DIAMANT INVESTMENT AND FINANCE LIMITED - sebi.gov.in · WMM Wet Mix Macadam . DIAMANT Diamant Investment and Finance Limited - 5 - PRESENTATION OF FINANCIAL INFORMATION AND USE OF

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DIAMANT

DRAFT LETTER OF OFFER June 22, 2009

(For Equity Shareholders of the Company only)

DIAMANT INVESTMENT AND FINANCE LIMITED(Originally Incorporated as Diamant Carbon & Graphite Products Limited in the state of Gujarat on 29/07/1980 under the

Companies Act, 1956. The name of the Company was changed to Diamant Investment and Finance Limited with effect from

01/02/2005 vide a fresh Certificate of Incorporation)

Registered Office: 9, Beau Moon Chambers, 27/33, Nagindas Master Road, Fort, Mumbai-400 023, Maharashtra.

(For details of change of our Registered Office, please refer to chapter titled “Our History and Corporate Matters” on

page no. 56 of the Draft Letter of Offer.)

Tel: +91-22-2265 3962; Fax: +91-22-2267 3962;

Contact Person: Ms. Vandita Jogi, Compliance Officer

E-mail: [email protected]

DRAFT LETTER OF OFFER

ISSUE OF 35,96,850 EQUITY SHARES OF RS. 10/- EACH FOR CASH AT A PREMIUM OF Rs. 25 (ISSUE PRICE OF Rs.35) PER EQUITY SHARE AGGREGATING Rs. 1258.90 LACS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTSBASIS IN THE RATIO OF 3 (THREE) EQUITY SHARES FOR EVERY 1 (ONE) EQUITY SHARE HELD [i.e. 3:1] ON RECORDDATE i.e. [•]. THE FACE VALUE OF THE EQUITY SHARE IS Rs.10/- PER SHARE AND THE ISSUE PRICE IS 3.5 TIMESTHE FACE VALUE

GENERAL RISKS

Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this

Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully

before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own

examination of the issuer and the issue including the risks involved. The 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 Letter of Offer. Investors are advised to refer to “Risk Factors” on page no. 7 of this Draft Letter of Offer

before making an Investment in this Issue.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains

all information with regard to Diamant Investment and Finance Limited and the Issue, which is material in the context of the

Issue, that the information contained in this Draft Letter of Offer is true and correct in all material aspects and is not misleading

in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts,

the omission of which makes this Draft Letter of Offer as a whole or any of such information or the expression of any such

opinions or intentions misleading in any material respect.

LISTING ARRANGEMENTS

The existing Equity Shares of the Company are listed on Bombay Stock Exchange Limited, Mumbai (BSE) which is also the

‘Designated Stock Exchange’. Accordingly the Company proposes to list the equity shares on BSE. The company has received

in-principle approval from BSE vide letter dated [•].

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

Ashika Capital Limited Purva Sharegistry India Pvt. Ltd.1008, Raheja Centre, 10th Floor, 9, Shiv Shakti Industrial Estate, Sitaram Mills Compound,

214, Nariman Point, Mumbai-400 021. J.R. Boricha Marg,Opp. Kasturba Hospital,

Tel : +91 - 22 - 66111700; Lower Parel (East), Mumbai-400 011;

Fax: +91 - 22 - 66111710 Tel.: 022-2301 6761;

Email: [email protected] Fax: 022-2301 2517;

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

Contact Person: Mr. Adesh Jain Contact Person: Mr. V. B. Shah

SEBI Regn. No:INM 000010536 SEBI Regn No: INR000001112

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR RECEIPT OF REQUESTS ISSUE CLOSES ONFOR SPLIT APPLICATION FORMS

[•] [•] [•]

P

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V

A

TABLE OF CONTENTS

Section Particulars Page No.

I GENERAL

Definitions And Abbreviations

Presentation Of Financial Information And Use Of Market Data

Forward Looking Statements

1

1

5

6

II RISK FACTORS 7

III INTRODUCTION

Summary Of Industry Overview

Summary Of Business Overview

The Issue

Summary Of Financial Information

General Information

Capital Structure Of The Company

Objects Of The Issue

Basis For Issue Price

Statement Of Tax Benefits

15

15

15

17

18

20

25

31

37

39

IV ABOUT THE COMPANY

Industry Overview

Business Overview

Our History And Corporate Structure

Our Management

Our Promoters

Dividend Policy

Regulations And Policies

45

45

49

56

63

72

75

76

V AUDITORS REPORT AND FINANCIAL INFORMATION

Management’s Discussion And Analysis Of Financial Condition And Results Of Operations As Reflected In The Financial Statements

79

100

VI LEGAL AND OTHER INFORMATION

Outstanding Litigations And Material Developments

Government Approvals/Licensing Arrangements

107

107

108

VII OTHER REGULATORY AND STATUTORY DISCLOSURES 110

VIII TERMS OF THE ISSUE 118

IX MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 137

X OTHER INFORMATION

List of Material Contracts and Documents for Inspection

Declaration

162

162

164

DIAMANT

Diamant Investment and Finance Limited

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SECTION I – GENERAL DEFINITIONS AND ABBREVIATIONS Conventional / General Terms Act The Companies Act, 1956 and amendments thereto

AGM Annual General Meeting

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

B. Com. Bachelor of Commerce

CA/FCA Chartered Accountant/Fellow of Chartered Accountant

CS/FCS Company Secretary/Fellow of Company Secretary

CY Calendar Year

EGM Extra Ordinary General Meeting

EPS Earnings Per Share

FY/Financial Year or Fiscal Year The twelve months ended March 31st of a particular year

GAAP Generally Accepted Accounting Principles

GDP Gross Domestic Product

GoI Government of India

HUF Hindu Undivided Family

IT Act Income Tax Act, 1961 and amendments thereto

LTD Limited

MOU Memorandum of Understanding

NAV Net Assets Value

P/E Ratio Price/ Earnings Ratio

PAN Permanent Account Number

PAT Profit After Tax

PBDT Profit Before Depreciation and Tax

PBIDT Profit Before Interest, Depreciation and Tax

PBT Profit Before Tax

PG Post Graduate

PVT Private

ROI Return on Investment

Security Certificate Equity Share Certificate

Security(ies) Equity Share(s)

Issue Related Terms Articles Articles of Association of Diamant Investment and Finance Limited.

ASBA Application Supported by Blocked Amount

ASE Ahmedabad Stock Exchange Limited, Ahmedabad

Board Board of Directors of Diamant Investment and Finance Limited

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BSE / Designated Stock Exchange Bombay Stock Exchange Limited, Mumbai

CAF Composite Application Form

Directors Directors on the Board of Diamant Investment and Finance Limited

ECS Electronic Clearing System

Equity Shareholders Equity Shareholders of the Company whose names appear as:

- Beneficial Owners as per the list furnished by the depositories in respect of Equity Shares held in electronic form and

- On the Register of Members of the Company in respect of the Equity Shares held in physical form

Equity Shares Equity Shares of the Company of Rs. 10/- each

ACL/ Lead Manager/ LM Lead Manager to the Issue i.e. Ashika Capital Limited

Issue / Rights Issue

Issue of 35,96,850 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 25 (Issue Price of Rs.35) per Equity Share aggregating to Rs. 1258.90 lacs to the existing equity shareholders on rights basis in the ratio 3 (Three) equity share for every 1 (One) equity share held on the record date i.e. on [•].

Issue Opening Date The date on which the Issue opens for subscription i.e. [•].

Issue Closing Date The date on which the issue closes for subscription i.e. [•].

Issue Period The period between the Issue Opening Date and Issue Closing Date and includes both these dates

Issue Price The price at which the equity shares will be issued by the Company under this Draft Letter of Offer i.e. Rs. 35 per share

Issuer / Company / Diamant / DIFL Diamant Investment and Finance Limited

Letter of Offer /LOF/ Offer Document

This Letter of Offer circulated to the Equity Shareholders and filed with the Stock Exchanges containing inter alia the Issue price and the number of equity shares to be issued, issue price and other incidental information

Memorandum Memorandum of Association of Diamant Investment and Finance Limited

NEFT National Electronic Funds Transfer

Promoter(s) Promoters shall have the same meaning as ascribed to it under the SEBI Guidelines and which has been particularly detailed in the disclosure in this Draft Letter of Offer

Record Date [•]

Registrar Registrar to the Issue, in this case is Purva Shareregistry India Pvt. Ltd.

Rights Entitlement The number of Equity Shares that an Equity Shareholder is entitled to under this Letter of Offer in proportion to his/her/its existing shareholding in the Company as on the Record Date [•]

ROC Registrar of Companies at Mumbai

RTGS Real Time Gross Settlement

SCSB Self Certified Syndicate Bank

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Company / Technical and Industry Related Terms

AAI Airport Authority of India

AY Assessment Year

BOOT Build, Own, Operate and Transfer

BOT Build, Operate and Transfer

CAGR Compounded Annual Growth Rate

CDSL Central Depository Services (India) Limited

CLB Company Law Board

DBM Dense Bitumen Macadam

DCA Department of Company Affairs

Depositories Act The Depositories Act, 1996 as amended from time to time

Depository A Depository registered with SEBI under the SEBI (Depositories & Participant) Regulations, 1996 as amended from time to time

DP Depository Participant

EPC Engineering, Procurement and Construction

FCNR Account Foreign Currency Non Resident Account

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999 read with rules and regulations there under and amendments thereto

FI Financial Institution

FII(s) Foreign Institutional Investors registered with SEBI under applicable laws

FIPB Foreign Investment Promotion Board, Department of Economic Affairs, Ministry of Finance, Government of India

GSM Granule Sub Base

Km Kilometer

NA Not Applicable

NBFC Non – Banking Financial Company

NR Non Resident

NHAI National Highway Authority of India

NHDP National Highway Development Programme

NMDP National Maritime Development Programme

NRE Account Non Resident External Account

NRI(s) Non-Resident Indian(s)

NRO Account Non Resident Ordinary Account

NSEW North – South & East – West

NSDL National Securities Depository Limited

PPP Public Private Partnerships

PWD Public Works Department

PMGSY Pradhan Mantri Gram Sadak Yojna

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RBI The Reserve Bank of India

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

SE / Stock Exchange (s) BSE

SEBI Securities and Exchange Board of India

SEBI (SAST) Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997

SEBI Act Securities and Exchange Board of India Act, 1992 as amended from time to time

SEBI Guidelines

Means the extant Guidelines for Disclosure and Investor Protection issued by Securities and Exchange Board of India, constituted under the Securities and Exchange Board of India Act, 1992 (as amended), called Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

WMM Wet Mix Macadam

DIAMANT


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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Unless stated otherwise, the financial information used in this Letter of Offer is derived from the Company’s financial statements as of fiscal 2009, 2008, 2007, 2006, and 2005 prepared in accordance with Indian GAAP and the Companies Act, 1956 and restated in accordance with applicable SEBI Guidelines, as stated in the report of our statutory auditors M/s. Tushar Parekh & Associates, Mumbai included in this Letter of Offer. In this draft Letter of Offer, unless the context otherwise requires all references to one gender also refers to another gender and the word “Lakh” or “Lac” means “one hundred thousand” and the word “million” means ten lakhs and the word “Crore” means “ten million”. Unless stated otherwise, throughout this Letter of Offer, all figures have been expressed in Lacs. All numbers presented in this draft Letter of Offer have been rounded off to two decimal places. Any discrepancies in any table between total and sum of the amounts listed are due to rounding off. All references to “India” contained in this draft Letter of Offer are to the Republic of India Our fiscal year commences on April 1 and ends on March 31 of the next year. Unless stated otherwise, reference herein to a fiscal year (eg. Fiscal 2009) is to the fiscal year ended March 31 of a particular year. All references to “Rupees” or “Rs.” or “INR” are to Indian Rupees, the official currency of the Republic of India.

Currency of Presentation

In this Letter of Offer, all references to “Rupees” “Rs.” “INR” are to the legal currency of India. Any percentage amounts, as set forth in “Risk Factors”, “Business”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Letter of Offer, unless otherwise indicated, have been calculated on the basis of our financial statements prepared in accordance with Indian GAAP. For the convenience of the Shareholders, as far as possible the reporting unit has been maintained as Rupees in Lacs. Market and industry data used in this draft Letter of Offer, has been obtained from industry publications and governmental sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable and that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe market data used in this draft Letter of Offer is reliable, it has not been independently verified.

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FORWARD LOOKING STATEMENTS This Draft Letter of Offer contains certain “forward looking statements”. These forward looking statements can generally be identified by words or phrases such as “expect”, “estimate”, intend”, “may”, “plan”, “project”, “shall”, “will” or other words or phrases of similar import. Similarly, statements that describe Company’s objectives, strategy, plans or goals are also forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions about the Company 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 the expectations include, among others : -

General economic and business conditions in India and other countries;

Company’s ability to successfully implement its strategy and its growth and expansion plans;

Factors affecting the industry;

Increasing competition in the industry;

Increases in labour costs, raw materials prices, prices of plant & machineries and insurance premium;

Cyclical or seasonal fluctuations in the operating results;

Amount that the Company is able to realize from the clients;

Changes in laws and regulations that apply to the industry;

Changes in fiscal, economic or political conditions in India;

Social or civil unrest or hostilities with neighboring countries or acts of international terrorism;

Changes in the foreign exchange control regulations, interest rates and tax laws in India.

For further discussion of factors that could cause Company’s actual results to differ, please see the section entitled “Risk Factors” included in this Draft Letter of Offer. In the light of inherent risks and uncertainties, the forward-looking statements, events and circumstances discussed in this Draft Letter of Offer might not occur and are not guarantees of future performance. Neither the Company, it’s Directors and Officers, any member of the Issue Management Team nor any of their respective affiliates has any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, for purposes of the Issue, the Company and the Lead Manager to the Issue will ensure that investors in India are informed of material developments relating to the business until such time as the grant of listing and trading permission by the Stock Exchanges.

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SECTION II – RISK FACTORS RISK FACTORS ENVISAGED BY MANAGEMENT AND MANAGEMENT’S PROPOSALS TO ADDRESS THE RISKS An investment in Equity Shares involves a high degree of risk. You should carefully consider all of the information in this Letter of Offer, including the risks and uncertainties described below, before making an investment in the Equity Shares of the Company. If any of the following risks actually occur, the business, results of operations and financial condition could suffer, the trading price of the Equity Shares of the Company could decline, and the investor may lose all or part of his investment. Materiality The Risk factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality: a) Some events may not be material individually but may be found material collectively. b) Some events may have material impact qualitatively instead of quantitatively. c) Some events may not be material at present but may be having material impacts in future. The risk factors are as envisaged by the management along with the proposals to address the risk if any. Wherever possible, the financial impact of the risk factors has been quantified. INTERNAL RISK FACTORS

1. Outstanding Litigations/ disputes/ cases pending against the Company. The Income Tax Department has alleged that Company has underpaid Income Tax over the years to the tune of Rs 20,96,632/-. In this regard, our company had filed an appeal before the Commissioner of Income Tax (Appeals), Ahmedabad on 15/01/2008 against Order dated 31/12/2007 passed by the Assistant Commissioner of Income Tax, Mehsana Circle, Mehsana. The Assistant Commissioner of Income Tax vide its aforesaid Order computed the tax liability to Rs 20,96,632/- along with interest. The company has deposited Rs 10,50,000/- on 18/01/2008 with the department for the said appeal. The company has also preferred an appeal against initiation of penalty proceedings u/s. 217 (1) (c) and hence the nature of penalty cannot be quantified.

2. Our Company is not registered as Non- Banking Financial Company (NBFC) with RBI.

The company has been carrying on business of trading in shares and securities for the last 4 years, without registration with RBI as a NBFC. RBI may therefore initiate suitable action against the company for the same. The Board of Directors of the Company have however passed a resolution in their meeting held on 31/01/2009 that the company will discontinue its share trading business with immediate effect, save and except for the purpose of disinvestment of the investment portfolio’s of the company. The company has now diversified into infrastructure and real estate activities and accordingly amended its Object Clause in the Memorandum of Association.

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3. Our Company had decided to venture into infrastructure and real estate activity, without any prior experience.

The company has overcome this by employing experienced personnel, to help carrying out its operations. The company has ventured into infrastructure and real estate activities in the year 2007-08 and has already completed works to the extent of Rs. 940.43 Lacs till date.

4. Our Company has not identified alternate sources of financing the Objects for which the present rights issue is being made and may be severely affected in timely execution of our contracts and in our ability to bid for further contracts, if we fail to mobilize resources as per our plans.

5. The Promoter Company Saboo Capital and Securities Private Limited is not registered as Non- Banking Financial Company (NBFC) with RBI.

6. We have not yet placed orders for the entire range of equipments (amounting to Rs. 768.80 lacs), which constitutes 61 % of the total proceeds proposed to be raised.

These equipements are readily available in the market and can be procured within a short period of time. Therefore, the order for these equipments will be placed as and when the funds are available.

7. The logo used by the company is not registered.

Our Company conducts its business using the logo “ DIAMANT ”, which is not yet registered. We may not be able to prevent unauthorized use of our logo by any third party, which may adversely affect our operations and reputation.

8. Our profitability and results of operations may be adversely affected in the event of increases in the price of raw materials, fuel costs and labour. The cost of raw materials, fuel and labour constitutes a significant part of our operating expenses. Our construction operations require various construction raw materials including iron and cement. Our ability to pass on increases in the purchase price of raw materials, fuel and other inputs may be limited to the escalation provisions in the contracts.

9. Our construction contracts are dependent on adequate and timely supply of key raw

materials at commercially acceptable prices. Construction contracts are primarily dependent on adequate and timely supply of raw materials such as cement, steel, aggregates etc. at competitive prices. In case the Company is unable to procure the requisite quantities of raw materials well in time and at competitive prices, the performance and profitability of the Company may be adversely affected.

10. We have high working capital requirements. If we experience insufficient cash flow which

restrain us to make required payments on our debt or fund working capital requirements, there may be an adverse effect on our results of operations. The Company has not approached any Bank for financing part of its working capital requirements. Our business requires a great deal of working capital. In many cases, significant amounts of working capital are required to finance the purchase of materials, the hiring of equipment and the performance of engineering, construction and other work on projects before payments are

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received from clients. In certain cases, we are contractually obligated to our clients to fund the working capital requirements of our projects. Our working capital requirements may increase if, under certain contracts, payment terms do not include advance payments or such contracts have payment schedules that shift payments toward the end of a project or otherwise increase our working capital burdens. In addition, our working capital requirements have increased in recent years because we have undertaken a growing number of projects within a similar timeframe and due to the growth of our Company’s business generally. Delays in receipt of our dues from the client’s, may result, in increases in our working capital needs.

Working capital requirement of Rs. 150 Lacs, out of the total working capital requirement of is Rs 450 lacs, is proposed to be financed by the proposed Rights Issue. The company will approach the banks for financing part of its working capital requirement in due course of time.

11. Projects included in our order book may be delayed, cancelled or not fully paid for by our clients, which could materially harm our cash flow position, revenues and earnings. The Company’s Order Book does not necessarily indicate future earnings related to the performance of that work. Order Book represents business that is considered firm, but cancellations or scope or schedule adjustments may occur. Delays in the completion of a project can lead to clients delaying or refusing to make payment to the Company of some or all of the amounts it expects to be paid in respect of the project. These payments often represent a significant portion of the margin the Company expects to earn on the project. In addition, even where a project proceeds as scheduled, it is possible that the contracting parties may default or otherwise fail to pay amounts owed. Any delay, reduction in scope, cancellation, execution difficulty, payment postponement or payment default in regard to Order Book projects or any other uncompleted projects, or disputes with clients in respect of any of the foregoing, could materially harm the Company’s cash flow position, revenues and earnings.

12. Any inability to attract, recruit and retain skilled personnel could adversely affect our

business and results of operations. The Company’s business substantially depends on the continued service of its key managerial personnel and loss of their services could have a material adverse effect on the Company. Its future success will also depend on its ability to attract and retain skilled personnel, such as engineering, project management and senior management professionals. If the Company fails to retain its current employees and attract new employees with potential, its reputation may be harmed and future earnings may be negatively impacted.

13. Our business may be adversely affected by losses from uninsured assets and projects

The Company has not taken out any insurance policy except vehicle insurance and workmens compensation insurance to the tune of Rs. 16.20 lacs. Our business may be adversely affected due to work accidents, fire or explosion, including hazards that may cause injury and loss of life, theft, equipment failure, severe damage to and destruction of property and equipment and environmental damage.

14. Our operations are seasonal and are adversely affected by difficult working conditions

during extreme high/low temperatures and monsoon which restrict our ability to carry on construction activities and fully utilize our resources.

Our revenues are based on the percentage of completion method. Since revenues are not recognized until there is a reasonable progress on a contract, revenues recorded in the first half of our financial year between April and September are traditionally lower compared to revenues recorded during the second half of our financial year. During periods of curtailed activity due to

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adverse weather conditions, we may continue to incur operation expenses, but our revenues from operations may be delayed or reduced.

15. We have not obtained any third party appraisals for our Project and our funding

requirements and the deployment of the proceeds of the Issue are based on management estimates, which are based on quotations received by us. Quotations may undergo a change which may result in increase in project cost and hence requirement of fund, which could result in delay in implementation of project.

16. Any negative cash flow in the future could have an adverse effect on our results of operations. We had a negative net cash flow amounting to Rs. 357.44 lacs for the year ended March 31, 2009 from Investing activities mainly because of our decision to stop investment business and selling our investments at loss. There can be no assurance that we will not experience periods of negative cash flow in the future. If the negative cash flow trend persists in future, our Company may not be able to generate sufficient amounts of cash flow to finance our Company’s working capital and capital expenditure requirements.

17. Failure to adhere to agreed timelines could adversely affect our reputation and/or expose

us to financial liability. Typically construction contracts are subject to specific completion schedule requirements with liquidated damages chargeable in the event the construction schedules are not adhered to. Failure to adhere to contractually agreed timelines are imperative of penal/liquidated damages in addition to loss of reputation.

18. Our registered office and other premises from where we operate are taken on rent / lease, which can be cancelled at any time. The premises from where we currently operate are either on rent/ lease for which an agreement has been entered into with the owners of the premises.

19. Mr. Naresh Saboo has been appointed as Managing Director by the Board in their meeting

on 01/04/2009. His appointment is subject to the approval of the Shareholders. The appointment of Mr. Naresh Saboo as Managing Director of the company will be placed before the shareholders for their approval in the ensuing AGM to be held on 11/07/2009.

20. The company does not comply with Accounting Standard 15 - Accounting for Employee Benefits, in respect of leave encashment and Gratuity liability. The Company recognizes gratuity and leave salary expenses on payment basis, hence no liability for the same has been ascertained and provided in the books of accounts.

21. The company has taken unsecured loans in the form of Inter Corporate Deposit (ICD) for

an amount of Rs. 382.82 lacs as on March 31, 2009, which is repayable on demand. The Company has borrowed an amount of Rs.382.82 Lacs in the form of ICD’s. One of the term of the same requires the Company to repay this amount on demand, which is of common paralance in business. The copies of these Agreements have been made part of Material Documents, please refer to page no. 162.

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22. Contingent Liabilities not provided for.

Statement showing Contingent Liability : (Rs in Lacs)

S. No Particulars Year Ended as

on 31/03/2009 Year Ended as on 31/03/2008

1 Income Tax – A.Y. 2003-04 10.46 10.46 2 Penalty Income Tax – A.Y. 2003-04 Not Determinable Not Determinable 3 Claims against the company not

acknowledged as Debts Not Determinable Not Determinable

4 Defect liability period in respect of contracts executed

Not Determinable Not Determinable

5 Sales Tax Reassessment for A.Y. 2001-02 1.65

23. The 3 subsidiaries of the Company which were incorporated in the year 2007 have not

started any commercial operations.

24. The deed of conveyance for the property at Pune, for which the agreement for sale has been entered into, has not been executed and hence not registered in the name of the comapny. The said property will be registered in the name of the Compnay once the payment of the balance amount of Rs. 132.50 lakhs is made.

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EXTERNAL RISK FACTORS The following factors that are beyond the control of the Company, which could have a negative impact on its performance:

1. Our business may be affected by prevailing economic conditions in India There could be project delays due to unfavorable climatic conditions or transportation delays, which may affect the overheads and increase the financing cost, on account of material, machinery and workforce that is employed at the construction site. Political, economic, social developments, natural calamity, acts of violence or war could adversely affect the industrial and commercial operations in the Country thereby affecting the business of the Company. Global, economic and political factors that are beyond the Company’s controls influence the forecasts and directly affect performance. These factors include interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, natural disasters, consumer credit availability, consumer debt levels, tax rates and policy, unemployment trends, terrorist threats and activities, worldwide military and domestic disturbances and conflicts, and other matters that influence consumer confidence and spending. Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude. Increases in interest rates may increase the Company’s financing costs. The taxation system within the country still remains complex. Any change in the regulatory environment may have an impact on the business of the Company.

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

Terrorist attacks or acts of war may seriously harm the business of the company. Terrorist attacks may cause damage or disruption to the company, its employees, its facilities, its projects, and its customers, which could impact the results from operations. Any future terrorist attacks, the national and international responses to terrorist attacks, or other acts of war or hostility may cause greater uncertainty and cause the business to suffer in ways that the company currently cannot predict.

3. The performance of our business may be adversely affected by changes in, or the

regulatory policies of, the Indian national, state and local governments

Our business may be adversely affected by the regulatory policies of the various Indian central, state and local governmental bodies for Income Tax Concession, Interest rate on housing loans, etc. Any changes in the tax laws in India particularly in Income Tax might lead to increased tax liability of the company thereby putting pressures on profitability.

4. After this Issue, our equity shares may experience price and volume fluctuations or an active trading market for our equity shares may not develop

The price of the Company’s equity shares in Indian stock exchanges may fluctuate after this Issue as a result of several factors, including: a) Volatility in the Indian and Global securities market; b) The results of operations and performance; c) Change in perceptions about the Company’s future performance or the performance of other

Indian companies in the same industry; d) Performance of the Company’s competitors in the industry and market perception of

investors in the sector; e) Adverse media reports on the performance of the Company or on the industry prospects and

future outlook; f) Changes in the estimates of the Company’s performance or recommendation by financial

analysts;

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g) Significant development in India’s economic liberalisation and deregulation policies; and h) Significant development in India’s fiscal and environmental regulations. There can be no assurance that an active trading market for the equity shares will develop or be sustained after this Issue, or that prices at which the Company’s equity shares are initially offered will correspond to the prices at which the Company’s equity shares will trade in the market subsequent to this issue. The Company’s share price could be volatile and may also decline.

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

Shares. The Indian securities markets are smaller than securities markets in more developed economies. Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. These exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time 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 similar problems occur in the future, the market price and liquidity of the Equity Shares could be adversely affected.

6. Political instability could adversely affect business and economic conditions in India generally and our business and results of operations in particular.

We are an Indian company and all of our assets and employees are located in India. Consequently, our financial performance and the market price of our shares will be affected by changes in exchange rates and controls, interest rates, governmental policies, including taxation policies, as well as political, social and economic developments affecting India.

7. 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. Natural calamities could have a negative impact on the Indian economy and may cause suspension, delays or damage to our current projects and operations, which may adversely affect our business and our results of operations.

NOTES TO RISK FACTORS: 1. Issue of 35,96,850 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 25 (Issue Price of

Rs.35) per equity share aggregating Rs. 1258.90 lacs to the existing Equity Shareholders on rights basis in the ratio of 3 (Three) equity share for every 1 (one) equity share held on record date i.e. [•]

2. Investors are advised to refer to the “Basis for Issue Price” and “Terms of the Issue” on page no. 37 and page no. 118 respectively of this Draft Letter of Offer before making any investment in this issue.

3. Investors are advised to refer to “Notes to Accounts” before investing in this issue; 4. Net worth before the Issue as on 31/03/2009 is Rs. 409.90 Lacs. 5. The Book Value of the equity shares of the Company as on 31/03/2009 is Rs. 34.19 per share.

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6. Average cost of acquisition of Equity Shares of the Company by Promoter/s is Rs. 25.48. 7. Financials of issuer/subsidiaries/ group companies have been disclosed as per the SEBI (DIP)

Guidelines, 2000. 8. All information shall be made available by the Lead Manager and the Issuer to the public and

investors at large and no selective or additional information will be made available for a section of investors in any manner whatsoever.

9. We have entered into various transactions with related parties, details of which are provided under

the heading “Related Party Disclosure”’ on page no. 89 of this Draft Letter of offer.

10. As on date 19/06/2009, our Company had 2,321 shareholders.

11. Our company has not issued Bonus Shares since inception.

12. No part of the Issue proceeds will be paid as consideration to Promoters, Promoter Company, Directors, Key Managerial Personnel, Associate Companies or Group Companies.

13. Investors may contact the Lead Manager or the Compliance officer for any compliant / clarification / information pertaining to the issue. For contact details of Lead Manager please refer to the front cover page.

14. The name of the company was changed to Diamant Investment and Finance Ltd., on February 01, 2005.

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SECTION III – INTRODUCTION SUMMARY This is only a summary and does not contain all the information that you should consider before investing in our Equity Shares. You should read the entire Draft Letter of Offer, including the information contained in the chapters titled “Risk Factors” and “Auditors Report and Financial Information” and related notes beginning on pages 7 and 79 of this Draft Letter of Offer before deciding to invest in our Equity Shares. SUMMARY OF INDUSTRY OVERVIEW Construction activity is an integral part of a country’s infrastructure and industrial development. It includes hospitals, schools, townships, offices, houses and other buildings; urban infrastructure (including water supply, sewerage, drainage); highways, roads, ports, railways, airports; power systems; irrigation and agriculture systems; telecommunications etc. Covering as it does such a wide spectrum, construction becomes the basic input for socio-economic development. Besides, the construction industry generates substantial employment and provides a growth impetus to other sectors through backward and forward linkages. It is, essential therefore, that, this vital activity is nurtured for the healthy growth of the economy. The Government of India’s focus and sustained increased budgetary allocation and increased funding by international and multilateral development finance institutions for infrastructure development in India has resulted in or is expected to result in several large infrastructure projects. The Government has developed various alternate sources of raising funding for infrastructure projects, including the levy of cess on petrol and diesel, which is being used to fund the road projects such as the Golden Quadrilateral and the North –South – East – West corridors. With a total length of approximately 3.3 million kilometers, India has the second largest road network in the world. Roads have played a vital role in transportation and also enhancing trade. The government has taken initiatives to improve and strengthen the network of National Highways, State Highways and roads in major districts and rural areas. The Indian real estate sector plays a significant role in the country’s economy. The real estate sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). Moreover, the real estate sector is also responsible for the development of over 250 ancillary industries such as cement, steel, paints etc. The real estate sector in India has observed a quite revolution over the past decade thanks to India’s booming economy which has led to an increased demand for both commercial and residential space. For further details on our Industry, please refer section titled “Industry Overview” on page no. 45 in this Draft Letter of Offer. SUMMARY OF BUSINESS OVERVIEW Diamant Investment and Finance Limited was originally incorporated on July 29, 1980 as Diamant Carbon & Graphite Products Limited under the Companies Act. Subsequently the company’s name was changed to Diamant Investment and Finance Limited on February 01, 2005. The Company’s main object, initially was to manufacture and deal in carbon and graphite products. The company under the then management made an initial public offer in September 1982 for issue of 3,50,000 Equity Shares of Rs. 10/- each for cash at par to the Public, through prospectus dated 15th July 1982 and the shares were listed on the Bombay Stock Exchange and Ahmedabad Stock Exchange. Subsequently, the company sold their manufacturing unit to Vesuvius India Ltd, Kolkata in the year 2003

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and amended its main object clause and ventured into investment and finance activity by trading in shares and securities. Diamant was then taken over by Vision Sales Pvt Ltd and Saboo Capital & Securities Pvt Ltd in the year 2005. The present Board of Directors of the Company felt that the future of India lies with in Infrastructure Development and considering the growth of the Company and taking into account the available opportunities in the Infrastructure sector, the Board of Directors of the company recommended that the company undertake Infrastructure business with change in the Objects Clause of the Company. The Objects Clause of the Company was amended to permit the company to undertake this activity in the year 2007. Diamant has procured some contracts from fairly large players in Infrastructure business and is presently into infrastructure and real estate. The company has also sold off its entire investments which they have made earlier and undertaken that no further purchase of shares or investment will be done by the company. Diamant is presently engaged mainly in road construction activities and has procured sub-contracts from fairly large players in Infrastructure sector.

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THE ISSUE: Equity Shares issued by the Company 35,96,850 Equity Shares of Rs.10/- each on a “Rights”

basis to the existing equity Shareholders /beneficial owners of the Company.

Rights Entitlement Three equity share for every One equity share held on Record Date.

Record Date [•] Issue Price per Equity Share Rs. 35 Equity Shares outstanding prior to the issue 11,98,950 Equity Shares of Rs.10/- each. Equity Shares outstanding after the issue 47,95,800 Equity Shares of Rs.10/- each. Use of Issue proceeds • Purchase of Capital Equipments

• Margin money for purchase of Capital Equipment • Repayment of Debt • Margin money for Working Capital. • Rights Issue expenses

ISSUE PROGRAME ISSUE OPENS ON [•] ISSUE CLOSES ON [•]

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SUMMARY OF FINANCIAL INFORMATION Please read the following data in conjunction with the detailed Auditors’ Report commencing on page no. 79 under the heading ‘Auditors Report and Financial Information’.

I. Statement of Assets and Liabilities (Rs. In lacs)

As at 31st March Particulars 2009 2008 2007 2006 2005Gross Block 748.22 386.48 13.94 13.06 13.02 Less: Depreciation 71.18 23.95 9.54 8.91 8.27 Net Block 677.04 362.53 4.40 4.15 4.75 Less: Revaluation Reserve - - - - -Net Block after adjustment for Revaluation Reserve 677.04 362.53 4.40 4.15 4.75 Capital Work in Progress - - - - -Total Fixed Assets (A) 677.04 362.53 4.40 4.15 4.75 Investment (B) 0.01 0.01 0.01 0.01 222.31

Current Assets, Loans and Advances

Inventories 160.67 1029.94 672.34 461.73 -Sundry Debtors 603.83 37.46 8.07 - -Cash and Bank Balance 39.74 17.69 28.94 7.01 68.73 Loans and Advances 813.45 771.57 2.67 56.19 29.30 Total (C) 1617.69 1856.66 712.02 524.93 98.03 Loans, Liabilities and Provisions Secured Loans 456.30 255.45 - - -Unsecured Loans 918.00 988.13 60.00 54.11 -Current Liabilities 486.94 562.29 326.52 224.79 10.51 Provisions 4.74 2.23 14.32 20.02 46.27 Deferred Tax Liability 18.86 7.46 0.61 0.65 0.06 Total (D) 1884.84 1815.56 401.45 299.57 56.85 Net Worth (A+B+C-D) 409.90 403.64 314.98 229.52 268.24 Represented By Share Capital 119.90 119.90 119.95 119.95 119.95 Total Reserves and Surplus 290.00 283.74 195.03 109.57 148.29 Less: Revaluation Reserves - - - - -Net Reserves and Surplus 409.90 403.64 314.98 229.52 268.24 Miscellaneous Expenditure (To the extent not w/off or adjusted) - - - - -

Net Worth 409.90 403.64 314.98 229.52 268.24

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II. Statement of Profit and Loss Account

(Rs. In lacs)

*EPS Calculated according to AS-20

Year ended 31st March Particulars 2009 2008 2007 2006 2005Income Income from operations 13088.57 18998.19 13413.81 385.65 -Increase/ (Decrease) in stocks (869.26) 357.59 210.61 461.73 -Other income 5.38 32.80 28.16 69.70 79.93Total 12224.69 19388.58 13652.58 917.08 79.93Expenditure Purchases 11580.94 19122.56 13529.50 925.77 -Administrative & Other Expenses 540.54 147.97 26.74 25.81 31.68Total 12121.48 19270.52 13556.24 951.58 31.68Profit before Interest, Depreciation and Tax 103.21 118.06 96.34 (34.50) 48.25Depreciation 47.24 14.41 0.63 0.63 0.89Profit before Interest and Tax 55.97 103.65 95.71 (35.13) 47.36Financial Expenses 38.65 8.61 5.54 0.44 0.17Net Profit Before tax 17.32 95.04 90.17 (35.57) 47.19Prior Period Items 0.64 - - - -Net Profit Before Tax 17.96 95.04 90.17 (35.57) 47.19Provision for Taxation Current Tax 1.85 1.05 0.28 - 16.15Deferred Tax 11.40 6.85 0.04 0.59 0.93Fringe Benefit Tax 1.30 0.26 0.03 0.13 -Net Profit after Tax 3.41 86.88 89.90 (36.29) 30.11Brought Forward from Previous Year 264.54 175.88 90.41 129.14 113.94Tax Adjustment of Earlier Years 2.86 1.78 9.61 2.44 0.03Transferred to General Reserve - - - - 1.20Proposed Dividend - - 12.00 - 12.00Corporate Dividend Tax - - 2.04 - 1.68Balance Carried to Balance Sheet 270.81 264.54 175.88 90.41 129.14Earning Per Share * 0.52 7.39 7.49 (3.03) 2.51

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GENERAL INFORMATION Dear Equity Shareholder(s), Pursuant to the resolution passed by the Board of Directors of the Company at their Meeting held on 13th December, 2008 and subsequent resolution passed by the shareholders of the Company in their Extra-ordinary General Meeting held on 10th January, 2009, the Company is authorized to raise resources on Rights basis, on terms and conditions as follows: Issue of 35,96,850 Equity Shares of Rs. 10/- Each for cash at a Premium of Rs. 25 (Issue Price of Rs. 35) per Equity Share Aggregating Rs. 1258.90 Lacs to the existing Equity Shareholders on Rights Basis in the Ratio of 3 (Three) Equity Share for Every 1 (One) Equity Share held on Record Date i.e. [•]. The Face Value of the Equity Share is Rs.10/- per Share and the Issue Price is 3.5 times the Face Value. The above Rights Issue structure was arrived after the supercession of the resolutions passed by the Board of Directors in their meeting held on 16th June, 2007 and by the shareholders of the Company in the AGM of the Company held on 27th July, 2007. The terms of which were as follows: Issue of Equity Share of Rs. 10/- each at a premium of maximum upto Rs. 20/- each, aggregating to a maximum of Rs. 7,20,00,000/- on rights basis to the existing Equity Shareholders of the Company in the ratio of 2:1 held on the Record Date. Details of the Issuer Company Name of the Company DIAMANT INVESTMENT AND FINANCE LIMITED Registered Office 9, Beau Moon Chambers

27/33, Nagindas Master Road, Fort, Mumbai - 400023

Tel: +91- 22 – 2265 3962

Fax: +91- 22 – 2267 3962

Email: [email protected]

Registration No. UIN No – U26994MH2003PLC143264 Contact Person Ms. Vandita Jogi, Compliance Officer. Address of Registrar of Companies

Purva Sharegistry India Pvt. Ltd. 9, Shiv Shakti Industrial Estate, Sitaram Mills Compound, J.R. Boricha Marg,Opp. Kasturba Hospital, Lower Parel (East), Mumbai-400 011; Tel.: 022-2301 6761; Fax: 022-2301 2517; E-mail: [email protected] Contact Person: Mr. V. B. Shah SEBI Regn No: INR000001112

Important:

a) This issue is open to the existing Shareholders of the Company whose names appear as Beneficial owners as per the list to be furnished by the depositories in respect of the shares held in the electronic form and on the Register of Members of the Company in respect of the shares held in physical form at the close of business hours on the Record Date i.e. [•]

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b) Please ensure that the Composite Application Form (hereinafter referred to as ‘CAF’) is received with this Draft Letter of Offer.

c) Please read this Draft Letter of Offer and the instructions contained in the accompanying CAF

carefully before making any investment in the issue.

d) The instructions contained in the enclosed CAF are an integral part of this Draft Letter of Offer and must be carefully followed. Applications not conforming to the instructions are liable to be rejected.

e) All enquiries in connection with this Draft Letter of Offer or the accompanying CAF and requests

for split forms must be Addressed (quoting the Registered Folio Number, the CAF Number and the name of the first shareholder as Mentioned on the CAF and super scribed “Diamant-Rights Issue” on the envelop to the Registrars to the Issue at the following address:

Purva Sharegistry India Pvt. Ltd. 9, Shiv Shakti Industrial Estate, Sitaram Mills Compound, J.R. Boricha Marg,Opp. Kasturba Hospital, Lower Parel (East), Mumbai-400 011; Tel.: 022-2301 6761; Fax: 022-2301 2517; E-mail: [email protected] Contact Person: Mr. V. B. Shah Under no circumstances should any request be sent to the Lead Manager to the Offer.

f) The Company undertakes to provide adequate Funds to the Registrars to the Offer for posting of

the Refund Orders/Letters of Allotment/ Share Certificates by registered post wherever applicable.

g) In case the original CAF is not received, or is misplaced by the applicant, the Registrars will issue

a duplicate CAF on the request of the applicant who should furnish the Registered Folio Number and his/her full name and address to the Registrars to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications.

h) It is to be specifically noted that the issue of equity shares is subject to Risk Factors appearing in

this Draft Letter of Offer.

i) The Rights Issue will be kept open for a minimum period of 15 days. If extended, it will be kept open for a maximum of 30 days.

j) The Issuer and the Lead Manager are obliged to update the Draft Letter of Offer and keep the

investors / Public informed of any material changes till the commencement of trading. ISSUE PROGRAMME The subscription list will open at the commencement of banking hours and will close at the close of banking hours on the days as mentioned below:

Issue Opens On Last date for receiving requests for Split Forms Issue Closes On

[•] [•] [•]

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BOARD OF DIRECTORS OF THE COMPANY Name of the Director Designation Status DIN

Mr. Naresh S. Saboo Chairman cum Managing Director Executive Director 00297916 Mr. Naresh M. Jain Director Executive Director 00291963 Mr. Ramesh C. Mishra Director Independent Director 00206671 Mr. Puneet Kumar Srivastava Director Independent Director 02690120

(Provisional) For further details of our Directors, please see the section titled “Our Management” beginning on page no. 63 of this Draft Letter of Offer 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, credit of allotted shares in the respective beneficiary accounts, refund orders etc. Issue Management Team

COMPLIANCE OFFICER Ms Vandita Jogi Compliance Officer 9, Beau Moon Chambers, 27/33, Nagindas Master Road, Fort, Mumbai-400 023, Maharashtra.

LEAD MANAGER REGISTRARS TO THE ISSUE Ashika Capital Limited 1008, Raheja Centre, 10th Floor, 214,Nariman Point, Mumbai-400 021. Tel :+ 91 – 22 – 6611 1700 Fax :+ 91 – 22 – 6611 1710 Email: [email protected] Website: www.ashikagroup.com SEBI Regn. No: INM 000010536 Contact Person: Mr. Adesh Jain

Purva Sharegistry India Pvt. Ltd. 9, Shiv Shakti Industrial Estate, Sitaram Mills Compound, J.R. Boricha Marg,Opp. Kasturba Hospital, Lower Parel (East), Mumbai-400 011; Tel.: 022-2301 6761; Fax: 022-2301 2517; E-mail: [email protected] Contact Person: Mr. V. B. Shah SEBI Regn No: INR000001112

AUDITORS OF THE COMPANY LEGAL ADVISOR TO THE ISSUE Tushar Parekh & Associates 11, Sopariwala House, Padamshi Mansion, 293 Princess Street, Marine Lines, Mumbai – 400 002 Tel: +91 – 22 – 2206 2798 Fax : +91 – 22 -2206 2798 Email: [email protected] Contact Person: Mr. Tushar R. Parekh

Mr. A. M. Bhatia 403, Snowhite, 12th Road, Khar (W), Mumbai – 400 052 Tel: +91 – 22 – 2646 4179 Fax : +91 – 22 – 2646 4179 Email: [email protected]

BANKERS TO THE COMPANY Axis Bank Limited ( formerly UTI Bank) 625, G.D.Somani Memorial School Cuffe Parade, Colaba, Mumbai – 400 001

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Tel: +91-22-2216 5261 / 62 Email: [email protected] Website: www.axisbank.com Contact Person: Ms. Salima Umani

BANKERS TO THE ISSUE [•] [•] INTER – SE ALLOCATION OF RESPONSIBILITES As there is only one Lead Manager, inter-se allocation of responsibilities is not applicable. CREDIT RATING / TRUSTEES This being a Rights issue, no Credit Rating or appointment of Debenture Trustee is required. IPO GRADING This being Rights Issue of Equity Shares, IPO grading is not applicable. DEBENTURE TRUSTEE This being Rights Issue of Equity Shares, an appointment of Debenture trustee is not required. MONITORING AGENCY In terms of SEBI DIP Guidelines Clause 8.17, the appointment of a monitoring agency is not mandatory for an issue size of Rs.50000 lacs and therefore no monitoring agency is appointed for this rights issue.. The Audit Committee of the Company will however monitor utilisation of the proceeds and the Committee will in turn report to the Board periodically. APPRAISING ENTITY The Issue has not been appraised and hence the details of the Appraising Agency is not given. UNDERWRITING / STANDBY SUPPORT This issue of equity shares is not being underwritten and/or no standby support is being sought for the said issue. Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies Act, 1956 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.”

Declaration by the Board on creation of separate account The Board of Directors declares that funds received against this issue will be transferred to a separate bank account other than the Bank account referred to in sub-section (3) of the Section 73 of the Companies Act. MINIMUM SUBSCRIPTION 1. If the Company does not receive the minimum subscription of 90% of the issue, the entire

subscription shall be refunded to the applicants within fifteen (15) days from the date of closure of the Issue.

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2. If there is a delay in the refund of subscription by more than Eight (8) days after the Company becomes liable to pay the subscription amount (i.e. fifteen (15) days after closure of the issue), the Company shall pay interest for the delayed period at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

The issue will become under-subscribed, if the number of shares applied for falls short of the number of shares offered, after considering the number of shares applied for as per the entitlement. The under-subscribed portion can be applied for only after the closure of the Issue. The promoters or any other person can subscribe to such under-subscribed portion as per relevant provisions of law. If any person presently in control of the Company desires to subscribe to such under-subscribed portion and if disclosure is made pursuant to SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, such allotment of the under-subscribed portion will be governed by the provisions of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. The Promoters have confirmed that they would subscribe to their entitlements in this Rights Issue in full and would also subscribe to the unsubscribed portion, if any, in this Rights Issue such that to ensure a minimum subscription of 90% of the Issue, as per the relevant provisions of the law. Subscription by the promoter to the extent of their entitlement in the Issue and acquisition of additional Equity Shares by them in case of undersubscription, if any, will not result in change of control of the management of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the SEBI Takeover Regulations. For details please refer to note no. 11 of the Capital Structure of the Company. The above is subject to the terms mentioned under the “Basis of Allotment”.

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CAPITAL STRUCTURE OF THE COMPANY

Particulars Aggregate/Nominal Value (Rs.)

Authorised Share Capital 50,00,000 Equity Shares of Rs. 10/- each 5,00,00,000

Issued, Subscribed and paid-up share capital before the issue 11,98,950 Equity Shares of Rs. 10/- each fully paid-up 1,19,89,500Present Issue of Equity Shares in terms of this Letter of Offer 35,96,850 Equity Shares of Rs.10/- each for cash at a premium of Rs. 25/- per Equity Share.

3,59,68,500

Paid up Equity Capital after Issue 47,59,800 Equity Shares of Rs. 10/- each 4,79,58,000

Share Premium Account Before the offer After the offer

Nil

8,99,21,250 Notes to Capital Structure: 1. Detail of changes in the Authorised Share Capital since inception are as follows: S.

No. Particulars of Increase Date of Meeting

1 Rs. 2,00,00,000/- (20,00,000 Equity Share of Rs 10/- each) Incorporation (29/07/1980)

2 From Rs. 2,00,00,000/- to Rs. 5,00,00,000/- (35,00,000 Equity Share of Rs 10/- each and 15,00,000 15% Cummulative Redeemable Preference Share of Rs 10/- each)

18/09/1997

3 Reorganisation of Capital to 50,00,000 Equity Share of Rs 10/- each. 10/01/2009 2. Build up of the Equity Share Capital

Date of Allotment

No. Of Equity Shares

Cumulative No. of Shares

Face Value (Rs)

Issue Price (Rs)

Consideration (Cash, Bonus, Consideration

other than cash)

Reasons for allotment

02/07/1980 1,400 1,400 10 10 Cash Initial subscription to Memorandum

12/01/1983 5,98,600 6,00,000 10 10 Cash Allotment to Promoter

12/01/1983 3,48,950 9,48,950 10 10 Cash Allotment to Public (in the IPO)

12/01/1983 1,050 9,50,000 10 5 Cash ( Partly unpaid @ Rs 5 per share)

Allotment to Public

21/01/1993 2,05,083 11,55,083 10 10 Other than cash* Allotment to Public 04/03/1994 15,514 11,70,597 10 10 Other than cash* Allotment to Public 13/11/1995 29,403 12,00,000 10 10 Other than cash* Allotment to Public 31/10/2007 (1,050)** 11,98,950 10 5 Cash Forfeiture of share

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* The Company has issued Shares for consideration other than Cash to the Banks/Financial Instiutions for conversion of outstanding loan amount due to them. These Banks/Financial Institutions were - The Industrial Credit & Investment Corporation of India (Bombay), Industrial Finance Corporation of India (Ahmedabad), Industrial Development Bank of India (Ahmedabad), Bank of Baroda (Bombay) and State Bank of India (Ahmedabad). ** 1050 partly paid equity shares were forfeited for non-payment of call monies and confirmed by BSE vide letter: DCS/FM/Cap_Conf/17/2008 dated May 23, 2008.

3. Shares of Promoter which are in lock-in period: Nil 4. Promoters Capital Build up

Name No. of Share Date of Allotment / transfer

Price (Rs.) Transfer from

1,10,928 20/03/2006 23.50 Sanat M Shah 93,720 20/03/2006 23.50 Monica U Dalal

Saboo Capital & Securities Pvt Ltd

1,25,050 20/03/2006 23.50 Open Offer Total 3,29,698 23.50 These shares were acquired by Saboo Capital & Securities Pvt Ltd., vide Share Purchase Agreeement dated 05/09/2005 entered into with Shri Sanat M Shah and Smt Monica U Dalal for the takeover of the management of the company and under the open offer and the total shares acquired amounts to 27.47 % of the total capital.

5. All shares issued as on date are fully paid up. 6. The Company does not have an Employees Stock Option Scheme. 7. Promoters’ Contribution and Lock-in

The present issue being a rights issue, provisions of promoters’ contribution and lock-in are not applicable.

8. In year 2005, the Company Management was taken over by Vision Sales Pvt. Ltd and Saboo Capital & Securities Pvt. Ltd by the purchase of 6,15,723 shares through a Memorandum of Understanding dated 05/09/2005 and they made an Open Offer for further acquisition of 20% of equity shares of Rs. 10/- each at a price of Rs. 23.50/- per share. The number of shares received in this open offer was 1,25,050 Shares, which were accepted by the acquirers.

9. Present Rights Issue:

Type of Instrument Ratio Face Value No. of Shares Issue Price ConsiderationEquity Shares 3:1 Rs. 10/- 35,96,850 35 Cash

10. Details of Shareholding before and after the offer:

Pre Issue Post Issue

Category of Shareholder No. of equity shares of Rs.

10/- each

% of present Capital

No. of equity shares of Rs.

10/- each

% of post issue

Capital

(A) Shareholding of Promoter and Promoter Group

(1) Indian

(a) Individuals/ Hindu Undivided Family

(b) Central Government/ State Government(s)

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(c) Bodies Corporate 3,29,698 27.50 13,18,792 27.50(d) Financial Institutions/ Banks (e) Any Other Sub-Total (A)(1) 3,29,698 27.50 13,18,792 27.50(2) Foreign

(a) Individuals (Non-Resident Individuals/ Foreign Individuals)

(b) Bodies Corporate (c) Institutions (d) Any Other (specify)

Total Shareholding of Promoter and Promoter Group A =(A)(1)+(A)(2) 3,29,698 27.50 13,18,792 27.50

(B) Public shareholding (1) Institutions (a) Mutual Funds/ UTI (b) Financial Institutions/ Banks

(c) Central Government/ State Government(s)

(d) (e)

Venture Capital Funds Insurance Companies

(f) Foreign Institutional Investors (g) Foreign Venture Capital Investors (h) Any Other (specify) Sub-Total (B)(1) (2) Non-institutions (a) Bodies Corporate 78,733 6.56 3,14,932 6.56

(b) Individuals -i. Individual shareholders holding nominal share capital up to Rs. 1 lakh

7,33,994 61.22

29,35,976 61.22

Individual –ii. shareholders holding nominal share capital in excess of Rs. 1 lakh.

56,425 4.71

2,25,700 4.71

(c) Any Other i) Clearing Members ii) NRI 100 0.01 400 0.01 Sub-Total (B)(2) 8,69,252 72.50 34,77,008 72.50

Total Public Shareholding (B)= (B)(1)+(B)(2) 8,69,252 72.50 34,77,008 72.50

TOTAL (A)+(B) 11,98,950 100.00 47,95,800 100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

GRAND TOTAL (A)+(B)+(C) 11,98,950 100.00 47,95,800 100.00

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11. Details of shareholding pattern of the Promoters as on 19/06/2009:

Pre Issue Post Issue Particulars No. of equity

shares of Rs. 10/- each

% of present Capital

No. of equity shares of Rs.

10/- each

% of post issue

Capital Promoters Saboo Capital & Securities Pvt Ltd 3,29,698 27.50 13,18,792 27.50

TOTAL 3,29,698 27.50 13,18,792 27.50

Our Promoters have confirmed vide their letter dated 22/06/2009 that they intend to subscribe to their respective entitlements in this Rights Issue in full. Our Promoter, either by themselves or a combination of their group entities, shall apply for additional Equity Shares in the Issue to the extent of any unsubscribed portion of the Issue. As a result of such subscription and consequent allotment, our Promoters may acquire Equity Shares over and above their Rights Entitlement, which may result in an increase of their shareholding being above the current shareholding with the Rights Entitlement of Equity Shares under the Issue. Such subscription and acquisition of additional equity shares by our Promoter, if any, will not result in change of control of the management of our Company and shall be exempted in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code.

However, the Promoters have confirmed vide their letter dated 22/06/2009 that in case the Rights Issue of the Company is completed with the Promoters subscribing to Equity Shares over and above their entitlement and as a result, if the public shareholding in the Company after the Rights Issue falls below the “permissible minimum level” as specified in the listing condition or listing agreement, they will either individually or jointly make an offer for sale of their holdings so that the public shareholding is raised to the “permissible minimum level” within a period of 3 months from the date of allotment in the proposed Issue, as per the requirements of sub-clause 17.1 and 17.2 of SEBI (Delisting of Securities) Guidelines, 2003, or as per any amendment thereto or any other period as may be directed by SEBI or any appropriate authority. In this context, the promoter have provided following undertaking:

“We hereby undertake that, in case the Rights Issue of Diamant Investment and Finance Limited is completed with the Promoters subscribing to Equity Shares over and above their entitlement and as a result, if the public shareholding in the Company after the Rights Issue falls below the “permissible minimum level” as specified in the listing condition or listing agreement, we will either individually or jointly make an offer for sale of our holdings so that the public shareholding is raised to the “permissible minimum level” within a period of 3 months from the date of allotment in the proposed Issue, as per the requirements of sub-clause 17.1 and 17.2 of SEBI (Delisting of Securities) Guidelines, 2003 or as per any amendment thereto or any other period as may be directed by SEBI or any appropriate authority.”

12. There are no transactions in the securities of the Company during preceding 6 months which were

financed/undertaken directly or indirectly by the promoters, directors, their relatives, their group companies or associates or by the above entities directly or indirectly through other persons.

13. The Promoters, Directors and Lead Managers to the Issue have not entered into any buy-back/stand

by or similar arrangements for any of the securities being issued through this Draft Letter of Offer.

DIAMANT


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14. Top ten shareholders on the date of filing of the Draft Offer Document with the SEBI.

Sl. No. Name of the shareholder No. of Equity Shares held

% of Issued Capital

1. Saboo Capital and Securities Pvt Ltd 3,29,698 27.502. Naresh Manakchand Jain 45,375 3.783. MTL Share and Stock Broker Ltd 12,000 1.004. Sumita Management Constancy Pvt Ltd 12,000 1.005. Manakchand Jain HUF 11,050 0.926. Bakul Sanghvi 8,600 0.727. Surendra Singh Bengani 8,000 0.678. Rajesh Kumar Gupta 6,500 0.549. Janak Nandini Gupta 6,500 0.5410. Dimpal Chordiya 6,000 0.50

15. Top ten shareholders 10 days prior to the date of filing of the Draft Offer Document with SEBI:


% of Issued Capital

1. Saboo Capital and Securities Pvt Ltd 3,29,698 27.502. Naresh Manakchand Jain 45,375 3.783. Vision Sales Pvt Ltd 18,000 1.504. Fair Intermediate Investment 15,250 1.275. MTL Share and Stock Broker Ltd 12,000 1.006. Sumita Management Constancy Pvt Ltd 12,000 1.007. Manakchand Jain HUF 11,050 0.928. Bakul Sanghvi 8,600 0.729. Surendra Singh Bengani 8,000 0.6710. Surendra Kedia 6,000 0.50

16. Top ten shareholders as on two years prior to the date of filing of the Draft Offer Document

with the SEBI:


% of Issued Capital

1. Vision Sales Pvt Ltd 4,11,075 34.262. Saboo Capital and Securities Pvt Ltd 3,29,698 27.473. Rama Sudha Karan 40,404 3.374. R K Adhukiya 38,900 3.245. ICICI Bank Ltd 25,750 2.156. Raju Bhandari 10,550 0.887. Bakul Sanghvi / Niru Sanghvi 8,600 0.72

DIAMANT


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8. Harsh Hitesh Javeri / Hitesh Ramji Javeri / Radhabai Ramji Javeri

4,250 0.35

9. Govind Shrikrishna Apte / Mangala G Apte 2,500 0.2110. Mahendrarai Shantilal Mehta 2,300 0.19

17. The Company undertakes that there shall be no further issue of capital whether by way of issue of

bonus shares, preferential allotment, Rights Issue or public issue or in any other manner, during the period commencing from the submission of the Letter of Offer to SEBI for Rights Issue till the securities referred in the Letter of Offer have been listed or application moneys refunded on account of failure of the Issue.

18. There are no bridge loans or any other financial arrangements which will be repaid out of the

proceeds of the current issue. 19. The number of equity shareholders/beneficial owners of the Company as on 19/06/2009 were 2,321. 20. The Company has no proposal, intention, negotiations, consideration to alter the capital structure by

way of split/consolidation of the denomination of the shares, or issue of shares on a preferential basis or issue of bonus or rights or further public issue of shares or any other securities, within a period of 6 months from the date of opening of the present issue.

21. The Company undertakes that at any given time, there shall be only one denomination for the shares

of the Company and the Company shall comply with such disclosure and accounting norms specified by SEBI from time to time.

22. The Company has not issued any Equity Shares out of revaluation reserves in the past. 23. The entire issue price is to be paid on application and hence there will be no partly paid up shares

arising out of this issue.

DIAMANT


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OBJECTS OF THE ISSUE The company intends to use the proceeds of the present Rights Issue for meeting the following objectives:

• Purchase of Capital Equipments • Margin money for purchase of Capital Equipment • Repayment of Debt • Margin money for Working Capital • Rights Issue expenses

The Main Objects clause of the Memorandum of Association of the Company enables the Company to undertake the activities, which the Company has been carrying out till date, and the proposed activities for which funds are proposed to be raised through this Rights Issue. COST OF PROJECT AND MEANS OF FINANCE The Cost of Project and Means of Finance as estimated by the the Management are as follows: Cost of Project Particulars Rs. In lacs

Purchase of Capital Equipments 768.80

Margin money for Purchase of Capital Equipment 98.29

Repayment of Debt 215.58

Margin money for Working Capital 150.00

Rights Issue Expenses 26.23

TOTAL 1258.90 Means of Finance

Particulars Rs. In lacs

Rights Issue Proceeds 1258.90

TOTAL 1258.90 DETAIL BREAK UP OF FUND REQUIREMENT 1. Purchase of Capital Equipments

The Company intends to use Rs. 768.80 lacs from the net proceeds of the issue for purchase of capital equipment to meet the requirements of its various projects. The Company has projected a capital expenditure plan of Rs. 768.80 lacs based on its Order Book as of May 31, 2009 and future requirements as estimated by the management. The details of the equipment the Company intends to purchase and their estimated costs, including the estimated taxes and associated costs, are specified in the following:

DIAMANT


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S. No

Equipment Model Qty Amount (In lacs)

Supplier Quotation Date

1 Ashok Leyland Tipper Taurus 2516/2 15 278.87 Ashok Leyland Ltd,

Nagpur 04/06/09

2 Komatsu Motor Grader with scarifier GD511A-1 1 88.12 Larsen & Toubro Ltd,

Nagpur 04/06/09

3 Vibratory Compactor L&T case 1107 STD 2 43.50 L&T case equip. Pvt

Ltd, Nagpur 04/06/09

4 L&T - Komatsu Hydraulic Excavator PC200-6 2 94.95 Larsen & Toubro Ltd,

Nagpur 04/06/09

5 Stationary Wet Mix Plant with 25 T storage silo

Apollo WM 200 1 34.22 Gujarat Apollo Ind.

Ltd, Mumbai 04/06/09

6 Asphalt Batch Mix Plant Apollo ANP-1500 1 198.73 Gujarat Apollo Ind.

Ltd, Mumbai 05/06/09

7 Mahindra Bolero SLX 2 14.81 Provincial Automobile Co Pvt Ltd, Nagpur 05/06/09

8 Mahindra Bolero Pickup FB 3 15.60 Provincial Automobile

Co Pvt Ltd, Nagpur 05/06/09

Total 768.80

For the above estimates all the equipment or machinery are yet to be ordered and the Company has relied upon quotations received from the suppliers. The order for these equipments will be placed as and when the funds are available. The figures in the Company’s capital expenditure plans are based on management estimates and have not been appraised by an independent organization. In addition, the Company’s capital expenditure plans are subject to a number of variables, including possible cost overruns, construction delays or defects and changes in the management’s views of the desirability of current plans, among others.

2. Margin money for Purchase of Capital Equipment

The business of the Company requires large investments in capital equipment for the execution of the projects. The Company has procured various equipments on Hire Purchase Agreement from different private finance companies and Banks in the year 2007, 2008 and 2009. The details of capital equipment we purchased are as follows: (Rs. in lacs)

S. No.

Equipment Model Date of

Hire Purchase

Banks / Finance

Company Qty Loan

Sanctioned Margin Money Paid

1 Excavator PC - 200 08/09/2007 L&T Finance Ltd 1 39.38 6.96

2 Tippers AL 2516 14/09/2007 GE Capital Ltd 3 38.37 8.55

3 Tippers TATA 2516 14/09/2007 GE Capital Ltd 2 25.13 5.87

4 Tippers TATA 2516 17/09/2007 L&T Finance Ltd 6 80.00 13.01

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5 Tippers AL 2516 29/09/2007 Indusind Bank Ltd 4 51.60 11.06

6 Excavator J S - 210 31/10/2007 GE Capital Ltd 1 37.60 8.70

7 Boloro SLX SLX 17/11/2007 ICICI Bank Ltd 1 4.68 1.04

8 Roller Soil Compactor 20/03/2008 L&T Finance

Ltd 1 17.85 3.15

9 Diesal Tanker Tata 407 24/12/2008 L&T Finance

Ltd 1 4.55 0.78

10 Tippers AL 2516 21/01/2009 L&T Finance Ltd 5 77.00 7.01

11 Roller Soil Compactor 12/02/2009 L&T Finance

Ltd 1 18.00 2.55

12 Kerb & Paver Machine

Kerb Laying & Sensor Paver 22/02/2009 SREI

Finance Ltd 2 38.57 6.98

13 Motor Gredar Gredar 28/02/2009 SREI Finance Ltd 1 53.26 9.75

14 Tata 207 Tata 207 28/02/2009 Tata Motors Fin. Ltd 1 4.30 0.42

15 Loader HM -2010 23/03/2009 SREI Finance Ltd 1 25.83 2.77

16 Tippers AL 2516 31/03/2009 ING Vysya Bank Ltd 5 73.25 8.75

17 Diesal Tanker Swaraj Majda 31/03/2009 Magma

Finance Ltd 1 4.99 0.94

TOTAL 594.36 98.29 3. Repayment of Debt

The Company has entered into various financing arrangements with a number of banks and private finance companies for procuring various capital equipment. Details of the amounts outstanding and repaid have been provided in the table below:

S. No.

Bank / Financial Institution

Amount Sanctioned (In lacs)

Total No. of Instal. Due

Instal. Amount

per month (In lacs)

No. of Instal. repaid upto

31/05/09

Amount of Instal. repaid upto

31/05/09 (In lacs)

Outstanding Amount as on 31/05/09

(In lacs)

1 L&T Finance Ltd 39.38 1+35 1.29 20 25.78 18.192 GE Capital Ltd 38.37 1+35 1.28 20 25.69 17.873 GE Capital Ltd 25.13 1+35 0.86 20 17.13 11.914 L&T Finance Ltd 80.00 1+35 2.70 20 53.94 37.545 Indusind Bank Ltd 51.60 1+35 1.68 19 31.98 24.766 GE Capital Ltd 37.60 1+35 1.23 18 22.15 19.537 ICICI Bank Ltd 4.68 1+35 0.15 18 2.72 2.39

DIAMANT


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8 L&T Finance Ltd 17.85 1+35 0.59 14 8.32 11.359 L&T Finance Ltd 4.55 1+35 0.16 6 0.99 3.9210 L&T Finance Ltd 77.00 1+35 2.73 4 10.94 69.8111 L&T Finance Ltd 18.00 1+35 0.62 3 1.86 16.7112 SREI Finance Ltd 38.57 1+35 1.37 2 2.75 36.7613 SREI Finance Ltd 53.26 1+35 1.89 2 3.77 50.73

14 Tata Motors Fin. Ltd 4.30 1+35 0.16 2

0.32 4.12

15 SREI Finance Ltd 25.83 1+35 0.90 2 1.80 24.62

16 ING Vysya Bank Ltd 73.25 1+35 2.54 2

5.08 70.71

17 Magma Finance Ltd 4.99 1+35 0.18 2 0.36 4.83 TOTAL 215.58 425.74

The Company has already paid the amount outstanding as on May 31, 2009 to the extent of Rs. 215.58 lacs out of the application money brought in by the promoters (as part of the issue proceeds). The Company proposes to pay the balance outstanding amount as on 31/05/2009 of Rs. 425.74 lacs out of internal accruals.

4. Margin money for Working Capital

The calculation of the working capital requirement which is partly funded through the proceeds of the present rights issue is as under:

(Rs. In lacs)

Particulars Actuals as on 31/03/2009

Estimates as on 31/03/2010

Gap

Current Assets Work In Progress 44 64 Inventories 116 867 Sundry Debtors 604 650 Other Advances 813 80 Cash & Bank Balances 40 40 Total 1617 1701 Current Liabilities Sundry Creditors 247 100 Other current Liabilities 244 25 Total 491 125 Working Capital Gap 1126 1576 450 To be Financed by: Working Capital funding from Banks/Internal Accruals/other borrowings 300

Present Rights Issue 150

DIAMANT


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Basis of estimation of working capital requirement

Particulars No. of Days Work in Progress 15Debtors 60Other Current Assets 10Creditors 15

Note : Inventories estimated for the year ended 31/03/2010 includes cost of the land purchased at Pune for the purpose of developing it into Commercial cum Residential Complex. Already an amount of Rs. 749.42 Lakhs have been advanced against such land which is shown under the other advances for the year ended 31/03/2009.

5. Rights Issue Expenses (Rs. in lacs)

Appraisal: The project is not appraised by any Bank/Financial Institution. Schedule of Implementation:

Particulars Expected Start Date Expected Close Date Purchase of Capital Equipments 01/10/2009 30/11/2009

Sources and Deployment of Funds: As per the Certificate given by M/s Tushar Parekh & Associates, Chartered Accountants dated 22/06/2009, an amount of Rs. 346.18 lacs has been spent on the various objects of the issue as on 22/06/2009. The details for which are as follows:

S. No Particulars Amount %age to the

Issue Size % to the issue

Expenses 1 Fees to the Intermediaries

a. Fees to Lead Managers to the Issue b. Fees to Registrar to the Issue c. Fees to SEBI and Stock Exchanges d. Fees to Legal Advisors to the Issue

7.72

0.33

2.50

0.33

0.61

0.03

0.20

0.03

29.43

1.26

9.53

1.26

2 Printing & Stationery and Postage Expenses 7.50 0.59 28.593 Advertisement and other Miscellaneous

Expenditure 7.85 0.62 29.93

TOTAL 26.23 2.08 100.00

DIAMANT


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Application of Funds

Particulars Amount (Rs. In lacs)

Margin Money for purchase of Capital Equipments 98.29

Repayment of Debts (Hire Purchase Installments) 215.58

Current Assets including Advances and Deposists 31.31

Right Issue Expenses 1.00

TOTAL 346.18 Sources of Funds:

Particulars Amount (Rs. In lacs)

Share Application Money 346.18

TOTAL 346.18 Note: The Promoters have already brought in an amount of Rs. 346.18 lacs towards share application money which will be adjusted towards their entitlement. Interim Use of Funds The management of our Company, in accordance with the policies established by our Board from time to time, will have flexibility in deploying the Net Proceeds. Pending utilization for the purposes described above, our Company intends to invest the funds in high quality interest bearing liquid instruments including money market mutual funds, deposits with banks, for the necessary duration or for reducing overdrafts. Such investments would be in accordance with investment policies approved by our Board from time to time. Monitoring of Utilization of funds The Board of Directors of our Company will monitor the utilization of the proceeds of the Issue. Our Company has not appointed any monitoring agency. The Company will disclose the utilization of proceeds of the Issue under a separate head in its balance sheet for FY 2009 specifying the purpose for which such proceeds have been utilized. Our Company, in its balance sheet for FY 2009, will provide details, if any, in relation to all such proceeds of the Issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue. However, at any point of time the proceeds of the Issue will not be used for any other purposes, except as those stated in the Memorandum of Association of our Company. Basic Terms of Issue The Equity shares being offered are subject to the provisions of the Companies Act, 1956, the Memorandum and Articles of Association of the Company, the terms of this Letter of offer and other terms and conditions as may be incorporated in the Allotment advice and other documents /certificates that may be executed in respect of the issue. The Equity shares shall also be subjected to laws as applicable, guidelines, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, GOI, RBI, ROC and /or other authorities as in force on the date of issue and to the extent applicable.

DIAMANT


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BASIS FOR ISSUE PRICE The Issue Price has been determined in consultation with Lead Manager to the Issue considering following qualitative & quantitative factors. Investors should also refer to the section “Risk Factors” and “Auditors Report” beginning on page no. 7 and 79 respectively to get a more informed view before making the investment decision. Qualitative Factors

We are an infrastructure project development company providing engineering, procurement and construction services for roads & highways.

Qualified and experienced employees.

We own and employ modern, specialised and critical equipment like Excavators, Dumpers,

Dozers, etc. which are essential to execute projects effectively. Quantitative Factors Information presented in this section is derived from our standalone audited restated financial statements prepared in accordance with Indian GAAP.

1. Earnings per share for the last three years

Particulars Earnings Per Share (Rs.) Weight Year Ended March 31, 2007 7.49 1 Year Ended March 31, 2008 7.24 2 Year Ended March 31, 2009 0.52 3 Weighted Average EPS 3.92

2. Price Earning Ratio in relation to Offer Price

Offer Price 35.00 Weighted Average EPS 3.92 P/E multiple Based on Weighted Average EPS 8.92 P/E multiple Based on EPS as on 31/03/2009 67.30

Industry P/E

Highest: 156.70 Lowest: 1.40 Industry composite Average: 17.40 *Source: Capital Market Volume XXIV/07 Dated June 01 – June 14, 2009; Industry: Construction

3. Comparison of the accounting ratios of the peer group (i.e. Company of the comparable size in the same industry for the period ending 31st March 2009

As the Company was previously into finance business and diversified into infrastructure and real estate in the recent past, No peer group comparison is done.

DIAMANT


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4. Return on Net Worth (RONW) for the last three years

Financial Year % Weight 31/03/2007 28.54 1 31/03/2008 21.52 2 31/03/2009 1.52 3 Weighted Average RONW 12.69

Minimum return on total Net worth after issue needed to maintain pre-issue EPS of Rs. 0.52 is 1.50%.

5. Net Asset Value (NAV) per share Particulars NAV (Rs.) As on March 31, 2009 34.19 Post Rights Issue 34.79

The Face Value of the share is Rs.10/- and the issue price is 3.5 times the face value.

In view of the above qualitative and quantitative parameters, the Company and the Lead Manager to the Issue, in consultation with whom the share premium has been decided, are of the opinion that the share premium is reasonable and justified. The investors may also want to pursue the risk factors and financials of the Company including important profitability and return ratios, as set out in the Auditors Report in the Draft Letter of Offer to have more informed view about the investment proposition.

DIAMANT


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STATEMENT OF TAX BENEFITS To, The Board of Directors Diamant Investment & Finance Limited 9, Beaumoon Chambers, 27/33, Nagindas Master Road, Fort, Mumbai: 400 023. Maharashtra Sub: Rights Offer of the Company: Possible Tax benefits to Company & Shareholders. Dear Sir, With Reference to above we are enclosing herewith “Annexure” regarding possible tax benefits available to the company and its shareholders under current tax laws presently in force. These benefits will be available subject to fulfilling the conditions specified in relevant sections of law. The statement regarding benefits given in “annexure” is intended to provide general information to investors and it is not a substitute of any professional advice. Each Investor is advised to consult his or her own advisor/consultant with respect to specific tax implications arising out of their participation in the rights offer. We do not express any opinion or provide any assurance whether: • The Company or its shareholders will continue to obtain these benefits in future, or • The Conditions prescribed for availing the benefits have been/would be met with. The contents of this “Annexure” are based of information’s, representations and explanations obtained from the company and on the basis of our understanding of business activities of the company. This report is solely for your information and for inclusion in offer document related to the rights issue and is not to be used in any way for any purpose without your prior written consent. For Tushar Parekh & Associates Chartered Accountants CA Tushar Parekh Proprietor Membership No.: 103230 Place: Mumbai Date: 18th June, 2009

DIAMANT


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“Annexure”

As per existing provision of Income Tax Act 1961 and other Laws applicable for time being in force, following tax benefits are available to Diamant Investment & Finance Limited hereinafter referred to as “The Company” & its shareholders but subject to fulfillment of conditions prescribed in relevant Laws.

Benefits Regarding Income Tax Act, 1961 (Hereinafter Referred To As (“Act”) Benefits to the Company

1. Dividend Income Income by way of dividend (as referred to in Sec 115-O of the Act) received from other domestic companies will be exempt from tax.

2. Preliminary Expenditure

The company is entitled to get deduction for 1/5th of expenditure incurred of the nature specified u/s 35D including expenditure of current issue in successive 5 years beginning with the previous year in which new unit commences production, subject to prescribed conditions therein.

3. Depreciation The Company will be entitled to claim depreciation allowance at the prescribed rates on tangible and intangible assets under section 32 of the Act. Subject to Company qualifying with the conditions as stated in section 32 (1) (iia) of Act as amended with effect from 01.04.2005, in respect of Plant & Machinery (other than Ships or Aircraft) acquired or installed after 31st day of March 2005, addition depreciation @20% shall be allowed.

4. Long term Capital Gain

In accordance with the provisions of section 10(38) of the Act, long term capital gains arising on the transfer of securities, held for a period of twelve months or more shall be exempted from tax if such transaction is entered into on at a recognized stock exchange in India and such transaction is chargeable to Securities Transaction Tax. Subject to the provisions of section 112 of the Act, long term capital gains, other than those mentioned above, will be chargeable to tax @ 20% (plus applicable surcharge and education cess) with indexation benefit and @ 10% (plus applicable surcharge and education cess) if computed without indexation benefit in case of shares of the company.

5. Short Term Capital Gain

Under Section 111A of the Act, short term capital gains accruing to company from transfer of short term capital assets, being securities held for a period of less than one year, in a transaction entered into on a recognized stock exchange in India and such transaction being chargeable to Securities Transaction Tax shall be chargeable to tax @ 15% plus applicable surcharge and education cess.

6. Mutual Funds Income in respect of Units from a Mutual Fund as defined u/s 10(23D) of the Act will be exempt in the hands of the Company u/s 10(35) of the Act.

7. Deductions As per Act Company is eligible for deduction u/s 80G, 80GGA, 80GGB, 80IAB, 80IB & 80JJA subject to provisions & conditions specified in relevant sections.

Benefits to the Resident Shareholders of the Company

• Dividend Income As per section 10(34) of the act, dividend declared, distributed or paid by the company is exempt in hands of shareholders of the company.

DIAMANT


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• Business Income from Trading in Securities If business income of an assessee includes income from trading in securities, the securities transaction tax paid on such transaction is allowed as a deduction from the income earned on such transaction as per the provisions of section 36(1)(xv) of the Income tax Act, 1961.

• Long term Capital Gain a) Under Section 10(38) of the Act, long term capital gain arising to the shareholder from transfer

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

b) Subject to the long term capital gains, other than those mentioned in (a) above, as per the provisions of Section 112(1) (a) and (b) read with proviso to Section 112(1) of the Act, long-term capital gains on transfer of the shares of the company by an Individual, Hindu Undivided Family and Domestic Companies, computed without indexation of cost of acquisition, would be taxed at the concessional rate of 10% (plus applicable Surcharge and Education Cess) in accordance with the provisions of section 112 of the Act and @ 20% in case the same is computed subject to indexation benefit. In case of individuals and HUF’s, where the total taxable income as reduced by long-term capital gain is below the basic exemption limit, the long-term capital gain will be reduced to the extent of the shortfall and only the balance long-term capital gain will be subjected to such tax in accordance with the provisio to sub-Section (1) of Section 112 of the Act.

c) Subject to the long term capital gains, other than those mentioned in (a) above, in accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, long-term capital gains tax arising on transfer of the shares of the company shall be exempt from capital gains tax to the extent the gains are invested within six months from the date of transfer in the purchase of long-term specified assets.

d) Subject to the long term capital gains, other than those mentioned in (a) above, in accordance with, and subject to the conditions and to the extent specified in Section 54ED of the Act, long-term capital gains tax arising on transfer of the shares of the company shall be exempt from capital gains tax to the extent the gains are invested within six months from the date of transfer in acquiring equity shares forming part of an eligible issue of capital. In addition the shares should be held for at least one year.

e) Subject to the long term capital gains, other than those mentioned in (a) above, in accordance with, and subject to the conditions and to the extent specified in Section 54F of the Act, long-term capital gains tax arising on transfer of the shares of the company held by an individual or Hindu Undivided Family shall be exempt from capital gains tax in proportion to the net sales consideration utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a new residential house, or for construction of a residential house within three years and the individual or HUF does not own any other residential house.

• Short Term Capital Gain Under Section 111A of the Act, short term capital gains arising from transfer of short term capital assets, being shares of the company held for a period of less than twelve months, in a transaction entered into on a recognised stock exchange in India and such transaction being chargeable to Securities Transaction Tax, shall be chargeable to tax @ 15% plus applicable surcharge and education cess. In case of individuals and HUF’s, where the total taxable income as reduced by short-term capital gain is below the basic exemption limit, the short-term capital gain will be reduced to the extent of the shortfall and only the balance short-term capital gain will be subjected to such tax in accordance with the provisio to sub-Section (1) of Section 111A of the Act.

• Income of Minor If shareholder is minor than income derived from the company by minor is taxable in the hands of parent and it is exempt from tax to the extent of Rs. 1500 per minor child per year.

DIAMANT


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Benefits to the Non Resident Shareholders of the Company

1. Dividend Income As per section 10(34) dividend (as defined u/s 115-0 of the Act), declared, distributed or paid by the company is exempt in hands of shareholders of the company.

2. Business Income from Trading in Securities If business income of a non resident assessee includes income from trading in securities, the securities transaction tax paid on such transaction is allowed as a deduction from the income earned on such transaction as per the provisions of section 36(1)(xv) of the Income tax Act, 1961.

3. Long Term Capital Gains As per the provisions of section 10 (38) of the IT Act long term capital gains arising from the sale of the shares of the Company held for a period of twelve months or more will be exempt from tax if the transaction is entered into in a recognised stock exchange in India and such transaction is chargeable to Securities Transaction Tax.

In accordance with, and subject to the conditions and to the extent specified in Section 54EC of the Act, long-term capital gains tax arising on transfer of the shares of the Company shall be exempt from tax to the extent the gains are invested within six months from the date of transfer in the purchase of long-term specified assets and are held for a period of 3 years

In accordance with, and subject to the conditions and to the extent specified in section 54ED of the Act, long-term capital gains tax arising on transfer of the shares of the Company shall be exempt from capital gains tax to the extent the gains are invested within six months from the date of transfer in acquiring equity shares forming part of an eligible issue of capital. In addition the shares should be held for at least one year.

In accordance with, and subject to the conditions and to the extent specified in Section 54F of the Act, long-term capital gains tax arising on transfer of the shares of the Company held by an individual shall be exempt from capital gains tax in proportion to the net sales consideration utilised, within a period of one year before or two years after the date of transfer, in the purchase of a new residential house, or for construction of a residential house within three years and the Individual or HUF does not own any other residential house.

As per the provisions of section 112 of the IT Act, the long term capital gains from the transfer of the shares of the Company held for a period of twelve months or more, otherwise than as mentioned above, shall be charged to tax: i. @ 20% plus applicable surcharge and education cess, if the gains are computed after

considering the benefit of indexation; ii. @10% plus applicable surcharge and education cess, if the gains are computed without

considering the benefit of indexation.

4. Short Term Capital Gains As per the provision of Section 111A, short term capital gains arising from the sale of Company’s shares held for a period of less than twelve months in a transaction entered into in a recognised stock exchange in India and such transaction is chargeable to Securities Transaction Tax, will be chargeable to tax @ 15% plus applicable surcharge and education cess.

5. Non Resident Indian members of the Company can elect to be governed by special provisions as enunciated in section 115C to 115I of the Income tax act, according to which exemption from capital gains tax is available subject to those complying with conditions stated in those sections.

i) Under Section 115E of the Act, any income from investment acquired out of convertible foreign exchange will be taxable at 20% (plus applicable Surcharge and Education Cess) while income from long-term capital gains on transfer of shares of the Company acquired out of convertible foreign exchange shall be taxed at the rate of 10% (plus applicable Surcharge and Education Cess).

ii) Under Section 115F of the Act, and subject to the conditions and to the extent specified therein, long-term capital gain arising to a Non-Resident Indian from transfer of shares of the

DIAMANT


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Company acquired out of convertible foreign exchange shall be exempt from capital gains tax to the extent the net consideration is invested within six months of the date transfer of the asset in any specified asset or in any saving certificates referred to in clause (4B) of Section 10 of the Act and the new asset is held for a period of at least three years.

iii) Under Section 115G of the Act, it is not necessary for a Non-Resident Indian to file a return of income under Sector 139(1) of the Act, if his total income consists only of investment income and/or long term capital gains earned on transfer of such investment acquired out of convertible foreign exchange, and the tax has been deducted at source from such income under the provisions of Chapter XVII-B of the Act.

iv) Under Section 115H of the Act, where a Non-Resident Indian becomes assessable as resident in India in any subsequent year he may furnish to the Assessing Officer a declaration in writing along with the return of income for the assessment year for which he is so assessable to the effect that the provisions of Chapter XII-A of the Act shall continue to apply to him in relation to the investment income (other than on shares in the Company) derived from any foreign exchange asset as defined therein. On doing so, the provisions of Chapter XII- A of the Act shall continue to apply to him in relation to such income for that assessment year and for every subsequent assessment year until the transfer or conversion into money of such assets.

v) Under Section 115I of the Act, where a Non-Resident Indian opts not to be governed by the provisions of Chapter XII-A of the Act for any assessment year, his total income for that assessment year (including taxable income arising from investment in the Company) will be computed according to the other provisions of the Act, and he will therefore be eligible to get concessions applicable to a resident individual and will be liable to tax accordingly.

6. In accordance with, and subject to provisions of Section 48 of the Act, capital gains arising out of transfer of capital assets being shares of the Company shall be computed by converting the cost of acquisition, expenditure in connection with such transfer and full value of the consideration received or accruing as a result of the transfer of the capital assets into the same foreign currency as was initially utilised in the purchase of shares and the capital gains computed in such foreign currency shall be reconverted into Indian currency, such that the aforesaid manner of computation of capital gains shall be applicable in respect of capital gains accruing/arising from every reinvestment thereafter and sale of shares of the Company. Cost indexation benefits will not be available in such a case.

For the Non Residents provision of Double Taxation Avoidance Agreement override the provision of the Act, to the extent these agreements are more favorable to the assessee.

Benefits to the Foreign Institutional Investors (FII)

1. Long term Capital Gain As per section 10(38) long term capital gain is exempt if it is arising from transfer of equity shares of the company subject to covering of transaction under Securities transaction Tax. Besides this lower rate of tax @10% can be applicable if benefit of indexation is not obtained.

Under section 54EC of the Act, the shareholder would be eligible to exemption from capital gain arising on transfer of shares, if such gain is invested in any long-term specified asset, which is prescribed in the section and subject to further compliance of provision of the section.

In accordance with, and subject to the conditions and to the extent specified in section 54ED of the Act, long-term capital gains tax arising on transfer of the shares of the Company shall be exempt from capital gains tax to the extent the gains are invested within six months from the date of transfer in acquiring equity shares forming part of an eligible issue of capital. In addition the shares should be held for at least one year.

2. Short Term Capital gain

As per the provision of Section 111A, short term capital gains arising from the sale of Company’s shares held for a period of less than twelve months in a transaction entered into in a recognised

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stock exchange in India and such transaction is chargeable to Securities Transaction Tax, will be chargeable to tax @ 15% plus applicable surcharge and education cess.

3. Special Provision Under Section 115AD (Chapter XII-A), income from securities (other than income on units referred to in section 115AB and dividend referred to in section 115-O) shall be taxed @ 20%. However no deductions under section 28 to 44C or 57 or Chapter VI-A shall be allowed. In respect of capital gain arising on transfer of capital assets, being shares and debentures in a company:

i) Short tem capital gains on transfer of shares/debentures other than those covered by section 111A as mentioned above in point no.2 would be taxable @ 30% (plus applicable Surcharge and Education Cess) and,

ii) Long tem capital gains on transfer of shares/debentures would be taxable @ 10% (plus applicable Surcharge and Education Cess).

Benefits to the Mutual Funds

In case a shareholder being a Mutual fund, as per the provision of section 10(23D) of the Act, any income of Mutual Funds registered under the SEBI Act, 1992 or regulation made there under, Mutual Funds set up by public sector banks or public financial institutions and mutual funds authorized by the RBI would be exempt from Income Tax, subject to the conditions as the Central Government may by notification in the official Gazette specify in this behalf.

Benefits to the Venture Capital companies/funds

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

Venture Capital Company which has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992 and notified as such in the Official Gazette; and Venture Capital Fund, operating under a registered trust deed or a venture capital scheme made by Unit Trust of India, which has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992 and notified as such in the Official Gazette set up for raising funds for investment in a Venture Capital Undertaking is exempt from income tax.

Benefits regarding Wealth Tax Act, 1957 As per wealth Tax Act 1957 no wealth tax shall be levied on value of shares of the company.

Notes 1. All above benefits are as per the current tax laws amended by the Finance Act, 2008.

2. All above tax rates are exclusive of applicable surcharge & education cess.

3. All above benefits are available to first name holder in case of joint holders. 4. In view of the individual nature of tax consequences, each investor is required to consult its own

tax advisor. The tax implication 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 the benefits which an investor can avail.

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SECTION IV – ABOUT THE COMPANY INDUSTRY OVERVIEW

The Company was into Investment and Finance business and diversified its activities into Infrastructure and real estate segment. Presently Company has entered into and completed various agreements/contracts in development of Roads and real estate. Construction activity is an integral part of a country’s infrastructure and industrial development. It includes hospitals, schools, townships, offices, houses and other buildings; urban infrastructure (including water supply, sewerage, drainage); highways, roads, ports, railways, airports; power systems; irrigation and agriculture systems; telecommunications etc. Covering as it does such a wide spectrum, construction becomes the basic input for socio-economic development. Besides, the construction industry generates substantial employment and provides a growth impetus to other sectors through backward and forward linkages. It is, essential therefore, that, this vital activity is nurtured for the healthy growth of the economy. National Highways And Roads The Government of India’s focus and sustained increased budgetary allocation and increased funding by international and multilateral development finance institutions for infrastructure development in India has resulted in or is expected to result in several large infrastructure projects. The Government has developed various alternate sources of raising funding for infrastructure projects, including the levy of cess on petrol and diesel, which is being used to fund the road projects such as the Golden Quadrilateral and the North –South – East – West corridors. With a total length of approximately 3.3 million kilometers, India has the second largest road network in the world. Roads have played a vital role in transportation and also enhancing trade. The government has taken initiatives to improve and strengthen the network of National Highways, State Highways and roads in major districts and rural areas. The Indian road network is divided into :

S. No Particulars Length ( in Km)1 Expressways 2002 National Highways 665903 State Highways 1318994 Major District Roads 4677635 Rural and Other Roads 2650000 TOTAL 3316452

About 65% of freight and 80% passenger traffic is carried by roads. The National Highways constitute only about 2% of the road network but cater to about 40% of the road transport demand in the country. (Source:www.nhai.org) The government has embarked upon an integrated National Highways Development Programme (NHDP). A major part of NHDP is the Golden Quadrilateral project. It entails upgrading and widening of 6,000 km of highways connecting the four major metropolitan cities of Delhi, Mumbai, Chennai and Kolkatta. The government is also undertaking the North-South and East-West Corridor projects. These projects comprise about 7,000 kms of highways connecting Srinagar (North) with Kanyakumari (South) and Silchar (East) with Porbandar (West). (Source : http//meaindia.nic.in – Website of Minsitry of External Affairs)

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The Tenth Plan has stressed the need for improving mobility and accessibility. While the NHDP is expected to improve mobility, the Pradhan Mantri Gram Sadak Yojana (PMGSY) is aimed at providing accessibility, especially to villages. The Pradhan Mantri Gram Sadak Yojana (PMGSY), was launched by the Govt. of India to provide connectivity to unconnected rural Habitations as part of a poverty reduction strategy. Government of India is endeavoring to set high and uniform technical and management standards and facilitating policy development and planning at State level in order to ensure sustainable management of the rural roads network. In the first phase, habitations (hamlets) of population of 1000 (500 in the case of Hill States, tribal and Desert areas) and above will be covered. In the second phase habitations of population of 500(250 in the case of Hill States, tribal and Desert areas) will be covered. About 368,000 km of new road construction and 370,000 km of upgradation/renewal is expected to be done at a cost of about $26 billion. Since inception till 12th March 2009 total projects amounting to Rs. 80486.69 Crore for 327015.269 kms of roads/pavements covering 140657 habitations under this scheme were sanctioned. (http://pmgsyonline.nic.in) Keeping in view the need for nationwide connectivity and mobility, the Committee on Infrastructure chaired by the Prime Minister proposed an expanded programme for highway development on the 13 January 2005. The proposed programme for the next seven years (2005-12) includes completion of:

• GQ and NSEW corridors (NHDP I &II)

The NHDP Phase I and Phase II comprise of the Golden Quadrilateral (GQ) linking the four metropolitan cities in India i.e. Delhi-Mumbai-Chennai-Kolkata, the North-South corridor connecting Srinagar to Kanyakumari including the Kochi-Salem spur and the East-West Corridor connecting Silchar to Porbandar besides port connectivity and some other projects on National Highways. Four-laning of the Golden Quadrilateral is nearing completion. The contracts for projects forming part of NS-EW corridors are being awarded rapidly for completion by December 2009.

• Four-laning of 10,000 kms (NHDP-III)

The Union Cabinet has approved the four-laning of 10,000 km of high density national highways, through the Build, Operation & Transfer (BOT) mode. The programme consists of stretches of National Highways carrying high volume of traffic, connecting state capitals with the NHDP Phases I and II network and providing connectivity to places of economic, commercial and tourist importance.

• Two laning of 20,000 km (NHDP-IV) With a view to providing balanced and equitable distribution of the improved/widened highways network throughout the country, NHDP-IV envisages upgradation of 20,000 kms of such highways into two-lane highways, at an indicative cost of Rs.25,000 crore. This will ensure that their capacity, speed and safety match minimum benchmarks for national highways.

• Six-laning of 6,500 kms (NHDP-V) Under NHDP-V, the Committee on Infrastructure has approved the six-laning of the four-lane highways comprising the Golden Quadrilateral and certain other high density stretches, through PPPs on BOT basis. These corridors have been four-laned under the first phase of NHDP, and the programme for their six-laning will commence in 2006, to be completed by 2012. Of the 6,500 kms proposed under NHDP-V, about 5,700 kms shall be taken up in the GQ and the balance 800 kms would be selected on the basis of approved eligibility criteria.

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The Golden Quadrilateral and NSEW projects

(Source: http://infrastructure.gov.in)

• Development of 1000 km of expressways (NHDP-VI)

With the growing importance of certain urban centres of India, particularly those located within a few hundred kilometers of each other, expressways would be both viable and beneficial. The Committee on Infrastructure has approved 1000 km of expressways to be developed on a BOT basis, at an indicative cost of Rs.15,000 crore. These expressways would be constructed on new alignments.

• Other Highway Projects (NHDP-VII)

The development of ring roads, byepasses, grade separators and service roads is considered necessary for full utilization of highway capacity as well as for enhanced safety and efficiency. For this, a programme for development of such features at an indicative cost of Rs.15,000 crore, has been mandated.

• Accelerated Road Development Programme for the North East Region

The Accelerated North-East Road Development Project is under consideration, which will mainly provide connectivity to all the State capitals and district headquarters in the north-east. The proposal would include upgrading other stretches on NH and state highways considered critical for economic development of the north-east region.

(Source: http://infrastructure.gov.in)

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Targets are to be achieved through restructuring and strengthening of National Highway Authority of India (NHAI), the main implementing agency for the expanded programme; developing Modal Concession Agreements for BOT projects and for operation, maintenance and tolling of completed NHDP stretches; addressing bottlenecks in ongoing projects arising from State level constraints, delays in environmental clearance, problems in land acquisition; focus on traffic management and safety related issues etc. The four-laning of 10,000 km of National Highways by March 2010 under NHDP III would be done entirely through the BOT route. A Special Accelerated Road Development Programme for the North Eastern Region (also called NHDP-NE) is envisaged for improving connectivity in the north-eastern states. This would include a road length of 7639 km comprising 3251 km of NH and 4388 km of other roads. The network is expected to act as catalyst for the development of the region. (Source : http//planningcommission.nic.in) Indian Real Estate Sector The Indian real estate sector plays a significant role in the country’s economy. The real estate sector is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). Five per cent of the country's GDP is contributed to by the housing sector. The real estate sector is also responsible for the development of over 250 ancillary industries such as cement, steel, paints etc. A study by rating agency ICRA shows that the construction industry ranks 3rd among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times. If the economy grows at the rate of 10 per cent, the housing sector has the capacity to grow at 14 per cent and generate 3.2 million new jobs over a decade. The real estate sector in India has observed a quite revolution over the past decade thanks to India’s booming economy which has led to an increased demand for both commercial and residential space. According to a study by a leading industry chamber, the Indian real estate sector is expected to grow at 30 per cent over the next decade, attracting foreign investments worth US$ 30 billion. The double-digit growth is mainly attributed to India’s booming off-shore business, including high-end technology consulting, call centres and software businesses. The IT and ITES sector alone is estimated to require 150 million sq ft of office space across urban India by 2010. Organised retail is also responsible for the growth in commercial office space requirement. The organised retail industry is likely to require an additional 220 million sq ft by 2010. Moreover, growth is not restricted to a few towns and cities but is pan-India, covering nearly all tier-I and tier-II cities. Almost 80 per cent of real estate developed in India is residential space, the rest comprising of offices, shopping malls, hotels and hospitals. According to the Tenth Five-Year-Plan, there is a shortage of 22.4 million dwelling units. Apart from the huge demand, India also scores on the construction front. A McKinsey report reveals that the average profit from construction in India is 18 per cent, which is double the profitability for a construction project undertaken in the US. Government Initiatives

The government has introduced many progressive reform measures to unlock the potential of the sector and also meet increasing demand levels. The government's recently announced stimulus package, coupled with the Reserve Bank of India's (RBI) move allowing banks to provide special treatment to the real estate sector, is likely to impact the Indian real estate sector in a positive way. RBI has decided to extend exceptional concessional treatment to the commercial real estate exposure and restructured it to June 30, 2009.

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• 100 per cent FDI allowed in realty projects through the automatic route.

• In case of integrated townships, the minimum area to be developed has been brought down to 25 acres from 100 acres.

• Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) repealed by increasingly larger number of states.

• Enactment of Special Economic Zones Act.

• Minimum capital investment for wholly-owned subsidiaries and joint ventures stands at US$ 10 million and US$ 5 million, respectively.

• Full repatriation of original investment after three years.

• 51 per cent FDI allowed in single-brand retail outlets and 100 per cent in cash-and-carry through the automatic route.

Besides the above measures, the government has recently announced an economic stimulus package keeping in mind the impact of the global slowdown on the Indian real estate sector. Public sector banks will shortly announce a package for home loan borrowers in two categories — up to US$ 10,626.74 and between US$ 10,626.74– US$ 42,507.. This is expected to increase borrowing for homes and in turn give a boost to the realty sector. Moreover, excise duty cuts on cement and steel will bring down construction costs. (Source: http:/www.ibef.org) BUSINESS OVERVIEW Diamant Investment and Finance Limited was originally incorporated on July 29, 1980 as Diamant Carbon & Graphite Products Limited under the Companies Act. Subsequently the company’s name was changed to Diamant Investment and Finance Limited on February 01, 2005. The company under the then management made an initial public offer in September 1982 for issue of 3,50,000 Equity Shares of Rs. 10/- each for cash at par to the Public, through prospectus dated 15th July 1982 and the shares were listed on the Bombay Stock Exchange and Ahmedabad Stock Exchange. The Company’s main object, initially was to manufacture and deal in carbon and graphite products. The company under the then management made an initial public offer in September 1982 for issue of 3,50,000 Equity Shares of Rs. 10/- each for cash at par to the Public, through prospectus dated 15th July 1982 and the shares were listed on the Bombay Stock Exchange and Ahmedabad Stock Exchange. Subsequently, the company sold their manufacturing unit to Vesuvius India Ltd, Kolkata in the year 2003 and amended its main object clause and ventured into investment and finance activity by trading in shares and securities. Diamant was then taken over by Vision Sales Pvt Ltd and Saboo Capital & Securities Pvt Ltd in the year 2005. The present Board of Directors of the Company felt that the future of India lies with in Infrastructure Development and considering the growth of the Company and taking into account the available opportunities in the Infrastructure sector, the Board of Directors of the company recommended that the company undertake Infrastructure business with change in the Objects Clause of the Company. The Objects Clause of the Company was amended to permit the company to undertake this activity in the year 2007. Diamant has procured some contracts from fairly large players in Infrastructure business and is presently into infrastructure and real estate. The company has also sold off its entire investments which they have made earlier and undertaken that no further purchase of shares or investment will be done by the company. Diamant is presently engaged mainly in road construction activities and has procured sub-contracts from fairly large players in Infrastructure sector.

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The company has offloaded its earlier investments which they had acquired and no further purchase of shares or investment activity will be carried on by the company. Projects under execution 1. Work Order from ATR Infraprojects Pvt Ltd The Company received work order dated 21/01/2009 for construction of WMM, DBM and Kerb laying & transportation from km 360.000 to km 395.000 at Rajnandgaon, Chattisgarh Section, NH 06. The scope of work includes:

• DBM Bituminous work including loading, Transportation and laying • WMM work including plant operation, loading, transportation, laying & compacting • Kerb laying, transportation work

The contract to be completed by 30/11/2009. The estimated Bill of Quantity value is Rs. 1889.25 lacs. The billing done till 31/05/2009 is Rs. 459.00 lacs. 2. Work Order from Ashoka Buildcon Ltd The Company received work order no.: ABL/DEO/EQA/27 dated: 16/07/2008 for construction of embankment, subgrade, GSB from km 362.00 to 405.00 of NH-6 in the State of Chhattisgarh bordering Maharashtra State. The scope of work includes:

• Clearing and Grubbing road land • Earthwork in excavation, necessary in construction • Construction of embankment roadway • Construction of sub grade • Providing, Laying and Compacting Granular sub-base • Loosening and recompacting sub grade in excavation • Loading of Aggregate • Aggregate carting

The duration of contract is 24 months from the date of work order. The estimated Bill of Quantity value is Rs. 1156.33 lacs. The billing done till 31/05/2009 is Rs. 487 lacs. 3. Work Order from Modern Road Makers Pvt. Ltd. The Company got work order no.: MRM/SDBOT/WO/053/2008 dated: 14/01/2009 for construction of six laning of NH-8 for the stretch from km 303 to km 323 in the State of Gujarat. The scope of work includes:

• Site Clearance • Earthwork, Erosion control, Drainage, Kerbs and Footpath • Sub-Bases, Bases (Non-Bituminous) and Shoulders

The completion period for the project is 18 months from the commencement date i.e. 01/02/2009. The estimated Bill of Quantity value is Rs. 1337.81 lacs. The billing done till 30/04/2009 is Rs. 0.15 lacs. INFRASTRUCTURE FACILITIES AND UTILITIES The employees of the company are working mostly onsite during the execution of the various projects. The company ensures that there is continuous availability of power and adequate water to its manpower.

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Manpower The present manpower strength of the Company is as follows:

Competition The Company expects competition from existing and new players in the field. The competition is from both domestic and international players in the Industry. Major Clients of Diamant are as follows: We have serviced esteemed clientele like Sadbhav Engineering Limited, Ashoka Buildcon Ltd., Modern Road Makers Pvt Ltd (Subsidiary of IRB Infrastructure Developers Ltd.), ATR Projects Pvt. Ltd., etc. and have been successful in sourcing repeat orders from them. Property The Company does not propose to purchase any property in the form of land, building or other structures out of the proceeds of the present rights issue. The company however uses the following property: S. No

Description of Property

Description of Document

Consideration Details as registration and Stamp Duty

Validity

1 Commercial Premises at Beaumoon Chamber, 27/33, N.M. Road, Fort, Mumbai

Leave and License agreement

Rs 10,000/ per Month

The said deed is stamped and registered on 15th June 2007.

Till cancelled mutually

2 Premises at Saboo Kunj, Walkar Road, Mahal, Nagpur

Rent Agreement

Rs 1,000/ per Month

Agreement date 01/09/2008

31/08/2009

3 Premises at Bilimora Road, Near Palak Hospital, kalapul, Samroli, Chikhli-396521, Gujarat

Rent Agreement

Rs 7,040/ per Month


30/06/2009

4 Premises above Annapurna Cloth Stores, Near Chichola Bus Stand, Chichola, Chattishgarh

Rent Agreement

Rs 2,000/ per Month


30/09/2009

Insurance

Policy Covered Insurance Company Name

Policy Number Name/ Nature of Policy

Policy Date Sum assured (Rs in Lacs)

From To

Reliance General Insurance

Receipt No. 06208-103129

Workmens Compensation

15/06/2009 16.20 15/06/2009 14/06/2010

S. No. Level No. of

Employees (Existing)

No. of Employees (Proposed)

1. Senior 3 22. Middle 5 103. Junior 12 254. Others (site staff) 120 270

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Details of Vehicle Insurance Policy Covered Sl.

No Insurance Company Name

Policy Number Name/ Nature of Policy

Policy Date

Sum assured (Rs in Lakhs)

From To

1 ICICI Lombard General Insurance Limited

3001/52699803/01/000

M & M Bolero SLX

18/09/2008 4.62 24/09/2008 23/09/2009


3008/52434451/01/000

Tata Motors Tipper model LPK 2516

01/09/2008 12.57 03/09/2008 02/09/2009


3008/52784713/01/000

JCB India Make Excavators Model JS 210

20/10/2008 37.04 30/10/2008 29/10/2009


3008/52416679/01/000

L & T Komatsu Make Excavators Model PC 200- 6

30/08/2008 37.06 31/08/2008 30/08/2009


3008/52481805/01/000

Ashok Leyland Tipper 2516/ 2 FBT

08/09/2008 12.04 10/09/2008 09/09/2009


3008/52481804/01/000


08/09/2008 12.04 10/09/2008 09/09/2009


3008/52481803/01/000


08/09/2008 12.04 10/09/2008 09/09/2009

8 Reliance General Insurance

1705782343002498

L & T case 1107 vibratory compactor

17/03/2009 18.86 18/03/2009 17/03/2010


3008/52729673/01/000


20/10/2008 12.04 24/10/2008 23/10/2009


3008/52729674/01/000


20/10/2008 12.04 24/10/2008 23/10/2009


3008/52729675/01/000


20/10/2008 12.04 24/10/2008 23/10/2009


3008/52729676/01/000


20/10/2008 12.04 24/10/2008 23/10/2009

13 ICICI Lombard General Insurance

3008/52424238/01/000

Tata Motors Tipper model

01/09/2008 12.57 02/09/2008 01/09/2009

DIAMANT


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Limited LPK 2516 14 ICICI Lombard

General Insurance Limited

3008/52424239/01/000


01/09/2008 12.57 02/09/2008 01/09/2009


3008/52424240/01/000


01/09/2008 12.57 02/09/2008 01/09/2009


3008/52424241/01/000


01/09/2008 12.57 02/09/2008 01/09/2009


3008/52424242/01/000


01/09/2008 12.57 02/09/2008 01/09/2009


3008/52424243/01/000


01/09/2008 12.57 02/09/2008 01/09/2009


3008/52434453/01/000


01/09/2008 12.57 03/09/2008 02/09/2009


3003/55541509/00/000

Tata Motors TATA SFC 407 31 EX

26/11/2008 5.35 26/11/2008 25/11/2009

21 Reliance General Insurance Limited

1705782343002471

L & T case 1107 vibratory compactor

13/02/2009 19.52 13/02/2009 12/02/2010


3003/55905025/00/000

Maxx Maxi Truck

13/01/2009 3.27 13/01/2009 12/01/2010


3008/55978831/00/000


22/01/2009 17.10 22/01/2009 21/01/2010


3008/55978829/00/000


22/01/2009 17.10 22/01/2009 21/01/2010


3008/55978833/00/000


22/01/2009 17.10 22/01/2009 21/01/2010


3008/55978830/00/000


22/01/2009 17.10 22/01/2009 21/01/2010


3008/55978832/00/000


22/01/2009 17.10 22/01/2009 21/01/2010


3005/55657136/00/000

Bajaj Platina 100 cc bike

12/12/2008 0.33 12/12/2008 11/12/2009


3005/55657110/00/000

Bajaj Platina 100 cc bike

12/12/2008 0.33 12/12/2008 11/12/2009

30 ICICI Lombard 3005/55905168/0 Bajaj Platina 13/01/2009 0.37 13/01/2009 12/01/2010

DIAMANT


- 54 -

General Insurance Limited

0/000 100 cc bike


1705782334004951

Tata 207 DI 04/03/2009 4.57 04/03/2009 03/03/2009

32 National Insurance Company Limited

150109/46/08/96000/920095

APOLLO Kerb Laying Machine

28/02/2009 8.00 02/03/2009 01/03/2010


150109/46/08/96000/920096

APOLLO AP550 Pavers Finisher

28/02/2009 37.53 02/03/2009 01/03/2010


150109/46/08/96000/920094

L&T Komatsu GD511A Motor Grader

28/02/2009 63.00 02/03/2009 01/03/2010


150109/46/08/96000/920185

Hindustan 2021 Z loader

21/03/2009 28.70 21/03/2009 20/03/2010

36 Royal Sundaram Alliance Ins. Co. Ltd

VC00091061000100


19/03/2009 15.58 19/03/2009 18/03/2010


VC00091065000100


19/03/2009 15.58 19/03/2009 18/03/2010


VC00091066000100


19/03/2009 15.58 19/03/2009 18/03/2010


VC00091070000100


19/03/2009 15.58 19/03/2009 18/03/2010


VC00091071000100


19/03/2009 15.58 19/03/2009 18/03/2010

41 Shriram General Insurance

215034/31/09/003442

Swaraj Mazda Sartaj

30/03/2009 5.92 30/03/2009 29/03/2010


1705792311002621

Mahindra Bolero XLS

07/05/2009 5.42 07/05/2009 06/05/2010

Land Bank S. No

Description of Property

Description of Document

Area Consideration Details as registration and Stamp Duty

1 Property at New Mangalwar Peth, Pune

Deed of Conveyance dated September 14, 2007

53 sq. mtrs

Rs 1,10,00,000 Rs. 30,340 Registration Fee Rs. 5,50,000 Stamp Fee

2 Property at New Mangalwar Peth, Pune

Agreement for Sale dated September 14, 2007

3325.25 sq. mtrs

Rs 7,00,00,000 Rs. 30,460 Registration Fee Rs. 35,00,000 Stamp Fee

DIAMANT


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Financial Indebtedness The following table sets out the details of financial indebtedness of our Company as on 31/03/2009 S. No

Name of Lender Date of Agreement

No. of Installment

Rate of Interest

Securities Offered

Loan Amount

Outstanding Amt incl. interest

1 ICICI Bank 18/10/2007 36 9.65 Hypothecation of Car

4,68,000 2,65,579

2 IndusInd Bank 01/10/2007 36 6.00 Hypothecation of 4 Tippers

49,92,000 28,12,488

3 GE Capital Ltd 10/09/2007 36 6.00 Hypothecation of 3 Tippers

38,37,000 20,20,316

4 GE Capital Ltd 10/09/2007 36 6.00 Hypothecation of 2 Tippers

25,13,000 13,23,177

5 GE Capital Ltd 31/10/2007 36 4.85 Hypothecation of Excavator

37,60,000 21,66,328

6 L&T Finance Ltd 27/08/2007 36 6.00 Hypothecation of 6 Tippers

80,00,000 42,15,898

7 L&T Finance Ltd 03/11/2007 36 4.88 Hypothecation of Excavator

39,38,000 20,45,565

8 L&T Finance Ltd 19/03/2008 36 5.50 Hypothecation of Soil Compactor

17,85,000 12,33,141

9 ING Vysya Bank* 04/04/2009 36 13.45 Hypothecation of 5 Tippers

73,25,000 73,36,545

10 L&T Finance Ltd 20/01/2009 36 8.10 Hypothecation of 5 Tippers

77,00,000 73,45,016

11 L&T Finance Ltd 19/11/2008 36 8.85 Hypothecation of Diesel Tanker

4,55,000 4,13,273

12 L&T Finance Ltd 11/02/2009 36 6.90 Hypothecation of Soil Compactor

18,00,000 17,57,437

13 Magma Finance Corp Ltd

31/03/2009 36 15.49 Hypothecation of Diesel Tanker

4,99,000 4,99,000

14 SREI Equipment Finance Pvt Ltd

22/02/2009 36 14.50 Hypothecation of Paver & Kerb laying Machine

38,56,325 38,56,325


15/03/2009 36 13.69 Hypothecation of Loader MAchine

25,83,472 25,83,472


22/02/2009 36 14.30 Hypothecation of Motor Grader Machine

53,25,991 53,25,991

17 Tata Motors Finance Ltd

02/03/2009 36 10.35 Hypothecation of Pick Up Van

4,30,000 4,30,000

* The original agreement was entered with the bank on 18/03/2009 for 5 tippers but the same was negotiated with a different equipment supplier on 04/04/2009. The interest for the said period of Rs. 37, 790 was capitalized..

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OUR HISTORY AND CORPORATE STRUCTURE The company Diamant Investment and Finance Ltd was originally incorporated as Diamant Carbon & Graphite Products Limited on 29th July, 1980 in the state of Gujarat It has obtained the Certificate of Commencement of Business on 2nd March, 1981. Subsequently, the company has changed its name to Diamant Investment and Finance Limited on 1st February, 2005. The Registered Office of our Company is situated at 9, Beau Moon Chambers, 27/33, Nagindas Master Road, Fort, Mumbai-400 023 The company made an Initial Public Offering in September 1982 for issue of 3,50,000 Equity Shares of Rs. 10/- each for cash at par to the Public, through prospectus dated 15th July 1982 to part finance the cost of setting up a plant for manufacturing of 1000 Tons per annum of Silicon Carbide/Graphite Crucibles, its accessories and other carbon and graphite products at Mehsana (Gujarat), an industrially backward area. In the year 2003, due to losses incurred during the two previous financial years 2000-2001 & 2001-2002, the company had no other alternative but either to sell off the company as a going concern or to sell manufacturing facility by way of slump sale with a view to stop further erosion of capital in the beneficial interest of the shareholders. Accordingly the company disposed off the manufacturing facility, viz. crucible manufacturing business at Gujarat to M/s. Vesuvius India Limited, Kolkata for a consideration of Rs. 3.89 crores excluding the liabilities such as secured loans and unsecured loans, gratuity, compensation/ retrenchment of employee/ workers and other miscellaneous liabilities and a sum of Rs. 1.23 crores towards business support service fees. Thus, the company was able to liquidate total secured and unsecured loans and other liabilities and had surplus balance. As there was no business operation at Gujarat, the Company decided to shift the Registered Office from the State of Gujarat to the State of Maharashtra and started the investment activities. On September 5, 2005, Vision Sales Private Limited and Saboo Capital and Securities Private Limited (Acquirers) had entered into a Share Purchase Agreement to acquire in aggregate 6,15,723 fully paid-up Equity Shares of Rs.10/- each representing 51.31% of Paid-up Equity Share Capital and 51.35% of Voting Capital of DIFL at a price of Rs. 23.50/- (Rupees Twenty Three and Fifty Paise only) per share payable in cash from the then existing shareholders of the Promoters Group. The details of the acquisition is as under:

Name of the Seller No. of Shares Negotiated Price

% of Paid-up Equity Share Capital

% of voting capital

Sanat M Shah 11,114* 0.93 0.93 Sanat M Shah 1,10,928** 9.24 9.25 Monica U Dalal 93,720** 7.81 7.82 Sanjay S Shah 78,915* 6.58 6.58 Pradeep S Shah 78,915* 6.58 6.58 Sudha S Shah 90,800* 7.56 7.57 Ameeta S Shah 40,403* 3.37 3.37 Suvarna J Dalal 1,10,928*

Rs. 23.50

9.24 9.25 TOTAL 6,15,723 51.31 51.35 * Acquired by Vision Sales Private Limited totaling to 4,11,075 Equity Shares. ** Acquired by Saboo Capital and Securities Private Limited totaling to 2,04,648 Equity Shares. The acquirers acquired additional 1,25,050 equity shares through open offer made. The acquirers complied with all the requirements of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Further, the Company has complied with all the requirements under the SEBI (Substantial Accquisition of Shares and Takeover) Regulation, 1997.

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In the year 2007, Vision Sales Pvt. Ltd. sold off its entire stake in the company to various individuals and entities and informed the stock exchange that they are no more the co-promoter of the company and have no representation on the Board of the company, vide letter dated November 15, 2008. The list of the various individuals and entities to whom the shares were sold by Vision Sales Pvt. Ltd. are as follows:

S. No.

Name of the purchaser No. of shares

1 Platinum Finvest Pvt. Ltd. 85,0002 Pragiri Finvest Pvt. Ltd. 85,0003 Jyoti V. Malu 6,0004 Prachi V. Malu 6,0005 Vasudeo B. Malu 6,0006 Ravindra Kumar 12,0007 Vijay Kumar Agrawal 12,0008 Sumeet Kumar Agrawal 12,0009 Anil Mansukhlal Kothari 12,00010 Rameshchandra Jain 12,00011 ASR Krishna Prasad 6,00012 A. Harileela 6,00013 Vardhaman Barmecha 6,00014 Meena Barmecha 6,00015 Abhinandan Jain 6,00016 Dimple Jain 6,00017 Dr. Ashok Sarda 6,00018 Vinod G. Jain HUF 6,00019 M. gowtham Chand HUF 6,00020 Dr. Trishila Dhemre 10,00021 Manakchand Jain Huf 42,00022 Naresh Jain 45,07523 Smita management Pvt. Ltd. 12,000 TOTAL 4,11,075

The Board of Directors of the Company taking into account the available opportunities in the Infrastructure Business and the meltdown in global stock markets including India, felt that the opportunity in the infrastructure business in India is tremendous and have recommended that the company should venture into Infrastructure business accordingly the Company has changed its main object clause and commenced its operation in infrastructure by undertaking projects and also buying necessary land for developing residential cum commercial complex. Key Events

Year Major Events 1980 The Company was Incorporated as Diamant Carbon & Graphite Products Limited. 1982 The Company came out with an IPO of Rs.35,00,000 Lakhs as to part finance project cost. 2003 The Company sold the Manufacturing unit at Gujarat to M/s Vesuvius India Limited, Kolkata. 2005 The Company changed its name to Diamant Investment and Finance Limited 2005 The Management of the Company has been changed from Mr. Sanat M. Shah & Associates to

Vision Sales Private Limited and Saboo Capital and Securities Private Limited. 2007 The Company entered into Infrastructure and real estate segment. 2007 The Company formed 3 Subsidiaries namely, Diamant Securities Private Limited, Diamant Realty

Private Limited, Diamant Infrastructure Developers Private Limited. 2007 Vision Sales Private Limited sold off their entire holding and were no more promoters of the

Company.

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Changes in Registered Office of our Company

Previous address New Address Date of Change 212/B, GIDC Estate, Mehsana – 384 002 (Gujarat)

178/4, GIDC Estate, Mehsana – 384 002 (Gujarat)

11/03/2003

178/4, GIDC Estate, Mehsana – 384 002 (Gujarat)

Hari Chambers, 64, Shahid Bhagatsingh Road, Fort, Mumbai – 400 023 (Maharashtra)

30/10/2003

Hari Chambers, 64, Shahid Bhagatsingh Road, Fort, Mumbai – 400 023 (Maharashtra)

Sidhwa House, 1st Floor, NA Sawant Marg, Colaba, Mumbai – 400 005 (Maharashtra)

06/09/2004

“Sidhwa House, 1st Floor, NA Sawant Marg, Colaba, Mumbai – 400 005 (Maharashtra)

9, Beau Moon Chambers, 27/33, Nagindas Master Road, Fort, Mumbai-400 023 (Maharashtra)

21/03/2006

Main Objects of the Company The main Object Clause of the Company as per the Memorandum of Association of the Company are stated as follows:

(1) To carry on any or all activities of an investment company and to buy, underwrite, acquire

interest and hold shares, stocks, debentures, debenture-stock, bonds, obligations and securities issued, sold, transferred or guaranteed by any corporation, company, undertaking authority or any Government in India or elsewhere, or any State Dominion or public body, Municipal or local Authority, or any firm or person whether in India or elsewhere.

(2) To carry out all types of financing operations and performing all types of financial services

including factoring hire purchase, leasing, bill marketing bailing, making of loans both short, medium and long term.

(3) To provide financial services, advice and facilities of every description, including ( but without

limiting the generality of the foregoing words) all those capable of being provided by bankers, stockbroker, stock jobbers, investment and pension fund managers and advisors, promoters, and managers of unit trusts and other investment media, insurance brokers, underwriters, issuing houses and financiers;

(4) To carry on the business of infrastructure Development, Roads, Bridges, Airport, Port

development of all types and descriptions, Highway, Seaways developments, act as properties developers, Infrastructure activity, like road , to acquire land, plots for colonization, or otherwise, sell plots, contra buildings for sale and rent or both, on installment or house, land and estate agents, and to arrange or undertake the sale, purchase or advertise for sale, purchase, assist in selling or purchasing and find or introduce purchaser or vendor of and to manage land, building and other property whether belonging to the company or not and to let any portion on any premises for residential, trade or business purchase , or other private or public purposes , and to collect rents and income and to supply to tenants and occupants and other refreshment clubs, public halls, managers, lights, waiting rooms, trading room, meeting room, laboratories, laundry. Conveniences, electric convenience, garages, and other advantages and to carry on the business in India and abroad relating to set up of Business Malls, Multiplex, Exhibition ground, Exhibition halls, community halls, Residential houses of all types and kind, Boat houses, Club , Holiday Resorts, Old man Homes, Shopping Complex of

DIAMANT


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all types and kinds and to cut trees and wide the roads and other places to develop the infrastructure as and when require.

Changes in Memorandum of Association since incorporation Date of

Shareholders approval

Changes

February 2005 The name of the Company was changed from Diamant Carbon & Graphite Products Limited to Diamant Investment and Finance Limited

September 18, 1997

Increase in authorized share capital from Rs. 2 Crores divided into 20,00,000 equity shares of Rs. 10/- each to Rs. 5 Crores divided into 35,00,000 Equity shares of Rs. 10/- each and 15,00,000 15% Cummulative Preference Share of Rs 10/- each.

November 19, 2004

Change in Object clause : (1) To carry on any or all activities of an investment company and to buy,

underwrite, acquire interest and hold shares, stocks, debentures, debenture-stock, bonds, obligations and securities issued, sold, transferred or guaranteed by any corporation, company, undertaking authority or any Government in India or elsewhere, or any State Dominion or public body, Municipal or local Authority, or any firm or person whether in India or elsewhere.

(2) To carry out all types of financing operations and performing all types of financial services including factoring hire purchase, leasing, bill marketing bailing, making of loans both short, medium and long term.

(3) To provide financial services, advice and facilities of every description,

including ( but without limiting the generality of the foregoing words) all those capable of being provided by bankers, stockbroker, stock jobbers, investment and pension fund managers and advisors, promoters, and managers of unit trusts and other investment media, insurance brokers, underwriters, issuing houses and financiers;

July 27, 2007 New object clause 4 relating to Infrastructure Development was included: ** To carry on the business of infrastructure Development, Roads, Bridges, Airport, Port development of all types and descriptions, Highway, Seaways developments, act as properties developers, Infrastructure activity, like road , to acquire land, plots for colonization, or otherwise, sell plots, contra buildings for sale and rent or both, on installment or house, land and estate agents, and to arrange or undertake the sale, purchase or advertise for sale, purchase, assist in selling or purchasing and find or introduce purchaser or vendor of and to manage land, building and other property whether belonging to the company or not and to let any portion on any premises for residential, trade or business purchase , or other private or public purposes , and to collect rents and income and to supply to tenants and occupants and other refreshment clubs, public halls, managers, lights, waiting rooms, trading room, meeting room, laboratories, laundry. Conveniences, electric convenience, garages, and other advantages and to carry on the business in India and abroad relating to set up of Business Malls, Multiplex, Exhibition ground, Exhibition halls, community halls, Residential houses of all types and kind, Boat houses, Club , Holiday Resorts, Old man Homes, Shopping Complex of all types and kinds.

September 27, 2008

Object clause 4 relating to Infrastructure Development was enlarged by addition of following : “……and kinds and to cut trees and wide the roads and other places to develop the infrastructure as and when required.”

January 10, 2009 Reorganisation of Share capital to Rs. 5 Crores divided into 50,00,000 Equity shares of Rs. 10/- each.

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Subsidiaries of the Company As on date, the Company has 3 subsidiaries.

1) Diamant Securities Private Limited

Date of Incorporation The Company was incorporated on December 11, 2007 under the Companies

Act, 1956 in the State of Maharashtra CIN U65923MH2007PTC176663 Registered Office 9, Beaumoon Chambers, 27, Nagindas Master Road, Fort, Mumbai – 400023 Share Capital 10000 Equity Shares of Rs. 10/- each Shareholding 100 % Subsidiary Listing Status The Company is not listed on any stock exchange The main objects of this Company is to carry on the business of consultant and act as broker in dealing and trading in shares, Government of India Bonds, Institutional Bonds of all kinds, Debentures, Futures, Options, units of mutual funds in all stock exchanges and both also in primary market and off market on its own and on behalf of the members, clients and custodians in Indian and abroad and act as Financial and investment advisor to arrange finance, investment in any form whatsoever including organizing for investment in shares, stocks, bonds of all kinds, debentures or other securities and to act as financial advisors in companies, corporations, enterprises business organizations or persons of any other association of persons.

Board of Directors • Mr. Naresh Saboo • Mr. Naresh Jain Business Activity: The Company is yet to commence operations

Financial Performance: The Company has not done any business activity since incorporation, hence no financial performance is given here.

2) Diamant Realty Private Limited


Act, 1956 in the State of Maharashtra CIN U45400MH2007PTC176741 Registered Office 9, Beaumoon Chambers, 27, Nagindas Master Road, Fort, Mumbai – 400023 Share Capital 10,000 Equity Shares of Rs. 10/- each Shareholding 100 % Subsidiary Listing Status The Company is not listed on any stock exchange The main objects of our Company is to carry on the business of properties developers, to acquire land, plots for colonization, or otherwise, sell plots, contra buildings for sale and rent or both on installment or house, land and estate agents, and to arrange or undertake the sale, purchase or advertise for sale, purchase, assist in selling or purchasing and find or introduce purchaser or vendor of and to manage land, building and other property whether belonging to the company or not and to let any portion on any premises for residential, trade or business purchase, or other private or public purposes. Board of Directors • Mr. Naresh Saboo • Mr. Naresh Jain

DIAMANT


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Business Activity The Company is yet to commence operations Financial Performance: The Company has not done any business activity since incorporation, hence no financial performance is given here. 3) Diamant Infrastructure Developers Private Limited


Act, 1956 in the State of Maharashtra CIN U45203MH2007PTC176716 Registered Office 9, Beaumoon Chambers, 27, Nagindas Master Road, Fort, Mumbai – 400023 Share Capital 10,0000 Equity Shares of Rs. 10/- each Shareholding 100% Subsidiary Listing Status The Company is not listed on any stock exchange The main objects of our Company is to carry on the business of designing, construction, developing, maintaining and operating infrastructure facilities including roads, highways, bridges, airports, ports or other public facilities of similar nature and to carry on business in infrastructure, industrial or engineering development and act as builders, contractors, infrastructure project consultant of every type and description and to own, control, manage or to erect, construct, maintain, alter, repair, pulldown and restore either alone, jointly or in collaboration with another or others, works of all descriptions including wharves, docks, piers, railways, water ways, water works, airports, space stations, roads, bridges, warehouses, offices, malls, mills, engines, plant, machinery, equipment of every description, gas station, pipe lines, civil works, chemical works, electric works, drainage, sewage works and building of every discretions. . Board of Directors • Mr. Naresh Saboo • Mr. Naresh Jain

Business Activity: The Company is yet to commence operations Financial Performance: The Company has not done any business activity since incorporation, hence no financial performance is given here.

Shareholders Agreements Our Company has not entered into any shareholders agreement. Strategic Partner & Financial Partner The Company does not have any Strategic Partner & Financial Partner as on the date of filing of this Draft Letter of Offer.

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OUR MANAGEMENT Board of Directors of the Company Our Company comprises of four directors, of which two are independent. Shri Naresh Saboo is the Chairman of our company and is in overall incharge and control of the company. He is ably supported by a qualified team of executives. The following table gives the details of the Board of Directors of our company as on the date of the Letter of Offer:

Name & Address, Designation,

Age & Occupation Designation Qualifications Date of

Appointment Other Directorships

Mr. Naresh Saboo Address: Saboo Kunj, Walker Road, Mahal, Nagpur – 440 002. DOB: 29th April, 1964 Occupation: Business

Chairman cum Managing Director (Executive and Non-Independent Director)

CA, B. Com. 16-06-2007 • Saboo Capital & Securities Pvt Ltd

• Diamant Securities Pvt Ltd

• Diamant Infrastructure Developers Pvt Ltd

• Diamant Realty Pvt Ltd Mr. Naresh Jain Address: B/ 502, Shukh Sagar Apartments, 5th Floor, Opp. Mumbai Central Station, Mumbai – 400 008 DOB: 12th September, 1964 Occupation: Service

Director (Non-Independent Director)

B. Com. 16-06-2007 • Diamant Securities Pvt Ltd

• Diamant Infrastructure Developers Pvt Ltd

• Diamant Realty Pvt Ltd • Pranjali (India) Pvt Ltd • Pranjali Infrastructure

Pvt Ltd • Pranjali Services Pvt

Ltd Mr. Ramesh Mishra Address: 62 – B, Mira Sector – III, Shristi, Mira Road, Thane – 401 107 DOB: 15th September, 1968 Occupation: Profession

Director (Independent Director)

FCS, PGDCA, LL.B.

31-01-2006 • Polypro Fibrils India Ltd.

• City Hospitalities India Ltd

• Clarus Finance & Securities Ltd.

• India Home Loans Ltd. • Ira Aarna Online

Paintings Pvt Ltd. • Nidhisha Securities

Private Ltd. • Ira Aarna Realty Pvt

Ltd. • Sumita Management

Constancy Pvt Ltd. • Red Twigs

Consultancy Pvt Ltd. • Skypak Financial

Securities Pvt Ltd • Procentris India Pvt

Ltd. Mr. Puneet Kumar Srivastava Address: 39-D, Kurmanchal Nagar, Lucknow – 226 016 DOB: 12th August, 1967 Occupation: Service

Director (Independent Director)

M. Tech. (Geo-Tech), B.Tech. (Civil)

05-06-2009 NIL

DIAMANT


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Brief Profile of Board of Directors: 1. Mr. Naresh Saboo S/o Mr. Satyanarayan Saboo, 45 years of age, is a B. Com. graduate from Nagpur University and completed his Chartered Accountanancy in the year 1987 He has started his career as a Practicising Chartered Accountant. He has more than 22 years of experience in the field of finance and has handled various assignments in Financial Management and Strategic Alliances. 2. Mr. Naresh Jain S/o Mr. Manekchand Jain, 45 years of age, is a B. Com. Graduate. He was previously associated with Vintel Distribution Pvt. Ltd. He had held the post of Managing Director of our Company from November 2007 to March 2009. He has been instrumental in the growth of our Company and is responsible for bringing many construction projects to the Company. 3. Mr. Ramesh Mishra S/o Mr. Kasinath Mishra, 40 years of age, is a FCS, PGDCA, LLB by Qualification. He is an Independent Director of our Company. He has more than 18 years of experience in Law, Finance and Corporate affairs. He advises our Company on various strategic decisions in development of new areas of expansions. 4. Mr. Puneet Kumar Srivastava S/o Mr. Srinarain Srivastava, a M. Tech (Geo-Tech) and B. Tech (Civil) by qualification. He is an Independent Director of our Company. He has more than 19 years of experience on roads projects. He is presently working with BCEOM India Pvt Ltd, New Delhi, as Materials Engineer. He was associated with Halcrow International Partnership, Dubai, Sheladia Associates and Consultants (India) Pvt Ltd, Lea Associates South Asia Pvt. Ltd. and Intercontinental Consultants and Technocrats Pvt. Ltd. Details of the Borrowing Powers Consent of the members of the Company was accorded to the Board of Directors of the Company vide a resolution passed at the Annual General Meeting of the Company held on 30/09/2006 pursuant to Section 293(1)(d) of the Companies Act, 1956 for borrowing from time to time any sum or sums of money which together with the money already borrowed by the Company (apart from temporary loans obtained from the Company’s Bankers in the ordinary course of business) which shall not exceed in aggregate at any time Rs. 30 Crs. (Rupees Thirty Crores only) over and above the paid up capital and free reserves of the Company. TERMS OF APPOINTMENT & COMPENSATION OF CHAIRMAN CUM MANAGING DIRECTOR Remuneration and Compensation of Chairman cum Managing Director Name Mr. Naresh Saboo Designation Chairman cum Managing Director Period 3 years w.e.f. 01.04.2009 Board Meeting Date 1 April 2009 Remuneration (a) Salary : Rs 50,000 – 70,000 – 1,00,000 Per Month

(b) Perquisites: The Managing Director shall be entitled to the following perquisites provided that the total vale of the perquisites shall be restricted to an amount equal to the annual salary or Rs 40,000 – 60000 – 80000 per annum, whichever is lower.

Other Terms and Conditions

1) In case the Managing Director dies during the course of his employment the company shall pay to his heirs/ legal representatives the remuneration and / or other perquisites due and payable upto the date of death of the Managing Director.

2) As long as the Director is in the employment of the Company he shall have no interest directly or indirectly in any manner whatsoever including but without limiting the generality thereof in any financing arrangements in or with any person, firm, company or corporation engaged in any business that is competitive with any business which the Company or any other Company

DIAMANT


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which is subsidiary or is affiliated to or is associated with the Company carries or from time to time. In the event that the Director breaches this Clause, the Company may terminate the Director’s employment hereunder without notice and such termination shall not affect any of the Director’s other obligations hereunder and the same shall survive such termination

3) In the event that the Director : i. commits any act of willful disobedience or misbehavior or any gross neglect to his duties. ii. breaches or fails to observe any of his provisions herein contained. iii. commits any act of bankruptcy. iv. commits an indictable offence; or v. fails to comply with the reasonable instructions, orders and directions of the Board of Directors of the Company. then the Company may forthwith terminate this Agreement and his employment hereunder.

4) In the event of the Director : i. becoming incapacitated by illness for a period of two (2) consecutive months or an accumulated period of four (4) months in any twelve (12) months period; OR ii. being advised by a panel or three (3) independent medical practitioners that his health has deteriorated to a degree that it is advisable for him to leave the Company. then the Company may forthwith terminate this agreement and his employment hereunder.

5) Upon termination of this agreement for any cause whatsoever, he shall cease to be a Director of the Company and of any subsidiary or affiliate of the Company.

6) In the event that the Director resigns, retires or his employment terminates pursuant to the provisions of this Agreement the Director hereby authorises the Company and/ or any related Company to set off against and deduct from all or any amounts owing out of salary, allowances, accrued leave, long service leave, supperannuation payments or any other emoluments or benefits owing to the Director by the Company and / or any related Company such amounts owed by the Director to the Company or any subsidiary or related Company of the Company on any account whatsoever.

7) This Agreement supersedes all previous written, verbal or implied terms conditions and representations relating to the Director’s employment, and all claims by either party against the other under any previous agreement are declared to be settled.

8)The Agreement on the part of the Director herein shall bind the Director and his heirs, executors and administrators.

Note: The above terms of remuneration and compensation of the Managing Director will be placed before the shareholders in the forthcoming AGM on 11/07/2009 for approval. None of the directors except Managing director received remuneration from the company.

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INTERESTS OF DIRECTORS Except as stated in "Related Party Transactions" on page 89 of this Draft Offer Document, and to the extent of shareholding in the Company, the directors do not have any other interest in the business. The directors are interested to the extent of shares allotted to them. Except to the extent of their compensation and their shareholding or shareholding of companies they represent, the Directors, other than the Promoters who are also Directors, do not have any other interest in the Company. All Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered into by the Company with any company in which they hold Directorships or any partnership firm in which they are partners as declared in their respective declarations. Except as stated otherwise, in this Offer Document, the Company has not entered into any contract, agreements or arrangements during the preceding two years from the date of the Draft Offer Document in which the directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements or are proposed to be made to them. Changes in the Directors in the last three years The following are the changes in the Board of Directors in the last 3 years:

COMPLIANCE WITH CORPORATE GOVERNANCE REQUIREMENTS In terms of SEBI circular No. CFD/DIL/CG/1/2005/29/3, dated 29/03/2005 issued by Division of Issues and Listing Corporation Finance Department, SEBI on Clause 49 of the Listing Agreement, the provisions relating to report on Corporate Governance are not applicable to the Company, since its present Paid-up Capital is less than Rs. 3.00 Crores. But the Paid-up Capital of the Company after the Rights Issue would be Rs. 4.79 Crores (assuming full acceptance). Hence the Company has formed various committees like Audit Committee, Remuneration Committee & Investor Grievance Committee as per norms of Clause 49 of Listing Agreement. The Company’s philosophy on Corporate Governance envisages an attainment of the highest level of transparency, accountability, and equity in all facets of its operations and in all interactions with the stakeholders, including the shareholders, employees, Government and lenders. The Company has complied with SEBI guidelines in respect of Corporate Governance specially with respect to broad basing of Board, Constituting the Committees such as Shareholding / Investor Grievance Committee, etc. Measures taken by the Company to implement Corporate Governance

The Board of Director of the Company comprises of Mr. Naresh Saboo, Mr. Naresh Jain, Mr. Ramesh Mishra and Mr. Puneet Kumar Srivastava. Out of which Mr. Naresh Saboo is Promoter Director and Mr. Ramesh Mishra and Mr. Puneet Kumar Srivastava are Independent Directors.

S. No

Name of the Director Date of Appointment

Date of Cessation

Reason

1. Mr. Puneet Srivastava 05/06/2009 N. A. N. A. 2. Mr. Jagdish Bhatt 29/07/2006 04/08/2008 Pre-occupations 3. Mr. B. Mallikaarjuna Rao 29/07/2006 04/08/2008 Pre-occupations 4. Mr. Naresh Saboo 16/06/2007 N. A. N. A. 5. Mr. Naresh Jain 16/06/2007 N. A. N. A. 6. Mr. Sasanka Shekhar Mishra 16/06/2007 05/06/2009 Pre-occupations 7. Mr. Naresh Saboo 21/03/2006 29/07/2006 Pre-occupations 8. Mr. Harshad N. Shah 29/07/2006 Pre-occupations 9. Mr. Ramesh Mishra 31/03/2006 N. A. N. A.

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None of the Directors have been appointed by virtues of any arrangement or understanding for the same.

The members of the Board are provided with all the requisite information well in advance of the

Board Meetings and the same are dealt with appropriately. All the Directors who are on various Committees are within the permissible limits of the Listing Agreement.

Details of the Members of the Board of Directors:-

Name of Director Category No. of

Directorships Committee Members Committee

Chairmanship Mr. Ramesh Mishra

Independent 12 Audit Committee, Shareholder/Investor Grivances Committee, Remuneration Committee

Mr. Puneet Kumar Srivastava

Independent 1 Audit Committee, Shareholder/Investor Grievances Committee, Remuneration Committee

Mr. Naresh Jain Executive 7 Audit Committee, Remuneration Committee

Mr. Naresh Saboo Executive 5 Shareholder/Investor Grievances Committee

The Company has constituted the following Committees of the Board of Directors: AUDIT COMMITTEE The Audit Committee comprises of 3 members under the Chairmanship of an Independent Director S. No. Name Designation Nature of Directorship 1 Mr. Ramesh Mishra Chairman Non Executive & Independent 2 Mr. Puneet Kumar Srivastava Member Non Executive & Independent 3 Mr. Naresh Jain Member Director 4 Ms. Vandita Jogi Secretary Scope of the Committee: The scope of this committee, is to oversee the Company’s financial reporting process and ensure correct, adequate and credible disclosure of financial information; recommending appointment and removal of external auditors and fixing their fees, reviewing with management the annual financial statements with special emphasis on accounting standards and other legal requirements concerning financial statements, reviewing the adequacy of the audit and compliance functioning including their policies, procedures, techniques and other regulatory requirements and reviewing the adequacy of internal control system and significant audit findings. Number of Meetings held The Audit committee met four times during the year

Particular Date of Meeting Audit Committee Meeting 25/06/2008 Audit Committee Meeting 30/07/2008

DIAMANT


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Audit Committee Meeting 27/10/2008 Audit Committee Meeting 31/01/2009

The functions of the committee includes

• Recommending the appointment and removal of external Auditor, fixation of Auditor’s fees. • Reviewing with management the financial statements before submission of the same to the

Board. • Overseeing of Company’s financial reporting process and disclosure of its financial information.

SHAREHOLDER/INVESTOR GRIEVANCES COMMITTEE The Shareholder/Investor Grievances Committee is constituted as under: S. No. Name Designation Nature of Directorship 1 Mr. Ramesh Mishra Chairman Non Executive & Independent 2 Mr. Puneet Kumar Srivastava Member Non Executive & Independent 3 Mr. Naresh Saboo Member Chairman cum Managing Director 4 Ms. Vandita Jogi Secretary The Shareholder/Investor Grievances committee looks into redressing investor’s grievances like non-receipt of shares, non-receipt of dividends, non-receipt of annual report, etc. The power of approving share transfer has been delegated to share transfer agent of the company. Number of Meetings held The committee met four times during the year

Particular Date of Meeting Shareholder/Investor Grievances Committee Meeting 25/06/2008 Shareholder/Investor Grievances Committee Meeting 30/07/2008 Shareholder/Investor Grievances Committee Meeting 27/10/2008 Shareholder/Investor Grievances Committee Meeting 31/01/2009

Function of the Investor Grievance includes

• Transfer / Transmission of shares / debentures. • Issue of new and duplicate share / Debenture Certificates. • To look into the redressing of shareholder and investors complaint like transfer of shares, non-

receipt of balance sheet, non-receipt of declared dividend etc. REMUNERATION COMMITTEE The Remuneration Committee is constituted as under: S. No. Name Designation Nature of Directorship 1 Mr. Ramesh Mishra Chairman Non Executive & Independent 2 Mr. Puneet Kumar Srivastava Member Non Executive & Independent 3 Mr. Naresh Jain Member Managing Director 4 Ms. Vandita Jogi Secretary There were no remuneration committee meeting held during the year under review as the committee was formed in 3rd quarter of 2008. Functions of Remuneration Committee

• Looking after fixation of salary, perquisites and commissions etc, to the directors of the company are in line with the agreed terms of reference and as per company policy.

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BOARD PROCEDURE The Board of Directors meets at least once in every quarter and generally there are 6 Board Meetings in a year. The Agenda for the meeting together with the relevant notes are circulated in advance. The minutes of the meeting are confirmed and approved in the subsequent Board Meeting. The Company confirms that all material information has been disclosed to the Board of Directors. DECLARATION OF RESULTS The Company declares the Quarterly results with in the expected time and the same have been reported to the Stock Exchanges as per the Listing Agreement. The Un-audited/Audited quarterly results were declared and published in the National Dailies and in Regional Newspapers as per Clause 41 of the Listing Agreement. REPORT ON CORPORATE GOVERNANCE Though the Code of Corporate Governance is not applicable to our Company in view of Capital as well as Net Worth being less than the threshold limits fixed under the Listing agreement, the company has a separate section on Corporate Governance in the annual report, with a detailed compliance report on Corporate Governance and the same forms part of the Annual Report sent to the shareholders. COMPLIANCE WITH LISTING AGREEMENT The Company is listed on BSE and has complied with the requirements under the Listing Agreement of the above-mentioned stock exchange. It has paid the requisite annual listing fee to the BSE for the period 2009-2010. No disciplinary action has been initiated by the Stock Exchange against Diamant Investment & Finance Limited or its Directors since the date of listing.

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MANAGEMENT ORGANIZATION CHART

Key Managerial Personnel The team of professionals is headed by Chairman cum Managing Director, Mr. Naresh Saboo. He has wide and varied experience.

Name of Director Designation Date of

Joining Age

(years) Qualification Total

Experience

Previous Employment

Salary (Per

Annum) Mr. Milind M. Shrirao

C..E.O.-Operation

01-01-2009

41 B.E. (Civil), M.Tech (Enviornmental Engg.), P.G.D.B.M. MIE

18Years Sadbhav Engineering Ltd

Rs 6,00,000

Mr. Rakesh Kumar

Site Engineer 01-12-2008

25 Dipl. In Civil Engg.

4 Years Sadbhav Engineering Ltd

Rs 1,92,000

Mr. Sahayam Ashish Cyril

Manager Site –Chikhli

01-01-2009

30 Dipl. in Civil Engg. and B.E.

6 Years M.B. Patil Construction Ltd.

Rs 3,00,000

Mr. Santosh Saboo

General Manager

01-10-2007

56 M.Com 30 Years Own Business

Rs 3,00,000

Mr. Ashok Kumar Shukla

Manager - Procurement

01-10-2007

43 Graduate 15 Years Partner In M/s. Gayatri Construction

Rs 3,00,000

Mr. Vishal G. Bhor

Manager Site -Chattishgarh

01-04-2009

26 B.E. (CIVIL) 4 Years Om Shree Developers

Rs 3,00,000

Ms. Vandita Jogi

Compliance Officer

01-02-2009

24 Pursuing L.L.B and C.S.

- - Rs. 60,000

Mr. Kamlesh Prasad

Accounts Manager

15-06-2009

30 B.Com 10 Years Saboo Capital & Securities Pvt. Ltd

Rs 2,40,000

BOD

CMD

CEO CFO CS

Comp Officer

GM Secretary

Manager Site Manager Site Manager

Secretary Accounts Mngr

Accounts Exec Finance Exec

Site Engineer Marketing Site Engineer Marketing

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Brief profile of Key Managerial Personnel

1) Mr. Milind M. Shrirao, aged 41 years, is our C.E.O.-Operations. He holds B.E.(Civil), M. Tech. (Environmental Engg.) and PGDBM degree. He has more than 18 years of extensive experience in construction of Highways. He was previously employed with Sadhbav Engineering Limited, Ahmedabad.

2) Mr. Rakesh Kumar, aged 25 years, is Site Engineer. He has a Diploma in Civil Engineering. He has more than 4 years of experience in Survey and Highway and well versed with auto level, Total Station Instrument.

3) Mr. Sahayam Ashish Cyril, aged 30 years, is Chikhli site Manager. He has a diploma in civil

engineering and a B.E. He has more than 6 years of experience in construction industry. He was previously employed with M. B. Patil Construction Ltd as Sr. Engineer.

4) Mr. Santosh Saboo , aged 56 years, is General Manager in the Company. He has done M. Com from Nagpur University. He has more than 30 years of experience in doing business activity. He had his own business before joining the Company.

5) Mr. Ashok Kumar Shukla, aged 43 years, is Manager – Procurement. He has more than 15 years of experience in road construction industry.

6) Mr. Vishal G. Bhor, aged 26 years, is Chattisgarh site Manager. He holds B.E.(Civil) degree. He was previously employed with Om Shree Developers, Pune as Junior Engineer.

7) Ms. Vandita Jogi, aged 24 years, is Compliance Officer. She has cleared 2nd year of LLB and CS

Intermediate exams.

8) Mr. Kamlesh Prasad, aged 30years, is Accounts Manager. He has done B. Com from Nagpur University. He has more than 8 years of experience in accounts and taxation matter. He was previously employed at Saboo Capital & securities Pvt ltd.

All the key managerial personnel are permanent employees of our Company. There is no arrangement or understanding with major shareholders, customers, suppliers or any other person pursuant to which any person has been selected as Director or Member of Senior Management. None of the Key Managerial Personnel have any relationship with the promoters or the directors of the Company except Mr. Santosh Saboo who is brother of Mr. Naresh Saboo. Shareholding of Key Managerial Personnel in our Company None of the key managerial personnel are holding any shares of the company. Loans to Key Managerial Personnel There are no loans outstanding against Key Managerial Personnel as on date. Bonus or Profit sharing Plan for the Key Managerial Personnel Our Company does not have any bonus or profit sharing plan for its Key Managerial Employees. Employee Stock Option Scheme (ESOS)/ Employees Stock Purchase Scheme (ESPS) Our Company does not have any stock option Plans or Stock Purchase Schemes for its employees.

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Changes in the Key managerial personnel during the last One-year Name Date of Appointment Date of Cessation Reason for Change Mr. Kamlesh Prasad 15-06-2009 - -

Mr. Vishal G. Bhor 01-04-2009 - -

Mr. Naresh Saboo 01-04-2009 - -

Mr. Naresh Jain 01-11-2007 31-03-2009 Personal Reason

Ms. Vandita Jogi 01-02-2009 - -

Ms. Regal Patel - 31-01-2009 Personal Reason

Mr. Shayam A Cyril 01-01-2009 - -

Mr. Milind M. Shrirao 01-01-2009 - -

Mr. Rakesh Kumar 01-12-2008 - - Payment or Benefits to Officers of the Company Except the payment of salaries, perquisites and bonus, the Company does not make any payments to its officers. INTEREST OF KEY MANAGEMENT PERSONNEL: The Key Managerial Personnel of our Company do not have any interest in our Company, other than to the extent of remuneration of benefits to which they are entitled as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business.

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OUR PROMOTERS

The Company is promoted by Mr. Naresh S. Saboo and M/s Saboo Capital & Securities Pvt. Ltd. The brief details of promoters are as below: Individual Promoter: Mr. Naresh S Saboo

Mr. Naresh Satyanarayan Saboo S/o Mr. Satyanarayan Motilal Saboo, 45 years of age, is a B. Com. graduate from Nagpur University and completed his Chartered Accountanancy in the year 1987. He started his career as a Practicising Chartered Accountant and is presently Chairman cum Managing Director of the company. He has more than 22 years of experience and has handled various assignments in Financial Management and Strategic Alliances.

Other Details of Promoter Name Mr. Naresh Satyanarayan Saboo Voter ID MT/23/136/384378 Driving License MH31 20080097365 IT PAN ACAPS9713L Bank Account Details Axis Bank – Savings A/c No: 330010100024772, Nagpur Passport Number B 3358674 Other Confirmations We confirm that Permanent Account Number, Passport Number and Bank Account Number of our promoter has been submitted to the Stock Exchanges, on which the Equity Shares are proposed to be listed, at the time of filing the Letter of Offer. Corporate Promoter: Saboo Capital & Securities Pvt Ltd

Date of Incorporation Incorporated under the Companies Act, 1956 in the State of Maharashtra on 12th June 1995.

Registration No. 11-89441 CIN U67190MH1995PTC089441 Registered Office Saboo Kunj, Walker Road, Mahal, Nagpur, Maharashtra - 440 002 Nature of Business The Main Object is to carry on the business of Investment and Finance. IT PAN AADCS0362B

Bank Details Axis Bank – Current A/c No: 330010200005050, Nagpur , ICICI Bank – Current A/c No: 005905004901, Nagpur

Listing Status The Company is not listed on any stock exchange Board of Directors as on 31st March 2009

Name Designation Mr. Naresh Satyanarayan Saboo Director Mr. Madhu Naresh Saboo Director Mr. Santosh Satyanarayan Saboo Director

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List of Top 10 Shareholders as on 31st March 2009:

Brief Audited Financial Results of the Company are as follows:

(Rs. In Lacs)

For the Financial Year ended Particulars 31st March,

2009 31st March,

2008 31st March,

2007 31st March,

2006 31st March

2005 Total Income 1249.08 593.85 1698.72 17.51 10.44Profit/loss after Tax 2.37 8.26 0.61 5.39 0.35Share Capital (Equity) 50.52 50.52 40.52 40.52 2.77Reserves and Surplus (excluding revaluation reserve)

70.07 72.57 45.14 44.53 1.49

Earnings Per share (in Rs.) 0.62 1.63 0.15 1.33 1.26Book Value per equity share (in Rs.) 23.86 24.36 21.14 20.99 15.37Face Value per Share (in Rs.) 10/- 10/- 10/- 10/- 10/-

The Company is not a Sick Company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 nor is under winding up. The Company has not made any public or rights issue in the preceding three years. Other Confirmations We confirm that Permanent Account Number, CIN No. and Bank Account Number of our promoter has been submitted to the Stock Exchanges, on which the Equity Shares are proposed to be listed, at the time of filing the Letter of Offer. Common Pursuits There is no common pursuit between the company and promoter of the company. Payment of benefit to promoters of Diamant Investment & Finance Ltd All the Promoters of the Company shall be deemed to be interested to the extent of shares held by them and/or their relatives which may be allotted to them out of the present issue and are deemed to be interested to the extent of remuneration and perquisites being drawn by them from the Company.

Name of Shareholder No of Shares held

Shreekant Phumbhra 1,00,000Satyanarayan M. Saboo 48,200Satyanayan Saboo (HUF) 42,500Sarswatidevi S. Saboo 40,100Shobha Santosh Saboo 35,100Prem Santosh Saboo 25,100Naresh S. Saboo (HUF) 25,100Hemant Santosh Saboo 23,300Leeladevi Saboo 22,500Anupama Saboo 20,000TOTAL 3,81,900

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Related Party Transactions Related party Disclosures are given as notes to accounts in Auditors Report on page no. 89 of this Draft Letter of Offer. Further our promoter and promoter group entities, including relatives of the promoters have confirmed that they have not been declared as willful defaulters by the RBI or any other Government authority and there are no violations of securities laws committed by them in the past or are pending against them. Companies with which the promoters have disassociated in last three years There are no companies/firms/ventures with which our promoter has disassociated himself from during the last three years. Sales or Purchase between companies in the Promoter Group There is no other companies in promoter group, hence no sales or purchase transaction between them.

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DIVIDEND POLICY Dividends, other than interim dividends, will be declared at the Annual General Meeting of the shareholders based on the recommendations of the Board of Directors. The Board may, at its discretion, recommend dividends to be paid to the Company’s shareholders. Generally, the factors that may be considered by the Board of Directors before making any recommendations for the dividend include, without limitation to the Company’s future expansion plans and capital requirements, profits earned during the fiscal year, cost of raising funds from alternate sources, liquidity position, applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories of investors from time to time and general market conditions. The dividends declared by the Company during the last five years are as below

(Rs in Lacs) Year Ended March 31 Particulars 2009 2008 2007 2006 2005

Rate of Dividend Nil Nil 10% Nil 10% Dividend Amount Nil Nil 12 Nil 12 Dividend Tax Nil Nil 2.04 Nil 1.68 Our dividend history may not necessarily be an indication of our dividend policy in the future.

Currency Of Presentation In this Draft Letter of Offer all references to ‘Rupees’ and ‘Rs.’ are to legal currency of India. US Dollar amounts have been translated into Rupees for various periods and presented solely to comply with requirements of the Clause 6.8.4 of the SEBI Guidelines. Investors are requested not to rely on such translated amounts.

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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 or complete, and are only intended to provide general information to the investors and are neither designed nor intended to be a substitute for professional legal advice. The Company is incorporated under the Companies Act, 1956 and complies with the provisions of the said Act and the rules made by the Central Government along with the administrative instructions given by the Government authorities from time to time. The Company is engaged in Infrastructure and Real Estate Industry. For the purpose of the businesses undertaken by the Company, we are required to obtain licenses and approvals depending upon the prevailing laws and regulations as applicable. The Commercial laws and regulations and provisions that are applicable to the Company, without being restricted to, include:

• Indian Contract Act, 1872 • Companies Act,1956 • Transfer of Property Act, 1882 • Registration Act,1908 • Bombay Stamp Act,1958 • Urban Land (ceiling and regulation) Act, 1976 • The Shops and Establishment Act, 1953 • Specific Relief Act,1963 • Land Acquisition Act,1984 • Indian Evidence Act,1872 • Income Tax Act, 1961 and Rules • Foreign Exchange Management Act, 1999 and Regulations & Notifications issued by the Reserve

Bank of India GENERAL Our Company is engaged in the business of construction contractors in Infrastructural projects mainly in roads contracts. Our Company also undertakes major projects which are awarded to other Contractors. Our company has been most active in the State of Maharashtra and Madhya Pradesh. For the purpose of executing the work undertaken by our Company, our Company may be required to obtain licenses and approvals depending upon the prevailing laws and regulations applicable in the relevant state, and depending on the projects. For details of such approvals please see “Government Approvals/Licensing Arrangements” beginning on page 108 of this Draft Letter of Offer. Foreign Ownership Under the Industrial Policy and FEMA, FDI up to 100% is permitted in construction and related engineering services. Further, the Industrial Policy now also permits foreign direct investment under the automatic route in projects for construction and maintenance of roads, highways, vehicular bridges, toll roads, vehicular bridges and ports and harbours. No approvals of the FIPB or the RBI are required for such Allotment of Equity Shares under this Issue. Our Company will be required to make certain filings with the RBI after the completion of the Issue. Ownership restrictions on FIIs Under the portfolio investment scheme, the overall issue of Equity Shares to FIIs on a repatriation basis should not exceed 24% of post-Issue paid-up capital of our Company. However, the limit of 24% can be raised up to the permitted sectoral cap for that company after approval of the board of directors and shareholders of our Company. The offer of Equity Shares to a single FII should not exceed 10% of the post-Issue paid-up capital of our Company or 5% of the total paid-up capital in case such sub-account is

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a foreign corporate or an individual. In respect of an FII investing in Equity Shares of a company on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed l 0% of the total issued capital of that company. Environment and Labour Regulations Depending on the nature of the projects undertaken by the company, some other applicable material environmental and labour laws regulations, without being restricted to, include the following:

Inter State Migrant Workers Act, 1979 Local Shops & Establishments legislations

Labour Laws We are also required to comply with an extensive set of laws, rules and regulations in relation to hiring and employment of labour. The laws applicable to us include the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, Employees’ State Insurance Act, 1948, the Workmen’s Compensation Act, 1923, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, Payment of Gratuity Act, 1972, Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Contract Labour (Regulation and Abolition) Act, 1970 etc. A brief explanation in relation to the aforesaid legislations is given herein below: The Payment of Wages Act, 1936 makes every employer responsible for the payment of wages to a person employed by him, prescribes periods for which wages must be paid, time of payment of wages, deductions which may be made from wages, etc. The Minimum Wages Act, 1948, provides for the fixing of appropriate minimum wages for workers involved in the various scheduled industries as specified in the act. The schedule of the Act refers to ‘employment on the construction’ or ‘maintenance of roads or in building operations’. The Payment of Bonus Act, 1965 prescribes the compulsory payment of bonuses to the employees by the establishments not expressly excluded by the statute. The provisions of the Payment of Bonus Act, 1965 provide for a minimum annual bonus payable to every employee, irrespective of whether or not the employee has made a profit or loss in the corresponding accounting year for which the bonus is payable. Under this Act, every employer is bound to pay to every employee, in respect of the accounting year, a minimum bonus which is 8.33% of the salary or wage earned by the employee during the accounting year or Rs.100, whichever is higher. The Employees’ State Insurance Act, 1948 is to provide benefits for employees or their beneficiaries in case of sickness, maternity, disablement and employment injury and to make provision for the same. Under this Act, every employee (including casual and temporary employees), whether employed directly or through a contractor, who is in receipt of wages upto Rs. 7,500 per month is entitled to be insured. In respect of such employees, both the employer and the employee must make certain contributions to the Employee State Insurance Corporation. Currently, the employee’s contribution rate is 1.75% of the wages and that of employer’s is 4.75% of the wages paid/payable in respect of the employee in every wage period. The Workmen’s Compensation Act, 1923 provides for compensation payable to workmen for death/injury/disablement arising out of an accident (and otherwise for some occupational diseases) in the course of such workmen’s employment (including through a contractor). The Payment of Gratuity Act, 1972 provides for the payment of gratuity to employees in certain prescribed establishments. Gratuity is payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years on his superannuation, on his retirement or resignation or on his death or disablement due to accident.

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The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 was introduced with the institution of provident funds and pension funds for employees in establishments, which employ more than 20 persons, and factories specified in Schedule I of this Act. The funds constituted under these schemes framed under this Act consist of contributions from both the employer and the employees, in the manner specified in this Act. The Contract Labour (Regulation and Abolition) Act, 1970 (“CLRA”) has been enacted to regulate the employment of contract labour in certain establishments, the regulation of their conditions and terms of service and to provide for its abolition in certain circumstances. The Contract Labour (Regulation & Abolition) Act, 1970 imposes obligations on the principal employer to obtain registration as a pre-requisite to employing contract labour, where applicable, and on each contractor employed by such principal employer, where contract labour is employed, to obtain a license under that Act. The contractor is required to comply with the terms of the license issued. This Act contains beneficial provisions to ensure the welfare of workers employed on contract labour.

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SECTION V – AUDITORS REPORT AND FINANCIAL INFORMATION To, The Members, Diamant Investment and Finance Limited, Mumbai

Reg: Rights offer of Diamant Investment & Finance Limited – Auditors Report as required by Part – II of Schedule II of the Companies Act, 1956

1. We have examined the financial information of Diamant Investment & Finance Limited (“the company”) annexed to this report that has been prepared in accordance with requirements of:

a. Clause B (1) of part II of Schedule II of The Companies Act, 1956 (“the Act”).

b. The Securities and Exchange Board of India (Disclosures and Investor Protection) Guidelines 2000 (‘the SEBI Guidelines’) issued by Securities and Exchange Board of India (SEBI) in pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992 and related amendments, and

c. The terms of reference received from the Company, requesting us to carry out the work proposed to be included in the Prospectus of the Company in connection with its Rights issue.

2. We have examined the attached restated summary statement of assets and liabilities as at 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and as at 31st March, 2009 and the attached restated summary statement of Profit & Loss for each of the years ended on those dates (“Summary Statement”) (enclosed as “Annexure-I and II” respectively) as prepared by the Company and approved by the Board of Directors. These profits/loss statements have been arrived at after making such adjustments and regroupings as in our opinion are appropriate. These profits statements have been extracted from the audited financial statement for the year ended 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 and approved by the Board of Director for the respective years.

3. Significant accounting policies adopted by the Company and the notes pertaining to the audited financial statements for the year ended 31st March 2009 is enclosed as “Annexure-III”.

4. We have examined the following other financial information of the Company proposed to be included in the Prospectus as approved by the Board of Directors and annexed to this report:

a) Cash flow statement for the five financial years ended on 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 enclosed as “Annexure-IV”.

b) Accounting ratios based on restated profits relating to Earning Per Share, Net Asset Value and Return on Net worth, enclosed as “Annexure-V”. Capitalisation Statement for the year ended on 31st March 2009 and tax shelter statement for the year ended on 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 enclosed as “Annexure-VI & VII” respectively.

c) Details of sundry Debtors as at 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 enclosed as “Annexure-VIII”.

d) Details of loans and advances as at 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 enclosed as “Annexure-IX”.

e) Details of Secured and Unsecured loans for the year ended 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 enclosed as “Annexure-X”.

5. Details of other income for the year ended 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 where such other income exceeds 20% of total income enclosed as “Annexure-XI.

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6. This report is intended solely for your information for inclusion in the prospectus for the proposed Rights issue of equity shares of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For Tushar Parekh & Associates Chartered Accountants CA Tushar Parekh Proprietor Menbership No.: 103230

Place: Mumbai Date: 18th June, 2009

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Annexure – I Statement of Assets and Liabilities The assets and liabilities of the Company as at the end of each five financial years ended on 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 are set out below. The assets and liabilities read with Significant accounting policies and notes to accounts annexed hereto have been arrived after making such regroupings as are, in our opinion, appropriate.

(Rs. in Lacs) As at 31st March

Particulars 2009 2008 2007 2006 2005Gross Block 748.22 386.48 13.94 13.06 13.02 Less: Depreciation 71.18 23.95 9.54 8.91 8.27 Net Block 677.04 362.53 4.40 4.15 4.75 Less: Revaluation Reserve - - - - -Net Block after adjustment for Revaluation Reserve 677.04 362.53 4.40 4.15 4.75 Capital Work in Progress - - - - -Total Fixed Assets (A) 677.04 362.53 4.40 4.15 4.75 Investment (B) 0.01 0.01 0.01 0.01 222.31

Current Assets, Loans and Advances

Inventories 160.67 1029.94 672.34 461.73 -Sundry Debtors 603.83 37.46 8.07 - -Cash and Bank Balance 39.74 17.69 28.94 7.01 68.73 Loans and Advances 813.45 771.57 2.67 56.19 29.30 Total (C) 1617.69 1856.66 712.02 524.93 98.03 Loans, Liabilities and Provisions Secured Loans 456.30 255.45 - - -Unsecured Loans 918.00 988.13 60.00 54.11 -Current Liabilities 486.94 562.29 326.52 224.79 10.51 Provisions 4.74 2.23 14.32 20.02 46.27 Deferred Tax Liability 18.86 7.46 0.61 0.65 0.06 Total (D) 1884.84 1815.56 401.45 299.57 56.85 Net Worth (A+B+C-D) 409.90 403.64 314.98 229.52 268.24 Represented By Share Capital 119.90 119.90 119.95 119.95 119.95 Total Reserves and Surplus 290.00 283.74 195.03 109.57 148.29 Less: Revaluation Reserves - - - - -Net Reserves and Surplus 409.90 403.64 314.98 229.52 268.24 Miscellaneous Expenditure (To the extent not w/off or adjusted) - - - - -

Net Worth 409.90 403.64 314.98 229.52 268.24

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Annexure - II Statement of Profit and Loss Account We report that the profits of the Company for the financial years ended on 31st March 2005, 31st March 2006, 31st March 2007, 31st March 2008 and 31st March 2009 are as set out below. The profit and loss account read with significant accounting polices and notes annexed hereto have been arrived at after charging all expenses of operating and management including depreciation and after making such adjustments and regroupings as are, in our opinion, appropriate.

(Rs. in Lacs)

*EPS Calculated according to AS-20

Year ended 31st March Particulars 2009 2008 2007 2006 2005Income Income from operations 13088.57 18998.19 13413.81 385.65 -Increase/ (Decrease) in stocks (869.26) 357.59 210.61 461.73 -Other income 5.38 32.80 28.16 69.70 79.93Total 12224.69 19388.58 13652.58 917.08 79.93Expenditure Purchases 11580.94 19122.56 13529.50 925.77 -Administrative & Other Expenses 540.54 147.97 26.74 25.81 31.68Total 12121.48 19270.52 13556.24 951.58 31.68Profit before Interest, Depreciation and Tax 103.21 118.06 96.34 (34.50) 48.25Depreciation 47.24 14.41 0.63 0.63 0.89Profit before Interest and Tax 55.97 103.65 95.71 (35.13) 47.36Financial Expenses 38.65 8.61 5.54 0.44 0.17Net Profit Before tax 17.32 95.04 90.17 (35.57) 47.19Prior Period Items 0.64 - - - -Net Profit Before Tax 17.96 95.04 90.17 (35.57) 47.19Provision for Taxation Current Tax 1.85 1.05 0.28 - 16.15Deferred Tax 11.40 6.85 0.04 0.59 0.93Fringe Benefit Tax 1.30 0.26 0.03 0.13 -Net Profit after Tax 3.41 86.88 89.90 (36.29) 30.11Brought Forward from Previous Year 264.54 175.88 90.41 129.14 113.94Tax Adjustment of Earlier Years 2.86 1.78 9.61 2.44 0.03Transferred to General Reserve - - - - 1.20Proposed Dividend - - 12.00 - 12.00Corporate Dividend Tax - - 2.04 - 1.68Balance Carried to Balance Sheet 270.81 264.54 175.88 90.41 129.14Earning Per Share * 0.52 7.39 7.49 (3.03) 2.51

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Annexure– III Accounting Policies and Notes to the balance sheet and profit and loss account Significant Accounting Policies a. Basis of Preparation of Financial Statements

Financial statements are prepared on the historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principals, and applicable accounting standards and the provisions of the Companies Act, 1956.

b. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the years presented. Actual results could differ from those estimates.

c. Revenue Recognition Incomes/Revenues are accounted for on accrual basis in accordance with the Accounting Standard

(AS-9) issued by the Institute of Chartered Accountants of India except for dividend and interest on income-tax and sales-tax refund. Revenue is recognised to the extent that it is probable that the economic benefit will flow to the company and the revenue can be reliably measured.

Sale of shares is accounted when the contract for sale is entered into and the delivery of the shares has been effected.

Profit/loss on derivative transaction is recognised on the expiry/exercise of Future Contracts on or before the date of settlement of the relevant contract.

Revenue on account of contracts is recognised on the basis of the certification of work done by the principal contractor.

d. Fixed Assets Fixed Assets are stated at cost including all incidental expenses incurred for bringing the asset to its

current position, less depreciation at rates prescribed in Schedule XIV to the Companies Act, 1956, subject to provisions of Accounting Standard 26 “Intangible Assets” issued by Institute of Chartered Accountants of India.

e. Depreciation Depreciation has been provided on Straight Line Method in accordance with section 205(2) of the Companies Act, 1956 at the rates specified in schedule XIV to the Companies Act, 1956, on pro–rata basis with reference to the period of use of such assets. Assets costing less than Rs. 5,000/- per item are depreciated at 100% in the year of purchase.

f. Inventories

Stock of Wood is valued at lower of cost or net realisable value. Cost is determined on the basis of direct expenses incurred in relation to cutting of trees.

Stock of equity share held as stock-in-trade by the company is valued at Cost. Cost of inventories is determined on “first in first out” basis.

Value of work uncertified by the principal contractor, in relation to contract is determined and valued by the management at the year-end and is carried at cost in the balance sheet as Uncertified Contract Revenues.

Property for development is valued at cost.

DIAMANT


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g. Impairment of Assets

The carrying amounts of Cash Generating Units/Assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated at the higher of net realisable value and value in use. Impairment loss is recognised wherever carrying amount exceeds the recoverable amount.

h. Investments

Investments are done in the name of company and valued at its cost. i. Retirement Benefits

All short-term employee benefits are recognised at their undiscounted amount in the accounting period in which they are incurred.

Retirement Benefits in the form of gratuity and leave salary is accounted on payment basis in the year of payment.

j. Income Tax Provision for current tax is made for the tax liability payable on taxable income after considering the

allowances, deductions and exemptions and disallowances if any determined in accordance with the prevailing tax laws.

The differences between the taxable income and the net profit or loss before tax for the period as per the financial statements are identified and the tax effect on the “timing differences” is recognised as deferred tax asset or deferred tax liability. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the tax rates and laws, enacted or substantively enacted as of the balance sheet date.

Fringe Benefit Tax is provided on the value of fringe benefits provided/deemed to be provided to the employees at the applicable tax rates.

k. Borrowing cost

Borrowing cost attributable to the acquisition of fixed assets is capitalised as the part of the cost of that fixed assets, till the date it is put to use. Other borrowing cost is recognised as expenditure in the period in which they are accrued.

l. Segmental reporting

Operations of the company have been bifurcated into three primary segments i.e. Financial, Infrastructure and Realty Segments.

Segment Revenue, Results and Assets and Liabilities figures include the respective amounts identifiable to each of the Primary Segments. Other unallocable expenditure, assets and liabilities relates to corporate as a whole.

m. Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the revenue account on a straight line basis.

n. Provisions, Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the outflow.

DIAMANT


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Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the company.

Contingent Assets are neither recognised nor disclosed in the Financial Statements as a matter of prudence.

o. Financial Derivatives i. At the time of inception of the contract

Initial margin paid before entering into the Stock Future contract is debited to “Initial margin – Stock Future A/c” and year-end balance in this account is disclosed separately in the balance sheet under the head of Current Assets.

ii. At the time of daily settlement

The amount of Mark-to-Market margin received /paid is debited/credited to “Mark-to-Market Margin Stock Future A/c” and year-end balance in this account is disclosed separately in the balance sheet under the head of Current Assets/Current Liabilities as the case may be.

iii. At the time of final settlement

The difference between the contract price and the settlement price is calculated and recognised as profit in the Profit and Loss Account.

Notes to Accounts 1. Contingent Liabilities

Claims against the company not acknowledged as Debts Not ascertainable Income Tax – Assessment Year 2003-04 Rs. 10,46,632/- Penalty – Income Tax - Assessment Year 2003-04 Not determinable Defect Liability period in respect of contracts executed Not determinable Sales Tax Reassessment for A. Y. 2001-02 Rs. 1,64,673/-

2. Right Issue The Company at its 27th Annual General Meeting held on 27th July, 2007 passed a resolution under

section 81 of the Companies Act, 1956 for issue of shares on a right basis. However, the Board deferred the issue of the shares on a right basis due to the market condition. To comply the applicable provisions as per the Securities Exchange Board of India (SEBI) requirements for issue of shares on a right basis, the company revalidated the aforesaid approval with partial modification at its Extra Ordinary General Meeting held on 10th January, 2009.

3. Secured Loans

From Banks Term Loan from ICICI Bank Rs. 2,65,579/- is secured by way of hypothecation of Car. Term Loans from Indusind Bank Rs. 28,12,488/- are secured by way of hypothecation of four Tippers. Term Loans from ING Vysya Bank Ltd. Rs. 73,36,545/- are secured by way of hypothecation of five Tippers From Financial Institutions Term Loans from GE Capital Ltd Rs. 33,43,493/- are secured by way of hypothecation of Five Tippers. Term Loan from GE Capital Ltd Rs. 21,66,328/- is secured by way of hypothecation of Excavator. Term Loan from L and T Finance Ltd Rs. 20,45,565/- is secured by way of hypothecation of Excavator. Term Loan from L & T Finance Ltd. Rs. 17,57,437/- is secured by way of hypothecation of Soil Compactor. Term Loans from L & T Finance Ltd. Rs. 73,45,016/- are secured by way of hypothecation of Five Tippers.

DIAMANT


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Term Loans from L & T Finance Ltd. Rs. 42,15,898/- are secured by way of hypothecation of Six Tippers. Term Loans from L & T Finance Ltd. Rs. 4,13,273/- are secured by way of hypothecation of Diesel Tanker . Term Loan from L & T Finance Ltd. Rs. 12,33,141/- is secured by way of hypothecation of Soil Compactor. Term Loan from Magma Finance Corp Ltd. Rs. 4,99,000/- is secured by way of hypothecation of Diesel Tanker. Term Loan from SREI Equipment Finance Pvt. Ltd. Rs. 38,56,325/- is secured by way of hypothecation of Paver Machine & Kerb Laying Machine. Term Loan from SREI Equipment Finance Pvt. Ltd. Rs. 25,83,472/- is secured by way of hypothecation of Loader Machine. Term Loan from SREI Equipment Finance Pvt. Ltd. Rs. 53,25,991/- is secured by way of hypothecation of Motor Grader Machine. Term Loan from Tata Motors Finance Ltd. Rs. 4,30,000/- is secured by way of hypothecation of Pick Up Van.

All the above loans are also secured either by way of guarantee by the promoter company M/s. Saboo Capital and Securities Pvt Ltd or personal guarantee of Mr. Naresh S. Saboo, Director.

4. During the year, a sum of Rs. 37,790/- (Previous year Rs. 4,93,257/- ) being interest till the date the

asset is put to use on borrowings attributable to qualifying assets have been capitalised. 5. During the year, assets worth Rs. 89,24,336/- purchased were not put to use and hence no

depreciation has been provided on the same. 6. The balances appearing under unsecured loans, sundry creditors, sundry debtors, loans and

advances, and certain banks are subject to confirmation and reconciliation and consequential adjustment, if any, will be accounted for in the year of reconciliation and/or confirmation.

7. In the opinion of the Board, the Current Assets, Loans and Advances have value on realisation in the

ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet.

8. In terms of section 22 of the Micro, Small and Medium Enterprises Development Act, 2006, the

outstanding of these enterprises are required to be disclosed. However, in absence of the information about the registration of the Enterprises under the above Act, the required information could not be furnished.

9. Since the Company recognises gratuity and leave salary expense on payment basis, no liability for

the same has been ascertained and provided in the accounts. Hence, the company has not complied with the provisions of AS–15 “Accounting for Retirement Benefit”.

10. The company has neither registered itself as NBFC nor has complied with the direction related to

provisions of Non Banking Financial Companies Prudential Norms (Reserve Bank) Direction, 1998. 11. Uncertified contract revenue of Rs. 44,00,475/- includes work executed by the company which has

not yet been certified by the principal contractors. The management has determined the value of the uncertified revenue based on the cost incurred by the company in relation to the same.

12. Earning Per Share Particulars 2009 2008 2007 2006 2005Net Profit After Tax (Rs. In Lacs) 6.27 86.88 89.90 (36.29) 30.11 Weighted Average no. of Equity Shares 11,98,950 11,98,950 1,200,000 1,200,000 1,200,000

Earning Per Shares (Rs.) 0.52 7.24 7.49 (3.03) 2.51

DIAMANT


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13. Additional information required to be furnished as per Para 3(1) and (2), 4 (c) and 4(d) of Part II of Schedule VI to the Companies Act, 1956. (As Certified by a Director)

(Rs. In lacs) Particulars 2009 2008 2007 2006 2005Class of goods Manufactured N.A. N.A. N.A. N.A. N.A.Licensed capacity per annum N.A. N.A. N.A. N.A. N.A.Installed capacity per annum N.A. N.A. N.A. N.A. N.A.Raw material consumed N.A. N.A. N.A. N.A. N.A.CIF value of imports N.A. N.A. N.A. N.A. N.A.Expenditure in foreign currency N.A. N.A. N.A. N.A. N.A.Consumption of Raw Material

- Imported N.A. N.A. N.A. N.A. N.A.- Indigenous N.A. N.A. N.A. N.A. N.A.

Consumption of Stores & Spares - Imported N.A. N.A. N.A. N.A. N.A.- Indigenous N.A. N.A. N.A. N.A. N.A.

F.O.B. Value of Exports N.A. N.A. N.A. N.A. N.A.

Directors Remuneration Particulars 2009 2008 2007 2006 2005Salary including allowances 12,00,000 5,00,000 18,000 233,724 252,990 Contribution to P.F. - - - 18,000 18,000 Other Perquisites - - - - -Total 12,00,000 5,00,000 18,000 251,724 270,990

Remuneration to Auditors Particulars 2009 2008 2007 2006 2005Audit Fees 55,000 32,500 32,500 22,448 137,750 Tax Audit 20,000 12,500 12,500 11,224 55,100 Taxation Matters - - - 250,000 175,000 Others 7,725 5,562 5,508 18,183 198,081 Total 82,725 50,562 50,508 301,855 565,931

Quantitative Information Stock of Shares Particulars 2009 2008 2007 2006 2005Opening Stock Quantity Value

58,14,272

91,413,402

29,71,596

6,72,34,376

27,34,333

4,61,73,267

- -

- -

Purchases (#) Quantity Value

84,76,450

1,15,80,94,443

2,95,14,745

1,90,06,75,538

1,02,83,170

1,35,29,49,527

40,37,466

9,25,76,570

- -

Turnover Quantity Value

1,42,90,722

1,23,63,98,597

2,66,72,069

1,89,15,42,932

1,00,45,907

1,34,36,87,862

13,03,133

3,85,64,695

- -

Closing Stock (#) Quantity Value

- -

58,14,272

91,413,402

29,71,596

6,72,34,376

27,34,333 4,61,73,267

- -

DIAMANT


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Stock of woods (In Tons) Particulars 2009 2008 2007 2006 2005Opening Stock Quantity Value

- -

- -

- -

- -

- -

Wood generated Quantity Value

4,926.008 33,05,791

- -

- -

- -

- -

Turnover Quantity Value

4,790.702 56,42,268

- -

- -

- -

- -

Closing Stock Quantity Value

135.306 86,600

- -

- -

- -

- -

Note: The Company has ventured into the wood business for the first time in the financial year 2008-2009 and hence the previous years figures are not provided.

14. The disputed demand in respect of Income Tax outstanding for the Assessment Year 2003-04 is Rs.

20,96,632/-, for which the Company has preferred an appeal. The company has already paid 50% of the demand raised under protest. Based on the decision of the appellate authorities and the interpretations of the other relevant provisions, the company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

15. The Company leases office under cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and the lessee. Rental payments under such leases are Rs. 2,72,580/- and Rs. 2,58,300/- during the years ended on March 31, 2009 and 2008 respectively.

16. Segment Reporting (Rs. In lacs)

Particulars Segments Total

Financial Infrastructure Realty

2009 2008 2009 2008 2009 2008 2009 2008 Segment Revenues 12,285.68 19,140.42 808.27 132.16 - - 13,093.95 19,272.58

Segment Results -246.8 78.03 264.11 31.45 - - 17.31 109.48

Less: Other unallocable expenses, net of unallocable income

- - - - - - - 14.44

Net Profit - - - - - - 17.31 95.04 Segment Assets 525.78 922.98 883.29 397.24 865.23 865.23 2,290.35 2,185.45

Unallocated Corporate Assets

- - - - - - 16.04 33.75

DIAMANT


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Total Assets - - - - - - 2,290.35 2,219.20 Segment Liabilities 416.54 801.43 740.29 361.22 678.16 618.16 1,834.99 1,780.81

Unallocated Corporate Liabilities

- - - - - - 45.45 34.75

Total Liabilities - - - - - - 1,880.44 1,815.56 Capital Employed 109.24 121.55 143.00 36.02 187.07 247.07 409.91 403.64

Capital expenditure incurred during the year

0.73 - 360.64 370.35 - - 361.37 370.35

The Company was operating in a single segment till 31st March 2007 and hence the segment reporting was not provided for the financial years ending 31st March 2002 to 31st March 2007.

17. Related Party Disclosures

In accordance with the Accounting Standard on “Related Party Disclosures” (AS 18), the disclosure In respect of transactions with the Company’s related parties are as follows:

A) Details of Related parties and nature of relationships

Particulars Financial Year

ended 31.03.2008/ 31.03.2009

Financial Year

ended 31.03.2007

Financial Year ended 31.03.2006

Financial Year ended 31.03.2005

Nature of Relationship

Name of Party

Name of Party

Name of Party

Name of Party

Key Management Personnel (‘KMP’)

Naresh Jain Naresh Saboo

Jagdish Bhatt Mallikarjuna Rao - -

Relatives of Key Management Personnel (‘RKMP’)

Santosh Saboo - -

Related parties where KMP/ RKMP exercise Significant influence

Verbana Mercantile Pvt. Ltd Saboo Capital and Securities Pvt. Ltd Clarus Finance and Securities Ltd Obident Exports Pvt. Ltd. Diamant Infrastructure Developers Pvt Ltd Diamant Realty Pvt Ltd Diamant Securities Pvt Ltd

Clarus Finance & Securities Limited Saboo Capital & Securities Pvt Ltd

- -

DIAMANT


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B) Details of transaction with related parties and details of outstanding balances Financial Year Ended Particulars Nature of Relationship

2009 2008 2007 2006 2005Expenses Sitting Fee Key Management

Personnel (‘KMP’) - - 1,000 - -

Managerial Remuneration

Key Management Personnel (‘KMP’) 12,00,000 5,00,000 - - -

Salary Paid Relatives of Key Management Personnel (‘RKMP’)

1,50,000 - - - -

Professional Fees

Key Management Personnel (‘KMP’) - - 1,00,000 - -

Interest Paid Related parties where KMP/ RKMP exercise Significant influence

- - 1,31,576 - -

Rent Paid Relatives of Key Management Personnel (‘RKMP’)

12,000 1,05,000 - - -

Related parties where KMP /RKMP exercise Significant influence

1,20,000 1,20,000 - - -

Rent Payable Relatives of Key Management Personnel (‘RKMP’)

3,000 15,000 - - -


1,20,000 30,000 - - -

Receivables Related parties where KMP/ RKMP exercise Significant influence

14,400 14,400 - - -

Finance Loan Received


1,99,85,000 9,10,01,576 74,50,000 - -


Loan Paid Related parties where KMP/ RKMP exercise Significant influence

1,01,70,000 1,94,10,000 54,50,000 - -


Outstanding Loan Related parties where

KMP/ RKMP exercise Significant influence

8,34,06,576 7,35,91,576 20,00,000 - -


The present promoters have taken over the management and control of the company since Financial Year 2006-07 and hence details of transactions and outstanding of related parties are not provided for financial year ending 2005 and 2006.

DIAMANT


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18. The management was of the opinion that there were no impairment indicators that existed as on the balance sheet date. Hence no provision for the impairment loss has been done.

19. Other advances includes Rs. 7,00,00,000/- (agreement value) advanced towards property at Pune for which the agreement for sale had been entered and registered in the name of the company. However the deed of conveyance has not been executed and hence not registered, due to Rs. 1,32,50,000/- out of the total consideration of Rs. 7,00,00,000/- being outstanding to be paid by the company to the vendors. The outstanding amount has been fully provided for in the accounts.

20. Provision of Rs. 1,30,000 towards Fringe Benefit Tax (FBT) as per the provisions of section 115WJ of

the Income Tax Act, 1961 has been made for the current year. 21. The company has provided for deferred tax. The net deferred tax liability/assets as at the balance

sheet date has been carried forward. The net deferred tax liability/assets consist of the following components:

Particulars 2009 2008 2007 2006 2005Deferred Tax Liability Depreciation on fixed assets 20,47,022 8,16,640 60,881 65,122 83,675Total [ A ] 20,47,022 8,16,640 60,881 65,122 83,675Deferred Tax Asset Employee Benefits - 21,805 - - 77,640Disallowance u/s 43B of Income Tax Act, 1961 1,13,813 48,972 - - -Disallowance u/s 40(a)(ia) of the Income Tax Act, 1961 47,316 - - - -

Total [ B ] 1,61,129 70,777 - - 77,640 Net Deferred Tax Liability / Assets[ A – B ] 18,85,893 7,45,863 60,881 65,122 6,035

22. Previous years figures have been regrouped / re-classified in order to conform to current years figures.

DIAMANT


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Annexure – IV Cash Flow Statement

(Rs. In Lacs) As at 31st marchParticulars 2009 2008 2007 2006 2005

A. Cash Flow from Operating Activities Net Profit before Tax 17.31 95.04 90.17 (35.57) 47.19Depreciation Charge 47.24 14.41 0.63 0.63 0.89Dividend (4.30) (2.38) (2.51) (0.17) (4.65)Gain on Sale of Investment - - - (18.84) (63.62)Surplus on Investment with Bank - - - (1.37) (2.33)Loss on Sale of Asset - - - - 0.39Balance written off - 9.64 - - -Interest Paid 36.97 8.37 5.42 0.15 -Interest Received (0.39) (0.23) (0.39) (4.65) (4.35)Operating profit before working capital changes 96.83 124.85 93.32 (59.82) (26.48)

Inventories 869.26 (357.59) (210.61) (461.73) -Sundry Debtors (566.37) (29.39) (8.07) - 0.74Other Current Assets - - 53.52 (26.88) 0.76Current Liabilities (72.49) 238.18 91.29 188.02 10.31Cash Generated from Operations 327.23 (23.95) 19.45 (360.42) (14.66)Direct Taxes paid (14.21) (13.03) - (2.57) (6.03)Prior period and extraordinary items - - - - -Net Cash from Operating Activities 313.02 (36.98) 19.45 (362.98) (20.69)B. Cash flow From Investing Activities Purchase / Acquisition of Fixed Assets (361.75) (372.53) (0.89) (0.04) (0.04)Sale of Investment - - - 632.59 328.43Purchase of Investment - - - (391.45) (429.05)Surplus on Investment with bank - - - 1.37 2.33Interest Received - 0.23 0.39 4.65 4.35Dividend Received 4.30 2.38 2.51 0.17 4.65Interest Paid - - - (0.15) -Dividend & Dividend Taxes Paid - - - (13.54)Sale of Fixed Assets - - - 0.11Net Cash from Investing Activities (357.45) (369.92) 2.01 247.15 (102.76)C. Cash Flow from Financing Activities Proceed /Repayment of Loan 130.72 1173.94 5.89 54.11 -Dividend paid - (12.00) - - -Dividend Distribution tax paid - (2.04) - - -Loans & Advances (27.66) (755.88) - - -Interest Paid (36.97) (8.37) (5.42) - -Interest Received 0.39 - - - -Net cash from Financing Activities 66.48 395.65 0.47 54.11 -Net Increase / (Decrease) in Cash & Cash Equivalents 22.05 (11.25) 21.93 (61.72) (123.45)

Opening Balance of Cash & Cash Equivalent 17.69 28.94 7.01 68.73 192.18Closing Balance of Cash & Cash Equivalent 39.74 17.69 28.94 7.01 68.73

*(Figures in bracket represent outflow)

DIAMANT


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Annexure – V Statement of Accounting Ratios Accounting Ratios 2009 2008 2007 2006 2005Earnings per share (Rs) 0.52 7.24 7.49 (3.03) 2.51Return on net worth % 1.53 21.52 28.54 (15.81 ) 11.23Net asset value per share (Rs) 34.19 33.67 26.25 19.13 22.35No. of equity shares of Rs. 10/- 11,98,950 11,98,950 1,200,000 1,200,000 1,200,000

DIAMANT


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Annexure – VI Capitalisation Statement

(Rs. in Lacs)

Particulars Pre issue as at 31.03.2009

Post Issue (at an offer Price of

Rs. 35/-) Loan Funds Short Term Debt 1374.29 (#) 1,374.29 Long Term Debt - - Total Debt 1374.29 1374.29 Shareholders' Fund Share Capital 119.90 480.00 Reserves & Surplus 290.01 (*) 1,189.22 Total Shareholders Fund 409.90 1,669.22 Term Debt / Equity 3.35 0.82

(#) Excludes repayments done during the period 1st April 2009 till the issue of this report i.e 10th June,

2009. (*)Includes premium amount on issue of shares on right basis Rs. 899.21 lacs, and excludes impact

of profit/loss on reserves and surplus for the period 1st April 2009 till the issue of this report i.e 10th June, 2009.

DIAMANT


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Annexure – VII Tax Shelter Statement

(Rs in lacs) Particulars 2009 2008 2007 2006 2005Tax rate (including Surcharge) 30.90% 33.99% 33.66% 33.66% 36.59%Profits 17.31 95.04 90.17 (35.57) 16.46Tax at Notional Rate 5.35 32.30 30.35 - 6.02Difference Between Income Tax & Book Depreciation 42.22 23.03 (0.13) (0.35) 0.02Other Adjustments 3.78 33.05 32.07 - 13.70Net Adjustments 38.44 10.02 31.94 - 13.68Tax (saving) /expense thereon (11.88) 3.41 (10.75) - (5.01)Taxation (6.53) 35.71 19.60 - 1.01Tax Adjustments* 8.31 34.70 19.34 - 0.26Total Taxation 1.78 1.01 0.26 - 1.27

DIAMANT


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Annexure - VIII Details of Sundry Debtors

Age Wise Break-Up of Sundry Debtors (Rs. in Lacs) Particulars 31.03.09 31.03.08 31.03.07 31.03.06 31.03.05 Less than six months 603.83 37.46 8.07 - - More than six months - - - - - Total 603.83 37.46 8.07 - -

DIAMANT


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Annexure – IX Details of Loans and Advances (Rs. In Lacs)

(Unsecured, Considered good) 31.03.09 31.03.08 31.03.07 31.03.06 31.03.05 Advances- recoverable in cash or in kind or for value to be received 14.87 4.64 1.63 1.65 0.37

Income Tax Paid 27.24 14.07 1.04 8.37 28.39 Balance with Excise & Custom Department - - - - 0.02 Sundry Deposit 19.92 3.44 - - 0.49 Inter Corporate Deposit 751.42 749.42 - 46.14 - Interest Receivable - - - - - Prepaid Expenses - - - 0.03 0.03 Total 813.45 771.57 2.67 56.19 29.30

DIAMANT


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Annexure – X Statement of Secured and Unsecured Loans Details of Secured Loans (Rs. in Lacs)

(#) Refer Point no. 3 to Notes to accounts for details Details of Unsecured Loans (Rs. in Lacs) Particulars 31.03.09 31.03.08 31.03.07 31.03.06 31.03.05 From Shareholders 510.37 428.42 20.00 50.11 - From Directors 24.80 19.79 - - - From Others 382.83 539.92 40.00 4.00 - Total 918.00 988.12 60.00 54.11 -

Particulars 31.03.09 31.03.08 31.03.07 31.03.06 31.03.05 From Banks (#) 104.15 48.36 - - - From Financial Institutions (#) 352.15 207.09 - - - Total 456.30 255.45 - - -

DIAMANT


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Annexure – XI Details of Other Income where such income exceeds 20% of the net profit before tax and extraordinary items (Rs. In Lacs) Particulars 31.03.09 31.03.08 31.03.07 31.03.06 31.03.05Brokerage Refund - 29.34 14.51 - -Central Excise Refund Received - - - 0.08 -Dividend Received 4.30 2.38 2.51 - 4.65Surplus on Investments - - - 1.37 2.33Claims Received 0.15 - 1.00 4.98 4.35Discount Received - 0.82 - 0.17 -Balances written back 0.40 - 9.61 0.27 -Interest on Income Tax Refund 0.34 0.20 - - 0.40Interest on Bank Deposits 0.05 0.03 - - -Interest on loans - - 0.39 4.64 4.35Profit on sale of shares - - - 20.50 63.62Other Income 0.14 0.03 0.14 0.66 -Sales Tax Refund - - - 0.08 0.23Total Other Income 5.38 32.80 28.16 32.75 79.93Percentage of Net Profit Before Tax (%) 31.08 34.88 31.23 (*) - 169.00

(*) Loss during financial year 2005-2006 hence, percentage of other income to net Profit before tax cannot be derived. Note: The above other income has arisen out of normal business activities of the company except for profit on sale of shares in financial year 2005 and 2006.

DIAMANT


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The Company’s promoter does not have any group company. The subsidiaries of the company has not commenced any commercial operation, hence no financial results for them are prepared. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS The Management Discussion and Analysis report Investors should read the following discussion of the Company’s financial condition and results of operations together with notes to those statements included in this Letter of Offer. The following discussion is based on the Company’s audited financial statements and on information available from other sources. The Company’s fiscal year ends on March 31st of each year; so all references to a particular fiscal year are to the twelve month period ended March 31st of that year. Business overview Diamant Investment and Finance Limited were engaged in manufacture and deal in carbon and graphite product. The management changed the main objects and activity of the company to investment and finance activity by trading in shares and securities, after they sold their manufacturing unit to Vesuvius India Ltd, Kolkata in the year 2003. The company was later taken over by Vision Sales Pvt Ltd and Saboo Capital & Securities Pvt Ltd in 2005. The present Board of Directors of the Company felt that the future of India lies with in Infrastructure Development and considering the growth of the Company and taking into account the available opportunities in the Infrastructure Business, the Board of Directors of the company have recommended that the company venture into Infrastructure and real estate business with change in the objects clause of the company. Company has procured some contracts from Modern Road Makers Private Limited, Ashoka Buildcon Limited, Sadbhav Engineering Limited in Infrastructure business. The company is presently into infrastructure business and road development. Significant Developments subsequent to the Last Financial Year The Directors of the Company confirm that in their opinion, no circumstances have arisen since the date of the last financial statements as disclosed in the Draft Letter of Offer and which materially and adversely affect or is likely to effect the trading or profitability of the Company, or the value of its assets or its ability to pay its liabilities within the next twelve months. Factors that may affect results of the operations of the company.

• General economic and business conditions As a company operating in India, we are affected by the general economic conditions in the country and in particular the factors affecting the infrastructure industry and the projects we undertake. The growth prospects of our business and our ability to implement our strategies will be influenced by economic growth.

• Dependence on government policy and regulation towards Infrastructure The growth of our business is dependent on the establishment of stable government policies and prudent regulation. Infrastructure development in India has historically been the preserve of the central and state governments, and has been constrained by various factors such as shortages of public funding, political considerations and issues of transparency and accountability. We believe that with the policy and regulatory reforms continuing to move in the right direction, our growth and financial conditions and operations will be positively impacted. • Input cost and availability of the specialised raw materials

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The cost of raw materials and other inputs constitute a significant part of our operating expenses. Any increase in the cost, to the extent, could not be passed on to the customers would have an adverse impact on our operations. Further, the availability of specialised raw materials like wheels is very critical for the smooth operations. Any impact on the above might affect our operations adversely.

• Competition

We expect competition to intensify due to possible new entrants in the market, existing competitors further expanding their operations and our entry into new markets where we may compete with well-established companies. Intense competition with the opening up of economy coupled with liberalization of import with lower levies might affect our operations.

• Dependence on few major customers and their plans for future We have some customers which form a major chunk of our operations and revenue. Future plans and policies of such customers may affect our financial conditions and operations. Significant Accounting Policies

a. Basis of Preparation of Financial Statements Financial statements are prepared on the historical cost convention, on accrual basis, in accordance with the Generally Accepted Accounting Principals, and applicable accounting standards and the provisions of the Companies Act, 1956.

b. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the years presented. Actual results could differ from those estimates.

c. Revenue Recognition Incomes/Revenues are accounted for on accrual basis in accordance with the Accounting Standard

(AS-9) issued by the Institute of Chartered Accountants of India except for dividend and interest on income-tax and sales-tax refund. Revenue is recognised to the extent that it is probable that the economic benefit will flow to the company and the revenue can be reliably measured.

Sale of shares is accounted when the contract for sale is entered into and the delivery of the shares has been effected.

Profit/loss on derivative transaction is recognised on the expiry/exercise of Future Contracts on or before the date of settlement of the relevant contract.

Revenue on account of contracts is recognised on the basis of the certification of work done by the principal contractor.

d. Fixed Assets

Fixed Assets are stated at cost including all incidental expenses incurred for bringing the asset to its current position, less depreciation at rates prescribed in Schedule XIV to the Companies Act, 1956, subject to provisions of Accounting Standard 26 “Intangible Assets” issued by Institute of Chartered Accountants of India.

e. Depreciation Depreciation has been provided on Straight Line Method in accordance with section 205(2) of the Companies Act, 1956 at the rates specified in schedule XIV to the Companies Act, 1956, on pro–rata

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basis with reference to the period of use of such assets. Assets costing less than Rs. 5,000/- per item are depreciated at 100% in the year of purchase.

f. Inventories

Stock of Wood is valued at lower of cost or net realisable value. Cost is determined on the basis of direct expenses incurred in relation to cutting of trees.

Stock of equity share held as stock-in-trade by the company is valued at Cost. Cost of inventories is determined on “first in first out” basis.

Value of work uncertified by the principal contractor, in relation to contract is determined and valued by the management at the year-end and is carried at cost in the balance sheet as Uncertified Contract Revenues.

Property for development is valued at cost. g. Impairment of Assets

The carrying amounts of Cash Generating Units/Assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated at the higher of net realisable value and value in use. Impairment loss is recognised wherever carrying amount exceeds the recoverable amount.

h. Investments

Investments are done in the name of company and valued at its cost. i. Retirement Benefits

All short-term employee benefits are recognised at their undiscounted amount in the accounting period in which they are incurred.

Retirement Benefits in the form of gratuity and leave salary is accounted on payment basis in the year of payment.

j. Income Tax Provision for current tax is made for the tax liability payable on taxable income after considering the

allowances, deductions and exemptions and disallowances if any determined in accordance with the prevailing tax laws.

The differences between the taxable income and the net profit or loss before tax for the period as per the financial statements are identified and the tax effect on the “timing differences” is recognised as deferred tax asset or deferred tax liability. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the tax rates and laws, enacted or substantively enacted as of the balance sheet date.

Fringe Benefit Tax is provided on the value of fringe benefits provided/deemed to be provided to the employees at the applicable tax rates.

k. Borrowing cost

Borrowing cost attributable to the acquisition of fixed assets is capitalised as the part of the cost of that fixed assets, till the date it is put to use. Other borrowing cost is recognised as expenditure in the period in which they are accrued.

l. Segmental reporting

Operations of the company have been bifurcated into three primary segments i.e. Financial, Infrastructure and Realty Segments.

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Segment Revenue, Results and Assets and Liabilities figures include the respective amounts identifiable to each of the Primary Segments. Other unallocable expenditure, assets and liabilities relates to corporate as a whole.

m. Leases

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the revenue account on a straight line basis.

n. Provisions, Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the outflow.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events but

their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the company.

Contingent Assets are neither recognised nor disclosed in the Financial Statements as a matter of prudence.

o. Financial Derivatives i. At the time of inception of the contract

Initial margin paid before entering into the Stock Future contract is debited to “Initial margin – Stock Future A/c” and year-end balance in this account is disclosed separately in the balance sheet under the head of Current Assets.

ii. At the time of daily settlement

The amount of Mark-to-Market margin received /paid is debited/credited to “Mark-to-Market Margin Stock Future A/c” and year-end balance in this account is disclosed separately in the balance sheet under the head of Current Assets/Current Liabilities as the case may be.

iii. At the time of final settlement

The difference between the contract price and the settlement price is calculated and recognised as profit in the Profit and Loss Account.

Comparison Statement of Profit and Loss for the year ended March 31st 2006, 2007, 2008 and 2009. (Rs. in Lacs)

Period Ended on 31.03.2006 31.03.2007 31.03.2008 31.03.2009 Amount Amount Amount Amount INCOME Income from Operations 385.65 13413.81 18998.19 13088.57Other Income 69.70 28.16 32.80 5.38Increase / (Decrease) in Stocks 461.73 210.61 357.59 (869.26)TOTAL 917.08 13652.58 19388.58 12224.69EXPENDITURE: Purchases 925.77 13529.50 19122.56 11580.94Administrative and other Expenses 25.81 26.74 147.97 540.55TOTAL 951.58 13556.24 19270.52 12121.49PBDIT (34.50) 96.34 118.06 103.20Depreciation 0.63 0.63 14.41 47.24Financial Expenses 0.44 5.54 8.61 38.65Net Profit Before Tax (35.57) 90.17 95.04 17.31Tax Adjustment & Prior Period Item (2.44) 9.61 1.78 3.50

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Less: PROVISION FOR TAXATION: Current Tax 0.00 0.28 1.05 1.85Deferred Tax 0.59 0.04 6.85 11.40Fringe Benefit Tax 0.13 0.03 0.26 1.30Net Profit After Tax (38.73) 99.51 86.88 6.26Brought Forward from Previous Year 129.14 90.41 175.88 264.54

Proposed Dividend 0.00 12.00 0.00 0.00Corporate Dividend Tax 0.00 2.04 0.00 0.00Balance Carried to Balance Sheet 90.41 175.88 264.54 270.80

Comparison of finances for the period ended 31 March 2006 over 31st March 2007. Revenue: The company’s revenue increased from Rs. 917.08 lacs in FY 2006 to Rs. 13652.58 lacs in FY 2007 – an increase of 1388.70 % from the previous financial year. This is due to the change in management in the late 2006 FY. Expenditure: As compared to increase in sales 1388.70 %, the expenditure was Rs. 13556.24 lacs for FY 2007 as compared to Rs. 951.58 lacs for FY 2006, an increase of 1324.60 % from the previous financial year. This is in line with increase in sales. Profit /loss before tax: The profit before tax increased to Rs. 90.17 lacs in FY 2007 as compared to a loss of Rs. 35.57 lacs in the FY 2006, an increase of 353.50 % from the previous financial year. Net profit/ loss: The net profit after tax increased to Rs. 89.90 lacs in FY 2007 as compared to a loss of Rs. 36.29 lacs in the FY 2006, an increase of 347.72 % from the previous financial year. Comparison of finances for the period ended 31 March 2007 over 31st March 2008. Revenue: The company’s revenue increased from Rs. 13652.58 lacs in FY 2007 to Rs. 19388.58 lacs in FY 2008 – an increase of 42.01 % from the previous financial year. Expenditure: As compared to increase in sales 42.01 %, the expenditure was Rs. 19270.52 lacs for FY 2008 as compared to Rs. 13556.24 lacs for FY 2007, an increase of 42.15 % from the previous financial year. This is in line with increase in sales. Profit /loss before tax: The profit before tax increased to Rs. 95.04 lacs in FY 2008 as compared to Rs. 90.17 lacs in the FY 2007, an increase of 5.40 % from the previous financial year. Net profit/ loss: The net profit after tax decreased to Rs. 88.65 lacs in FY 2008 as compared to Rs. 89.90 lacs in the FY 2007, a decrease of 1.39 % from the previous financial year. Comparison of finances for the period ended 31 March 2008 over 31st March 2009. In this period the company has completely stopped its investment activities and concentrated only on infrastructure business. Revenue: The company’s total revenue decreased from Rs. 19388.58 lacs in FY 2008 to Rs. 12224.69 lacs in FY 2009 – a decrease of 36.94 % from the previous financial year. This is mainly because the investment business was stopped and most of the investments were sold at loss. Expenditure: As compared to decrease in sales of 36.94 %, the expenditure was Rs. 12121.49 lacs for FY 2009 as compared to Rs. 19270.52 lacs for FY 2008, a decrease of 37.09 % from the previous financial year. This is in line with decrease in sales. Profit /loss before tax:

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The profit before tax decreased to Rs. 17.31 lacs in FY 2009 as compared to Rs. 95.04 lacs in FY 2008, this is because most of the investment in shares were sold at loss. Net profit/ loss: The net profit after tax decreased to Rs. 6.27 lacs in FY 2009 as compared to Rs. 88.65 lacs in FY 2008, due to booking of loss in investment activity.

1) Unusual or infrequent events or transactions Our Company has started the infrastructure and real estate activities in the FY 2008. For more details refer to the section titled “Our History and Corporate Structure” and “Business Overview” beginning on page no. 49 and page no. 45 respectively in this Draft Letter of Offer.

2) Significant economic changes that materially affected or are likely to affect income from

continuing operations. Government’s focus on the infrastructure Sector will have a major bearing on the companies involved in the Infrastructure Industry. Accordingly, any major changes in the policies of the Government could have an impact on the profitability of our Company.

3) Known trends or uncertainties that have had or are expected to have a material adverse

impact on sales, revenue, or income from continuing operations Apart from the risks as disclosed under heading ‘Risk Factors’ beginning on page no. 7 in this Draft Letter of Offer, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4) Future changes in relationship between costs and revenues, in case of events such as future

increase in labour or material costs or prices that will cause a material change are known Our Company’s future cost and sale prices will be determined by demand/supply situation, overall economic conditions of the country, government policies and availability of raw material etc. and prices there of.

5) Extent to which material increases in net sales or revenue are due to increased sales volume,

introduction of new products or services or increased sales prices. Increases in revenues are by and large linked to increases in volume of business.

6) Total turnover of each major Industry segment in which our Company operated

The Company is operating only in one segment namely road construction. However, there are no published data available to the Company for total turnover of the Road Construction Industry.

7) Status of any publicly announced new products or business segment.

Our Company has not publicly announced any new products or business segments. 8) The extent to which the business is seasonal.

The construction activities are affected sometimes, due to extreme temperatures and heavy rains. 9) Any significant dependence on a single or few suppliers or customers.

We source our major raw material from various suppliers across the region we operate. We are not dependent on few Customers for our sales of products.

10) Competitive Conditions

The Company faces stiff competition from larger and well-established players. The Company is smaller in size compared to the market leaders, which acts as deterrent for very large projects. Further, smaller proprietary firms also create competition for the Company.

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Working Results Information relating to the Company sales, gross profit etc., as required by the Ministry of Finance Circular No.F2/5/SE/76 dated February 5, 1977 read with the amendments of even No. dated March 8, 1977 as under: The unaudited working results of the Company for the period ended 31/05/2009 are given hereunder: (Rs in Lacs)

Particulars Amount Net Sales / Income from operations 463.00Total Expenditure 324.00Gross Profit 139.00Paid-up Equity Share Capital (Face value Rs. 10/- per share) 120.00Earning Per Shares (Rs.) 1.15

There are no material changes and commitments, which are likely to affect the financial position of the Company since March 31, 2009 (i.e. last date up to which audited information is incorporated in the Letter of Offer) Week end prices of Equity Shares of the Company for the last four weeks on the BSE is as below: Week Ended Closing Price (Rs.) Highest Price (Rs.) Lowest Price (Rs.) June 19, 2009 73.20 84.35 73.20 June 12, 2009 88.70 91.45 84.10 June 5, 2009 96.25 101.45 92.05 May 29, 2009 92.75 99.45 92.75 Source: BSE The closing Price of the Equity Shares of the Company on the BSE on 19/06/2009 was Rs. 73.20 per equity Share (cum-rights price).

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SECTION VI – LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS Except as described below and in the notes to the financial statements, there are no contingent liabilities not provided for, outstanding litigations, disputes, non payment of statutory dues including disputed / contested tax liabilities of any nature including government claims, over dues to banks / financial institutions, defaults including those against banks / financial institutions, defaults in dues towards instrument holders like debenture holders, fixed deposits, and arrears on cumulative preference shares issued by the company or the companies / firms promoted by the company, defaults in creation of full security as per terms of issue / other liabilities, proceeding initiated for economic / civil / any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of Part 1 of Schedule XIII of the Companies Act, 1956) against Diamant Investment & Finance Limited except the following:

A) LITIGATION PERTAINING TO THE COMPANY: Diamant Investment & Finance Limited

(i) DISPUTES AGAINST THE COMPANY: Pertaining to Securities Laws: NIL Pertaining to Criminal Laws: NIL Arbitration Matters: NIL Pertaining to Civil Laws: NIL Pertaining to Statutory Laws: NIL

(ii) DISPUTES / CLAIMS FILLED BY THE COMPANY: Pertaining to Securities Laws: NIL Arbitration Matters: NIL Pertaining to Civil Laws: NIL Pertaining to Statutory Laws: Income Tax cases- Assessment Year 2003-04: The Company has filed an appeal before the Commissioner of Income Tax (Appeals), Ahmedabad on 15.01.2008 against order dated 31/12/2007 passed by the Assistant Commissioner of Income Tax, Mehsana Circle, Mehsana. The Assistant Commissioner of Income Tax vide its aforesaid order computed the tax liability to Rs. 20,96,632/- along with interest. The company has deposited Rs. 10,50,000/- dated 18th January, 2008 as mutually agreed with the department for the outcome of said appeal. The company has also preferred an appeal against initiation of penalty proceedings u/s. 271(1)(c) so nature of penalty cannot be quantified.

(iii) STATUTORY / OTHER LEGAL NOTICES RECEIVED BY THE COMPANY & IT’S DIRECTORS: NIL

B) LITIGATIONS / DISPUTES / DEFAULTS AGAINST PROMOTERS / DIRECTORS:

There are no other civil, criminal, statutory, or other proceedings / cases pending against the promoters / directors of the issuer company except the following Income Tax related matter: Against Mr. Naresh Saboo, Chairman cum Managing Director An additional tax liability of Rs. 1,10,457/-, Rs. 86,247/- and Rs. 8,22,024/- had been raised against the Director for the A.Y. 2005-06, 2006-07 and 2007-08 respectively. The Director has preferred an appeal before the Commissioner of Income Tax (Appeals) Central III of Mumbai and the appeal is pending till date. Against Mr. Naresh Jain, Director An additional tax liability of Rs. Rs. 24,62,035/- had been raised against the Director for the A.Y. 2007-08. The Director has preferred an appeal before the Commissioner of Income Tax (Appeals) Central III of Mumbai and the appeal is pending till date.

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C) LITIGATIONS PERTAINING TO GROUP COMPANIES : NIL D) LITIGATIONS / DISPUTES / DEFAULTS AGAINST PROMOTER GROUP COMPANIES AND /

OR ASSOCIATES OTHER THAN STATED ABOVE : There are no civil, criminal, statutory, or other proceedings / cases pending against the promoters group companies and / or associates other than stated above.

MATERIAL DEVELOPMENTS: The Directors of the company in their opinion hereby state that there is no material development after the date of the last financial statements disclosed in the Draft Letter of Offer which is likely to materially and adversely affect or is likely to affect the trading or profitability of the Company or the value of its assets, or its ability to pay its liabilities within the next twelve months. Amount Owed to Small Scale Undertakings / Creditors The name of Small Scale Undertakings / creditors to whom the Company owes a sum exceeding Rs. 1 lacs which is outstanding for more than 30 days, as on March 31, 2009: NIL Adverse Events There has been no adverse event affecting the operations of our Company occurring within one year prior to the date of filing of this Letter of Offer with BSE. Defaults Our Company has not defaulted in meeting any statutory dues, institutional dues or bank dues. Our Company has not defaulted in making any payment/refunds for debentures, fixed deposits and interest on debentures and fixed deposits. GOVERNMENT APPROVALS/LICENSING ARRANGEMENTS Name of Registration / License Issuing Authority Registration / License no. and Date

Certificate of Incorporation Registrar of companies,

Gujarat 3859 Date: 29th July, 1980

Certificate of Commencement of Business

Registrar of Companies, Gujarat

3859 dated March 02, 1981

Certificate of Registration of Confirming Transfer of the Registered Office from one State to Another

Asst Registrar of Companies, Gujarat

L26994GJ1980PLC3859 dated November 14, 2003

Fresh certificate of incorporation with change of name from Diamant Carbon & Graphite Limited to Diamant Investment & Finance Limited

Registrar of companies, Maharashtra

U26994MH2003PLC143264 Date: 1st February, 2005

Value Added Tax / Central Sales Tax

Sales Tax Officer, Nagpur, Maharashtra Sales Tax Officer, Seoni, Madhya Pradesh Commercial Tax Officer, Rajnangaon, Chhattisgarh Asst Commissioner of Commercial Tax, Bilimora

27140623096V w.e.f. 01.08.2007. Nagpur. 23566703279 w.e.f. 01.09.2007. Seoni. 22633604786 w.e.f. 24.05.2008. Rajnangaon. 24240701940 w.e.f. 20/05/2009. Bilimora

Permanent Account Number Commissioner of Income Tax, Mumbai, Maharashtra

AAACD2168B

Tax Deduction Account Number Income Tax Department MUMD11383B Service Tax Code Commissioner of Central

Excise & Service Tax, AAACD2168BST001

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Nagpur Under Section 7(1) 7(2) of the Central Sales Tax Act, 1956

Sales Tax Officer, Nagpur, Maharashtra

27140623096C w.e.f. 01.08.2007. Nagpur

Shops & Establishment License Senior Inspector, Shops & Establishment Act, 1948

A008542 Date: 31.12.2009

Certificate of Enrolment under Section 5 (2) (2A) of the Maharashtra State Tax on Profession, Trade, Callings and Employments Act 1975

Profession Tax Officer, Enrollment Registration Branch, Mumbai

11002118003601 w.e.f. 01.04.1993

Allotment of Account Number under the Employees Provident Funds and Miscellaneous Provision Act, 1952

Regional Provident Fund Commissioner, Maharashtra

MH/BAN/49690 Dated 29/05/2008

The following applications are filed for approval but are in process / pending with the government authorities: There are no applications which are filed for approval but are in process / pending with the government authorities. Our Company has received the necessary material consents, licenses, permissions and approvals from the Government/RBI and various Government agencies required for our present business. No further consent of the Government of India / Government Authorities is required for the present Issue other than those mentioned in the Draft / Letter of Offer. It must, however, be distinctly understood that in granting the above approvals, the Government and other authorities do not take any responsibility for the financial soundness of our Company or for the correctness of any of the statements or any commitments made or opinions expressed.

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SECTION VII – OTHER REGULATORY AND STATUTORY DISCLOSURES 1. Authority for the Present Issue The Board of Directors pursuant to the resolution passed at the Board Meeting held on 13th December, 2008 and subsequent resolution passed by the shareholders of the Company in their Extra-ordinary General Meeting held on 10th January, 2009 have decided to offer 35,96,850 Equity Shares of Rs. 10/-each for cash at a premium of Rs. 25/- each on Rights basis to the existing Equity Shareholders of the Company in the ratio of Three Equity Shares for every One Equity Share held [i.e. 3:1] on Record Date i.e. [•] aggregating to Rs. 1258.90 lacs. The above Rights Issue structure was arrived after the supercession of the resolutions passed by the Board of Directors in their meeting held on 16th June, 2007 and by the shareholders of the Company in the AGM of the Company held on 27th July, 2007. The terms of which was as follows: Issue of Equity Share of Rs. 10/- each at a premium of maximum upto Rs. 20/- each, aggregating to a maximum of Rs. 7,20,00,000/- on rights basis to the existing Equity Shareholders of the Company in the ratio of 2:1 held on the Record Date. 2. Prohibition by SEBI The Company, its Promoters, its Directors or any of the Company’s associates or group companies and companies with which the Directors of the Company are associated as Directors or Promoters, or Directors or Promoters in control of, of the promoting Company, are currently not prohibited from accessing the capital market under any order or direction passed by SEBI except the Show Cause Notice issued by SEBI whose details are mentioned elsewhere in this Draft Letter of Offer. The listing of any securities of the issuer has never been refused at any time by any of the Stock Exchanges in India or abroad. Further the Promoters, their relatives (as per Act), the Company, group companies, associate companies are not detained as willful defaulters by RBI / Government authorities. 3. Eligibility for the Issue Diamant is an existing Company under the Companies Act, whose equity shares are listed on BSE. The issuer company is exempted from the eligibility norms in terms of Clause 2.4.1(iv) as defined under Chapter II of The SEBI (DIP) Guidelines, 2000. 4. Disclaimer Clause AS REQUIRED, A COPY OF THIS LETTER OF OFFER HAS BEEN SUBMITTED TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPOSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER OF OFFER. THE LEAD MANAGER ASHIKA CAPITAL LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE OFFER DOCUMENT, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER ASHIKA CAPITAL LIMTIED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED 22/06/09 IN ACCORDANCE WITH THE SEBI (MERCHANT BANKERS) REGULATIONS, 1992 WHICH READ AS FOLLOWS:

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WE, THE UNDER NOTED LEAD MERCHANT BANKER (S) TO THE ABOVE MENTIONED FORTHCOMING ISSUE STATE AS FOLLOWS: 1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO

LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY,

ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY;

WE CONFIRM THAT: (a) THE DRAFT LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE

DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; (b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE

GUIDELINES, INSTRUCTIONS ETC., ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH;

(c) THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND

ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO 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;

3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE

DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION IS VALID;

4. WE HAVE SATISFIED OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFILL THEIR UNDERWRITING COMMITMENTS. – NOT APPLICABLE

5. 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 PROMOTER DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT LETTER OF OFFER WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT LETTER OF OFFER— NOT APPLICABLE

6. WE CERTIFY THAT 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 LETTER OF OFFER- NOT APPLICABLE

7. 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

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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 COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. – NOT APPLICABLE

8. WHERE THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION IS NOT APPLICABLE TO

THE ISSUER, WE CERTIFY THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION UNDER CLAUSE 4.10 (C) ARE NOT APPLICABLE TO THE ISSUER.

9. 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 ACITIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

10. 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 DRAFT LETTER OF OFFER. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER WOULD SPECIFICALLY CONTAIN THIS CONDITION.

11. 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.

12. WE CERTIFY THAT A DISCLOSURE HAS BEEN IN THE DRAFT LETTER OF OFFER THAT

THE INVESTORS SHALL BE GIVEN AN OPTION TO GET SHARES IN THE DEMAT OR PHYSICAL MODE.

13. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER: (a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE 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.

The filing of this Letter of Offer does not, however, absolve the Company from any liabilities under Section 63 or Section 68 of the Companies Act or from the requirement of obtaining such statutory or other clearance as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take up, at any point of time, with the Lead Manager any irregularities or lapses in this Letter of Offer. 5. Caution The Company and the Lead manager accept no responsibility for statements made otherwise than in the Draft Letter of Offer or in the advertisement or any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information would be doing so at his/her/their own risk.

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The Lead Manager and the Issuer shall make all information available to the public and investors at large and no selective or additional information would be available for a section of investors in any manner whatsoever including at road shows, presentations, in research or sales report etc, after filing of the Letter of Offer with SEBI. The Lead Managers and the Company shall update the Draft Letter of Offer and keep the public informed of any material changes till the listing and trading commences. 6. Disclaimer with respect to Jurisdiction This Draft Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and regulations there under. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Mumbai, India only. 7. Disclaimer Clause of Bombay Stock Exchange Limited “Bombay Stock Exchange Limited, Mumbai (“the Exchange”’) has given, vide its letter dated [•], permission to this Company to use the Exchange’s name in this Draft Letter of Offer as one of the stock exchanges on which Company’s securities are proposed to be listed. The Exchange has scrutinised this Draft Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company. The Exchange in any way manner: i. Warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Letter of Offer; or ii. Warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or iii. take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company. and It should not for any reason be deemed or construed that this Draft Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever Filing The Letter of Offer has been filed with the Corporation Finance Department, SEBI, SEBI Bhavan, Plot No C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051, A copy of this Letter of Offer has been filed with BSE having attached thereto the Material Contracts and Documents. All the legal requirements applicable till the date of filing the Letter of Offer with the stock exchanges and SEBI has been complied with. 8. Listing The existing Equity Shares of the Company are listed on BSE. The Company will make applications to these Stock Exchanges for permission to deal in and for an official quotation in respect of the Equity Shares arising out of the issue. The Company has received ‘in-principle’ approvals from BSE (Designated Stock Exchange) vide their letter no. [•] dated [•]. In case, the permission to deal in and for and official quotation of the Equity Shares is not granted by any of the Stock Exchanges where the listing application will be made, the issuer shall forth with repay without interest, all monies received from the applicants in pursuance of this Letter of Offer and if such money is not repaid within 8 days after the delay from which the Issuer is liable to repay it, then the Company and every Director of the Company who is an officer in default shall, on and from the expiry of 8 days, be jointly and severally liable to repay that money with interest as prescribed under Section 73 of the Companies Act, 1956. The Company has complied with the provisions of listing agreement more particularly Corporate Governance.

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9. Impersonation As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection (1) of Section 68A of the Companies Act, 1956 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” 10. Consents Consents in writing of the Directors, the Company Secretary and Compliance Officer, the Auditors, Bankers to the Company and Bankers to the Issue, Lead Managers to the Issue, Registrar to the Issue to act in their respective capacities, have been obtained and filed along with a copy of the Letter of Offer with the SEBI / Stock Exchange, 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 this Draft Letter of Offer for registration with the Stock Exchanges. Tushar Parekh & Associates, Chartered accountants are statutory auditors have given their written consent to the inclusion of their report in the form and context in which it appears in this Offer Document and such consent and report has not been withdrawn up to the time of delivery of this Offer Document for filing with the Stock Exchange. Tushar Parekh & Associates, Chartered accountants, have given their written consent to the tax benefits accruing to the Company and its members in the form and context in which it appears in this Offer Document and has not withdrawn such consent up to the time of delivery of this Offer Document for filing with the Stock Exchange. 11. Expert Opinion Save and otherwise stated in this Letter of Offer, the Company has not obtained any expert opinions 12. Issue Expenses

(Rs in lacs)

S. No Particulars Amount %age to the Issue Size

% to the issue Expenses

1 Fees to the Intermediaries a. Fees to Lead Managers to the Issue b. Fees to Registrar to the Issue c. Fees to SEBI and Stock Exchanges d. Fees to Legal Advisors to the Issue

7.72

0.33

2.50

0.33

0.61

0.03

0.20

0.03

29.43

1.26

9.53

1.26

2 Printing & Stationery and Postage Expenses 7.50 0.59 28.593 Advertisement and other Miscellaneous

Expenditure 7.85 0.62 29.93

TOTAL 26.23 2.08 100.00

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13. Previous rights and public issue if any (during the last five years) There is no Public Issue or Rights issue made during last five years.

14. Issue of Shares otherwise than for Cash The Company has issued Shares for consideration other than Cash to the Banks/Financial Instiutions for conversion of outstanding loan amount due to them. These Banks/Financial Institutions were - The Industrial Credit & Investment Corporation of India (Bombay), Industrial Finance Corporation of India (Ahmedabad), Industrial Development Bank of India (Ahmedabad), Bank of Baroda (Bombay) and State Bank of India (Ahmedabad). There have been no other issue of shares by the company for consideration other than cash.

15. Particulars of the Issuer Company and the Listed Companies under the same management as defined under section 370 (1) (B) of the Companies Act 1956, that made any capital Issue during the last three years. Neither the issuer company nor any listed company under the same management has made public issue during the last three years.

16. Promise Vs Performance The Company had issued IPO of Equity Shares in the year 1982 for part financing the cost of the project undertaken by the company and also for meeting expenses of the issue. Public Issue 1982: The performance of our Company vis-à-vis the projections made as per our initial public offer prospectus dated July 15, 1982 is as follows: (Rs. In lacs)

Particulars 31/03/1983* 31/03/1984* 30/03/1985* Promise Actual Promise Actual Promise Actual Income Interest Charge Profit/Loss after tax Earning Per Share (Rs.)

*Note: (i)There were no projections relating to Income, Interest Charge, Profit or Earning Per Share made in the prospectus dated July 15, 1982, by the Company; and (ii) Records for the years 1983, 1984 and 1985 are unavailable with the present management of the Company, owing to the takeover of the Company in the year 2005 the whereby present Promoters of the Company had acquired the Company from the erstwhile Promoters and there was a consequent change in management thereof.

Outstanding Debentures and other instruments issued by the company As on date there are no outstanding debentures or any other instruments issued by the company.

17. STOCK MARKET DATA The Company’s shares are listed on BSE. As the shares are actively traded only on BSE, the Company’s stock market data has been given for BSE.

The high and low closing prices recorded on BSE for the preceding three years and the number of shares traded on the days the high and low prices were recorded are stated below:

Year High (Rs.) High Date Volume Low (Rs.) Low Date Volume Total

Volume for the Year

Average(Rs.)

2006 29.25 29/12/2006 150 29.25 29/12/2007 150 150 29.252007 167.65 28/12/2007 150 30.70 29/06/2007 150 14450 99.182008 172.00 04/01/2008 150 52.60 31/12/2008 50 217500 112.30(Source: Bombay Stock Exchange Limited, official website: www.bseindia.com) *Average calculated as mean of high and low of the closing prices.

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The details of the share prices on the BSE during last 6 months are as follows:

Month

High (Rs.) Date of High Volume Low

(Rs.) Date of Low VolumeTotal

Volume in the Month

Average

December 2008

67.85 02/12/2008 5500 52.60 31/12/2008 50 5750 60.23

January 2009

50.00 09/01/2009 9000 37.65 29/01/2009 2900 67700 43.82

February 2009

49.00 11/02/2009 1700 41.85 09/02/2009 3600 124250 45.42

March 2009

55.10 31/03/2009 15850 42.05 05/03/2009 13300 141657 48.57

April 2009 89.75 29/04/2009 3200 51.00 06/04/2009 5900 62508 70.37May 2009 102.90 15/05/2009 933 86.00 13/05/2009 122 44811 94.45(Source: Bombay Stock Exchange Limited, official website: www.bseindia.com) *Average calculated as mean of high and low of the closing prices. Weekend prices for the last four weeks on BSE is as follows:

Week ended Price per Share on BSE (Rs.)

June 19, 2009 73.20 June 12, 2009 88.70 June 5, 2009 96.25 May 29, 2009 92.75

The closing price of the equity shares of the Company as on 19/06/2009 on BSE was Rs. 73.20, the trading day immediately preceding the date on which the Board of Directors approved the draft Letter of Offer. 18. Investor Grievance and Redressal System The Company has qualified and experienced staff in its Secretarial Department which closely monitors and co-ordinates with its RTA, for attending to and resolving the complaints of its shareholders. The Company attempts or uses its best endeavors jointly with the RTA, to ensure that complaints are minimal and that all complaints are resolved satisfactorily. The Company ordinarily attempts to dispose the complaints within four weeks of receipt of complaints. The Company Secretary supervises the process of redressal of grievances. The Company’s name has never appeared in the press release issued by SEBI regarding maximum number of complaints received from investors. Purva Sharegistry India Pvt. Ltd .will be acting as Registrar to the Issue with whom the Company has made arrangements for attending to the investor’s complaints. However, investors can also address their grievances to the Company Secretary and Compliance Officer of the Company, who will coordinate all matters related to the investors’ grievances expeditiously with the Registrars & Transfer Agents. The Company would make all efforts to deal with and redress investors’ complaints within 30 days of their receipt. Complaint letters should be typewritten or legibly handwritten quoting folio number, application number, number of equity shares applied for, name and address of the first applicant, name and address of the Bank, branch where application was submitted with date thereof, and the date of receipt by the Registrars to the Issue in case application was sent by post. The Company has appointed Ms. Vandita Jogi as the Compliance Officer. Envelopes containing the complaints should be addressed to:

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Ms. Vandita Jogi Compliance Officer 9, Beau Moon Chambers 27/33, Nagindas Master Road, Fort, Mumbai - 400023 All the complaints received subsequent to making document public have been dealt with suitably. There are no investor complaints pending with the Company as on the date of Draft letter of offer. There are no listed companies under the same management within the meaning of section 370(1B) of the Companies Act 1956. 19. Changes in the Auditors in the last Three Years

NAME DATE Reason for Change P. Sanghani & Co 2006 Resignation Tushar Parekh & Associates 2006 Appointment

20. Capitalisation of Reserves or Profits There has been no capitalization of reserves or profits in the last five years. 21. Revaluation of Assets There has been revaluation of reserves or profits in the last five years. 22. Minimum Subscription If our Company does not receive the minimum subscription of 90% of the Issue the entire subscription shall be refunded to the Applicants within 15 days from the date of closure of the Issue. If there is a delay in refund of subscription beyond eight days after the date from which our Company becomes liable to pay the amount (15 days after closure of the Issue), our Company shall pay interest for the delayed period as prescribed under Section 73 of the Companies Act. The Issue will become undersubscribed after considering the number of Equity Shares applied as per entitlement plus additional Equity Shares. The undersubscribed portion shall be applied for only after the Issue Closing Date. In the event of under subscription, the Promoters shall, either by themselves or a combination of their group entities, apply for additional Equity Shares in the Issue such that at least 90% of the Issue is subscribed. As a result of such subscription and consequent allotment, the Promoters may acquire Equity Shares over and above their Rights Entitlement, which may result in an increase of their shareholding being above the current shareholding with the Rights Entitlement of Equity Shares under the Issue. Such subscription and acquisition of additional Equity Shares by the Promoters, if any, will not result in change of control of the management of our Company and shall be exempted in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. The Promoters, either by themselves or a combination of their group entities, shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to the Promoters of any unsubscribed portion over and above their Rights Entitlement shall be done in compliance with the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements.

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SECTION VIII – TERMS OF THE ISSUE The Equity Shares now being offered are subject to the provisions of the Act, the Memorandum and Articles, conditions of the RBI approval, if required, the terms of the Offer Document, the Composite Application Form and other terms and conditions as may be incorporated in the Share Certificates / Letters of Allotment and other documents/ certificates that may be executed in respect of the Equity Shares. Further to the above, the equity shares shall also be subject to laws as applicable, guidelines, notifications and regulations relating to the issue of capital and listing of securities issued from time to time by SEBI / Government of India / Stock Exchange / RBI and/or other authorities, as in force on the date of the offer and to the extent applicable. Authority For The Present Issue The Board of Directors of the Company (hereinafter referred to as “The Board”) pursuant to the resolution passed at the Board Meeting held on December 13, 2008 and subsequent resolution passed by the shareholders of the Company in their Extra-ordinary General Meeting held on 10th January, 2009 have decided to offer 35,96,850 Equity Shares of Rs. 10/-each at a premium of Rs. 25/- (Issue price of Rs. 35) on Rights basis to the existing Equity Shareholders of the Company in the ratio of Three Equity Shares for every One Equity Share held [3:1] on Record Date i.e. [•] aggregating to Rs. 1258.90 lacs. The above Rights Issue structure was arrived after the supercession of the resolutions passed by the Board of Directors in their meeting held on 16th June, 2007 and by the shareholders of the Company in the AGM of the Company held on 27th July, 2007. The terms of which were as follows: Issue of Equity Share of Rs. 10/- each at a premium of maximum upto Rs. 20/- each, aggregating to a maximum of Rs. 7,20,00,000/- on rights basis to the existing Equity Shareholders of the Company in the ratio of 2:1 held on the Record Date. Ranking Of Equity Shares The Equity Shares being issued in the Rights Issue and those arising from this issue shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari-passu in all respects with the existing Equity Shares of the Company including dividends. Company undertakes that at any given time there shall be only one denomination for the Equity Shares respectively of the Company issued under this Rights Issue and that it will comply with such disclosure and accounting norms as specified by SEBI from time to time. Basis Of Offer The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear on the Register of Members of the Company and the names of the beneficial Equity Owners as provided by the Depositories at the close of business hours on [•] being the Record Date fixed in consultation with Bombay Stock Exchange (The Designated Stock Exchange). The equity shares are being offered for subscription in the ratio of Three equity share for every one equity share held by the Equity Shareholders. Rights Entitlement As your name appears as beneficial owner in respect of the shares held in electronic form or appears in the Register of Members as an equity shareholder of the Company as on [•] (Record Date), you are entitled to the number of shares as disclosed in Block I of Part A of the enclosed CAF. Principal Terms of Equity Shares Face Value, Issue Price And Terms Of Payment Face Value : Rs. 10/- Issue Price : Rs 35/-

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Entire amount of Equity Share payable on Application only. Rights Entitlement Ratio The eligible shareholders shall be entitled to the following: 3 (Three) Equity shares for every 1 (One) Equity Shares held on the Record Date. Rights entitlement on shares held in the pool account of the clearing members on the Record Date shall be considered, and such claimants are requested to: a) Approach the concerned depository through the clearing member of the Stock exchange with

requisite details; and b) Depository in turn should furnish details of the transaction to the Registrar.

Only upon receipt of the aforesaid details, rights entitlement of the claimants shall be determined. Fractional Entitlement On applying the rights ratio being Three equity share for every One equity share held (3:1) and hence no fractional shares will arise. In case any fractional entitlements, in such case the fractional entitlement shall be rounded off to the next higher integer. The additional shares required to accommodate such rounding off will be adjusted out of the entitlement of one of the promoter group shares. Rights Of Equity Shareholders The rights available to the equity shareholders of the Company are subject to the provisions of the Companies Act, 1956 and Memorandum and Articles of Association of the Company. The rights include the following :

• Right to receive dividend, if declared • Right to attend general meetings and exercise voting powers, unless prohibited by law. • Right to vote personally or by proxy, unless prohibited by law • Right to receive offer for rights shares and be allotted bonus shares, if issued • Any other rights available under the Companies Act, 1956.

Note : Only the registered equity shareholders or in case of joint holders, those shareholders, whose name appear first in the Register of members / list of beneficial owners shall be entitled to the above-mentioned rights. General Terms of the Issue Market Lot The market lot for the Equity Shares held in the demat mode is one share. In case of physical certificate, the Company would issue one certificate for the equity shares allotted to one person (“Consolidated Certificate”). In respect of consolidated certificate, the Company will, only upon request from the equity shareholder, split and return such consolidated certificate into smaller denomination within 7 days time in conformity with clause 3 of the Listing Agreement. No fee would be charged by the Company for splitting the consolidated certificate. Joint Holders Where two or more persons are registered as the holders of any Shares, they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to other provisions contained in the Articles. Nomination In accordance with Section 109A of the Companies Act, only individuals applying as sole applicants/ joint applicants can nominate, non-individuals including society, trust, body corporate, partnership firm, holder of power of attorney cannot nominate. In accordance with Section 109A of the Companies Act, the sole or first holder, along with other joint holders, may nominate any one person in whom, in the event of the death of sole holder or in case of joint holders, death of all the holders, as the case may be, the Equity

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Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the Company’s Registered / Corporate Office or to the Company’s Registrar and Transfer Agents. The Applicant can make the nomination by filling in the relevant portion of the CAF. In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, 1956, shall upon the production of such evidence as may be required by the Board, elect either:

• to register himself or herself as the holder of the Equity Shares; or • to make such transfer of the Equity Shares, as the deceased holder could have made

Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registered the nomination with the Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant would prevail. If the applicant requires changing the nomination, they are requested to inform their respective DP. Notices All notices to the Equity Shareholder(s) required to be given by the Company shall be published in one English national daily with wide circulation and one Hindi national daily and one regional language daily newspaper and/or, will be sent by ordinary post/ to the registered holders of the Equity Share from time to time. Mode Of Payment Of Dividend The dividend, if any, for the future years will be paid to all eligible shareholders in terms of the provisions of the Companies Act, 1956. The unclaimed dividend will be transferred to Investor Protection Fund as prescribed under the Companies Act, 1956. Odd Lots The Equity Shares would be traded in dematerialised form and the minimum trading lot for Equity Shares will be one Equity Share. Therefore there would not be any odd lots generated at the time of allotment. Minimum Subscription If the Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the Issue. If there is a delay in the refund of subscription by more than 8 days after the Company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), the Company shall pay interest for the delayed period at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. The issue will become undersubscribed after considering the number of shares applied as per entitlement plus additional shares. The undersubscribed portion shall be applied for only after the Issue Closing Date. In the event of undersubscription, the Promoters intend to apply for additional Equity Shares to make the Rights Issue fully subscribed to the extent of 90% of the Rights Issue. Allotment of shares against the Promoters for additional Equity Shares in excess of their respective rights entitlement will not result in change of control of the management of the Company and will be governed by the provision of regulation 3(1)(b) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and amendments thereof. The Promoters undertake to comply with Clause 17 of SEBI (Delisting of

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Securities) Guidelines 2003 in case of non-promoter holding in the Company falls below the level required for continuous listing requirement. The above is subject to the terms mentioned under the section entitled `Basis of Allotment' on page no. 132 this Draft Letter of Offer. ISSUE PROCEDURE Option To Subscribe Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the securities in dematerialised (electronic) form at the option of the applicant. The Company signed a tripartite agreement with National Securities Depository Limited (NSDL) and M/s. Purva Sharegistry India Pvt Ltd on 01/04/2009 which enables the investors to hold and trade in securities in a dematerialised form, instead of holding the securities in the form of physical certificates. Applicants have an option to seek allotment of equity shares in physical mode or in dematerialised from. The Company has also signed the tripartite agreement with Central Depository Services (India) Limited (CDSL) and M/s Purva Sharegistry India Pvt Ltd on 24/03/2009. Offer To Non- Resident Equity Shareholders Applications received from NRI's and other NR shareholders for allotment of equity shares shall be, inter alia, subject to the conditions imposed from time to time by the RBI under FEMA in the matter of refund of Application moneys, allotment of equity shares, issue of letter of Allotment/ share certificates, payment of interest, dividends, etc. General permission has been granted to any person resident outside India to apply shares offered on rights basis by an Indian Company in terms of FEMA and the rules and regulations there under. Vide notification dated 18th June, 2003, RBI has granted general permission to Indian companies to issue rights/ bonus shares to existing non- resident shareholders. The existing non-resident shareholders may apply for issue of additional shares and the company may allot the same subject to the condition that the overall issue of shares to non residents in the total paid up capital does not exceed the sectoral cap. In other words, non- residents may subscribe for additional shares over and above shares offered on rights basis by the company and renounce the shares offered in full or part thereof in favour of a person named by them. Residents may subscribe for additional shares over and above the offered on rights basis by the company and also renounce the shares offered either in full or in part thereof in favour of a person named by them. The equity shares issued under the Rights Issue and purchased by NR shall be subject to the same conditions including restrictions in regards to the repatriability as are applicable to the previously held Equity shares against which Equity shares under the Rights Issue are issued. However, as per the provisions of AP DIR circular No 14 dated 16th September, 2003 issued by RBI such shareholders who have been allotted the Equity shares as OCB's would not be permitted to participate in the Rights Issue. Accordingly, shareholders or applicants who take/ receive renounced shares who are OCB's and wishing to participate in the Rights Issue, would be required to submit approvals in relation thereto from the RBI. The Board of Directors of Diamant may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the allotment of Equity Shares, payment of dividend etc, to the Equity shareholders who are Non Resident. Procedure For Application The CAF would be mailed to all the shareholders, with an additional, separate advice for non-resident shareholders. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrars to the Issue for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. Non-resident shareholders can obtain a copy of the CAF from the Registrars to the Issue by furnishing the registered folio number, DP ID number, Client ID number and their full name and address.

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Acceptance Of Offer You may accept the offer and apply for the equity shares hereby offered to you either wholly or in part by filing the enclosed CAF and submitting the same along with application money to the Bankers to the issue or their branches mentioned in the CAF before the close of banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board or a committee authorized by the board thereof in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the cheque drawn on a local bank at Mumbai or a demand draft payable at Mumbai, for an amount net of bank and postal charges, to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. How To Apply You may apply for the equity shares offered wholly or in part by filling in the enclosed CAF and submitting the same along with the application money to the Bankers to the Issue or their designated branches on or before the closure of the subscription list. The CAF should be complete in all respects, as explained in the INSTRUCTIONS indicated in the CAF. The CAF should not be detached under any circumstances, otherwise the application(s) will be rejected forthwith. All applications should be made only on the printed CAF provided by the Company or on blank paper in case of non-receipt of CAF. You may exercise any one of the following options with regard to the equity shares offered to you, using the enclosed CAF. Options available Action required

1 Accept entitlement in full Fill in and sign ‘Part A’ of the CAF 2. Accept entitlement in full and apply for additional Equity Shares

Fill in and sign ‘Part A’ of the CAF after indicating in Block IV the number of additional Equity Shares applied for.

3. Accept entitlement in part without renouncing the balance.

Fill in and sign ‘Part A’ of the CAF, after indicating in Block III the number of Equity Shares accepted.

4. Renounce the entitlement in full to one person (renouncee) (joint renouncees are considered as one renouncee) (joint renouncees cannot exceed more than three) without applying for Equity Shares

Fill in and sign ‘Part B’ of the CAF indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncee must fill in and sign ‘Part C’ of the CAF.

5. Accept entitlement in part and then renounce the balance to one or more renounces or Renounce all the equity Shares offered to you to more than one renouncee.

Fill in and sign ‘Part D’ of the CAF for split forms after indicating the required number of split forms and send the entire CAF to the Registrars so as to reach them on or before the last date for receiving requests for split forms indicated in the CAF. On receipt of the split forms take action as indicated below: i) For the Equity Shares, if any, which you want to accept, fill in and sign ‘Part A’ of one Split CAF. ii) For the Equity Shares you want to renounce, fill in and sign ‘Part B’ in the required number of CAFs indicating the number of Equity Shares renounced to each renouncee. iii) Each renouncee should then fill in and sign ‘Part C’ of the respective split CAF for the Equity Shares accepted by each renouncee.

6. Introduce a joint holder or change the sequence of joint holders.

This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C.

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Application For Additional Equity Shares You are also eligible to apply for additional equity shares over and above the number of equity shares offered to you, provided you have applied for all the equity shares offered without renouncing them in whole or in part in favour of any other person(s). The application for additional Equity Shares shall be considered and allotment shall be made at the absolute discretion of the Board or the Committee of Directors. If you desire to apply for additional equity shares you may fill in the number of additional equity shares in PART A of the CAF. The allotment of additional equity shares will be at the sole discretion of the Board of Directors on an equitable basis with reference to the number of Equity Shares held by you on the Record Date in consultation with BSE. In the case of requests for additional equity shares by Non Residents, the allotment will be subject to the approval of RBI. The renouncees applying for all the Equity Shares renounced in their favor may also apply for additional Equity Shares. In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened for the purpose. The Board of Directors may reject any application for additional equity shares without assigning any reasons thereof. Renunciation You may renounce all or any of the equity shares, you are entitled to in favour of any individual, limited Companies, or statutory corporations / institutions. However renunciation in favour of more than three persons as join holders, trust or society (unless the same is registered under the Societies Registration Act, 1860 or any other applicable trust laws and is authorised under its constitution to hold shares in a Company), minors (unless acting through natural or legal guardians), Partnership Firms, or their nominees, or any of them will not be accepted. Any renunciation from Resident(s) to Non- Resident(s), Non-Resident(s) to Non-Residents or from Non-Residents to Resident(s) subject to the renouncer(s) / renouncee(s) obtaining requisite approval(s) of the Reserve Bank of India (RBI) under the provisions of the Foreign Exchange Management Act, 1999, and other applicable laws and such permission should be attached with the CAF. Applications not accompanied by the aforesaid approval are liable to be rejected. Procedure For Renunciation (a) To Renounce in whole If you wish to renounce this offer in whole, please complete PART ‘B’ of the Composite Application Form (CAF) enclosed with the Letter of Offer for the number of equity shares renounced and deliver the CAF duly signed to the person(s) in whose favour the equity shares are so renounced. In case of joint holding, all joint holders must sign as per specimen signatures recorded with the Company at the place provided for the purpose and in the same order. The person(s), in whose favour the offer has been renounced (renouncees) should complete and sign PART C of the CAF. In case of joint renouncees, all joint renouncees must sign. (b) To Renounce in Part If you wish to accept this offer in part and renounce the balance of this offer the CAF must first be split into the requisite number of forms, by applying to the Registrar to the Issue. Please indicate your requirement of split forms in the space provided for this purpose in PART D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on or before the last date for receiving requests for split forms, i.e. [•]. On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed. If you wish to apply for equity shares jointly with any person(s) who is/are not already joint holder(s) with you, then it would amount to renunciation and the procedure of renunciation as mentioned above shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure as stated above shall have to be followed.

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Further, this right of renunciation is subject to the express condition that the Board shall be entitled in its absolute and unqualified discretion to reject any such request for allotment of equity shares from renouncee(s) without assigning any reason thereof save where the equity shares have been renounced in favour of a person who is already a member of the Company. In case the signature of the shareholder(s) who has renounced the Rights Equity Shares, does not match with the specimen registered with the Company, the application will be rejected. Request For Spilt Forms:

• Request for Split Forms should be addressed to the Registrar to the Issue so as to reach them on or before the last date for receiving of request for split forms by filling in PART D of the CAF.

• Requests for Split Forms will be entertained only once. Application By Post Applicants residing at places where there are no collecting branches may send their application by post. All applicants who wish to send in their applications by post should mail their applications by Registered Post only accompanied with a Demand Draft / Cheque net of demand draft / postal charges drawn in favour of the bankers to the Issue and marked "[•] A/c Diamant-Rights Issue" on a local bank of at Mumbai at the following address : Registrar’s Address : Purva Sharegistry India Pvt. Ltd. 9, Shiv Shakti Industrial Estate, Sitaram Mills Compound, J.R. Boricha Marg,Opp. Kasturba Hospital, Lower Parel (East), Mumbai-400 011; Tel.: 022-2301 6761; Fax: 022-2301 2517; E-mail: [email protected] Contact Person: Mr. V. B. Shah The Company would not, in any way, be liable for postal delays, and applications received through mail after closure of Issue date will be returned to the applicants. Application sent by post, thus shall be at the sole risk of the applicant in regard to delayed receipt / non-receipt of the applications by the Company. Applications by mail should not be sent to any other address except as mentioned above. PROCEDURE FOR APPLICATION THROUGH THE APPLICATIONS SUPPORTED BY BLOCKED AMOUNT ("ASBA") PROCESS This section is for the information of Equity Shareholders proposing to subscribe to the Issue through the ASBA Process. The Company and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Letter of Offer. Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and ensure that the number of Equity Shares applied for by such Equity Shareholders do not exceed the applicable limits under laws or regulations. Equity Shareholders applying under the ASBA Process are also advised to ensure that the CAF is correctly filled up, stating therein the bank account number maintained with the SCSB in which an amount equivalent to the amount payable on application as stated in the CAF will be blocked by the SCSB. The list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.html. For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link. Equity Shareholders who are eligible to apply under the ASBA Process The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Equity Shareholders of the Company on the Record Date. Equity Shareholders who:

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• is holding Equity Shares in dematerialised form and has applied towards his/her/ their rights entitlements or additional securities in the Issue in dematerialised form;

• has not renounced his /her/ their entitlements in full or in part; • has not split the CAF; • is not making an application on plain paper; • is not a Renouncee; • applies through a bank account with one of the SCSBs, • is a resident shareholder.

Availability Of Duplicate CAF In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID No. and his / her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilise the original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the applicant violates any of these requirements, he/ she shall face the risk of rejection of both the applications as well as forfeiture of amounts remitted along with the applications. Application On Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Rights Issue on plain paper, along with an Account Payee Cheque / Demand Draft payable at Mumbai which should be drawn in favour of “DIAMANT - RIGHTS ISSUE” and send the same by registered post directly to the Registrar to the Issue. The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company should contain the following particulars: 1. Name of the Issuer: Diamant Investment and Finance Limited 2. Name of the shareholder including joint-holders 3. Folio No./DP ID Number and Client ID Number 4. Number of shares held as on [•] (Record Date) 5. Certificate numbers and Distinctive numbers, if held in physical form 6. Number of shares to which entitled 7. Number of shares applied for, out of entitlement 8. Number of additional shares applied for, if any 9. Total number of equity shares applied for 10. Total Amount paid on application at the rate of Rs. 35 per equity share. 11. Particulars of Cheque/Draft enclosed 12. Savings/Current Account Number and Name and Address of the Bank where the shareholder will

depositing the refund order. 13. PAN/GIR number and Income tax Circle/Ward/District of the sole/all the joint applicants where the

application is for shares of a value of Rs.50,000/- or more 14. In case of Non-Resident shareholders, NRE/FCNR/NRO Account No., name and address of the bank

and branch. 15. Signature of shareholders in the same order as appearing in the records of the Company. The application, along the the cheque/Draft, mentioning the above details should be sent to the Registrars to the Issue by Registered Post to reach on or before the last date for submission of the CAF i.e. [•]. However, it should be noted that the shareholders making the application otherwise than on the standard CAF shall not be entitled to renounce their rights and should not utilise the CAF for any purpose, including renunciation, even if it is received subsequently. If the shareholder violates any of these requirements, then both the applications as stated above would be liable to be rejected and the money payable along with the application would be refunded and no interest will be paid thereon.

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APPLICATION(S) WILL NOT BE ACCEPTED BY THE LEAD MANAGER TO THE ISSUE OR THE COMPANY. ALL APPLICANTS ARE ADVISED TO SEND IN THE DULY COMPLETED APPLICATION ALONG WITH THE RELEVANT DOCUMENTS / PAYMENT INSTRUMENTS TO THE REGISTRARS TO THE ISSUE. MODE OF PAYMENT For Resident Shareholders Only Payments should be made in Cheque or Demand Draft drawn on any Bank (including a Co-operative Bank) which is situated at and is a member or a sub-member of the Banker's `Clearing House' located at the Centres (indicated in the CAF) where the Application is accepted. A separate Cheque /Demand Draft should accompany each Application. Outstation cheques / drafts will not be accepted and application(s) accompanied by such cheques / drafts will be rejected. Money orders, postal orders, outstation cheques or demand drafts, cheques / drafts drawn on banks not participating in the `clearing' will not be accepted and applications accompanied with such instruments will be rejected. Only one mode of payment per application will be accepted. All cheques or demand drafts accompanying the application must be crossed "A/c Payee Only" and drawn in favour of the Bankers to the Issue and marked "[•] A/c Diamant-Rights Issue". You are requested to mention the CAF Number on the reverse of the Cheque / Draft. No separate receipts will be issued for application money. However, the Bankers to the Issue receiving the Application Form will acknowledge receipt of the application by stamping and returning to the applicant the Acknowledgement Slip at the bottom of each Application Form. For further instructions, please read the CAF carefully. In case payment is effected in contravention of the conditions mentioned herein, the application money will be refunded and no interest will be paid thereon. The Company is not responsible for any post loss in transit on this account. Shareholders / Renouncees residing at places other than those mentioned in CAF and not having collection centres in their city should send their application by Registered Post Only to the Registrar to the Issue, Purva Sharegistry India Pvt. Ltd., 9, Shiv Shakti Industrial Estate, Sitaram Mills Compound, J.R. Boricha Marg,Opp. Kasturba Hospital, Lower Parel (East), Mumbai-400 011; enclosing a demand draft drawn on a clearing bank and payable at Mumbai only, net of Bank charges and postal charges, so as to reach them before the closure of the Issue. For Non-Resident Applicants/FIIs As regards the application by Non-Resident shareholders, the further conditions as given below shall apply. Payment by non-residents must be made by Demand Draft/Cheque payable at Mumbai or funds remitted from abroad in any of the following ways: Applications with Repatriation benefits a. By Indian Rupee drafts purchased abroad and payable at Mumbai; or b. By cheque/draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Mumbai; or c. Rupee draft purchased by debit to NRE/FCNR Account maintained elsewhere in India and payable in Mumbai;or d. FIIs registered with SEBI must remit funds from special Non-Resident Rupee deposit account. All cheques/drafts submitted by NRIs/FIIs should be drawn in favour of "[•] A/c Diamant-Rights Issue-NR" payable at Mumbai and must be crossed “A/c Payee only” for the amount payable. A separate cheque or bank draft must accompany each application form. Applicants may note that where payment is made by drafts purchased from NRE/FCNR/NRO accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the

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NRE/ FCNR/NRO account should be enclosed with the CAF. Otherwise the application shall be considered incomplete and will be liable to be rejected. In the case of NRIs who remit their application money from funds held in FCNR/NRE Accounts, refunds and other disbursements, if any shall be credited to such account details of which should be furnished in the appropriate columns in the CAF. In the case of NRIs who remit their application money through Indian Rupee Drafts from abroad, refunds and other disbursements, if any will be made in US Dollars at the rate of exchange prevailing at such time subject to permission of RBI. The Company will not be liable for any loss on account of exchange rate fluctuation for converting the Rupee amount into US Dollars or for collection charges charged by the applicant’s Bankers. Application without Repatriation Benefits As far as NRIs holding shares on non-repatriation basis is concerned, in addition to the ways specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the allotment of Equity Shares will be on non-repatriation basis. All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in favour of "[•] A/c Diamant-Rights Issue" payable at Mumbai and must be crossed “A/c Payee only” for the amount payable. The CAF duly completed together with the amount payable on application must be deposited with the collecting bank indicated on the reverse of the CAF before the close of banking hours on the issue closing date. A separate cheque or bank draft must accompany each CAF. Applicants may note that where payment is made by drafts purchased from NRE/FCNR/NRO accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/ FCNR/NRO account should be enclosed with the CAF. Otherwise the application shall be considered incomplete and will be liable to be rejected. Note:

• In case where repatriation benefit is available, dividend and sales proceeds derived from the investment in shares can be remitted outside India, subject to tax, as applicable according to Income-tax Act, 1961.

• In case Equity Shares are allotted on non-repatriation basis, the dividend/sale proceeds of the Equity Shares cannot be remitted outside India.

• The CAF duly completed together with the amount payable on application must be deposited with the Collection Bank indicated on the reverse of the CAF before the close of banking hours on the aforesaid issue Closing Date. A separate cheque or bank draft must accompany each CAF.

• In case of applications received from Non-Residents, refunds and other distribution, if any, will be made in accordance with the guidelines/rules prescribed by RBI as applicable at the time of making such remittance and subject to necessary approvals.

Last Date For Application The last date for submission of CAF is [•]. The Board will have the right to extend the said date for such period as it may determine from time to time but not exceeding sixty days from the date the issue opens. If the CAF together with the amount payable is not received by the Bankers to the Issue/Registrars to the Issue on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board, the offer contained in this Draft Letter of Offer shall be deemed to have been declined and the Board shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the heading “Basis of Allotment”. Note On Cash Payment (Section 269 (SS)) As per the provisions of Section 269(SS) of the Income Tax Act, 1961, investors are requested that subscriptions against applications for securities should not be effected in cash and must be effected only by Account Payee cheques or account Payee bank drafts if the amount payable is Rs. 20,000/- or more. In case payment is effected in contravention of this provision, the application is liable to be rejected.

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Application By Mutual Funds A separate application can be made in respect of each scheme of an Indian Mutual Fund registered with the Board and that such application shall not be treated as multiple applications. The applications made by the AMCs or Custodians of a Mutual Fund shall clearly indicate the name of the concerned scheme for which Application is being made. 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 Fund. No Mutual fund should own more than 10% of any company's paid up capital carrying voting rights. Application Under Power Of Attorney In case of an application under Power of Attorney or by a Body Corporate or by a Society, a certified true copy of the relevant Power of Attorney or relevant resolution or authority to make investment and sign the application along with the copy of the Memorandum & Articles of Association and/or bye laws must be lodged with the Registrars to the Issue giving reference of the serial number of the CAF within 7 days of closure of the Issue. In case the above referred documents are already registered with the Company, the same need not be furnished again; however, the serial number of registration or reference of the letter, vide which these papers were lodged with the Company must be mentioned just below the signature(s) on the application. In no case should these papers be attached to the application submitted to the Bankers to the Issue. Bank Details Of The Applicant The applicant must fill in the relevant column in the CAF giving particulars of Savings Bank/Current Account Number and the name of the Bank with whom such accounts is held, to enable the Registrar to the Issue to print the said details in the Refund Orders, if any, after the name of the payees. Please note that provision of Bank Account details has now been made mandatory and applications not containing such details are liable to be rejected. CAF Number On The Cheque/Demand Draft To avoid any misuse of instruments, the applicants are advised to write the application number and name of the first applicant on the reverse of the cheque / demand draft. Quoting of pan/gir no. In the CAF Where an application is for allotment of securities in response to a Rights Issue, for a total value of Rs. 50,000/- or more i.e. the total number of securities applied for multiplied by the issue price, is Rs. 50,000/- or more the applicant or in the case of applications in joint names, each of the applicants, should mention his/her Permanent Account Number (PAN) allotted under the Income-Tax Act, 1961 or where the same has not been allotted, the GIR Number and the Income-Tax Circle/Ward/District. In case neither the PAN nor the GIR Number has been allotted, the fact of non-allotment should be mentioned in the CAF. CAFs without this information will be considered incomplete and are liable to be rejected. Unique Identification Number With effect from July 1, 2005, SEBI had decided to suspend all fresh registrations for obtaining UIN and the requirement to contain/quote UIN under the SEBI MAPIN Regulations/Circulars vide its circular MAPIN/Cir- 13/2005. However, in a recent press release dated December 30, 2005, SEBI has approved certain policy decisions and has now decided to resume registrations for obtaining UINs in a phased manner. The press release states that the cut off limit for obtaining UIN has been raised from the existing limit of trade order value of Rs. 100,000 to Rs. 5,00,000 or more. The limit will be reduced progressively. For trade order value of less than Rs. 5,00,000, an option will be available to investors to obtain either the PAN or UIN. These changes are, however, not effective as of the date of this Letter of Offer and SEBI has stated in the press release that the changes will be implemented only after necessary amendments are made to the SEBI MAPIN Regulations.

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General Instructions 1. Application should be made on the printed CAF, provided by the Company except as mentioned

under the head‚ application on plain paper in the Letter of Offer and should be complete in all respects. Applications found incomplete with regard to any of the particulars required to be given therein, and/or which is not completed in conformity with the terms of this Letter of Offer is liable to be rejected and the amount paid, if any, in respect thereof will be refunded without interest within the stipulated period.

2. The CAF must be filled in English in BLOCK LETTERS. 3. Signatures should be either in English or Hindi or the languages specified in the Eighth Schedule to

the Constitution of India. Signatures other than in the aforesaid languages or thumb impression must be attested by a notary public or a Special Executive Magistrate under his/her official seal.

4. In case of Joint Holders, all joint holders must sign the relevant parts of the Application Form in the same order and as per the specimen signatures recorded with the Company.

5. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant at the address given in the CAF.

6. In case of joint applicants, refunds and all payments will be made to the person whose name appears first on the application form and all communications will be addressed to him/her. To prevent any fraudulent encashment of refund orders by third parties, the Sole/First Applicant must indicate Saving / Current Account number and the name of the bank and its branch with whom such account is held in the space provided in the CAF for the purpose so that Refund Orders are printed with these details after the name. Applications without this information are liable to be rejected.

7. The Application Form should be presented to the Bank in its entirety. If any of the Part(s) A, B, C and D of the Application Form(s) is /are detached or separated, such application will forthwith be rejected.

8. All shareholders must submit the CAF along with remittance only to the Bankers to the Issue mentioned elsewhere in this Draft Letter of Offer and not to the Company, the Registrar or the Lead Manager, except in the cases mentioned below.

9. Applicants making applications on plain paper and those residing at places other than cities where the collection centres of the Bankers to the Issue have been authorized by the Company for collecting applications, will have to make payment by Demand Draft (net of demand draft and postal charges) payable at Mumbai and send their application forms to the Registrars to the Issue by REGISTERED POST. If any portion of the CAF is/are detached or separated, such application is liable to be rejected.

10. In case a Non-Resident or NRI shareholder has specific approval from the RBI in connection with his shareholding, he should enclose a copy of such approval with the CAF. Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for allotment of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a Non-Resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

11. All communication in connection with application for the Equity Shares, including any change in address of the shareholders should be addressed to the Registrars to the Issue quoting the name of the first/sole applicant shareholder, folio number and CAF number.

12. Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled to obtain split CAF.

13. Only one mode of payment per application should be used. 14. A separate cheque/draft must accompany each CAF. Grounds for Technical Rejection Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following: (i) Amount paid does not tally with the amount payable for; (ii) Bank account details (for refund) are not given;

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(iii) Age of first applicant not given; (iv) PAN photocopy/ PAN Communication/ Form 60/ Form 61 declaration not given; (v) UIN number not given as applicable; (vi) In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant documents are not submitted; (vii) If the signature of the existing shareholder does not match with the one given on the application form and for Renouncees, if the signature does not match with the records available with their Depositories; (viii) If the Applicant desires to have shares in electronic form, but the application form does not have the applicant’s Depository account details; (ix) Application forms are not submitted by the applicants within the time prescribed as per the application form and the Letter of Offer; (x) Applications not duly signed by the sole/joint Applicants; (xi) Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to invest in the issue; (xii) Applications accompanied by Stock invest; (xiii)In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the applicants (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s identity; (xiv)FIIS applying on forms used for accepting shares renounced in their favour or applications for additional shares, without the copy of RBI permission / approval enclosed will be rejected; (xv) Applications by ineligible Non-residents (including on account of restriction or prohibition under applicable local laws) and where last available address in India has not been provided. For further instructions please read the instructions printed overleaf on the CAF carefully. Option To Investors To Apply For Equity Shares In Dematerialised Form Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the securities in authorized (electronic) form at the option of the applicant. The Company and Purva Sharegistry India Pvt. Ltd., Mumbai, the Registrar to the Company, have signed a tripartite agreement with NSDL on 01/04/2009 which enables the investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates. The Company and Purva Sharegistry India Pvt. Ltd., Mumbai, the Registrar to the Company, have also signed a tripartite agreement with Central Depository Services (India) Limited (CDSL) on 24/03/2009. The ISIN No. granted to the equity shares of the Company is INE 206I01018 In this Rights Issue, the allottees who have opted for Equity Shares in Dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and Dematerialized form should be made. If such applications are made, the application for physical securities will be treated as multiple applications and is

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liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares. Procedure for opting for this facility for allotment of Equity Shares arising out of this Issue in electronic form is as under: 1. Open a Beneficiary Account with any Depository Participant (care should be taken that the

Beneficiary Account should carry the name of the holder in the same manner as is exhibited in the records of the Company. In case of joint holding, the Beneficiary Account should be opened carrying the names of the holders in the same order as with the Company). In case of Investors having various folios in the Company with different joint holders, the investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such Beneficiary Account (s) need not adhere to this step.

2. For shareholders holding shares in dematerialised form as on Record Date, the beneficial account

number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Rights Equity Shares by way of credit to such account the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of Equity Shares arising out of this Issue can be received in a dematerialised form even if the original Equity Shares of the Company are not dematerialised. Nonetheless, it should be ensured that the Depository Account is in the name(s) of the shareholders and the names are in the same order as in the records of the Company.

3. Responsibility for correctness of applicant’s age and other details given in the CAF vis-à-vis those

with the applicant’s Depository Participant would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be same as registered with the applicant’s Depository Participant.

4. If incomplete/incorrect Beneficiary Account details are given in the CAF or where the investor does

not opt to receive the Rights Equity Shares in dematerialised form, the Company will issue Equity Shares in the form of physical certificate(s).

5. The Rights Equity Shares allotted to investors opting for dematerialised form, would be directly

credited to the Beneficiary Account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit of the Rights Equity Shares to the applicant’s Depository Account will be provided to the applicant by the applicant’s Depository Participant.

6. Renouncees can also exercise this option to receive Equity Shares in the dematerialised form by

indicating in the relevant block and providing the necessary details about their Beneficiary Account. Investors may please note that the trading of securities upon listing shall only be in demat form, although investors have an option to hold shares in the physical form or demat form. Disposal Of Applications And Application Money No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to the Issue/Registrars to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgement slip at the bottom of each CAF. The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case, without assigning any reason. No receipt will be issued for application money received. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF.

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In case an application is rejected in full, the whole of the application money received will be refunded without interest and after deducting bank charges. Wherever an application is rejected in part, will be refunded without interest and after deduction of bank charges to the applicant within six weeks from the close of the Issue. Fictitious Applications Attention of the applicants is specifically drawn to the provisions of subsection (1) of Section 68A of the Companies Act, 1956, 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”

BASIS OF ALLOTMENT The Board, subject to provisions contained in this Draft Letter of Offer and the Articles of Association of the Company and approval of the Designated Stock Exchange, will proceed to allot the Equity Shares in the following order of priority:

(a) Full allotment to the Shareholders who have applied for their Rights entitlement, either in full or in part and also the renouncee(s) who have applied for equity shares renounced in their favour either in full or in part (subject to the other provisions contained under the paragraph titled “Renunciation”).

(b) Allotment to the shareholders who have applied for additional equity shares provided that they have applied for all the equity shares offered to them, provided there is a surplus after making full allotment under (a) above. The allotment of such additional equity shares will be made as far as possible on the basis of the equity shares held as on the Record Date.

(c) Allotment to the renouncees who have applied for all the equity shares renounced in their favour and have applied for additional equity shares, as the Board may in its absolute discretion deem fit, provided there is a surplus after making full allotment (a) and (b) above.

(d) Allotment to any other person as the Board may in their absolute discretion deem fit, provided there is a surplus after making full allotment under (a), (b), (c) above.

The unsubscribed portion of the equity shares, if any, offered to the shareholders after considering the application for Rights/Renunciation and additional equity shares, as above, shall be disposed off at the sole discretion of the Board of Directors of the Company. In case of oversubscription the allotment would be done in a proportionate manner in consultation with the designated Stock Exchange. The Issue will become under subscribed after considering the number of Equity Shares applied as per entitlement plus additional Equity Shares. The promoters or any other person shall subscribe to such under subscribed portion as per the relevant provisions of the law. If any person presently in control of the Company desires to subscribe to such under subscribed portion and if disclosure is made pursuant to SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, such allotment of the under subscribed portion will be governed by the provisions of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. Allotment to Promoters of any unsubscribed portion, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time. In the event of over-subscription, the Promoter / Promoter group’s entitlement shall be first used to round

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off any fractional entitlement. LETTER OF ALLOTMENT AND REFUND ORDERS For applications made by Cheques/Drafts: The Company will issue and dispatch Letter of Allotment/Securities Certificate and/or Letter of Regret alongwith the Refund Orders or credit the allotted securities to the respective beneficiaries account, if any, within a period of 15 days from the date of closure of issue. If such money is not repaid with 8 days from the day the company becomes liable to pay it, the company shall pay that money with interest as stipulated under Section 73 of the Companies Act, 1956. Refunds, if any, will be made alongwith Allotment Letters and /or Regret Letters by refund order / pay order drawn on the Bankers to the Issue and will be despatched within 15 days from the date of closure of Issue, by Registered Post if the amount of such refund exceeds Rs.1500/-. Such cheque refund order / pay order will be payable at par during their validity period at all centres where the applications are received. In case of joint applications, Refund Orders, if any, will be made out in the First applicant’s name and all communication will be addressed to the person whose names appears on the CAF. For application by Non-Resident Indians / Foreign Institutional Investors (FIIs): In case of Non-Resident Indians/FIIs who remit their application money from funds held in NRE/FCNR/NRO Accounts, refund/payment of interest and other disbursements, if any, shall be credited to such account, details of which should be furnished in the column provided for that purpose in the CAF. In case of non-residents who remit their application money through Indian Rupee drafts purchased from abroad, refunds/payments of interest and other disbursements, if any, will be made in US dollars at the exchange rate prevailing at such time, subject to the permission of the RBI. The Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupees amount into US Dollars. Mode of Making Refund Applicants should note that on the basis of name of the applicant, Depository Participant’s name, Depository Participant-Identification number and Beneficiary Account Number provided by them in the Composite Application Form, the Registrar to the Issue will obtain from the depositories the applicant’s bank account details including nine digit MICR code. Hence, applicants are advised to immediately update their bank account details as appearing on the records of the depository participant. Please note that failure to do so could result in delays in credit of refunds to applicant at the applicant’s sole risk and neither the Lead Manager nor the Company shall have any responsibility and undertake any liability for the same. The payment of refund, if any, shall be undertaken in any of the following manners:

1. NEFT: Payment of refund shall be undertaken through National Electronic Fund Transfer (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.

2. ECS: Payment of refund would be done through ECS for applicants having an account at any of the 68 centres: 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,

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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); Vishakhapatnam (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. One of the methods for payment of refund is through ECS for applicants having a bank account at any of the abovementioned 68 centres, except where the applicant, being eligible, opts to receive refund through NEFT, direct credit or RTGS.

3. Direct Credit: Applicants having bank accounts with the Banker(s) to the Issue / Refund Banker(s), in this case being, HDFC Bank Limited, shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Banker(s) to the Issue / Refund Banker(s) for the same would be borne by the Issuer.

4. RTGS: Applicants having a bank account at any of the abovementioned centres and whose refund

amount exceeds Re. 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 CAF. In the event the same is not provided, refund shall be made through ECS. Charges, if any, levied by the Banker(s) to the Issue / Refund Banker(s) for the same would be borne by such applicant opting for RTGS as a mode of refund. Charges, if any, levied by the applicant’s bank receiving the credit would be borne by the applicant.

5. For all other applicants, including those who have not updated their bank particulars with the MICR

code, the refund orders shall 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 HDFC Bank Limited, and payable at par at the places where applications are accepted. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other centres will be borne by the Applicants.

Despatch Of Refund Orders The Company undertakes that the requisite funds will be made available to the Registrar for complying with the requirement of despatch of refund orders / allotment letters. The Company shall ensure despatch of refund orders of value over Rs.1,500/- by Registered Post only and adequate funds will be made available to the Registrar. Printing Of Bank Particulars On Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatory and are to be provided for printing on the refund orders. Bank account particulars will be printed on the refund orders, which can then be deposited only in the account specified. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Interest In Case Of Delay In Despatch Of Allotment / Refund Orders The Company agrees that it shall pay interest at the rate of 15% per annum if the allotment has not been made and/or the equity share allotment letters/refund orders have not been despatched and relevant equity shares have not been credited to the beneficiary account of the investors within 15 days from the date of closure of the issue. However applications received after the closure of issue in fulfillment of underwriting obligations to meet the minimum subscription requirement, shall not be entitled for the said interest. UNDERTAKINGS BY THE COMPANY

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The Company has given undertakings that:

i. The complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily.

ii. All steps for completion of the necessary formalities for listing and commencement of trading at all

Stock exchanges where the securities are to be listed will be taken within seven working days of finalization of basis of allotment.

iii. Adequate arrangements shall be made to collect all Applications Supported By Blocked Amount

(ASBA) and to consider them similar to non-ASBA applications while finalising the basis of allotment

iv. The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post shall be made available to the Registrar to the Issue.

v. Where funds are made through electronic transfer of funds, a suitable communication shall be sent to

the applicant within 15 days of closure of the issue, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund.

vi. The certificate of the securities/refund orders to the non-resident Indians shall be dispatched within

specified time.

vii. Except as disclosed, no further issue of securities affecting equity capital of the Company shall be made till the securities issued/offered through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc.

Our Company accepts full responsibility for the accuracy of information given in this Letter of Offer and confirms that to best of its knowledge and belief, there are no other facts the omission of which makes any statement made in this Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts. All information shall be made available by the Lead Manager and the Issuer to the investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road shows, presentations, in research or sales reports etc. Utilisation Of Issue Proceeds The Board of Directors declares that: i. All monies received out of the issue shall be transferred to a separate bank account other than the

bank account referred to in sub-section (3) of Section 73 of the Companies Act; ii. Details of all monies utilised out of issue referred to in sub-item (i) shall be disclosed under an

appropriate separate head in the balance sheet of the Company indicating the purpose for which such monies have been utilised;

iii. Details of all unutilized monies out of the issue, if any, shall be disclosed under the appropriate

separate head in the balance sheet of the Company indicating the form in which such unutilized monies have been invested.

The funds received against this Issue will be kept in a separate bank account and the Company will not have any access to such funds unless it satisfies BSE (the Designated Stock Exchange) with suitable documentary evidence that the minimum subscription of 90% of the Issue has been received by the Company.

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Restrictions On Foreign Ownership Of Indian Securities Foreign investment in Indian securities is regulated through the industrial policy of Govt. of India or the Industrial Policy and FEMA. While the Industrial Policy 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 to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures for making such investment. The government bodies responsible for granting foreign investment approvals are the Foreign Investment Promotion Board of the Govt. of India (FIPB) and the RBI. Under the present regulations, there is no ceiling on FII investment in the Company. The transfer of Equity shares of NRIs, FIIs, Foreign Venture Capital Investors registered with SEBI and Multilateral and Bilateral Development Financial institutions shall be subject to the conditions as may be prescribed by the Government of India or RBI while granting such approvals.

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SECTION IX – MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION Pursuant to Schedule II of the Companies Act and SEBI Guidelines, the main provisions of the Articles of Association inter alia relating to alteration of capital, voting rights, dividend, lien, calls, forfeiture, restrictions on transfer and transmission of Equity Shares are detailed herein below. Please note that each provisions detailed herein below is numbered as per the corresponding article number in the Articles of Association and that capitalised terms used in this section have the meaning that has been given to such terms in the Articles of Association.

CAPITAL 3. The Authorised Share Capital of the Company is as Mentioned in Clause V of the Memorandum of

Association of the Company. 4. The Company may by ordinary resolution from time to time alter the conditions of the Memorandum

regarding its share capital in any one or more ways, provided for by Section 94 of the Act, by increasing or by consolidating and dividing, or by conversion into stock or recon version of stock or by subdividing or by canceling the same.

5. The Company in general meeting may by ordinary resolution from time to time increase the capital of the Company to any amount by the creation of new shares including redeemable preferences shares as it may deem expedient. The new shares including redeemable preferences shares shall be issued upon such terms and conditions and we such rights and privileges annexed thereto as may be prescribed by general meeting resolving upon the creation thereof, and in particular such shares may be issued with a preferential or qualified right to dividends and in the distribution of assets of the Company. (a) Provided that the new shares (not being preference shares) shall not carry voting rights or rights in the Company as to dividend, capital or otherwise which are disproportionate to the rights attaching to the holders of other shares ( not being preference shares). (b) Provided further that when redeemable preferences shares are issued, the Board shall have due regard to the provisions of Section 80 of the Act.

6. Where at any time it is proposed to increase the subscribed capital of the Company by allotment of further shares, including redeemable preferences shares, such capital may be increased by the allotment of further shares in accordance with the provisions of section 81 of the Act.

7. If any whenever as the result of issue of new or further shares of any consolidation or subdivision of shares , may shares become held my members in fractions, the Directors shall subject to the provisions of the Act and the 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 there of . For the purpose of giving effect to any such sale the directors may authorize 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 any irregularity or invalidity in the proceedings in references to the sale.

8. The Board may, without any section of the Company, at their sole discretion allot any of the shares in the capital of the Company either at par or premium. Provided that option or right to call of shares shall not be given to any person or persons except with the sanction of the Company in General Meeting.

9. The Company may, from time to time, by special resolution, subject to the confirmation of the Court, reduce its capital by paying of capital or canceling capital which has been lost or is unrepresented by available assets or reducing the liability on the shares or otherwise as may seem expedient; and capital may be paid off upon the footing that it may be called up again or otherwise. And paid up capital may be cancelled as aforesaid without reducing the nominal amount of the shares by the like amount, to the extent the unpaid and callable capital shall be increased by the like amount.

10. The ordinary resolution whereby any share is subdivided may determine that as between the holders of the shares resulting from such sub-division one or more of such of shares shall have some preferences or special advantage as regards dividend, capital, voting or otherwise over as compared with the other or others.

11. Whenever the same 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 each class may, subject to the provisions of Section 106 and 107 of the Act, be varied with the consent in

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writing of that class or with the sanction of special resolution passed of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the issued shares of that class, and all the provisions relating to quorum at such meetings ) shall mutatismutandis apply to every such meeting. This Article is not to derigate from any power the company would have had, if this Article was omitted.

SHARES 12. The shares of different kinds in the capital shall be numbered progressively according to their

several denominations and except in the manner hereinbefore mentioned, no share shall be subdivided.

13. The Board may allot and issue shares in the Capital of the Company as payment or part payment for any property sold or transferred, goods or machinery supplied or for services rendered to the Company or 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 up shares.

14. As application signed by or on behalf of the 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 shall for the purpose of these Articles be a shareholder.

15. The money (if any) which the Board shall, on the allotment of any shares by them, require or direct to be by way of deposit, call or otherwise shall immediately on the inscription of the name of the allotment in the Register of Members as the name of the holder of such shares become a debt; due to and revocable by the Company from the allot tee hereof and shall be by him accordingly.

16. Every member or his executors or administrators shall pay to the Company, a proportion of the Capital represented by his share or shares which my for the time being have remained unpaid thereon in such amounts, at such time or times and in such manners as the Board shall time to time in accordance with the Company’s regulations require.

17. (a) Every share certificate shall be issued under the seal of the Company, which shall be affixed in the presence of (i) two directors or persons acting on behalf of the directors under a duly registered power of attorney; and (ii) the secretary or some other person appointed by the Board for the purpose. The two directors or their attorneys and the secretary or other person shall sign the share certificate. Explanation- For the purpose of this Article, director may sign a share certificate by affixing his signature thereon by men of any machine, equipment or other mechanical means such as engraving in metal or lithography but not by means of a rubber stamp, provided that the director shall be responsible for the safe custody of such machine, equipment or other material used for the purpose. Provided always that not withstanding anything contained in this Article the certificates of little to shares may be executed and issued in accordance with such other provisions of the Act, or the rules made there under, as my be in force for the time being and from time to time. (b) Every member or allot tee of shares shall be entitle to receive without payment a certificate under the seal of the Company, in such form as the board shall prescribe or approve, specifying the share or shares allotted to him and the amount paid thereof. Two be treated as single member and the certificate of any share which may be the subject of joint ownership may be delivered to any one of such joint owners on behalf of all of them.

18. No certificate/s of any share of shares or debenture shall be issued either in exchange for those which are subdivided or consolidated or in replacement of those which are defaced, torn or old, decrepited, worn out , or rendered useless from any cause whatsoever, or where the cages on the reverse for recording transfers have been fully utilized, unless the certificates in lieu of which they are issued are surrendered to the Company, provided that the Company may charge such fee, if any, not exceeding one rupee per certificate issued on splitting or consolidation of Certificate into lots of other than market unit of trading on the stock exchange or in replacement of certificates that are defaced or torn, as the Board thinks fit. Any renewed certificate may be marked as such. No duplicate certificate shall be issued in lieu of those that are lost or destroyed, without the prior consent of the Board or without payment of such fee, if any, not exceeding one rupee per certificate, and on such fee, if any not exceeding one rupee per certificate, and on such reasonable terms if any, s to evidence of such loss or destruction and indemnity and the payment of out of pocket expenses incurred by the Company in investigating evidence, as the Board thinks fit. The directors may in their discretion waive payment of such fee in the case of any certificate or certificates. Where new

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certificates has been issued as aforesaid, particulars of every such certificate shall also be entered in Register of Renewed and Duplicate Certificate shall also be entered in a Register of Renewed and Duplicate Certificates indicating against the names of the person or persons to whom the certificate is issued, the number and the date issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the Register of Members by suitable cross-references in the “Remarks” column. All entries made in the said register shall be authenticated by the secretary or such other person as may be appointed by the Board for purposes of sealing and singing the share certificate under Provisions of Article 17(a). Explanation ;- In article 17 and 18 hereof, unless the context otherwise requires “Board” means the Board of Directors of the Company or a Committee thereof consisting of not less that three directors when the total number of Directors exceeds six, and not less that two directors when the total number does not exceed six.

19. if any share stands in the names of two or more persons, any one of them shall, as regards receipts of dividends or bonus, service of notice and all or any other matters connected with the Company except voting at meeting and the transfer of shares, be deemed the sole holder thereof but the joint holders of a share shall be severally as well as jointly liable for the payment of all installments and calls due in regulations.

20. Save as herein otherwise provided, the Company shall be entitled to treat the registered holder of any shares as the absolute owner thereof and accordingly, shall not except as ordered by a court of competent, jurisdiction or by the Act required, be bound to recognize any equitable or other claim or interest in such share on the part of any other person.

21. (i) None of the funds of the company hall be employed in the purchase of or lent on share of the Company. Provided that nothing in clause (i) shall be taken to prohibit; (a) The provision by the Company, in accordance with any scheme for the time being in force, of fully

paid shares in Company, being a purchase or subscription by trustees of or for shares to be held by or for shares to be held by or for the benefit of the employees of the Company including any director holding salaried office or employment in the Company.

(b) The making by the Company of Loans, within the limit laid down in clause (ii), to persons (other than directors) bonafied in employment of the Company with view to enabling those persons to purchase or subscribe for fully paid shares in the Company to be held by themselves by way of beneficial ownership.

(ii) No loan made to any person in pursuance of sub-clause of provision to clause (i) shall exceed the amount of his salary or wages of that time for a period of six months. (iii) Company to redeem any shares issued under Section 90 of the Act or under any corresponding provision in any previous Companies Law.

22. Every shareholder who shall change his name or address shall give notice of the change of name or address to the Company.

CALLS 25. The Board my from time to time, but subject to the conditions herein after mentioned, make such

calls s they think fit, upon the shareholders in respect of all monies for the time being unpaid on the shares held by them respectively and not by the conditions of allotment thereof made payable at fixed times and every shareholder at the time and place, appointed by the Board : provided, however, that calls shall be made on a uniform basis on all shares falling under the same class. Call may be made payable by installments. A call my be revoked or postponed at the discretion of the Board. For the purpose of this Article, shares of the same nominal value on which different amounts have been paid up shall not be deemed to fall under the same class.

26. Eight days notice at least shall be given by the Company (either by letter to the members or by advertisement) of the time and place fixed by the Board for the payment of every call made payable otherwise than on allotment.

27. A call shall be deemed to have been made at the time when the resolution authorizing it is passed. 28. The Board may from time to time t their discretion extend the time fixed for the payment of any call

and may extend such as to all any of the shareholders whom from residence at a distance or other cause of any nature whatsoever, the Board may deem fairly entitled to such extension, but not share holder shall be entitled to such extension save as a matter of grace and favor.

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29. If any shareholder fail to pay any call due from him on the day appointment for payment thereof of any such extension thereof as aforesaid, he shall be liable to pay interest for the same from the day appointed for the payment thereof to the time to actual payment of such rte as shall from time be fixed by the Board but nothing in this article shall be deemed to make it obligatory upon the Board to demand or recover any interest from any such shareholder

30. Neither the receipt by the Company of a portion of any money which shall from time time be due from any member to the Company in the respect of his 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 as hereinafter provided.

31. On the trial or hearing of any action for the recovery of any money due for any call, it shall be sufficient to prove that the name of the member used is entered in the register as the holder or one of the joint holders of the shares in respect of which such debt is accrued and that the resolution making the call is duly recorded in the minute book and that notice of such call was duly given to the member sued in pursuance of these presents and it shall not be necessary to prove the appointment of the Directors who made such call, not any other matters, whatsoever but the proof off the matters, aforesaid shall be conclusive evidence of the debt.

32. The Board may , if they think fit, receive from any of the shareholders willing to advance the same, all or any part of the amounts of their respective shares beyond the sum actually called up; and upon the moneys so paid in advance , or upon the money so paid in advance , or upon so much thereof as from time to time such advances are made, the Board may pay or allow interest at such rate as the shareholder paying the sum in advance and the Board agree upon provided always that t any time after the payment of any such money so paid in advance, it shall be lawful for the Board from time to time to repay to such shareholders so much of such money as shall then exceed the amount of the calls made upon such shares, unless there be an express agreement to the contrary and after such repayment, such shareholder shall be liable to pay and such shares shall be charged with payment of , all future calls , as if no such advance had been made. Provided that money so paid in advance of calls on any shares may carry interests but shall not confer a right to dividend to participate in profits.

33. The Company may accept from member the whole or part of the mount remaining unpaid on any shares held by him, although no part of that amount has been called up.

34. (A)The company shall have a first and paramount lien upon paid up on each share where a larger mount is paid up on some of them than others. (B)The Company shall have a first and paramount lien upon all the shares (0ther than fully paid –up shares) Registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently payable and no equitable interest in any shares be created except upon the footing and condition that this article will have a full effect .And such lien shall extended to all dividends and bonuses from time to time declared in respect of such shares .Unless otherwise agreed registration of a transfer of shares will operate as a waiver of the Company’s lien if any on such shares. The Directors may at any declare any shares wholly or in part to be exempt from the provisions of this clause. The Company may sell, in such manner as the Board thinks fit, any shares on which the Company has lien for the purpose of enforcing the same. PROVIDED THAT no sale shall be made : (a) Unless sum in respect of which the lien exist is presently payable or (b) Until expiration of fourteen days after a notice in writing stating and demanding payment off such

part of the amount in respect of which the lien exists as is presently payable has been given to the registered holder for the time being of the shares or the person entitled there to by reason of death or insolvency .For the purpose of such sale the Board may cause to be issued a duplicate certificate in respect of such shares and may authorize one of their members to execute transfer on behalf and in the name of such members.

(c) The Purchaser shall not be bound to see to the application of the purchase money, nor shall his titled be affected by any irregularity or invalidity in the proceedings in reference to the sale; (1) The net proceeds of any such shall be received by the company and applied in or towards

satisfaction of such part of the amount in respect of which the lien exists as is presently payable, and

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(2) The residence, if any shall be paid to the person entitled to the shares at the date of sale (subject to a like lien for some not presently payable s existed on the shares before the sale).

FORFEITURE AND SURRENDER 35. If any shareholder fails to pay any call or installment on or before the day fixed for the payment of the

same the Board may , at any time there after during such time as the call or installment remains unpaid , give notice to him or his heir ,administrator , executor or assignees or if none be known to the Company , then by advertisement requiring him to pay the same together with interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment.

36. The notice shall name a day (not being less than seven days from the date of notice) and a place or places on at which such call or investment and such interest and expenses as aforesaid are to be paid and the notice shall also state that in the event of non-payment at or before the time and at the place fixed, the shares in respect of which the call was made or investment was payable, will be liable to be forfeited.

37. If the requisition of any such notice as aforesaid shall not be complied with every or any shares in respect of which such notice has been given may at any time there after, before payment of all calls or installments, interest and expenses due in respect thereof be forfeited by a resolution of the Board to that effect .Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.

38. When any shares shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture with the date thereof shall forthwith be made in the Register of Members.

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

40. Any shareholder whose shares have been forfeited shall, notwithstanding the forfeiture, be liable to pay the Company all calls, installments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture together with interest thereupon from the time of forfeiture, until payment at such rate as the Board may determine, and the Board may enforce the payment thereof if they think fit.

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

42. A certificate in writing under the hands of two Directors and countersigned by the Secretary that the call in respect of a share was made, made , and that the forfeiture of the shares was made by a resolution of the Board to that effect shall be sufficient evidence of the fact stated therein as against all persons entitled to such share and such declaration and the receipt of the Company for the price of such share shall constitute a good titled to such share and a certificate of proprietorship shall be delivered to the purchaser, and thereupon he shall be deemed the holder of such share discharged from all calls due prior to such purchase, and he shall not be bound to see the application of the purchase money nor shall his title to the share be affected by any irregularity in the proceedings in reference of such forfeiture or sale.

43. In the mean time and until any share so forfeiture shall be sold, re-allotted, or otherwise dealt with as aforesaid, the forfeiture, thereof may at the discretion and by a resolution of the Board be remitted as a matter of grace and in favor and not as of right, on payment to the Company of the money which was owing thereon to the Company at the time of forfeiture thereof, being declared with interest for the same up to the time of the actual payment thereof .If the Board shall think fit to receive the same or on any other terms which the Board may deem reasonable.

44. The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which by the terms of the issue of share becomes payable at a fixed time, whether on account of the amount of the share or by way of premium, as if the same had been payable by virtue of a call.

45. The Board may, at any time so far as may be permissible by law, accept the surrender or any share, from or by any shareholder desirous of surrendering on such term as the Board may think fit.

46. Upon any sale after surrender or for enforcing a forfeiture purported to have been exercised by virtue of the powers herein before given, the Board may cause the purchaser’s name to be entered in the register in respect of the shares sold, and the person to whom the share is sold or disposed off shall

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not be bound to see the regularity of the proceedings or to the application of the purchase money, nor shall his titled to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale or disposal of the share. The validity of sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

TRANSFER AND TRANSMISSION OF SHARES 47. The Company shall keep a book to be called the “Register of Transfers” and herein shall be fairly

and distinctly entered the particulars of every transfer or transmission of any share. 48. Shares in the Company may be transferred by an instrument in writing in the form prescribed from

time to time and before it is signed by or on behalf of the transferor, the same should be presented to the registered of Companies or other prescribed authority who shall have stamped or otherwise endorsed thereon the date on which it is so presented and there after it shall be delivered to the Company at any time before the date of such presentation or within two months from the date of such presentation, whichever is later .The instrument of transfer shall be in writing and all the provisions of Section 108 of the Companies Act and of any statutory modification there of for the time being shall be duly complied within respect of all transfers of shares and registration thereof.

49. Every such instrument of transfer shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of such shares until the name of the transferee is entered in the register of Member in respect thereof.

50. The Company may on giving seven days notice by advertisement in some newspaper circulating in the district in which Registered office of the Company is situated, close the Register Members for any time or times not exceeding in the whole 45 days in each year and not exceeding 30 days at a time.

51. Subject to the provision of Section 111 of the Act and Section 22 A of the Securities Contracts (Regulation) ct, 1956, the Board may, at its discretion, decline to register of acknowledge any transfer of shares/ debentures, whether fully paid or not (notwithstanding that the proposed transferee is already a member/debenture holder) but in such cases it shall , within two months from the date on which the instrument of transfer was lodged with the Company, send to the transferee and the transferor notice of the refusal to register such transfer, giving reasons for such refusal. Provided that registration of a transfer shall not be refused on the ground of the transferor being either lone or jointly with any person or persons indebted to the Company on any account whatsoever except Company’s lien on the shares.

52. The Board may have the same right to decline to register a person entitled for transmission to any shares or his nominees, as if he were the transferee named in an ordinary transfer presented for registration.

53. The provisions of articles 51 and 52 dealing with Board’s power to decline to register the transfer and transmission of shares shall also apply in case of debentures.

54. In case of death of any one or more of the persons named in the Register as joint holders of any share, the survivor or survivors shall be the only person recognized by the Company as having any title to or interest in such shares but nothing herein contained shall be taken to release the estate of a deceased joint holder from any liability on shares held by him jointly with any other person.

55. The executors or administrators of a deceased shareholder, not being one of the several joint holders shall be the only person recognized by the Company shall not be bound to recognize such executors or administrators unless such executor or administrator shall have first obtained probate or Letter of Administration or Succession Certificate as the case may be, from a duly constituted Court in India provided that in any case when the Board in their absolute discretion think fit the Board may dispense with production of probate, letters of Administration or succession Certificate and under the next Article register the name of any person who claims to be absolutely entitled to the shares standing in the name of a deceased shareholder.

56. Any person interested in share in consequence of the death, bankruptcy or insolvency of any shareholder, or by any lawful means other than by a transfer in accordance with these presents, upon producing evidence that he sustains the character in respect of which he proposes to act under this clause, or of his title, may with the consent of the Board (which they shall not be under any obligation to give) and giving such indemnity as the Board think sufficient , either be registered himself as the holder of the share or may elect to have some persons nominated by him, and approved by the Board, registered as such holder, provided nevertheless that he shall testify the

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election by executing to his nominee an instrument of transfer of the share, in accordance with the provisions herein contained and until he does so, he shall not be free from any liability in respect of the share.

57. A person becoming entitled to share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, 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 relation to meeting of the Company. Provided that the Board may at any; time, give notice requiring any such person to elect either to be registered himself or to transfer the share and if the notice is not complied with within 90 days, the Board may thereafter withhold payment of all dividends, bonuses or other money payable in respect of the shares, until the requirements of the notice have been complied with.

58. The instrument of transfer shall be presented to the Company together with such evidence as the Board may require to prove the title of transferor and generally under and subject to such conditions and regulations as the board shall from time to time prescribe, and every registered instrument of transfer shall remain permanently in the custody of the Company.

59. Every transmission of a share shall be verified in such manner as the Company may require and the Company may refuse to register any such transmission until the same to be verified and the regulations of the Company be complied with.

60. The Board may decline to recognize any transmission of any share unless the application for transmission is accompanied by the certificate of the shares to which it relates, and such other evidence as the Board may reasonably require to show the right to transmission.

61. The Board may also declined to recognize any instrument for transfer unless; (a) The instrument of transfer is accompanied by the certificates of the shares to which it relates, and

such other evidence as the Board may reasonably require to show the right of the transfer to make the transfer;

(b) The instrument of transfer is in respect of only one class as shares ; and (c) The instrument of transfer is duly stamped; (d) The instrument of transfer is in accordance with Article No.48.

62. The Company shall incur no liability or responsibility whatever in consequent of their registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof ( as shown or appearing in the Register of Members) to the prejudice of persons having or claiming an equitable right, title or interest to or in the same shares, notwithstanding that the Company may have had notice of such transfer , and may have entered such notice or referred thereto in any book of the Company and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right, title, or interest or be under any liability whatsoever for refusing or neglecting to do so though it may have been entered or referred to in some book of the company , but the Company shall neverthless be at liberty to have regard and attend to any such notice, and give effect thereto, if the Company shall think fit.

63. Copies of the Memorandum of Association and Articles of Association and of these presents and other agreements and resolutions referred to in section 39 and 192 of the Act, shall be furnished by the Company to every shareholder at his request on payment of one rupee for each copy.

GENERL MEETING 66. (1) The Company shall in each year hold in addition to any other meeting general meeting as its

annual general meeting and shall specify the meeting as such in the notice calling it and not more than fifteen months shall elapse between the date of one annual general meeting and that of the next; provided that the time may be extended by a further period not exceeding three months, if the same has been permitted by the Registrar for any special reason. (2) Every annual general meeting hall be called at a time during business hours, on a day that is not a public holiday, and shall be held either at the registered office of the Company or at some other place within the limits of the town or city where the registered office of the Company is situated at the relevant time.

67. The general meeting referred to in Article. 66 shall be called and styled as annual general meeting and all other meeting shall be called extraordinary general meeting.

68. The Board may, whenever they think fit, call an extra-ordinary general meeting of the Company and they shall in regard to any matter on the requisition of members of the company representing not

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less than one tenth off such of the paid up capital of the Company, as at the date of requisition, carries the rights of voting in regard to that matter, forthwith proceeds to convene n extra-ordinary general meeting of the Company, and in the case of such requisition, the provisions of section 169 of the Act shall apply. No shareholder or shareholders shall call a meeting of the Company except by or upon requisition as herein provided.

69. Subject to the provision of sub-section (2) of section 171 of the Act as regards short notice, a general meeting of the Company may be called by giving not less than twenty one days notice in writing. Every such notice shall specify the place and the day and hour of the meeting and shall contain a statement of the business to be transacted there at .There shall appear with reasonable prominence s a statement in the notice that a member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and that a proxy need not be a member. And in case of a special business, an explanatory statement setting out all material facts concerning each item of business, including in particular the nature of the concern or interest, if any, therein of every director shall be annexed to the notice. Provided that where any item of special business as aforesaid to be transacted at a meeting of the Company, relates to, or affects, any other Company of every director of the Company shall also be set out in the statement if the extent of such shareholding interest is not less that twenty percent of the paid-up share capital of that other Company, Where any item of business consists of the according of approval to any document by the meeting the time and place where the document can be inspected shall be specified in the statement aforesaid. The above notice shall be given in the manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the Company in general meeting and by the provisions of the Act, to such persons as are under the Act or the regulations of the Company, entitled to receive such notices from the Company, but the accidental omission to give notice to or the non-receipt of notice by any member shall not invalidate the proceedings at any general meeting.

70. Every such notice shall be signed by the Managing Director/s or by such other officer as the Board may appoint, except in case of a meeting convened by shareholders in accordance with these presents in which case the notice my be signed by the shareholders convening the same, or by any five or more of them.

71. Every annual general meeting shall be competent to receive and consider profit and loss account, the balance sheet and the reports of the Board and of the auditor, to declare dividends, to elect directors and to appoint auditors and to fix the remuneration of the auditors, without special notice having been given or explanatory statement having been annexed to the notice, of the purposes for which it is convened or of the business to be transacted there at. Any business other than the above business to be transacted at any other general meeting shall be deemed special.

72. With the exceptions mentioned in the foregoing Article s to the business which may be transacted at any annual general meeting without explanatory statement having been annexed to the notice calling the general meeting, no annual general meeting, or extraordinary general meeting shall be competent to enter upon, discuss, or transact any business which had not been specially mentioned in the notice or notices which it was convened.

73. Five members personally shall be the quorum for any general meeting of the Company. 74. If, at the expiration of half an hour from the time appointed for the meeting a quorum is not present,

the meeting, if convened upon such requisition as aforesaid, shall be dissolved, but in any other case it shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and at such other time and place as the Board may determine.

75. If at the adjourned meeting also a quorum is not present within fifteen minutes from the time appointed for holding the meeting, the members present shall be quorum, and may transact the business for which meeting was called.

76. The Chairman (if any) of the Board shall if willing, preside as Chairman at every general meeting, including annual and extra ordinary; but if there be no such Chairman, or in case of his absence or refusal to preside, some one of the Director shall be chosen to be Chairman of the Meeting.

77. If at any meeting quorum of shareholders shall be present, and the chair shall not be taken by the Chairman of the Board or by a Director at the expiration of fifteen minutes from the time appointed the holding the meeting, or if before the expiration of that time all the Directors declined to take the chair the shareholders present shall choose one of their own member to be Chairman of the meeting.

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78. No business shall be discussed at any general meeting; except that of the election of a Chairman, whilst the chair is vacant.

79. The Chairman may adjourned any meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When meeting is adjourned for thirty days or more, notice of time and place of the adjourned meeting shall be given in a local daily newspaper before seven days of the day of adjourned meeting.

80. Every question submitted to a meeting shall be decided in the first instance by a show, both on the show of hands and at a poll (if any), have casting vote in addition to his own vote to which he may be entitled as a member.

81. At any general meeting resolution put to vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the voting on show of hands) ordered to be taken by the Chairman of the meeting of his own motion or shall be ordered to be taken by him on a demand made in that behalf by any member or members present in person or by proxy and holding shares in the company, which confer power to vote on the resolution in question, not being les than one-tenth of the total voting power in respect of such resolution or on which n aggregate sum of not les than fifty thousand rupees has been paid up and unless a poll is so demanded, a declaration by the Chairman that a resolution has on a show of hands, been carried unanimously, or by a particular majority or lost and an entry to that effect in the Minute Book of the Company shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of or against such resolution.

82. If poll is demanded as aforesaid, the same shall be taken in such manner and at such time and place and either by open voting or by ballot as the Chairman of the meeting shall direct; and either at once or after an interval or adjournment or otherwise, but not later than forty eight hours from the time when the demand was made. The demand of poll may be withdrawn. a poll demanded on a question of adjournment shall be taken forthwith.

83. (1) Where poll I to be taken, The Chairman of the meeting shall appoint two scrutinizers to scrutinize the votes given on the poll and to report there on him. (2) The Chairman hall have power, at any time before the result of the poll in declared, to remove scrutinizers from the office and to fill vacancies in the office of scrutinizer arising from such removal or from any other cause. (3) Of the two scrutinizers 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.

84. 1. subject to the provision of the Act, the Chairman of the meeting shall have power to regulate the manner in which poll shall taken. 2. The result of the poll shall be deemed to be the decision of the meeting and the resolution on which the poll was taken.

85. The demand of a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which a poll has been demanded.

VOTES OF SHAREHOLDERS 86. No member hall exercise any voting right in respect of any share registered in his name on which

any calls or other sums presently payable by him have not been paid, or in regard to which the Company has exercise any rights of forfeiture.

87. Every shareholders not disqualified by the proceeding article and who has been duly registered, shall be entitled to be present, and to speak and vote at such meeting and when present in person shall have one vote one a show of hands, or on a poll, when, when present in person or by proxy, shall have one vote in respect of every shares held by him. Provided that the holders of preference shares shall have no right to be present or to vote either in person or by proxy at any general meeting by virtue or in respect of their holding of preference shares, unless a resolution is proposed affecting the rights or privileges of the holders of preference shares. A body corporate may, if it is a member of the Company, by resolution of its board of directors or other governing body, authorize such person as it thinks fit to act as its representative at any meeting of the Company. A person authorized by resolution as aforesaid shall be entitled to exercise the same rights and powers (including the right to vote by proxy) on behalf of the body corporate which he represents as that body could exercise if it were individual member of the Company. any resolution for winding up the

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Company or for the repayment or reduction of its share capital shall be deemed directly to affect the rights attached to preference shares within the meeting of this Article.

88. If any shareholder be a lunatic, or non-compos mentis the vote in respect of his share or shares shall be by his committee or other legal guardian, and if any shareholder be a minor, the vote in respect of his share or shares shall be by his guardian or any one of his guardians if more than one, to be selected in case of dispute by the Chairman of the meeting.

89. Where there are joint registered holders of any share, any one of such persons my vote at any meeting either personally 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 proxy, one of the said persons, so present, whose name stands first on the register in respect of such share shall alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member in whose name any share stands shall for the purpose of this Article be deemed joint holders thereof.

90. The instrument appointing proxy shall – (a) Be in writing and (b) Be signed by the appointer or his attorney duly authorized in writing if the appointer is a body

corporate, be under its seal or be signed by officer or an attorney duly authorized by it. 91. The instrument appointing a proxy and the power of attorney, or other authority if any, under which it

is signed or notarially certified copy of that power of authority, shall be deposited at the registered office of the Company not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid.

92. If any such instrument of appointment be confined to the object of appointing an attorney of proxy, or substitute it shall remain permanently, or for such time as the Board 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.

93. 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 proxy or transfer of the share in respect of which the vote is given, provided no intimation in writing of the death, revocation or transfer shall have been received at the office before the meeting.

94. Every instrument of proxy for meeting shall be in any of the following forms, or shall as nearly as circumstances will admit be in any of the forms and to the effect following ;

95. No objection shall be made to the validity of any vote except at the meeting or poll at which such vote shall be tendered, and every vote, whether given personally or by proxy, and not disallowed at such meeting or poll, shall be deemed valid for all purposes of such meeting or pool whatsoever.

96. 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 time of taking of a pool shall be the sole judge of the validity of every vote tendered, ay such poll.

DIRECTORS 97. The first Directors of the Company shall be the following .

(1) Shri.Udgit J Dalal (2) Shri. Jitendra J. Dalal (3) Shri. Rashmikant L. Dalal. The Present Directors are:

1. Mr. Naresh Saboo – Chairman cum Managing Director 2. Mr. Naresh Jain – Director 3. Mr. Ramesh Chandra Mishra – Independent Director 4. Mr. Puneet Kumar Srivastave – Independent Director

98. Unless otherwise determined by a General Meeting, Members of the Board shall not be less than three or more than fifteen, not less than two third of whom shall be liable to retire by rotation.

99. (1) The Board may appoint an alternate Director to act for a Director (herein after in this Article called the “original director”) during his absence for a period not less than three months from the state in which the meetings of the Board are originally held. (2) An alternate Director appointed under the sub-Article (1) 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

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vacate office if and when the original Director returns to the state in which meetings of the Board are originally held. (3) If the term of the original directors is determined before he so returns to the State aforesaid, any provision for the automatic appointment of retiring director in default of another appointment shall apply to the original and not to the alternate director.

100. The Director shall not be required to hold any qualification share in the Capital of the Company. 101. Notwithstanding any thing to the contrary contained in these Articles, and Subject to any agreement,

so long as any monies remain owing by the Company to any financial institutions out of any loan granted by them to the Company, or so long as the said institutions continue to hold shares in the Company as a result of underwriting or in any other manner whatsoever.; The said institution shall have a right from time to time to appoint their nominee as a director (herein after described as “special Director”) on the Board of the Company and to remove from such office any person so appointed and to appoint any other person in his place. Neither the Company nor its directors shall have power to remove from office the said Special director. The said Special Director shall not be required to hold any share qualification in the Company nor shall be liable to retirement by rotation of Directors. Subject as aforesaid, the Special Director shall e entitled to the same rights and privileges and be subject to the same obligations as any other Director of the Company.

101 (A) Notwithstanding anything to the contrary contained in these Articles, so long as any money remain owing by the company to the Industrial development Bank of India (IDBI) , Industrial Finance Corporation of India (IFCI), The industrial credit and Investment Corporation of India Limited (ICICI) The industrial Reconstruction corporation of India Limited (RCI) Life Insurance Corporation of India (LIC), Unit Trust of India (UTI), General Insurance Corporation of India (GIC), National Insurance Corporation Limited(NIC), The Oriental Fire and General Insurance Company Limited(OFCI), The New India Insurance Company Limited(NIA), United India Assurance Company Limited(NIA), United India Insurance Company Limited (UI) OR A State Financial Corporation or any financial institution owned or controlled by the Central Government or a State Government or the Reserve Bank of India or by two or more of them or by Central Government or a State Government or the Reserve bank of India or by two more of them or by Central Government by themselves ( each of the above is herein after in this Article referred to as “the Corporation”) out of any loans/debenture assistance granted by them to the Company or so long as the Corporation holds or continues to hold debentures/shares in the company as a result of underwriting or by direct subscription or private placement, or so long as any liability of the Company appoint from time to time any arising out of any Guarantee furnished by 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 Directors”) 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 Director/s shall not be required to hold any share qualification in the Company. Also t the option of the Corporation such Nominee Director/s Shall not be liable to retirement by rotation of Directors. Subject as aforesaid, the Nominee Director/ s shall be entitled to the said rights and privileges and be subject to the same obligations as any other Director of the Company. The Nominee Director/s appointed shall hold the said Office only so long as any money remain owing by the Company to the Corporation or so ling as the Corporation holds or continues to hold debentures/shares in the Company as a result of under writing or by direct subscription or private placement or the liability of the Company arising out of the guarantee is outstanding and the Nominee Director/s so appointed in exercise of the said power shall ipso facto/ vacate such office immediately the moneys owing by the Company to the Corporation are paid off or on the Corporation causing to hold Debentures/shares in the Company or on the satisfaction of the liability of the Company rising out of the guarantee furnished by the Corporation. The nominee Director/s appointed under this Article shall be entitled to receive all notice of and attend all General Meetings, Board Meetings and of the Meetings of the Committee of which the

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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 to which the other Directors of the Company are entitled, but if any other fees, commission, monies or remuneration in any form is payable to the Directors or the Company, the fees, commission, monies and remuneration in relation to such Nominee Director/s, shall accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation or such nominee Director/s in connection with their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or , sa the case may be , to such Nominee Director/s. Provided that any such Nominee Director/s is an officer of the Corporation the sitting fees, in relation to such Nominee Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation. Provided also that in the event of the Nominee Director/s being appointed as whole time Director/s, such Nominee Directors shall exercise such powers and duties as may be approved by the Corporation and have such rights as are usually exercised or available to a whole time Director in the management of the ffairs of the Company. Such whole time Director/s shall be entitled to receive such remuneration fees, commission and monies as may be approved by the Corporation.”

102. The remuneration of a director shall be such amount as may be fixed by the Board such maximum sum as may be prescribed by the Act or the Central Government from time to time under section of the Act be substituted. The words such maximum sum as may be prescribed by the Act or the Central Government from time to time under Section 310 of the Act be substituted for every meeting of the Board or of the Committee of Directors attended by him; and such reasonable additional remuneration as may be fixed by the Board be paid to any one or more of their members for services rendered by him or them in signing the share certificate in respect of the Company’s original capital or any future or new issue thereof for any debenture issued by the Company; and the Director shall be paid such further remuneration (if any) as the Board shall from time to time determine and such remuneration and further remuneration shall be divided among the Directors in such proportion and manner as the Board may from time to time determine and in default of such determination within the year equally.

103. If any director , being willing ,shall be called upon to perform extra services, or to make any special exertions in going or residing abroad, or otherwise for any purpose of the Company , the Board may arrange with such director for such special remuneration for such services, either by a fixed sum or by percentages of profits , or otherwise as may determined by the Board and such remuneration my be either in addition to or in substitution for his remuneration above provided and shall be entitled to be repaid any traveling or other and the directors shall be entitled to be repaid any traveling or other expenses incurred in connection with the business of the Company.

104. In addition to the remuneration payable to the directors under the preceding articles, they may be repaid all traveling , hotel and other expenses incurred by them. (a) In attending and returning from meeting of the Board of directors or any committee thereof

general meetings of the Company. (b) In connection with the business of the company , if it is entrusted to the director or directors

specifically by the Board. 105. A director of the Company may become a director or other office of , or otherwise interested in , any

Company promoted by the Company or in which the Company may be interested as shareholders or otherwise , and no such director shall be accountable to the Company for a remuneration or other benefits received by him as a director or officer of , or from his interest in , such other Company. Unless the Company otherwise directs.

106. The Board, on behalf of the Company, may pay a gratuity or pension or allowance on retirement to any director who has held any other salaried office or place of profit with the Company or to his widow or dependents and may contributions to any fund for provision of any such gratuity , pension or allowance.

107. The Board shall have power, at any time and from time to time , to appoint any person as a director to fill a casual vacancy, and a 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 he had not vacated as aforesaid.

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108. The board shall have power at any time, and from time to time , to appoint any person as a director as an addition to the Board. (a) Provide that an additional director shall hold office only up to the date of the next annul general

meeting of the Company. (b) Provided further that the member of the directors and additional directors together shall not

exceed the maximum strength fixed for the Board by the Article 98 . 109. At any general meeting of the Company in every year 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 nearest to one third shall retire from office by rotation, and the retiring directors shall be those who are longest in office.

110. Retiring directors shall be eligible for reappointment. 111. In case any question shall arise as to which of the directors who become directors on the same day

shall retire, the same shall in default of and subject to any agreement among themselves, be determined by the Board by lot.

112. The continuing directors may act not withstanding any vacancy in the Board but if and so ling as their number is reduced below the quorum fixed by the articles for a meeting of the Board, the continuing directors or director may act for the purpose of increasing the number of directors to the fixed for the quorum, of summoning a general meeting of the Company, but for no other purpose.

113. The Company at any General Meeting at which directors retire in the manner above mentioned, shall fill up the vacated offices, by appointing a like number of persons to be directors and may fill up any other vacancies.

114. (a) If the place of the retiring directors is not so filled in and the meeting has not expressly resolve not to fill the vacancy, the meeting shall stand adjourned till the same day in the next week at the same time and place of if that day is a public holiday, till the next succeeding day which is not a public holiday, at the same time and place. (b) If t the adjourned meeting also, the place of the retiring directors 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 reappointed at the adjourned meeting, unless. I At the meeting or t the previous meeting a resolution for the reappointment of such director has

been put to meeting and lost; II The retiring directors has , by a notice in writing addressed to the Company or its Board,

expressed his unwillingness to be so reappointed; III He is not qualified or is disqualified for appointment; IV A resolution, whether special or ordinary, is required for his appointment or reappointment in

virtue of any provisions of this Act; or V The proviso to sub-section (2) of the Section 263 is applicable to the case.

115. Director my at any time give notice in writing to his wish to resign by delivering such notice to the secretary or leaving the same at the registered office of the Company, and thereupon his office shall be vacated.

116. Person shall not be capable of being appointed a director of the Company, if (a) He has found to be of unsound mind by a Court of competent jurisdiction and the finding is in

force; (b) He is an undercharged insolvent; (c) He has applied to be adjudicated as an insolvent and his application is pending; (d) He has been convicted by a Court of any office involving moral turpitude and sentenced in

respect thereof to imprisonment for not les than six months, and a period of five years has not elapsed from the date of expiry of the sentence;

(e) He has not paid any call in respect of shares of the Company held by him, whether along or jointly with others, and six months have elapsed from the last date fixed for the payment of the call; or

(f) An order disqualifying him for an appointment as directors has been passed by a Court in pursuance of Section 203 of the ct and is in force , unless the leave of the Court has been obtained.

Explanation- Person who has incurred disqualification described in clauses (d) or (e) may be appointed as director, if the said disqualification is removed by the Central Government by notification in the Official Gazette.

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117. (1) The office of a director shall become vacant if ; (a) He fail to obtain within the time specified in sub-section (1) of Section 270 of the Act, or at any

time thereafter ceases to hold the share qualification, required of him under Article 100. (b) He is found to be unsound mind by a Court of competent jurisdiction. (c) He has applied to be a adjudicated as an insolvent; (d) He has adjudicated as an insolvent. (e) He is convicted by a Court of any offence involving moral turpitude and sentenced in respect

thereof to imprisonment for not les than six months; (f) He is convicted by a Court of any offence involving moral turpitude and sentenced in respect

thereof to imprisonment for not les than six months; he absent himself from three consecutive meetings of the Board for a continuous period of three months, whichever is longer without obtaining leave of absence from the Board;

(g) He absent himself from three consecutive meetings of the Board, or from all meetings of Board for a continuous period of three months, whichever is longer without obtaining leave of absence from the Board.

(h) 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 or which he is a director, accepts a loan. Or any guarantee or security for a loan, from Company in contravention of Section 295 of the Act;

(i) He acts in contravention of section 299 of the Act; (j) He becomes disqualified by an order of Court under section 203 of the Act. (k) He is removed in pursuance of section 284 of the Act; or (l) Having been appointed a director by virtue of his holding any office or other employment in the

company, he ceases to hold such office or other employment in the company. (2) Not withstanding anything contained in sub-clause (d), (e) and (j) of clause (1) the disqualification

referred to therein shall not make effect, (a) for thirty days from the date of the adjudication sentence or order; (b) 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 oe petition is disposed of or;

(c) where, within the seven days aforesaid, any further appeal or petition is preferred in respect of the adjudication, sentence, conviction or order and the appeal or petition if allowed, would result in the removal of disqualification until such further appeal or petition is disposed of.

118. Subject to the provisions of section 283,297, 299, 300 and 314 of the Act, no director of the Company or the firm of which he is a partner of any partner of such firm or private company of which he is a member or a Director shall be qualified by his office from contracting with the company either as a vendor, purchaser, gent, broker or any reason of his lending money to the Company, or otherwise, nor hall any such contract or any contract or arrangement entered into, by or on behalf of the Company in which any director shall be in any way interested , be voided ; not shall any director, so contracting or being so interested, be liable to account to the Company for any profit realized by any such contract or arrangement by reason only of such director holding that office , or of fiduciary relation there by established, but it is declared that the nature of his concern or interest must be disclosed by him at the meeting of the Board after the acquisition of his interest, and that no director shall as a director , take part in the discussion of or vote in respect of any contract or arrangement in which he is so interested ,and if he is does so vote , his vote shall be void . Provided that no such disclosure of interest by directors will be necessary in case of any other company where any of the directors of the Company or two or more of them together holds or hold, not more that two percent of the paid up share capital in that other Company. Provided further that the directors, or any of them may take part in the discussion of or vote on.

(a) Any contract of indemnity against any loss which they or any one or more of them suffer by reason of becoming or being sureties or surety for the Company.

(b) Any contract or agreement entered into or to be entered into with public company or a private company which is subsidiary of public company, in which the interest of the directors foresaid consists solely- (i) In his being director of such company and the holder of not more that shares of such

number or value therein as is requisite to qualify him for appointment as a director thereof , he having been nominated as such director by the Company , or

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(ii) In his being member holding not more than two percent of its paid-up share capital. A general notice that any director is a member or a director of any specified firm or body corporate, and is to be regarded as concerned or interested in any subsequent transaction with such firm or body corporate, shall be sufficient disclosure under this article, and after such general notice, if shall not be necessary to give any special notice relating to any particular transaction with such firm or body corporate. A Director shall not be disqualified by reason of his holding any office or place of profit under the Company in conjunction with his office of director, except that of auditor, and may be appointed thereto upon such terms as to remuneration, tenure of office and otherwise, as the Board may arrange.

119. (1) The Company may , by ordinary resolution, remove a director (not being director appointed by the Central Government in pursuance of section 408) before the expiry of his period of notice. (2) Special notice shall be required of any resolution to remove a director under this Article or

appoint somebody instead of a director so removed at the meeting at which he is removed. (3) On receipt of notice of resolution to remove 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 herd on the resolution at the meeting.

(4) Where notice is given of a resolution to remove a director under this Article, and the director concerned makes with respect thereto representations in writing to the Company (not exceeding a resolution length) and requests their notification to the member of the Company, the Company shall , unless the representations are received by it too late for it to do so ;- (a) In any notice of the resolutions to every member of the Company, state the facts of the

presentations have been made, and (b) Send a copy of the representations to every member of the Company to whom notice of the

meeting is sent (whether before or after receipt of the representatives by the Company ) and if a copy of the representations 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 herd orally) require that the representations shall be read out at the meeting.

Provided that the copies of the reorientations needed not be sent out and the representations needed not be sent out and the representations need not be read out t the meeting, if on the application either of the Company or of any other person who claims to be aggrieved, the Court is satisfied that the rights conferred by this clause are being abused to secure needless publicity of defamatory matter. (5) Vacancy created by the removal of a director by this Article, may if he had been appointed by the

Company in general meeting or by the Board in pursuance of article 107 or 108, be filled by the appointment or another director in his stead by the meeting t which he is removed, provided special notice of the intended appointment was given under clause (2) ; 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,

(6) If the vacancy is not filled under clause (5) , it my be filled as a casual vacancy in accordance with the provision of the Articles 107 o far as they may be applicable and all the provisions of that article hall apply accordingly. Provide that the director who was removed from office shall not be reappointed as a director by the Board

120. 1. A person who I not retiring director hall subject to the provisions of the Act, be eligible for appointment to the office of directors t any general meeting, if he or some member intending to propose him has, not les that 14 days before the meeting, left at the office of the Company, a notice in writing under his hand signifying his candidature for office of director or the intention of a member to propose him as a candidate for that office along with a deposit of rs.500/- or such other sum as may be prescribed by the Act or the Central Government from time to time which shall be refunded to such person or the member succeeds in getting elected as a Director as the case may be. 2. The Company shall inform its members of the candidature of a person for the office of director or

the intention of a member to propose such person as a candidate for that office, by serving individual notices on the members not less than seven days before the meeting.

Providing that it shall not be necessary for the Company to serve individual notices upon the members as aforesaid if the Company advertises such candidature or intention not les that seven days before the meeting in at least two newspapers circulating in town or city where the registered

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office of the Company is situated at the relevant time , for which one I publishes in the English language at and the other in the Gujarati Language .

121. The Company shall keep at its registered office a register, or its directors, managing directors, manager and secretary containing with respect to each of them the periods respectively prescribed by Section 303(1) of the Act, and shall within the periods respectively prescribed Section 303(2) of the ct, send to the Registrar a return in duplicate in the prescribed form containing the particulars specified in the said Register and a notification in duplicate in the prescribed form of change among its directors, managing directors, manager or secretary specifying the date of the change.

POWERS OF THE BOARD 122. (1) Subject to the Provisions of the Act ,the Board shall be entitled to exercise all such powers, and

to do all such acts and things, as the Company is authorized to exercise and do; Provide that the Board shall not exercise any power or do any act or thing which is directed or required, whether by the Act or any other law or by the memorandum or by these presents or otherwise, to be exercised or done exclusively by the Company in general meeting. Provided further that in exercising any such power or doing any such act or thing, the Board shall be subject to the provisions contained in that behalf in the Act or in any other law or in the memorandum or articles of the Company or in any regulations not inconsistent there with and duly made there under, including regulations made by the Company in that regard in general meeting. (2) No regulation made by the Company in general meeting shall invalidate any prior act of the

Board which would have been valid if that regulation had not been made. 123. Subject to and in accordance with the restrictions of power of the Board contained in Section 293 of

the Act and without prejudice to the general powers conferred by Article 122 and the other powers conferred by these presents, it is hereby expressly declared that the Board shall have the following powers (which may be exercised by the managing director or directors wherever any of the powers are entrusted to them either by these presents or otherwise ) that is to say, power;-

(a) To purchase or otherwise acquire any lands, buildings, machinery, premises, herdsmen’s, property, effects assets, rights, credits, royalties, business and good-will of any joint Stock Company carrying on the business of manufacturing and dealing in graphite products or any other business which this Company is authorized to carry on , in any part of India, also to promote, aid, foster, subsidies, or acquire interest in any industry or undertaking in any country or countries whatsoever.

(b) The purchase , or take on lese for any term or terms of years, or otherwise acquire any factories or any other undertaking or any land or lands, with or without buildings and outhouses thereon , situate in any part of India at such price of rent, and under and subject to such terms and conditions ass the Board may think fit ; and in any such purchase , lease or other acquisition, accept ssuch title as the Board may believe or my be advised to be reasonably satisfactory.

(c) To erect and construct , on the said land or lands buildings, houses, warehouses, sheds or tanks necessary and adapted to the working of a factory manufacturing graphite products and to alter, extend and improve the same;; to provide machinery, engines and apparatus requisite for the construction of such a factory, and the due and efficient working thereof.

(d) To let or lease the property of the Company, in part or in whole, for such rent, and subject to such conditions as may be thought advisable.

(e) To sell such portion of the lands or building of the Company as may not be required for the purposes of the Company.

(f) 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 ( subject to the provisions of Section 81 of the Act ), bonds debentures, or other securities of the Company and any such shares may be issued either as fully paid up or with such amount credited as paid up thereon s my be agreed upon, and any such bonds, debentures or other securities may be either specifically charged upon all or any part of the property of the Company and its uncalled capital or not so charged.

(g) To secure the fulfillment of any contracts or engagement entered into by the Company by mortgage or charge of all or any of the properties of the Company and its uncalled capital for the time being, or in such other manner as they may think fit.

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(h) To accept from any member so far as may be permissible by law, as surrender of his shares or stock or any part thereof, on such terms and conditions ass shall be agreed .

(i) Subject to the provisions of Section 49 of the Act. 1. To get the share in other body corporate to an amount not exceeding the nominal value

of the qualification shares which are required to be held by a director thereof, registered or held by the Company jointly in the names of itself and of person or nominee or in the name of a person or nominee expressly described as a nominee or in the nominee of the Company Where the Company has a right to appoint any person, or persons, or where any nominee or nominee of the Company has or have been appointed as a directors of any such other body corporate.

2. To deposit with Bank being the Bankers of the Company, any shares or securities, for the collection of any dividend or interest payable thereon.

3. To deposit with transfer to any person any shares or securities, by way of security for the repayment of any loan advanced to the Company of the performance of any obligation undertaken by it.

(i) To institute, conduct, defend, compound or abandon any legal proceedings by or against the Company or its officers, or otherwise concerning the affairs of the Company and also, subject to the provisions of Section 293 and 295 of the Act, to compound and allow time for payment or satisfaction of any debts due, and of any claims or demands by or against the Company, to arbitration and observe and perform any awards made thereon.

(j) To act on behalf of the Company in all matters relating to bankrupts and insolvents. (k) To act on behalf of the Company in all matters relating to bankrupts and insolvents. (l) To make and give receipts, releases and other discharges for moneys payable to the

Company and for the claims and demands of the Company. (m) Subject to the provisions of section 77, 292, 295, 370 and 372 of the Act, to invest and deal

with moneys of the Company not immediately required for the purposes thereof upon such security or without security and in such manner as they may think fit and from time to time vary such investments

(n) To subscribe for , purchase, accept, take, hold, or otherwise acquire shares of any company, society or undertaking which does, among other things the business or manufacturing and /or dealing in graphic products, or the objects of which shall either wholly or in part be similar to those of this Company or such as may be likely to promote or advance the interest of this Company.

(o) Subject to and in accordance with the provisions of Section 49 of the Act, to execute in the name and on behalf of the Company in favor of any Director or other person who may incur, or be about to incur, any personal ability whether as principal or surety for the benefits of the Company, such mortgages of the Company’s property ( present and future) as they think fit, and such mortgage may contain a power of sale and other powers, provisions, covenants and agreements as shall be agreed upon.

(p) To give any officer, or allow any bonus, pension, gratuity or compensation to any employee of the Company, or his widow, children or dependents, that may appear to the Board just or proper, whether such employee, his widow, children or dependents have or have not a legal claim upon the Company.

(q) To give award or allow any bonus, pension, gratuity or compensation to any employee of the Company , or his widow, children or dependents, that may appear to the Board just or proper , whether such employee, his widow, children or dependents have or have not legal claim upon the Company.

(r) To provide for the welfare of employees (including Directors) or ex-employees of the Company or its predecessors in business and wives, widows and families or the dependants or connection of such persons by building or contributing to the building of houses or dwellings or quarters or by grants of money, pensions, gratuities, allowances, bonuses, profit sharing bonuses or benefits of any other payments or by creating and from time to time subscribing or contributing to provident fund and other associations, institutions, funds profit sharing or other schemes or trusts and by providing or subscribing or contributing towards places of instruction and recreation, hospitals and dispensaries, medical and other attendance and other assistance as the Board shall think fit.

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(s) Subject to the provisions of Section 293(1) (e) and 293 of the Act, to subscribe or contribute to or otherwise to assist or guarantee “money” to charitable, benevolent, religious, scientific, national, public or any other useful institutions objects or purposes, or for any exhibition.

(t) Before recommending any dividend, to set aside out of the profits of the Company such as they may think proper, for depreciation or to a depreciation fund, insurance fund, reserve fund or sinking fund or any special fund, to meet for special dividends, or for equalizing dividends, or for repairing, improving, extending and maintaining any of the properties of the Company with power from time to time to transfer moneys standing to the credit of one fund or any part thereof to the credit of any other fund and to invest the several sums so set aside or so much thereof

(u) required to be invested upon such investments (other than shares of the Company), as they may think fit, and from time to time deal with and vary such investments and dispose of and apply and expand all or any part thereof for the benefit of the Company, in such manner and for such purposes as the Board in its absolute discretion, think conducive to the interests of the Company, notwithstanding that the matters to which the Board apply or upon which they expand the same, or any part thereof , my be matters to or upon which the capital moneys of the Company might rightly be applied or expended, and to divide the reserve fund into such special fund as the Board may think fit and to employ the assets constituting all or any of the above funds including the depreciation fund, in the business of the Company of in the purchase or repayment of debentures or debenture stock, and that without being bound to keep the same separate from the other assets. If the assets constituting any of the above funds are employed in the business of the Company, the Board may pay or allow to the credit off such funds interest at such rate as the Board may think proper but not exceeding 12% per annum.

(v) At any time and from time to time , by power of attorney under the seal of the Company, to appoint any person or persons, to be the attorneys of the Company, for such purposes and with such powers, authorities and discretions( not exceeding those vested in or exercisable by the Board under these presents) and for such period and subject to such conditions as the Board may from time to time think fit.

(w) To appoint any two or more directors directors-in –charge to carry on the management of the affairs of the Company pending the appointment or reappointment of managing directors and to pay them such remunerations as the Board think fit and within the limits permissible under the Act.

(x) For or in relation to any of the matters aforesaid or otherwise for the purposes of the Company, to enter into all such negotiations and contract and rescind and vary all such contracts and execute and do all such acts, deeds, and things in the name and on behalf of the Company as they may consider expedient.

(y) For or in relation to any of the matters aforesaid or otherwise for the purposes of the Company, to enter into all such contracts and contract and rescind and vary all such contracts and execute and do all such acts, deeds, and things in the name and on behalf of the Company as they may consider expedient.

(z) From time to time to delegate all or any of those powers and authorities to the Managing Directors to sub-delegate and to make, vary and repeal by-laws for the regulations and servants.

(aa) To enter into agreements with the Managing Director or Directors, or Mangers with such modification as may be deemed expedient , either before or after the execution and to carry out the same into effect, and to affix the seal of the Company to the same.

(bb) To carry on the management of the affairs of the Company in the absence of appointment or reappointment of managing directors or in the event of their resignation or removal or suspension.

(cc) And generally to do all such other acts and things as are necessary, incidental or conducive to the attainment of all or any of the objects of the Company and to sanction and authorize all such matters and things as may be necessary to be done , authorized or sanctioned in or about the execution of all or any of the powers conferred upon the Board.

124. (1) A Manager may be appointed by the Board for such terms at such remuneration and upon such conditions as it may fit.

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(2) A director may be appointed as Manager. 125. A provision of the Act or these presents requiring or authorizing a thing to be done by or to a director

and the manager or secretary shall not be satisfied by its being done by or the said person acting both as director and as , or in place of , the manager as secretary.

BORROWING POWER OF THE BOARD 126. Subject to and in accordance with the provisions of sections 292 and 293 of the Act, the Board may

raise or secure the payment of repayment of sum or sums in such manner and upon such terms and conditions in all respect as they think fit, and in particular , by the issue of debentures or debenture stock of the Company charged upon all or any part of the property of the Company ( both present and future) including its uncalled capital for the time being.

127. Debenture, debenture stock and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

128. Any debentures, debenture stock, bonds, or other securities, may be issued at a discount, premium or otherwise and with any special privileges as to redemption, surrender, drawings, allotment of shares, attending and voting at general meetings of the Company, appointment of Directors and otherwise. Provided that debentures, debenture stocks, bonds or other securities with a right to allotment of or conversion into shares shall not be issued except with the sanction of the Company in General Meeting.

129. Any uncalled capital of the Company may be included in or charged by any mortgage or any other security by the Board.

130. If the directors of any of them or other persons shall become personally liable for the payment of any such primarily due from the Company, the Board may execute or cause to be executed any mortgage , charge or security over or effecting the whole or any part of the assets of the Company by way of indemnity against any loss which the directors or any one or more of them may suffer by reason of becoming or being sureties or surety for the Company.

PROCEEDINGS OF BOARD OR COMMITTEE OF DIRECTORS 131. (1) A meeting of the Board of Directors shall be held at least once in every three months and at least

four such meetings shall be held in every year. The Board may meet for the dispatch of business, adjourn and otherwise regulate its meetings, as it thinks fit. (2) The quorum for the meeting of the Board shall be one-third of its total strength (any fraction

contained in that one-third being rounded off as one), or two directors, whichever is higher. Provided that where at any time the number of interested directors exceeds or is equal to two –thirds of the total strength, the number of the remaining directors who are not interested present at the meeting being not les than two, shall be the quorum during such time. Explanation ;- in this article – (a) “Total strength” means the total strength of the Board after deducting there from the number

of the directors, if any, whose places may be vacant at the time. (b) “Interested directors” means any director whose presence cannot, by reason of Section 300

of the Act, count for the purpose of forming a quorum at a meeting of the Board, at the time of any discussion or vote on any matter.

132. If at the expiration of fifteen minutes from the time appointed for the Board’s meeting a quorum is not present, no business shall be transacted except that of election of a Chairman and the meeting, unless the Chairman otherwise directs shall stand adjourned to the same day in the next week at the same time and place.

133. (a) The Board may elect a Chairman for its meetings and determine the period for which he is to hold office. (b) If no such Chairman is elected, or if at any meeting the Chairman is not present within five

minutes after the time appointed for holding the meeting, the directors present may choose one of their members to be Chairman of the meeting.

134. A director my, at any time, and the Managing Director, on his own, or upon the request of Directors in writing shall convene meeting of the directors. Notice of every meeting off the Board shall be given in writing to every director for the time being in India, and at his usual address in India to every other director.

135. Any question which shall arise at any meeting of the Board shall be decided by a majority of votes, the Chairman shall have a casting vote in addition to his own vote as a director.

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136. A Meeting a Board 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 articles of the Company for the time being vested in or exercisable by the Board.

137. The Board may delegate any of their powers to the 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 but every committee so formed shall in exercise of the powers delegate to it , conform to all such regulations as may from time to time be prescribed by the Board, all acts done by any such committee in conformity with such regulations, and in fulfillment of their appointment, but not otherwise, shall have like force and effect as if done by the Board .

138. All acts done by any meeting of Board or by a committee of directors, or by any person acting as a director shall , not withstanding that it shall afterwards be discovered that there was defect in the appointment of such director, or persons acting as aforesaid or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified , to be director.

139. The meetings and proceedings of any such committee consisting of two or more members shall be governed by the provisions herein contained for regulating the meetings and proceedings of Board so far as the same are applicable thereto, and are not superseded by the express terms of the appointment of such committee or any regulation imposed by the Board aforesaid.

140. No resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation unless the resolution has been circulated in draft, together with the necessary papers, if any, to all the directors, or to all the members of the committee, then in India (not being less in number that the quorum fixed for a meeting of the Directors or committee as the case may be), and to all other directors or members, at their usual address in India and has been approved by such of the directors as are then in India, or by a majority of such of them as are entitled to vote on the resolution.

141. (1) The Company shall cause minutes of all proceedings of every general meeting and of all proceedings of every meeting of its Board or of every committee of the Board, to be kept by making within 30-days of the conclusion of every such meeting concerned, entries thereof in books kept for that purpose with the pages consecutively numbered. (2) Each page of every such book shall be initialed or signed and last page of the record of

proceedings of each meeting in such books shall be dated and signed;- (a) In the case of minutes of proceedings of a meeting of the board or of a committee thereof, by

the Chairman of the said meeting or the chairman of the next succeeding meeting. (b) In the case of minutes of proceedings of a general meeting by the Chairman of the same

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 authorized by the board for the purpose.

(3) The minutes of each meeting shall contain a fair correct summary of the preceding thereat. (4) All appointments of officers made at any of the meetings aforesaid shall be included in the

minutes of the meeting. (5) In the case of a meeting of the Board or of a committee of the Board, the minutes shall also contain –

(a) The name of the directors present at the meeting , and (b) In the case of each resolution passed at the meeting the names of the directors, if any,

dissenting from or not concurring in the resolution. (6) Nothing contained in this Article shall be deemed to require the inclusion in any such minutes of

any matter which , in the opinion off the chairman of the meeting. (a) Is or could reasonably be regarded as defamatory of any person. (b) Is irrelevant or immaterial to the proceeding; or (c) Is detrimental to the interest of the Company;

Explanation L:- the chairman shall exercise an absolute discretion in regard to the inclusion or on-inclusion of any matter In the minutes on the ground specified in this sub-Article.

142. Minutes of meetings kept in accordance with the provisions of Section 193 of the Act and Article 141 above shall be evidence of the proceedings recorded therein. Where minutes of the proceeding or of a committee of the Board have been kept in accordance with the provisions of section 193 of the Act and Article 141 then, until the contrary I proved, the meeting shall be deemed to have duly called

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and held and all proceedings there at to have been duly taken place, and in particular, all appointments of directors or liquidators made at the meeting shall be deemed to be valid.

143. The Company shall not be entitled to subscribe for , or purchase ( whether by itself, or by any individual or association of individuals in trust for its benefit or on its account) the shares of any other body corporate except to the extent and except in accordance with the restrictions and conditions specified in section 372 of the Act.

144. (a) The directors may . from time to time appoint one or more of their body to be managing or whole time director/directors of the Company , for a fixed term not exceeding five years at one time for which he or they is or re to hold such office and may from time to time ( subject to the provisions of any contract between him or them and the Company) remove or dismiss him or them from office and appoint or reappoint the same person or others in his or their place or places. (b) Subject to any contract between him and the Company , a Managing or Whole time Director shall

not, while he continues to hold that office, be subject to retirement by rotation and he shall not be reckoned as a director for the purpose of determining the rotation of retirement of directors or in fixing the number of directors to retire, but (subject to the provisions of any contract between him and the Company), he shall be subject to the same provisions as to resignation and removal as the other directors of the Company and he shall , ipso facto and immediately, cease to be a managing director if he ceases to hold the office of director from any cause.

(c) The remuneration of managing director or whole time director shall (subject to the provisions of any contract between him and the Company ) from time to time be fixed by the directors, and may be, by way of fixed salary or by way of commission on net profits of the Company, or partly by and partly by the other.

(d) The director may from time to time entrust to and confer upon a managing director or whole time director for the time being such of the power exercisable under these presents by the directors, as they think fit, and may confer such powers for such time , and to be exercised for such objects and purposes, and upon such terms and conditions and with such restrictions as they think expedient and they may counter such powers, either collaterally with , or to the exclusion of and in substitution for, all or any of the powers of the Directors in that behalf, and may from time to time revoke, withdraw, alter or vary all or any of such powers.

(e) The Company in general meeting may also from time to time appoint any managing director or managing directors or wholetime director or whole time directors of the company and may exercise all the powers referred to in this Article.

(f) Receipts signed by the Managing Director for any moneys, goods or property receive in the usual course of business of the Company or for any moneys, goods or property lent to or belonging to the company shall be an effectual discharge on behalf of and against the Company for the money, funds or property which in such receipts shall be acknowledged to be received and person paying such money shall not be bound to see to the application or be answerable for any misapplication thereof. The Managing Directors shall also have the power to sign and accept and endorse cheques on behalf of the Company.

(g) The Managing Director shall be entitled to sub-delegate ( with the sanction of the Directors, where necessary) all or any of the powers, authorities and discretions for the time being vested in him in particular from time to time to provide by the appointment of any Attorneys for the management and transaction of the affairs of the company in any specified locality in such manner as they may think fit.

(h) Not withstanding anything contained in these Articles, the Managing Director is expressly allowed generally to work for and contract with the Company and especially to work for and contract with the Company and especially to do the work of Managing Director and also to do any work for the Company upon such terms and conditions and for such remuneration (subject to the provisions of the Act ) as may from time to time agreed between him and the Directors of the Company.

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SEAL 145. The Board shall have power to provide a Seal for the purposes of the Company, and from time to

time to destroy the same, and substitute a new seal in lieu thereof and shall provide for the safe custody of the seal for the time being and it shall not be used except by the authority of the Board or a committee of the directors and in the presence of at least one off them, who shall sign every instrument or deed to which the seal is affixed and every such instrument or deed shall be countersigned by the Managing Director or secretary or such other person appointed by the directors; provided neverthless that certificates of shares or debentures may be sealed and signed in the manner provided in Article 17.

ACCOUNTS 146. The Company shall keep at its registered office proper books of account with respect;-

(a) All sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure take place;

(b) All sales and purchases of goods by the Company ;and (c) The assets and liabilities of the Company.

Provided that all or any of the books of account aforesaid may be kept at such other place in India s the Board may decide and when the Board so decides the Company shall within seven days of the decision file with the Registrar a notice in writing giving the full address of that other place. The Company shall preserve in good order its books of account relating to a period of not less than eight years immediately preceding the current year.

147. The Board shall from time to time determine whether and to what extent and at what times and places and under what conditions of regulations, the accounts and books of the Company, or any of the shall be open to the inspection of members, and no member not being a director shall have any right of inspection of any account or book or document of the Company except as conferred by the Act or authorized by the Board or by the Company in general meeting.

148. A copy of every such profit and loss account and balance sheet (including auditors report and every other document required by law to be annexed or attached to the Balance Sheet) shall be sent at least twenty one days before the meeting t which the name are to be laid before the members of the Company, to issued by the Company, whether such members or trustee is or is not entitled to have notices of general meeting of the Company sent to him nd to all persons other than such members or trustees being the persons so entitled . Provided that the Board may if it deems fit instead of sending the said documents as aforesaid may make copies of the documents available for inspection t the Registered Office of the Company during working hours for period of twenty one days before the date of Meeting and send a statement containing the salient features of such document in the form prescribed under Section 219 of the Act to every member of the Company and to every trustee for the holders of any debentures issued by the Company not les than twenty one days before the date of the meeting , they shall , notwithstanding that fact, be deemed to have been duly sent if it is so agreed by all the members entitled to vote at the meeting.

149. Every Balance Sheet and Profit and Loss Account of the company when audited and adopted by the Company in general meeting shall be conclusive except s regards any matters in respect of which modification may from time to time be considered proper by the Board of Directors and approved by shareholders at a general meeting.

AUDIT 150. The accounts of the Company shall, once at least in every year, be examined and the correctness of

the profit and loss account and balance sheet ascertained, by one or more auditor or auditors. 151. Auditors shall be appointed and their duties regulated in accordance with Section 224, 224A,

225,226 and 227 of the Act. All notices of , and other communications relating to , any general meeting of the Company which any member of the Company is entitled to have sent him shall also be forwarded to the auditor of the Company, and the auditors shall be entitled to attend any general meeting and to be heard at any general meeting which he attends on any part of the business which concerns him as in auditor.

152. Every account of the Company when audited and approved by a general meeting shall be conclusive, and if any error is discovered thereafter the same be corrected in the next account.

DIVIDENDS 153. Subject as aforesaid , the profits of the Company which it shall from time to time be determined to

divide in respect of any year or other period shall be applied first in paying the fixed preferential

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dividend on the capital paid up on the Preference Shares, if any , in the order in which the various classes of preference shares are entitled and secondly in paying a dividend for such year or other period on the capital paid up on the equity shares.

154. The Company in general meeting may declared 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. Provided that the dividend shall be paid or the dividend warrant shall be posted within forty two days of the declaration of dividend except when the case of any shareholder falls within the contingencies described in provision to Section 207 of the Act.

155. No larger dividend shall be payable than is recommended by the Board, but the Company in general meeting may declare a smaller dividend. No dividend shall be declared or paid except out of the profits of the Company, or any other undistributed profits arrived at in the manner laid down in Section 205 of the Act and no dividend shall carry interest as against the Company. The declaration of the Board as to the amount of the net profits of the Company shall be conclusive.

156. The Board may, from time to time, pay to the members on account of the next forthcoming dividend such interim dividend as, in their judgment, the position of the Company justifies.

157. Where capital is paid up in advance of calls upon the footing that the same shall carry interest, such capital shall not, whilst carrying interest, confer a right to participate in profits.

158. All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but , if any share is issued on terms providing that it shall rank for dividend as from a particular date such shares shall rank for dividend accordingly.

159. The Board may retain the dividends payable upon shares in respect of which any person is , under Articles 56 hereof , entitled to become a member or which any person, under the Article, is entitled to transfer, until such person shall become a member in respect of such shares or shall duly transfer the same.

160. No member shall be entitled to receive payment of any interest or dividend in respect of his share or shares whilst any money my be due or owing from him to the Company in respect of such share or shares or otherwise however either lone or jointly with any other person or person; and the Board may deduct from the interest or dividend payable to any shareholder, all sums of money so due from him to the Company.

161. A transfer of shares shall not pass the right to any dividend declared thereon before the registered of the transfer.

162. Unless otherwise directed , any dividend may be paid up by cheque or warrant sent through the post to the registered address of the member , or person entitled , or in case of joint holders to any one of them named in the register in respect of the joint holding. The Company shall not be liable, or responsible for any cheque or warrant lost in transit or for any dividend lost to the member or person entitled thereto , by the forged endorsement of any cheque or warrant or the fraudulent recovery thereof by any other means. The managing directors or Board may, if they think fit call upon the shareholders, when applying for dividends or bonus, to produce their share certificate at the registered office or other place where the payment of dividend is to be made.

162 (A) No unclaimed dividend shall be forfeited by the Board till the claim thereto becomes barred by law and the Company shall comply with all the provisions of section 205-A of the Act in respect of unclaimed or unpaid dividend.

163. Any general meeting may upon the recommendations of the Board resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of the reserve fund or in the hands of the Company and available for dividend or representing premium received on the issue of shares and standing to the credit of the share premium account or the capital redemption reserve fund to be capitalized and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend or to their nominee or nominee if so resolved by the general meeting and in the same proportions on the footing that they become entitled thereto s capital and that all or any part of such capitalized fund be applied on behalf of such shareholders in paying up in full any uninsured shares or debentures of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued share and that such distribution or payment shall be accepted by such shareholders in full satisfaction of their interest in the said capitalized sum.

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164. (1) For the Purpose of giving effect to any resolution in pursuance of articles 162 or 163 the Board shall have full power; (a) to settle any difficulty which may arise in regard to the distribution as they think expedient and in

particular to issue fractional certificates and to fix the value for distribution of any specific assets and to determine that cash payment shall be made to any members upon the footing of the value so fixed in order to adjust the rights of all parties and to vest any such cash or specific assets in trustees upon such trusts for persons entitled to the dividend or capitalized fund as may seem expedient to the Board;

(b) to make all appropriations and applications of undivided profits resolved to be capitalized thereby and all allotments and issues of fully paid shares or debentures if any;

(c) to authorize any person to enter, on behalf of all the members entitled thereto, into an agreement with the Company providing for the allotment to them respectively, credited as fully paid up, of any further shares or debentures to which they may be entitled upon such capitalization or (as the case may require) for the payment by the Company on their behalf , by the application thereto of their respective proportion of the profits resolved to be capitalized , of the amounts or any part of the amounts remaining unpaid on their existing shares.

(2) Any agreement made under such authorities shall be effective and binding on all such members. 166. Any genera l meeting declaring a dividend may make a call on the members of such amount as the

meeting fixes but so that the call on each members shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may, it so, arranged between the Company aand the members, be set off against the call.

NOTICES 167. A notice of document requiring to be served by the Company be given by the company to any

member either personally or by sending it by post to him to his registered address, or if he has no registered address in India, to his address if any, within India supplied by him to the company for giving off notices to him. Where notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying and such service shall be deemed to have been effected. (i) in the case of notice of meeting, at the expiration of forty-eight hours after the letter containing the same is posted; (ii) in any other case, at the time at which the letter would be delivered in the ordinary course of the post; Provided that where member has intimated to the company in advance that documents should be sent to him under certificate of posting or by registered post with or without acknowledgement due and has deposited with the Company, a sum sufficient to defray the expenses of doing so, service of the document shall not be deemed to be effected unless it is sent in the manner intimated by the members. If a member has no registered address in India and not supplied to the Company an address within India for giving of notice to him, a notice advertised in a newspaper circulating in the neighborhood of the registered office of the Company shall be deemed to be duly given to him on the day on which advertisement appears. A notice or document requiring to be served may be given by the Company to the joint holders of a share by giving the notice to the joint holder named first in the registered in respect of the share. A certificate in writing signed by any manager, secretary or other officer of the company that the notice was so addressed, prepaid, and posted shall be conclusive evidence thereof. A notice or document requiring to be serve may be given by the company to the person entitled to a share in consequence of the death or insolvency of a member by sending it through the post in prepaid letter addressed to them by name or by the title of the representative of the deceased or assignees of the insolvent or by any like description at the address (if any) in India supplied for the purpose by the persons claiming to be so entitled or (until such an address or (until such an address has been so supplied) by giving the notice in any manner in which the same night have been given iff the death or insolvency had not occurred. Notice of every general meeting shall be given in the same manner hereinbefore authorized to – (a) every member of the Company except those members who , having no registered address within India have not supplied to the Company an address within India for giving of notices to them (b)every person entitled to a share in consequence of the death or insolvency of a member, who but for his death or insolvency would be entitled to receive notice of the meeting; and

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(c) the auditor of the Company and he shall be entitled to be heard at any general meeting which he attends, on any part of the business which concerns him as an auditor; and (d) no other person shall be entitled to receive notices of the gereral meeting. Provided that where the notice of a meeting is given by advertising the same in a Newspaper circulating in the neighborhood of the registered office of the company under Sub-section (3) of section 53 of the Act and as provided herein above , the statement of material facts referred to in Section 173 of the Act and Articles 69 herein above may not be annexed to the notice as required by the said provision but it shall be mentioned in the advertisement that the statement has been forwarded to the members of the Company.

168. All notices to be given on the part of shareholder shall not be left at or sent by registered post to the registered office of the Company.

169. Any notice required to be given by the company to the members or any of them and the manner of service of which is not expressly provided for by thee presents shall be regarded as sufficient if given by advertisement once in one daily or weekly local newspaper.

170. Every person , who by operation of law , transfer or other means whatsoever, shall become entitled to any share, shall be bound by and every notice of other document in respect of such shares which, previous to his name and address being entered upon the register and previous or subsequent to such devolution of interest, is given to the person from whom he derives his title and who is registered.

171. Any notice or document delivered or sent by post to or left at the registered address of any member or to his agent as above provided in accordance with these presents, then, notwithstanding such member be then deceased, and whether or not the Company has notice of his death shall be deemed to have been duly served in respect of any registered shares whether held solely or jointly with other persons by such member until some other persons be registered in his stead as the holder or joint holder thereof and such service shall for all purposes of these presents be deemed as sufficient service of such notice or document on his or her heirs, executors or administrators and all person if any jointly interested with him or her, in any such share.

172. Any notice to be given by the Company shall be signed by the Managing Director/s or such other officer as the Board may appoint and the signature thereto my be written , printed, lithographed or Photostat.

SECRACY CLAUSE AND INDEMNITY OF DIRECTORS 173. No member shall be entitled to visit or inspect the Company’s works without the permission of the

board or Managing Director or to require discovery of or any information respecting any details of the Company’s trading, or any matter which is or may be in the nature of a trade secret, mystery of trade or secret process, which may relate to the conduct of the business of the Company, and which, in the opinion of the board, will be inexpedient in the interest of the member of the Company to communicate to the Company.

174. Every director, managing director, auditor, secretary and other officer for the time being of the Company may be indemnified out of the assets of the Company against any liability incurred by him in depending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or discharged or in connection with any application under section 633of the Act in which relief is granted to him by the court.

175. Subject to the provisions of the section 201 of the Act, no director, or other officer of the Company shall be liable for the acts, receipts, neglects or defaults of any other director or officer or for joining in any receipt or other act for conformity or for any loss or expenses happening to the Company through the insufficiency or deficiency of the title to any property acquired by order of the board for or on behalf of the Company, or for insufficiency or deficiency of any security in or upon which any of the moneys of the Company shall be invested or for any loss or damage arising from the bankruptcy Insolvency, or tortious act of any person company, or corporation, with whom any moneys securities or effects shall be entrusted or deposited , or for any loss occasioned by any error or judgment or oversight on his part, or for any other loss, damage or misfortune whatever, which shall happen in the execution of the duties of his office or in relation thereto, unless the same happens through his own dishonesty.

GENERAL 176. Each member of the Company present and future, is to be deemed to joint the Company with full

knowledge of all the contents of this presents.

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SECTION X – OTHER INFORMATION 1. LIST OF MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts mentioned below (not being contracts entered into in the ordinary course of business carried on by the Company) are or may be deemed to be material contracts. Copies of these contracts along with documents referred below may be inspected at the Registered Office of the Company between 10.00 a.m. and 1.00 p.m. on any working day until the closing of the subscription list. Material Contracts

1. Memorandum of Understanding dated June 15th, 2009 signed between the Company and Ashika Limited for acting as Lead Manager to the Issue.

2. Memorandum of Understanding dated March 16th, 2009 signed between the Company and

Purva Sharegistry India Pvt Ltd for acting as Registrar to the Issue.

3. Letter dated 01/03/2009 appointing Purva Sharegistry India Pvt Ltd as the Registrar to the Issue.

4. Tripartite Agreement with NSDL dated April1st, 2009 for dematerialization of shares.

5. Tripartite Agreement with CDSL dated March 24th, 2009 for dematerialization of shares. Material Documents

1. Memorandum and Articles of Association of the Company as amended from time to time.

2. Certificate of Incorporation of the Company dated 29th July, 1980.

3. Certificate of commencement of business of the Company dated 2nd March, 1981.

4. Copy of Board Resolution dated 13th December, 2008 for the proposed rights offer.

5. Copy of the special resolution passed by the members of the Company on January 10th, 2009 for the proposed rights offer.

6. Copy of resolution dated 22/06/2009 authorizing jointly and severally Mr. Naresh Saboo,

Managing Director, Mr. Naresh Jain, Director and Ms. Vandita Jogi, Compliance Officer to make necessary corrections to make the draft letter of offer / letter of offer and to sign the same.

7. Letter dated June 18th, 2009 from M/s. Tushar Parekh & Associates, the Statutory Auditors of the

Company, regarding the tax benefits available to the Company and its members.

8. Letter dated June 18th, 2009 from M/s. Tushar Parekh & Associates, the Statutory Auditors of the Company regarding financial performance for the past five years adjusted as per SEBI guidelines.

9. Annual reports of the Company for the year ended March 31, 2005 , 2006 , 2007, 2008 and

2009.

10. Consents from the Directors, Auditors, Lead Manager, Legal Advisors to the Issue, Registrar, Compliance Officer, Bankers to the Issue, Bankers to the Company to act in their respective capacities.

11. Certificate dated 18/06/2009 from Mr. Ashok M. Bhatia, Legal Advisor to the Issue, regarding the Litigations, Legal and Other Information relating to the Company.

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12. Due Diligence Certificate dated 22/06/2009 to SEBI from Ashika Capital Limited.

13. Certified copies of Form 5s along with relevant resolutions for increase in authorized Share capital.

14. Copy of Board Resolution dated 22/06/2009 and [•] approving draft Letter of Offer and Final

Letter of Offer respectively.

15. Relevant extracts regarding Industry Information.

16. Copy of various Government Approvals obtained by the Company.

17. Statutory Auditors certificate dated 22/06/2009 regarding sources and deployment of funds.

18. In principle approval dated [•] from BSE for listing of the securities offered in this issue.

19. SEBI Observation Letter No. [•] dated [•]

20. Letters of intent for the subscription to rights entitlement, received from the promoters.

21. Copy of Deed of Conveyance dated September 14, 2007 entered into with Smt. Sindhu M. Dixit for purchase of land at Pune.

22. Copy of Agreement for sale dated September 14, 2007 entered into with Mr. Mukund R. Kulkarni & Others for purchase of land at Pune.

23. Copy of work order dated 14/01/2009 entered into with Modern Road Makers Private Limited.

24. Copy of work order dated 16/07/2008 entered into with Ashoka Buildcon Limited.

25. Copy of work order dated 21/01/2009 entered into with ATR Infraprojects Private Limited

26. Copies of quotations obtained.

27. Copy of Resolution passed dated 01st April, 2009 for appointment of the Managing Director.

28. Copy of Agreement dated 01/04/2009 between Mr. Naresh Saboo, Managing Director, and the

Company providing for terms of appointment including remuneration.

29. Hire Purchase Agreements entered into with Banks and Finance Companies for the procurement of equipments.

30. Copy of Inter Corporate Deposit Agreements. Any of the contracts or documents mentioned in this Draft Letter of Offer may be amended or modified at any time, if so required, in the interest of the company or if required by other parties, without reference to the shareholders, subject to compliance of the applicable laws.

Crystal (022) - 6614 [email protected]