters by the RBI or any other governmental authority and there are no violations of securities laws committed by them in the past or are pending against them

Eligibility for the Issue

Our Company is eligible for the Issue in accordance with Clause 2.2.1 of the SEBI Guidelines as explained under the eligibility criteria calculated in accordance with financial statements under Indian GAAP:

• Our Company has net tangible assets of at least Rs. 30 million in each of the preceding three full years of which not more than 50% is held in monetary assets and is compliant with Clause 2.2.1(a) of the SEBI Guidelines;

• Our Company has a track record of distributable profits in accordance with Section 205 of the Companies Act, for at least three of the immediately preceding five years and is compliant with Clause 2.2.1(b) of the SEBI Guidelines;

• Our Company has a net worth of at least Rs. 10 million in each of the three preceding full years and is compliant with Clause 2.2.1(c) of the SEBI Guidelines; and

• The aggregate of the proposed Issue size and all previous issues made in the same financial year is not expected to exceed five times the pre-Issue net worth of our Company and is compliant with Clause 2.2.1(e) of the SEBI Guidelines.

The Company’s net profit, dividend, net worth, net tangible assets and monetary assets derived from the Auditor’s Report included in this Draft Red Herring Prospectus as at, and for the last five years ended Financial Year 2007 are set forth below:

(Rs. million, except percentage values)

Particulars

As at

March

31,

2007

As at

March

31,

2006

As at

March

31,

2005

As at

March

31,

2004

As at

March

31,

2003

Distributable profits (1) 311.84 84.89 78.71 78.45 63.60

Net Worth (2) 2144.34 598.84 588.44 440.08 125.88

Net tangible assets (3) 3937.60 2958.75 1823.41 445.30 126.56

Monetary assets (4) 128.72 34.36 7.78 11.77 0.44

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Monetary assets as a percentage of the net tangible assets 3.27 1.16 0.43 2.64 0.34 (1) ‘Distributable profits’ have been defined in terms of Section 205 of the Companies Act. (2) ‘Net worth’ has been defined as the aggregate of equity share capital (including share application money of

F.Y.2003-04, Equity Shares has been allotted in the F.Y.2004-05 against share application money) and reserves, excluding miscellaneous expenditures, if any.

(3) ‘Net tangible assets’ means the sum of all net assets of the Company excluding intangible assets as defined in Accounting Standard 26 issued by Institute of Chartered Accountants of India.

(4) Monetary assets comprise of cash and bank balances, public deposit accounts with the Government.

Further, in accordance with Clause 2.2.2A of the SEBI Guidelines, we shall ensure that the number of prospective allottees to whom the Equity Shares will be Allotted will be not less than 1,000. Further the Issue is subject to the fulfillment of the following provisions of the SCRR

• A minimum of 2,000,000 equity shares (excluding reservations, firm allotments and promoter contribution) are offered to the public;

• The Issue size is a minimum of Rs. 1000 Million and

• The issue is made through the Book Building Method with the allocation of 60% of the Issue size to QIB’s.

DISCLAIMER CLAUSE AS REQUIRED, A COPY OF THE DRAFT RED HERRING PROSPECTUS HAS BEEN

SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE

DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY

SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL

SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED

TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS

EXPRESSED IN THE DRAFT RED HERRING PROSPECTUS. THE BOOK RUNNING LEAD MANAGERS, ENAM SECURITIES PRIVATE LIMITED AND JM FINANCIAL CONSULTANTS

PRIVATE LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT

RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY

WITH SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 AS FOR THE

TIME BEING IN FORCE. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS

PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF

ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE BOOK

RUNNING LEAD MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN

THIS BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS

ENAM SECURITIES PRIVATE LIMITED AND JM FINANCIAL CONSULTANTS PRIVATE

LIMITED HAVE FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED, APRIL

10, 2008 IN ACCORDANCE WITH THE SEBI (MERCHANT BANKERS) REGULATIONS, 1992

WHICH READS AS FOLLOWS:

I. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO

LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES

WITH COLLABORATORS ETC. AND OTHER MATERIALS MORE PARTICULARLY

REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE

FINALISATION OF THE DRAFT PROSPECTUS/LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

II. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE

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COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES,

INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE

OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE

AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:

(A) THE DRAFT PROSPECTUS/LETTER OF OFFER FORWARDED TO THE

BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND

PAPERS RELEVANT TO THE ISSUE;

(B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE

AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE

BOARD, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY

IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

(C) THE DISCLOSURES MADE IN THE DRAFT PROSPECTUS / LETTER OF

OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS

TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN

THE PROPOSED ISSUE (AND SUCH DISCLOSURES ARE IN ACCORDANCE

WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SEBI

(DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 AND OTHER APPLICABLE LEGAL REQUIREMENTS).

III. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED

IN THE PROSPECTUS/LETTER OF OFFER ARE REGISTERED WITH THE BOARD

AND THAT TILL DATE SUCH REGISTRATION IS VALID.

IV. WE HAVE SATISFIED OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS

TO FULFIL THEIR UNDERWRITING COMMITMENTS.

V. WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN

OBTAINED FOR INCLUSION OF THEIR SECURITIES AS PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE SECURITIES PROPOSED TO

FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN, WILL

NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS DURING THE

PERIOD STARTING FROM THE DATE OF FILING THE DRAFT PROSPECTUS WITH

THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS

STATED IN THE DRAFT PROSPECTUS.

VI. WE CERTIFY THAT CLAUSE 4.6 OF THE SEBI (DISCLOSURE AND INVESTOR

PROTECTION) GUIDELINES, 2000, WHICH RELATES TO SECURITIES INELIGIBLE

FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY

COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE CLAUSE HAVE BEEN MADE IN THE DRAFT PROSPECTUS/LETTER OF

OFFER.

VII. WE UNDERTAKE THAT CLAUSES 4.9.1, 4.9.2, 4.9.3 AND 4.9.4 OF THE SEBI

(DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 SHALL BE

COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION AND SUBSCRIPTION FROM ALL

FIRM ALLOTTEES WOULD BE RECEIVED AT LEAST ONE DAY BEFORE THE

OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’ CERTIFICATE TO

THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER

CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT

PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE

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COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE – NOT

APPLICABLE.

VIII. WHERE THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION IS NOT

APPLICABLE TO THE ISSUER, WE CERTIFY THE REQUIREMENTS OF

PROMOTERS’ CONTRIBUTION UNDER CLAUSE 4.10 {SUB-CLAUSE (A), (B) OR (C),

AS MAY BE APPLICABLE} ARE NOT APPLICABLE TO THE ISSUER – NOT

APPLICABLE.

IX. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH

THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE

‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF

ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE

ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN

TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

X. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO

ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN

A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF

THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY

THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE PROSPECTUS/LETTER OF OFFER. WE

FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE

BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS

CONDITION - NOTED FOR COMPLIANCE.

XI. WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION,

ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE

PROMOTERS, DIRECTLY OR INDIRECTLY, TO ANY PERSON WHO RECEIVES

SECURITIES BY WAY OF FIRM ALLOTMENT IN THE ISSUE – NOT APPLICABLE.

XII. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT

OR PHYSICAL MODE – NOT APPLICABLE AS THE ISSUE SIZE IS MORE THAN RS.

10 CRORES, HENCE UNDER SECTION 68B OF THE COMPANIES ACT, 1956, THE

EQUITY SHARES ARE TO BE ISSUED IN DEMAT MODE ONLY.

XIII. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT PROSPECTUS/LETTER OF OFFER:

(A) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME

THERE SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE

COMPANY AND

(B) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH

SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE

BOARD FROM TIME TO TIME.

All legal requirements pertaining to the Issue will be complied with at the time of filing of the Red Herring Prospectus with the RoC in terms of section 60B of the Companies Act. All legal

requirements pertaining to the Issue will be complied with at the time of registration of the

Prospectus with the RoC in terms of sections 56, 60 and 60B of the Companies Act.

The filing of the Draft Red Herring Prospectus does not, however, absolve the Company from any

liabilities under section 63 or 68 of the Companies Act or from the requirement of obtaining such statutory and other clearances as may be required for the purpose of the proposed Issue. SEBI

217

further reserves the right to take up at any point of time, with the Book Running Lead Managers,

any irregularities or lapses in the Draft Red Herring Prospectus.

Disclaimer from the Company and the BRLMs

Investors that bid in the Issue will be required to confirm and will be deemed to have represented to the Company, and the Underwriters and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company and will not Issue, sell, pledge or transfer the Equity Shares of the Company to any person who is not eligible under applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company. The Company, the Underwriters and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advicing any investor on whether such investor is eligible to acquire Equity Shares of the Company. The Company, the Directors, the BRLMs accept no responsibility for statements made otherwise than in this Draft Red Herring Prospectus or in the advertisements or any other material issued by or at instance of the above mentioned entities and anyone placing reliance on any other source of information, would be doing so at his or her own risk.

The BRLMs accept no responsibility, save to the limited extent as provided in the Memorandum of Understanding entered into among the BRLMs and the Company and the Underwriting Agreement to be entered into among the Underwriters and the Company. All information shall be made available by the Company and the BRLMs 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 whatsoever including at road show presentations, in research or sales reports or at bidding centres etc. The BRLMs and their respective associates and affiliates may engage in transactions with, and perform services, for the Company and their respective group companies, affiliates or associates in the ordinary course of business and have engaged or may in future engage in commercial banking and investment banking transactions with the Company, for which they have received and may in the future receive compensation. Neither the Company nor the Syndicate is liable to the Bidders for any failure in downloading the Bids due to faults in any software/hardware system or otherwise. Disclaimer in Respect of Jurisdiction This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are not minors, HUFs, companies, corporate bodies and societies registered under the applicable laws in India) and authorised to invest in shares, Mutual Funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under applicable trust law and who are authorised under their constitution to hold and invest in shares, permitted insurance companies and pension funds and to Eligible NRIs and FIIs. This Draft Red Herring Prospectus does not, however, constitute an invitation to subscribe to Equity Shares Issued hereby in any jurisdiction other than India to any person to whom it is unlawful to make an Issue or invitation in such jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is required to inform himself or herself about and to observe, any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Morbi, Gujarat only. No action has been or will be taken to permit a public issuing in any jurisdiction where action would be required for that purpose, except that the Draft Red Herring Prospectus had been filed with SEBI for observations. Accordingly, the Equity Shares, represented thereby may not be Issued or sold, directly or indirectly, and this Draft Red Herring Prospectus may not be distributed, in any jurisdiction, except in

218

accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Draft Red Herring Prospectus nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date.

The Equity Shares have not been and will not be registered under the US Securities Act of 1933 (the

“Securities Act”) or any state securities laws in the United States and may not be offered or sold

within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in

Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not

subject to, the registration requirements of the Securities Act. Accordingly, the Equity Shares are

only being offered and sold (i) within the United States to “qualified institutional buyers”, in reliance

on Rule 144A under the Securities Act, and (ii) outside the United States to non-US persons in

offshore transactions in reliance on Regulation S under the Securities Act.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other

jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in

any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Disclaimer clause of the BSE As required, a copy of the Draft Red Herring Prospectus has been submitted to BSE. BSE has given vide its letter dated [●], permission to the Company to use BSE’s name in the Red Herring Prospectus as one of the stock exchanges on which our securities are proposed to be listed. BSE has scrutinised the Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to us. BSE does not in any manner:

• Warrant, certify or endorse the correctness or completeness of any of the contents of the Draft Red Herring Prospectus; or

• Warrant that this Company’s securities will be listed or will continue to be listed on BSE; or

• 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 the Draft Red Herring Prospectus has been cleared or approved by BSE. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against 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 As required, a copy of the Draft Red Herring Prospectus has been submitted to NSE. NSE has given in its letter dated [●] permission to the Company to use NSE’s name in the Red Herring Prospectus as one of the stock exchanges on which our securities are proposed to be listed, The NSE has scrutinised the Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to us. 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 the Draft Red Herring Prospectus 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 the Draft Red Herring Prospectus; nor does it warrant that our 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 the Company, its promoters, its management or any scheme or project of this Company. Every Person who desires to apply for or otherwise acquires any of our securities may do so pursuant to

219

independent inquiry, investigation and analysis and shall not have any claim against NSE whatsoever by reason of any loss which may be suffered by such Person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever. Filing A copy of this Draft Red Herring Prospectus has been filed with SEBI at SEBI Bhavan, G Block, 3rd Floor, Bandra Kurla Complex, Bandra (E),Mumbai 400 051. A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 60B of the Companies Act, will be delivered for registration to the RoC and a copy of the Prospectus required to be filed under Section 60 of the Companies Act will be delivered for registration with RoC situated at Ahmedabad. Listing Applications have been made to the BSE and the NSE for permission for listing of the Equity Shares being issued through this Draft Red Herring Prospectus. If the permission to deal in and for an official quotation of the Equity Shares is not granted by any of the Stock Exchanges, the Company shall forthwith repay, without interest, all moneys received from the applicants in pursuance of this Draft Red Herring Prospectus. If such money is not repaid within eight days after the Company becomes liable to repay it (i.e. from the date of refusal or within 15 days from the date of Bid/Issue Closing Date, whichever is earlier), then the Company shall, on and from expiry of 8 days, be liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under Section 73 of the Companies Act. The Company shall ensure that all steps for the completion of the necessary formalities for listing and commencement of trading at both the Stock Exchanges mentioned above are taken within seven working days of finalisation of the basis of allotment for the Issue. Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies Act, which is reproduced below: “Any person who:

(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any

shares therein, or

(b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other person in a fictitious name

shall be punishable with imprisonment for a term which may extend to five years.”

Consents Consents in writing of: (a) the Directors, the Company Secretary and Compliance Officer, the auditors, the legal advisors, the Bankers to the Issue; the Bankers to the Company and (b) the Book Running Lead Manager, the Syndicate Members, the Escrow Collection Banks, the IPO Grading Agency and the Registrar to the Issue to act in their respective capacities, have been obtained and would be filed along with a copy of the Red Herring Prospectus with the RoC as required under Sections 60 and 60B of the Companies Act and such consents have not been withdrawn up to the time of delivery of the Red Herring Prospectus for registration with the RoC.

220

In accordance with the Companies Act, 1956 and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000, Finava & Associates, the Company’s Statutory Auditors have given their written consent to the inclusion of their report in the form and context in which it appears in the Draft Red Herring Prospectus and such consent and report has not been withdrawn up to the time of delivery of the Red Herring Prospectus for registration with the RoC. Expert Opinion Except the report of [●] in respect of the IPO grading of this Issue annexed herewith and except as stated elsewhere in this Draft Red Herring Prospectus, the Company has not obtained any expert opinions.

Issue Related Expenses

The total expenses of the Issue are estimated to be approximately Rs [•] million. The expenses of this Issue include, among others, underwriting and management fees, selling commission, printing and distribution expenses, legal fees, statutory advertisement expenses and listing fees. All expenses with respect to the Issue will be borne by us. The estimated expenses of the Issue are as follows:

(In Rs. million)

Activity Expense

(in Rs. million)

Expense (% of

total expenses)

Expense (% of

Issue Size)

Lead management fee and underwriting commissions*

[•] [•] [•]

Advertising and marketing expenses* [•] [•] [•]

Printing and stationery* [•] [•] [•]

Others (IPO Grading fee, Registrar’s fees, legal fees, listing fees etc.)*

[•] [•] [•]

Total estimated Issue expenses* [•] [•] [•] * Will be completed after finalisation of the Issue Price.

Fees Payable to the Book Running Lead Managers, and Syndicate Members The total fees payable to the Book Running Lead Manager and the Syndicate Member (including underwriting commission and selling commission) will be as stated in the engagement letter with the BRLMs, a copy of which is available for inspection at the registered office of the Company located at Ajanta Corporate House, 8-A, National Highway, Morbi, District Rajkot, Gujarat 363 642. Fees Payable to the Registrar to the Issue The fees payable to the Registrar to the Issue for processing of application, data entry, printing of CAN/refund order, preparation of refund data on magnetic tape, printing of bulk mailing register will be as per the Memorandum of Understanding to be signed with the Company, a copy of which is will be made available for inspection at the registered office of the Company. The Registrar to the Issue will be reimbursed for all out-of-pocket expenses including cost of stationery, postage, stamp duty and communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable it to send refund orders or allotment advice by registered post/speed post/under certificate of posting. IPO Grading

This Issue has been graded by [•] and has been assigned a grade of [•], indicating [•], through its letter

dated [•]. For details in relation to the Report of the Grading Agency, refer to “Annexures” beginning on

page [•].

221

Particulars regarding Public or Rights Issues during the Last Five Years We have not made any public or rights issues during the last five years preceding the date of this Draft Red Herring Prospectus.

Issues otherwise than for Cash

Except as stated in the section entitled “Capital Structure” on page 18 of this Draft Red Herring Prospectus,

the Company has not issued any Equity Shares for consideration otherwise than for cash. Commission and Brokerage paid on Previous Issues of the Equity Shares Since this is the initial public issue of the Company’s Equity Shares, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares since the Company’s inception. Companies under the Same Management There is no other company under the same management within the meaning of erstwhile Section 370 (1B) of the Companies Act, other than the Promoter group companies, details of which companies are provided in the sections entitled “Our Promoter Group” beginning on pages 108 this Draft Red Herring Prospectus. Promise vs. Performance – Last Issue of Promoter Group Companies There has been no public issue by any of the Promoter Group Companies in the last five years.

Outstanding Debentures or Bonds The Company does not have any outstanding debentures or bonds as of the date of filing this Draft Red Herring Prospectus.

Outstanding Preference Shares The Company does not have any outstanding preference shares except as described in the section titled “Capital Structure” beginning on page 18 in this Draft Red Herring Prospectus.

Stock Market Data of our Equity Shares This being an initial public issue of the Company, the Equity Shares are not listed on any stock exchange.

Purchase of Property There is no property which has been purchased or acquired or is proposed to be purchased or acquired which is to be paid for wholly or partly from the proceeds of the present Issue or the purchase or acquisition of which has not been completed on the date of this Draft Red Herring Prospectus, other than property, in respect of which:

• The contract for the purchase or acquisition was entered into in the ordinary course of business, nor was the contract entered into in contemplation of the Issue, nor is the Issue contemplated in consequence of the contract; or

• The amount of the purchase money is not material. Except as stated in this Draft Red Herring Prospectus, the Company has not purchased any property in which any of its Promoter and/or Directors, have any direct or indirect interest in any payment made

222

thereunder.

Mechanism for Redressal of Investor Grievances The Memorandum of Understanding to be entered into between the Registrar to the Issue, and the Company will provide for retention of records with the Registrar to the Issue for a period of at least one year from the last date of dispatch of letters of allotment, demat credit, refund orders to enable the investors to approach the Registrar to the Issue for redressal of their grievances. All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, application number, number of shares applied for, amount paid on application, Depository Participant, and the bank branch or collection centre where the application was submitted. Disposal of Investor Grievances by the Company The Company estimates that the average time required by the Company or the Registrar to the Issue for the redressal of routine investor grievances shall be ten working days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, the Company will seek to redress these complaints as expeditiously as possible. The Company has appointed Mr. Rajendra Patel, Company Secretary as the Compliance Officer and he may be contacted in case of any pre-Issue or post-Issue-related problems. He can be contacted at the following address: Ajanta Manufacturing Limited Ajanta Corporate House 8-A, National Highway Morbi, District Rajkot Gujarat 363 642 Changes in Auditors

S. No Name of Auditor Date of Appointment

1. Finava & Associates November 10, 1994

2. Deloitte Haskins & Sells September 27, 2007

3. Finava & Associates February 16, 2008

Capitalisation of Reserves or Profits Except as disclosed in this Draft Red Herring Prospectus, we have not capitalised our reserves or profits at any time during the last five years. Revaluation of Assets

The Company has not revalued its assets in the last five years.

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SECTION VII: ISSUE RELATED INFORMATION

TERMS OF THE ISSUE The Equity Shares being issued are subject to the provisions of the Companies Act, our Memorandum and Articles of Association, the terms of this Draft Red Herring Prospectus, the Red Herring Prospectus and the Prospectus, Bid cum Application Form, the Revision Form, the CAN and other terms and conditions as may be incorporated in the Allotment advices and other documents/ certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws, guidelines, notifications and regulations relating to the issue of capital and listing of securities issued from time to time by SEBI, the Government of India, Stock Exchanges, ROC, RBI and/ or other authorities, as in force on the date of the Issue and to the extent applicable.

Ranking of Equity Shares The Equity Shares being issued shall be subject to the provisions of our Memorandum and Articles and shall rank pari-passu with the existing Equity Shares of our Company including rights in respect of dividend. The Allottees will be entitled to dividends and other corporate benefits, if any, declared by the Company after the date of Allotment.

Mode of Payment of Dividend We shall pay dividends, if any, to our shareholders as per the provisions of the Companies Act. Face Value and Issue Price The face value of the Equity Shares is Rs. 10 each and the Issue Price is Rs. [●] per Equity Share. The Floor Price is [●] times of the face value and the Cap Price is [●] times of the face value of the Equity Share. Compliance with SEBI Guidelines We shall comply with all disclosure and accounting norms as specified by SEBI from time to time. Rights of the Equity Shareholder Subject to applicable laws, the equity shareholders shall have the following rights: ● Right to receive dividend, if declared; ● Right to attend general meetings and exercise voting powers, unless prohibited by law; ● Right to vote on show of hands in person or on a poll either in person or by proxy; ● Right to receive offers for rights shares and be allotted bonus shares, if announced; ● Right to receive surplus on liquidation; ● Right of free transferability; and ● Such other rights, as may be available to a shareholder of a listed public company under the

Companies Act, the terms of the listing agreement executed with the Stock Exchanges, and our Company’s Memorandum and Articles of Association.

For a detailed description of the main provisions of our Articles relating to voting rights, dividend, forfeiture and lien, transfer and transmission and/or consolidation/splitting, please refer to the section titled “Main Provisions of Our Articles of Association” on page 257 of this Draft Red Herring Prospectus.

Market Lot and Trading Lot In terms of Section 68B of the Companies Act, the Equity Shares shall be Allotted only in dematerialised form. As per the SEBI Guidelines, the trading of our Equity Shares shall only be in dematerialised form for

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all investors. Since trading of our Equity Shares is in dematerialised form, the tradable lot is one Equity Share. Allotment in this Issue will be only in electronic form in multiples of [●]. Equity Share subject to a minimum Allotment of [●] Equity Shares. For details of allocation and allotment see, “Issue Procedure” on page 229 of this Draft Red Herring Prospectus.

Jurisdiction Exclusive jurisdiction for the purpose of this Issue is with the competent courts/authorities in Morbi, Gujarat, India.

The Equity Shares have not been and will not be registered under the US Securities Act of 1933 (the

“Securities Act”) or any state securities laws in the United States and may not be offered or sold

within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in

Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not

subject to, the registration requirements of the Securities Act. Accordingly, the Equity Shares are

only being offered and and sold (i) within the United States to “qualified institutional buyers”, in

reliance on Rule 144A under the Securities Act, and (ii) outside the United States to non-US persons

in offshore transactions in reliance on Regulation S under the Securities Act.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other

jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in

any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Nomination Facility to Investor In accordance with Section 109A of the Companies Act, the sole or first Bidder, along with other joint Bidders, may nominate any one person in whom, in the event of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares Allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the Registered Office of our Company or to the Registrar and Transfer Agents of our Company. In accordance with Section 109B of the Companies Act, any Person who becomes a nominee by virtue of Section 109A of the Companies Act, shall upon the production of such evidence as may be required by the Board, elect either:

• To register himself or herself as the holder of the Equity Shares; or

• To make such transfer of the Equity Shares, as the deceased holder could have made. Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Since the Allotment of Equity Shares in the Issue will be made only in dematerialised form, there is no need to make a separate nomination with us. Nominations registered with respective depository participant of the applicant would prevail. If the investors require changing their nomination, they are requested to inform their respective depository participant.

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Application by Eligible NRIs/FIIs registered with SEBI and FVCIs registered with SEBI

It is to be distinctly understood that there is no reservation for Eligible NRIs or FIIs registered with SEBI or FVCIs registered with SEBI. Such Eligible NRIs, FIIs registered with SEBI or FVCIs registered with SEBI will be treated on the same basis as other categories for the purpose of allocation.

Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Issue (including allocation of at

least 60% of the Issue to QIBs), to the extent of the amount including devolvement to the members of the

Syndicate, if any, within 60 days from the Bid/Issue Closing Date, our Company shall forthwith refund the

entire subscription amount received. If there is a delay beyond 8 days after our Company becomes liable to

pay the amount, our Company shall pay interest prescribed under Section 73 of the Companies Act.

Furthermore, in terms of clause 2.22 A of the SEBI guidelines, the Company shall ensure that the number

of prospective allottees to whom Equity Shares will be allotted shall not be less than 1,000.

Arrangement for Disposal of Odd Lots

There are no arrangements for disposal of odd lots.

Restrictions on Transfer of Shares

There are no restrictions on transfers and transmissions of shares and on their consolidation/splitting except

as provided in our Articles of Association. For details see the section titled “Main Provisions of our

Articles of Association” beginning on page 257 of this Draft Red Herring Prospectus.

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ISSUE STRUCTURE The present Issue of 10,064,900 Equity Shares Rs. 10 each, at a price of Rs. [●] for cash aggregating Rs. [●] million is being made through the 100% Book Building Process. The Issue will constitute 19.50% of the post-Issue paid up capital of the Company. The Company is considering a Pre-IPO Placement of Equity Shares with certain investors (“Pre-IPO Placement”). The Pre-IPO placement is at the discretion of the Company. The Company will complete the issuance of such Equity Shares prior to filing the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the Issue size offered to the public would be reduced to the extent of such Pre-IPO Placement, subject to a minimum Issue size of 10% of the post Issue paid up capital being offered to the public.

Particulars QIBs Non-Institutional

Bidders

Retail Individual

Bidders

Number of Equity Shares*

At least 6,038,940 Equity Shares

Not less than 3,019,470 Equity Shares available for allocation or Issue Size less allocation to QIB Bidders and Retail Individual Bidders.

Not less than 1,006,490 Equity Shares available for allocation or Issue Size less allocation to QIB Bidders and Non-Institutional Bidders.

Percentage of Issue Size available for allotment/allocation

At least 60% of Issue Size being allocated. However, up to 5% of the QIB Portion shall be available for allocation proportionately to Mutual Funds only.

Not less than 10% of Issue available for allocation or the Issue size less allocation to QIB Bidders and Retail Individual Bidders.

Not less than 30% of Issueavailable for allocation or the Issue size less allocation to QIB Bidders and Non-Institutional Bidders.

Basis of Allotment/Allocation if respective category is oversubscribed

Proportionate as follows:

(a) 301,947 Equity Shares shall be available for allocation on a proportionate basis to Mutual Funds; and

(b) 5,736,993 Equity Shares shall be allotted on a proportionate basis to all QIBs including Mutual Funds receiving allocation as per (a) above.

Proportionate Proportionate

Minimum Bid Such number of Equity Shares that the Bid Amount exceeds Rs. 100,000 and in multiples of [●] Equity Shares.

Such number of Equity Shares that the Bid Amount exceeds Rs. 100,000 and in multiples of [●] Equity Shares.

[•] Equity Shares and in multiples of [●] Equity Shares.

Maximum Bid Such number of Equity Shares not exceeding the Issue size, subject to applicable limits.

Such number of Equity Shares not exceeding the Issue size subject to applicable limits.

Such number of Equity Shares whereby the Bid Amount does not exceed Rs. 100,000.

Mode of Allotment Compulsorily in dematerialised form.

Compulsorily in dematerialised form.

Compulsorily in dematerialised form.

Bid Lot [●] Equity Shares in multiples of [●] Equity Shares

[●] Equity Shares in multiples of [●]

[●] Equity Shares in multiples of [●]

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Particulars QIBs Non-Institutional

Bidders

Retail Individual

Bidders

Equity Shares Equity Shares

Trading Lot One Equity Share One Equity Share One Equity Share

Who can Apply ** Public financial institutions as specified in Section 4A of the Companies Act, FIIs registered with SEBI, scheduled commercial banks, mutual funds registered with SEBI, multilateral and bilateral development financial institutions, venture capital funds registered with SEBI, foreign venture capital investors registered with SEBI, state industrial development corporations, insurance companies registered with Insurance Regulatory and Development Authority, provident funds (subject to applicable law) with minimum corpus of Rs. 250 million, pension funds with minimum corpus of Rs. 250 million in accordance with applicable law and the National Investment Fund set up by the Government of India.

NRIs, Resident Indian individuals, HUF (in the name of Karta), companies, corporate bodies, scientific institutions societies and trusts.

Individuals (including HUFs, NRIs) applying for Equity Shares such that the Bid Amount does not exceed Rs. 100,000 in value.

Terms of Payment# QIB Margin Amount shall be payable at the time of submission of Bid cum Application Form to the Syndicate Member.

Margin Amount shall be payable at the time of submission of Bid cum Application Form to the Syndicate Member.

Margin Amount shall be payable at the time of submission of Bid cum Application Form to the Syndicate Member.

Margin Amount At least 10% of Bid Amount Full Bid Amount on bidding

Full Bid Amount on bidding

* Subject to valid Bids being received at or above the Issue Price. In terms of Rule 19 (2)(b) of the

SCRR, this is an Issue for less than 25% of the post–Issue capital, therefore, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Issue shall be allocated to Qualified Institutional Buyers on a proportionate basis out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allotment on a proportionate basis to QIBs and Mutual Funds, subject to valid bids being received from them at or above the Issue Price. If at least 60% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, not less than 10% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price. Under-subscription, if any, in any category, except the QIB Portion, would be allowed to be met with spill-over from any other category or combination of categories at the discretion of our Company in consultation with the BRLMs and the Designated Stock Exchange.

** In case the Bid cum Application Form is submitted in joint names, the investors should ensure that

the demat account is also held in the same joint names and are in the same sequence in which they

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appear in the Bid cum Application Form. Withdrawal of the Issue The Company in consultation with the BRLMs, reserves the right not to proceed with the Issue at any time, including after the Bid Closing Date but prior to Allotment, without assigning any reason therefor. Bidding/Issue Programme

BID/ISSUE OPENS ON [●]

BID/ISSUE CLOSES ON [●]

Bids and any revision in Bids shall be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time) during the Bidding/Issue Period as mentioned above at the bidding centres mentioned on the Bid cum Application Form except that on the Bid /Issue Closing Date, the Bids shall be accepted only between 10

a.m. and 1 p.m. (Indian Standard Time) uploaded until (i) 5.00 pm in case of Bids by QIB Bidders, Non-Instituional Bidders where the Bid amount is in excess of Rs. 100,000 and (ii) until such time as permitted by the NSE and BSE, in case of Bids by Retail Individual Bidders where the Bid Amount is up to Rs. 100,000. Due to limitation of time available for uploading the Bids on the Bid/Issue Closing Date, the Bidders are advised to submit their Bids and revision in Bids one day prior to the Bid/Issue Closing Date and, in any case, no later than 1.00 pm (Indian Standard Time) on the Bid/Issue Closing Date. Bidders are cautioned that in the event a large number of Bids are received on the Bid/ Issue Closing Date, as is typically experienced in public offerings, some Bids may not get uploaded on the last date. Such Bids that cannot be uploaded will not be considered for allocation under the Issue. If such Bids are not uploaded the Company, BRLMs and Syndicate Members will not be responsible. Bids will be accepted only on Business Days. The Company reserves the right to revise the Price Band during the Bidding/Issue Period in accordance with SEBI Guidelines. The cap on the Price Band should not be more than 20% of the floor of the Price Band. Subject to compliance with the immediately preceding sentence, the floor of the Price Band can move up or down to the extent of 20% of the floor of the Price Band advertised at least one day prior to the Bid /Issue Opening Date.

In case of revision in the Price Band, the Issue Period will be extended for three additional days after

revision of Price Band subject to the Bidding Period/Issue Period not exceeding 10 days. Any revision

in the Price Band and the revised Bidding Period/Issue Period, if applicable, will be widely

disseminated by notification to the BSE and the NSE, by issuing a press release, and also by

indicating the change on the web sites of the BRLMs and at the terminals of the Syndicate.

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ISSUE PROCEDURE

Book Building Procedure In terms of Rule 19 (2) (b) of the SCRR, this is an Issue for less than 25% of the post–Issue capital of the Company, therefore, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Issue shall be allocated to Qualified Institutional Buyers on a proportionate basis out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid bids being received from them at or above the Issue Price. If at least 60% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, not less than 10% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price. Bidders are required to submit their Bids through the Syndicate. Further, QIB Bids can be submitted only through Syndicate Members. In case of QIB Bidders, the Company in consultation with the BRLMs may reject Bids at the time of acceptance of Bid cum Application Form provided that the reasons for rejecting the same shall be provided to such Bidder in writing. In case of Non-Institutional Bidders and Retail Individual Bidders, our Company will have a right to reject the Bids only on technical grounds. Investors should note that allotment of Equity Shares to all successful Bidders will only be in the

dematerialised form. Bidders will not have the option of getting allotment of the Equity Shares in

physical form. The Equity Shares on allotment shall be traded only in the dematerialised segment of

the Stock Exchanges. Bid cum Application Form Bidders shall only use the specified Bid cum Application Form bearing the stamp of a member of the Syndicate for the purpose of making a Bid in terms of this Draft Red Herring Prospectus. The Bidder shall have the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not be considered as multiple Bids. Upon the allocation of Equity Shares, dispatch of the CAN, and filing of the Prospectus with the RoC, the Bid cum Application Form shall be considered as the Application Form. Upon completing and submitting the Bid cum Application Form to a member of the Syndicate, the Bidder is deemed to have authorised the Company to make the necessary changes in the Red Herring Prospectus and the Bid cum Application Form as would be required for filing the Prospectus with the RoC and as would be required by RoC after such filing, without prior or subsequent notice of such changes to the Bidder. The prescribed colour of the Bid cum Application Form for various categories is as follows:

Category Colour of Bid cum Application

Form

Indian public, Eligible NRIs applying on a non repatriation basis [●]

Non-Residents, Eligible NRIs, FVCIs registered with SEBI, FIIs, multilateral and Bilateral Development Financial Institutions applying on a repatriation basis

[●]

Who can Bid?

• Persons eligible to invest under all applicable laws, rules, regulations and guidelines;

• Indian nationals resident in India who are majors, or in the name of their minor children as natural/legal guardian,in single or joint names (not more than three);

• Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder should

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specify that the Bid is being made in the name of the HUF in the Bid cum Application Form as follows: “Name of Sole or First bidder: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta”. Bids by HUFs would be considered at par with those from individuals;

• Companies and corporate bodies registered under the applicable laws in India and authorised to invest in the equity shares;

• Mutual Funds registered with SEBI;

• Indian Financial Institutions, scheduled commercial banks (excluding foreign banks), regional rural banks, co-operative banks (subject to RBI regulations and the SEBI Guidelines and regulations, as applicable;

• Venture Capital Funds registered with SEBI;

• Foreign Venture Capital Investors registered with SEBI subject to compliance with applicable law;

• State Industrial Development Corporations;

• Trusts/societies registered under the Societies Registration Act, 1860, as amended, or under any other law relating to Trusts/societies and who are authorised under their constitution to hold and invest in equity shares;

• Eligible NRIs on a repatriation basis or a non-repatriation basis subject to applicable laws;

• FII registered with SEBI, on a repatriation basis or on a non-repatriation basis subject to applicable laws;

• Scientific and/or industrial research organisations under their constitution authorised to invest in equity shares;

• Insurance Companies registered with Insurance Regulatory and Development Authority, India;

• Provident Funds with minimum corpus of Rs. 250 million and who are authorised under their constitution to hold and invest in equity shares;

• Pension Funds with minimum corpus of Rs. 250 million and who are authorised under their constitution to hold and invest in equity shares;

• Multilateral and Bilateral Development Financial Institutions; and

• Any other QIBs permitted to invest in the Issue under applicable law or regulation.

As per existing RBI regulations, OCBs cannot Bid in this Issue.

Participation by associates of BRLMs and Syndicate Members The BRLMs and Syndicate Member shall not be entitled to subscribe to this Issue in any manner except towards fulfilling their underwriting obligations. However, associates and affiliates of the BRLMs, and Syndicate Members may subscribe for Equity Shares in the Issue, including in the QIB Portion and Non-Institutional Portion where the allocation is on a proportionate basis. Such bidding and subscription may be on their own accout or on behalf of their clients. Bidders are advised to ensure that any single Bid from them does not exceed investments limits or maximum number of Equity Shares that can be held by them under applicable laws, rules, regulations,

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guidelines and approvals. The information below is given for the benefit of the Bidders. The Company and the BRLMs are not liable for any amendments or modification or changes in applicable laws or regulations, which may

occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their

independent investigations and ensure that the number of Equity Shares Bid for do not exceed the

applicable limits under laws or regulations. Bids by Mutual Funds An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual Fund Portion. In the event that the demand is greater than 301,947 Equity Shares, allocation shall be made to Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining demand by the Mutual Funds shall, as part of the aggregate demand by QIBs, be available for allocation proportionately out of the remainder of the QIB Portion, after excluding the allocation in the Mutual Fund Portion. In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made.

As per the current regulations, the following restrictions are applicable for investments by mutual funds:

No mutual fund scheme shall invest more than 10% of its net asset value in the Equity Shares or equity related instruments of any company provided that the limit of 10% shall not be applicable for investments in index funds or sector or industry specific funds. No mutual fund under all its schemes should own more than 10% of any company’s paid-up share capital carrying voting rights. In accordance with the SEBI Guidelines, 5% of the QIB portion shall be available for allocation to Mutual Funds. Mutual Funds participating in this portion will also be eligible for allocation in remaining QIB portion. Bids by NRIs

1. Bid cum application forms have been made available for NRIs at our registered /corporate office,

and members of the Syndicate. 2. NRI applicants may please note that only such applications as are accompanied by payment in free

foreign exchange shall be considered for Allotment. The NRIs who intend to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians.

Bids by FIIs

As per the current regulations, the following restrictions are applicable for investments by FIIs:

The issue of Equity Shares to a single FII should not exceed 10% of our post-Issue issued capital Equity Shares. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of our total issued capital or 5% of our total issued capital in case such sub-account is a foreign corporate or an individual. Under the current foreign investment policy applicable to us foreign equity participation up to 100% is permissible under the automatic route. As of now, the aggregate FII holding in us cannot exceed 24% of our total issued capital. With the approval of the Board and the shareholders by way of a special resolution, the aggregate FII holding can go up to 100%. However, as on this date, no such resolution has been recommended to the shareholders of the Company for adoption. Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms

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of regulation 15A(1) of the Securities Exchange Board of India (Foreign Institutional Investors) Regulations 1995, as amended, an FII or its sub account may issue, deal or hold, off shore derivative instruments such as Participatory Notes, equity-linked notes or any other similar instruments against underlying securities (all such off shore derivative instruments are referred to herein as P-notes) listed or proposed to be listed in any stock exchange in India only in favour of those entities which are regulated by any relevant regulatory authorities in the countries of their incorporation or establishment subject to compliance of “know your client” requirements. An FII or its sub account shall also ensure that no further downstream issue or transfer of any instrument referred to hereinabove is made to any person other than a regulated entity. P-Notes have not been and are not being offered or sold pursuant to this Draft Red Herring Prospectus. This Draft Red Herring Prospectus does not contain any information concerning P-Notes, including, without limitation, any information regarding any risk factors relating thereto.

The SEBI, through its Press Release (PR No. 286/2007) dated October 25, 2007 has decided that with respect to P-Notes.

• FIIs and their sub-accounts shall not issue/renew offshore derivative instruments with underlying securities as derivatives with immediate effect. They are required to wind up the current position over 18 months, during which period SEBI will review the position from time to time.

• Further issuance of offshore derivative instruments by the sub-accounts of FIIs will be discontinued with immediate effect. They will be required to wind up the current position over 18 months, during which period SEBI will review the position from time to time.

• The FIIs who are currently issuing offshore derivative instruments with notional value of P-Notes outstanding (excluding derivatives) as a percentage of their assets under custody in India of less than 40% shall be allowed to issue further offshore derivative instruments only at the incremental rate of 5% of their assets under custody in India.

• Those FIIs with notional value of Participatory Notes outstanding (excluding derivatives) as a percentage of their AUC in India of more than 40% shall issue Participatory Notes only against cancellation / redemption / closing out of the existing Participatory Notes of at least equivalent amount.

Any P-Notes that may be issued are not the securities of the Company and do not constitute any obligation of, claims on or interests in our Company. Our Company has not participated in any offer of any P-Notes, or in the establishment of the terms of any P-Notes, or in the preparation of any disclosure related to the P-Notes. Any P-Notes that may be offered are issued by, and are the sole obligations of, third parties that are unrelated to our Company. Our Company does not make any recommendation as to any investment in P-Notes and does not accept any responsibility whatsoever in connection with the P-Notes. Any P-Notes that may be issued are not securities of the BRLMs and do not constitute any obligations or claims on the BRLMs.

Prospective investors interested in purchasing any P-Notes have the responsibility to obtain adequate disclosures as to the issuer(s) of such P-Notes and the terms and conditions of any such P-Notes. Neither SEBI nor any other regulatory authority has reviewed or approved any P-Notes or any disclosure related thereto. Prospective investors are urged to consult with their own financial, legal, accounting and tax advisors regarding any contemplated investment in P-Notes, including whether P-Notes are issued in compliance with applicable laws and regulations.

Bids by SEBI registered Venture Capital Funds and Foreign Venture Capital Investors

As per the current regulations, the following restrictions are applicable for SEBI registered Venture

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Capital Funds and Foreign Venture Capital Investors:

The SEBI (Venture Capital) Regulations, 1996 and the SEBI (Foreign Venture Capital Investor) Regulations, 2000 prescribe investment restrictions on venture capital funds and foreign venture capital investors registered with SEBI. Accordingly, whilst the holding by any individual venture capital fund registered with SEBI in one company should not exceed 25% of the corpus of the venture capital fund, a Foreign Venture Capital Investor can invest its entire funds committed for investments into India in one company. Further, Venture Capital Funds and Foreign Venture Capital Investors can invest only up to 33.33% of the investible funds by way of subscription to an initial public offer.

Maximum and Minimum Bid Size (a) For Retail Individual Bidders: The Bid must be for a minimum of [●] Equity Shares and in

multiples of [●] Equity Share thereafter, so as to ensure that the Bid Price payable by the Bidder does not exceed Rs. 100,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid Price does not exceed Rs. 100,000. In case the Bid Price is over Rs. 100,000 due to revision of the Bid or revision of the Price Band or on exercise of Cut-off option, the Bid would be considered for allocation under the Non-Institutional Bidders portion. The option to Bid at Cut-off Price is an option given only to the Retail Individual Bidders indicating their agreement to Bid and purchase at the final Issue Price as determined at the end of the Book Building Process.

(b) For Non-Institutional Bidders and QIBs: The Bid must be for a minimum of such number of

Equity Shares such that the Bid Amount exceeds Rs. 100,000 and in multiples of [●] Equity Shares thereafter. A Bid cannot be submitted for more than the Issue Size. However, the maximum Bid by a QIB investor should not exceed the investment limits prescribed for them by applicable laws. Under existing SEBI guidelines, a QIB Bidder cannot withdraw its Bid after the Bid/

Issue Closing Date and is required to pay QIB Margin upon submission of Bid.

In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the Bid Amount is greater than Rs. 100,000 for being considered for allocation in the Non-Institutional Portion. In case the Bid Amount reduces to Rs. 100,000 or less due to a revision in Bids or revision of the Price Band, Bids by Non-Institutional Bidders who are eligible for allocation in the Retail Portion would be considered for allocation under the Retail Portion. Non-Institutional Bidders and QIBs do not have the option to Bid at Cut-off.

Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or

maximum number of Equity Shares that can be held by them under applicable law or regulation or

as specified in this Draft Red Herring Prospectus. Information for the Bidders: (a) The Company will file the Red Herring Prospectus with the RoC at least 3 (three) days before the

Bid/Issue Opening Date. (b) The Company, the BRLMs shall declare the Bid/ Issue Opening Date, Bid/ Issue Closing Date and

Price Band at the time of filing the Red Herring Prospectus with RoC and also publish the same in three widely circulated newspapers (one each in English, Hindi and Gujarati).

(c) The members of the Syndicate will circulate copies of the Red Herring Prospectus along with the

Bid cum Application Form to potential investors. (d) Any investor (who is eligible to invest in our Equity Shares) who would like to obtain the Red

Herring Prospectus and/ or the Bid cum Application Form can obtain the same from our registered office or from any of the members of the Syndicate.

(e) Eligible Investors who are interested in subscribing for the Equity Shares should approach any of

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the BRLMs, members of the Syndicate or their authorized agent(s) to register their Bids. (f) The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum

Application Forms should bear the stamp of the members of the Syndicate. Bid cum Application Forms, which do not bear the stamp of the members of the Syndicate, will be rejected.

Method and Process of Bidding

(a) The Company and the BRLMs shall declare the Bid /Issue Opening Date, Bid /Issue Closing Date

and Price Band at the time of filing the Red Herring Prospectus with the RoC and also publish the same in three widely circulated newspapers (one each in English, Hindi and Gujarati). This advertisement shall contain disclosures as provided under the SEBI Guidelines. The BRLMs and Syndicate Members shall accept Bids from the Bidders during the Issue Period in accordance with the terms of the Syndicate Agreement. This advertisement, subject to the provisions of Section 66 of the Companies Act shall be in the format prescribed in Schedule XX–A of the SEBI DIP Guidelines, as amended vide SEBI Circular No. SEBI/CFD/DIL/DIP/17/2005/11/11 dated November 25, 2005.

(b) The Bidding/ Issue Period shall be a minimum of three working days and not exceeding seven

working days. In case the Price Band is revised, the revised Price Band and Bidding/ Issue Period will be published in three national newspapers (one each in English, Hindi and Gujarati) and also by indicating the change on website of BRLMs and at the terminals of the members of the Syndicate. The Bidding/ Issue Period may be extended, if required, by an additional three days, subject to the total Bidding/ Issue Period not exceeding ten working days.

(c) Each Bid cum Application Form will give the Bidder the choice to bid for up to three optional

prices (for details refer to the paragraph titled “Bids at Different Price Levels” on page 235 within the Price Band and specify the demand (i.e., the number of Equity Shares Bid for) in each option. The price and demand options submitted by the Bidder in the Bid cum Application Form will be treated as optional demands from the Bidder and will not be cumulated. After determination of the Issue Price, the maximum number of Equity Shares Bid for by a Bidder at or above the Issue Price will be considered for allocation/Allotment and the rest of the Bid(s), irrespective of the Bid Price, will become automatically invalid.

(d) During the Bidding/ Issue Period, investors who are interested in subscribing to our Equity Shares

should approach members of the Syndicate or their authorized agents to register their bid. (e) The Bidder cannot bid on another Bid cum Application Form after Bids on one Bid cum

Application Form have been submitted to any member of the Syndicate. Submission of a second Bid cum Application Form to either the same or to another member of the Syndicate will be treated as multiple Bids and is liable to be rejected either before entering the Bid into the electronic bidding system, or at any point of time prior to the allocation or Allotment of Equity Shares in this Issue. However, the Bidder can revise the Bid through the Revision Form, the procedure for which is detailed under the paragraph titled “Bids at Different Price Levels and Revision of Bids” on page 235.

(f) The Members of the Syndicate will enter each Bid option into the electronic bidding system as a

separate Bid and generate a Transaction Registration Slip, (“TRS”), for each price and demand option and give the same to the Bidder. Therefore, a Bidder can receive up to three TRSs for each Bid cum Application Form.

(g) During the Bidding/Issue Period, Bidders may approach the members of the Syndicate to submit

their Bid. Every member of the Syndicate shall accept Bids from all clients / investors who place orders through them and shall have the right to vet the Bids, subject to the terms of the Syndicate Agreement and the Red Herring Prospectus.

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(h) Along with the Bid cum Application Form, all Bidders will make payment in the manner described under the paragraph titled “Terms of Payment and Payment into the Escrow Accounts” on page 241.

Bids at Different Price Levels and Revision of Bids

(a) The Price Band has been fixed at Rs. [•] to Rs. [•] per Equity Share of Rs. 10 each, Rs. [•] being

the Floor Price and Rs. [•] being the Cap Price. The Bidders can bid at any price within the Price

Band, in multiples of Rs. [•]. (b) In accordance with SEBI Guidelines, the Company in consulatation with the BRLMs reserves the

right to revise the Price Band during the Bidding/ Issue Period in accordance with SEBI Guidelines. The cap on the Price Band should not be more than 20% of the floor of the Price Band. Subject to compliance with the immediately preceding sentence, the floor of the Price Band can move up or down to the extent of 20% of the floor of the Price Band disclosed in the Red Herring Prospectus.

(c) In case of revision in the Price Band, the Issue Period will be extended for three additional days

after revision of Price Band subject to a maximum of 10 working days. Any revision in the Price Band and the revised Bidding Period/Issue Period, if applicable, will be widely disseminated by notification to NSE and BSE, by issuing a public notice in three national newspapers (one each in English, Hindi and Gujarati), and also by indicating the change on the websites of the BRLMs and at the bidding terminals of the members of the Syndicate.

(d) The Company in consultation with the BRLMs can finalise the Issue Price within the Price Band

in accordance with this clause, without the prior approval of, or intimation, to the Bidders. (e) The Bidder has to Bid for the desired number of Equity Shares at a specific price. The Bidder can

bid at any price within the Price Band in multiples of Re. 1 (One). The Bidder has to bid for the desired number of Equity Shares at a specific price. Retail Individual Bidders may bid at Cut-off Price. However, bidding at Cut-off Price is prohibited for QIB and Non-Institutional Bidders shall be rejected.

(f) Retail Individual Bidders who bid at the Cut-Off Price agree that they shall purchase the Equity

Shares at any price within the Price Band. Retail Individual Bidders bidding at Cut-Off Price shall deposit the Bid Price based on the higher end of the Price Band in the Escrow Account. In the event the Bid Price is higher than the subscription amount payable by the Retail Individual Bidders, who Bid at Cut off Price (i.e., the total number of Equity Shares allocated in the Issue multiplied by the Issue Price), the Retail Individual Bidders, who Bid at Cut off Price, shall receive the refund of the excess amounts from the Refund Account.

(g) In case of an upward revision in the Price Band announced as above, Retail Individual Bidders

who had bid at Cut-off Price could either (i) revise their Bid or (ii) make additional payment based on the cap of the Revised Price Band (such that the total amount i.e., original Bid Price plus additional payment does not exceed Rs. 100,000, if such Bidder wants to continue to Bid at Cut-off Price), with the Syndicate Member to whom the original Bid was submitted. In case the total amount (i.e., original Bid Price plus additional payment) exceeds Rs. 100,000 for Retail Individual Bidders the Bid will be considered for allocation under the Non-Institutional Portion in terms of this Draft Red Herring Prospectus. If, however, such Bidder does not either revise the Bid or make additional payment and the Issue Price is higher than the cap of the Price Band prior to revision, the number of Equity Shares bid for shall be adjusted downwards for the purpose of Allotment, such that the no additional payment would be required from such Bidder and such Bidder is deemed to have approved such revised Bid at Cut-off Price.

(h) In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders

who have bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of

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bidding would be refunded from the Refund Account. (i) In the event of any revision in the Price Band, whether upwards or downwards, the Company in

consulation with the BRLMs shall decide the minimum number of Equity Shares for each Bid to ensure that minimum application value is within range of Rs. 5,000 to Rs. 7,000.

(j) During the Bidding/ Issue Period, any Bidder who has registered his or her interest in the Equity

Shares at a particular price level is free to revise his or her Bid within the Price Band using the printed Revision Form, which is a part of the Bid cum Application Form.

(k) Revisions can be made in both the desired number of Equity Shares and the Bid price by using the

Revision Form. Apart from mentioning the revised options in the revision form, the Bidder must also mention the details of all the options in his or her Bid cum Application Form or earlier Revision Form. For example, if a Bidder has Bid for three options in the Bid cum Application Form and he is changing only one of the options in the Revision Form, he must still fill the details of the other two options that are not being revised, in the Revision Form. The members of the Syndicate will not accept incomplete or inaccurate Revision Forms.

(l) The Bidder can make this revision any number of times during the Bidding Period. However, for

any revision(s) in the Bid, the Bidders will have to use the services of the same member of the Syndicate through whom he or she had placed the original Bid.

(m) Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be made

only in such Revision Form or copies thereof. (n) Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft

for the incremental amount, if any, to be paid on account of the upward revision of the Bid. The excess amount, if any, resulting from downward revision of the Bid would be returned to the Bidder at the time of refund in accordance with the terms of the Red Herring Prospectus.

(o) When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and get a revised

TRS from the members of the Syndicate. It is the responsibility of the Bidder to request for

and obtain the revised TRS, which will act as proof of his or her having revised the previous

Bid.

(p) Only Bids that are uploaded on the online IPO system of the NSE and BSE shall be considered for

allocation/ allotment. In the event of descrepency of data between the Bids registered on the online IPO system and the physical Bid cum Application Form, the decision of the Company in consulatation with the BRLMS based on physical records of Bid cum Application Forms, shall be final and binding on all concerned.

Bids and revisions of Bids must be:

(a) Made only in the prescribed Bid cum Application Form or Revision Form, as applicable ([●] colour for Resident Indians and NRIs is applying on non-repartraition basis, [●] colour for Non Residents including Eligible NRIs, FIIs and FVCIs registered with SEBI applying repartriation basis).

(b) Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions

contained herein, in the Bid cum Application Form or in the Revision Form. Incomplete Bid cum Application Forms or Revision Forms are liable to be rejected.

(c) For Retail Individual Bidders, the Bid must be for a minimum of [●] Equity Shares and in

multiples of [●] Equity Shares thereafter subject to a maximum Bid Amount of Rs. 100,000. (d) For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of

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Equity Shares that the Bid Price exceeds or equal to Rs. 100,000 and in multiples of [●] Equity Shares thereafter. Bids cannot be made for more than the Issue Size. Bidders are advised to ensure that a single Bid from them should not exceed the investment limits or maximum number of shares that can be held by them under the applicable laws or regulations.

(e) In single name or in joint names (not more than three, and in the same order as their Depository

Participant details). (f) Thumb impressions and signatures other than in the languages specified in the Eighth Schedule to

the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official seal.

Electronic Registration of Bids

(a) The Members of the Syndicate will register the Bids using the on-line facilities of BSE and NSE. There will be at least one on-line connectivity in each city, where a stock exchange is located in India and where Bids are being accepted.

(b) The BSE and NSE will offer a screen-based facility for registering Bids for the Issue. This facility

will be available on the terminals of the Members of the Syndicate and their authorised agents during the Bidding Period. Syndicate Members can also set up facilities for off-line electronic registration of Bids subject to the condition that they will subsequently upload the off-line data file into the on-line facilities for book building on a half hourly basis. On the Bid Closing Date, the Members of the Syndicate shall upload the Bids till such time as may be permitted by the Stock Exchanges.

(c) The aggregate demand and price for Bids registered on the electronic facilities of BSE and NSE

will be uploaded on a regular basis, and display graphically the consolidated demand at various price levels. This information can be accessed on BSE’s website at “www.bseindia.com” and “www.nseindia.com”.

(d) At the time of registering each Bid, the members of the Syndicate shall enter the following details

of the investor in the on-line system:

• Name of the Bidder(s). Bidders should ensure that the name given in the Bid cum Application Form is exactly the same as the name in which the Depository Account is held. In case the Bid cum Application Form is submitted in joint names, Bidders should ensure that Depository Accounts also held in the same joint names and are in the same sequence in which they appear in the Bid cum Application Form.

• Investor Category – Individual, Corporate, NRI, FII, QIB or Mutual Fund etc.

• Numbers of Equity Shares bid for.

• Bid price.

• Bid cum Application Form number.

• Whether Margin Amount has been paid upon submission of Bid cum Application Form.

• Depository participant identification number and client identification number of the beneficiary account of the Bidder.

(e) A system generated TRS will be given to the Bidder as a proof of the registration of each of the

bidding options. It is the Bidder’s responsibility to obtain the TRS from the members of the

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Syndicate. The registration of the Bid by the member of the Syndicate does not guarantee that the Equity Shares shall be allocated/Allotment either by the members of the Syndicate or our Company.

(f) Such TRS will be non-negotiable and by itself will not create any obligation of any kind. (g) In case of QIB Bidders, members of the syndicate also have the right to accept the bid or reject it.

However, such rejection should be made at the time of receiving the bid and only after assigning a reason for such rejection in writing. In case on Non-Institutional Bidders and Retail Individual Bidders who Bid, Bids would not be rejected except on the technical grounds listed on page 244 of this Draft Red Herring Prospectus.

(h) It is distinctly understood that the permission given by BSE and NSE to use their network and

software of the Online IPO system should not in any way be deemed or construed to mean that the compliance with various statutory and other requirements by our Company and/or the BRLMs are cleared or approved by BSE and NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the statutory and other requirements nor does it take any responsibility for the financial or other soundness of the Company, our Promoter, our management or any scheme or project of our Company.

(i) It is also to be distinctly understood that the approval given by BSE and NSE should not in any

way be deemed or construed that this Draft Red Herring Prospectus has been cleared or approved by the BSE and NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Red Herring Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on the BSE and NSE.

(j) Only bids that are uploaded on the online IPO system of the NSE and BSE shall be considered for

allocation/ Allotment. In case of discrepancy of data in the electronic books vis-à-vis the date contained in the physical bid form for a particular bidding the details as per physical application form of that bidder may be taken as the final date for the purpose of Allotment.

GENERAL INSTRUCTIONS

Do’s:

(a) Check if you are eligible to apply in accordance with applicable laws and the terms of the Draft Red Herring Prospectus;

(b) Read all the instructions carefully and complete the applicable Bid cum Application Form; (c) Ensure that the details about Depository Participant and Beneficiary Account are correct as

Allotment of Equity Shares will be in the dematerialised form only; (d) Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a

member of the Syndicate; (e) Ensure that you have been given a TRS for all your Bid options; (f) Submit revised Bids to the same member of the Syndicate through whom the original Bid was

placed and obtain a revised TRS; (g) For Bid(s) at all values Bidders, should mention their Permanent Account Number (PAN) allotted

under the IT Act.; (h) Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all

respects;

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(i) Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s)

in which the beneficiary account is held with the Depository Participant. In case the Bid cum Application Form is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the Bid cum Application Form;

(j) Ensure that your Bid is within the Price Band.

Don’ts:

(a) Do not Bid for lower than the minimum Bid size; (b) Do not Bid/ revise Bid price to less than the lower end of the Price Band or higher than the higher

end of the Price Band; (c) Do not bid on another Bid cum Application Form after you have submitted a Bid to the members

of the Syndicate; (d) Do not pay the Bid Price in cash, by money order or by postal order or by stockinvest; (e) Do not send Bid cum Application Forms by post; instead submit the same to a member of the

Syndicate only; (f) Do not bid at Cut Off Price (for QIB Bidders and Non-Institutional Bidders); (g) Do not fill up the Bid cum Application Form such that the Equity Shares bid for exceeds the Issue

Size and/ or investment limit or maximum number of Equity Shares that can be held under the applicable laws or regulations or maximum amount permissible under the applicable regulations or under the terms of the Red Herring Prospectus;

(h) Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this

ground; (i) Do not Bid at Bid Amount exceeding Rs. 100,000 (for retail Indian Bidders); and (j) Do not submit the Bid without QIB Margin Amount, in case of a Bid by QIB.

Instructions for Completing the Bid cum Application Form Bidders can obtain Bid cum Application Forms and / or Revision Forms from the members of the Syndicate.

Bidder’s Depository Account and Bank Details Bidders should note that on the basis of name of the Bidders, Depository Participant’s name,

Depository Participant-Identification number and Beneficiary Account Number provided by them in

the Bid cum Application Form, the Registrar to the Issue will obtain from the Depository the demographic details including address, Bidders bank account details, MICR code and occupation

(hereinafter referred to as ‘Demographic Details’). These Bank Account details would be used for

giving refunds to the Bidders. Hence, Bidders are advised to immediately update their Bank Account

details as appearing on the records of the depository participant. Please note that failure to do so

could result in delays in despatch/ credit of refunds to Bidders at the Bidders sole risk and neither

the BRLMs or the Registrar or the Escrow Collection Banks nor the Company shall have any responsibility and undertake any liability for the same. Hence, Bidders should carefully fill in their

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Depository Account details in the Bid cum Application Form. IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY

PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND

BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS

MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS

EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD.

IN CASE THE BID CUM APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME

JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE BID

CUM APPLICATION FORM. These Demographic Details would be used for all correspondence with the Bidders including mailing of the CANs/Allocation Advice and printing of Bank particulars on the refund orders or for refunds through electronic transfer of funds, as applicable. The Demographic Details given by Bidders in the Bid cum Application Form would not be used for any other purpose by the Registrar to the Issue. By signing the Bid cum Application Form, the Bidder would be deemed to have authorised the depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. In case of Bidders receiving refunds through electronic transfer of funds, delivery of refund

orders/allocation advice/CANs may get delayed if the same once sent to the address obtained from

the depositories are returned undelivered. In such an event, the address and other details given by

the Bidder in the Bid cum Application Form would be used only to ensure dispatch of refund orders. Please note that any such delay shall be at the Bidders sole risk and neither the Company, the

Registrar, Escrow Collection Bank(s) nor the BRLMs shall be liable to compensate the Bidder for

any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories, which matches three parameters, namely, names of the Bidders (including the order of names of joint holders), the Depository Participant’s identity (DP ID) and the beneficiary’s identity, then such Bids are liable to be rejected. The Company in its absolute discretion, reserves the right to permit the holder of the power of attorney to request the Registrar that for the purpose of printing particulars on the refund order and mailing of the refund order/CANs/allocation advice/ refunds through electronic transfer of funds, the Demographic Details given on the Bid cum Application Form should be used (and not those obtained from the Depository of the Bidder). In such cases, the Registrar shall use Demographic Details as given in the Bid cum Application Form instead of those obtained from the depositories. Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only and net of

bank charges and / or commission. In case of Bidders who remit money through Indian Rupee drafts purchased abroad, such payments in Indian Rupees will be converted into US Dollars or any other

freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the

time of remittance and will be dispatched by registered post or if the Bidders so desire, will be

credited to their NRE accounts, details of which should be furnished in the space provided for this

purpose in the Bid cum Application Form. The Company will not be responsible for loss, if any,

incurred by the Bidder on account of conversion of foreign currency.

As per the current RBI regulations, OCBs are not permitted to participate in the Issue.

There is no reservation for Non Residents, NRIs, FIIs and all such bidders will be treated on the

same basis with other categories for the purpose of allocation. Bids under Power of Attorney

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In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of the Memorandum of Association and Articles of Association and/or bye laws must be lodged along with the Bid cum Application Form. Failing this, the Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefor. In case of Bids made pursuant to a power of attorney by FIIs, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of their SEBI registration certificate must be lodged along with the Bid cum Application Form. Failing this, the Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefor. In case of Bids made by insurance companies registered with the Insurance Regulatory and Development Authority, a certified copy of certificate of registration issued by Insurance Regulatory and Development Authority must be lodged along with the Bid cum Application Form. Failing this, the Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefor. In case of Bids made pursuant to a power of attorney by Mutual Funds, venture capital funds registered with SEBI and FVCIs registered with SEBI, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of their SEBI registration certificate must be lodged along with the Bid cum Application Form. Failing this, the Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefor. In case of Bids made by provident funds with minimum corpus of Rs. 250 million (subject to applicable law) and pension funds with minimum corpus of Rs. 250 million, a certified copy of certificate from a chartered accountant certifying the corpus of the provident fund/ pension fund must be lodged along with the Bid cum Application Form. Failing this, the Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason thereof. The Company in its absolute discretion, reserve the right to relax the above condition of simultaneous lodging of the power of attorney along with the Bid cum Application form, subject to such terms and conditions that the Company and the BRLMs may deem fit. PAYMENT INSTRUCTIONS Escrow Mechanism The Company and the members of the Syndicate shall open Escrow Accounts with one or more Escrow Collection Bank(s) for the collection of the Bid Amount payable upon submission of the Bid cum Application Form and for amounts payable pursuant to allocation in the Issue. The Escrow Collection Banks will act in terms of the Red Herring Prospectus and the Escrow Agreement. The Escrow Collection Bank (s) for and on behalf of the Bidders shall maintain the monies in the Escrow Account. The Escrow Collection Bank(s) shall not exercise any lien whatsoever over the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the Designated Date, the Escrow Collection Bank(s) shall transfer the funds from the Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account and the Refund Account. Terms of Payment and Payment into the Escrow Accounts Each Bidder shall draw a cheque or demand draft for the amount payable on the Bid and/or on allocation/Allotment as per the following terms. 1. Each category of Bidders i.e., QIB Bidders, Non-Institutional Bidders and Retail Individual

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Bidders, shall provide the applicable Margin Amount, with the submission of the Bid cum Application Form draw a cheque or demand draft for the maximum amount of his/ her Bid in favour of the Escrow Account of the Escrow Collection Bank(s) and submit the same to the member of the Syndicate to whom the Bid is being submitted. Bid cum Application Forms accompanied by cash shall not be accepted. The Margin Amount payable by each category of Bidders is mentioned under the section titled “Issue Structure” on page 226. The maximum Bid price has to be paid at the time of submission of the Bid cum Application Form based on the highest bidding option of the Bidder.

2. Where the Margin Amount applicable to the Bidder is less than 100% of the Bid Price, any

difference between the amount payable by the Bidder for Equity Shares allocated/allotted at the Issue Price and the Margin Amount paid at the time of Bidding, shall be payable by the Bidder no later than the Pay-in-Date, which shall be a minimum period of 2 (two) days from the date of communication of the allocation list to the members of the Syndicate by the BRLMs. If the payment is not made favouring the Escrow Account within the time stipulated above, the Bid of the Bidder is liable to be cancelled.

3. The payment instruments for payment into the Escrow Account should be drawn in favour of:

• In case of Resident QIB Bidders: “[●]”

• In case of non-resident QIB Bidders: “[●]”

• In case of Other Resident Bidders: “[●]”

• In case of Other Non Resident Bidders: “[●]” 4. In case of Bids by Eligible NRIs applying on repatriation basis, the payments must be made

through Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance. Payment will not be accepted out of Non-Resident Ordinary (NRO) Account of Non-Resident Bidder bidding on a repatriation basis. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to NRE Account or FCNR Account.

5. In case of Bids by Eligible NRIs applying on non-repatriation basis, the payments must be made

through Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance or out of of Non-Resident Ordinary (NRO) Account of Non-Resident Bidder bidding on a repatriation basis. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to NRE Account or FCNR Account or NRO Account.

6. In case of Bids by FIIs or FVCIs, the payment should be made out of funds held in Special Rupee

Account along with documentary evidence in support of the remittance. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to Special Rupee Account.

6. Where a Bidder has been allocated a lesser number of Equity Shares than the Bidder has Bid for,

the excess amount, if any, paid on bidding, after adjustment towards the balance amount payable on the Equity Shares allocated\ will be refunded to the Bidder from the Refund Account.

7. On the Designated Date, the Escrow Collection Bank shall also refund all amounts payable to unsuccessful Bidders and also the excess amount paid on Bidding, if any, after adjusting for

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allocation/Allotment to the Bidders.

8. Payments should be made by cheque, or demand draft drawn on any Bank (including a Co-operative Bank), which is situated at, and is a member of or sub-member of the bankers’ clearing house located at the centre where the Bid cum Application Form is submitted. Outstation cheques/bank drafts drawn on banks not participating in the clearing process will not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. Cash/ Stockinvest/Money Orders/ Postal orders will not be accepted.

Payment by Stockinvest

In terms of the Reserve Bank of India Circular No. DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the option to use the stockinvest instrument in lieu of cheques or bank drafts for payment of Bid money has been withdrawn. Hence, payment through stockinvest would not be accepted in this Issue. OTHER INSTRUCTIONS

Joint Bids in the case of Individuals

Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments will be made out in favour of the Bidder whose name appears first in the Bid cum Application Form or Revision Form. All communications will be addressed to the First Bidder and will be dispatched to his or her address as per the Demographic Details received from the Depository.

Multiple Bids

A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares required. Two or more Bids will be deemed to be multiple Bids if the sole or First Bidder is one and the same. In this regard, the procedures which would be followed by the Registrar to the Issue to detect multiple applications are given below: 1. All applications are electronically strung on first name, address and applicant’s status. Further,

these applications are electronically matched for common first name and address and if matched, these are checked manually for age, signature and father/ husband’s name to determine if they are multiple applications.

2. Applications which do not qualify as multiple applications as per above procedure are further

checked for common DP ID/ beneficiary ID. In case of applications with common DP ID/ beneficiary ID, are manually checked to eliminate possibility of data entry error to determine if they are multiple applications.

3. Applications which do not qualify as multiple applications as per above procedure are further

checked for common PAN. All such matched applications with common PAN are manually checked to eliminate possibility of data capture error to determine if they are multiple applications.

In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. The Company reserves the right to reject, in our absolute discretion, all or any multiple Bids in any or all categories.

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In cases there are more than 20 applications having a common address, such shares will be kept in abeyance, post allotment and released on confirmation of KYC norms by the depository. Permanent Account Number or PAN

For Bid(s) at all values, the Bidder or in the case of a Bid in joint names, each of the Bidders, should mention his/ her Permanent Account Number (PAN) allotted under the I.T. Act. Applications without this information will be considered incomplete and are liable to be rejected. It is to be specifically noted that

Bidders should not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground.

GROUNDS FOR REJECTIONS

Bidders are advised to note that Bids are liable to be rejected inter alia on the following technical grounds:

• Amount paid does not tally with the amount payable for the highest value of Equity Shares bid for;

• Age of First Bidder not given;

• In case of partnership firms, Equity Shares may be registered in the names of the individual partners and no firm as such shall be entitled to apply;

• Bid by persons not competent to contract under the Indian Contract Act, 1872 including minors, insane persons;

• PAN not stated and GIR number given instead of PAN;

• Bids for lower number of Equity Shares than specified for that category of investors;

• Bids at a price less than lower end of the Price Band;

• Bids at a price more than the higher end of the Price Band;

• Bids at Cut Off Price by Non-Institutional and QIB Bidders;

• Bids for number of Equity Shares which are not in multiples of [●];

• Category not ticked;

• Multiple Bids as defined in this Draft Red Herring Prospectus;

• In case of Bid under power of attorney or by limited companies, corporate, trust etc., relevant documents are not submitted;

• Bids accompanied by Stockinvest/money order/postal order/cash;

• Signature of sole and / or joint Bidders missing;

• Bid cum Application Forms does not have the stamp of the BRLMs, or Syndicate Members;

• Bid cum Application Forms does not have Bidder’s depository account details;

• Bid cum Application Forms are not delivered by the Bidders within the time prescribed as per the Bid cum Application Forms, Bid/Issue Opening Date advertisement and the Draft Red Herring Prospectus and as per the instructions in the Draft Red Herring Prospectus and the Bid cum

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Application Forms;

• In case no corresponding record is available with the Depositories that matches three parameters namely, names of the Bidders (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s account number;

• Bids for amounts greater than the maximum permissible amounts prescribed by the regulations;

• Bids by QIBs not submitted through members of the Syndicate;

• Bids by OCBs;

• Bids by persons who are not eligible to acquire Equity Shares in terms of applicable laws, rules, regulations, guidelines and approvals;

• Bids by US persons other than “qualified institutional buyers” as defined under Rule 144A of the Securities Act or other than in reliance on Regulation S under the Securities Act; and

• Bids by any persons outside India if not in compliance with applicable foreign and Indian laws. Price Discovery and Allocation (a) After the Bid/Issue Closing Date, the BRLMs will analyse the demand generated at various price

levels. (b) The Company in consultation with the BRLMs shall finalise the “Issue Price”. (c) The allocation to QIBs will be at least 60% of the Issue and 10% and 30% of the Issue will be

available for allocation to Non-Institutional and Retail Individual Bidders respectively, on a proportionate basis, in a manner specified in the SEBI Guidelines and this Draft Red Herring Prospectus, in consultation with the Designated Stock Exchange, subject to valid bids being received at or above the Issue Price.

(d) Investors may note that in case of over-subscription in the Issue, Allotment to Bidders in all of the

categories shall be on a proportionate basis. (e) Under-subscription, if any, in any category except QIB Category would be met with spill over

from any other category at the sole discretion of the Company and the in consultation with the BRLMs. However, if the aggregate demand by Mutual Funds is less than 301,947 Equity Shares, the balance Equity Shares available for allocation in the Mutual Fund Portion will first be added to the QIB Portion and be allotted proportionately to the QIB Bidders. If a minimum allocation of 60% of the Issue is not made to the QIBs, the entire subscription monies shall be refunded.

(f) Allotment to Eligible NRIs, FIIs, foreign venture capital funds registered with SEBI applying on

repatriation basis will be subject applicable law and the terms and conditions stipulated by the RBI.

(g) The BRLMs in consultation with our Company shall notify the members of the Syndicate of the

Issue Price and allocationsto their respective Bidders, where the full Bid Amount has not been collected from the Bidders.

(h) We reserve the right to cancel the Issue any time after the Bid/issue Opening Date but before the

Allotment without assigning any reasons whatsoever. (i) In terms of SEBI Guidelines, QIBs shall not be allowed to withdraw their Bid after the Bid/ Issue

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Closing Date. Signing of Underwriting Agreement and RoC Filing (a) The Company, the BRLMs and the Syndicate Member shall enter into an Underwriting

Agreement on finalisation of the Issue Price and allocation(s) /Allotment to the Bidders. (b) After signing the Underwriting Agreement, the Company would update and file the updated Red

Herring Prospectus with RoC, which then would be termed ‘Prospectus’. The Prospectus would have details of the Issue Price, Issue size, underwriting arrangements and would be complete in all material respects.

(c) The Company will issue a statutory advertisement after the filing of the Prospectus with the RoC.

This advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate the Issue Price. Any material updates between the date of Red Herring Prospectus and the date of Prospectus will be included in such statutory advertisement.

Issuance of CAN (a) Upon approval of the basis of Allotment by the Designated Stock Exchange, the BRLMs or

Registrar to the Issue shall send to the members of the Syndicate a list of their Bidders who have been allocated/ Allotted Equity Shares in the Issue. The approval of the basis of Allotment by the Designated Stock Exchange for QIB Bidders may be done simultaneously with or prior to the approval of the basis of allocation for the Retail and Non-Institutional Bidders. However, investors should note that the Company shall ensure that the date of Allotment of the Equity Shares to all investors in this Issue shall be done on the same date.

(b) The BRLMs or members of the Syndicate would dispatch a CAN to their Bidders who have been

allocated Equity Shares in the Issue. The dispatch of a CAN shall be deemed a valid, binding and irrevocable contract for the Bidder to pay the entire Issue Price for all the Equity Shares allocated to such Bidder. Those Bidders who have not paid the entire Bid Amount into the Escrow Account at the time of bidding shall pay in full the amount payable into the Escrow Account by the Pay-in Date specified in the CAN.

(c) Bidders who have been allocated/Allotted Equity Shares and who have already paid the Bid

Amount into the Escrow Account at the time of bidding shall directly receive the CAN from the Registrar to the Issue subject, however, to realisation of his or her cheque or demand draft paid into the Escrow Account. The dispatch of a CAN shall be deemed a valid, binding and irrevocable contract for the Bidder to pay the entire Issue Price for the Allotment to such Bidder.

Notice to QIBs: Allotment Reconciliation and Revised CANs After the Bid/Issue Closing Date, an electronic book will be prepared by the Registrar on the basis of Bid applications received. Based on the electronic book, QIBs will be sent a CAN on or prior to [●], 2008, indicating the number of Equity Shares that may be Allotted to them. This CAN is subject to the basis of final Allotment, which will be approved by the Designated Stock Exchange and reflected in the physical book prepared by the Registrar. Subject to SEBI Guidelines, certain Bid applications may be rejected due to technical reasons, non-receipt of funds, cancellation of cheques, cheque bouncing, incorrect details, etc., and these rejected applications will be reflected in the reconciliation and basis of Allotment as approved by the Designated Stock Exchange and specified in the physical book. As a result, a revised CAN may be sent to QIBs and the allocation of Equity Shares in such revised CAN may be different from that specified in the earlier CAN. It is not necessary that a revised CAN will be sent. QIBs should note that they may be required to pay additional amounts, if any, by the Pay-in Date specified in the revised CAN, for any increased Allotment of Equity Shares. The CAN will constitute the valid, binding and irrevocable contract (subject only to the issue of a revised CAN) for the QIB to pay the entire Issue Price for all the Equity Shares allocated to such QIB. The revised CAN, if issued, will supersede in entirety the earlier CAN.

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Designated Date and Allotment of Equity Shares (a) The Company will ensure that the Allotment of Equity Shares is done within 15 days of the

Bid/Issue Closing Date. After the funds are transferred from the Escrow Account to the Public Issue Account on the Designated Date, the Company would ensure the credit to the successful Bidders depository account. Allotment of the Equity Shares to the allotees shall be within two working days of the date of Allotment.

(b) In accordance with the SEBI Guidelines, Equity Shares will be issued, and Allotment shall be

made only in the dematerialised form to the allotees. Allottees will have the option to re-materialise the Equity Shares, if they so desire, as per the provisions of the Companies Act and the Depositories Act.

BASIS OF ALLOTMENT

A. For Retail Individual Bidders

• Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all the successful Retail Individual Bidders will be made at the Issue Price.

• The Issue size less Allotment to Non-Institutional and QIB Bidders shall be available for Allotment to Retail Individual Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price.

• If the aggregate demand in this category is less than or equal to 3,019,470 Equity Shares at or above the Issue Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid Bids.

• If the aggregate demand in this category is greater than 3,019,470 Equity Shares at or above the Issue Price, the Allotment shall be made on a proportionate basis up to a minimum [●] Equity Shares. For the method of proportionate basis of Allotment, refer below.

B. For Non-Institutional Bidders

• Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all successful Non-Institutional Bidders will be made at the Issue Price.

• The Issue size less Allotment to QIBs and Retail Portion shall be available for Allotment to Non-Institutional Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price.

• If the aggregate demand in this category is less than or equal to 1,006,490 Equity Shares at or above the Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand.

• In case the aggregate demand in this category is greater than 1,006,490 Equity Shares at or above the Issue Price, Allotment shall be made on a proportionate basis up to a minimum of [●] Equity Shares. For the method of proportionate Basis of Allotment refer below.

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D. For QIBs

• Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to determine the total demand under this portion. The Allotment to all the QIB Bidders will be made at the Issue Price.

• The QIB Portion shall be available for Allotment to QIB Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price.

• Allotment shall be undertaken in the following manner:

(a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion shall be determined as follows: (i) In the event that Mutual Fund Bids exceeds 5% of the QIB Portion,

allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion.

(ii) In the event that the aggregate demand from Mutual Funds is less than

5% of the QIB Portion then all Mutual Funds shall get full Allotment to the extent of valid bids received above the Issue Price.

(iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual

Funds shall be available for Allotment to all QIB Bidders as set out in (b) below;

(b) In the second instance Allotment to all QIBs shall be determined as follows:

(i) In the event that the oversubscription in the QIB Portion, all QIB

Bidders who have submitted Bids above the Issue Price shall be Allotted Equity Shares on a proportionate basis for up to 95% of the QIB Portion.

(ii) Mutual Funds, who have received allocation as per (a) above, for less

than the number of Equity Shares Bid for by them, are eligible to receive Equity Shares on a proportionate basis along with other QIB Bidders.

(iii) Under-subscription below 5% of the QIB Portion, if any, from Mutual

Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis.

• The aggregate Allotment to QIB Bidders shall not be less than 6,038,940 Equity Shares.

Illustration of Allotment to QIBs and Mutual Funds (“MF”)

A. Issue Details

Sr. No. Particulars Issue details

1 Issue size 200 million equity shares

2 Allocation to QIB (60%) 120 million equity shares

Of which:

a. Allocation to MF (5%) 6 million equity shares

b. Balance for all QIBs including MFs 114 million equity shares

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Sr. No. Particulars Issue details

3 No. of QIB applicants 10

4 No. of shares applied for 500 million equity shares

B. Details of QIB Bids

S.No Type of QIB bidders# No. of shares bid for (in million) 1 A1 50

2 A2 20

3 A3 130

4 A4 50

5 A5 50

6 MF1 40

7 MF2 40

8 MF3 80

9 MF4 20

10 MF5 20

Total 500

# A1-A5: ( QIB bidders other than MFs), MF1-MF5 ( QIB bidders which are Mutual Funds)

C. Details of Allotment to QIB Bidders/ Applicants

(Number of equity shares in million)

Type of

QIB

bidders

Shares

bid for Allocation of 6 million

Equity Shares to MF

proportionately (please

see note 2 below)

Allocation of balance 114

million Equity Shares to

QIBs proportionately

(please see note 4 below)

Aggregate

allocation to

MFs

(I) (II) (III) (IV) (V)

A1 50 0 11.40 0

A2 20 0 4.56 0

A3 130 0 29.64 0

A4 50 0 11.40 0

A5 50 0 11,40 0

MF1 40 1.2 9.12 10.32

MF2 40 1.2 9.12 10.32

MF3 80 2.4 18.24 20.64

MF4 20 0.6 4.56 5.16

MF5 20 0.6 4.56 5.16

500 6 114 51.64

Please note: 1. The illustration presumes compliance with the requirements specified in this Draft Red

Herring Prospectus in the section titled “Issue Structure” beginning on page 226 of this Draft Red Herring Prospectus.

2. Out of 120 million Equity Shares allocated to QIBs, 6 million (i.e. 5%) will be allocated

on proportionate basis among 5 Mutual Fund applicants who applied for 200 million shares in QIB category.

3. The balance 114 million Equity Shares (i.e. 120 - 6 (available for MFs)) will be allocated

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on proportionate basis among 10 QIB applicants who applied for 500 million Equity Shares (including 5 MF applicants who applied for 200 million Equity Shares).

4. The figures in the fourth column titled “Allocation of balance 114 million Equity Shares

to QIBs proportionately” in the above illustration are arrived as under:

• For QIBs other than Mutual Funds (A1 to A5)= No. of shares bid for (i.e. in column II) X 114 / 494

• For Mutual Funds (MF1 to MF5)= [(No. of shares bid for (i.e. in column II of the table above) less Equity Shares allotted ( i.e., column III of the table above)] X 114/494

• The numerator and denominator for arriving at allocation of 114 million shares to the 10 QIBs are reduced by 6 million shares, which have already been Allotted to Mutual Funds in the manner specified in column III of the table above.

Method of Proportionate Basis of Allotment in the Issue

In the event of the Issue being over-subscribed, the Company shall finalise the basis of Allotment in

consultation with the Designated Stock Exchange. The Executive Director (or any other senior official

nominated by them) of the Designated Stock Exchange along with the BRLMs and the Registrar to the

Issue shall be responsible for ensuring that the basis of Allotment is finalised in a fair and proper manner.

The Allotment shall be made in marketable lots, on a proportionate basis as explained below: a) Bidders will be categorised according to the number of Equity Shares applied for. b) The total number of Equity Shares to be Allotted to each category as a whole shall be arrived at on

a proportionate basis, which is the total number of Equity Shares applied for in that category (number of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse of the over-subscription ratio.

c) Number of Equity Shares to be Allotted to the successful Bidders will be arrived at on a

proportionate basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse of the over-subscription ratio.

d) In all Bids where the proportionate Allotment is less than [●] Equity Shares per Bidder, the

Allotment shall be made as follows:

• The successful Bidders out of the total Bidders for a category shall be determined by draw of lots in a manner such that the total number of Equity Shares Allotted in that category is equal to the number of Equity Shares calculated in accordance with (b) above; and

• Each successful Bidder shall be Allotted a minimum of [●] Equity Shares. e) If the proportionate Allotment to a Bidder is a number that is more than [●] but is not a multiple of

one (which is the market lot), the decimal would be rounded off to the higher whole number if that decimal is 0.5 or higher. If that number is lower than 0.5, it would be rounded off to the lower whole number. Allotment to all Bidders in such categories would be arrived at after such rounding off.

f) If the Equity Shares allocated on a proportionate basis to any category are more than the Equity

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Shares Allotted to the Bidders in that category, the remaining Equity Shares available for Allotment shall be first adjusted against any other category, where the Allotted shares are not sufficient for proportionate Allotment to the successful Bidders in that category. The balance Equity Shares, if any, remaining after such adjustment will be added to the category comprising Bidders applying for minimum number of Equity Shares.

PAYMENT OF REFUND Bidders must note that on the basis of name of the Bidders, Depository Participant’s name, DP ID, Beneficiary Account number provided by them in the Bid-cum-Application Form, the Registrar will obtain, from the Depositories, the Bidders’ bank account details, including the nine digit Magnetic Ink Character Recognition (“MICR”) code as appearing on a cheque leaf. Hence Bidders are advised to immediately update their bank account details as appearing on the records of the Depository Participant. Please note that failure to do so could result in delays in despatch of refund order or refunds through electronic transfer of funds, as applicable, and any such delay shall be at the Bidders’ sole risk and neither the Company, the Registrar, Escrow Collection Bank(s), Bankers to the Issue nor the BRLMs shall be liable to compensate the Bidders for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay. Mode of making refunds The payment of refund, if any, would be done through various modes as given hereunder: 1. ECS – Payment of refund would be done through ECS for applicants having an account at any of

the following 68 centers: Ahmedabad, Bangalore, Bhubaneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna, Thiruvananthapuram (managed by RBI); Baroda, Dehradun, Nashik, Panaji, Surat, Trichy, Trichur, Jodhpur, Gwalior, Jabalpur, Raipur, Calicut, Siliguri (Non-MICR), Pondicherry, Hubli, Shimla (Non-MICR), Tirupur, Burdwan (Non-MICR), Durgapur (Non-MICR), Sholapur, Ranchi, Tirupati (Non-MICR), Dhanbad (Non-MICR), Nellore (Non-MICR) and Kakinada (Non-MICR) (managed by State Bank of India); Agra, Allahabad, Jalandhar, Lucknow, Ludhiana, Varanasi, Kolhapur, Aurangabad, Mysore, Erode, Udaipur, Gorakpur and Jammu (managed by Punjab National Bank); Indore (managed by State Bank of Indore); Pune, Salem and Jamshedpur (managed by Union Bank of India); Visakhapatnam managed by Andhra Bank); Mangalore (managed by Corporation Bank); Coimbatore and Rajkot (managed by Bank of Baroda); Kochi/Ernakulum (managed by State Bank of Travancore); Bhopal (managed by Central Bank of India); Madurai (managed by Canara Bank); Amritsar (managed by Oriental Bank of Commerce); Haldia (Non-MICR) (managed by United Bank of India); Vijaywada (managed by State Bank of Hyderabad); and Bhilwara (managed by State Bank of Bikaner and Jaipur). This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for applicants having a bank account at any of the abovementioned 68 centers, except where the applicant, being eligible, opts to receive refund through direct credit or RTGS.

2. Direct Credit – Applicants having bank accounts with the Refund Banker(s), as mentioned in the

Bid cum Application Form, shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company.

3. RTGS – Applicants having a bank account at any of the abovementioned sixty eight centres and

whose refund amount exceeds Rs. 1 million, have the option to receive refund through RTGS. Such eligible applicants who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the Bid-cum-application Form. In the event the same is not provided, refund shall be made through ECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company. Charges, if any, levied by the applicant’s bank receiving the credit would be borne by the applicant.

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4. NEFT (National Electronic Fund Transfer) – Payment of refund shall be undertaken through NEFT wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the applicants through this method. The process flow in respect of refunds by way of NEFT is at an evolving stage and hence use of NEFT is subject to operational feasibility, cost and process efficiency. In the event NEFT is not operationally feasible the payment of refunds would be made through any of the other modes as discussed in the sections.

5. For all other applicants, including those who have not updated their bank particulars with the

MICR code, the refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and through Speed Post/ Registered Post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn on the Escrow Collection Banks and payable at par at places where Bids are received. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

Letters of Allotment or Refund Orders We shall give credit to the beneficiary account with depository participants within two working days from the date of the finalisation of basis of allotment. Applicants residing at all centres where clearing houses are managed by the RBI, will get refunds through ECS only except where applicant is otherwise disclosed as eligible to get refunds through direct credit & RTGS. We shall ensure despatch of refund orders, if any, of value up to Rs.1, 500 by “Under Certificate of Posting”, and shall dispatch refund orders above Rs.1, 500, if any, by registered post or speed post at the sole or First Bidder’s sole risk within 15 days of the Bid/Issue Closing Date. Applicants to whom refunds are made through electronic transfer of funds will be send a letter through ordinary post intimating them about the mode of credit of refund within 15 days of closure of Bid/ Issue.

In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI DIP

Guidelines, the Company further undertakes that:

• Allotment of Equity Shares will be made only in dematerialised form within 15 days from the Bid/Issue Closing Date;

• The Company shall pay interest at 15% per annum (for any delay beyond the 15 day time period as mentioned above), if Allotment is not made, refund orders are not dispatched and/or demat credits are not made to investors within the 15 day time prescribed above.

The Company will provide adequate funds required for dispatch of refund orders or allotment advice to the

Registrar to the Issue. Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by us, as an Escrow Collection Bank and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders. DISPOSAL OF APPLICATIONS AND APPLICATION MONEYS AND INTEREST IN CASE OF

DELAY The Company ensures dispatch of Allotment advice, refund orders (except for Bidders who receive refunds through electronic transfer of funds and give benefit to the beneficiary account with Depository Participants and submit the documents pertaining to the Allotment to the Stock Exchanges within two working days of

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date of Allotment of Equity Shares. In case of applicants who receive refunds through ECS, direct credit or RTGS, the refund instructions will be given to the clearing system within 15 days from the Bid/ Issue Closing Date. A suitable communication shall be sent to the bidders receiving refunds through this mode within 15 days of Bid/ Closing Date, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund. The Company shall use best efforts to ensure that all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be listed, are taken within seven working days of Allotment. In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Guidelines, the Company further undertakes that:

• Allotment of Equity Shares shall be made only in dematerialised form within 15 days of the Bid/Issue Closing Date;

• Dispatch of refund orders or in a case where the refund or portion thereof is made in electronic manner, the refund instructions are given to the clearing system within 15 days of the Bid/Issue Closing Date would be ensured; and

• The Company shall pay interest at 15% (fifteen) per annum for any delay beyond the 15 day time period as mentioned above, if Allotment is not made and refund orders are not dispatched or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner and/or demat credits are not made to investors within the 15 day time prescribed above as per the guidelines issued by the Government of India, Ministry of Finance pursuant to their letter No. F/8/S/79 dated July 31, 1983, as amended by their letter No. F/14/SE/85 dated September 27, 1985, addressed to the stock exchanges, and as further modified by SEBI’s Clarification XXI dated October 27, 1997, with respect to the SEBI Guidelines.

UNDERTAKINGS BY OUR COMPANY We undertake the following:

• That the complaints received in respect of this Issue shall be attended to by us expeditiously and satisfactorily;

• That all steps will be taken for the completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be listed within seven working days of finalisation of the basis of Allotment;

• That funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be made available to the Registrar to the Issue by the Issuer.

• That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 15 days of the Bid/ Issue Closing Date, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund.

• That the refund orders or allotment advice to the Non-Resident Indians shall be dispatched within specified time; and

• That no further issue of Equity Shares shall be made till the Equity Shares offered through this

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Draft Red Herring Prospectus are listed or until the Bid monies are refunded on account of non-listing, under-subscription etc.

The Company shall not have recourse to the Issue proceeds until the approval for trading of the Equity Shares from all the Stock Exchanges where listing is sought has been received.

Utilisation of Issue proceeds Our Board certifies that:

• All monies received out of the Issue shall be credited/transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Companies Act;

• Details of all monies utilised out of Issue shall be disclosed under an appropriate head in our balance sheet indicating the purpose for which such monies have been utilised;

• Details of all unutilised monies out of the Issue, if any shall be disclosed under the appropriate head in the balance sheet indicating the form in which such unutilised monies have been invested;

EQUITY SHARES IN DEMATERIALISED FORM WITH NSDL OR CDSL As per the provisions of Section 68B of the Companies Act, the Allotment of Equity Shares in this Issue shall be only in a de-materialised form, (i.e., not in the form of physical certificates but be fungible and be represented by the statement issued through the electronic mode). In this context, two agreements have been signed among the Company, the respective Depositories and the Registrar to the Issue: a) Agreement dated [●]with NSDL, the Company and the Registrar to the Issue; b) Agreement dated [●] with CDSL, the Company and the Registrar to the Issue. All Bidders can seek allotment only in dematerialised mode. Bids from any Bidder without relevant details of his or her depository account are liable to be rejected. a) A Bidder applying for Equity Shares must have at least one beneficiary account with either of the

Depository Participants of either NSDL or CDSL prior to making the Bid. b) The Bidder must necessarily fill in the details (including the Beneficiary Account Number and

Depository Participant’s identification number) appearing in the Bid cum Application Form or Revision Form.

c) Allotment to a successful Bidder will be credited in electronic form directly to the beneficiary

account (with the Depository Participant) of the Bidder d) Names in the Bid cum Application Form or Revision Form should be identical to those appearing

in the account details in the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the Depository.

e) If incomplete or incorrect details are given under the heading ‘Bidders Depository Account

Details’ in the Bid cum Application Form or Revision Form, it is liable to be rejected. f) The Bidder is responsible for the correctness of his or her Demographic Details given in the Bid

cum Application Form vis-à-vis those with his or her Depository Participant. g) Equity Shares in electronic form can be traded only on the stock exchanges having electronic

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connectivity with NSDL and CDSL. All the Stock Exchanges where our Equity Shares are proposed to be listed have electronic connectivity with CDSL and NSDL.

h) The trading of the Equity Shares of the Company would be in dematerialised form only for all

investors in the demat segment of the respective Stock Exchanges.

Investors may note that, post Allotment in the Issue, they may convert dematerialized shares to physical certificates in compliance with the Articles of Association, the Depositories Act and the Companies Act. However, please take note clause (h) above.

Communications All future communications in connection with Bids made in this Issue should be addressed to the Registrar to the Issue quoting the full name of the sole or First Bidder, Bid cum Application Form number, Bidders Depository Account Details, number of Equity Shares applied for, date of bid form, name and address of the member of the Syndicate where the Bid was submitted and cheque or draft number and issuing bank thereof. Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allotment, credit of allotted shares in the respective beneficiary accounts, refund orders etc.

Withdrawal of the Issue The Company in consultation with the BRLMs reserves the right not to proceed with the Issue at anytime including after the Bid/ Issue Opening Date, without assigning any reason thereof. In terms of the SEBI Guidelines, QIB Bidders shall not be allowed to withdraw their Bid after the Bid/Issue Closing Date.

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RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of GoI and FEMA. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is freely permitted in all sectors of Indian economy up to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures for making such investment. As per current foreign investment policies, foreign investment in the manufacturing activities is permitted under the automatic route. By way of Circular No. 53 dated December 17, 2003, the RBI has permitted FIIs to subscribe to shares of an Indian company in a public offer without the prior approval of the RBI, so long as the price of the equity shares to be issued is not less than the price at which the equity shares are issued to residents. Transfers of equity shares previously required the prior approval of the FIPB. However, vide a RBI circular dated October 4, 2004 issued by the RBI, the transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that (i) the activities of the investee company are under the automatic route under the foreign direct investment (FDI) Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (ii) the non-resident shareholding is within the sectoral limits under the FDI policy, and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI.

Subscription by foreign investors (NRIs/FIIs)

There is no reservation for Non Residents, NRIs, FIIs, foreign venture capital funds, multi-lateral and bilateral development financial institutions and any other foreign investor. All Non Residents, NRIs, FIIs and foreign venture capital funds, multi-lateral and bilateral development financial institutions and any other foreign investor applicants will be treated on the same basis with other categories for the purpose of allocation. As per existing regulations, OCBs cannot participate in the Issue.

The Equity Shares have not been and will not be registered under the US Securities Act of 1933 (the

“Securities Act”) or any state securities laws in the United States and may not be offered or sold

within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in

Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not

subject to, the registration requirements of the Securities Act. Accordingly, the Equity Shares are

only being offered and and sold (i) within the United States to “qualified institutional buyers”, in

reliance on Rule 144A under the Securities Act, and (ii) outside the United States to non-US persons

in offshore transactions in reliance on Regulation S under the Securities Act.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other

jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in

any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. The above information is given for the benefit of the Bidders. The Company and the BRLMs are not

liable for any amendments or modification or changes in applicable laws or regulations, which may

occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their

independent investigations and ensure that the number of Equity Shares Bid for do not exceed the applicable limits under laws or regulations.

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SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

Pursuant to Schedule II of the Companies Act and the SEBI Guidelines, the main provisions of the Articles of Association relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. Please note that the each provision herein below is numbered as per the corresponding article number in the Articles of Association and defined terms herein have the meaning given to them in the Articles of Association.

Table “A” not to apply

1. (a) The regulations contained in the Table marked “A” in schedule I of the Companies Act, 1956 (hereinafter called the Act or the said Act) shall not apply to the company, except in so far as the Same are repeated, contained or expressly made applicable in these Articles or by the said Act.

4.A The Company may purchase it own shares or other specified securities subject to and in accordance with the provisions of section 77A of the Companies Act, 1956 and any regulations or procedures made there under by the Government of India in this behalf and in accordance with any other guidelines as may be prescribed for the time being in force.

5 (a) The Authorised Shares Capital of the Company is Rs.72,00,00,000/- (Rupees Seventy Two Crore only) divided in to 5,50,00,000 (Five Crore Fifty Lac) Equity Shares of Rs. 10/- (Rupees Ten Only) each and 1,70,00,000 (One Crore Seventy Lacs) Redeemable Preference share of Rs. 10/- (Rupees Ten Only) each with power to increase or reduce the share capital of the Company and to divide the share capital for the time being into several classless and to attach thereto respectively such preferential, qualified or special rights, privileges or conditions as any be determined by or in accordance with the Articles of Association of the company and to vary, modify or abrogate any such rights, privileges or conditions in such manner as may for the time being be provide by the Articles of Association of the Company.

(b) Subject to the rights of the holders, of any other shares entitled by the terms of issue to preferential repayment over the equity shares in the event of winding up of the Company, the holders of the equity shares shall be entitled to be repaid the amounts of capital paid up or credited as paid up on such equity shares and all surplus assets thereafter shall belong to the holders of the equity shares in proportion to the amount paid up or credited as paid up on such equity shares respectively at the commencement of the widening up.

Increase/ reduction and alteration of capital

2. The Company may from time to time in general meeting increase its share capital by the issue of new shares of such amounts as it thinks expedient.

On what conditions the new shares may be issued.

(a) Subject to the provisions of section 80, 81 and 90 of the Act, the new shares shall be issued upon such terms and conditions and with such rights and privileges annexed thereto by the general meeting creating the same as shall be directed and if no direction be given as the Directors shall determine and in particular such shares may be issued subject to the provision of the said sections with a preferential or qualified right to dividends and in distribution of assets of the company and subject to the provisions of the said sections with special or without any right of voting and subject to the provisions of Section 80 of the Act any preference shares may be issued on the terms that they are or at the option of the Company are liable to be redeemed.

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Further issue of capital

(b) Where at any time after the expiry of two years from the formation of the Company or at any time after the expiry of one year from the allotment of shares in the Company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed Capital of the Company by allotment of further shares than:

(i) such further shares shall be offered to the persons who at the date of offer, are holders of the equity shares of the Company, in proportion, as nearly as circumstances admit, to the capital paid up on those shares at that date.

(ii) the offer aforesaid shall be made by a notice specifying the number of shares offered and limiting a time not being less than one month from the offer within which the offer, if not accepted will be deemed to have been declined.

(iii) the offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the offered to him or any of them in favor of any other person and the notice referred to in sub clause (ii) shall contain a statement of this right.

(iv) after the expiry of the time specified in the notice aforesaid or on receipt of earlier intimation from the person to whom such is given that he declines to accept the sharps offered, the board may dispose of them in such manner as they think most beneficial to the Company.

(c) Notwithstanding anything contained in the preceding sub-clause 6 (b) the further shares aforesaid may be offered to any persons (whether or not those persons referred to in clause 6 (b)(i) hereof) in any manner whatsoever the company may:

(i) By a special resolution passed by the Company in a general meeting; or

(ii) Where no such special resolution is passed if the votes cast (whether on a show of hands or on a poll as the case may be) in favor of the proposal contained in the resolution moved in that general meeting (including the casting vote, if any, of the Chairman) by members who being entitled so to do, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members so entitled and voting and the central Government is satisfied on an application made by the Board of Directors in this behalf, that the proposal is most beneficial to the Company.

“Nothing in clause 6 (b) (iii) hereof shall be deemed:

(a) To extend the time within which the offer should be accepted; or

(b) To authorize any person to exercise the right of renunciation for a second time, on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.

Nothing in this Article shall apply to the increase of the subscribed capital of the company caused by the exercise of an option attached to the debentures issued by the Company:

(i) To convert such debentures or loans into shares in the Company ; or

(ii) To subscribe for shares in the Company

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PROVIDED THAT the terms of issue of such debentures or the terms of such loans include a term providing for such option and such term:

(a) Either has been approved by the central Government before the issue of debentures or the raising of the loans or is in conformity with rules, if any, made by that Government in this behalf ; and

(b) In the case of debentures or loans or other than debentures issued to, or loans obtained from the Government or any institution specified by the Central Government in this behalf, has also been approved by the special resolution passed by the Company in General Meeting before the issue of the loans.

Shares at the Disposal of the Directors

(d) Subject to the provisions of Section 81 of the Act and these Articles, the shares in the capital of the company for the time being shall be under the control of the directors who may issue, allot or otherwise dispose of the same or any of them to such person, in such proportion and on such terms and conditions and either at a premium or at par or (subject to the compliance with the provision of section 79 of the Act) at a discount and at such time as they may from time to time thing fit and with sanction of the company in the General Meeting to give to any person or persons the option or right to call for any shares either at par or premium during such time and for such consideration as the directors think fit, and may issue and allot shares in the capital of the company on payment in full or part of any property sold and transferred or for any services rendered to the company in the conduct of its business and any shares which may so be allotted may be issued as fully paid up shares and if so issued, shall be deemed to be fully paid shares. Provided that option or right to call of shares shall not be given to any person or persons without the sanction of the company in the General Meeting.

Same as original capital

(d) Except so far as other wise provided by the conditions of issue or by these presents, any capital raised by the creation of new shares shall be, considered as part of the original capital and shall be subject to the provisions herein contained with reference to the payment of calls, installments transfers, transmission forfeiture, lien surrender, voting and otherwise.

Power to issue redeemable Preference Shares

3. (a) Subject to the provisions of Section 80 of the Act and subject to the provisions on which any shares may have been issued, the Company may issue preference shares which are or at the option of the Company are liable to be redeemed;

Provided that:

(i) no such shares shall be redeemed except out of the profits of the Company which would otherwise be available for dividend or out of the proceeds of a fresh issue of Shares made for the purpose of redemption;

(ii) no such shares shall be redeemed unless they are fully paid;

(iii) the premium, if any, payable on redemption shall have been provided for out of the profits of the Company or out of the Company’s share premium account before the shares are redeemed;

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(iv) Where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend, be transferred to a reserve fund to be called “the capital redemption reserve account”, a sum equal to the nominal amount of the shares redeemed” and the provisions of the Act relating to the reduction of the share capital of the Company shall except as provided in Section 80 of the Act, apply as if the capital redemption reserve account were paid up share capital of the Company.

(b) Subject to the provision’s of section 80 of the Act and subject to the provisions on which any shares may have been issued, the redemption of preference shares may be effected on such terms and in such manner as may be provided in these Articles or by the terms and conditions of their issue and subject thereto in such manner as the Directors may think fit.

(c) The redemption of preference shares under these provision by the Company shall not be taken as reducing the amount of its authorized Share Capital.

(d) Where in pursuance of this Articles, the Company has redeemed or is about to redeem any preference share, it shall have power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued; and accordingly the Share Capital of the Company shall not, for the (purpose of calculating the fees payable under Section 611 of the Act, be deemed to be increased by the issue of shares in pursuance of this clause.

Provided that where new shares are issued before the redemption of the old shares the new shares shall not so far as relates to stamp duty be deemed to have been issued in pursuance of this clause unless the old shares are redeemed within one month after the issue of the new shares.

(e) The Capital Redemption Reserve Account may, notwithstanding anything in this Article, be applied by the Company, in paying up uninsured shares of the Company to be members of the Company as fully as fully paid bonus shares.

Provision In case of Redemption of Preference Shares

4. The Company shall be at liberty at any time, either at one time or from time to time as the Company shall think fit, by giving not less than six months previous notice in writing to the holders of the preference shares to redeem at par the whole or part of the preference shares for the time being outstanding by payment of the nominal amount thereof with dividend calculated up to the date or dates notified for payment (and for this purpose the dividend shall be deemed to accrue and due from day to day) and in the case of redemption of part of the preference shares the following provisions shall take effect :

(a) The shares to be redeemed shall be determined by drawing of lots which the Company shall cause to be made at its registered office in the presence of one Director at least; and

(b) Forthwith after every such drawing, the Company shall notify the share holders whose shares have been drawn for redemption its intention to redeem such shares by payment at the registered office of the company at the time and on the date to be named against surrender of the Certificates in respect of the shares to be so redeem and at the time and date so notified each such shareholder shall be bound to surrender to the Company the Shares certificates in respect of the shares to be redeemed and thereupon the Company shall pay the amount payable to such shareholders in respect of such demotion, The shares to be redeemed shall cease to carry dividend from the date named for payment as aforesaid. Where any such certificate comprises any shares, which have not been drawn for redemption, the Company shall issue to the holder thereof a fresh certificate therefore.

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Reduction of capital

5. The Company may from time to time by special resolution, subject to confirmation by the court and subject to the provisions of Section 78, 80 and 100 to 104 of Act, reduce its share capital and any Capital Redemption Reserve Account or premium account in any manner for the time being authorized by law and in particular without prejudice to the generality of the foregoing power may be:

(a) extinguishing or reducing the liability on any of its shares in respect of Share Capital not paid up;

(b) either with or without extinguishing or reducing liability on any of its shares, cancel paid up share capital which is lost or is unrepresented by available assets; or

(c) either with or without extinguishing or reducing liability on any of its shares, pay off any paid up share capital which is in excess of the wants of the Company;

and may, if and so far as is necessary, after its Memorandum, by reducing the amount of its share capital and of its shares accordingly.

Division, Sub-Division, Consolidation, Conversion and Cancellation of Shares

6. Subject to the provisions of Section 94 of the Act, the Company in general meeting may by an ordinary resolution after the condition of its Memorandum as follows, that is to say it may:

(a) consolidate and divide all or any of its Share Capital into shares or large amount than its existing shares;

(b) sub-divide its shares or any of them into shares of smaller amount than originally fixed by the Memorandum subject nevertheless to the provisions of the Act in that behalf and so however that in the sub-division the proportion between the amount paid and the amount if any, unpaid on each reduced share shall be the same as it was in the case of the share which the reduced share is derived and so that as between the holders of the shares resulting from such sub-division one or more of such shares may, subject to the provisions of the Act, be given any preference or advantage over the others or any other such shares.

(c) Convert, all or any of its fully paid up shares into stock, and re-convert that stock into fully paid up shares of any denomination.

(d) Cancel, shares, which at the date of such general meeting have not been taken or agreed to be taken by any person, and diminish the amount of its shae capital by the amount of the shares so cancelled.

Notice to Registrar of Consolidation of Share Capital, Conversion of shares into stocks etc.

7. (a) If the Company has:

(i) Consolidated and divided its Shares Capital into shares of large amount than its existing shares:

(ii) Converted any shares into stock;

(iii) Reconverted any stock into shares;

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(iv) Sub-divided its share or any of them;

(v) Redeemed any redeemed preference shares; or

(vi) Concealed any shares otherwise than in connection with a reduction of Share Capital under Section 100 to 104 of the Act.

The Company shall within one month after doing so, give notice thereof the Registrar specifying as the case may be, the shares consolidated divided. Converted, sub-divided, redeemed or canceled or the stocks reconverted.

(b) The Company shall thereupon request the Registrar to record the notice and make any alterations which may be necessary in the Company’s memorandum or Articles or both.

Modifications of rights

8. If at any time the share capital, by reason of the issue of Preference Shares or otherwise, is divided into different classes of shares, all or any of the rights and privileges attached to any class (unless otherwise provided by the terms of issue of the shares of that class nay, subject to the provisions of Sections 106 and 107 of the Act and whether or not the company is being wound up, be varied, modified, commuted, affected or abrogated with he consent in writing of the holders of three-fourths in nominal value of the issued shares of that class or with the sanction of a Special Resolution passed at a separate general meeting of the holders of the shares of that class. This Article shall not derogate from any power, which the Company would have if this Article were omitted. The provisions of these Articles relating to general meeting shall mutates mutandis apply to every such separate meeting but so that if any adjourned meeting of such holders a quorum as defined in article 102 is not present, those persons who are present shall be quorum.

SHARE AND CERTIFICATES

Issue of further shares not to affect right of existing share holders

9. The rights or privileges conferred upon the holders of the shares of any class issued with preference of other rights, shall not unless otherwise be deemed to be varied or modified or affected by the creation or issue of further shares ranking pari passu therewith.

Provisions of Sections 85 to 88 of the Act to apply

10. The provisions of Section 85 to 88 of the Act in so far as the same may be applicable shall be observed by the Company.

Register of Members and Debenture holders

11. (a) The Company shall cause to be kept a Register of Members and an index of Members in accordance with Section 150 and 151 of the Act and Register and index of Debenture holders in accordance with Section 152 of the Act. The Company may also keep a foreign Register of Members and Debenture holders in accordance with Section 157 of the Act.

(b) The Company shall also comply with the provisions of Sections 159 and 161 of the Act. As to filling of Annual Returns.

(c) The Company shall duly comply with the provisions of Section 163 of the Act, in regard to keeping of the Registers, indexes, copies of Annual Returns and giving inspection thereof and furnishing copies thereof.

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Restriction on allotment

12. The Board shall observe the restriction as to allotment of shares to the public contained in Section 69 and 70 of the Act and shall cause to be made the return as to allotment provided for in Section 75 of the Act.

Shares to be numbered progressively and no shares to be subdivided

13. The shares in the Capital shall be numbered progressively according to the several denominations and except in the manner herein before mentioned no share shall be subdivided. Every forfeited or surrendered share shall continue to bear the number by which the same was originally distinguished.

Shares at the disposal of the Directors

14. Subject to the provisions of` Section 81 of the Act and these Articles the shares in the Capital of the company for the time being shall be under the control of the Directors who may issue, allot or otherwise dispose of the same or any of them to such persons, in such proportion and on such terms and conditions and either at a premium or at par or (subject to compliance with the provisions of Section 79 of the Act) at a discount and at such time as they may from time to time think fit and with the sanction of the Company in general meeting to give to any person the option to call for any shares either at par or at a premium during such time and for such confirmations as the Directors think fit, and may issue and allot shares in the capital of the Company on payment in full or part for any property sold and transferred or for services rendered to the Company in the conduct of its business and any shares which may be so allotted may be issued as fully paid up shares and if so issued shall be deemed to be fully paid shares. Provided that option or right to call of shares shall not be given to any person or persons without sanction of the Company in the General Meeting.

Every share transferable etc.

15. (i) The shares or other interest of any member in the Company shall be a movable property transferable in the manner provided by the Articles.

(ii) Each share in the Company shall be distinguished by its appropriate number.

(iii) A Certificate under the Common Seal the company, specifying any shares held by any member shall be prima facia, evidence of the title of the member of such shares.

Application of premium received on issued of shares

16. (a) Where the company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium on those shares shall be transferred to an account to be called “the share premium account” and the provisions of the Act relating to the reduction of the Share Capital of the Company shall except as provided in this Article, apply as if the share premium account were paid-up share capital of the Company.

(b) The share premium account may, notwithstanding, anything in clause (a) above, be applied by the Company.

(i) in paying up un-issued share of the Company to be issued to members of the Company as fully paid bonus shares;

(ii) in writing off the preliminary expenses of the Company;

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(iii) in writing off the expenses of or the commission paid or discounts allowed on any issue of shares or debentures of the Company; or

(iv) in providing for he premium payable on the redemption of any redeemable preference shares or of any debenture of the Company.

Sale of fractional shares

17. If and whenever, as the result of issue of new or further shares or any consolidation or sub-division of shares, any shares are held by members in fractions, the Directors shall subject to the provisions of the Act and these Articles and to the directions of the Company in general meeting, if any, sell those shares, which members hold in fractions, for the best price reasonably obtainable and shall pay and distribute to and amongst the members entitled to such shares in due proportion, the net proceeds of the sale thereof For the purpose of giving effect to any such sale the directors may authorise any person to transfer the shares sold to the purchaser thereof, comprised in any such transfer and he shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by an irregularity or invalidity in the proceedings in reference to the sale.

Acceptance of Shares

18. An application signed by or on behalf of an applicant for shares in the Company, followed by an allotment of any shares therein shall be an acceptance of shares within the meaning of these Articles and every person who thus or otherwise accepts any shares and whose name is on the Register of members shall for the purpose of these Articles be a member. The Director shall comply with the provisions of Section 69, 70, 71, 72 and 73 of the Act in so far as they are applicable.

Deposits and calls etc to be a debt payable immediately

19. The money (if any) which the Board shall, on the allotment of any shares being made by them, require or direct to be paid by way of deposit, call or otherwise in respect of any shares allotted by them immediately, on the insertion of the name of the allottee in the Register of Members as the name of the holder of such shares, become a debt, due to and recoverable by the Company from the allottee thereof and shall be paid by him accordingly.

Trusts not recognised

20. Save as herein provided, the Company shall be entitled to treat the person whose name appears on the Register of Members as the holder of any share as the absolute owner thereof, and accordingly shall not (except as ordered by a Court of competent jurisdiction or as by law required) be bound to recognise an benami, trust of equity or equitable, contingent, future, or partial or other claim or claims or right to or interest in such share on the part of any other person whether or not it shall have express or implied notice thereof and the provisions of Section 153 of the Act shall apply.

Issue of Certificates of Shares to be governed by Section 84 of the Act etc

21. (a) The issue of certificates of shares or of duplicate or renewal of certificates of Shares shall be governed by the provisions of Section 84 and other provisions of the Act, as may be applicable and by the Rules or notifications or orders, if any, which may be prescribed or made by competent authority under the act or rules or any other law. The directors may also comply with the provisions of such rules or regulations of any stock exchange where the shares of the Company may be listed for the time being.

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Certificate of Shares

(b) The certificate of title to shares shall be issued under the Seal of the Company and shall be signed by such Directors or Officers or other authorised persons as may be prescribed by the Rules made under the Act from time to time and subject thereto shall be signed in such manner and by such persons as the Directors may determine from time to time.

(c) The Company shall comply with all rules and regulations and other directions, which may be made by any competent authority under Section 84 of the Act.

DEMATERIALISATION OF SECURITIES

26A The provisions of this Article shall apply notwithstanding anything to the contrary contained in any other Articles.

a) The Company shall be entitled to dematerialize securities and to offer securities in a dematerialized form pursuant to the Depositories Act, 1996.

b) Every holder of or subscriber to securities of the Company shall have the option to receive certificates for such securities or to hold the securities with a Depository. Such a Person who is the Beneficial Owner of the securities can at any time opt out of a Depository, if permitted by law, in respect of any securities in the manner provided by the Depositories Act, 1996 and the Company shall, in the manner and within the time prescribed, issue to the Beneficial Owner the required certificates for the securities. If a Person opts to hold his securities with the Depository, the Company shall intimate such Depository the details of allotment of the securities, and on receipt of the information, the Depository shall enter in its record the name of the allottee as the Beneficial Owner of the securities.

c) All securities held by a Depository shall be dematerialized and be in fungible form. Nothing contained in Sections 153, 153A, 153B, 187B, 187C and 372A of the Companies Act shall apply to a Depository in respect of the securities held by on behalf of the Beneficial Owners.

d) (i) Notwithstanding anything to the contrary contained in the Companies Act or these Articles, a Depository shall be deemed to be the registered owner for the purposes of effecting transfer of ownership of securities of the Company on behalf of the Beneficial Owner.

(ii) Save as required by Applicable Law, 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.

(iii) Every Person holding securities of the Company and whose name is entered as the Beneficial Owner of securities in the record of the Depository shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of the securities which are held by a Depository and shall be deemed to be a Member of the Company.

e) Notwithstanding anything contained in the Companies Act or these Articles to the contrary, where securities of the Company are held in a Depository, the records of the Beneficiary Ownership may be served by such Depository on the Company by means of electronic mode or by delivery of floppies or discs.

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f) Nothing contained in Section 108 of the Companies Act or these Articles, shall apply to a transfer of securities effected by a transferor and transferee both of whom are entered as Beneficial Owners in the records of a Depository.

g) Notwithstanding anything contained in the Companies 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.

h) Nothing contained in the Companies Act or these Articles regarding the necessity of having distinctive numbers for securities issued by the Company shall apply to securities held with a Depository.

i) The register of Members and index of beneficial owners maintained by a Depository under the Depositories Act, 1996 shall be deemed to be the register and index of Members and security holders for the purposes of these Articles.

UNDERWRITING COMMISSION AND BROKERAGE

Power to pay certain commission and prohibition of payment of all other commissions,

discounts etc.

22. (A) The Company may pay a commission to any person in consideration of :

(i) his subscribing or agreeing to subscribe whether absolutely or conditionally, for any shares in or debentures of the Company, subject to the restrictions specified in sub-section (4A) of Section 76 of the Act, or

(ii) his procuring or agreeing to procure subscriptions, whether absolute or conditional for any shares in or debentures of the Company, if the following conditions are fulfilled, namely :

(a) the commission paid or agreed to be paid does not exceed in the case of the shares, five percent of the price at which the shares are issued and in the case of debentures, two and half percent of the price at which the debentures are issued;

(b) the amount or rate percent of the commission paid or agreed to be paid on shares or debentures offered to the public for subscription, is disclosed in the prospectus, and in the case of shares or debentures not offered to the public for subscription, is disclosed in the Statement in lieu of Prospectus and filed before the payment of the commission with the Registrar, and where a circular or notice, not being a Prospectus inviting subscription for the shares or debentures is issued is also disclosed in that circular or notice :

(c) the number of shares or debentures which such persons have agreed for a commission to subscribe, absolutely or conditionally is disclosed in the manner aforesaid and

(d) a copy of the contract for the payment of commission is delivered to the Registrar at the time of delivery of the prospectus or the statement in lieu of prospectus for registration

(B) Save as aforesaid and save as provided in Section 75 of the Act, the Company shall not allot any of its shares or debentures or apply any of its moneys, either directly or

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indirectly, in payment of any commission, discount or allowance, to any person in consideration of:

(i) His subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in, or debentures of the Company of :

(ii) His procuring or agreeing to procure subscriptions, whether

Absolutely or conditionally, for any shares in, or debentures of the Company whether the shares, debentures or money be so allotted or applied by, being added to he purchase money of any property acquired by the Company on to the contract price of any work to be executed for the Company or the money be paid out of the nominal purchase money or contract price, or otherwise

(C) Nothing in this article shall affect the power of the Company to pay such brokerage, as it has hereto before been lawful for the Company to pay.

(D) A vender to, promoter of, or other person who received payment in shares, debentures or money from the Company shall have and shall be deemed always to have had power to apply any part of the shares, debentures or money so received for payment of any commission, the payment of which, if made directly by the Company would have been legal under Section 76 of the Act.

(E) The commission may be paid or satisfied (subject to the provisions of the Act and these articles) in cash, or in shares, debentures or debtor-stocks of the Company.

CALLS

Directors may make calls

23. The directors may from time to time and subject to section 91 of the Act and subject to the terms on which any shares/debentures may have been issued and subject to the conditions of allotment, by a resolution passed at a meeting of the Board (and not by circular resolution) make such calls as they think for upon the member/debenture holders in respect of all moneys unpaid on the shares/debentures held by them respectively and such member/debenture holders shall pay the amount of every calls so made on him to the persons and at the times and places appointed by the directors. A call may be made payable by installments. A call may be postponed pr revoked as the Board may determine.

Calls to date from resolution

24. A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed and may be made payable by members/debenture holders on a subsequent date to be specified by the Directors.

Notice of call

25. Thirty days notice in writing shall be given by the Company of every calls made payable otherwise than on allotment specifying the time and place of payment provided that before the time of payment of such call, the Directors may by notice in writing to the members/debenture holders revoke the same.

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Directors may extent time

26. The Directors may, from time to time, at their discretion, extended the time fixed for the payment of any call, and may extend such time as to all or any of the members/debenture holders who from residence at a distance or other cause the Directors may deem fairly entitled to such extension, but no member/debenture holder shall be entitled to such extension, save as a matter of grace and favor.

Sums deemed to be calls

27. Any sum, which by the terms of issue of a share/debenture becomes payable on allotment or at any fixed date whether on account of the nominal value of the share/debenture or by way of premium, shall for the purpose of these articles be deemed to be call duly made and payable on the date on which by the terms of issue the same becomes payable, and in case non-payment, all the relevant provisions of these Articles as to payment of interest and expenses, foreiture or otherwise, shall apply as if such sum had become payable by virtue of a call duly made notified.

Installments on shares to be duly paid

28. If by the condition of allotment of any shares the whole or part of the amount of issue price thereof shall be payable by installments, every such installments, shall when due, be paid to the Company by the person who, for the time being and from time to time, shall be the registered holder of the share or his legal representative.

Calls on shares of the same class to be made on uniform basis

29. Where any calls for further Share Capital are made on shares, such calls shall be made on a uniform basis on all shares falling under the same class.

Explanation: For the purpose of this provision, share of the same nominal value on which different amounts have been paid up shall not be deemed to fall under the same class.

Liability of Joint holders of shares

30. The joint holders of a share shall be severally as well as jointly liable for the payment of all installments and calls due in respect of such shares.

When interest on call or Instalment payable

31. If the sum payable in respect of any call or installment be not paid on or before the day appointed for payment thereof any such extension thereof, the holder for the time being or allotted of the share in respect of which a call shall have been made or the installment shall be due, shall pay interest as shall be fixed by the Board from the day appointed for the payment thereof or any such extension thereof or any such extension thereof to time of actual payment but the Directors may waive payment of such interest wholly or in part.

Partial payment not to preclude forfeiture

32. Neither a judgment nor a decree in favor of the Company for calls or other moneys due in respect of any shares nor any part payment or satisfaction thereof nor the receipt by the Company of a portion of any money which shall from time to time be due from any member in respect of any shares either by way of principal or interest nor any indulgence granted by the company in respect of payment of any such money shall preclude the forfeiture of such shares as herein provided.

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Proof on trial of suits for money due on shares

33. On the trial or hearing of any action or suit brought by the Company against any member or his legal representative for the recovery of any money claimed to be due to the Company in respect of any shares it shall be sufficient to prove that the name of the member in respect of whole shares the money is sought to be recovered appears in the Register of Member as the holder or one of the holders, at or subsequent to the date at which the money sought to be recovered in alleged to have become due, of the shares in respect of which such money in south to be recovered, and that the resolution making the call is duly recorded in the Minutes Book; and that the notice of such call was duly given to the member or his representative, sued in pursuance of these presents; and it shall not be necessary to prove the appointment of the Directors who made such calls nor that a quorum of Directors was present at the Board at which any calls nor that a quorum of Directors was present at the Board at which any call was made, nor that the meeting at which any call was duly convened or constituted nor any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt.

Payment in anticipation of calls may carry interest

34. (a) The Directors may, if they, think fit, subject to the provisions of Section 92 of the Act, agree to and receive from any member willing to advance the same whole or any part of the moneys due upon the shares held by him beyond the sums actually called for, and upon the amount so paid or satisfied in advance, or so much there of as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made, the Company may pay interest at such rate, to the member paying such sum in advance and the Directors agree upon provided that money paid in advance of calls shall not confer a right to participate in profits or dividends. The Directors may at any time repay the amount so advanced.

(b) The member shall not however be entitled to any voting rights in respect of the moneys so paid by him until the same would but for such payment become presently payable.

35. The provisions of Article 42 shall mutates mutinies apply to the calls on debentures of the Company.

LIEN

Company’s lien on Share/Debentures

44. The Company shall have first and paramount lien upon all the shares/debenture (other than fully paid up shares/debentures) registered in the name of each member/debenture holder (whether solely or jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares/debentures and no equitable interest in any shares/debenture shall be created except upon the footing and condition that this Article hereof will have full effect. And such lien shall extend to all dividends and bonuses from time to time declared in respect of such shares/debentures. Unless otherwise agreed the registration of a transfer of shares/debentures shall operate as a waiver of the Company’s lien if any on such shares/debentures. The Directors may at any time declare any shares/debentures wholly or in part to be exempt from the provisions of this Clause.

As to enforcing lien by sale

45. For the purpose of enforcing such lien, the Board may sell the shares/debentures subject thereto in such manner as they shall think fit, and for that purpose may cause to be issued a duplicate certificate in respect of such shares and/or debentures and may authorise one of their member or appoint any officer or agent to execute a transfer thereof on behalf of and in the name of such

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member/debenture holder. No sale shall be made until such period, as may be stipulate red by the Board from time to time, and until notice in writing of the intention to sell shall have been served on such member and/or debenture holder or his legal representatives and default shall have been made by him or them in payment, fulfillment, or discharge of such debts, liabilities or engagements for fourteen days after such notice.

Application of proceeds of sale

46. (a) The net proceeds of any such sale shall be received by the Company and applied in or towards payment if such part of the amount in respect of which the lien exists as is presently payable and the residue if any, shall (subject to a eke lien for sums not presently payable as existed upon the shares before the sale) be paid to the persons entitled to the shares and/or debentures at the date of the sale.

Outsiders’ lien not to affect Company’s lien

(b) The Company shall be entitled to treat the registered holder of any share or debenture as the absolute owner thereof and accordingly shall not (except court of competent jurisdiction as ordered by a jurisdiction or by statue required) be bound to recognise equitable or other claim to, or interest in, such shares or debenture on the part of any other person. The Company’s lien shall prevail notwithstanding that it was received notice of any such claims.

FORFEITURE

If call or installment not paid notice must be given

47. (a) If any member or debenture holder fails to pay the whole or any part of any call or installment or any money due in respect of any share of any share or debentures either by way of principal or interest on or before the day appointed for the payment of the same or any such extension thereof as aforesaid, the Directors may at any time thereafter, during such time as the call – or any installment or any part thereof or other moneys remain unpaid or a judgment or decree in report thereof remains unsatisfied in whole or in part, serve a notice on such member or debenture holder or on the person (if any) entitled to the share by transmission requiring him to pay such call or installment or such part thereof or other as remain unpaid together with any interest that may have accrued and all expenses that may have been incurred by the company by reason of such non payment.

Form of Notice

(b) The notice shall name a day not being less than One month from the date of the notice and a place or places, on and at which such call, or installment or such part or other moneys as aforesaid and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event of non payment of call amount with interest at or before the time and at the place appointed, the shares or debentures in respect of which the call was made or installment or such part or other moneys is or are payable will be liable to forfeited.

In default of payment shares or debentures to be forfeited

48. If the requirements of any such notice as aforesaid are not complied with any share/debenture in respect of which such notice has been given, may at any time thereafter before payment of all calls installments, interest and expenses or other moneys due in respect thereof, be forfeited by a resolution of the Directors to that effect. Neither the receipt by the company of a portion of any money which shall from time to time be due from any member of the Company in respect of his

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shares, either by way of principal or interest, nor any indulgence granted by the company, in respect of the payment of any such money, shall preclude the company from thereafter proceeding to enforce a forfeiture of such shares as herein provided. Such forfeiture shall include all dividends declared or interest paid or any other moneys payable in respect of the forfeited shares or debentures and not actually paid before the forfeiture.

Entry of forfeiture in register of members/debenture holders

49. When any shares/debenture shall have been so forfeited, notice of the forfeiture shall be given to the member or debenture holder in whose name it stood immediately prior to the forfeiture with the date thereof, shall forthwith be made in the Register of members or debenture holders but no forfeiture shall be invalidated by any omission or neglect or any failure to give such notice or make such entry as aforesaid.

Forfeited share/debenture to be property of Company and may be sold

50. Any share or debenture so forfeited shall be deemed to be the property of the Company, and may be sold, re-allotted or otherwise disposed of either to the original holder or the any other person upon such terms and in such manner as the Directors shall think fit.

Power to annual Forfeiture

51. The Directors may, at any time before any share or debenture so forfeited shall have been sold re-allotted or otherwise disposed of, annual forfeiture thereof upon such conditions as they think fit.

Shareholders or Debenture holders still liable to pay money owing at time of forfeiture and

interest

52. Any member or debenture holder whose shares or debentures have been forfeited shall, notwithstanding the forfeiture be liable to pay and shall forthwith pay the Company, all calls installments, interest expenses and other money owing upon or in respect of such shares or debenture at the time of the forfeiture together with interest thereon from the time of the forfeiture until payment at such rate as the Director may determine, and the Directors may determine, and the Directors may enforce the payment of the whole or apportion thereof, if they think fit, but shall not be under any obligation to do so.

Effect of forfeiture

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

Certificate of forfeiture

54. A certificate in writing under the hand of one director and counter signed by the Secretary or any other officer authorised by the directors for the purpose, that the call in respect of a share or debenture was made and notice thereof given and that default in payment of the call was made and that the forfeiture of the share or debenture was made by the resolution of directors to that effect shall become inclusive evidence of the facts stated therein as against persons entitled to such share or debenture.

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Validity Sales under Articles 45 and 50

55. Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers hereinabove given, the Directors may, if necessary, appoint some person to execute an instrument of transfer of the shares or debenture sold and cause the purchaser’s name to be entered in the Register of members or Register of debenture holders in respect of the snares or debentures sold or to the application of the purchase money and after his name has been entered in the register of members or debentures holders in respect of such shared or debentures the validity of the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall be for damages only and against the company exclusively.

Cancellation of share/debenture certificate in respect of forfeited share/debenture

56. Upon, any sale re-allotment or other disposal under the provisions of the preceding Articles the certificate/s originally issued in respect of the relative shares or debentures shall (unless the same shall on demand by the company has been previously surrendered to it by the defaulting member or debenture holder) stand cancelled and become null and void and be of no effect, and the directors shall be entitled to issue a duplicated certificate/s in respect of the said share or debenture to the person/s entitled thereto.

Title of purchaser and allotted of forfeited shares/debentures

57. The company may receive the consideration, if any, given for the share or debenture on any sale, re-allotment or other disposition thereof, and the person to whom such share or debenture is sold, re-allotted or disposed of may be registered as the holder of the share or debenture and shall not be bound to see to the application of the consideration, if any, nor shall his title to the share or debenture be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale re-allotment or other disposal of the share of debenture.

Surrender of Shares or debentures

58. The Directors may, subject to the provisions of the Act, accept a surrender of any share or debenture from or by any member or debenture holder desirous of surrendering them on such terms as they think fit.

TRANSFER AND TRANSMISSION OF SHARES AND DEBENTURES

Register of transfers

59. The Company shall keep to be called the “Register of transfers” and therein shall be fairly and distinctly entered the particulars of every transfer or transmission of any share.

Form of transfer

60. The instrument of transfer shall be in writing and all the provisions of section 108 of the Act and statutory modification thereof shall be duly complied with in respect of all transfer of shares and registration thereof.

Instrument of transfer to be executed by transferor and transferee

61. The transferor shall sign every such instrument of transfer and transferee and the transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register of members in respect thereof.

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Directors may refuse to register transfer

62. (a) Subject to the provisions of Section 111A, these Articles and other applicable provisions of the Act or any other law for the time being in force, the Board may refuse whether in pursuance of any power of the company under these Articles or otherwise to register the transfer of, or the transmission by operation of law of the right to, any shares or interest of a Member in or debentures of the Company. The Company shall within one month from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to Company, send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal. Provided that the registration of a 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 where the Company has a lien on shares.

(b) Nothing in Section 108, 109, and 110 of the Act, shall prejudice this power to refuse to register the transfer of, or the transmission on legal documents by operation of law of the rights to, any shares or interest of a member in, any shares or debentures of the Company.

Transfers of shares

63. (a) An application of registration of the transfer of shares may be made either by the transferor or the transferee provided that where such application is made by the transferor, no registration shall in the case of party paid shares be effected unless the Company gives notice of the application to the transferee and subject to the provisions of clause (d) of this Article, the Company shall unless objection in made by the transferee within two weeks from the date of receipts other notice, enter in the Register of member the name of the transferee in the same manner and subject to the same conditions as if the application for registration was made by the transferee.

(b) For the purpose of clause (a) above notice to the transferee shall be deemed to have been duly given if sent by prepaid registered post to the transferee at the address given in the instrument of transfer and shall be deemed to have been duly delivered at the time at which it would have been delivered at the time at which it would have been delivered to him in the ordinary course of post.

(c) It shall not be lawful for the Company to register a transfer of any shares unless proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation if any, of the transferee has been delivered to the company along with the Certificate relating to the shares and if no such Certificate is in existence, along with the etter of allotment of shares. The Directors may also call for such other evidence as may reasonably be required to show he right of the transferor to make the transfer provided that where it is proved to the satisfaction of the Directors of the Company that an instrument of transfer signed by the transferor and the transferee has been lost, the Company may, if the Directors think fit, on an application in writing made by the transferee and bearing the stamp required by an instrument of transfer register the transfer on such terms as to indemnity as the Directors may think fit.

(d) Nothing in clause (c) above shall prejudice any power of the company to register as shareholder any person to whom the right to any share has been transmitted by operation of law.

(e) The company shall accept all application for transfer of shares/debentures, hoverer, this condition shall not apply to requests received by the company;

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(A) For splitting of a share or debenture certificate into several scripts of very small denominations;

(B) Proposals for transfer of shares/debentures comprised in share/debenture certificate to several parties involving, splitting of a share/debenture certificate into small denomination that such split/transfer appears to be unreasonable or without any genuine need.

(i) Transfer of Equity shares/debentures made in pursuance of any statutory provision or an order of a competent court of law;

(ii) The transfer of the entire equity shares/debentures by an existing share holder/debenture holder of the Company holding under one folio less than 10 (ten) Equity shares or 10 (ten) debentures (all relating to the same series) less than in market lots by a single transfer to a single or join transferee.

(iii) The transfer of not less than 10 (ten) Equity shares or 10 (ten) debentures (all relating to the same series) in favors of the same transferee(s) under two or more transfer deeds, out of which one or more relate (S) to the transfer of less than 10 (ten) Equity Shares/10 (ten) debentures.

(iv) The transfer of less than (ten) Equity Shares or 10 (ten) debentures (all-relating to the same series) to the existing share holder/debenture holder subject to verification by the Company.

Provided that the Board may in its absolute direction waive the aforesaid conations in a fit and proper case(s) and the decision of the Board shall be final in such case(s).

(f) Nothing in this Article shall prejudice any power of the Company to refuse to register the transfer of any share.

Custody of instrument of transfer

64. The instrument of transfer shall after registration be retained by the Company and shall remain in their custody. All instruments of transfer, which the Directors may decline to register, shall on demand be returned to the persons depositing the same. The Directors may cause to be destroyed all transfer deed lying with the Company after such period as they may determine.

Transfer books and Register of members when closed

65. The Board shall have power on giving not less than seven day’s previous, notice by advertisement in some newspaper circulating in the distract in which the office of the Company is situate, to close the Transfer books, the Register of members of 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.

Transfer to Minors etc.

66. Only fully paid shares or debentures shall be transferred to a minor acting through his/her logal or natural guardian. Under no circumstances, shares or debentures be transferred to any insolvent or a person of unsound mind.

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Title to shares of deceased holder

67. The executors or administrators of a deceased member (not being one or two or more joint holders) or the holder of a deceased member (not being one or two or more joint holders) shall be the only persons whom the Company will be bound to recognise as having any title to the shares registered in the name such member, and the Company shall not be bound to recognise such executors or administrator or the legal representatives unless they shall have first obtained probate of Letter of Administration or Succession Certificate, as the case may be from a duly constituted competent court in India, provided that in any case where the Directors in their absolute discretion think fit, the Directors may dispense with the production of probate or Letter of Administration or a Succession certificate upon such terms as to indemnity or otherwise as the Directors in their absolute discretion may think necessary and Article 70 register the name of any person who claims to be absolutely entitled to the shares standing in the name of a deceased member, as a member.

Registration of persons entitled to share otherwise than by transfer

68. (a) Subject to the provisions of Articles 67 and 77 (d) any person becoming entitled to any share in consequence of the death, lunacy bankruptcy or insolvency of any member or by any lawful means other than by a transfer in accordance with these presents, may with the consent of the Directors (which they shall not be under and 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 titles as the directors shall think sufficient, either be registered himself as member in respect of such shares or elect to have some person nominated by him and approved by the Directors registered as a member in respect of such shares. Provided nevertheless that if such person shall elect to have his nominee registered he shall testify his election by executing in favour of his nominee an instrument of transfer accordance with the provisions herein contained and until he does so, he shall not be free from any liability in respect of such shares.

(b) A transfer of the shares or other interest in the Company of a deceased member thereof made by his legal representative shall, although the legal representative is not himself a member be valid as if he had been a member at the time of the execution of the instrument transfer.

Claimant to be entitled to same advantage

69. The person becoming entitled to a share by reason of the death, lunacy, bankruptcy or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled as if he were registered holder or the shares except that he shall not before being registered as a member in respect of the share, be entitled in respect of it, to exercise any right conferred by membership in relationship to the meeting of the Company provided that the Board may at any time give notice requiring any such persons to elect either to be registered himself or to transfer shares and if the notice is not complied within sixty days, the Board may thereafter withhold payment of al dividends, interest, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with.

Persons entitled may receive dividend without being registered as member

70. A person entitled to a share by transmission shall, subject to the right of the Directors to retain such dividends, bonuses or money as hereinafter provided be entitled to receive, and may give a discharge for any dividends, bonuses or other moneys payable in respect of the share/debenture.

71. Article 70 shall not prejudice the provisions of Articles 44 and 55.

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Refusal to register nominee

72. The Directors shall have the same right to refuse on legal ground to register a person entitled by transmission to any shares or his nominee as if he were the transferee named in an ordinary transfer for presented for registration.

Directors may require evidence of transmission

73. Every transmission of a share shall be verified in such manner as the Directors may require, and the Company may refuse to register any such transmission until the same be so verified or until or unless an indemnity be given to the Company with regard to such registration which the Directors at their discretion shall consider sufficient, provided nevertheless that there shall not be any obligation on the Company or the Directors to accept any indemnity.

No fee on transfer or transmission

74. No fees shall be charged for registration of transfer, probate, succession certificate and letters of administration, certificate of death or marriage, power of attorney or similar other documents.

The Company not liable for disregard of a notice prohibiting registration of transfer.

75. 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 or appearing the Register of members) to the prejudice of persons having or claiming any equitable right, title or interest to or in said share, notwithstanding that the Company may have had notice of such equitable right, title or interest or referred thereto in Amy 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 Directors shall so think fit.

76. The provisions of these Articles shall mutaits mutandis apply to the transfer or transmission by operation of law of debentures of the Company.

JOINT HOLDERS

Joint-holders

77. Where two or more persons are registered as the holders of any share/debentures, they shall be deemed (so far as the Company is concerned) to hold the same as joint tenant with benefits of survivorship subject to the following and other provisions contained in these Articles.

No transfer to more than four persons as joint holders

(a) The joint holders of any share/debentures shall be liable severally four persons as the holders of any share/debenture.

Transfer by joint holders.

(b) In the case of a transfer or shares/debentures held by joint holders, the transfer will be effective only if it is made by all the joint holders.

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Liability of joint holders

(c) The joint holders of any share/debenture shall be liable severally as well as jointly for and in respect of all calls or installments and other payments, which ought to be made in respect of such share/debenture.

Death of one or more joint holders

(d) On the death of any one or more of such joint holders the survivor/survivors shall be the only person or persons recognised by the Company as having any title to the share/debenture but the Directors may such evidence require such evidence of death as they may deem fit, and nothing herein contained shall be taken to release the estate of a deceased joint holder from any liability on shares/debentures held by him jointly with any other person.

Receipt of one sufficient

(e) Any one of such joint holders may give effectual receipts of any dividends, interests or other moneys payable in respect of such shares/debenture.

Delivery of certificate and giving of notices to first named holder

(f) Only person whose name stands first in the Register of Members/debenture holders as one of the joint holder of any shares/debentures shall be entitled to the delivery of the certificate relating to such share/debenture or to receive notice (which expression shall be deemed to include all documents as defined in Article (2)(a) hereof and any document served on or sent to such person shall be service on all the joint holders.

Vote of joint holders

(g) (i) Any one of two or more joint holders may vote at any meeting either personally or by attorney or by proxy in respect of such shares as if he were solely entitled thereto and if more than one of such joint holders be present at any meeting personally or by attorney then that one of such persons so present whose name stands first or higher (as the case may be) on the Register in respect of such share shall alone be entitled to vote in respect thereof but the other or others of the joint holders shall be entitled to be present at the meeting provided always that a joint holder present at any meeting personally shall be entitled to vote in preference to a joint holder present by Attorney or by proxy although the name of such joint holder present by an Attorney or proxy stands first or higher (as the case may be) in the register in respect of such shares.

(ii) Several executors or administrators of deceased member in whose (deceased member) sole share shall for the purpose of this clause be deemed joint holders.

BORROWING POWERS

Restriction on powers of the Board

78. The Board of Directors shall not except with the consent of the Company in general meeting and subject to Article 172 of the Article of Association of the Company.

(a) Sell, lease or otherwise dispose of the whole or substantially the whole, of the undertaking of the Company or where the company owns more than one undertaking of the whole or substantially the whole of any such undertaking,

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(b) Remit or give time for the repayment of any debt due by a Director.

(c) Invest otherwise than in trust securities the amount of compensation received by the Company in respect of the compulsory acquisition alter the commencement of this Act, of any such undertaking as is referred to in clause (a) or of any premises or properties used for any such undertaking and without which it can not be carried on or can be carried on only with difficulty or only after a considerable time.

(d) Borrow monies where the moneys to be borrowed, together with the moneys already borrowed by the Company (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) will exceed the aggregate of the paid-up capital of the company and its free reserves, that is to say, reserves not set apart for any specific purpose.

(e) Contribute to charitable and other funds not directly relating to the business of Company of the welfare of its employees, any amounts the aggregate of which will, in any financial year exceed fifty thousand rupees or five percent, of its average not profits as determined in accordance with the provisions of Section 349 and 350 of the Act during the three financial years immediately preceding, whichever is greater, Explanation: Every resolution passed by the Company in general meeting in relation to the exercise of the power referred to in clause (d) or in clause(e) shall specify the total amount unto which money may be borrowed by the Board of Directors under clause (d) or as the case may be the total amount which may be contributed to charitable and other funds in any financial year under clause (e).

Conditions on which money may be borrowed

79. The Directors may raise and secure the payment of such sum or sums in such manner and upon such terms and conditions in all respects as they think fit, and in particular by the issue of bonds, perpetual or redeemable, debenture or debenture stocks or any mortgage or charge or other security on the undertaking of the whole or any part of the property of the company (both present and future) including its uncalled capital for the time being.

Bonds, debentures etc. to be subject to the control of directors

80. Any bonds, debentures, debenture stock or other securities issued or to be issued by the Company shall be under the control of the Directors who may issue them upon such terms and conditions and in such manner and for such consideration as they shall consider to be for the benefit of the Company.

Provided that bonds, debentures, debenture stock or other securities so issued or to be issued by the Company with the right to allotment of or conversion into shares shall not be issued except with the sanction of the Company in general meeting by a special resolution.

Securities may be assignable free from equities

81. Debentures, debenture stocks, bonds or other securities may be made assignable free from any equities between the company and the person to whom the same may be issued.

Issue at discount etc. or with special privileges

82. Any bonds, debenture stocks, or other securities may be issued, subject to the provisions of the Act, at a discount premium or otherwise and may be issued on condition that they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption, surrender drawings, allotment of shares, attending (but not voting) at the General

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Meeting appointment of Directors and otherwise Debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in the General Meeting and subject to the following:

Debentures with voting right to be issued

(a) The Company shall not issues any debenture carrying voting rights at any meeting of the company whether generally or in respect of particular classes of business.

(b) The Company shall have power to reissue redeemed debentures in certain cases in accordance with Section 121 of the Act.

(c) Payments of the certain debts out of assets subject to floating charge in priority to claim under the charge may be made in accordance with the provisions of the Section 123 of the Act.

(d) Certain charges mentioned in Section 125 of the Act shall be void against the liquidators or creditors unless registered as provided in Section 125 of the Act.

(e) The term `charge’ shall include mortgage in these Articles.

(f) A contract with the Company to take up and pay for any debentures of the Company may be enforced by a decree for specific performance.

Limitations of time for issues of certificate

(g) The Company shall, within three months after the allotment of any of its debenture or debenture stock, and within one month after the application for the registration of the transfer of any such debentures or debenture stocks have complete and have ready for delivery the Certificate of all the debentures and the Certificates of all debenture stock allotted or transferred unless the conditions of issues of the debentures or stocks otherwise provide.

The expression `transfer; for the purpose of this clause means a transfer duly stamped and otherwise valid and does not include any transfer which the Company is for any reason entitled to refuse to register and does not register.

Rights to obtain copies of and inspect Trust Deed

(h) (i) A copy of Trust Deed for securing any issue of debentures shall be forwarded to holder of any such debentures or any member of the Company at his request and within seven days of the making thereof on payment.

i. In the case of a printed Trust Deed of the sum Rupee One and

ii. In the case of Trust Deed, which has not been printed thirty-seven paise for every one hundred words, words of fractional part thereof required to be copied.

(ii) The Trust Deed referred to in item (I) above shall also be open to inspect by any member or debenture holder of the Company in the same manner, to the same extent and on payment of the same fees, as if it were the Register of members of the Company.

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Mortgage of uncalled capital

83. If any uncalled capital of the Company is included in or charges by any mortgage or other security the directors shall subject to the provisions of the Act and these Articles make calls on the members in respect of such uncalled capital in trust for the person in whose favour such mortgage or security is executed.

Indemnity may be given

84. If the Directors or an of them or any other person shall become personally liable for the payment of any sum primarily due from the Company the Directors may execute or cause to be executed any mortgage charge or security over of affecting the whole or any part of the assets of the Company by way of indemnity to secure the Directors or person so becoming liable as aforesaid from an loss in respect of such liability.

Registration of charges

85. (a) The provisions of the Act relating to registration of charges shall be complied with.

(b) in the case of a charge created out India and comprising solely property situated outside India, the provisions of Section 125 of the Act shall also be complied with.

(c) Where a charge is created in India but comprises property outside India the instrument creating or purporting create the charge under Section 125 of the Act or a copy thereof verified in the prescribed manner may be filed for registration, notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situate as provided by Section 125 of the Act.

(d) Where any charge on any property of the Company is required to be registered under Section 125 of the act has been so registered any person acquiring such property or any part thereof or any share or interest therein shall be deemed to have notice of the charge as from the date of such registration.

(e) in respect of registration of charges on prosperities acquired subject to charge the provisions of Section 127 of the Act shall be complied with.

(f) The Company shall comply with provisions of Section 128 of the act relating to particulars in case of series of debentures entitling holders pair pass.

(g) The company shall comply with the provisions of Section 129 of the act in regard to registration of particulars of commission, allowance or discount paid or made directly or indirectly in connection with the debentures.

(h) The company shall comply with the prohibitions of section 133 of the act as to endorsement of Certificate of registration on debenture or Certificate of Debenture stock.

(i) The company shall comply with the provisions of section 134 of the act as regards registration of particulars of every charge and of every series of debentures.

(j) As to modification of charges the company shall comply with the provision of section 135 of the act.

(k) The company shall comply with the provisions of section 138 of the Act regarding keeping a copy of instrument creating charge at the registered officer of the company and

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comply with provisions of section 137 of the act in regard to entering in the register of charges any appointment of receiver or manager as therein provided.

(l) The company shall also comply with the provision of section 138 of the act as to reporting satisfaction of any charge and procedure thereafter.

(m) The company shall keep at its registered office a register of charges and enter therein all charges specifically affecting any property of the company and all floating charges on the undertaking or on any property of the company giving in each case:

(i) A short description of the property charged;

(ii) The amount of the charge; and

(iii) Except in the case of securities to bearer the names of persons entitled to the charge.

(n) Any creditor or member of the Company and any other persons shall have the right to inspect copies of instruments creating charges and Company’s register of charges in accordance with and subject to the provisions of Section 144 of the Act.

Trust not recognised

86. No notice of any trust, express or implied or constructive shall be entered on the Register of Debenture holders.

SHARE WARRANTS

Powers to issue share warrants

87. The Company may issue share warrants subject to and in according with the provisions of Section 114 and 115 of the Act and accordingly the Board may in its discretion with respect to any share which is fully paid upon application in writing signed by the persons registered as holder of the share which is fully paid upon application in writing signed by the persons registered as holder of the share and authenticated by such evidence (if an) as the board may from time to time require as to the identity of the person signing the application and on receiving the certificate (if any) of the share and the amount of the stamp duty on the warrant and such fee as the Board may from time to time required issue a share warrant.

Deposit of share warrants

88. (a) The bearer of a share warrant may at any time deposit warrant at the office of the Company and so long as the warrant remains so deposited the depositor shall have the same right of signing a requisition for calling a meeting of the company and of attending and voting and exercising the other privileges of a member at any meeting held after the expiry of two clear days from the time of deposit, as if his name were inserted in the Register of members as the holder of the share included in the deposited warrant.

(b) Not more than one person shall be recognised as depositor of the Share Warrant.

(c) The Company shall on two days written notice return the deposited share warrant to the depositor.

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Privileges and disabilities of the holders of share warrant.

89. (a) Subject as herein otherwise expressly provided, no person shall, as bearer of a share warrant, sign a requisition for calling a meeting of the Company, or attend or vote or exercise any of the privileges of a member at a meeting of the Company or be entitled to receive any notice from the Company.

(b) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if he ware named in the Register of members as the holder of the shares included in the warrant and he shall be a member of the Company.

Issue of new share warrant or coupon

90. The board may from time to time, make rules as to the terms on which (if it shall think fit) a new share warrant or coupon may be issued by way or renewal in case of defacement loss or destruction.

CONVERSION OF SHARES INTO STOCK AND RE-CONVERSION

Shares may be converted into stock

91. The Company in general meeting may convert any paid up shares into stock and when any shares shall have been converted into stock, the several holders of such stock may thenceforth transfer their respective interest therein or any part of such inserts in the same manner and subject to the same regulations as and subject to which the stock arise might have been transferred if no such conversion had taken place or as near thereto as circumstances will admit. The Company may at any time reconvert any stock into paid up shares.

Right of Stock holders

92. The holders of stock shall according to he amount of stock held by them have the same right, privileges and advantages as regards dividends, voting at meeting of the Company and other matters, as if they held the share from which the stock arose, but no such privilege or advantage (except participation in the dividends and profits of the Company and the assets on winding up) shall be conferred by an amount of stock which would not if existing in shares have conferred that privilege or advantage.

VOTES OF MEMBERS

Restrictions on exercise of voting rights of members who have not paid calls

93. (a) No member shall exercise any voting right in respect of any shares registered in his name on which any calls or other sums presently payable be him have not been paid or in regard to which the Company has and has exercised any right or lien.

(b) Where the shares of the company are held in trust, the provisions of Section 187 B of the Act shall regulate the voting power in respect of such shares.

Restriction on exercise of voting right in other cases to be void

94. A member is not prohibited from exercising his voting right on the ground that he has not held his share or other interest in the company for any specified period preceding the date on which the vote is taken, or on any other ground not being a ground set out in Article 104.

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Equal rights of shareholders

95. Any shareholder whose name is entered in the Register of member of the Company shall enjoy the same right and be subject to the same liabilities as all other shareholders of the same class.

Voting to be show of hands in first instance

96. At any general meeting a resolution put to vote at the meeting shall unless a poll is demanded under Section 179 of the Act be decided on a show of hands.

97. (a) Subject to the provisions of the Act upon show of hands every member entitled to vote and present in person shall have one vote and upon a poll every member entitled to vote and present in person or by proxy shall have one vote for every share held by him

No voting by proxy on show of hands

(b) No member not personally present shall be entitled to vote on a show of hands unless such member is a body corporate present by proxy or by a representative duly authorised under Section 187 or 187A of the Act in which case such proxy or representative may vote on a show of hands as if he were a member of the Company.

How members non-compos minutes and minor may vote

(c) A member of unsound mind or in respect of whom an order has been made by any court having jurisdiction in lunacy, may, vote, whether on a show of hands or on a poll by his committee or other legal guardian and any such committee or guardian may on poll vote by proxy; if any member be a minor the vote in respect of his share or shares shall be by his guardians or any one of his guardians if more than one to be selected in case of dispute by the Chairman of the meeting.

Votes in respect of shares of deceased or insolvent members etc

(d) Subject to the provisions of the Act and other provisions of these Articles any person entitled under the transmission clause to any share may vote at any general meeting in respect thereof as if he was registered holder of such shares, provided that at least 48 (forty eight) hours before the time of holding the meeting or adjourned meeting as the case may be at which he proposes to vote he shall satisfy the Directors of his right to such shares unless the Directors shall previously admitted his right to vote at such meeting in respect thereof.

Custody of instrument

(e) If any such instrument of appointment be confined to the object appointing proxy or Substitute for voting at meetings of the Company, it shall remain permanently or for such time as the Directors may determine in the custody of the company; if embracing other objects a copy thereof examined with the original shall be delivered to the Company to remain in the custody of the Company.

Validity of votes given by proxy notwithstanding death of members etc

(f) A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death of the principal or revocation of the proxy or the transfer of the share in respect of which the vote is given provided that no intimation in writing of the death revocation or transfer shall have been received at the Registered office of the Company before the meeting.

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Time for objects for vote

(g) No objection shall be made to the validity of any vote except at the meeting or poll at which such vote shall be tendered and every vote whether given personally or by an agent or proxy or representative not disallowed at such meeting or poll shall be deemed valid for all purpose of such meeting or poll whatsoever.

Chairman of any meeting to be the judge of any vote

(h) The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting. The Chairman present at the taking of poll shall be the sole judge of the validity of every vote tendered at such poll.

Chairman’s declaration of result of voting by show of hands to be conclusive

98. A declaration by the Chairman in pursuance of Section 177 of the Act that on a show of hands a resolution has or has not been carried, either unanimously or by a particular majority and an entry to that effect in the books containing the minutes of the proceedings of the company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes cast in favour of or against such resolution.

Demand for poll

99. (a) Before or on the declaration of the result of the voting on any resolution of a show of hands a poll may be ordered to be taken be the Chairman of the meeting of his own motion and shall be ordered to be taken by him on a deemed made in that behalf by any member or members present in person or by proxy and holding shares in the Company which confer a power to vote on the resolution not being less than one-tenth of the total voting power in respect of the resolution or on which an aggregate sum of not less than fifty thousand rupees has paid up.

(b) The demand for a poll may be withdraw at any time the person or persons who made the demand.

Time of taking poll

100. (a) A poll demanded on a question of adjournment shall be taken forthwith.

(b) A poll demanded on any other question (not being a question relating to the election of a Chairman which is provided for in section 175 of the Act.) shall be taken at such time not being later than 48 (forty eight) hours from the time when the demand was made as the Chairman may direct.

Right of a member to use his votes differently

101. On a poll taken at a meeting of the Company a member or other person entitled to vote for him as the case may be need not if he votes use all his votes or cast in the same way all the votes he uses.

Scrutineers at poll

102. (a) Where a poll is to be taken the Chairman of the meeting shall appoint two scrutinisers to scrutinise the votes given on the poll and to report thereon to him.

(b) The Chairman shall have power at any time before the result of the poll is declared to remove a scrutiniser from office and to fill vacancies in the office of scrutiniser arising

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from such removal or from any other cause.

(c) Of the two scrutiniser appointed under this article one shall always be a member (not being an officer or employee of the Company) present at the meeting provided such a member is available and willing to be appointed.

Manner of taking poll and result thereof

103. (a) Subject to the provisions of the Act the Chairman of the meeting shall have power to regulate the manner in which a poll shall be taken?

(b) The result of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll was taken.

Casting Vote

104. In the case of an equality of votes, whether on a show of hands or on a poll the Chairman of the meeting at which the show of hands takes place or at which the polls is demanded shall be entitled to a casting vote in addition to his own vote or votes to which he may be entitled as a member.

Representation of Body Corporate

105. A body corporate (Whether a Company within the meeting of the Act or not) if it is a member or creditor (including a holder of debentures) of the Company may in accordance with the provisions of Section 187 of the Act. Authorise such person by a resolution of its Board of Directors as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company or at any meeting of creditors of the Company.

Representation of the President of India of Governors

106. (a) The President of India or the Governor of a state if he is a member of the Company may appoint such person as he thinks fit to act as his representative at any meeting of the company or at any meeting of any class of members of the company in accordance with provisions of Section 187A of the Act or any other statutory provision governing the same.

(b) A person appointed to act as aforesaid shall for the purpose of the Act be deemed to be a member of such a Company and shall be entitled to exercise the same rights and powers (including the right to vote by proxy) as the President or as the case may be the Governor could exercise, as a member of the Company.

Public Trustee

(c) The Company shall comply with provisions of Section 188 of the Act relating circulation of member’s resolutions.

Circulation of member’s resolution

107. The Company shall comply with provisions of Section 188 of the Act relating to circulation of member’s resolutions.

Resolution requiring special notice

108. The provisions of Section 191 of the Act shall apply to resolutions passed at an adjourned meeting of the Company or of the holders of any class of shares in the Company and of the Board of

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Directors o the Company and the resolutions shall be deemed for all purposes as having been passed on the date on which in fact they were passed and shall not be deemed to have been passed on any earlier date.

Registration of resolutions and agreements

109. The Company shall comply with the provisions of Section 192 of the Act relating to registration of certain resolutions and agreements.

Minutes of proceeding of general meeting and of Board and other meetings

110. (a) The Company shall cause minutes of all proceedings of general meetings and of all proceedings of every meeting of its Board of Directors or of every Committee of the Board to be kept by making within thirty days of the conclusion of every such meeting concerned entries thereof in books kept for that purpose with their pages consecutively numbered.

(b) Each page of every such book shall be initialed or signed and the last page of the record of proceeding of each meeting in such books shall be dated and signed:

(i) in the case of minutes of proceedings of the Board or of a Commit there if by the Chairman of the said meeting or the Chairman of the next succeeding meeting.

(ii) in the case of minute of proceeding of the general meeting by Chairman of the said meeting within the aforesaid period of thirty days or in the event of the death or inability of that Chairman within that period, by a Director duly authorised by the Board for the purpose.

(c) In no case the minute of proceedings of a meeting shall be attached to any such book as aforesaid by pasting or otherwise.

(d) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.

(e) All appointments of officers made at any of the meetings aforesaid shall be included in the minutes of the meeting.

(f) In the case of a meeting of the Board of Directors of a Committee of the Board the minutes of the meeting.

(i) The name of the Directors present at the meetings and

(ii) in the case of each resolution passed at the meeting the names of the Directs, if any dissenting from or not concurring the resolution.

(g) Nothing contained in Clauses (a) to (d) hereof shall be deemed to require the inclusion in any such minute of any matter which in the option of the Chairman of the meeting.

(i) is or could reasonably be regarded as defamatory of any person

(ii) is irrelevant or immaterial to the proceedings; or

(iii) is detrimental to the interest of the Company.

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The Chairman shall exercise an absolute discretion in regard to the inclusion or non-inclusion of an matter in the minutes on the grounds specified in this clause.

Minutes to be considered to be evidence

(h) The minutes of meetings kept in accordance with the provisions of Section 193 of the Act shall be evidence of the proceedings recorded therein.

Presumptions to be drawn where minutes duly drawn and signed

111. Where minute of the proceedings of any general meeting of the Company or of any meeting of its Board of Directors or of a committee of the board have been kept in accordance with the provisions of Section 193 of the act then, until the contrary is proved, the meeting shall be deemed to have been duly called and held and all proceedings thereat to have duly taken place and in particular all appointments of Directors or Liquidators made at the meeting shall be deemed to be valid and the minutes shall be evidence of the proceedings recorded therein.

Inspection of Minutes Books of General Meetings

112. (a) The books containing the minutes of the proceedings of any general meeting of he Company shall;

(i) Be kept at the registered office of the Company and

(ii) be open during the business hours to the inspection of any member without charge subject such reasonable restrictions as the company may in general impose so however that not less than two hours in each day are allowed for inspection.

(b) Any member shall be entitled to be furnished, within seven days after he has made a request in that behalf of the Company with a copy of any minutes referred to in clause (a) above on payment of thirty-seven Paise for every one hundred words or fractional part thereof required to be copied.

Publication of reports of proceeding of general meetings

113. No document purporting to be a report of the proceedings of any general meeting of the Company shall be circulated or advertised at the expenses of the Company unless it includes the matters required by Section of 193 of the Act to be contained in the Minutes of the proceedings of such meeting.

MANAGERIAL PERSONNEL

Managerial personnel

114. The Company shall duly observe the provisions of Section 197A of the Act regarding prohibition of simultaneous appointment of different categories of managerial personnel therein referred to.

BOARD OF DIRECTORS

Board of Directors

115. Unless otherwise determined by the company in General Meeting the number of Directors shall not be less than three and not more than twelve.

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Appointment of senior Executives as whole time directors

116. The first Directors of the Company shall be:

1. ODHAVJIBHAI R. PATEL

2. PRAVINBHAI O. PATEL

(b) Subject to the provisions of the Act and within the overall limit prescribed under these Articles for the number of Directors on the board the board may appoint any Senior Executive of the Company as a Whole time Director of the Company for such period and upon terms and conditions as the Board may decide. The following provisions shall govern the Senior Executive so appointed.

(ii) He shall be liable to retire by rotation as provided in the Act but shall be eligible for reappointment. His reappointment as a Director shall not constitute a break in his appointment as Whole time Director.

(iii) He shall be reckoned as Director for the purpose of determining and fixing the number of Directors to retire by rotation.

(iv) He shall cease to be a Director of the Company on the happening of any event specified in Sections 283 and 314 (2C) of the Act. He shall cease to be a Director of the Company, if for any reason whatsoever, he ceases to hold the position of Senior Executive in the Company or ceases to be in the employment of the Company.

(v) Subject to what is stated hereinabove he shall carry out and perform all such duties and responsibilities as may from time to time be conferred upon or entrusted to him by the Managing Director/s and/or the Board shall exercise such powers and authorities subject to such restrictions and conditions and/or stipulations as the Managing Director/s and/or the Board may form time to time determine.

(c) Nothing contained in this Article shall be deemed to restrict or prevent the right of the Board to revoke, withdraw, alter, vary or modify all or any of such powers, authorities, duties and responsibilities conferred upon or vested in or entrusted to such whole time directors.

Debenture Director

117. Any Trust Deed for securing debentures or debenture stocks, may if so arranged provide for the appointment, from time to time by the Trustees thereof or by the holders of debentures or debentures tocks of some person or persons to be a Director or Directors of the Company and may empower such Trustees or holders of Directors or debenture stocks from time to time to remove and reappoint any Director/s so appointed. The Director/s so appointed under this Article is herein referred to as “Debenture Director” and the term “Debenture Directors means the Director for the time being in office under this Article. The Debenture Director(s) shall not be bound to hold any qualification shares and shall not be liable to retire by rotation or be removed by the Company. The Trust Deed may contain such ancillary provisions as may be arranged between the Company and the Trustees and all such provisions shall have effect not withstanding any to the other provisions herein contained.

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Nominee Director

118. Notwithstanding anything to the contrary contained in these Articles so long as any moneys remain owing by the Company to the Industrial Development Bank of India (IDBI), The Industrial Credit and Investment Corporation of India Ltd. (ICICI), Industrial Finance Corporation of India (IFCI) and Life Insurance Corporation of India (LIC) or to any other Finance Corporation or Credit Corporation or to any other Finance Company or Body out of any loans granted by them to the Company or so long as (IDBI, ICICIC, LIC and Unit Trust of India (UTI) or another Financing Corporation or Credit Corporation or any other Financing Company or Body (each of which IDBI, IFCI, ICICI, LIC and UTI or any other Finance Corporation or Credit Corporation or any other Financing Company or Body is hereinafter in this Article referred to as “the Corporation”) continue to hold debentures in the Company as a result of underwriting or by direct subscription or private placement or so long as the Corporation holds shares in the Company as a result of underwriting or direct subscription or private placement or so long as any liability of the Company arising out of any guarantee furnished by the Corporation on behalf of the Company remains outstanding the Corporation shall have a right to appoint from time to time any person or persons as a Director or Directors whole time or non-whole time (Which Director or Directors is/are hereinafter referred to as “Nominee Director/s”) on the Board of the Company and to remove from such office any person or persons so appointed and to appoint any person or persons in his or their place/s.

The Board of Directors of the Company shall have no power to remove from office the Nominee Director/s. At the option of the Corporation such Nominee Directors/ shall not be required to hold any shares qualification in the Company. Also at the option of the Corporation such Nominee Director/s hall not be liable to retirement by rotation of Directors. Subject as aforesaid, the Nominee Director/s shall be entitled to the same rights and privileges and be subject to the same obligations as any other Director of the Company.

The Nominee Director/s so appointed shall hold the said office only so long as any money remain owing by the Company as a result of direct subscription or private placement or so long as the Corporation holds shares in the Company as a result of underwriting or direct subscription or the liability of the Company arising our of any guarantee is outstanding and the Nominee Director/s so appointed in exercise of the Power shall ipso factor vacate such office immediately the moneys owing by the Company to the Corporation is paid of or on the Corporation censing to hold debenture/shares in the Company or on the satisfaction of the liability of the Company arising our of any guarantee furnished by the Corporation.

The Nominee Director/s appointed under this Articles shall be entitled top receive all notices of and attend al General Meeting, Board Meetings and of the Meetings of the Committee of which the Nominee Director’s is/are member/s as also the minutes of such meetings. The Corporation shall also be entitled to receive all such notices and minutes. The Company shall pay to the nominee Director/s sitting fees and expenses which the other Directors of the Company are entitled bug if any other fees, commission, monies or remuneration in any form in payable to the Directors of the Company, the fees, commission, monies and remuneration in relation to such Nominee Director/s shall accrue to the Corporation and same shall accordingly be paid by the Company directly to the Corporation. Any expenses that may be incurred by the Corporation or by such Nominee Director/s in connection with their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or as the case may be to such Nominee Director/s.

Provided that if any such Nominee Director/s is an office of the Corporation the sitting fee relation such Nominee Director/s shall also accrue to the Company shall accordingly pay the Corporation and the same directly to the Coronations.

Provided also that invent of the Nominee Director/s being appointed as whole time Director/s such Nominee shall exercise such powers and duties as may be approved by the Landers and have such

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rights as are usually exercised or available to whole time Director in the management of the affairs of the Browser, Such Nominee Director/s shall be entitled to receive such remuneration, fees commission and monies as may be approved by the Landers.

Special Director

119. (a) In connection with any collaboration arrangement with any company corporation or firm or person for supply of technical know-how and/or machinery or technical advice, the Director may authorise such Company, Corporation, firm or person (hereinafter in this clause referred to as “Collaborator”) to appoint from time to time any person or persons as Director or Director of the Company (hereinafter referred to as “Special Director”) and may agree that such special Director shall not be liable to retire by ration and need to possess any qualification shares to qualify him for the office of such Director, so however, that such special Director shall hold office so long as such collaboration arrangement remains in force unless otherwise agreed upon between the Company and such collaborator under the collaboration arrangements or at any time thereafter.

(c) The collaborator may at any time and from time to time remove any such special Director appointed by it and may at the time of such removal and also in the case of death or resignation of the person so appointed, at any time, appoint any other person as a Special Director in his place and such appointment or removal shall be made in writing signed by such company or corporation or any partner of such person and shall be delivered to the company at its registered office.

(d) It is clarified that every collaborator entitled to appoint a Director under this Article may appoint one or more such person or persons as a Director(s) and so that if more than one Collaborator is so entitled there may at any time be as many Special Director as the Collaborators eligible to make the appointment.

120. Subject to the provisions of Section 255 of the Act, the number of Directors appointed under Articles 130 and 131 shall not exceed in the aggregate one third of the total number of Directors for the time being in office.

Appointment of Alternate Director

121. (a) The Board of Directors of the Company may appoint an alternate Director to act for a Director (hereinafter in this Article called “the Original Director”) during his absence for a period of not less than three months from the State in which meetings of the Board are ordinarily held.

(b) An alternate Director appointed under this Article shall not hold office as such for a period longer than that permissible to the original Director in whose place he has been appointed and shall vacate office if and when the Original Director returns to the State in which meeting of the Board are ordinarily held.

(c) If the term of office of the Original Director is determined before the returns to the State aforesaid ant provision for the automatic reappointment of retiring directors in default of another appointment shall apply to the original and not to the alternate director.

Appointment of Additional Directors

122. Subject to the provisions of Section 260 of the act, the Board of Directors shall have power at any time to appoint any person as an additional director to the Board, but so that the total number of Directors shall not exceed the maximum number fixed by these Articles. Any director so appointed shall hold the office only up to the next annual general meeting of the Company and

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shall then be eligible for re-appointment.

Appointment of Director to fill the casual Vacancy

123. (a) Subject to the provisions of Section 262 of the Act, of the office of any Director appointed by the Company in general meeting is vacated before his tem of office expires in the normal course, the resulting casual vacancy may in default of and subject to any regulation in the Articles of the Company be filled by the Board of Directors at the meeting of the Board and the Director so appointed shall hold office only up to the date up to which the Director in whose place he is appointed would have held office if it had not been vacated as aforesaid but he shall then be eligible for re-election.

Individual Resolution for Directors appointment

(b) At a general meeting of the Company a motion shall not be made for the appointment of two or more persons as Director of the Company by a single resolution unless a resolution that it shall be made has first been agreed to by the meeting without any vote being given against it. Resolution moved in contravention of this Article shall be whether or not objection was taken at the time of its being so moved. Provide that where a resolution so moved is passed no provision for the automatic reappointment of retiring director by virtue of these articles and the Act in default of another appointment shall apply.

Appointment of Chairman

124. The directors may from time to time elect among themselves a chairman of the Board and determine the period for which he is to hold office if at any meeting of the Board, the chairman is not present within fifteen minutes after the time appointed for holding the same, the directors present may choose one of their members to be chairman of the meeting.

Qualification of Director

125. A director need not hold any shares in the Company to qualify him for the office of a Director of the Company.

Remuneration of Directors

126. (a) Subject to the provisions of the Act, a Managing Director or a Director who is in the whole time employment of the Company may be paid remuneration either by way of a monthly payment or at a specified percentage of the net profits of the Company or partly by one way and partly by the other.

(b) Subject to the provisions of the Act, a Director, who is neither in the whole some employment nor a Managing Director may be paid remuneration either:

(i) By way of monthly, quarterly or annual payment with the approval of the Central Government or,

(ii) by way of commission if the company by a special resolution has authorised such payment.

(c) The fee payable to Directors (other than Managing or Whole time Director, if any) for attending each meeting of the Board or committee thereof shall be such sum as may be prescribed by the Act or the Central Government from time to time.

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Traveling and other expenses

127. The Board may allow and pay to pay and Director for the purpose of attending a meeting such sum either a fixed allowance and/or actual as the Board may consider fair compensation for traveling, board and lodging and incidental and/or such actual out of pocket expenses incurred by such director in addition to his fees, for attending such meeting to and from the place at which the meetings of the Board of Committees thereof or general meetings of the Company are held from time to time or any other place at which the Director executes his duties.

Remuneration for extra services

128. If any Director, being willing shall be called upon to perform extra services or to take any special exertions for any of the purposes of the Company and in that event the Company may, subject to the provisions of the Act, remunerate such Director either by a fixed sum or by a percentage of profit or otherwise, as may be determined by the Directors but not exceeding that permitted under Section 309 of the Act and such remuneration may be either in addition to or in substitution for his share in the remuneration above provided.

Increase in remuneration of Directors to require Government sanction

129. (a) Any provisions to the remuneration of any Director including a Managing or joint Managing or whole time Director or any amendment thereof, which purpose to increase or has the effect of increasing, whether directly or indirectly the amount thereof, whether that provisions is contained in the Company’s Memorandum or their Articles, or in an agreement entered into by it, or any resolution, passed by the Company in general meeting or by the Board of Directors, shall not have any effect unless approved by the Central Government and the amendment shall become void if, and in so far as, it is disapproved by the Government.

Increase in remuneration of Managing Director on re-appointment or appointment

(b) If the terms of any re-appointment of a Managing or Joint Managing or Whole time Director, purpose to increase or have the effect of increasing, whether directly or indirectly, the remuneration which the Managing or Joint Managing or Whole time Director, as the case may be was receiving immediately before such re-appointment or appointment shall not have any effect unless approved by the Central Government, and shall be cove void if, and in so far as, it is disapproved by the Government.

Directors not to act when number fall below minimum

130. When the number of Directors in office falls below the minimum above fixed, the Directors shall not act except in emergencies or for the purpose of filling up vacancies or for summoning a general meeting of the Company and so long as the number is below the minimum they may so act notwithstanding the absence of the necessary quorum.

Eligibility

131. A person shall not be capable of being appointed a Director if he has the disqualifications referred to in Section 274 of the Act.

Directors vacating office

132. (a) The Office of a Directors Shall become vacant if:

(i) He is found to be of unsound mind by a court of competent jurisdiction;

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(ii) He applies to be adjudicated an insolvent;

(iii) He is adjudged an insolvent;

(iv) He is convicted by a court, of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months.

(v) He fails to pay any call in respect of shares of the Company held by him, whether alone or jointly with others, within sic months from the last date fixed for the payment of the call unless the Central Government by Notification in the official Gazette removes the disqualification incurred by such failure;

(vi) He absents himself from three consecutive meetings of the Board of Directors, or from all meetings of the Board of Directors for a continuous period of three months, whichever is longer, without obtaining leave of absence from the Board.

(vii) He whether by himself or by any person for his benefit or on his account or any firm in which he is a partner or any private company of which he is a director, accepts a loan or any guarantee or security for a loan, from the Company in contravention of Section 295 of the Act;

(viii) He acts in contravention of Section 299 of the Act;

(ix) He becomes disqualified by an order of court under Section 203 of the Act;

(x) He is removed in pursuance of Section 284 of the Act;

(xi) having been appointed a Director by virtue of his holding any office or other employment in the Company, he ceases hold such office or other employment in the Company.

(xii) He resigns his office by notice in writing given to the company.

(b) Notwithstanding anything in sub-clause (iii), (iv) and (v) of clause (a) above, the disqualifications referred to in these sub-clause shall not take effect;

(i) for thirty days from the date of the adjudication, sentence or order;

(ii) Where any appeal or petition is preferred within the thirty days aforesaid against the adjudication, sentence or conviction resulting in the sentence or order until the expiry of seven days from the date on which such appeal or petition is disposed off, or

(iii) where within the seven days aforesaid, any further appeal, or petition is referred in respect to the adjudication, sentence, conviction or order and the appeal or petition, if allowed, would result in the removal of the disqualification, until such further appeal or petition is disposed off.

Removal of Directors

133. (a) The Company may (subject to the provisions of the Section 284 and other applicable provision of the Act and these Articles remove any director other than ex-officio directors or special directors or debenture directors or a nominee director or a director appointed by the Central Government in pursuance of the Section 408 of the ct, before the expiry of his period of office.

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(b) Special notice as provided by Section 190 of the Act shall be required of any resolution to remove a Director under this Article or to appoint some other person in place of a Director so removed at which he is removed.

(c) On receipt of notice of a resolution to remove a Director under this Article, the Company shall forthwith send a copy thereof to the Director concerned and the Director (whether or not he is a member of the Company) shall be entitled to be heard on the resolution at the meeting.

(d) Where notice if given of a resolution to remove a Director under this Article and the Director concerned makes with respect thereto representation in writing to the Company (not exceeding a reasonable length) and requests their notification to members of the Company, the Company shall unless the representation are received by it too late for it to do so.

(i) in the notice of the resolution given to member of the Company state the fact of the representations having been made, and

(ii) sent a copy of the representation to every member of the Company to whom notice of the meeting is sent (whether before or offer receipt of the representations by the Company) and if a copy of the representation is not sent as aforesaid because they were received too late or because of the Company’s default, the Director may (without prejudice to his right to be heard orally) require that the representations be read out at the meeting provided that copies of the representations need not be sent or read out at the meeting if so directed by the court.

(e) A vacancy created by the removal of a Director under this Article may if he had been appointed in pursuance of Section 262 of the Act be filled by the appointment of another Director in his stead by the meeting at which he is removed, provided special notice of the intended of the intended appointment has been given under clause (b) hereof. A Director so appointed shall hold office until the date up to which his predecessor would have held office if he had not been removed as aforesaid.

(f) If the vacancy is not filled under clause (e) it may be filled as a casual vacancy in accordance with the provisions in so far as they may be applicable of Section 262 of the Act, and all the provision of that Section shall apply accordingly;

Provided that the Director who was removed from office under this Article shall not be-appointed as a Director by the Board of Directors.

(g) Nothing contained in this Article shall be taken;

(i) as depriving a person removed there under of any compensation or damages payable to him in respect of the termination of his appointment as Director or of any appointment terminating with that as director; or

(ii) as derogating from any power to remove a Director which may exist apart from this Article.

Directors may contract with Company

134. (a) Subject to the restrictions imposed by these Articles and be Section 292, 293, 294, 295, 297, 300, 311, 370 and 373 and any other provisions of the Act, no Director, managing Director, or other Officer or employee of the Company shall be disqualified from holding

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his office by contracting with the company either as vendor, purchaser agent broken or otherwise nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director, Managing Director, Joint Managing Director, Executive Director other officer or employee shall be in any way interested, be avoided, nor shall the Director, Managing Director, or in any officer or employee so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason only of such Director, Managing Director, Officer or employee holding that office or of the fiduciary relation thereby established but the nature of his or their interest must be disclosed by him or them in accordance with the provisions of Section 299 of the Act where that section be applicable.

(b) In accordance with Section 300 of the Act, no Director shall as a Director, vote or take part in any discussion in respect of any contract or arrangement in which he is interested and if he does so vote, his vote shall be void nor shall his presence count for the purpose of forming the quorum at the time of any such discussion or vote.

Provided that the above prohibition or restriction shall not apply to the extent or under the circumstances mentioned in sub-section (2) of Section 300 of the Act.

(c) A General notice such as is referred to in sub-section (3) or Section 299 of the Act shall be sufficient disclosure under this Article as provided in that Section.

Directors may be directors or companies promoted by the company

135. A Director, Managing Director, Officer or employee of the Company may be or become a director of any Company promoted by the Company or in which it may be interested as a vendor, member or otherwise, and no such Director shall be accountable for any benefits received as director or member of such Company except to the extent and under the circumstances as may be provided in the Act.

Duty of Directors etc. to make disclosure

136. (a) Every Director (including a person deemed to be a director by virtue of the explanation to sub-section (1) of Section 303 of the act.) Managing Director, Manager or Secretary of the Company, who is appointed to or relinquishes the office of Director, Managing Director, Manager or Secretary of any other body corporate shall within twenty days of his appointment or relinquishment of such office as the case may be disclose to the Company aforesaid the particulars relating to the office in the other body corporate which are required to be specified under sub-section (1) of section 303 of the Act.

(b) Every Director of the Company and every person deemed to be a Director of the Company by virtue of sub-section (10) of Section 307 of the Act, and every person referred to in sub-section (11) of Section 307 of the Act, shall give notice to the Company of such matters as may be necessary for the purpose of enabling the Company to comply with the provisions of that Section and Section 308 of the Act.

Directors etc, not to hold office or place of profit.

137. The provisions of Section 314 of the Act shall be complied with when applicable in regard to holding of office or place or profit under the Company or under any subsidiary of the Company by any person mentioned in the said section. The words office or place of profit shall have the meaning assigned to them by Section 314 of the Act.

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Loans to Directors

138. The Company shall observe the restrictions imposed on the Company in regard to granting of loans to Directors and other persons as provided in Section 295 and other applicable provisions, if any of the Act.

Appointment of Sole Selling Agents

139. (a) The appointment, re-appointment and extension of the term of a Sole Selling Agent, shall be regulated in accordance with provisions of Section 294 of the Act and any rules or Notifications issued by competent authority in accordance with that section and the Director and/or the Company in general meeting with that section and the Directors and/or the Company in general meeting may make the appointment, re-appointment or extension of the term of office in accordance with and subject to the provisions of the said Section and such Rules or Notification, if any as may be applicable.

(b) The payment of any compensation to a Sole Selling Agent Shall be subject to the provisions under Section 294A of the Act.

Board resolution at a meeting necessary for certain contract

140. (a) Except with the consent of the Board of Directors of the Company and with the previous approval of the Central Government a Director of the Company or his relative a firm in which such a director or relative is a partner, any other partner in such a firm or a private company of which the Director is a member or directors, shall not enter into any contract with the Company;

(i) for the sale, purchase or supply of any goods materials or services, or

(ii) for underwriting the subscription of any shares in or debentures of the Company.

(b) Nothing contained in the foregoing sub-clause (a) shall affect;

(i) the purchase of goods and materials from the Company or the sale of goods and materials to the Company, by any Director, relative, firm, partner or private company as aforesaid for cash at prevailing market prices; or

(ii) any contract or contracts between the Company on one side and any such Director, relative, firm, partner or private company on the other side for sale, purchase, or supply of any goods, materials and services in which either the Company or the Director, relative, firm, partner or private company as the case may be, regularly trades or does business;

Provided the such contract or contracts do not relate to goods and materials the value of which, or service cost of which exceeds five thousand rupees in the aggregate in any year comprised in the period of the contract or contracts.

(c) Notwithstanding anything contained in the foregoing sub-clause (a) and (b) a Director, relative, firm, partner or private company as aforesaid, may in circumstances of urgent necessity, enter, without obtaining the consent of the Board into any contract with the Company for the sale, purchase or supply of any goods, materials or services even if the value of such goods, materials or services exceeds five thousand rupees in the aggregate in any year comprised in the period of the contract; but in such a case, the consent of the Board shall be obtained at a meeting within three months of the date on which the contract was entered into.

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(d) Every consent of the Board required under this clause shall be accorded by a resolution passed at a meeting of the Board and not otherwise; and the consent of the Board required under sub-clause (a) above shall not be deemed to have been given within the meaning of that sub-clause unless the consent is accorded before the contract is entered into or within three months of the date on which it was entered into.

(e) If consent is not accorded to any contract under this clause, anything done in pursuance of the contract shall be void able at the option of the Board.

(f) The Directors, so contracting or being so interested shall not be liable to the Company for any profit realised by any such contract or the fiduciary relation thereby established.

(g) The Company shall also comply with such other provision of Section 297 of the Act, as may be applicable.

ROTATION OF DIRECTORS

Rotation of Directors

141. Not less than one thirds of the total number of Director shall

(a) be persons whose period of office is liable to determination by retirement of Directors by rotation, and

(b) save as otherwise expressly provided in the Act, be appointed by the Company in general meeting.

The remaining Directors shall, in default of and subject to any regulations in the Articles of the Company, also be appointed by the Company, in general meeting.

Ascertainment of Directors retiring by rotation and filling up vacancies

142. (a) At every general meeting one-third of such of the Directors for the time being as are liable to retire by rotation, or if their number is not three or a multiple of three, then the number nearer to one-third, shall retire from office.

(b) The Directors to retire by rotation at every annual general meeting shall be those who have been longest in office since their last appointment, but as between persons who became Directors on the same day, those who are to retire shall in default of and subject to any agreement amongst them, be determined by lot.

(c) At the annual general meeting at which a Director retires as aforesaid, the Company may fill up the vacancy by appointing the retiring Director or some other person thereto.

(d) (i) If the place of the retiring Director is not so filled up and that meeting has not expressly resolved not to fill the vacancy the meeting shall stand adjourned till the same day in the next week, at the same time and place, or if that day is a public holiday, till the next succeeding day which is not a public holiday, at the same time and place.

(ii) If at the adjourned meeting also, the place of the retiring Director is not filled up and that meeting also has not expressly resolved not to fill the vacancy, the retiring Director shall be deemed to have been appointed at the adjourned meeting unless.

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1) at that meeting or at the previous meeting a resolution for the re-appointment of such Director has been put to the meeting and lost;

2) the retiring Director has by a notice in writing addressed to the Company or its Board of Directors, expressed his unwillingness to be so re-appointed;

3) he is not qualified or is disqualified for appointment;

4) a resolution, whether special or ordinary, is required for his appointment or re-appointment in virtue of any provisions of the Act; or

(e) The Provision to sub-section (2) of Section 263 of the Act is applicable to the case.

Explanation: In this article and Article 156 the expression `Retiring Director’ means Directors retiring by rotation.

Right to persons other than retiring Directors to stand for Directorship

143. (a) A person who is not a retiring Director shall, in accordance with Section 257 of the Act and subject to the provisions of the Act, be eligible for appointment to the office of Director at any general meeting if he or some member or members intending to propose him has, not less than fourteen days before the meeting left at the registered office of the Company a notice in writing under his hand signifying his candidature for the office of director or the intention of such member or members to propose him as a candidate for that office as the case may be along with a deposit of such sum as may be prescribed by the Act or the central government from time to time which shall be refunded to such person or, as the case may be, to such member, if the person succeeds in getting elected as a Director.

(b) The Company shall inform its members of the candidature of a person for the office of director or the intention of a member(s) to propose a person as a candidate for that office by serving individual notices on the members not less than seven days before the meeting in the manner provided under Section 257 of the Act.

Consent of candidate for Directorship to be filed with the Registrar

144. Every person who is proposed as a candidate for the office of the Director of the Company shall sign and file with the Company and with the Registrar, his consent in writing to act as a Director, if appointed, in accordance with the provisions of Section 264 of the Act in so far as they may be applicable.

PROCEEDINGS OF DIRECTORS

Meeting of Directors

145. The Directors may meet together as a Board for the dispatch of business from time to time and shall so meet at least once in every three months and at least four such meetings shall be held in every year and they may adjourn and otherwise regulate their meetings and proceedings as they deem fit. The provisions of this Article shall not be deemed to be contravened merely by reason of the fact that meetings of the Board, which had been called in compliance with the terms herein mentioned could not be held for want of quorum.

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When meeting to be convened

146. Any Director of the Company may and the Manager of Secretary on the requisition of a Director shall, at any time summon a meeting of the Board.

Directors entitled to notice

147. Notice of every meeting of the Board of the Company shall be given in writing to every Director for the time being in India and at his usual address in India.

Questions at Board Meeting how decided

148. Question arising at any time at a meeting of the Board shall be decided by majority of votes and in case of equality of votes, the Chairman, in his absence the Vice Chairman or the Director presiding shall have a second or casting vote.

Who to preside at meetings of the Board

149. (a) The Directors may elect a Chairman of their meetings and determine the period for which he is to hold office. The Directors may also appoint a Vice Chairman of the Board of Directors to preside at the meetings of the Board of Directors at which the Chairman shall not be present and determine the period for which he is to hold office.

(b) All the meetings of the Directors shall be presided over by the Chairman, if present, but it at any meeting of Directors the Chairman be not present at the time appointed for holding the same, the Vice Chairman, if present, shall preside and if he be not present at such time then and in that case the Directors shall choose one of the Directors then present to preside at the meeting.

Quorum at Board Meeting

150. (a) The quorum at a meeting of the Director shall be as prescribed by Section 287 of the Act.

Quorum competent to exercise power

(b) A meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the regulations or the Articles of the Company for the time being vested in or exercisable by the Directors generally.

Procedure in case of want of quorum

(c) If a meeting of the board could not be held for want of quorum, then the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place or if that day is a public Holiday, till the next succeeding day which is not a public holiday, at the same time and place.

Directors may appoint committee

151. Subject to the provisions of Section 292 and other provisions of the Act and Article 165 the Directors may delegate all or any of their powers to committees consisting of such member or members of their body as they think fit, and they may, from time to time revoke and discharge any such Committee either wholly or in part and either as to persons or purposes or persons, but every Committee so formed shall in the exercise of the powers so the delegated, conform to any regulations that may from time to time be imposed on it by the Directors. All acts done by any

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such Committee in conformity with such regulations and in fulfillment of the purposes of their appointments but not otherwise, shall have the like force and effect as if done by the Board, Subject to the provisions of the act the Board may from time to time fix the remuneration to be paid to any member or members of that body constituting a Committee appointed by the Board in terms of these Articles, and may pay the same.

Resolution by circular

152. Subject to the provisions of Section 289 of the Act, a resolution passed without any meeting of directors, or of a Committee of Directors appoint under these Articles and evidenced by writing under the hands of all the Directors or members of such Committee as aforesaid, for the time being in India, be as valid and effectual as a resolution duly passed at a meeting of the Directors or of such committee called and held in accordance with the provisions of these Articles.

Provided that the resolution has been circulated in draft, together with the necessary papers, if any to such Directors or member of the committee, then in India (not being less in number than the quorum fixed for a meeting of the Board or the Committee as the case may be) and all other Directors or members at their usual address in India and has been approved by such Directors as are then in India or by majority of such of them as are entitled to vote on the resolution.

Limit of Directors’ number

153. Subject to the provisions of Section 252, 255 and 259 of the Act, the Company in general meeting may, be ordinary resolution, increase or reduce the number of Directors within the limits fixed in that behalf by these Articles.

Acts Board or Committee valid not withstanding defect of appointment

154. All acts done by any meeting of the Directors or by a Committee of Directors, or by any person acting as a Director, shall notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of such Directors or person acting as aforesaid, or they or any of them were or was disqualified or that their or his appointment had terminated by virtue of any provisions contained in these Articles or the Act, be as valid as if every such person has been duly appointed and was qualified to be a Director.

Minutes of proceedings of the Board and the Committee to be valid

155. The Directors shall cause minutes to be duly entered in a book or books provided for the purpose in accordance with these Articles and Section 193 of the Act.

Board Minutes to be evidence

156. Minutes of any meeting of the Board of Directors or of any Committees of the Board if purporting to be signed by the Chairman of such meeting or by the Chairman of the next succeeding meeting shall be for all purposes whatsoever prima facie evidence of the actual passing of the resolution recorded and the actual and regular transaction or occurrence of the proceedings so recorded and the regularity of the meeting at which the same shall appear to have taken place.

Register of Directors and Managing Directors etc

157. The Directors shall cause to be kept at the registered office of the Company.

(b) (i) A register of the Directors, managing Directors, Manger and Secretary of the Company containing the particulars required by Section 303 of the Act.

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(ii) A register of Contracts with companies and firms in which the Directors are interested, containing the particulars required by Section 301 of the Act, and

(iii) A Register of Directors shareholding containing the particulars required by Section 307 of the Act. They shall also cause to be kept to the registered and indexes as required by the Act.

(c) The Company shall comply with provisions of the Section 301, 303 and 307 and other Section of the Act with regard to the inspection of registers and furnishing copies or extracts so far as the same is applicable to the Company.

POWERS OF DIRECTORS

Certain powers to be exercised by the Board only at meeting

158. (a) Without derogating from the powers vested in the Board of Directors under these Articles, the Board shall exercise the following powers on behalf of the Company and they shall do so only by means of resolutions passed at meetings of the Board.

(i) The power to make calls on shareholders in respect of money unpaid on their shares;

(ii) The power to issue debenture;

(iii) The power to borrow moneys otherwise than on debentures;

(iv) The power to invest the funds of the Company, and

(v) The power to make loans.

Provided that the Board may be resolution passed at the meeting, delegate to any committee of Directors, the Managing Director, the Manager or any other principal officer of the Company or in the case of a branch office or the Company, a principal officer of the branch office, the powers specified in sub-clauses (iii), (iv) and (v) to the extent specified in clause (b), (c) and (d) respectively on such condition as the Board may prescribe.

(b) Every resolution delegating the power referred to in sub-clause (iii) of clause (a) shall specify the total amount outstanding at any one time up to which moneys may be borrowed by the delegate.

(c) Every resolution delegating the power referred to in sub-clause (iv) of clause shall specify the total amount up to which the funds of the company may be invested and the nature of the investments which may be made by the delegate.

(d) Every resolution delegating the power referred to in sub-clause (v) of clause (a) shall specify the total amount up to which loans may be made by the delegates, the purpose for which the loans may be made and the maximum amount up to which loans may be made for each such purpose in individual cases.

(e) Nothing in this Article shall be deemed to affect the right of the Company in general meeting to impose restrictions and conditions on the exercise by the Board of any of the powers referred to in sub-clauses (i),(ii), (iii), (iv) and (v) of clause (a) above.

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Restriction on powers of Board

159. (a) The Board of Directors of the Company shall not except with the consent of the Company in general meeting:

(i) sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking of the Company or where the Company owns more than one undertaking of the whole or substantially the whole of any such undertaking.

(ii) remit, or give for the repayment of any debt, due by a Director;

(iii) invest, otherwise than in trust securities, the amount of compensation received by the Company in respect of the compulsory acquisition of any such undertaking as is referred to in sub-clause (I) above, or of any premises or properties used for any such undertaking and without which it cannot be carried on or can be carried on only without difficulty or only after a considerable time :

(iv) borrow moneys, where the money to be borrowed, together with the moneys already borrowed by the Company (apart from the temporary loans obtained from the Company’s bankers in the ordinary course of business) will exceed the aggregate of the paid-up capital of the Company and its free reserves that is to say, reserves not set apart for any specific purpose; or

(v) contribute to charitable and other funds not directly relating to the business of the Company or the welfare of its employees any amounts the aggregate of which will in any financial year, exceed fifty thousand rupees or five percent of tits average net profits as determined in accordance with the provisions of Section 349 and 350 of the Act during the three financial year, immediately proceeding, whichever is greater.

(c) Nothing contained in sub-clause (a) above shall affect:

(i) the title of a buyer or other person who buys or takes a lease of any such undertaking as is referred to in that sub-clause in good faith and after exercising due care and caution, or

(ii) the selling or leasing of any property of the Company where the ordinary business of the Company consists of, or comprises such selling or leasing.

(d) Any resolution passed by the Company permitting any transaction such as is referred to in sub-clause (a) (I) above, may attach such conditions to the permission as may be specified in the resolution, including conditions regarding the use, disposal or investment of the sale proceeds which may result from the transaction. Provided that this clause shall not be deemed to authorise the Company to affect any reduction in its capital except in accordance with the provisions contained in that behalf in the Act.

(e) No debt incurred by the Company in excess of the limit imposed by sub-clause (iv) of clause (a) above, shall be valid or effectual, unless the lender proves that the advanced the loan in good faith and without knowledge that the limit imposed by that clause had been exceeded.

Prohibition regarding making of political contributions

(f) Due regard and compliance shall be observed in regard to matters dealt with by or in the Explanation contained in sub-section (1) of Section 293 of the Act and in regard to the

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limitations on the power of the Company contained in Section 293A of the Act.

General powers of the Company vested in Directors

160. Subject to the provisions of the Act, the management of the business of the Company shall be vested in the Directors and the Directors may exercise all such powers and do all such acts and things as the Company is by the Memorandum of Association or otherwise authorised to exercise and do and not hereby or by the status or otherwise directed or required to be exercised or done by the Company in General Meeting but subject nevertheless to the provisions of the Act and other Act and of the Memorandum of Association and these Articles and to any regulations, not being inconsistent with the Memorandum of Association and these Articles or the Act, from time to time made by the company in general meeting provided that no such regulation shall invalidate and prior act of the Directors which would have been valid if such regulation had not been made.

Specific powers given to Directors

161. Without prejudice to the general powers conferred by Article 172 and the other powers conferred by these presents and so as not in any way to limit any or all of those powers, it is hereby expressly declared that the Directors shall have the following powers:

To pay registration expenses

(i) to pay the costs, charges and expenses preliminary and incidental to the promotion, formation, establishment and registration of the Company;

(ii) to pay and charge to the capital account of the Company any interest lawfully payable thereon under the provisions of Section 6 and 208 of the Act;

To acquire property

(iii) Subject to the provisions of the Act and these Articles to purchase of otherwise acquire any lands, buildings, machinery, premises, hereditaments, property effects, assets, rights, credits, royalties, bounties and goodwill of any person, firm or Company carrying on the business which this company is authorised to carry on, at or for such price or consideration and generally on such terms and conditions as they may think fit; and in any such purchase or acquisition to accept such title as the Board may believe or may be advised to the reasonable satisfactory.

To purchase lands, buildings etc.

(iv) Subject to the provisions of the Act to purchase, or take on lease for any them or terms of years, or otherwise acquire any mills or factories or any land or lands, with or without buildings and outhouse thereon, situate in any part of India, at such price or rent and under and subject to such terms and conditions as the Directors may think fit; and in any such purchase, lease or other acquisition to accept such title as the Directors may believe or may be advised to be reasonably satisfactory;

To construct buildings

(v) To erect, construct, enlarge, improve, alter, maintain, pull down, rebuild or reconstruct any buildings, factories, offices, workshops or other structures, necessary or convenient for the purpose of the Company and to acquire land for the purpose of the Company.

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To mortgage, charge property

(vi) To let, mortgage, charge, sell or otherwise dispose of subject to the provisions of Section 293 of the Act, any property of the company either absolutely or conditionally and in such manner and upon such terms and conditions in all respects as they think fit and to accept payment or satisfaction for the same in cash or otherwise, as they may think fit;

To pay for property etc.

(vii) At their discretion to pay for any property, rights or privileges acquired by or services rendered to the Company, either wholly or partially, in cash or in shares, bonds, debentures, debenture stocks or other securities of the Company, and any such shares may be issued either as fully and paid up or with such amount credited as paid up thereon as may be agreed upon; and any such bonds, debentures, debenture stock or other securities may be either specifically charged upon all or any part of the property of the Company and its uncalled capital or not so charges;

To insure

(viii) To insure and keep insured against loss or damage by fire or otherwise, for such period and to such extent as they may think proper, all or any part of the building, machinery, goods stores, produce and other moveable property of the Company either separately or co-jointly; also to insure all or any portion of the goods, produce, machinery and other articles imported or exported by the Company and to sell, assign, surrender or discontinue any policies of assurance effected in pursuance of this power;

To open accounts

(ix) Subject to section 292 of the Act, to open accounts with any bank or bankers or with any Company, firm, or individual and to pay money into and draw money from any account from time to time as the Directors may think fit;

To secure contracts

(x) To secure the fulfillment of any contracts or engagements entered into by the Company by mortgage or charge of all or any of the properties of the Company and its unpaid capital for the time being or in such other manner as they may think fit;

To attach to Share such conditions

(xi) To attach to any shares to be issued as the consideration for any contract with or property acquired by the Company, or in payment for services rendered to the Company, such conditions, subject to the provisions of the Act, as to the transfer thereof they may think fit;

To accept surrender, of shares

(xii) To accept from any member on such terms and conditions as shall be agreed, a surrender of his hares or stock or any part thereof to the provisions of the Act;

To appoint trustees

(xiii) To appoint any person persons (whether incorporated or not) to accept and hold in trust for the Company any property belonging to the Company or in which it is interested or for any other purposes and to execute and do all such deeds and things as may be

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requisite in relation to any such trusts and to provide for the remuneration of such trustee or trustees;

To being and defend actions

(xiv) To institute conduct, detect, compound or abandon any legal proceedings by or against the Company or its officer or otherwise concerning the affairs of the Company and also subject to the provisions of Section 293 of the Act to compound and allow time for payment or satisfaction of any debts due, or of any claims or demands by or against the Company;

To refer to arbitration

(xv) To refer, subject to the provisions of section 293 of the Act, any claims or demands by or against the Company to arbitration and observe and perform the awards;

To act insolvency matters

(xvi) To act on behalf of the Company in all matters relating to bankrupts and insolvents;

To give receipts

(xvii) To make and give receipts, releases and other discharges for money payable to the Company and for the claims and demands of the Company subject to the provisions of Section 293 of the Act.

To authorise acceptances

(xviii) To determine form time to time as to who shall be entitled to sign bills, notes, receipts, acceptances, endorsements, cheque, dividend warrants, releases, contracts and documents on the Company’s behalf;

To invest moneys

(xix) Subject to the provisions of Section 292, 293, 370, 372 or the Act, invest and deal with any of the moneys of the Company, not immediately required for the purpose thereof, upon such shares, securities, or investment (not being shares in this Company) and in such manner as they may think fit, and from time to time to vary or realise such investments;

To provide for personal liabilities

(xx) To execute in the name and on behalf of the Company in favour of any Director or other person who may incur or be about to incur any personal liability for the benefit of the Company, such mortgage of the Company’s property (present and future) as they may think fit and any such mortgage may contain a power of sale and such other powers, covenants and provisions as shall be agreed on;

To give to Directors etc. and interest in business

(xxi) Subject to such sanction as may be necessary under the Act or these Articles, to give to any Director, Officer, or other person employed by the Company, an interest in any particular business or transaction either by way of commission on the gross expenditure thereon or otherwise or a share in the general profits of the Company, and such interest, commission or share or profits shall be treated as part of the working expenses of the

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Company.

To provide for welfare of employees

(xxii) To provide for the welfare of employees or ex-employees of the Company and their wives, widows, families, dependants or connections of such persons by building or contributing to the building of houses, dwelling, or chawls or by grants of money, pensions, allowances, gratuities, bonus or payments by creating and from time to time subscribing or contribution to provident and other funds, institutions, or trusts and by providing or subscribing or contribution towards places of instruction and recreation, hospitals and dispensaries, medical and other attendance and other and other assistance as the Directors shall think fit;

To subscribe to charitable and other funds

(xxiii) To subscribe or contribute or otherwise to assist or to guarantee money to charitable, benevolent, religious, scientific, national public or any other useful institutions, object or purpose for any exhibitions;

To maintain pension funds

(xxiv) To establish and maintain or procure the establishment and maintenance of any contributory or non contributory pension or superannuation funds for the benefit of, and give or procure the giving of donation, gratuities, pensions allowances or emoluments, to any persons who are or were at any time in the employment of services of the Company, or of any Company which is a subsidiary or is allied to or associated with the Company or with any such subsidiary Company or who are or were at any time Directors or Officers of the Company or of any such other Company as aforesaid, and the wives, widows, families and dependants of any such persons and, also to establish and subsidies and subscribe to any institutions, associations, clubs or funds collected to be for the benefit of or to advance the interest and well being of the Company or of any such other company as aforesaid, and make payments to or towards the insurance of any such person as aforesaid and do any of the matters aforesaid, either along or in conjunction with any such other Company as aforesaid;

(xxv) To decide and allocate the expenditure on capital and revenue accounts either for the year or a period or spread over the years.

To create Reserve Fund

(xxvi) Before recommending any dividend, to aside out of profits of the Company such sums as they fund or any other special fund to meet contingencies or to repay redeemable preference shares, debentures, or debenture stock or for special dividends or for equalising or for repairing, improving, extending and maintaining any part of the property of the Company, and for such other purpose as the Directors may, in their absolute discretion, think, conducive to the interests of the Company and to invest the several sums so set aside or so much thereof as required to be invested upon such investments (subject to the restrictions imposed by Section 292 and 293 other provisions of the Act) as the directors may think fit, and from time to time, to deal with any vary such investment and dispose of and apply and expend all or any part thereof for the benefit of the Company in such manner and for such purpose as the Directors (subject to such restrictions as aforesaid) in their absolute discretion think conducive to the interest of the company notwithstanding that the company might rightly be applied or expended; and to divide the reserve fund in the business of the company or in repayment or redemption or redeemable preference shares, debentures or debenture stock and that without being

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bound to keep the same separate from other assets or to pay interest on the same, with power, however to the Directors at their discretion, to pay or allow to the credit of such fund interest at such rate as the Directors may think proper.

To Appoint Managers etc.

(xxvii) To appoint and at their discretion to remove or suspend such Managers, Secretaries, Officers, Clerks, Agents and servants for permanent, temporary or special services as they may from time to time think fit and to determine their powers and duties, and fix their salaries or emoluments and require security in such instances and to such amounts as they may think fit, and from time to time provide for the management and transactions of the affairs of the Company in any special locality in India in such manner as they think fit. The provisions contained in the clause following shall be without prejudice to the general powers conferred by this clause.

To authorise by power of attorney

(xxviii) At any time and from time to time by power of attorney to appoint any person or persons to be the attorney or attorneys of the company for such purposes and with such powers, authorises and discretions (not exceeding those vested in or exercisable by the Directors under these presents) and for such period and subject to such conditions as the Directors may time to time think fit and any such appointment (if the Directors may think fit) be made in favour of any Company or the members, directors nominees or managers of any Company or firm or otherwise in favour of any fluctuating body or person whether nominated, directly or indirectly by the Directors and any such power of attorney may contain any such powers for the protection on convenience of persons dealing with such attorneys as the Directors may think fit; and may contain powers enabling any sub-delegate or attorneys as aforesaid to sub-delegate all or any of the powers, authorities and discretions for the time being vested in them.

To authorise, delegate

(xxix) Subject to the provisions of the Act, generally and from time to time and at any time to authorise, empower or delegate to (with or without power of sub-delegation) any Director, officer or officer or employee for the time being as the Company and/or any other persons for the time being vested in the Director by these presents, subject to such restrictions and conditions, if any as the Directors may think proper.

To Negotiate

(xxx) To enter into all such negotiations, contracts and rescind and/or vary all such contracts and to execute and do all such acts, deeds, and things in the name of on behalf of the Company as they may consider expedient for or in relation to any of the matters aforesaid or otherwise for the purpose of the Company.

MANAGING DIRECTORS

Powers to appoint Managing or Whole time Directors

162. (a) Subject to the provisions of the Act and of these Articles the Board shall have power to appoint from time to time any of its member as Managing Directors or Managing Directors and/or Whole time Director and/or Special Director like Technical Director, Financial Director, etc. of the Company for a fixed term not exceeding five years at a time and upon such terms and conditions as the Board thinks fit, and the Board may be resolution vest in such Managing Director or Managing Directors/Whole time

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Director(s), Technical Director(s), Financial Director(s), and Special Director(s) such of the powers hereby vested in the Board generally as its think fit, and such powers may be made exercisable for such period or periods, and upon such conditions and subject to such restrictions as it may determine. The remuneration of such Directors may be by way of monthly remuneration and/or fee for meeting and/or participation in profits, or by and or all of those modes, or of any other mode not expressly prohibited by the Act.

(b) The Directors may whenever they appoint more than one Managing Director, designate one or more of them as “Joint Managing Director” or “Joint Managing Directors” or “deputy Managing Directors” as the case may be.

Appointment and payment of remuneration of Managing or Whole time Director

(c) Subject to the provisions of Section 198m, 269, 309, 310 and 311 of the Act, the appointment and payment of remuneration to the above Director shall be subject to approval of the members in general meeting and of the Central Government.

INTEREST OUT OF CAPITAL

Interest may be paid out of Capital

163. Where any shares in the Company are issued for the purpose of raising money to defray the expenses of the construction of any work or building, or the provisions of any plant, which cannot be made profitable for a lengthy period, the Company may pay interest on so much of that shares capital as is for the time being paid up, for the period and at the rate and subject to the conditions and restrictions provided by Section 208 of the Act, and may charge the same to capital as part of the cost of construction of the work or building, or the provisions of plant.

DIVIDENDS

Division of Profits

164. The profit of the company subject to any special rights relating thereto created or authorised to be created by these presents shall be divisible among the members in proportion to the amount of Capital paid up or credited as paid up on the shares held by them respectively.

Dividend payable to registered holder

165. No dividend shall be paid by the Company in respect of any share except to the registered holder of such share or to his order or to his banker.

Time for payment of dividend

166. Where a dividend has been declared by the Company it shall be paid within the period provided in Section 207 of the Act.

Capital paid up in advance and interest not to earn dividend

167. Where the Capital is paid up in advance of calls upon the footing that the same shall carry interest, such capital shall not, whilst carrying interest confer a right to dividend or o participate in profits.

Dividends in proportion to amount paid up

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168. (a) The Company shall pay dividends in proportion to the amounts paid up or credited as paid up on each share, when a larger amount is paid up or credited as paid up on some shares than on others. Nothing in this Article shall be deemed to affect in any manner the operation of Section 208 of the Act.

(b) Provided always that any Capital paid up on a share during the period in respect of which a dividend is declared, shall unless the terms of issue otherwise provide, only entitle the holder of such share to an apportioned amount of such dividend proportionate to the capital form time to time paid during such period on such share.

Company in General Meeting may declare dividends

169. The Company in general meeting may declare a dividend to be paid to the members according to their respective rights and interests in the profits and may fix the time for payment.

Power of Directors to limit dividends

170. No large dividend shall be declared than is recommended by the Directors but the Company in general meeting may declare a smaller dividend.

Dividend only to be paid out of profits

171. No dividend shall be declared or paid by the Company otherwise than out of profits of the financial year arrived at after providing for depreciation in accordance with the provisions of sub-section (2) of Section 205 of the Act or out of to 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 or out of moneys provided by the Central Government for the payment of dividend in pursuance of the guarantee given by that Government 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 that 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 years 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 provisions of sub-section (2) of Section 205 of the Act or against both.

Provide further that no dividend shall be declared or paid for any financial year out of the profits of the Company for that year arrived at after providing for depreciation as above, except after the transfer to the reserves of the Company of such percentage of its profits for that year as may be prescribed in accordance with Section 205 of the Act or such higher percentage of its profits as may-be allowed in accordance with that Section.

Nothing contained in this Article shall be deemed to affect in any manner the operation of section 208 of the Act.

Director’s declaration as to net profits conclusive

172. The declaration of the Directors as to the amount of the net profits of the Company shall be conclusive.

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Interim dividends

173. The directors may, from time to time, pay to their members such interim dividends as in their judgment the position of the Company justifies.

Retention of Dividend until completion of transfer under Article

174. The Directors may retain the Dividends payable upon shares in respect of which any person is under the Transmission clause of these Articles entitled to become a member or which any person under that clause is entitled to transfer until such person shall become a member in respect of such shares or shall duly transfer the same.

No member to receive Dividend whilst indebted to the Company and Company’s right to reimbursement there from

175. Subject to the provisions of the Act, no member shall be entitled to receive payment of any interest or dividend in respect of his share(s) whilst any money may be due or owing from him to the Company in respect of such share(s) or debenture(s) or otherwise however either alone or jointly with any other person or persons and the Directors may deduct from the interest or dividend payable to any member, all sums of moneys so due from him to the Company.

Transferred shares must be registered

176. A transfer of shares shall not pass the right to any dividend declared thereon before the registration of the transfer.

Dividend how remitted

177. Unless otherwise directed any dividend may be paid by cheque or warrant or a pay-slip or receipt having the force of a cheque or warrant sent through ordinary post to the registered address of the member or person entitled or in the case of joint holders to that one of them first named in the Register or Members in respect of the joint holding. Every such cheque or warrant so sent shall be made payable to the registered holder of shares or to his order of to his bankers.

The Company shall not be liable or responsible for any cheque or warranty lost in transmission or for any dividend lost, to the member or person entitled thereto by the forged endorsement of any cheque or warrant or the fraudulent or improper recovery thereof by any other means.

Unpaid Dividend or Dividend Warrant posted

178. (a) Where the Company has declared a dividend but which has not been paid or the dividend warrant in respect thereof has not been posted within 30 days from the date of declaration to any shareholder entitled to the payment of the dividend the company shall within 5 days from the date of expiry of the said period of 30 days, open a special account in that behalf in any scheduled bank called “Unpaid Dividend Account of Ajanta Manufacturing Limited” and transfer to the said account, the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted.

(b) Any money transferred to the unpaid dividend account of the Company which remains unpaid or unclaimed for a period of seven years from the date of such transfer, shall be transferred by the Company to the general revenue account of the Central Government. A claim to any money so transferred to the fund known as Investor Education and Protection Fund established under section 205 C of the Act.

(c) No unpaid or unclaimed dividend shall be forfeited by the Board.

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Dividend and call together

179. Any general meeting declaring a dividend may on the recommendation of the Directors make a call on the members for such amount as the meeting fixed, but so that the call on each member shall not exceed the dividend payable to him so that the call be made payable at the same time as the dividend and the dividend may, fit so arranged between the Company and the members, be set off against the calls.

Dividend to be payable in cash

180. No dividend shall be payable except in cash. Provided that nothing in this Article of the Share Premium to prohibit the capitalisation of profit or reserves of the Company for the purpose of issuing fully paid up bonus shares or paying up any amount for the time being unpaid on any shares held by the members of the company.

CAPITALISATION

Capitalisation

181. (a) Any general meeting may resolve that any amount Standing to the credit of the Share Premium Account or the Capita Redemption Reserve Account or any moneys’ investments or other assets forming part of the undivided profits (including profits or surplus moneys arising form the realisation and where permitted by law, from the appreciation value of any capital assets of the Company) standing or the credit of the General Reserve or any Reserve fund or any other fund of the Company or in the hands of the Company and available for dividend may be capitalised. Any such amount (excepting the amount Standing to the Credit of the Share Premium Account and/or the Capital Redemption Reserve Account) may be capitalised.

(i) by the issue and distribution as fully paid shares, debenture, debenture stock, bonds or obligations of the Company or

(ii) by crediting the shares of the Company which may have been issued and are not fully paid up, with the whole or any part of the sum remaining unpaid thereon.

Provided that any amounts standing to the credit of the Share Premium Account may be applied in;

1) Paying up un issued shares of the Company to the issued to members of the Company as fully paid bonus shares;

2) in writing off the preliminary expenses of the Company;

3) in writing off the expenses of, or the commission paid or discount allowed on any issue of shares of debentures of the Company; or

4) in providing for the premium payable on the redemption of any redeemable preference share or of any debentures of the Company. Provided further that any amount standing to the credit of the Capital Redemption Reserve account shall be applied only in paying up un issued shares of the Company as fully paid bonus shares.

(c) Such issue and distribution under sub-clause (a) (I) above and such payment to the credit if unpaid share capital under sub clause (a) (ii) above shall be made to, among and in favour of the member of any of them entitled thereto and in accordance with their

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respective rights and interests and in proportion to the amount of capital paid up on the shares held by them respectively in respect of which such distribution under sub-clause (a) (ii) above shall be made on the footing that such members become entitled thereto as capital.

(d) The Directors shall give effect to any such resolution and apply portion of the profits, General Reserve Fund or any other fund or account as aforesaid as may be required for the purpose of making payment in full for the shares, debentures or debenture stock, bonds or other obligations of the company so distributed under sub-clause (a) (i) above or (as the case may be)for the purpose of paying, in whole or in part, the amount remaining unpaid on the shares which may have been issued and are not fully paid-up under sub-clause (a) (ii) above provided that no such distribution or payment shall be made unless recommended by Directors and if so recommended such distribution and payment shall be accepted by such members as aforesaid in full satisfaction of their interest in the said capitalised sum.

(e) For the purpose of giving effect to any such resolution the Directors may settle any difficulty which may arise in regard to the distribution or payment as aforesaid as they think expedient and in particular they may issue fractional certificates or coupons and fix the value for distribution of any specific assets and may determine that such payments be made to any members on the footing of the value so fixed and may vest any such cash, shares, fractional certificates, or coupons, debentures, debenture stock, bonds, or other obligations in trustees upon such trusts for the persons entitled thereto as may seem expedient to the Directors and generally may make such arrangement for the acceptance, allotment and sale of such shares, debentures, debenture stock, bonds or other obligations and fractional certificates or coupons or otherwise as they may think fit.

(f) Subject to the provisions of the Act and these Articles in case where some of the shares of the Company are fully paid and others are partly paid only, such capitalisation may be effected by the distribution of further shares in respect of the fully paid shares, and by crediting the partly paid shares with whole or part of the unpaid liability thereon but so that as between the holders of fully paid shares, and the partly paid shares the sums so applied in the payment of such further shares and in the extinguishments of diminution of the liability on the party paid share shall be so applied pro rata in proportion to the amount then already paid or credited as paid on the existing fully paid and partly paid shares respectively.

182. When deemed requisite a proper contract shall be filed with the Registrar of Companies in accordance with the Act and the Board may appoint any person to sign such contract on behalf of the members entitled, as aforesaid and such appointment shall be effective.

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SECTION IX: OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts which are or may be deemed material have been entered into or will be entered

into by the Company. These contracts copies of which have been attached to the copy of this Draft Red

Herring Prospectus delivered to the Registrar of Companies, Gujarat, Dadra and Nagar at Ahmedabad for

registration. Copies of the above mentioned contracts and also the documents for inspection referred to

hereunder, may be inspected at the Registered Office of the Company located at Ajanta Manufacturing

Limited, 8-A, National Highway, Morbi, District Rajkot, Gujarat 363 642 from 11.00 am to 4.00 pm on

working days from this date of the Draft Red Herring Prospectus until the Bid Issue/Closing date.

A. Material Contracts for the Company

1. Deed of Agreement between our Company, ATCM, AL and AIL dated September 19, 2002

2. Trademark License Agreement between ATCM and our Company dated November 13,

2004

3. Trademark License Agreement dated March 20, 2008 entered into with ATCM and

Jaysukhbhai O. Patel 4. Lease agreement entered into between Jaysukhbhai O. Patel and the Company dated

October 2, 2007 B. Material Contracts to the Issue

1. Letter of Engagement dated February 1, 2008 for the appointment of Enam Securities

Private Limited and JM Financial Consultants Private Limited from the Company appointing them as BRLMs.

2. Memorandum of Understanding dated April 8, 2008 between the Company and the

BRLMs. 3. Memorandum of Understanding dated April 7, 2008 between the Company and the

Registrar to the Issue.

4. Escrow Agreement dated [•] between the Company, BRLMs, Escrow Collection Bank and the Registrar to the Issue.

5. Underwriting Agreement dated [•] between the Company, BRLMs, and the Syndicate Members.

6. Syndicate Agreement dated [•] between the Company, BRLMs and the Syndicate Members.

C. Documents for Inspection

1. Certified copies of the updated Memorandum and Articles of Association of the Company as amended from time to time.

2. Certificate of Incorporation of the Company dated November 9, 1994. Fresh Certificate

of Incorporation of the Company dated January 23, 2004. 3. Resolutions of the Board of Directors and the shareholders of the Company dated

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February 21, 2008 and February 25, 2008, respectively, in relation to this Issue and other related matters.

4. The report of Finava & Associates, Chartered Accountant, the statutory auditors, dated

April 4, 2008 prepared as per Indian GAAP and mentioned in this Draft Red Herring Prospectus together with copies of balance sheet and profit and loss account of the Company referred to therein.

5. Consent from the Auditors for inclusion of their names as the statutory auditors and of

their reports on accounts in the form and context in which they appear in this Draft Red Herring Prospectus.

6. The Tax Benefit Report dated April 4, 2008 from the Company’s statutory auditors. 7. Consent of Directors, BRLMs, the Syndicate Members, Legal Advisors to the Issue,

Registrars to the Issue, Escrow Collection Banker, Banker to the Issue, Bankers to the Company, Company Secretary and Compliance Officer as referred to in their specific capacities.

8. Resolution of the Members passed at the Extraordinary General Meeting held on

February 16, 2008 appointing Finava & Associates, Chartered Accountant as statutory auditors for the year 2007-2008.

9. Board resolution dated July 7, 2007 and Shareholder Resolution dated September 27,

2007 in relation to the appointment and remuneration of Jaysukhbhai O. Patel, Managing Director.

10. Board resolution dated August 25, 2005 and Shareholder Resolution dated September 29,

2005 in relation to the appointment of Jayesh Sheth, Executive Director. 11. Due Diligence Certificate dated April 10, 2008 addressed to SEBI from the BRLMs. 12. SEBI observation Letter Nos. [●] dated [●]. 13. Initial listing application dated [●], 2008 and [●], 2008, for listing the Equity Shares of

the Company on NSE and BSE respectively. 14. In principle listing approvals dated [●] and [●] issued by NSE and BSE respectively. 15. Tripartite Agreement dated [●], 2008 the Company, NSDL and the Registrar to the Issue. 16. Tripartite Agreement dated [●] 2008 between the Company, CDSL and the Registrar to

the Issue. 17. IPO Grading Report dated [●], 2008 by [●].

Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION

We, hereby declare that all relevant provisions of the Companies Act, 1956 and the guidelines issued by the Government or the guidelines issued by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in this Draft Red Herring Prospectus is contrary to the provisions of the Companies Act, 1956 or the Securities and Exchange Board of India Act, 1992 or Rules made there under or guidelines issued, as the case may be. We further certify that all statements in this Draft Red Herring Prospectus are true and correct. SIGNED BY THE DIRECTORS OF THE COMPANY

_________________________

Odhavjibhai Patel (Non-Executive Non-Independent Chairman)

_________________________

Jaysukhbhai O. Patel (Managing Director)

_________________________

Jayesh Sheth (Executive Director)

_________________________

Chintan J. Bhalodia* (Non-Executive Director)

_________________________

Nemi C. Jain (Independent Director)

_________________________

Jitendra T. Patel (Independent Director)

_________________________

Tushar D. Udani (Independent Director)

_________________________

Jitendra K. Jain (Independent Director)

*through his constituted attorney

SIGNED BY THE CHIEF FINANCIAL OFFICER OF THE COMPANY

___________________________

K. Kamraj (Chief Financial Officer) Date: April 10, 2008 Place: Morbi, Gujarat