Henkel India Limited · Information Memorandum Henkel India Limited LISTING The Equity Shares of Henkel India Limited is

Information Memorandum Henkel India Limited

HENKEL INDIA LIMITED

INFORMATION MEMORANDUM FOR LISTING OF 11,64,54,271

EQUITY SHARES OF RS. 10/- EACH

Regd. Office: No.3, Cenotaph Road, Teynampet, Chennai – 600 018.

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HENKEL INDIA LIMITED

(Incorporated as a Public Limited Company on 29th day of September 1916 under the name and style “THE CALCUTTA CHEMICAL COMPANY LIMITED” under the provisions of the Indian Companies Act, 1913, in the state of West Bengal. The Registered Office of the Company was, with due approvals, shifted to the State of Tamil Nadu with effect from 18th September 2003, subsequently the name of the Company was changed to “HENKEL INDIA LIMITED” with effect from 24th day of August 2004.)

Regd. Office:No.3, Cenotaph Road, Teynampet, Chennai – 600 018. Tel.: 044-24330089 Fax: 044-24344731

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

INFORMATION MEMORANDUM FOR LISTING OF 11,64,54,271* EQUITY SHARES OF RS.10 EACH

GENERAL RISKS “Investment in equity and equity-related securities involve a degree of risk and investors should not invest in the equity shares of Henkel India Limited unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in the shares of Henkel India Limited. For taking an investment decision, investors must rely on their own examination of the Company including the risks involved. The securities have not been recommended or approved by Securities Exchange Board of India (SEBI) not does SEBI guarantee the accuracy of this document.” ABSOLUTE RESPONSIBILITY OF HENKEL INDIA LIMITED “Henkel India Limited having made all reasonable inquiries, accepts responsibility for and confirms that this Information Memorandum contains all information with regard to Henkel India Limited, which is material, that the information contained in the Information Memorandum 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 Information Memorandum as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.” *excludes 10,200 shares kept in abeyance before allotment due to legal disputes.

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http://www.henkel-india.com/

mailto:[email protected]


LISTING The Equity Shares of Henkel India Limited is proposed to be listed on The Stock Exchange, Mumbai, Calcutta Stock Exchange Limited and Madras Stock Exchange Limited. The existing equity shares of Henkel India Ltd. have been listed with Calcutta Stock Exchange Ltd since 1975. SHARE TRANSFER AGENT Cameo Corporate Services Limited Subramanian Building, V Floor No.1, Club House Road Chennai – 600 002. Tel: 044-28460390 – 95 (5 lines) Fax: 044-28460129 - Grams: “CAMEO”

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TABLE OF CONTENTS

S. No. TOPIC Page No.

Glossary of Terms/ Abbreviations 5 Risk Factors 6

I. General Information 8 II. Capital Structure 12 III. Objects of The Scheme of Amalgamation 17 IV. History 16 V Business 21

VI. Products 24 VII. Management of the Company 27 VIII. Management Discussion & Analysis of the Financial

Condition and Result of Operations as reflected in the Financial Statements

39

IX. Financial Information of Henkel India Limited and other Group Companies 40

X. Particulars regarding the Companies under the same management.

44

XI. Outstanding Litigation, Defaults and Material Developments 55

XII. Government Approvals 56 XIII Manpower Requirements 58 XIV. Other Regulatory Disclosures 58 XV. Dividend Policy 59 XVI. Main Provisions of the Articles of Association 59

XVII. Material Contracts and Documents 94 XVIII. Declaration 95

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GLOSSARY OF TERMS/ ABBRIVIATIONS

Articles/ Articles of Association Articles of Association of Henkel India Limited Auditors The Statutory Auditors of Henkel India Limited Banker(s) to the Company The Bankers of Henkel India Limited Board of Directors/ Board/ Directors The Board of Directors of Henkel India Limited BSE The Stock Exchange, Mumbai CDSL Central Depository Services (India) Limited Companies Act The Companies Act, 1956, as amended from

time to time CSE The Calcutta Stock Exchange Assn. Ltd DSE Designated Stock Exchange EPS Earnings per equity share Equity Shares Equity shares of the Company of Rs.10 each

unless otherwise specified in the context thereof

Financial year/ fiscal/ FY The twelve months ended March 31 of a particular year

HUF Hindu Undivided Family Information Memorandum This document as filed with the Stock Exchanges

is known as and referred to as the Information Memorandum

I.T. Act The Income-tax Act, 1961, as amended from time to time, except as stated otherwise

Memorandum/ Memorandum of Association

The Memorandum of Association of Henkel India Limited

MSE The Madras Stock Exchange Limited NAV Net Asset Value NSDL National Securities Depository Limited RBI Reserve Bank of India ROC Registrar of Companies, Tamilnadu, Chennai. SEBI The Securities and Exchange Board of India

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

1992, as amended from time to time SEBI Guidelines SEBI (Guidelines for Disclosure and Investor

Protection) 2000 issued by SEBI effective from January 27, 2000, as amended, including instructions and clarifications issued by SEBI from time to time.

Stock Exchanges BSE, Madras Stock Exchange Limited and Culcutta Stock Exchange Association Limited.

Transferor Company HENKEL SPIC INDIA LIMITED “HSIL”

Transferee Company HENKEL INDIA LIMITED “HIL”

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RISK FACTORS Risk envisaged by the Management: A. Risks Internal to the Company 1. Risks relating to business operations The operations of the Company are subject to the assumptions in demand and supply position in terms of quantity and price of raw material and finished goods. B. Risks External to the Company 1. International presence in the Indian consumer Market is gaining ground

and product prices continue to reduce. Management Perception The Company carries appropriate sensitive analysis of various assumption while drawing the business plans so as to minimize the risk relating, which may be cause due to sudden change in various assumption considering for drawing the business plan. 2. Unchecked import of cheap products may also affect the sales of the

Company. Management Perception The company proposes to address this risk by focused efforts to reduce the costs of operations and match the ever growing consumer expectations both in terms of the quality of the products and services, persuading the Government to take appropriate and effective steps to check the import of substandard and cheap products. The Government has already imposed anti-dumping duty on import of various products. These measures will help the company in addressing the above risk. 3. Unfavourable trends in import tariffs on key raw materials and products may adversely impact the cost structure and/or selling prices of some of the products in the domestic markets thereby potentially affecting margins. Management Perception In view of India's commitment to WTO to reduce tariffs to WTO bound rates, the impact of tariffs is not likely to be substantial in the future. 4. The weakness lies in the competition envisaged from companies with lower cost structure in the developing world, the market for sale of the products manufactured by Henkel India Ltd is subject to price fluctuations owing to changes in the domestic demand, export, import, and production level of other competitors.

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During the year 2003 – 2004 the company witnessed the breaking of various records, viz., highest bar production, highest zeolite production, highest zeolite export, highest cleanser production and over all highest year production. Hence these competitions envisaged can be adequately overcome. Note to risk factors:-

As per the Scheme of amalgamation, approved by the Hon'ble High Court of Judicature at Chennai, vide order dated 26.04.2005, the entire running business of the transferor company (HENKEL SPIC INDIA LIMITED) is being transferred to the transferee company [HENKEL INDIA LIMITED (formerly CALCUTTA CHEMICAL COMPANY LIMITED)] and the same will be carried on by the transferee company on a going concern basis. Accordingly all the above risks are being addressed and will continue to be so addressed by the transferee company also and the company does not foresee any adverse impact on the business of the company in future on this account.

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PART I HENKEL INDIA LIMITED

Regd. Office:No.3, Cenotaph Road, Teynampet, Chennai – 600 018.

Tel.: 044-24330089 Fax: 044-24344731

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

I. GENERAL INFORMATION Authority for Listing The Hon’ble High Court of Judicature at Madras, vide its Order dated 26th April, 2005 has approved the Scheme of Amalgamation between HENKEL SPIC INDIA LIMITED with HENKEL INDIA LIMITED whereby the entire business of Henkel Spic India Limited has been transferred to and vested in Henkel India Limited (formerly Culcatta Chemicals Limited) with effect from 01st July 2004 (i.e. the Appointed Date under the Scheme) under Sections 391 to 394 of the Companies Act, 1956. In accordance with the said Scheme, the Equity Shares of Henkel India Limited issued pursuant to the Scheme shall, subject to applicable regulations, be listed and admitted to trading on The Stock Exchange, Mumbai (“BSE”), The Calcutta Stock Exchange (“CSE”) and Madras Stock Exchange Limited (“MSE”). Such listing and admission for trading will be subject to fulfillment by the Company of listing criteria of BSE for such issues and also subject to such other terms and conditions as may be prescribed by BSE at the time of the application by the Company seeking listing. Eligibility Criterion There being no Initial Public Offering or Rights Issue, the eligibility criteria in terms of Clause 2.2.1 of SEBI (DIP) Guidelines, 2000 does not become applicable. The Company has submitted its Information Memorandum, containing information about itself, making disclosures in line with the disclosure requirement for public issues, as applicable, to BSE for making the said Information Memorandum available to public through their websites viz. www.bseindia.com. The Company has made the said Information Memorandum available on its website viz. www.henkel-india.com. Prohibition by SEBI The Company, its directors, its promoters, other companies promoted by the promoters and companies with which the Company’s directors are associated as directors have not been prohibited from accessing the capital markets under any order or direction passed by SEBI.

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http://www.henkel-india.com/



Caution The Company accepts no responsibility for statements made otherwise than in the Information Memorandum or in the advertisements to be published in terms of Clause 8.3.5.4 of SEBI (DIP) Guidelines, 2000 or any other material issued by or at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his or her own risk. All information shall be made available by the Company to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner. Disclaimer Clause of BSE As required, a copy of this Information Memorandum has been submitted to BSE. The BSE has vide its letter dated 27th January, 2005 has approved the Scheme of Amalgamation under Clause 24(f) of the Listing Agreement and by virtue of that approval the BSE’s name in this Information Memorandum as one of the Stock Exchanges on which the Company’s securities are proposed to be listed. The BSE does not in any manner: • warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; or • warrant that this Company’s securities will be listed or will continue to be listed on the BSE; or • take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed to mean that this Information Memorandum has been cleared or approved by the BSE. Every person who desires to apply for or otherwise acquire any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the BSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Disclaimer Clause of the MSE As required, a copy of this information Memorandum has been submitted to BSE, BSE vide its letter dated 27th January 2005, approved the scheme of arrangement under Clause 24(f) of the Listing Agreement and by virtue of that approval MSE’s name in this Information Memorandum as one of the stock exchange on which this company’s securities are proposed to be listed. It is to be distinctly understood that the aforesaid permission given by MSE should not in any way be deemed or construed to mean that this Information Memorandum

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has been cleared or approved by MSE; nor doe it any manner warrant, certify or endorse the correctness of completeness of any of the contents of this Information Memorandum; nor does it warrant that this Company’s securities will be listed or will continue to be listed on the MSE; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its management of any scheme or project of this Company. Every person who desire 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 MSE whosoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription / acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever. Disclaimer Clause of CSE The CSE’s name has been mentioned in this Information Memorandum as one of the Stock Exchanges on which this Company’s securities are proposed to be listed. It should not in any way be deemed or construed to mean that this Information Memorandum has been cleared or approved by CSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; nor does it warrant that this Company’s securities will be listed or will continue to be listed on the CSE; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company. Every person who 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 CSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever. Filing Copies of this Information Memorandum have been filed with BSE, MSE and CSE in due compliance. Listing Applications have been made to BSE, MSE, CSE for permission to deal in and for an official quotation of the Equity Shares of the Company. The Company has nominated BSE as the Designated Stock Exchange for the aforesaid listing of the shares. The company had received the in-principle approval from CSE for listing of the shares. The Company has already taken steps for the completion of necessary formalities for listing and commencement of trading at the Stock Exchanges mentioned above.

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Demat Credit The transferor Company has executed Agreements with NSDL and will execute agreement with CDSL for admitting its securities in demat form, the said amalgamation of the transferor company are being transferred to the transferee company as part of Scheme of amalgamation and the same would be applicable to shares being issued under the Scheme of amalgamation. Share Transfer Agent Cameo Corporate Services Limited Subramanian Building, V Floor No.1, Club House Road-Chennai – 600 002. Tel: 044-28460390 – 95 (5 lines) Fax: 044-28460129-Grams: “CAMEO”

Auditors M/s.CNGSN & Associates Chartered Accountants ‘Agastyar Manor’, No.20, Raja Street T.Nagar, Chennai – 600 017.

Banker to the Company 1. State Bank of India, Overseas Branch,

Chennai – 600 001. 2. Standard Chartered Bank No.9, Rajaji Salai, Chennai - 600 001. 3. Deutsche Bank No.114, M.G.Road, Nungambakkam Chennai – 600 034. 4. Citibank N.A No.1, Club House Road, Chennai – 600 002.

Compliance Officer & Company Secretary N.Rajeeva Prakash Company Secretary Henkel India Ltd. No.3 Cenotaph Road Teynampet Chennai – 600 018 Email: [email protected]

Investors can contact the Compliance Officer in case of any share transfer or other related problem.

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II. CAPITAL STRUCTURE

Share Capital (Rs.) AUTHORIZED SHARE CAPITAL Post Merger Pre-Merger

Equity shares of Rs.10/- each 1,72,00,00,000 1,40,00,000 Preference shares of Rs.10/- each 68,00,00,000 - 9% Preference shares of Rs.10/- each - 4,47,500 7% Preference shares of Rs.10/- each - 8,00,000

TOTAL 2,40,00,00,000 1,52,47,500

ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

Equity shares of Rs.10/- each 1,16,46,44,710* 80,00,000 9% Redeemabale Non – Cumulative Preference Shares of Rs.10/- each

28,00,00,000 -

4% Redeemable – Cumulative Preference Shares of Rs.10/- each

40,00,00,000 -

9% Redeemable cumulative first preference shares of Rs.10/- each

- 4,47,500

7% Redeemable cumulative second preference shares of Rs.10/- each (less calls unpaid, add forfeited amount)

- 6,34,730

TOTAL 1,84,46,44,710* 90,82,230

*includes 10,200 shares kept in abeyance before allotment due to legal disputes.

1. The Company was incorporated as a public limited Company on 29th day of September 1916 under the name and style “THE CALCUTTA CHEMICAL COMPANY LIMITED” under the provisions of the Indian Companies Act, 1913, in the state of West Bengal. The Registered Office of the Company was, with due approvals, shifted to the State of Tamil Nadu with effect from 18th September 2003, subsequently the name of the Company was changed to “HENKEL INDIA LIMITED” with effect from 24th day of August 2004. The Hon’ble High Court of Judicature at Madras, vide its Order dated 26th May, 2005 has approved the Scheme of Amalgamation between HENKEL INDIA LIMITED with HENKEL INDIA LIMITED whereby the entire business of Henkel SPIC India Limited has been transferred to and vested in Henkel India Limited (formerly Calcutta Chemicals Limited) with effect from 01st July 2004 (i.e. the Appointed Date under the Scheme) under Sections 391 to 394 of the Companies Act, 1956.

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As per the Scheme, the Company will issue and allot following shares:

a) Shareholders holding One equity share of Rs. 10/- each of the

Transferor Company, other than the Transferee Company, on the Record Date will be allotted one equity share of Rs. 10/- each of Transferee Company. Accordingly, 11,63,93,959* equity shares of the Transferee Company’s shares of Rs.10/- each will be allotted to the shareholders of the Transferor Company in exchange for 11,63,93,959* equity shares of Rs. 10/- each held by them.

*includes 10,200 shares kept in abeyance before allotment due to legal

disputes. b) Preference shareholder, M/s Henkel KGaA, Germany, holding 9%

Redeemable Non Cumulative Preference Shares of Rs.10/- each of the Transferor Company will be allotted one 9% Redeemable Non-Cumulative Preference Share of Rs. 10/- each in the Transferee Company for every one preference share held in the Transferor Company. Accordingly, 2,80,00,000 preference shares of the Transferee Company’s shares of Rs.10/- each will be allotted to M/s. Henkel KGaA, in exchange for 2,80,00,000 preference shares of Rs. 10/- each held by them.

c) Preference shareholder, M/s Henkel KGaA, Germany, holding 4%

Redeemable Cumulative Preference Shares of Rs.10/- each of the Transferor Company will be allotted one 4% Redeemable Cumulative Preference Share of Rs. 10/- each in the Transferee Company for every one preference share held in the Transferor Company. Accordingly, 4,00,00,000 preference shares of the Transferee Company’s shares of Rs.10/- each will be allotted to M/s. Henkel KGaA, in exchange for 4,00,00,000 preference shares of Rs. 10/- each held by them.

2. The share capital of the Company before the approval of the scheme was as

follows. Authorised : Amount in Rs. 14,00,000 Equity Shares of Rs.10/- each 1,40,00,000 44,750 9% Redeemable Cumulative First Preference 4,47,500 shares of Rs.10/- 80,000 7% Redeemable Cumulative Second Preference 8,00,000 shares of Rs.10/- 1,52,47,500

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Issued, subscribed and paid-up 8,00,000 Equity shares of Rs.10/- each fully paid-up 80,00,000 80,00,000 3. Consequent upon the approval of the Scheme, the Authorized Share Capital of

the Company stood increased to Rs.2,40,00,00,000 divided into 17,20,00,000 Equity Shares of Rs. 10/- each and 6,80,00,000 Redeemable Non-cumulative/ Cumulative Preference Shares of Rs.10/- each. Also, the issued, subscribed and the paid up capital of the Company is increased to Rs. 1,84,46,44,710 divided into 11,64,64,471* Equity Share of Rs. 10/- each, 2,80,00,000 9% Redeemable Non-cumulative Preference Shares of Rs.10/- each and 4,00,00,000 4% Redeemable Cumulative preference shares of Rs.10/-.

* includes 10,200 shares kept in abeyance before allotment due to legal disputes.

Notes to the Capital Structure:

1. PROMOTERS’ CAPITAL AND LOCK-IN – NIL

2. Promoters of the Company, their relatives and associates, and their Directors have not purchased or sold or financed, directly or indirectly, any equity shares from the date of approval of the scheme by the High Court till the date of submission of this Information Memorandum.

3. Shareholding pattern of Equity Shares of the Company before and after the

Scheme (as on date): Pre Amalgamation Post Amalgamation

Category No. of Shares held

% of holding

No. of Shares held

% of holding

A

Promoter’s Holding

Promoters - Indian Promoters

- - 19,395,900 16.65

- Foreign Promoters - - 59,360,203 50.97

Sub-Total

78,756,103

67.62

B

Non-Promoters Holding

Institutional Investors - - - -

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

- - - -

FIIs International Finance Corporation (W)

- - 3,283,353

2.82

Sub-Total

- - 3,283,353 2.82

C

Others

Private Corporate Bodies (HENKEL SPIC INDIA LTD)

729,488 91.19

Indian Public 70,512 8.81 34,414,815 29.56

NRIs/ OCBs - -

Sub-Total

800,000

100.00

34,414,815 29.56

GRAND TOTAL 800,000 100.00 116,454,271* 100.00

* Excludes 10,200 shares kept in abeyance before allotment due to legal disputes.

4. List of the persons/entities comprising Promoters as shown in the Post Amalgamation Shareholding pattern above are as follows:

S. No.

Name of the Promoter No. of Shares of Rs. 10/- each

% of total paid up capital

1.

Henkel KGaA 59,360,203 50.97

2.

Tamilnadu Petroproducts ltd.

19,395,900

16.65

TOTAL 78,756,103 67.62

5. Top ten shareholders of the Henkel India Limited (Transferee Company) on the date

of filing the Information Memorandum with Stock Exchange

Sl.no Name of the Shareholder % of shareholding

1. Henkel KGaA Germany 50.97 2. Tamilnadu Petroproducts Limited. 16.65 3. International Finance Corporation 2.82 4. Nalin Pravin Shah 1.46

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5. Damani Estates & Finance Pvt Ltd. 0.35 6. Manan Nalin Shah 0.29 7. Tara Chand Jain 0.27 8. Shah Ileshkumar Purushottamdas 0.25 9. Manish K Damani 0.14 10. Sunil Kapoor 0.12

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6. Name of the shareholders Henkel India Limited on the date of incorporation of

the Company – 29.09.1916.

Sl. No Name of the Shareholder No. of Shares

% of total Shares

1. Birendranath Maitra, 4, Bakul Bagan, Ist Lane, Bhowanipore.

30 33.33

2. R.N.Sen, 41, Machuabazar Street, Calcutta.

30 33.33

3. Khagendra Chandra Das, Industrial Chemist, 1, Anthony Bagan Lane, Calcutta.

30 33.33

TOTAL

90

100.00

7. There has been no further issue of capital except as stated above whether by way

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

8. There shall be only one denomination for the Equity Shares of the Company, subject to applicable regulations and the company shall comply with such disclosure and accounting norms specified by SEBI, from time to time.

9. The Company has about 74,040 members as on the date of filing this Information Memorandum.

III. OBJECTS OF THE SCHEME OF AMALGAMATION:

The main object of merging the two companies is to create a single business entity in order to drive the benefits of synergies. The transferor company and the transferee company are engaged in the manufacture, buying, selling, importing, exporting, processing, treating in or dealing in Detergents, cosmetics and Hair-care products. Hence the activities of the transferor company can be advantageously combined with activities / business of the Transferee Company. The amalgamation would more particularly the benefit of sharing of the financial resources, managerial, technical, distribution and marketing expertise. The amalgamation would also results in improvement in financial ratios, reduction in administrative costs and finance charges. The amalgamated company will have benefit of the combined reserves, assets, man-power and cash flows of both the companies. The combined resources of the amalgamated company will enhance its capacity to face competition in the market place more effectively.

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THE MAIN FEATURES OF THE SCHEME The salient features of the Scheme are as follows:

a. The Appointed Date of the Scheme of Amalgamation is 1st July 2004.

b. The proposed Amalgamation is between the Transferor and the Transferee Companies. The creditors of the Transferor Company and the Transferee Company will not be affected by the proposed Amalgamation.

c. With effect from the Appointed Date, the entire undertaking and business of the Transferor Company with all their properties and assets shall without any further act, instrument, deed or order be transferred to and vested in the Transferee Company as a going concern.

d. On and from the Appointed Date, all debts secured and unsecured, liabilities and obligations of every kind including tax liabilities of the Transferor Company shall without any further act or deed be transferred to and vested in and be deemed to have been transferred to and vested in the Transferee Company so as to become the debts, liabilities and obligations of the Transferee Company from that date.

e. All contracts and deeds to which the Transferor Company is a party shall remain in full force and effect against or in favour of the Transferee Company.

f. All the employees of the Transferor Company would become the employees of the Transferee Company without any break or interruption in service and on the terms not less favourable than that enjoyed by them.

g. The Transferee Company would allot to the equity shareholders of the Transferor Company, (other than Transferee Company) equity shares in the ratio of one (equity share) of Rs.10/- each of the Transferee Company credited as fully paid for every 1 (One) Equity share of Rs.10/- each of the Transferor Company held by them on the record date to be fixed by the Board of Directors of the Transferor Company in consultation with the Transferee Company.

h. The Transferee Company would allot to the preference shareholder holding 9% Redeemable Non- Cumulative Preference shares of Rs.10/- of the Transferor Company in the ratio of one preference share of Rs.10/- each credited as fully paid for every 1 (One) preference share held of Rs.10/- each of the Transferor Company held by them.

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i. The Transferee Company would allot to the preference shareholder holding 4% Redeemable Cumulative Preference shares of Rs.10/- of the Transferor Company in the ratio of one preference share of Rs.10/- each credited as fully paid for every 1 (One) preference share held of Rs.10/- each of the Transferor Company held by them.

j. The shares held by the Transferor Company, both fully and partly paid-up, in the Transferee Company, shall be cancelled.

k. The new equity shares to be allotted by the Transferee Company to the shareholders of the Transferor Company shall be subject to the provisions of the Articles of Association of the Company and shall rank pari passu in all respects with the existing equity shares of the Transferee Company.

l. The new equity shares of the Transferee Company issued in terms of the Scheme, shall subject to applicable regulations, payment of the appropriate fee and other applicable regulations, be listed on the Stock Exchange, Mumbai, the Calcutta Stock Exchange and the Madras Stock Exchange Limited.

m. Upon the new shares in the Transferee Company being issued and allotted to the eligible members of the Transferor Company, whose names appear on its register of members on the record date fixed for this purpose, the share certificates in relation to all shares in the Transferor Company shall be deemed to have been cancelled and be of no effect on and from such record date.

n. All legal proceedings of whatsoever nature by or against the Transferor Company shall be continued by or against the Transferee Company.

o. On and from the Appointed Date, the Transferor Company shall be deemed to have carried on and to be carrying on its business for and on behalf of and on account of the Transferee Company.

p. The Transferor Company shall stand dissolved without going through the process of winding up, upon orders to this effect by the Hon’ble High Court of Judicature at Madras.

q. The Scheme is conditional upon and subject to the approval by the requisite majority of the members of the Transferor Company and Transferee Company as prescribed in the Companies Act, 1956 and sanction of the Hon’ble Court of Judicature at Madras.

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r. The Scheme will be operative from the Appointed Date i.e. 1st July, 2004 and shall come into effect from the date on which the sanctions and approvals mentioned above are obtained and a certified copy of the order of the Hon’ble High Court of Judicature at Madras is field with the Registrar of Companies, Chennai.

s. Other consequential provisions for the purpose of giving effect to the said Scheme have also been made.

3. Shareholders holding One equity share of Rs. 10/- each of the Transferor Company, other than the Transferee Company, on the Record Date will be allotted one equity share of Rs. 10/- each of Transferee Company. Accordingly, 11,63,93,959* equity shares of the Transferee Company’s shares of Rs.10/- each will be allotted to the shareholders of the Transferor Company in exchange for 11,63,93,959* equity shares of Rs. 10/- each held by them. *includes 10,200 shares kept in abeyance before allotment due to legal disputes.

4. Preference shareholder, M/s. Henkel KGaA, Germany, holding 9% Redeemable Non Cumulative Preference Shares of Rs.10/- each of the Transferor Company will be allotted one 9% Redeemable Non-Cumulative Preference Share of Rs. 10/- each in the Transferee Company for every one preference share held in the Transferor Company. Accordingly, 2,80,00,000 preference shares of the Transferee Company’s shares of Rs.10/- each will be allotted to M/s. Henkel KGaA, in exchange for 2,80,00,000 preference shares of Rs. 10/- each held by them.

5. Preference shareholder, M/s Henkel KGaA, Germany, holding 4% Redeemable Cumulative Preference Shares of Rs.10/- each of the Transferor Company will be allotted one 4% Redeemable Cumulative Preference Share of Rs. 10/- each in the Transferee Company for every one preference share held in the Transferor Company. Accordingly, 4,00,00,000 preference shares of the Transferee Company’s shares of Rs.10/- each will be allotted to M/s. Henkel KGaA, in exchange for 4,00,00,000 preference shares of Rs. 10/- each held by them.

6. The said equity/preference shares to be issued and allotted by the Transferee Company shall rank paripassu in all respects from the date of allotment in terms of this Scheme, with the existing equity/preference shares of the Transferee Company, with all rights thereto, and shall be entitled to full dividend, if any, which may be declared by the Transferee Company after the effective date of the Scheme.

7. The equity shares of the Transferee Company issued in terms of this clause,

shall subject to the provisions of the Memorandum and Articles of the Transferee Company, the relevant listing agreements, payment of the appropriate fee and other applicable regulations, be listed on the Stock

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Exchange, Mumbai, the Calcutta Stock Exchange and the Madras Stock Exchange.

8. The entire business including all assets and liabilities of the transferor company as on the appointed date shall stand transferred to and vest in the transferee company, on a going concern basis.

IV. HISTORY The Company was incorporated as a public limited Company on 29th day of September, 1916 under the name and style “THE CALCUTTA CHEMICAL COMPANY LIMITED” under the provisions of the Indian Companies Act, 1913, Vide certificate of incorporation no.11139 for 1916-17 dated 29.09.1916 bearing registration number 2735 in the state of West Bengal. The Registered Office of the Company was, with due approvals, shifted to the State of Tamil Nadu with effect from 18th September 2003, subsequently the name of the Company was changed to “HENKEL INDIA LIMITED” with effect from 24th day of August 2004 under the fresh certificate of incorporation consequent on change of name No. 024129TN2003PLC051626 dated 24.08.2004. Pursuant to the Scheme of Amalgamation approved by the Hon’ble High Court of judicature at Madras vide its order dated 26th April 2005, the transferor company (HSIL) has transferred its entire business to the transferee Company w.e.f. 1st July, 2004. MAIN OBJECTS OF THE COMPANY 1. To manufacture and deal in chemicals, scientific appliances and the like 2. To start a Techno-chemicals, laboratory for analytical purposes, and to give

expert advice on technical matters 3. To manufacture, buy, sell, import, export, process, treat in or otherwise deal

in detergents of all forms, soap, soap chips and soap powder for commercial, household, industrial and institutional use and /or otherwise, household cleaners, dish washing products, scouring agents, bath and toilet cleaners, glass cleaners, cleaning and rinsing agents, sanitation products and systems for measuring, control and dispensing.

4. To manufacturing, buy, sell, import, export, process, treat in or otherwise deal in disinfectants, rinsing cleaning, decreasing, and disinfecting agents for industrial and food sectors, decreasing and picking agents, picking agents, dispensing, cleaning and disinfecting equipments.

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Change in Memorandum of Association of the Company since its inception

Date Particulars

18.09.2003 The Registered office of the Company was shifted from Calcutta in the state of west Bengal to Chennai in the state of tamilnadu.

18.08.2004 The name of the Company was changed from the Calcutta Chemical Co. Ltd., to Henkel India Ltd.,

08.07.2005 The objects clause was amended through postal ballot so as to include the objects of the transferor company.

V. BUSINESS

The Company is engaged in the business of manufacturing and marketing of various categories of products including, cosmetics/ toiletries, detergents/household cleansers. The product portfolio includes international brands like Henko, Pril and Fa besides strong domestic brands like, Mr.White, Margo, Neem and Chek. Plant Locations, and other details of business

V.(1) - TILJALA PLANT

The factory at Tiljala is in operation for more than 50 years. The plant has a capacity of 4,800 MT of Soaps and 1,200 MT of Toothpaste.

The plant was operated to cater to the market requirement of our branded products and export requirements. The production facilities are at par with the best of the industries and the Quality Management System is certified as per ISO: 9001:2000 guidelines.

Land, Building and Plant & Machinery The Company's plant is located in Tiljala, in the District of Kolkata, in the state of West Bengal. The factory building consisting of total covered area of 6500 sq. m is constructed on land measuring 12000 sq. m approx. The factory building comprises of production hall, raw material godown, finished goods godown, conference room, administrative block etc.

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Power, Fuel & Utilities Power The main source of power of the company is being met from 6.6 kVA Calcutta Electric Supply. The company at present has connected load of 300 kW in addition the company has one DG set of 250 kVA and two DG sets of 110 kVA each to meet the power requirements for the manufacturing requirements. Water Water required is met by two bore well pumps of capacity 45 kl/hr and 30kl/hr. Besides, the water used as Raw material is DM water which is procured from outside. Effluent Treatment Effluent treatment Plant is based on the principal of Activated Sludge Process. No effluent is let out of the factory premises without treatment in the ETP. The effluent let out of the factory after treatment in the ETP is much within the permissible limit of West Bengal Pollution Control Board.

V(2) AMBATTUR PLANT

The factory at Ambattur was inaugurated during 1960. The plant has a capacity of 16,000 MT of detergent Bars & powders .

The plant was operated to cater to the market requirement of our branded products and export requirements. The performance for all two plants was good with respect to on stream efficiency. The Company witnessed ,highest bar and powder production, during the year 2004 - 2005. Land, Building and Plant & Machinery The Company's plant is located in AmbatturIndustrial Area, in the District of Thiruvallur(TN). The factory building consisting of total covered area of 2750 sq.mtrs is constructed on land measuring 6745 sq. mtrs. The factory building comprises of production hall, raw material godown, finished goods godown, conference room, administrative block etc. The company has installed capacity of. 16000 MT per annum .The Plant & Machinery for manufacture of has been installed as per the detailed technical plans & supervision of Henekl KGaA.

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Power, Fuel & Utilities Power The main source of power of the company is being met from Tamil Nadu State Electricity Board Power Supply. The company at present has connected load of 300 KVA in addition the company has Two DG set of 250 KVA&125KVA to meet the power requirements for the manufacturing requirements. Water Industrial requirements are managed by bore well. Drinking water is sourced through tanker lorries . Plant Locations, and other details of business which is being transferred to the company as per the Scheme

V(3) KARAIKAL PLANT

The factory at Karaikal was inaugurated during the month of Mar 1993 and commercial production commenced during the month of August 1993. The plant has a capacity of 30,000 MT of detergents and 10,000 MT of Zeolites.

The plant was operated to cater to the market requirement of our branded products and export requirements. In addition, Zeolite was produced for captive, domestic and export requirements. The performance for all three plants was good with respect to on stream efficiency. The Company witnessed the breaking of various records viz., highest bar production, highest Zeolite, highest zeolite export, highest cleanser production and over all highest year production for the year 2003 - 2004.

The company’s Karaikal plant is the first detergent plant in India to receive the ISO 14000 Certification.

Land, Building and Plant & Machinery The Company's plant is located in Industrial Area, in the District of Karaikal under Union Territory of Pondicherry. The factory building consisting of total covered area of 10 acres. is constructed on land measuring 40 acres. The factory building comprises of production hall, raw material godown, finished goods godown, conference room, administrative block etc. The company has installed capacity of 30,000 MT of detergents and 10,000 MT of Zeolites. The Plant & Machinery for manufacture of has been installed as per the detailed technical plans & supervision of Henekl KGaA, Germany. The entire manufacturing facilities have been set up as part of joint venture with Henkel KGaA, Germany during 1993.

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Power, Fuel & Utilities Power The main source of power of the company is being met from Pondicherry. State Electricity Board Power Supply. The company at present has connected load of 1750 KVA in addition the company has one DG set of 750 KVA to meet the power requirements for part of the manufacturing requirements. Water effluent treatment Industrial requirements are managed by bore well. Drinking water is sourced through tanker lories . After the Scheme becoming effective, the Karaikal plant being transferred to the Transferee company pursuant to the Scheme of Amalgamation.

VI. PRODUCTS

COSMETICS AND TOILETRIES

Product Principal Raw Material Principal End Users

Manufacturing Process

Margo soap Sodium soap, Talc, Moisturisers, Perfume

consumer Manufactured in sigma mixer, followed by duplex vacuum plodding. Plodded soaps stamped and packed

Neem Tooth paste

Calcium carbonate, Glycerin, Sorbital, Neem extract, preservatives, Flavour, etc.,

Consumer Manufactured by controlled mixing followed by filling operation

Mahabringhol Teel oil, Karanji oil, Castor oil Herbs

Consumer Manufactured by controlled mixing process followed by filling in glass bottles

Tuhina Glycerin, Stearic acid, paraffin, lanolin, preservatives, perfume, et.,

Consumer as moisturizing

lotions

Manufactured by controlled mixing followed by filling

Aramusk soap Sodium soap, Talc, muscular Perfume


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After the Scheme becoming effective, the Company shall carry on the business of manufacturing and marketing of the following products and the entire business being transferred to it pursuant to the Scheme of Amalgamation.

VI. PRODUCTS

DETERGENT POWDER SEGMENT



Henko Stain Champion

Labsa, Soda ash, Zeolite, fillers, Enzyme, perfume, etc.,

Consumers (both bucket wash and hand wash)

Manufactured by Spray drying process.

Henko matic Labsa, Soda ash, Zeolite, fillers, Enzyme, perfume, etc.,

Consumers mainly for washing machines

Manufactured by Spray drying process.

Mr.White Labsa, Soda ash, fillers, zeolite, perfume, etc,

Consumers (bucket wash and hand wash)

Manufactured by dry mixing process

Chek Labsa, Soda ash, fillers, zeolite, perfume, etc,

Consumers (bucket wash and hand wash)

Manufactured by dry mixing process

DETERGENT CAKE SEGMENT



Henko bar Labsa, soda, silicate, mined minerals, perfume, etc.,

consumers Manufacturing in sigma mixer and extruded through duplex vacuum plodder

Chek bar Labsa, soda, silicate, mined minerals, perfume, etc.,


Mr. White bar Labsa, soda, silicate, mined minerals, perfume, etc.,


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DISHWASHERS SEGMENT



Pril Liquid Labsa, SLES, water, pH buffer, preservatives, perfume, etc.,

Consumers for dish washing

Mixing process followed by filling in the bottles

Pril scoring bar Labsa, soda, silicate, mined minerals, perfume, etc.,


Lime shot bar Labsa, soda, silicate, mined minerals, perfume, etc.,


Cosmetics and Toiletries



Chek Soap Sodium soap, Talc, Perfume consumer Manufactured in sigma mixer, followed by duplex vacuum plodding. Plodded soaps stamped and packed

Fa - Soap Sodium soap, Talc, sea minerals, Perfume


Fa – Deodrant Spray / Rollon

Alcohol, Deodorant agents, Perfume

Consumer Manufactured by mixing operation followed by filling in metal cans using Propellent for dispensing

Fa – After shaving Lotion

Alcohol, preservatives, Perfume, etc.,

Consumer Manufactured by controlled mixing followed by filling operation

Fa- Shaving cream Lanolin, Glycerine, Moisturising agents, preservatives, perfume,

Consumers Manufactured by controlled mixing operation, followed by filling in tubes

Fa Talc Calcium carbonate, Magnesium carbonate, perfume, etc.,

Consumers Manufactured by mixing followed by filling

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VII. MANAGEMENT OF THE COMPANY PROMOTERS AND THEIR BACKGROUND

a) Promoters

1. Henkel KGaA,. Germany

Henkel KGaA head quartered at Germany has business interest in varied fields such as chemical products, surface technologies, adhesives, cosmetics/ toiletries, detergents/household cleansers and industrial & institutional hygiene. It has an European base and is today a multi-national organization with over 51,000 employees world-wide, a turnover of around Rs.60,000 Crs. Henkel KGaA has been active in the field of detergents and household cleaning products for over 100 years. Henkel has been one of the pioneers in research for alternatives to phosphatic builders in detergents, when the water pollution effects of phosphate first became known in the late 60's. Tamilnadu Petroproducts Ltd. TPL is a flagship company belonging to SPIC group, a leading industrial conglomerate in Southern India with a group turnover of over Rs.7500 Crs. TPL in the manufacture and marketing of Linear Alkyl Benzene (LAB), Epichlorohydrin (ECH) and Chlor Alkali products which are broadly classified under the industry structure as “Chemicals”. LAB is widely used in various detergent formulation. TPL is the only manufacturer of ECH in India which is mainly used in the manufacture of Epoxy resins, insecticides and medicines. Chlor Alkali is the basic chemical used in industries like aluminium, paper and textiles. TPL is presently having a turn over of Rs.830 Crs. with the gross profit of Rs. 83 Crs.

Henkel KGaA, jointly with Tamilnadu Petroproducts Ltd promoted Henkel India Ltd., a merged entity between Henkel SPIC India Ltd and Henkel India Ltd., during Sept’87. b) Board of Directors The Details regarding the Board of Directors of the Company are as under. 1) Name : Dr.A.C.Muthiah Position : Chairman Age : 63 years Qualification : B.E (Mechanical) Post Doctorate in Science Expertise : Industrialist Date of appointment : 29/4/2005 PAN NO : AAAHA6527L

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An Engineer from Madras University and a management graduate from University of Detroit, Dr.Muthiah is the Chairman of SPIC group. He is a member of the Society of Manufacturing Engineers, USA. He had extensive training abroad and in India before he joined the family business. He is connected with several leading industries both in India and abroad in various capacities, such as Chairman, President, Vice-Chairman and Director. He heads “SPIC” (Southern Petrochemical Industries Corporation Limited), Chennai, which is one amongst the largest industrial conglomerates in the country, with diversified activities in various fields. Dr.Muthiah is a member of the Prime Minister’s Advisory Council on Trade and Industry and the Vice President of Federation of Indian Chamber of Commerce. Dr.Muthiah was President of the Southern India Chamber of Commerce & Industry for 8 years and he was also the President of the Indian Council of Arbitration. He is connected with a number of educational institutions. He is a member of the Executive Committee of the All India Council for Technical Education. He is also a member of the Tamil Nadu State Council for Higher Education. He is a member of the Board of Governors of the Regional Engineering College, Trichy. Dr.Muthiah is also the Chairman of Sri Venkateswara Educational & Health Trust which runs the highly acclaimed Sri Venkateswara College of Engineering near Chennai. Dr.Muthiah is Chairman of Governing Board of the SPIC Bio Process Laboratory in Anna University. He is also a Member of the Board of Governors of Anna University’s Curriculum Programme on Industrial Bio Technology. Founder Member of SPIC Science Foundation, Dr.Muthiah is also the Chairman of the Management Committee of this Foundation. SPIC Science Foundation has formed a separate Division “Chennai Mathematical Institute” in which eminent and renowned mathematicians are involved. Dr.Muthiah is also Founder Member of the Madras School of Economics; He is also on the Board of Governors of the same. Anna University, which is one of the oldest and internationally renowned Engineering Universities in the country, conferred on his Honorary Doctorate Degree in Science in 1992. Dr.Muthiah is the Honorary Consul of Belgium for Southern India. His Royal Highness Crown Prince Philippe of Belgium, on behalf of the King of Belgium, bestowed a ‘Knighthood’ on Dr.Muthiah in recognition of his outstanding services as Consul of Belgium. Dr.Muthiah was the President of the Board of Control for Cricket in India and the President of Tamilnadu Cricket Association for 8 years. He is a Member of many clubs, including the Marylebone Cricket Club, London. Dr.Muthiah is the Trustee and Secretary of Tamil Isai Sangam founded by his illustrious grandfather Sri.Annamalai Chettiar for promotion of Tamil Music. He is the Chairman of Cheshire Home. He is holding Directorship in the following Indian companies. This list does not include Directorship in Companies excluded as per section 278 of the Companies Act, 1956

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Committee Membership

SL Company Position

Chairman Member 1 Southern Petrochemical Industries

Corporation Limited Chairman -

-

2 South India Corporation (Agencies) Ltd Chairman - - 3. SPIC Petrochemical Limited Chairman - - 4. First Leasing Company of India Limited Chairman - - 5. Manali Petrochemical Limited Chairman - - 6. Tuticorin Alkali Chemical & Fertilisers

Limited Chairman - -

7. Tamilnadu Petroproducts Limited Vice Chairman - - 8 National Aromatics and Petrochemical

Corporation Limited Vice Chairman - -

9 Indo-Jordan Chemicals Limited Director - -

2) Name : Peter Kardorff Position : Director (Henkel KGaA, Germany Nominee) Age : 47 years Qualification : MBA from Mannheim University, Germany Expertise : Marketing and Sales Date of appointment : 29/4/2005 PAN NO : Not Applicable

Mr.Peter Kardorff is holding a Master Degree for Business Administration from Mannheim University, Germany in 1984 and he joined Henkel KGaA in the same year. In different assignments within Henkel, Mr. Peter Kardorff has 20 years business experience in marketing and sales in Germany as well as in Belgium/Netherlands. From 1994-98, he had the position of International Marketing Director for Henkel’s flagship brand “Persil”. Since 1998, he is Vice President Detergents for the Emerging Markets, covering India, the Near/Middle East as well as the Maghreb region. Mr.Peter Kardorff does not hold directorship in any of the Indian Companies.

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3) Name : Mr.Peter K Scherer Position : Director Age : 46 years Qualification : M.B.A. Finance Expertise : Responsible for Henkel’s Acquisition

and foundation of Joint Venture Date of appointment : 29th April 2005. PAN NO : Not Applicable Mr.Peter K Scherer holds a master degree in Business Administration from University of Saarland, Germany, and University of Michigan, Ann Arbor, USA. After spending two years in banking he joined Henkel KGaA in 1986 where he held various positions in Corporate Finance and controlling. During his career with Henkel he was assigned as Head of Finance to Henkel Thai Ltd., Bangkok and Henkel SPIC India Ltd., Chennai. He is currently Vice President and CFO of Henkel Arabia being responsible for Finance, Accounting, IT, Logistics and Purchasing. Mr.Peter K Scherer does not directorship in any of the Indian companies. 4) Name : Dr. Rainer Salz Position : Director Age : 59 years Qualification : Chemical Graduate Post Doctorate

(Metal organic Catalytic Process) Expertise : Technical Manager and Technology wise responsible

for Henkel’s detergent J.V.’s in Near Middle East/Asia and for Acquisition and foundation of Joint Venture

Date of appointment : 29th April 2005 Dr.Salz is a Chemist from University of Cologne, Germany. Graduate from Max-Planck-Institute fuer Kohlenforschung in Muehlheim/Ruhr and Ruhruniversity of Bochum. After post doctorate and scientific research in metal organic catalytic processes, he is serving Henkel in Duesseldorf for more than 20 years. He had different positions in Research and Development and in big scale productions for chemicals, detergents and cosmetics. Dr.Salz is an experienced technical manager and technology wise responsible for Henkel's new acquisitions and foundation of Joint Ventures in the field of detergents in above-mentioned regions. He is responsible for their development in terms of implementation of latest technologies, investment structuring and manufacturing efficiency. Dr. Salz is also member of the Board of Henkel Algeria, a new foundation of Henkel Detergent.

Dr. Salz does not hold directorship in any of the Indian Companies.

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5) Name : Rajendra S Lodha Position : Director Age : 62 years Qualification : Chartered Accountant Expertise : Leading Chartered Accountant Date of appointment : 29th April 2005 PAN NO : AAZPL9692A Mr.Rajendra Lodha, a well known Chartered Accountant was the President of Federation of Indian Chamber of Commerce & Industry (FICCI) in its Platinum Jubilee Year i.e., 2002 with the additional distinction of being the first professional from service sector to occupy this post.

He is a Senior Partner of the leading accounting and consulting firm M/s. Lodha & Co. which is the Indian Member firm of BDO International (5th largest international accounting firm having annual billing in excess of US$ 2.4 billion). He is the Chairman of BDO Lodha (P) Ltd. He has served on the Indian Prime Minister’s Council on Trade & Industry, the Board of Trade, the Central Direct Taxes Advisory Committee etc. He is also the first Chairman of the South Asia Business Forum sponsored by the Asian Development Bank and a Director of the Board on the BOAO Economic Forum headquartered in China.

A past President of the Indian Chamber of Commerce, Calcutta, Mr.Lodha has served for six years on the Central Board of the State Bank of India as well as on its Executive Committee. A gold medalist in his C.A.Exams, he is presently the President of the Indian Council of Arbitration and the FICCI Socio Economic Development Foundation. Mr.Lodha is currently serving on the Boards of organizations interalia, National Securities Depository Ltd. (NSDL), Indian Petrochemical Corporation, Tourism Finance Corporation and Oriental Insurance Co.Ltd and on SEBI’s Committees on Takeover Code Review, on Corporate Governance and on Disclosure in Offer Documents. Besides he is the Chairman of Alfred Herbert (India) Ltd. and Co-Chairman of Birla Corporation Ltd. He is a Trustee of Bharatiya Vidya Bhavan, U.K. and Bombay Hospital, Mumbai.

He has been a pioneer in acting as the Advisor to prestigious GDR/Euro issues in excess US$1 billion for several Indian Corporates and has personally supervised the statutory audit of organizations, interalia RBI, LIC, IOC, ICICI, ONGCR, SAIL, IFCI etc. He has served on the Board of the Bank of India and the Unit Trust of India. He was Member of the Working Group set up by the Government to totally recast the Companies Act and is currently serving on the first National Advisory Committee on Accounting Standards.

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He is holding Directorship in the following Indian companies. This list does not include directorship in companies excluded as per Section 278 of the Companies Act,1956.

Committee Membership Sl. No.

Company Position

Chairman Member

1 Alfred Herbert (I) Ltd. Chairman - - 2 Birla Corporation Limited Chairman - - 3. Birla Ericsson Optical Ltd. Chairman - - 4. Hindustan Gums & Chemicals Ltd. Chairman - - 5. Universal Cables Limited Chairman - - 6. Vindya Telelinks Ltd. Chairman - - 7. Indian Petrochemicals Corpn Ltd. Director Audit Remuneration 8. First Capital India Ltd. Director - - 9. Lodha Capital Markets Ltd. Director - - 10. Mazbat Tea Estate Ltd. Director - - 11 National Securities Depository Ltd. Director Audit-

Committee -

12. The Punjab Produce Holdings Ltd Director - - 13 PNG Gilts Ltd. Director - - 14 SBI Life Insurance Co.Ltd. Director - -

6)

Name : Dr.Besant C. Raj Position : Director Age : 72 years Qualification : Doctorate of Business Administration,

Harvard University, U.S.A M.B.A, IIM Ahmedabad

International Teachers Programme in Businesss Administration, Harvard University, U.S.A. M.A. Psychology, Banaras Hindu University M.A.Philosophy, University of Madras

Expertise : Leading HRD Consultant Date of appointment : 29th April 2005 PAN NO : AACPA4313Q

Dr. A. Besant C. Raj is an MBA from the Indian Institute of Management, Ahmedabad (first batch). He also holds the doctoral degree in Business Administration from the Harvard Business School, Harvard University, USA. He has a Masters degree in Philosophy from Madras University and a Masters degree in Psychology from Banaras Hindu University. After a distinguished teaching career, which includes being the Director of Studies at Administrative Staff College, Hyderabad, Dr. Raj founded his own Management Consultancy Company, Besant Raj International Ltd. in 1979 with his wife. Dr. Raj is the founder Chairman of the Institute of Chartered Financial Analysts of India. He is on several boards and till recently was on the board of Industrial Development Bank of India (IDBI). He is closely associated with several educational institutions like The Jawaharlal Nehru Institute of Development Banking of IDBI and he is the Chairman of The Madras Christian College Board.

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Dr.Raj has carried out several prestigious national and international consultancy assignments, which include work with The Ford Foundation, New York, and The Common Wealth Fund for Technical Co-operation, London, The Economic Development Institute of the World Bank and the Iraq National Oil Company. Currently Dr.Raj is a member of the Panel of Judges to evaluate Integrated Steel Plants for Prime Minister’s Award.

His famour releases are Public Enterprise Investment Decisions in India Published by Macmillan during 1977, Financial Management published by Tata McGraw Hill publishing Company Ltd.1978 and his three books on Psychology and Book on Social Psychology in Tamil fetched a State Award of the Government of Tamilnadu.


Company Position

Chairman Member

1. Cochin Minerals and Rutile Ltd. Director - - 2. Ispat Industries Ltd Director - - 3 Besant Raj International Ltd Managing

Director - -

4. SPEL Semiconductor Ltd. Director - - 7) Name : Mr. SUKHENDU RAY Position : Director Age : 82 years Qualification : F.C.A England and Wales Expertise : Leading Chartered Accountant Date of appointment : 5th August 1985 PAN NO : ADGPR8514H A Science Graduate from the University of Calcutta and qualified Chartered Accountant from England. He is presently a Fellow Member of the Institute of Chartered Accountants of England and Wales having 40 years of working experience in varied functions. Mr.Ray served as a member of Bengal Chamber of Commerce and industry, Central Council of the Association of Indian Engineering Industries (now CII), Indian Institute of Management, Indian Institute of Social Welfare and Business Management, Calcutta and Indian advisory Board of Standard Chartered Bank. Mr.Ray served as President of the Bengal Club, Calcutta.

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Mr.Ray is holding Directorship in the following Indian companies, This does not include directorship companies excluded as per Section 278 of the Companies Act, 1956.


Company Position

Chairman Member

1 Stone India Ltd. Director Audit Shareholders/ Investors’ Grievance

-

2 Consolidated Fibers & Chemicals Ltd. Director Shareholders/ Investors’ Grievance

Audit

3. Asiatic Oxygen Ltd. Director Audit Shareholders/ Investors’ Grievance

4 Unimers India Ltd. Director - Audit 5. Nagarjuna Agrichem Ltd. Director - - 8) Name : Mr.Rm.Muthukaruppan Position : Director Age : 52 years Qualification : Bachelor Degree in Engineering Expertise : Technical Date of appointment : 29th April 2005 PAN No : AAOPM6202A Mr.Rm.Muthukaruppan has served in various positions in handling process, production, technical services, projection development work, market development, implementing and operating LAB & ECH projects. He was inducted in the Board of Tamilnadu Petroproducts and serving as its Managing Director since February 2004. He is serving as a Member of Regional Committee of Indian Chemical Manufacturers Association and Vice-President in Manali Industries Association. He is serving as Director in the Board of few companies including Gulf Petroproduct Company, Bahrain.


Company Position

Chairman Member

1 Tamilnadu Petroproducts Ltd. Managing Director & COO

- -

2 Gulf Petroproduct Company E.C Director - -

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9) Name : Mr. A.SATISH KUMAR Position : Managing Director Age : years Qualification : M.B.A. IIM Ahmedabad Expertise : Marketing Date of appointment : 16/03/00 PAN NO : AADPA4415A Note: As per the Scheme of Amalgamation the entire business of the transferor company is being transferred to the transferee company. Accordingly all the Directors of the transferor company have been appointed on the Board of transferee company.

COMPENSATION TO MANAGING DIRECTORS/ WHOLE TIME DIRECTORS The detail of compensation to be paid to the managing director and whole time director is as follows: As per of the Scheme of Amalgamation, all the employees of the transferor Company who are in its employment of the effective date of the scheme shall as from such date, become the employees of the transferee Company on the basis that their services have not been interrupted by the vesting of the undertaking of the transferor Company. Accordingly the Company had appointed Mr.A.Satish Kumar, as Managing Director for a period of 5 years w.e.f 11th August 2005 on the terms and conditions as set out herein below:

REMUNERATION a) Salary Basic salary varying from Rs.1,25,000/- p.m to Rs.2,50,000/- p.m including Dearness Allowance (excluding Children Education Allowance), subject to the Board of Directors and or Committee fixing the actual remuneration from time to time within the aforesaid limit. b) Commission : Commission @ 1% on net profit of the company, not exceeding annual basic salary. In the event of loss or inadequate profit in any financial year the Managing Director shall be paid remuneration by way of salary and perquisites and will not be eligible for any commission.

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c) Perquisites

Perquisites like housing/house rent allowance, gas, electricity, water, furnishing, medical reimbursement, leave and leave travel concession, club fees, personal accident insurance and such other perquisites be paid. The monetary value of such perquisites to be determined in accordance with Income Tax Rules, 1962 subject to a maximum limit of the annual salary. However, contribution to Superannuation Fund and Provident Fund or Annuity fund to the extend these either singly or put together are not taxable under the Income Tax Act, 1961, Gratuity payable at a rate not exceeding half a month's salary for each completed year of service, Encashment of Leave at the end of the tenure, use of company's car for official purposes and telephone at residence (including for local calls and long distance official calls), entertainment expenses incurred for the business shall not be treated as Perquisites. Pursuant to the Merger, Company need to appoint Managing Director, Mr.A.Satishkumar has been serving as Managing Director, in HSIL since its inception and has been instrumental for its growth to date. Under his able leadership, the company has made great strides in carving out for itself a niche market in several areas of business. Board members would appreciate that the world over, the FMCG business is a highly competitive business and the Indian scenario is no exception. Making inroads into markets where world giants fight for market shares is no ordinary feat and viewed in that context, HSIL's achievements to date are laudable. Mr. A.Satishkumar has tremendous exposure to various facets of the business and has won public acclaim in various forums for his business acumen. Further, the company nurses ambitious growth plans which would entail Mr. Satishkumar shouldering greater responsibilities. The Company has stepped up its levels of activities in all fronts and is on its way to become a significant player in the competitive detergent and cleansers market under the able guidance of Mr. A.Satishkumar. CORPORATE GOVERNANCE The provisions of the listing agreement to be entered into with the Stock Exchange with respect to Corporate Governance will be applicable to the Company immediately upon the listing of its Equity Shares on the Stock Exchange. The Company has already appointed independent Directors on the Board and has also constituted the Audit Committee and the Shareholders Committee as required by Clause 49 of the listing agreement to be entered into with the Stock Exchange.

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AUDIT COMMITTEE The Board of the Company has constituted an Audit Committee consisting of three Non-Executive independent Directors viz., Dr.A.Besant C.Raj, Mr.Peter Scherer, Mr.S.Ray who is a Chartered Accountant by qualification is the Chairman of the Committee. The responsibilities of the audit Committee include: 1. Overseeing the financial reporting process to ensure proper disclosure of

financial statements; 2. Recommending appointment/ Removal of external auditors and fixing their

remuneration; 3. Reviewing the annual financial statements before submission to the Board; 4. Reviewing adequacy of internal control systems; 5. Adequacy, structure and staffing of the internal audit function; 6. Reviewing findings of internal investigation, discussing the scope of audit with

external auditors and looking into reasons of substantial default, if any, of non payment to shareholders.

SHARE TRANSFER & INVESTOR GRIEVANCE REDRESSAL COMMITTEE The Board of the Company has constituted Shareholders/Investors Grievances Committee comprising of Dr.A.BesantC Raj, Mr.A.Satish Kumar and Mr.Rm.Muthukaruppan. Shareholding of Directors

S. No. Name of the Director No. of Shares of Rs. 10/- each

1. Dr.A.C.Muthiah 3200 2. Rm.Muthukaruppan 150 3 A.Satish Kumar 5178

Interest of the Directors The other than their respective shareholdings in the Company and reimbursement of expenses incurred and normal remuneration/ sitting fee from the Company as stated above, the directors of the Company have no other interest in the Company.

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Change in Board of Directors of the Company since 10 years

List of Directors of Henkel India Ltd. Sl.No. Name Date of

Appointment Date of

Resignation 1 Dr.A.C.Muthiah 29/04/2005 - 2 Mr.Peter Kardorff 29/04/2005 - 3 Mr.Peter K Scherer 29/04/2005 - 4 Dr.Rainer Salz 29/04/2005 - 5 Mr.R.S.Lodha 29/04/2005 - 6 Dr.A.Besant C Raj 29/04/2005 - 7 Mr.Sukhendu Ray 29/04/2005 - 8 Mr.Rm.Muthukaruppan 29/04/2005 - 9 Mr.A.Satishkumar 16/03/2000 - 10 Dr.(Mrs.) Ashima Chatterjee 17/11/1972 11/08/2005 11 Mr.T.Aich 24/10/1998 11/08/2005 12 Mr.B.Sen 29/05/1991 11/08/2005 13 Mr.VR Veerappan 16/03/2000 11/08/2005 14 Mr. S.Ramesh 16/03/2000 11/08/2005 15. Mr.R.R.Samuel Chandar 31/03/2001 11/08/2005 16. Mr.Ranju Kr.Mohan 16/03/2000 11/08/2005 17. Mr.M.M.Ghose 30/03/1985 31/03/2001 18. Mr.V.K.Sehgal 16/03/2000 31/03/2001 19. Mr.K.K.Banerjee 27/06/1997 16/03/2000 20. K.C.Gupta 20/03/1998 16/03/2000 21. K.P.Roy 27/06/1997 16/03/2000 22 K.D.Paul 07/10/1983 05/08/1985 23 Mr.N.C.Chaudhury 07/10/1983 03/12/1999 26. Mr.N.N.Chaudhury 07/10/1983 03/12/1999 27. Mr.S.Kar 07/10/1983 16/01/1997 28 Mr.T.S.Venkatesan 10/12/1996 27/06/1997 29. Mr.S.Kar 07/10/1983 16/01/1997 30. Mr.P.Saha 31/07/1995 30/04/1997 31. Mr.K.Srinivasan 31/05/1988 12/03/1996 32. Mr.B.Ramdass 30/03/1993 19/10/1995

39


Key Managerial Personnel As per of the Scheme of Amalgamation, all the employees of the transferor Company who are in its employment of the effective date of the scheme shall as from such date, become the employees of the transferee Company on the basis that their services have not been interrupted by the vesting of the undertaking of the transferor Company. Accordingly details of Key Managerial Personnel being transferred form the transferor company is as follows: Name Age Designation Qualificati

on Total Experience (years)

Date of joining

Previous Employment

A.Satish Kumar

52 yrs Managing Director

M.B.A IIM Ahmedabad

20 Yrs 11/8/05 Managing Director - Henkel SPIC India Ltd, Since 16/12/91 to 11/8/05.

Bonus or Profit Sharing Plan for Key Managerial Personnel The bonus is payable as per the policy of the Company as applicable to all employees. There is no profit sharing plans. Change in Key Managerial Personnel since inception Mr.A.Satish Kumar, was appointed as Managing Director of the Company on 11/8/05. Their have been no other Key Managerial Personnel except as stated above in the Company. VIII. MANAGEMENT DISCUSSION & ANALYSIS OF THE FINANCIAL CONDITION AND

RESULT OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS

As per the Order of the Honb’le High Court of Madras dated 26th April 2005, Henkel SPIC India Ltd was amalgamated with our company, the appointed date being 1st July 2004. Accordingly, the financials results encompasses the result of Henkel SPIC from 1st Jul’04 to 31st Dec’04 and that of our company from 1st Jan’04 to 31st Dec’04. Therefore, the financial figures are not comparable with that of previous year. Hence, Management Discussion Analysis could not be prepared

40


IX. FINANCIAL INFORMATION HENKEL INDIA LIMITED

UNAUDITED FINANCIAL RESULTS (Rs. Crores)

SL. Particulars Quarter Ended Half Year ended Y/e

No. 30.06.05 30.06.04 30.06.05 30.06.04 31.12.04 (Audited)

1 Net Sales including excise duty 92.47 27.45 152.33 49.53 177.80 2 Other Income 0.02 0.79 0.23 0.91 3.51 3 Total Expenditure a) Materials 52.25 24.53 97.67 44.20 116.37 b) Staff Cost 3.25 1.10 5.24 2.28 10.00 d) Other Expenditure 29.08 1.13 36.18 1.99 40.93 4 Interest 1.86 0.22 4.70 0.41 4.80 5 Depreciation 2.02 0.11 3.57 0.30 4.91 6 Profit before Tax and Exceptional

Items 4.03 1.15 5.20 1.26 4.30 Exceptional Items - - - - Profit before Tax 4.03 1.15 5.20 1.26 4.30 7 Provision for Taxation -Income Tax - - - - 0.33 -Deferred Tax - - - - 0.95 8 Net Profit after Tax 4.03 1.15 5.20 1.26 3.02 9 Paid-up : Equity share capital 116.46 0.80 116.46 0.80 116.46 : Preference share capital 68.00 - 68.00 - 68.00

10 Reserves excluding Revaluation Reserve 11.76 8.86 11.76 8.86 11.76

11 Basic and diluted EPS for the period, for the year to date and

for the previous year (Rs) (not annualised) 0.35 14.32 0.45 15.75 0.26

12 Aggregate of Non-Promoter Share Holding a) Number of Shares 37,708,008 70,152 37,708,008 70,152 37,708,008 b) Percentage of Share holding 32.38% 8.77% 32.38% 8.77% 32.38%

Notes: 1. The Board of Directors at their meeting held on 11/8/05 has taken on record the above financial results as

reviewed and recommended by the Audit Sub Committee. The Statutory Auditors have carried out a Limited Review of the aforesaid results.

2. No provision for Income Tax and Deferred Tax is considered on account of carried forward losses. 3. Henkel SPIC India Ltd (HSIL) has been merged with our Company pursuant to the Hon’ble High Court of

Madras order dt.26/4/05. The appointed date as per the Scheme of Merger is 1/7/04. The aforesaid figures for quarter /half year ended 30/6/05 of HIL include the figures of HSIL, Transferror Company from 1/7/04 to 31/12/04 and that of HIL from 1/1/04 to 31/12/04. Hence the results of quarter /half yearly ending 30/6/05 are not comparable with that of the previous year. Last year's figures have been regrouped whenever necessary. The afore said results is deemed to be issued to the shareholders of HSIL also.

4. The equity share capital includes Rs.116.38 Crs of HSIL The number of shares under non-promoter shareholding Includes 3,76,37,856 Equity shares of HSIL.

41


SEGMENTWISE REPORT (Rs. Crores)

SL. Description Quarter Ended Half Year ended Y/ e

No. 30.06.05 30.06.04 30.06.05 30.06.04 31.12.04 (Audited)

1 Segment Revenue a) Soaps 28.67 17.12 47.22 26.00 66.15 b) Detergents 58.26 4.64 95.97 14.34 92.52 c) Others 5.54 5.69 9.14 9.19 19.13 Total 92.47 27.45 152.33 49.53 177.80 Less:Inter segment revenue Net Sales/income from Operations 92.47 27.45 152.33 49.53 177.80 2 Segment Results Profit before Tax and interest from each segment a) Soaps 2.07 0.81 3.55 1.01 6.40 b) Detergents 3.54 0.01 6.08 0.05 4.73 c) Others 0.30 0.05 0.50 0.07 1.34 Total 5.91 0.87 10.13 1.13 12.47 Less: Interest 1.86 0.22 4.70 0.41 4.80 Other un-allocable (income) net of unallocable expenditure 0.02 (0.50) 0.23 (0.54) 3.37 Total Profit before Tax 4.03 1.15 5.20 1.26 4.30 3 Capital Employed (Segment Assets-Segment Liabilities) a) Soaps 50.38 16.40 50.38 16.40 44.91 b) Detergents 139.17 9.05 139.17 9.05 122.89 c) Others 50.40 5.80 50.40 5.80 43.82 Total 239.95 31.25 239.95 31.25 211.62

Notes: 1. Segments reported above have been identified in line with AS-17issued by the ICAI. 2. Other includes Cosmetics, Toiletries, Hair Oil, Perfumes, Tooth Paste, Soap Noodle and Zeolite. 2. Capital Employed has been derived for each of the segments on the basis of the Assets and Liabilities

identified with each segment either directly or on a reasonable allocation basis. A Summary of past financial results after adjustments as given in the auditors report for the past three years

42


HENKEL INDIA LIMITED BALANCE SHEET FOR THE LAST THREE YEARS (Rs.lacs)

Particulars 31.12.2004 31.12.2003 31.12.2002

Sources of Funds

Share Holders Funds

Share Capital 18,446.44 90.82 90.82

Reserve & Surplus 1,779.01 1,500.00 1,476.61

Loan funds

Secured loans 3,189.35 1,263.38 1,080.23

Unsecured loans 16,824.58 146.61 306.58

Deferred Tax Liability 2,663.03 - -

Total 42,902.44 3,000.82 2,954.24

Application of Funds

Fixed Assets

Gross Block 30,869.66 1,769.23 1,648.44

Less : Accumulated

Depreciation

1,233.83 739.80 (675.92)

Net Block 29,635.83 1,029.42 972.52

Add: Capital work-in-progress 60.59 19.13 20.54

29,696.42 1,048.55 993.06

Investments 428.40 41.02 45.10

Deferred tax assets 2,663.03 94.61 64.49

Current Assets, Loans & Advances 16,823.35 3,106.29 2,902.70

Less : Current Liabilities & Provisions 6,708.77 1,334.46 (1,233.37)

Net Current Assets 10,114.58 1,771.83 1,669.33

Miscellaneous expenditure - 44.79 68.70

Profit and Loss Account Balance - - 113.55

42,902.44 3,000.82 2,954.24

43


HENKEL INDIA LIMITED (FORMERLY THE CALCUTTA CHEMICAL LIMITED)

PROFITS & LOSS ACCOUNT FOR THE LAST THREE YEARS (Rs./lacs)

Particulars 31.12.2004 31.12.2003 31.12.2002

INCOME :

Sales 19,839.57 8,318.25 8,099.91

Less: Excise Duty (2,059.72) (1,207.94) (1,459.66)

Other income 351.19 107.20 218.34

18,131.04 7,217.51 6,858.59

EXPENDITURE :

(Increase)/Decrease in Stock (2,011.96) 30.65 (55.18)

Raw Materials Consumed 5,499.58 3,344.70 3,480.86

Purchase of Finished and Trading Goods

8,149.10 2,206.82 1,708.79

Personnel Costs 1,574.80 491.12 513.50

Interest 480.27 114.60 144.46

Depreciation 491.08 55.09 52.25

Other Expenses 3,517.96 850.72 925.92

17,700.83 7,093.74 6,788.65

PROFIT BEFORE TAX 430.20 123.76 69,940.32

Provision for tax – (Minimum Alternate Tax)

33.10 4.00 (4.60)

Provision for deferred tax – release/ (charge)

(94.61) 30.12 (11.32)

Profit available for appropriation 302.49 149.88 54.01

APPROPRIATION :

General Reserve 291.54 32.75 -

Preference Share Redemption Reserve 10.95 - -

Proposed dividend on Preference Shares

- 3.16 -

Tax on proposed dividend - 0.41 -

302.49 36.33 -

Loss brought forward - 113.55 (167.56)

Profit/(Loss) carried to Balance Sheet - - (113.55)

Basic and diluted earnings per share of face value of Rs.10

0.26 18.29 6.46

44


X. GROUP COMPANIES 1. HENKEL KGaA, Germany (Foreign Promoter) Date of Incorporation : 26 Sept 1876 - (129 years old)

At the beginning of the Company's history, we meet a 28 year-old merchant who was interested in science - Fritz Henkel. On September 26,1876 he and two partners founded the company Henkel & Cie in Aachen and marketed his first product, "Universalwaschmittel", a universal detergent based on silicate.

The following 129 years have seen the astonishing success story of a German family of entrepreneurs and uncountable thousands of their employees.

Nature of Activities :

The Henkel Group operates in three strategic areas of competence - Home Care, Personal Care, and Adhesives, Sealants and Surface Treatment. These strategic business areas are organized into four globally operating business sectors within the Henkel Group:

• Laundry & Home Care, • Cosmetics/Toiletries, • Consumer & Craftsmen Adhesives, and • Henkel Technologies.

Henkel KGaA has been active in the field of detergents and household cleaning products for over 100 years. Henkel has been one of the pioneers in research for alternatives to phosphatic builders in detergents, when the water pollution effects of phosphate first became known in the late 60's. Henkel has business interest in varied fields such as chemical products, surface technologies, adhesives, cosmetics / toiletries, detergents/household cleansers and industrial & institutional hygiene.

45


HENKEL KGaA

BALANCE SHEET FOR THE LAST THREE YEARS (Rs./lacs)

Particulars 31.12.2004 31.12.2003 31.12.2002

Sources of Funds

Share Holders Funds

Share Capital 2,01,960 2,01,960 2,01,960

Reserve & Surplus 22,84,200 16,26,480 16,14,060

Loan funds

Secured loans 1,04,220 59,400 540

Unsecured loans 16,09,740 9,42,300 13,51,080

Deferred Tax Liability 2,45,700 97,740 1,30,680

Total 44,45,820 29,27,880 32,98,320


Fixed Assets

Gross Block 59,13,000 40,06,800 41,03,460

Less : Accumulated

Depreciation

25,39,620 22,68,000 22,55,040

Net Block 33,73,380 17,38,800 18,48,420

Add: Capital work-in-progress 62,100 56,160 43,200

Investments 5,60,520 7,55,460 7,68,960

Deferred tax assets 1,76,580 1,59,840 1,76,040

Current Assets, Loans & Advances 29,02,500 23,30,640 17,39,880

Less : Current Liabilities & Provisions

26,48,700 21,27,600 12,98,700

Net Current Assets 2,53,800 2,03,040 4,41,180

Miscellaneous expenditure 19,440 14,580 20,520

Profit and Loss Account Balance - - -

TOTAL 44,45,820 29,27,880 32,98,320

46


HENKEL KGaA PROFITS & LOSS ACCOUNT FOR THE LAST THREE YEARS (Rs./lacs)

Particulars 31.12.2004 31.12.2003 31.12.2002

INCOME :

Sales 57,19,680 50,95,400 52,14,240

Less: Excise Duty - - -

Other income 10,67,580 1,90,620 1,10,700

EXPENDITURE :

(Increase)/Decrease in Stock - - -

Raw Materials Consumed - - -


30,32,100 26,81,100 27,55,620

Personnel Costs 3,07,800 2,74,320 2,90,520

Interest 88,020 75,600 83,160

Depreciation 4,62,240 2,26,800 2,70,000

Other Expenses 18,60,300 16,19,460 15,67,080

TOTAL (B) 57,50,460 48,77,280 49,66,380

PROFIT BEFORE TAX (A-B) 10,36,800 4,08,780 3,58,560


1,51,740 1,22,580 84,240


51,840 (5,940) (39,420)

Profit available for appropriation 9,36,900 2,80,260 2,34,900

APPROPRIATION :

General Reserve 8,37,000 1,90,080 1,50,660

Preference Share Redemption Reserve - - -


- - -

Tax on proposed dividend - - -

99,980 90,180 84,240

Loss brought forward - - -

Profit/(Loss) carried to Balance Sheet 99,900 90,180 84,240

47


DETAILS OF THE LISTING OF THE SHARES OF THE COMPANY Shares are quoted at Frankfurt Stock Exchange, Germany BOARD OF DIRECTORS 1. Dipl.Ing. Albrecht Woeste, 2. Winfried Zander 3. Dr.Simone Bagel-Trah 4. Hanks Dietrichs 5. Benedikt Joachim Freiherr Von Herman 6. Bernd Hinz 7. Prof. Dr.Dr.h.c.mult.Heribert Meffert 8. Andrea Pichottka 9. Prof. Dr.Dr.h.c. mult.Heinz Riesenhuber 10.Heinrich Thorbecke 11.Michel Vassilidaids 12.Bernhard Walter 13.Dr.h.c.Jurgen Walter 14.Brigitte Weber 15.Wener Wenning 16.Dr.Anneliese Wilsch-Irrgang 17.Rolf Zimmermann 2. TAMILNADU PETRO PRODUCTS LIMITED. Date of Incorporation : 1986 Nature of Activities : Linear Alkyl Benzene (LAB) has beenTPL’s flagship product, contributing to nearly 90% of the revenues - the other two being Epichlorohydrin (ECH) and Caustic Soda. It is but natural that any impact on LAB, positive or negative, would reflect on TPL’s performance as a whole.

48


TAMILNADU PETRO PRODUCTS LTD.

BALANCE SHEET FOR THE LAST THREE YEARS (Rs.lacs)

Particulars 31.3.2005 31.3.2004 31.3.2003

Sources of Funds 42,337.92 44,684.23 45,625.51

Share Holders Funds

Share Capital 8,997.15 8,997.15 8,997.15

Reserve & Surplus 33,340.77 35,687.08 36,628.36

Loan funds

Secured loans 27,546.62 27,311.33 29,426.77

Unsecured loans 1,886.01 5,106.92 7,103.14

Deferred Tax Liability 9,543.09 10,048.73 10,684.97

Total 81,313.64 87,151.21 92,837.39


Fixed Assets

Gross Block 1,19,936.23 1,17,377.48 1,18,883.03

Less : Accumulated

Depreciation

71,706.84 64,899.70 61,859.92

Net Block 48,256.39 52,477.78 57,023.11

Add: Capital work-in-progress 6,457.73 5,023.16 3,173.49

Investments 18,127.11 16,146.35 6,105.29

Deferred tax assets

Current Assets, Loans & Advances

22,378.46 24,291.98 37,489.64


13,906.05 10,788.06 10,954.14

Net Current Assets 8,472.41 13,503.92 26,535.50

Miscellaneous expenditure - - -

Profit and Loss Account Balance 9,016.36 4,922.37 3,813.34

49


INDIAN PROMOTER TAMILNADU PETROPRODUCTS LTD.

PROFITS & LOSS ACCOUNT FOR THE LAST THREE YEARS (Rs.lacs)

Particulars 31.12.2004 31.12.2003 31.12.2002

INCOME :

Sales 83,033.57 75,410.20 76,034.76

Less: Excise Duty 8,761.49 9,210.93 8,476.06

Other income 675.97 535.95 272.3

EXPENDITURE :



Purchase of Finished and Trading Goods - - -

Personnel Costs - - -

Interest 2.697.44 3,492.98 3,746.63

Depreciation 6,811.29 6,554.74 6,828.02

Other Expenses - - -

PROFIT BEFORE TAX 689.18 3,636.01 3,408.35

Provision for tax – (Minimum Alternate Tax) 54..00 1,400.00 905.31

Provision for deferred tax – release/ (charge) (505.64) 14.94 502.63

Profit available for appropriation 6,042.26 2,221.07 2,300.41

APPROPRIATION :

General Reserve - 200.00 200.00

Debenture Redemption Reserve - 800.00 800.00

Proposed dividend on Equity Shares 126.19 144.09 144.09

Tax on proposed dividend - 200.00 200.00

Loss brought forward - - -

Profit/(Loss) carried to Balance Sheet 9016.36 4859.89 3784.55


1.31 2.46 2.55

CAPITAL STRUCTURE Rs.lcs Authorized Amount 200,000,000 Equity Shares of Rs.10/-each 20,000.00 Issued Amount 89,976,899, Equity Shares of Rs.10/-each 8,997.69 Subscribed Amount 89,971,474, Equity Shares of Rs.10/-each 8997.15 Paid-up Amount 89,971,474, Equity Shares of Rs.10/-each 8997.15

50


SHARE HOLDING PATTERN Category No. of Shares

held % of shareholding

A Promoters - Indian Promoters – TIDCO - Indian Promoters – SPIC

1,58,43,751 1,52,34,751

17.61 16.93

- Foreign Promoters - - Sub-Total

3,10,78,126

34.54

B Institutional Investors 51,19,333 5.69 Mutual Funds and UTI Banks, Financial Institutions, Insurance Companies (Central/ State Govt. Institutions/ Non-Government Institutions)

22,425

0.02 FIIs 20,41,425 2.27

Sub-Total 71,83,183 7.98

Private Corporate Bodies 1,08,26,430 12.03

Indian Public 3,66,96,614 40.80

NRIs/ OCBs 39,05,899 4.34

Mutual Funds & Banks 22,425 0.02

Others - Clearing Members 2,81,222 0.31

Sub-Total 5,14,28,943 57.17 GRAND TOTAL 8,96,90,252 100.00

DETAILS OF THE LISTING OF THE SHARES OF THE COMPANY SHARES ARE QUOTED AT

MADRAS STOCK EXCHANGE NATIONAL STOCK EXCHANGE BOMBAY STOCK EXCHANGE

51


DETAILS OF HIGH AND LOW BSE NSE Month/Year 2004 – 05 High (in Rs.) Low (in Rs.) High (in Rs.) Low (in Rs.) April 2004 25.90 22.05 25.75 22.20 May 23.35 17.00 23.45 15.00 June 20.00 18.30 20.05 16.10 July 20.50 18.35 20.45 18.25 August 20.45 17.80 20.45 17.75 September 23.65 19.20 23.65 18.95 October 24.55 20.15 24.300 20.10 November 23.45 20.10 23.50 20.50 December 28.00 21.10 28.15 21.15 January 2005 27.85 18.90 27.75 21.25 February 25.20 21.70 25.20 21.75 March 23.70 19.65 23.75 19.70 The Company has not become 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 rights or public issue during the preceding three years BOARD OF DIRECTORS 1. Ramesh Mishra, I.A.S. Chairman 2. Dr.A.C.Muthiah Vice-Chairman 3. Ashok Kumar Gupta, I.A.S. Director 4. Malik Feroze Khan, I.A.S. Director 5. S.Susai Director 6. Ashwin C.Muthiah Director 7. Babu K.Varghese Director 8. C.Ramachandran Director 9. Dhananjay N.Mungale Director 10. N.R.Krishnan Director 11. Dr.K.U. Mada Director 12. N.Rangachary Director 13. V.Ramani Director & Chief Financial Officer 14. Rm.Muthukaruppan Managing Director & Chief Operating Officer

52


SUBSIDIARY COMPANY HENKEL MARKETING LIMITED

Date of Incorporation : 15.11.1974 Nature of Activities : Marketing of detergents, cosmetics and cleansers Financial information :

HENKEL Marketing India Ltd BALANCE SHEET FOR THE LAST THREE YEARS (Rs.lacs)

Particulars 31.12.2004 31.12.2003 31.12.2002

Sources of Funds

Share Holders Funds

Share Capital 86.00 86.00 86.00

Reserve & Surplus 28.63 109.61 121.23

Loan funds

Secured loans - - -

Unsecured loans - - -

Deferred Tax Liability 1.86 - -

Total 116.49 195.61 207.23


Fixed Assets

Gross Block 63.05 416.09 948.02

Less : Accumulated

Depreciation

55.67 298.09 799.62

Net Block 7.38 118.00 148.40

Add: Capital work-in-progress - - 30.00

Investments - - -

Deferred tax assets 1.86 - -

Current Assets, Loans & Advances

6693.01 1001.47 489.40


8572.45 997.64 548.98

Net Current Assets (1879.44) 3.83 (59.58)

Miscellaneous expenditure - 15.52 31.03

Profit and Loss Account Balance 1986.69 58.26 57.38

53


Henkel Marketing India Ltd

PROFITS & LOSS ACCOUNT FOR THE LAST THREE YEARS (Rs./lacs)

Particulars 31.12.2004 31.12.2003 31.12.2002

INCOME :

Sales 19953.52 4066.31 3300.18

Less: Excise Duty 324.28 526.75 387.94

Other income 125.38 70.70 37.06

EXPENDITURE :




14698.55 3259.10 2653.92

Personnel Costs 1227.11 90.43 123.49

Interest 15.87 22.73 30.19

Depreciation 2.23 12.28 16.36

Other Expenses 5739.29 226.60 106.28

PROFIT BEFORE TAX (1928.43) (0.88) 19.06


- - -


- - 36.45

Profit available for appropriation - - -

APPROPRIATION : - - -

General Reserve - - -

Preference Share Redemption Reserve - - -


- - -

Tax on proposed dividend - - -

Loss brought forward (58.26) (57.38) (112.89)

Profit/(Loss) carried to Balance Sheet (1986.69) (58.26) (57.38)


(224.20) (0.10) 6.50

54


CAPITAL STRUCTURE Rs.Lacs

Authorized Amount 1200,000 Equity Shares of Rs.10/-each 120.00 30,00,11% Cumulative Redeemable Preference Shares of Rs.100/- each

300.00

ISSUED Amount 860,000 Equity Shares of Rs.10/- each 86.00 SUBSCRIBED Amount 860,000 Equity Shares of Rs.10/- each 86.00 Paid-up Amount 860,000 Equity Shares of Rs.10/- each 86.00 SHARE HOLDING PATTERN Category No. of Shares held % of

shareholding A Promoters - Indian Promoters

-

-

- Foreign Promoters - -

Sub-Total

-

-

B Institutional Investors - - Mutual Funds and UTI Banks, Financial Institutions, Insurance Companies (Central/ State Govt. Institutions/ Non-Government Institutions)

-

-

FIIs

- -

Sub-Total - -

Private Corporate Bodies (HENKEL INDIA LTD) 825,550

96.00

Indian Public 34,450 4.00

NRIs/ OCBs - -

Sub-Total

860,000

100.00

GRAND TOTAL

860,000

100.00

55


The Company is a un-listed public limited company. The Company has not become a sock company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 nor is under winding up. The company has not made any rights or public issue during the preceding three years BOARD OF DIRECTORS 1. G.Kumaraswamy Reddy .. Director 2. A.Satish Kumar .. Director 3. M.B.Sridharan .. Director 4. R.R.Samuel Chandar .. Director XI. OUTSTANDING LITIGATION, DEFAULTS AND MATERIAL DEVELOPMENTS Save as stated herein: 1. There are no outstanding or pending material litigation, suit, criminal or civil prosecution, proceeding initiated for offence (irrespective of whether specified in paragraph (I) of Part 1 of Schedule XIII of the Companies Act) or litigation for tax liabilities against the Company, its Promoters, directors or Promoter Group companies. 2. There are no material defaults, non payments or overdues of statutory dues, institutional or bank dues or dues towards holders of debentures, bonds and fixed deposits and arrears of preference shares, other than unclaimed liabilities of the Company, its Promoters or Promoter Group Companies. Litigation, Disputes, etc. Against the Company 1. HENKEL INDIA LIMITED Company had received several Show Cause notices from the Commissioner of Central Excise, Kolkata and Chennai, seeking to know why demands for Rs 240.29 lcs and Rs 386.60 lcs respectively could not be raised on the Company on account of differential central excise duty alleged to have been short paid / not paid during the period 1 June 1991 to 31 March 1995 for Kolkata factory and 1 June 1991 to 30 April 1998 for Chennai factory. Replies to all the above show cause notices have been filed by the Company and personal hearings have also been completed both at Kolkata and Chennai. In the mean time, the Central Excise Authorities had confirmed the demand of Rs 402.60 lcs (including penalty Rs 16 lcs) for the period upto 30 April 1998 for Chennai factory and Rs 260.29 (including penalty Rs 20) for the period upto 31 March 1995 for Kolkata factory. The Company had preferred appeals to the appropriate authorities

56


against the above demands and in both the cases, the appellant authority has set aside the demands for a de-novo consideration of the issue. In view of the above, the Company contends that the above demands are not sustainable and accordingly no provision thereof has been considered in these accounts.

XII. GOVERNMENT APPROVALS The Company has all the necessary permissions and approvals from the Government and various Government agencies for the existing activities. As per the Scheme of Amalgamation the entire business of the transferor Company with all its approvals, permissions, benefits, rights, registrations, consents etc. is being transferred to the transferee Company which would be carried on by the transferee Company on a going concern basis. No further approvals from any Government authority/ Reserve Bank of India (RBI) are required by the Company to undertake the existing activities, save and except those approvals, which may be required to be taken in the normal course of business from time to time. The Central Government/ RBI accepts no responsibility for the financial soundness or correctness of the statements made in this Information Memorandum. The major approvals/ permissions/ consents/ NOCs from Government and other agencies for conducting its present manufacturing activities at its plants are as under: DETAILS OF LICENCES/ NOC/ APPROVAL FOR MANUFACTURING UNITS APPROVALS/ LICENCES

(1) TILJALA, CALCUTTA

S. No.

License No. & Date Authority Purpose & Validity/ Renewal

1 Licence No : 6344

Inspector of Factories, WB.

Valid up to 31.12.2005

2 Licence No : CL – 7 - M Licence No : CL – 752 – M

Drug & cosmetics Licence.


NOCs

S. No. Authority Purpose & Validity/ Renewal

1 Renewal of consent to operate under section 25 & 26 of the water(Prevention and control of Pollution) Act, 1974, and section 21 of the Air (Prevention and control of pollution) Act,1981

West Bengal Pollution Control Board,

For manufacturing process


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(2) AMBATUR, CHENNAI

S. No.


1 Inspector of Factories, TN.

Renewal on 1.01.2005

Valid upto 31.12.2005

NOCs Sl. No.

NOC & Date Authority Purpose & Validity/ Renewal

1 Central Pollution Control Board,

For manufacturing process Valid upto 31.03.2006

(3) KARAIKAL PLANT

S. No.


1 FA- 4720 dtd 8.9.1992.(Old)

KTC 007 dtd 13.04.2005 (New) After changing licence pattern for Karaikal region

Inspector of Factories, TN.

Renewal on 13.04.2005 Valid upto 31.12.2005

2 Regn No. R – 187 (89) dated 30/03/1989

Secretariat for Industrial approvals,

Deptt. of Industrial Development, Ministry of Industry,

Govt. of India

For setting up of a new industrial undertaking at Tirunallar, Tehsil Karaikal, District Kraikal in the union territory of Pondichery for manufacture of Synthetic detergents of ISI Standards only.

30,000 tonnes only.

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NOCs Sl. No.

NOC & Date Authority Purpose & Validity/ Renewal

1 PPCC from 1st Jan to 31st Dec 2005

Central Pollution Control Board,

For manufacturing process (air pollution)

Valid upto 31st Dec 2005

2 PPCC from 1st Jan to 31st Dec 2005

Central Pollution Control Board,

For operation of (water effluent)

Valid upto 31st Dec 2005

XIII - MANPOWER REQUIREMENTS

The total employee strength of the Company as on September, 2005.

726 Approx

XIV. OTHER REGULATORY DISCLOSURES

Stock Market Data for Equity Shares of the Company Equity Shares of the Company are listed on Calcutta Stock Exchange Limited. The Company is seeking approval for listing of its shares in The Stock Exchange Mumbai and The Madras Stock Exchange Limited, through this Information Memorandum. Particulars Regarding Previous Public or Rights Issues during the Last Five Years The Company has not made any previous public or rights issue during the last five years. There is no issue of shares otherwise than for cash and there are no outstanding debentures and redeemable preference shares. There has been no revaluation of assets of the Company since last five years except that as per the Scheme of Amalgamation the Company, in its Balance Sheet as at 31st December 2004 has considered the revaluation of land & building as per the recommendation of the approved valuers and Chartered Accountants and also diminution or accretion in the value of assets.

Companies under the same Management

The following are the companies under the same management within the meaning of Section 370(1B) of the Companies Act. 1. Henkel KGAa. 2. Tamilnadu Petroproducts 3. Henkel Marketing India Limited

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Disclosure on negative net worth/ winding up/ sick/ BIFR/ disassociation/ strike off from ROC There is no group company having a negative net working or under winding up or a sick company or under BIFR. Further, the Company has not disassociated from any company. Further, non of the Group Companies, have applied for striking off their name from the ROC.

XV. DIVIDEND POLICY

The Board of Directors of the company did not recommend payment of any dividend since incorporation. Dividend will be declared at the annual general meeting of the shareholders based on recommendation by the Board. The Board may recommend dividend at its discretion to be paid to the members.

XVI. MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF HENKEL INDIA LIMITED.

TRANSFER AND TRANSMISSION OF SHARES Transfer

46. (a) The instrument of transfer of any shares in the Company shall be executed both by the transferor and the transferee and the transferor shall be deemed to remain holder of the shares until, the name of the transferee is, entered in the Register of members in respect thereof. (b) The Board shall not register any transfer of shares unless a proper instrument of transfer duly stamped and executed by the transferor and the transferee has been delivered to the Company along with the certificate and such other evidence as the Company may require to prove the title of the transferor or his right to transfer the shares. Provided that where it is proved to the satisfaction of the Board that an instrument of transfer signed by the transferor and the transferee has been lost the Company may, if the Board thinks fit, on an application in writing made by the transferee and bearing the stamp required for an instrument of transfer, register the transfer on such terms as to indemnity as the Board may think fit. (c) An application for the registration of the transfer of any share or shares may be made either by the transferor or the transferee, provided that where such application is made by the transferor, no registration shall in the case of partly paid shares to be effected unless the Company gives notice of the application to the transferee. The Company shall, unless objection is made by the transferee within two weeks from the date of receipt of the notice, enter in the Register the name of the transferee in the same manner and subject to the same conditions as if the application for registration was made by the transferee.

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(d) For the purpose of sub-clause (c) notice to the transferee shall be deemed to have been duly given if despatched by prepaid registered post to the transferee at the address given in the instrument of transfer and shall be deemed to have been delivered at the time at which it would have been delivered in the ordinary course of post. (e) Nothing in sub-clause (d) shall prejudice any power of the Board to register as a shareholder any person to whom the right to any share has been transmitted by operation of law. (f) Nothing in this Article shall prejudice the power of the Board to refuse to register the transfer of any shares to a transferee, whether a member or not. (g) Notwithstanding anything contained in the Articles of Association, in the case of transfer of shares or other marketable securities, where the Company has not issued any certificates and where such shares or securities are being held in an electronic and fungible form, the provisions of the Depositories Act, 1996, shall apply.

47. The instrument of transfer shall be in writing and all the provisions of Section 108 of the Companies Act, 1956 and of any statutory modification thereof for

the time being shall be duly complied with in respect of all transfers of shares and the registration thereof:

Board’s rights to refuse to register 48. (a) The Board may, at their absolute discretion and without assigning any

reason, decline to register: (1) The transfer of any share where fully paid or not to a person of whom they do not approve, or (2) Any transfer or transmission of shares on which the, Company has a lien. Provided that registration of any transfer shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except a lien on the shares.

(b) If the Board refuses to register any transfer or transmission of right, they shall within two months from the date on which the instrument of transfer or the intimation of such transmission was delivered to the Company send notice of the refusal, to the transferee and the transferor or to the person giving intimation of such transmission as the case may be. (c) In case of such refusal by the Board, the decision of the Board shall be subject to the right of the appeal conferred by Section 111 Sub-clause (3) (d) The Provisions of this clause shall apply to transfers of stock also.

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Further right of Board of Directors to refuse to register. 49. (a) The Board, at their discretion, may decline to recognise or accept

instrument of transfer of shares unless the instrument of transfer is in respect of one class of shares. (b) No fee shall be charged by the Company for registration of transfers or for effecting transmissions of shares on the death of any member. No fee shall be charged for registering any letters of probate, letters of administration and other similar documents. Rights to shares on death of a member for transmission

50. (1) In the event of death of anyone or more of several joint holders, the survivor or survivors, alone shall be entitled to be recognised as having title to the Shares. (2) In the event of death of any sole holder or of the death of last surviving holder, the executors or administrators of such holder or other person legally entitled to the shares shall be entitled to be recognised by the Company as having any title,to the shares of the deceased. Provided that on production of such evidence as to title and on such indemnity or other terms as the Board may deem sufficient, any person may be recognised as having title to the shares as heir or legal representative of the deceased shareholder. Provided further that if the deceased shareholder was a member of Hindu joint family, the Board on being satisfied to that effect and on being satisfied that the shares standing in his name in fact belonged to the joint family, may recognise the survivors or the Karta thereof as having title to the shares registered in the name of such member; Provided further that in any case it shall be lawful for the Board in their absolute discretion to dispense with the production of probate or letters of administration or other legal representation upon such evidence and such terms as to indemnity or otherwise as to the Board may deem just. Rights and liabilities of a person.

51. (1) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time be required by the Board and subject as hereinafter provided, elect either:

(a) to be registered himself as a holder of the share; or (b) to make such transfer of the share as the deceased or insolvent

member could have made. (2) The Board, shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had transferred the share his death or insolvency.

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Notice by such a person of his election .

52. (1) If the person so becoming entitled shall elect to be registered as holder of the shares himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. (2) If the person aforesaid shall elect to transfer the share, he shall testify his election by executing a transfer of the share. (3) All the limitations, restrictions and provisions of these regulations

relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or insolvency of the member had not occurred and the notice or transfer had been signed by that member. No transfer shall be made to an infant or a person of unsound mind.

53. No transfer shall be made to an infant or a person of unsound mind Endorsement on transfer and issue of certificate 54. Every endorsement upon the certificate of any share in favour of any

transferee shall be signed by the President or by some person for the time being duly authorised, by the Board in that behalf'. In case any transferee of a share shall apply for a new certificate on payment in addition to the transfer fee) of a sum of Rupee One for every such certificate of shares to which the said transfer relates and upon his delivering be cancelled every old or existing up to be certificate which is to be replaced by a new one. Provided that the additional sum of Rupee One shall not be charged for issue of new certificate in replacement of those which are decrepit or worn out or where the cages on the reverse for recording transfers have been fully utilised. Custody of transfer

55. The instrument of transfer shall, after registration, remain in the custody of

the Company. The Board may cause to be destroyed all transfer deeds lying with the Company for a period of ten years or more.

Register of Members 56. (1) The Company shall keep a book to be called the Register of Transfers and

therein shall be entered the particulars of every transfer or transmissions of any shares held in dematerialised form.

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Closure of Register of Members (2) The Board may after giving not less than seven days previous notice by advertisement in some newspapers circulating in the district in which the Registered Office of the Company is situated, close the Register of Members or the register of Debenture Holders for any period or periods not exceeding in the aggregate forty-five days in each year but not exceeding thirty days at any one time. When instruments of transfer to be retained. (3) All instruments of transfer which shall be registered shall be retained by the Company but any instrument of transfer which the Directors may decline to register shall be returned to the person depositing the same.

Company’s right to register transfer by apparent legal owner. 57. The Company shall incur no liability or responsibility whatever in

consequence of their registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof (asshown or appearing in the Register of Members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the same shares notwithstanding that the Company may have had notice of such equitable right or title or interest prohibiting registration of such transfer and may have entered such notice referred thereto in any book of the Company and the Company shall not be bound by or required to regard or attend to or give effect to any notice which may be given to it of any equitable right, title or interest or be under any liability whatsoever for refusing or neglecting so to do though it may have been entered or referred to in the books of the Company; but the Company shall nevertheless be at liberty to have regard and to attend to any such notice and give effect thereof, if the Board shall think fit. DEMATERIALISATION OF SECURITIES

23. (a) Power of the Company to dematerialise and rematerialise. The Company shall be entitled to dematerialise its existing shares, debentures and other securities, rematerialise its shares, debentures and other securities held in the Depositories and / or offer its fresh shares, debentures and other securities, in a dematerialised form pursuant to the Depositories Act, 1996 and the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996. (b) Options for Investors Every Person subscribing to securities offered by the Company shall have the option to receive securities certificates or to hold the securities with a depository. Such a person who is the beneficial owner of the sucurities can at any time opt out of a depository, if permitted by the law, in respect of any security in the manner provided by the Depositories

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Act, and the Company shall, in the manner and within the time prescribed, issue to the beneficial owner and required Certificate of Securities. If a person opts to hold his security with a depository, the Company shall intimate such depository the details of allotment of the security, and on receipt of the information, the depository shall enter in its record the name of the allottee as the beneficial owner of the security. (c) Securities in Depositories to be in fungible form. All securities held by a depository shall be dematerialised and be in fungible form. Nothing contained in Sections, 153, 153A, 153B, 187B, 187C and 372A of the Companies Act, 1956 shall apply to a depository in respect of the securities held by it on behalf of the beneficial owners. (d) Rights of Depositories and Beneficial Owners. Notwithstanding anything to the contrary contained in the Act or these Articles, a depository shall be deemed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of the beneficial owner. Save as otherwise provided above, the depository as the registered owner of the securities shall not have any voting rights or any other rights in respect of the securities held by it. The beneficial owner of securities shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of his securities which are held by a depository. (e) Service of Documents. Notwithstanding anything in the Act or these Articles to the contrary, where securities are held in a depository, the records of the beneficial ownership may be served by such depository on the Company by means of electronic or by delivery of floppies or discs.

GENERAL MEETINGS Statutory Meeting

71. (a) The Company shall within a period of not less than one month nor more than six months from the date at which the Company is entitled to commence business, hold a General Meeting of the members of the Company which shall be called the Statutory Meeting. (b) The Board of Directors shall not less than 21 days before the date on which meeting is held forward a report called the Statutory Report to every member of the Company provided that if the Statutory Report is forwarded later than is required above, it shall notwithstanding the fact, be deemed to have been duly forward if it is so agreed to by all the members entitled to attend and vote at the meeting.

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(c) The Board of' Directors shall comply with the provisions of Section 165 of the Act in connection therewith. Annual General Meeting

72. The Company shall in each year hold in addition to the other meeting a general meeting which shall be styled as its; annual general meeting at intervals and in accordance with the provisions of Section 166 of the Act.

Extra-ordinary General Meeting 73. (1) Extraordinary General Meetings may be held either at the Registered

Office of the Company or at such convenient place as the Board or the President (subject to any directions of the Board) may deem fit, Right to summon Extra-Ordinary General Meeting (2) The Chairman or President may whenever they think fit and shall if so directed by the Board convene an Extraordinary General Meeting at such time and place as may be determined. Extra-ordinary Meeting by Requisition

74. (a) The Board shall on the requisition of such number of members of the Company as is specified below proceed duly to call an Extra-ordinary General Meeting of the Company and comply with the provisions of the Act in regard to meetings on requisition. (b) The requisition shall set out, matters for the consideration of which the meeting is to be called, shall be signed by the requisitionists and shall be deposited at the Registered Office of the Company or sent to the Company Registered Post addressed to the Company at its Registered Office. (c) The requisition may consist of several documents in like forms each signed by one or more requisitionists. (d) The number of members entitled to requisition a meeting in regard to any matter shall be such number of them as hold on the date of the deposit of the requisition of not less than 1 /10th of such of the paid-up capital of the Company as at the date carries the right of voting in regard to the matter set out in the requisition. (e) If the Board does not within 21 days from the date of deposit of the requisition with regard to any matters proceed duly to call a meeting for the consideration of these matters on a date not later than 45 days from the date of deposit of the requisition, the meeting may be called by the requisitionists themselves or such of the requisitionists, as represent either majority in value of the paid-up share capital held by them or of not less than 1/10th of such paid-up capital of the Company as is referred to in Sub-clause (d) above, whichever is less.

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Length of notice of calling meeting

75. A General Meeting of the Company may be called by giving not less than twenty-one days' notice in writing, provided that a General Meeting may be called after giving shorter notice if consent thereto is accorded in the case of the Annual General Meeting by all the members entitled to vote there at and in the case of any other meeting of the Company holding not less than 95% of the part of the paid-up share capital which gives the right to vote on the matters to be considered at the meeting. Provided that where any members of a Company are entitled to vote only on some resolutions to be moved at a meeting and not on the others, those members shall be taken into account for purpose of this clause in respect of the former resolution or resolutions and not in respect of the latter. Accidental omission to give notice not to invalidate meeting

76. The accidental omission to give notice of any meeting to or the non-receipt of any such notice by any of the members shall not invalidate the proceedings, or any resolution passed at such meeting. Special business and statements to be annexed

77. All business shall be deemed special that is transacted at an Extraordinary meeting and also that is transacted At an Annual Meeting with the exception of declaration of a dividend, the consideration of the accounts, Balance Sheets and the reports of the Directors and Auditors, the election of the Directors in the the place of those retiring, and the a appointment of and the fixing remuneration of Auditors. Where any items of business to be transacted at the meeting are deemed to be special as aforesaid, there shall be annexed to the notice of the meeting a statement setting out all material facts concerning each such items of business, including in particular the nature of the concern or interest, if any therein, of every Director. If 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. 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 the extent of share holding, interest in that other Company of every Director of the Company shall also be set out in the statement if the extent of such share holding interest is not less than 20% of the paid-up share capital of the Company. Quorum

78. Five members personally present shall be a quorum for a General meeting and no business shall be transacted at any general meeting unless the requisite quorum is present when the meeting proceeds to business.

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If quorum not present when meeting to be dissolved and when to be adjourned

79. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if called upon the requisition of members, shall be dissolved; in any, other case, it shall stand adjourned to the same day in the next week and at the time and place or to such other day and at such other time and places as the Board may determine and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the members present shall be a quorum.

Chairman of General Meeting 80. The Chairman of the Board of Directors shall preside at every general meeting

of the Company and if he is not present within 15 minutes after the time appointed for holding the meeting, or if he is unwilling to act as Chairman the Vice-Chairman of the Board of Directors shall preside at every general meeting of the Company.

When chairman absent choice of another chairman 81. If there is no such Chairman or Vice-Chairman or if at any General Meeting

either the Chairman or Vice-Chairman is not present within 15 minutes after the time appointed for holding the meeting or if they are unwilling to act as Chairman the members present shall choose a Director present to be the Chairman of the Meeting and if no Directors present and all the Directors are unwilling to take the chair, the members present shall choose someone of their number to be the Chairman.

Adjournment of Meeting 82. The Chairman may, with the consent of any meeting at which a quorum is

present and shall, if so directed by the meeting, adjourn that 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 a meeting is adjourned for thirty days or more, notice of the Adjourned meeting shall be given as in the case of an original meeting. Save as Aforesaid, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

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Questions at general meeting how decided 83. At a General Meeting, a resolution put to the 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 show of hands) demanded in accordance with the provisions of Section 179. 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 book of the proceedings of the Company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against that resolution.

Casting vote 84. In the case of an equality of votes, the Chairman shall, both on a show of

hands and on a poll, have a casting vote in addition to the vote or votes to which he may be entitled as a member.

Taking of poll 85. If a poll is duly demanded in accordance with the provisions of Section 179, it

shall be taken in such manner as the Chairman, subject to the provisions of Section 184 and Section 185 of the Act, may direct and the results of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll was taken.

In what cases poll taken without adjournment 86. A poll demanded on the election of Chairman or on a question of

adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time not being later than forty eight hours from the time when demand was made as the Chairman may direct.

Votes 87. (1) Every member of the Company holding any Equity share capital shall have

a right to vote in respect of such capital on every resolution placed before the Company. On a show of hands, every such member present shall have one vote and shall be entitled to vote in person or by proxy and his voting right on a poll shall be in proportion to his share of the paid-up Equity Capital of the Company.

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(2) Every member holding any Preference shares shall in respect of such shares have a right to vote only on resolutions which directly affect the rights attached to the Preference shares and subject as aforesaid, every such member shall in respect of such capital be entitled to vote in person or by proxy, if the dividend due on such preference shares or any part of such dividend has remained unpaid in respect of an aggregate period of not less than two years preceding the date of the meeting. Such dividend shall be deemed to be due on Preference shares in respect of any period, whether a dividend has been declared by the Company for such period or not, on the day immediately following such period. (3) Whenever the holder of a Preference share has a right to vote on any resolution in accordance with the provisions of this Article, his voting right on a poll shall be in the same proportion as the capital paid up in respect of such Preference shares bears to the total Equity paid up capital of the Company. Business may proceed notwithstanding demand for poll

88. A demand for a poll shall not prevent the continuance of a meeting for the

transaction of any business other than that on which a poll has been demanded. The demand for a poll may be withdrawn at any time by the person or persons who made the demand.

Joint Holders 89. In the case of joint holders, the vote of the first named of such joint holders

who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders.

Member of unsound mind 90. A member of unsound mind, or in respect of whom an order has been made

by any Court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his Committee or other legal guardian, and any such Committee or guardian may, on a poll, vote by proxy.

No member entitled to vote while call due to company 91. No member shall be entitled to vote at a general meeting unless all calls or

other sums presently payable by him in respect of shares in the Company have been paid.

Proxies permitted on polls 92. On a poll, votes may be given either personally or by proxy provided that no

Company shall vote by proxy as long as a resolution of its Directors in accordance with provisions of Section 187 is in force.

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Instrument of proxy. 93. (a) The instrument appointing a proxy shall be in writing under the hand of

appointer or of his attorney duly authorised in writing, or if the appointer is a corporation, either under the common seal or under the hand of an officer or attorney so authorised. Any person may act as proxy whether he is a member or not. (b) A body corporate (whether a Company within the meaning of this Act or not) may:(i) If it is a member of the Company by resolution of its Board of Directors or other governing body, authorise such person as it thinks fit to act as its representatives at any meeting of the Company, or at any meeting or any class of members of the Company. (ii) If it is a creditor (including a holder of debentures) of the Company, by resolution of its Directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of any creditors of the Company held in pursuance of this Act or of any rules made thereunder, or in pursuance of the provisions contained in any debenture or trust deed, as the case may be. (c) A person authorised 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 if he were personally the member, creditor or debenture holder. Instrument of proxy to de deposited at the office.

94. The instrument appointing a proxy and the power of attorney or other

authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Registered Office of the Company not less than forty-eight 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.

Validity of vote by proxy. 95. A vote given in accordance with the terms of an instrument of proxy shall be

valid notwithstanding the previous death of the appointer, or revocation of the 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 Registered Off ice of the Company before the commencement of the meeting or adjourned meeting at which the proxy is used.

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Form of Proxy. 96. Any instrument appointing a proxy maybe in the following or in any other

form which the Board shall approve.

General Form I/We.....................................................of...............................................................in the district of.............................being member(s) of the above named Company hereby appoint Mr............................ ............................ of................................ in the district of ............................................... .....................................or failing him Mr........................................................ of.................................................................. in the district of...................................... as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting/Extraordinary General Meeting of the Company to be held on the..........................................day of..........................................................20.........................and at every adjournment thereof. Signed this.....................................day of.....................20.................... Signature

Form for affording members an opportunity of voting for or against the resolution I/We.....................................................of...............................................................in the district of.............................being member(s) of the above named Company hereby appoint Mr........................................................ of.........................................in the district of ........................................... .........................................or failing him Mr.................................................. ......of.................................................................. in the district of..............................................as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting/Extraordinary General Meeting of the Company to be held on the..........................................day of............................. .............................20.........................and at every adjournment thereof. I/We direct the proxy to vote For/against Resolution No. 1 For/against Resolution No. 2 For/against Resolution No. 3 Signed this.....................................day of.....................20.................... Signature NOTE: Strike out "for" or "against" as appropriate. Unless this is done and unless other wise Instructed, the proxy will act as he thinks fit.

DIRECTORS

97. Until otherwise determined by a general meeting, the number of Directors shall be not less than 4 and not more than the limit as may be specified in the Act, from time to time.

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Number of Directors 98. The first Directors shall be:-

1) Shri.Maharaja Shashi Kanta Acharji Chaudhuri (2) Shri. Lt.Col.R.L.Dutt, M.D.I.M.S(Retd.) (3) Shri. Rai Bahadur Upendra Lal Roy (4) Shri. Amulyadhone Addy.Esqr. (5) Shri. K.C.Das, Esqr (6) Shri. B.N.Maitra, Esqr Qualification of Directors

99. Any person, whether a member of the Company or not may be appointed, Director. No qualification by way of holding shares in the capital of the Company shall be required of any Director.

100. A director may retire from his office upon giving one month's notice in writing

to the Company of his intention to do so and such resignation shall take effect upon the expiration of such notice or its earlier acceptance.

101. (a) The remuneration of each of the Directors shall be as prescribed under

Rule 10B of the Companies (Central Government) General Rules pursuant to Section 310 of the Companies Act, 1956. The Company may allow and pay to a Director who for the time being is residing out of place at which any meeting of the Directors maybe held and who shall come to that place for the purpose of attending that meeting such sum as the Directors may consider fair compensation for his expenses in connection with his attending the meeting in addition to his remuneration (b) Subject to the provisions of the Act, the Directors may, with the sanction of a Special Resolution passed in the General Meeting, and such sanction if any of the Government of India as may be required under the Companies Act, sanction and pay to any or all the Directors such remuneration for their services as Directors or otherwise and for such period and on such terms as they may deem fit. (c) Subject to the provisions of the Act, the Company in General Meeting may by special resolution sanction and pay to the Directors in addition to the said fees set out in sub-clause (a) above, a remuneration of not exceeding one per cent (1%) of the net profits of the Company calculated in accordance with the provisions of Section 198 of the Act. The said amount of remuneration so calculated shall be divided equally between all the Directors of the Company who held office as Directors at any time during the year of account in respect of which such remuneration is paid or during any portion of such year, irrespective of the length of the period for which they had held office respectively as such Directors.

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(d) Subject to the provisions of Section 314 of the Companies Act, and subject to such sanction of the Government of India, as may be required under the Companies Act, if any Director shall be appointed to advise the Directors as an expert or be called upon to perform extra services or make special exertions for any of the purpose of the Company, the Directors may pay to such Director such special remuneration as they think fit; such remuneration may be in the form of either salary, commission or lump sum and may either be in addition to or in substitution of the remuneration specified in clause (a) of the Article.

102. The continuing Directors may act notwithstanding any vacancy in their body;

but subject to the provisions contained in Article 127 below. Chairman or president of the Board of Directors

103. (a) The Board of Directors may from time to time elect one of their body to

be the Chairman of the Board of Directors and one as Managing Director.(b) The Chairman and the President shall be paid, subject to the sanction of the Government, if any required for the purpose, such sum as remuneration for his services as Chairman and President respectively as the Company may, with like sanction from time to time, fix by a special resolution at a General Meeting

Casual Vacancy 104. If the Office of any Director becomes vacant before the expiry of the period

of his Directorship in normal course, the resulting casual vacancy may be filled by the Board at a meeting of the Board subject to Section 262 of the Act. Any person so appointed shall hold off ice only upto the date upto which the Director in whose place he is appointed would, have held office if the vacancy had not occurred as aforesaid.

VACATION OF OFFICE BY DIRECTORS

Vacation of office by Directors

105. (1) The Office of a Director shall be vacated if: (a) he fails to obtain with the time specified in Sub-Section (1) of Section 270 it or at any time thereafter ceases to hold the share qualification, required of him by the Articles of the Company. (b) he is found to be of unsound mind by a Court of competent jurisdiction; (c) he applies to be adjudicated as an insolvent; (d) he is an undischarged insolvent;

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(e) he is convicted by a Court for any offence involving moral turpitude and is sentenced in respect thereof to imprisonment for not less than six months; (f) he fails to pay any call in respect of shares of the Company held by him, whether alone or jointly with other, within six months from the last date fixed for the payment of the call; unless the Central Government has by notification in official Gazette removed the disqualification by such failure. (g) he absents himself from three consecutive meetings of the Board or from all meetings of the 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 of which he is a Director accepts a loan, or any guarantee or security for a loan from the company in contravention of Section 295. (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 or (k) he is removed in pursuance of Section 284 of the Act. (l) having been appointed a Director by virtue of holding any office or other employment in the Company, he ceases to hold such office or other employment in the Company. (2) Notwithstanding anything in clause (d), (e) and (j) aforesaid, the disqualification referred to in those clauses shall not take 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 or 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 the disqualification, until such further appeal or petition is disposed of.

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Alternate Director

106. (1) The Board may appoint an Alternate Director to act for a Director, hereinafter called in this clause the original Director during his absence for a period of not less than 3 months from the State in which the meetings of the Board are ordinarily held. (2) An alternate Director appointed as aforesaid shall vacate office if and when the original Director returns to the State in which meetings of the Board are ordinarily held. Additional Director

107. The Directors may, from time to time appoint any person as an additional

Director provided that the number of Directors and Additional Directors together shall not exceed the maximum number of Directors fixed under Article 96 above. Any person so appointed as an Additional Director shall hold office up to the date of the next Annual General Meeting of the Company.

Debenture Director 108. Any trust Deed for securing debentures or debenture-stocks may, if so

arranged, provide for the appointment, from time to time, by the Trustees thereof or by the holders of debentures or debenture-stocks, of some person to be a Director of the Company and may empower such Trustees or holders of debentures or debenture-stocks, from time to time, to remove and re-appoint any Director so appointed. The Director appointed under this Article is herein referred to as "Debenture Director", and the term "Debenture Director", means the Director for the time being in off ice under this Article. The Debenture Director shall not be bound to hold any qualification shares and shall not be liable to retire by rotation or be removed by the Company. The Trust Deed may contain such ancillary provisions shall have effect notwithstanding any of the other provisions herein contained.

109. (a) Notwithstanding anything to the contrary contained in these Articles, so long as any moneys remain owing by the Company to the Industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI), The Industrial Credit & Investment Corporation of India Limited (ICICI) and Life Insurance Corporation of India (LIC) or to any other Finance Corporation or Credit Corporation or to any other Financing Company or Body out of any loans granted by them to the Company or so long as IDBI, IFCI, ICICI, LIC and Unit Trust of India (UTI) or any other Financing Corporation or Credit Corporation or any other Financing Company or Body (each of which IDBI, IFCI, ICICI, LIC and UTI or any other Finance Corporation or Credit Corporation or any other Financing Company or Body is hereinafter in this Article referred to as " the Corporation") continue to hold debentures in the Company by direct subscription or private placement, or so long as the

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Corporation holds shares in the Company as a result of underwriting or direct subscription or so long as any liability of the Company arising out of any Guarantee furnished by the Corporation on behalf of the Company remains outstanding, the Corporation shall have a right to appoint from time to time, any person or persons as a Director or directors whole time or non whole time (which director or directors is/are hereinafter referred to as "Nominee Director/s") on the Board of the Company and to remove from such office any person or persons so appointed and to appoint any person or persons in his or their place/s, provided that the number of such Nominee Directors shall at no time exceed three. 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 at the option of the Corporation such Nominee Directors/s shall not liable to retirement by rotation of Director/s. Subject as aforesaid, the Nominee Director/s shall be entitled to the same rights and privileges and be subject to the same obligations as any other Director of the Company. The Nominee Director/s so appointed shall hold the said Office only so long as any moneys remain owing by the Company to the Corporation or so long as the Corporation hold Debentures in the Company as a result of direct subscription or private placement or so long as the corporation hold shares in the Company as a result of underwriting or direct subscription 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 ipsofacto vacate such office immediately the moneys owing by the Company to the Corporation are paid off or on the Corporation ceasing to hold debentures/shares in the Company or on the satisfaction of the liability of the Company, arising out of the Guarantee furnished by the Corporation. The Nominee Directors appointed under this article shall be entitled to receive all notices of and attended all General Meetings, Board Meetings and of the meetings of the Committee of which the Nominee Director/s is/are member/s as also the minutes of such meetings. The Corporation shall also be entitled to receive all such notices and minutes. The Company shall pay to the Nominee Director/s sitting fees and expenses 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 of the Company, the fees, commission, monies and remuneration in relation to such Nominee Director/s shall accrue to the Corporation and same shall accordingly be paid by the Company directly to the Corporation. Any expenses that may be incurred by the Corporation or such Nominee Director/s in connection with their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or, as the case may be, to such Nominee Director/s.

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Provided that if 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 further if such Nominee Director/s is an officer of the Reserve Bank of India, the sitting fees in relation to such Nominee Director/s shall also accrue IDBI and the same shall accordingly be paid by the Company directly to IDBI. In the event of the Nominee Director/s being appointed as whole time Director/s such Nominee Director/s shall exercise such powers and have such rights as the usually exercised or available to the whole time Director in the management of the affairs 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. (b) The Corporation may at any time and from time to time remove any such Corporation Director appointed by it and may at the time of such removal and also in the case of death or resignation of the person so appointed at any time, appoint any other person as a Corporation Director in his place. Such appointment or removal shall be made in writing signed by the Chairman of the Corporation or any person or Director thereof and shall be delivered to the Company at its registered office. It is clarified that every Corporation entitled to appoint a Director under this Article may appoint such number of persons as Directors as may be authorised by the Directors of the Company, subject to Section 255 of the Act. Special Director

110. (a) In Connection with any collaboration arrangement with any Company or Corporation or any firm or person for supply of technical know-how and/or machinery or technical and/or marketing advice the Directors may authorise such Company, corporation, firm or person hereinafter in this clause referred to as "Collaborator" to appoint from time to time anyperson as a Director of the Company [hereinafter referred to as "Special Director'] and may agree that such Special Director shall not be liable to retire by rotation and need not possess any qualification shares to qualify him for the office of such Director so however that such Special Director shall hold office so long as such collaboration arrangement remains in force, unless otherwise agreed upon between the Company and such collaborator under the collaboration arrangements or at any time thereafter.

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(b) The Collaborator may at any time and from time to time remove any such Special Director appointed by it and may at any time of such removal and also in the case of death or resignation of the person so appointed at anytime, appoint any other person as a Special Director in his place and such appointment or removal shall be made in writing signed by such Company or Corporation or any partner or such person and shall be delivered to the Company at its registered office. It is clarified that every Collaborator entitled to appoint a Director under this Article may appoint one such person as a Director and so that if more than one Collaborator is so entitled there may be at any time as many Special Directors as the Collaborators eligible to make the appointment. Government Director etc.,

111. (a) Subject to the provisions of the Act the Directors and the President and

Vice-President shall not be disqualified by reason of their office as such from contracting with the Company either as Vendor, Purchaser, Lender, Agent Broker, or otherwise, nor shall any such contract or any contract or arrangements entered into by or on behalf of the Company with any Director or the President and Vice-Presidents or with any Company or Partnership of or in which any Director or the President and Vice presidents shall be a member or otherwise interested be avoided nor shall any Director or President and Vice-Presidents so contracting or being such member or so interested be liable to account to the Company Special Director Government Directors etc. for any profit realised by such contact or arrangement by reason only of such Director or the President and Vice-President holding that office or of the fiduciary relation thereby established but the nature of the interest must be disclosed by the Director or President and Vice-President at the meeting of the Board at which the contact or arrangement is determined on, if the interest then exists or in any other case at the first meeting of the Board after the acquisition of the interest. Provided nevertheless that no Director shall vote as a Director in respect of any contract or arrangement in which he is so interested as aforesaid or take part in the proceedings thereat and he shall not be counted for the purpose of ascertaining whether there is quorum of Directors present. This proviso shall not apply to any contract by or on behalf of the Company to give to the Directors or the President and Vice Presidents or any of them any security by way of indemnity against any loss which they or any of them suffer by becoming or being securities for the Company. A general notice that the President and Vice-Presidents or any Director is a Director or a member of any specified Company or is a member of any specified firm and is to be regarded as interested in any subsequent transaction with such Company or firm shall, as regards any such transaction be sufficient disclosure under this article and after such general notice it shall not be necessary to give any

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special notice relating to any particular transaction with such Company or firm. (b) A Director may be or, become a Director of any Company promoted by this Company or in which this Company may be interested as Vendor, Shareholder or other wise and no such Director shall be accountable to the Company for any benefits received as a Director or member of such Company.

Rights of Directors

112. Expect as otherwise provided by these Articles, all the Directors of the

Company shall have in all matters equal rights and privileges, and be subject to equal obligations and duties in respect of the affairs of the Company.

Directors to comply with sec 299

113. Notwithstanding anything contained in these presents any Director contracting with the Company shall comply with the provisions of Section 299 of the Companies Act, 1956.

Directors’ power to contract with company.

114. Subject to the limitations prescribed in the Companies Act, 1956 the

Directors shall be entitled to contract with the Company and no Directors shall be disqualified by their having contracted with the Company as aforesaid.

ROTATION OF DIRECTORS

Rotation and Retirement of Directors

11 5. At the first annual general meeting of the Company the whole of the directors excepting the Government Director, corporation Director, Special Director, Debenture Director shall retire from office. At every subsequent annual meeting one third of the Directors liable to retirement by rotation for the time being or if their number is not three or a multiple of three, then the number nearest to one third shall retire from office.

Proportion of Directors to Retire 116. Not less than two-thirds of the total number of Directors shall be appointed

on the Board of Directors of the Company by holders of Equity Shares in General Meeting and the said shareholders Directors shall be subject to retirement by rotation and the provisions as to holding of qualification shares, etc. shall apply to each such Directors.

Retiring Director eligible for re-election

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117. A retiring Director shall be eligible for re-election and the Company at the General Meeting at which a director retires in the manner aforesaid may fill up the vacated office by electing a person thereto.

Which Directors to retire

118. The Directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who become Directors on the same day, those to retire shall unless they otherwise agree among themselves, be determined by lot.

Retiring Directors to remain in office till successors appointed

119. Subject to Section 256 of the Act, if at any meeting at which an election of Directors ought to take place, the place of the vacating or deceased Directors is not filled up and the meeting has not expressly resolved not to fill up the vacancy the meeting shall stand adjourned till the same day in the next week at the same time, and place or if that day is a public holiday till the next succeeding day which is not a public holiday at the same time and place, and if at the adjourned meeting the place of vacating Directors is not filled up and the meeting has also not expressly resolved not to fill up the vacancy, then the vacating Directors or such of them as have not had their places filled up shall be deemed to have been reappointed at the adjourned meeting.

Power of General Meeting to increase or reduce number of Director

120. Subject to the provisions of Section 252, 255 and 259 the Company in General Meeting may increase or reduce the number of Directors subject to the limits set out in Article 97(a) and may also determine in what rotation the increased or reduced number is to retire.

Power to remove Directors by ordinary resolution 121. Subject to Provisions of Section 284, the Company by Ordinary Resolution,

may at any time remove any Director except the non-rotational directors representing the institutions, the collaborator, if any, and the President before the expiry of his period of Office, and may by Ordinary Resolution appoint another person in his stead. The person so appointed shall hold Office until the date upto which his predecessor would have held Office if he had not been removed as aforementioned. A Director so removed from Office shall not be reappointed as a Director by the Board of Directors. Special Notice shall be required of any resolution to remove a Director under this Article or to appoint somebody instead of the Director at the meeting at which he is removed.

Right of persons other than retiring Directors to stand for Directorships 122. A person not being a retiring Director shall be eligible for appointment to the

off ice of a Director at any general meeting if he or some other member intending to propose him as a Director has, not less than fourteen days before

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the meeting, left at the office of the Company a notice in writing under his hand signifying his candidature for the office of the Director, or the intention of such member to propose him as a candidate for that off ice as the case may be.

Register of Directors and notification or change to Registrar 123. The Company shall keep at its Principal Office a register containing the

addresses and occupation and the other particulars required by Section 303 of the Act of its Directors and Secretary and shall send to the Registrar of Companies returns as required by the Act.

Business to be carried

124. The business of the Company shall be carried on by the Board of Directors. Meeting of the Board 125. The Board may meet for the despatch of business, adjourn and other wise

regulate its meetings, as it thinks fit; provided that the meeting of the Board shall be held at least once in every three months and at least four such meeting shall be held in every year. Director may summon meeting

126. A Director may at any time convene a meeting of the Directors. It shall not be necessary to give notice of a meeting of the Directors to the Director who is not in India, subject to Section 286 of the Act. Question how decided

127. (1) Save as otherwise expressly provided in the Act, a meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the regulations of the Company for the time being vested in or exercisable by the Directors generally and all questions arising at any meeting of the Board shall be decided by a majority of the Board.

(2) In case of an equality of votes, the Chairman shall have a second or casting vote in addition to his vote as a Director. Right of continuing Directors when there is no quorum

128. The continuing Directors may act notwithstanding any vacancy in the Board, but if and so long as their number is reduced below four, the continuing Directors or Director may act or the purpose of increasing the number of Directors to four or for summoning a general meeting of the Company and for no other purpose.

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Quorum 129. The quorum for a meeting of the Board shall be one third of its total strength

(any fraction contained in that one third being rounded of as one) or twoDirectors whichever is higher; provided that where at any time the number of interested Directors is equal to or exceeds two-thirds of the total strength the number of the remaining Directors that is to say the number of Directors who are not interested present at the meeting being not less than two shall be the quorum during such time. The total strength of the Board shall mean the number of Directors actually holding office as Directors on the date of the resolution or meeting that is to-say, the total strength of the Board after deducting there from the number of Directors, if any, whose places are vacant at the time.

Election of Chairman of the Board 130. If no person has been appointed as Chairman or Vice-Chairman and President

under Article 102 above or if at any meeting the Chairman or Vice- Chairman and President is not present within 15 minutes after the time appointed for holding the meeting the, Directors present may, choose one of their number to be the Chairman of the meeting.

Powers to appoint committees and to delegate 131. (1) The Board may from time-to-time and at any time constitute one or more

committees of the Board consisting of such member or members of its body as the Board may think fit.

(2) Subject to the provisions of Section 292 the Board may delegate from time-to-time and at any time to any Committee so appointed all or any of the powers, authorities and discretion for the time being vested in the Board and such delegation may be made on such terms and subject to such conditions as the Board may think fit. (3) The Board may from time-to-time revoke, add to or vary any powers, authorities and discretions so delegated. Election of Chairman of the Committee

132. The meeting and proceedings of any such Committee consisting of two or more members shall be governed by the provisions herein contained for regulating the meeting and proceedings of the Directors so far as the same are applicable thereto, and not superseded by any regulations made by the Directors under the last preceding Articles.

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Election of Chairman of the Committee 133. (1) The Chairman or the President shall be the Chairman of its meetings; if

either is not available or if at any meeting either is not present within five minutes after the time appointed for holding the meeting, the members present may choose one of their number to be Chairman of the meeting. (2) The quorum of a Committee may be fixed by the Board and until so fixed if the Committee is of a single member or two members the quorum shall be one and if more than two members it shall be two.

Question how determined 134. (1) A Committee may meet and adjourn as it thinks proper.

(2) Question arising at any meeting of a Committee shall be determined by the sole member of the Committee or by a majority of votes of the members present as the case may be and in case of an equality of votes, the Chairman shall have a second or casting vote in addition to his vote as a member of the Committee. Acts done by Board or Committee valid not withstanding detective appointment etc.

135. All acts done by any meeting of the Board or of a Committee thereof or by any person acting as a Director shall, notwithstanding that if may be afterwards discovered that there was some defect in the appointment of anyone or more of such Directors or of any person acting as aforesaid or that they or any of them were disqualified, be as valid as if every such Director and such person had been duly appointed and was qualified to be a Director.

Resolution by circulation 136. Save as otherwise expressly provided in the Act, a resolution in writing

circulated in draft together with the necessary papers, if any to all the members of the Committee then in India (not being less in number than the quorum fixed 'for the meeting of the Board or the Committee as the case may be) and to all other Directors or members at their usual addresses in India and 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 shall be valid and effectual as if it had been a resolution duly passed at a meeting of the Board of Committee duly convened and held.

POWERS AND DUTIES OF DIRECTORS

General powers of Company vested in Directors 137. The business of the Company shall be managed by the Directors who may

exercise all such powers of the Company as are not, by the Act or any statutory modification thereof for the time being in force, or by these Articles, required to be exercised by the Company in General meeting subject

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nevertheless to any regulation of these Articles to the provisions of the said Act, and to such regulations being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the Company in General Meeting; but no regulation made by the Company in General Meeting, shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made.

Attorney to the Company 138. The Board may appoint at any time and from time-to-time by a Power of

Attorney under the Company's seal, any person to be the Attorney of the Company for such purpose and with such powers authorities and discretions not exceeding those vested in or exercisable by the Board under these Articles and for such period and subject to such conditions as the Board may from time to time think fit and any such appointment may, if the Board thinks fit be made in favour of the members, or any of the members of any firm or Company or the members, Directors, nominees or managers of any firm or Company or otherwise in favour of any body or persons whether nominated directly or indirectly by the Board and any such Power of Attorney may contain such provisions for the protection or convenience of person dealing attorney as the Board may think fit.

Powers to authorise Sub-delegations 139. The Board may authorise any such delegate or attorney as aforesaid to

subdelegate all or any of the powers, authorities and discretion for the time with such being vested in him.

Directors duty to comply with the provisions of the Act 140. The Board shall duly comply with the provisions of the Act and in particular

with the provisions in regard to the registration of the particulars of mortgages and charges affecting the property of the Company or created by it, and to keeping a register of the Directors, and to sending to the Registrar an annual list of members and a summary of particulars relating thereto, and notice of any consolidation or increase of share capital and copies of special resolutions and such other resolutions and agreements required to be filed under Section 192 of the Act and a copy of the register of Directors and notifications of any changes therein.

Specific powers of Directors 141. In furtherance of and without prejudice to the general powers conferred by

or implied in Article 132 and other powers conferred by these Articles and subject to the provisions of Section 292 and 293 of the Act, it is hereby expres sly declared that it shall be lawful for the Directors to carry out all or any of the objects set forth in the Memorandum of Association and to do the following things.

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To acquire and dispose of property and rights. (a) To purchase or otherwise acquire for the company any property, rights, or privileges which the Company is authorised to acquire at such price and generally on such terms and conditions as they think fit and to sell, let exchange, or otherwise dispose of property privileges and undertakings of the Company upon such terms and conditions and for such consideration as they may think fit. To pay for property in debentures etc. (b) At their discretion to pay for any property, rights and privileges acquired by or services rendered to the Company either wholly or partially in cash or in shares, bonds debentures or other securities of the Company and any such shares may be issued either as fully paid up or with such amount, credited as paid up the sum as may be either specifically charged upon all or any part of the property of the Company and its uncalled capital or not so charged. To secure contracts by mortgages (c) To secure the fulfilment of any contracts or agreements entered into by the Company by mortgage or charge of all or any of the property of the Company and its uncalled capital for the time being or in such other manner as they think fit. To appoint officers etc., (d) To appoint and at their discretion remove or suspend such agents Secretaries, Officers, Clerks and servants for permanent temporary or special services as they may from time-to-time think fit and to determine their powers and duties and fix their salaries or emoluments and to require security in such instances and to such amount as they think fit. To appoint officers etc., (e) 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 to compound and allow time for payments or satisfaction of any dues and of any claims or demands by or against the Company. To refer to arbitration (f) To refer any claims or demands by or against the Company to arbitration and observe and perform the awards. To give receipts (g) To make and give receipts releases and other discharges for money payable to the Company and of the claims and demands of the company. To act in matter of bankrupts and insolvents (h) To act on behalf of the Company in all matters relating to bankrupts and insolvents.

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To give security by way of indemnity (i) To execute in the name and on behalf of the Company in favour of any Director or other person who may incur or be about to incur personal liability for the benefit of the Company such mortgage of the Company's property (present and future) as they think fit and any such mortgage may contain in power of sale and such other powers, covenants and provisions as shall be agreed upon. To give commission (j) To give any person employed by the Company a commission on the Profits of any particular profits or transaction or a share in the general profits of the Company. To make contracts etc., (k) To enter into all such negotiations and contracts 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 consider expedient for or in relation to any of the matters aforesaid or otherwise for the purposes of the Company. To make bye laws (l) From time-to-time make, vary and repeal bye-laws for the regulations of the business for the Company its officers and servants. To set aside profits for Provident Fund (m) Before recommending any dividends to set aside portions of the profits of the Company to form a fund to provide for such pensions, gratuities or compensations; or to create any Provident Fund or Benefit Fund in such or any other manner as the Directors may deem fit. To make and alter rules (n) To make and alter rules and regulations concerning the time and manner of payments of the contributions of the employees and the Company respectively to any such fund and accrual employments, suspension and forfeiture of the benefits of the said fund and the application and disposal thereof and otherwise in relation to the working and management of the said Fund as the Directors shall from time-to-time think fit. (o) And generally, at their absolute discretion to do and perform every act and thing which they may consider necessary expedient for the purpose of carrying on the business of the Company excepting such acts and things as by Memorandum of Association of the Company or by these presents may stand prohibited.

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Secretary 142. The Board shall have power to appoint as the Secretary a person fit in their

opinion for the said office, for such period and on such terms and conditions as regards remuneration and otherwise as it may determine. The Secretary shall have such powers and duties as may, from time to time be delegated or entrusted to him by the Board or the President. Powers as to commencement of business

143. Any branch or kind of business which by the Memorandum of Association of the Company or these presents is expressly or by implication authorised to be undertaken by the Company, may be undertaken by the Board at such time or times as they shall think fit and further may be suffered by them to be in abeyance whether such branch or kind of business may have been actually commenced or not so long as the Board may deem it expedient not to commence or proceed with such branch or kind of business.

Designation of Powers 144. Subject to Section 292 the Board may delegate all or any of its powers to any

Directors jointly or severally or to any one Director at its discretion.

BORROWING Borrowing powers

1. (1) The Board may from time to time raise any money or any moneys or sums of money for the purpose of the Company; provided that the moneys to be borrowed together with the moneys already borrowed by the Company (apart from temporary loans obtained from the Company's bankers in the ordinary course of business) shall not without the sanction of the Company at a General Meeting exceed the aggregate of the paidup capital of the Company and its free reserves that is to say reserves not set apart for any specific purpose and in particular but subject to the provisions of Section 292 of the Act, the Board may from time to time at their discretion raise or borrow or secure the payment of any such sum or sums of money for the purpose of the Company, by the issue of debentures to members, perpetual or otherwise including debentures convertible into shares of this or any other company or perpetual annuities and in security of any such money so borrowed, raised or received, mortgage pledge or charge, the whole or any part of the property assets or revenue of the Company present or future including its uncalled capital by special assignment or otherwise or transfer or convey the same absolutely or in trust and give the lenders powers of sale and other powers as may be expedient and purchase redeem or pay off any securities.

Provided that every resolution passed by the Company in General Meeting in relation to the exercise of the power to borrow as stated above shall specify the total amount upto which moneys may be borrowed by the Board of Directors.

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Provided that subject to the provisions of Section 292 the Board may by a resolution delegate the power to borrow money otherwise than on debentures to a Committee of Directors or the President subject to limits specified in the said resolution of the total amount which may be so borrowed.

(2) Subject to the provisions of the clause next above the Board may from time to time at their discretion, raise or borrow or secure the repayment of any sum or sums of money for the purpose of the Company at such times and in such manner and upon such terms and conditions in all respects as they think fit, and in particular, by promissory notes or by opening current accounts, or by receiving deposits and advances with or without security, or by the issue of bonds, perpetual or redeemable 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 for the time being, or by mortgaging or charging or pledging any lands, buildings, bonds or other property and securities of the Company, or by such other means as to them may seem expedient.

Assignment of debentures

146. Such debentures, debenture stock, bonds or other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

Terms of Debenture issue 147. (a) Any such debentures, debenture stocks, 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 of the Company, or otherwise, provided that debentures with the right to allotment or conversion into shares shall not be issued except with the sanction of the Company in General Meeting.

(b) Any trust deed for the securing of any debentures or debentures stock and or any mortgage deed and or other bond for securing payment of moneys borrowed by or due by the Company and or any contract or any agreement made by the Company with any person, firm, body corporate, Government or authority who may render or agree, to render any financial assistance to the Company by way of loans advanced or by guaranteeing of any loan borrowed or other obligations of the Company or by subscription to the share capital of the Company or provide assistance in any other manner, may provide for the appointment, from time to time, by any such Mortgagee Lender, Trustee of or Holders of debentures or Contracting Party as aforesaid, of one or more persons to be a Director or Directors of the Company. Such Trust Deed, Mortgage Deed, Bond or Contract may provide that the persons appointing a Director as aforesaid may from time to time remove any Director so appointed by him and appoint any other person in his place and provide for

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filling up of any casual vacancy created by such person vacating office as such Director. Such power shall determine and terminate on the discharge or repayment of the respective Mortgage, Loan or Debt or Debentures or on the termination of such contract and any person so appointed as Director under Mortgage or Bond or Debenture Trust Deed or under such contract shall cease to hold office as such Director on the discharge of the same. Such appointment and provision in such document as aforesaid shall be valid and effective as if contained in these presents. (c) The Director or Directors so appointed by or under a Mortgage Deed or other bond or contract as aforesaid shall be called a Mortgagee Director or Mortgagee Directors and the Director if appointed as aforesaid under the provisions of a Debenture Trust Deed shall be called "Debenture Director". The words Mortgagee Director or "Debenture Director" shall mean the Mortgagee Director or Debenture Director for the time being in off ice. The Mortgagee Director or Debenture Director shall not be required to hold any qualification shares and shall not be liable to retire by rotation or to be removed from office by the Company. Such Mortgage Deed or Bond or Trust Deed or contract may contain such auxiliary provisions as may be arranged between the Company and mortgage Lender, the Trustee or contracting party as the case may be and all such provisions shall have effect notwithstanding any of the other provisions herein contained but subject to the provisions of the Act. (d) The Directors appointed as Mortgagee Director or Debenture Director under the Article shall be deemed to be ex-officio Directors. (e) The total number of Ex-officio Directors, if any, so appointed under this Article together with the other Ex-officio Directors, if any appointed under any other provisions of these presents shall not at anytime exceed one-third of the whole number of Directors for the time being.

Charges on uncalled capital

148. Any uncalled capital of the Company may be included in or charged by any mortgage or other security. Subsequent assigness of uncalled capital

149. Where any uncalled capital of the Company is charged, all persons taking any subsequent charge thereon shall take the same subject to such prior charge, and shall not be entitled, by notice to the share holders or otherwise, to obtain priority over such prior charge.

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Charges in favour of Directors for indemnity 150. If the Directors or any of them or any other persons, shall become personally

liable for the payment of any sum primarily due from the Company the Board may execute or cause to be executed any mortgage, charge or security over or affecting the whole or any part of the assets of the Company by way of indemnity to secure the Directors or other person so becoming liable as aforesaid from any loss in respect of such liability. Powers to be exercised by Board only at meeting

151. (1) Subject to the provisions of the Act the Board shall exercise the following powers on behalf of the Company and the said power shall be exercised only by resolution passed at the meetings of the Board:

(a) Power to make calls on shareholders in respect of moneys unpaid on their shares; (b) Power to issue debentures; (c) Power to borrow moneys otherwise than on debentures; (d) Power to invest the funds of the Company; (e) Power to make loans. (2) The Board may by a meeting delegate to any Committee of the Board or to the President the powers specified in sub-clauses (c), (d) and (e) above. (3) Every resolution delegating the power set out in sub-clause (c) shall specify the total amount outstanding at any one time up to which moneys may be borrowed by the said delegate. (4) Every resolution delegating the power referred to in sub-clause (d) shall specify the total amount upto which the funds may be invested and the nature of investments which may be made by the delegate. (5) Every resolution delegating the power referred to in sub-clause (e) above shall specify the total amount upto which loans may be made by the delegate, the purposes for which the loans may be made, and the maximum amount of loans that may be made for each such purpose in individual cases.

Register of mortgages to be kept 152. The Directors shall cause a proper register to be kept in accordance with the

provisions of the Companies Act, 1956 for all mortgages and charges specifically affecting the property of the Company and shall duly comply with the requirements of the said Act, in regard to the registration of mortgages and charges therein specified, and otherwise and shall also duly comply with

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the requirements of the said Act as to keeping a copy of every instrument creating any mortgage or charge by the Company at the off ice. Register of holders of debentures

153. Every Register of holders of debentures of the Company may be closed for any period not exceeding on the whole forty-five days in any year, and not exceeding thirty days at any one time. Subject as aforesaid every such register shall be opened to the inspection of registered holders of any such debentures and of any members but the company may in General Meeting impose any reasonable restrictions so that at least two hours in every day when such register is open, are appointed for inspection.

Inspection of copies and of Register of mortgages 154. The Company shall comply with the provisions of the Companies Act 1956, as

to allowing inspection of copies kept at the Principal office in pursuance of the said Act, and as to allowing inspection of the Register of mortgages to be kept at the off ice in pursuance of the said Act.

Supplying copies of register of holders of debentures 155. The Company shall comply with the provisions of The Companies Act 1956,

as to supplying copies of any register of holders of debentures or any trust deed for securing any issue of debentures. Rights of holders of debentures as to Balance Sheet

156. Holders of debentures shall have the same right to receive and inspect the Balance Sheet of the Company and the reports of the Auditors and other reports as are possessed by the members of the Company.

Minutes 157. (1) The Company shall comply with the requirements of Section 193 of the

Act in respect of the keeping of the minutes of all proceedings of every General Meeting and every meeting of the Board or any Committee of the Board.

(2) The Chairman of the meeting shall exclude at his absolute discretion such of the matters as are or could reasonably be regarded as defamatory of any person irrelevant or immaterial to the proceedings or detrimental to the interests of the Company.

MANAGING DIRECTOR AND VICE-PRESIDENT

158. (a) The Board shall appoint with such sanction of the Company in General

Meeting and subject to such terms and conditions as may be necessary the first Managing Director for a period of 5 years and to be renewed mutually agreed to for a further period of 5 years.

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(b) The Board may from time to time with such sanction of the Central Government as may be required by law appoint one or more of their body to the Office of Vice-President or Vice-Presidents. (c) The Directors may from time to time resolve that there shall be either one or more Vice-President. (d) In the event of any vacancy arising in the Office of a Vice-President or if the Directors resolve to increase the number of Vice-Presidents, the vacancy shall be filled by the Board of Directors and the Vice-President so appointed shall hold the Office for such period as the Board of Directors may fix.

Tenure of Vice-President 159. If a Vice-President ceases to hold office as Director, he shall IPSOFACTO and

immediately cease to be a Vice-President. Managing Director not to retire by rotation

160. The Managing Director shall not be liable to retirement by rotation so long as he holds office as President.

Remuneration of Vice President 161. The Vice-Presidents shall, subject to such sanction by the Central

Government as by law required, receive such remuneration (whether by way of salary, commission or participation in profits or partly in one way and partly in another) as the Company in General Meeting may from time to time determine. Power to be exercised by the Managing Director

162. The Managing Director shall, subject to the supervision and control and policy directives of the Board of Directors have the management of all the affairs and business of the Company and of all its assets and he shall have power to do all acts and things which he shall consider necessary or desirable in the management of the affairs of the Company and to exercise and perform all the powers and duties vested in him for the time being in accordance with the provisions of these presents or by any resolution of the Board.

(a) Subject to the provisions of Section 293 of the Act, to sell for cash or on credit and either wholesale or in retail and for ready or future delivery and realise the proceeds of sale or property movable or immovable or any rights or privileges belonging to the Company or in which the Company is interested or over which the Company may have any such power of disposal, and to exchange such property or rights belonging to the Company for other property or rights.

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(b) To determine from time to time who shall be entitled to sign on the Company's dividend warrants, releases, contracts and documents and to give the necessary authority for such purposes. (c) To execute all deeds, agreements, contracts, receipts and other documents that may be necessary or expedient for the purpose of the Company and to make and give receipts, releases and other discharges for moneys or goods or property received in the usual course of business of the Company or lent or payable to or belonging to the Company and for the claims and demands of the Company. (d) To enter into, vary or cancel all manner of contracts on behalf of the Company. (e) To engage and in his discretion to remove, suspend, dismiss and remunerate bankers, legal advisers, accountants, managers, officers, cashiers, clerks, agents, commission agents, dealers, brokers, foremen, servants, employees or technical or skilled assistants as from time to time may in their opinion be necessary or advisable in the interests of the Company and upon such terms as to duration of employment, remuneration or otherwise, and may require security in such instances and to such amounts as the Managing Director thinks fit. (f) To acquire by purchase, lease, exchange, pledge, hypothecation, or otherwise transfer lands, estates, fields, buildings, office show rooms, godowns and other buildings in the state of Tamil Nadu or elsewhere Machinery, Engine Plant, Rolling stock, Tools, Machine Tools Outfits, Stores, Hardware and any other materials of whatever description either on credit or for cash and for present or future delivery. (g) To plan, develop, improve, cut down, process, sell or otherwise dispose of the products of the Company and to incur all expenses in this behalf. (h) To erect, maintain, repair, equip, alter and extend buildings and machinery in the state of Tamil Nadu or in any other place. (i) To enter into all such negotiations and contracts 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 for or in relation to any of the matters aforesaid or otherwise for the purpose of the Company. (j) To pay all moneys due by the Company and look after the finance of the Company.

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(k) To open current and time deposit accounts or other account with banker or bankers at his choice, and to operate on such accounts and also when necessary to overdraw or take loans on such accounts on the security of the Company or of any of its assets. (l) To draw, accept, endorse, discount, negotiate and discharge on behalf of the Company all bills of exchange, promissory notes, cheques, hundies, drafts, railway receipts, dock warrants, delivery orders, Government Promissory notes, other Government instruments, bonds, debentures or debenture-stocks of Corporation, Local Bodies, Port Trusts, Improvement Trusts or other corporate bodies and to execute transfer deeds for transfer ring stocks, shares or stock-certificates of the Government and other local or corporate bodies in connection with any business or any subject of the Company. (m) Subject to Article 144 above to borrow from time to time such sums of moneys for the purpose of the Company upon such terms as may be expedient and with or without security. (n) To receive and give effectual receipts, and discharge on behalf of and against the Company for moneys, funds, goods or property lent, payable or belonging to the Company or for advances against the goods of the Company. (o) To make or receive advance of money, goods, machinery, plant and other things by way of sale, mortgage, hypothecation, lien, pledge, deposit or otherwise in such manner and on such terms as the Managing Director may deem fit. (p) To submit to arbitration and enforce the fulfilment of awards regarding any claims in which the Company may be interested to adjust, settle or compromise any claims due to or by the Company and to give to debtors of the Company time for payment. (q) To institute, appear in or defend any legal proceedings in the name of and on behalf of the Company to sign any pleading or other documents to engage or to instruct any Advocate, Solicitors, and Lawyers and to execute any vakalat or other authority in their favour and to compound and compromise any claim, suit or proceedings. (r) To make all manner of insurances. (s) To exercise authority as a controlling officer over all personnel employed for the company and over all personnel affairs.

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(t) To delegate any of the powers, authorities and discretions for the time being vested in the Managing Director or the Vice-Presidents or other Executives of the Company and also from time to time provide by the appointment of an attorney or attorneys to sign, seal, execute, deliver, register or cause to be registered all instruments, deeds, documents or writings, usually necessary or expedient for any of the purposes of the Company not requiring the common seal of the Company. Provided that the Directors may from time to time, revoke, withdraw, alter or vary all or any of the above powers.

163. The Board may delegate substantial powers of management to the Vice

President.

XVII. MATERIAL CONTRACTS AND DOCUMENTS

1) Memorandum and Articles of Association of the Company as amended from time to time.

2) Certificate of Incorporation of dated 29th September 1916 3) Scheme of Amalgamation between Henkel India Limited and Henkel Spic Limited. 4) Orders dated 26th April 2005 of the Hon'ble High Court of Judicature at Chennai

approving the Scheme of Amalgamation. 5) Application made to BSE for listing of the securities. 6) Copy of Agreement with National Securities Depository Ltd. (NSDL) dated 11th

July, 2005. 7) Copies of Annual Report of Henkel India Limited (formerly Calcutta Chemical

Limited) for the year ended 31st December, 2004. 8) Copies of Consent letters from Auditors, Registrars.

XVIII. DECLARATION NO STATEMENT MADE IN THIS INFORMATION MEMORANDUM SHALL CONTRAVENE ANY OF THE PROVISIONS OF THE COMPANIES ACT, 1956 AND THE RULES MADE THEREUNDER. ALL THE LEGAL REQUIREMENTS AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC., ISSUED BY SEBI, GOVERNMENT OR ANY OTHER COMPETENT AUTHORITY IN RESPECT OF LISTING OF SECURITIES HAVE BEEN DULY COMPLIED WITH. Your faithfully For Henkel India Ltd A.Satish Kumar Managing Director Place : CHENNAI Date : 7/10/05

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