LETTER OF OFFERThis Document is Important And Requires Your Immediate Attention

This Letter of Offer is being sent to you as a shareholder of Inertia Industries Limited. If you require any clarifications about the action to be taken, youshould consult your stockbroker or investment consultant or the Manager to the Offer. In case you have sold your shares in the Target Company, pleasehand over this Letter of Offer and the accompanying Form of Acceptance cum Acknowledgement, Form of Withdrawal and Transfer Deed to theMember of Stock Exchange through whom the said sale was effected.

McDowell Alcobev LimitedRegistered Office : 3, Second Line Beach, Chennai 600 001

Corporate Office: 17th Floor, Hoechst House, Nariman Point, Mumbai 400 021(Tel.: 022-22834503 Fax: 022-22834552)

MAKES A CASH OFFER AT Rs 10/- (RUPEES TEN ONLY) PER FULLY PAID UP EQUITY SHARE (THE OFFER PRICE FOR PARTLYPAID UP EQUITY SHARES IS Rs 5/- (RUPEES FIVE ONLY) PER PARTLY PAID UP SHARE)

PURSUANT to Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 andsubsequent amendments thereto

TO ACQUIRE 13,699,985 EQUITY SHARESrepresenting 25.00% of present issued equity share capital (which constitute 25.04% of voting capital, refer para 5.2 for details)

of

Inertia Industries LimitedRegistered Office: O-14, 1st Floor, Lajpat Nagar-II, New Delhi 110 024

(Tel/Fax: 011-2983 5424 / 2984 5425)Please Note :1) This Offer is being made pursuant to Regulation 10 &12 of the SEBI Takeover Code.2) The Offer is subject to the approval(s), if any, of the Reserve Bank of India under the Foreign Exchange Management Act, 1999 for acquiring the

shares tendered by non-resident shareholders including NRIs/FIIs and OCBs.3) If the aggregate of the valid response exceeds 13,699,985 equity shares (representing 25.00% of present issued equity share capital and 25.04%

of the voting capital), then the Acquirer shall accept the Offers received from the Shareholders of Inertia Industries Limited on a proportionatebasis, in consultation with the Manager to the Offer, in accordance with Regulation 21(6) of the SEBI Takeover Code.

4) If there is any upward revision in the Offer Price by the Acquirer till the last date of revision i.e. May 12, 2004 (Wednesday), or withdrawal of theOffer in terms of the SEBI Takeover Code, the same would be informed by way of a public announcement in the same newspapers where theoriginal Public Announcement dated May 19, 2003 had appeared. Such revised offer price would be payable for all the Shares tendered anytimeduring the Offer and accepted under the Offer.

5) The procedure for acceptance is set out in Section 8 of this Letter of Offer. A Form of Acceptance cum Acknowledgement is enclosed with thisLetter of Offer.

6) The Public Announcement, Corrigendum to the Public Announcement, Letter of Offer, Form of Acceptance cum Acknowledgement and Form ofWithdrawal would also be available on SEBI’s website http://www.sebi.gov.in

7) Shareholders who have accepted the Offer by tendering the requisite documents, in terms of the Public Announcement / Letter of Offer,can withdraw the same upto three working days prior to the date of the closure of the offer.

8) If there is a competitive bid:·� The public offer under all the subsisting bids shall close on the same date.� As the offer price cannot be revised during the period after May 12, 2004 (Wednesday), it would therefore be in the interest of

shareholders to wait till the commencement of that period to know the final offer price of each bid and tender their acceptanceaccordingly.

9) For Risk Factors please refer overleaf.All future correspondence, if any, should be addressed to the Registrar to the Offer at address mentioned below.

Manager to the Offer Registrar to the Offer

Ambit Corporate Finance Pvt. Limited Intime Spectrum Registry Limited1st Floor, Nirlac Center, B-25, C-13, Pannalal Silk Mills Compound,Qutab Institutional Area, L.B.S Marg, Bhandup(W),New Delhi 110 016 Mumbai – 400 078Tel : 011 5153 1819, Tel : 022 5555 5454,Fax : 011 5153 3020 Fax : 022 2567 2693Email: inertiaoffer@ambitpte.com Email: nikunj@intimespectrum.comContact persons : Nitin Tandon, Sanjay Bansal Contact person: Nikunj Daftary

OFFER OPENS: April 22, 2004 (Thursday) OFFER CLOSES: May 21, 2004 (Friday)

SCHEDULE OF MAJOR ACTIVITIES OF THE OFFER

Activity Original Date Revised DateDate of Original Public Announcement May 19, 2003 (Monday) May 19, 2003 (Monday)

Specified Date (for the purpose of determining the names of June 13, 2003 (Friday) June 13, 2003 (Friday)shareholders to whom the Letter of Offer would be sent)

Last date for a competitive bid June 9, 2003 (Monday) June 9, 2003 (Monday)

Last date for completion of dispatch of the LOO to the June 28, 2003 (Saturday) April 17, 2004 (Saturday)shareholders of the Target Company

Date of revised Public Announcement (Corrigendum) –– April 21, 2004 (Wednesday)

Date of Opening of the Offer July 16, 2003 (Wednesday) April 22, 2004 (Thursday)

Last date for revising the Offer Price August 5, 2003 (Tuesday) May 12, 2004 (Wednesday)

Last date for withdrawal by Shareholders who have August 11, 2003 (Monday) May 18, 2004 (Tuesday)accepted the OfferDate of Closing of the Offer August 14, 2003 (Thursday) May 21, 2004 (Friday)

Last date for communicating rejection/acceptance and the September 13, 2003 (Saturday) June 19, 2004 (Saturday)corresponding payment for acquired shares and /or theshare certificate for the rejected shares will be dispatched/credited

Risk Factors:1. Currently, the equity shares of the Target Company are not being traded in any of the stock exchanges

where they are listed (refer para 5.3). Further, the equity shares of Inertia were suspended from trading onBSE w.e.f February 14, 2003. Therefore, ability of the shareholders to trade / exit from the Target Companyis restricted.

2. Equity shares of Target Company are not uniformly listed on all stock exchanges. 44.91% of the votingcapital is not listed on DSE, 78.07% on BSE, 78.07% on ASE, 78.07% on CSE and 43.50% on JSE.

3. Target Company had filed reference with BIFR under section 15(1) of Sick Industrial Companies Act(Special Proisions), 1985 declaring itself as a Sick Industrial Company (refer para 5.19.1). BIFR vide theirletter dated February 20, 2004 has registered the reference of Inertia. Currently Target Company has noplans in place to take itself out of the purview of BIFR.

4. The beer Industry is heavily regulated by Government. The business of MAL and Inertia is subject to theregulations of State Government policy on excise. Changes in the fiscal policies of Government could havean adverse impact on their profitability. A significant change in the Government liberalization andderegulation policies could affect business and economic conditions in India and the business of theAcquirer and Target Company in particular. Adverse changes in other regulation such as the distributionnorms may affect the operations. States may individually decide to impose prohibition on the sale ofalcoholic beverages, including beer, as has been done in the past.

5. Beer industry is witnessing high level of competition as the domestic players gear up to compete for a largershare of the market. The entry of multinationals in the domestic brewing business has led to increasedcompetition. Growing competition may force the MAL / Inertia to reduce the prices of its products andservices, which may reduce its revenues and margins and/or decrease its market share, either of whichcould have a materially adverse effect on their business, financial condition and results of operations.Competition may also increase if tariff barriers on imported beer are lowered.

6. The beer industry has a negative perception in the Indian cultural context. This leads to circumstances likeban on advertising of alcoholic beverages in the print / TV media, which is not conducive to businessdevelopment.

7. Evolving beer industry standards, changing customer preferences and new product introductions have animportant impact on the business. MAL and Inertia’s success depends on its ability to keep pace with thesechanges. They may not successfully address these developments on a timely basis, and even if addressed,their products may not be successful in the market place. In addition, products developed by competingcompanies may make MAL / Inertia’s products less competitive.

8. Beer business is seasonal in nature with the sales volume dipping during the period July to January eachyear because of monsoon and cold weather conditions.

TABLE OF CONTENTS

Sr. No. Subject Page No.

1. Disclaimer 1

2. Details of the Offer 1

3. Background of the Acquirer 3

4. Disclosure in terms of Regulation 21(3) 9

5. Background of the Target Company 9

6. Offer Price and Financial Arrangements 18

7. Terms and Conditions of the Offer 20

8. Procedure for Acceptance and Settlement 21

9. Documents for Inspection 23

10. Declaration by the Acquirer 24

Attached - Form of Acceptance cum Acknowledgement and Form of Withdrawal.

DEFINITIONS/ABBREVIATIONS:

Acquirer / MAL McDowell Alcobev Limited

Sellers United Breweries Limited (“UBL”), Feedback Computers Private Limited (“Feedback”)

and Accra Investments Private Limited (“Accra”)

BSE The Stock Exchange, Mumbai

Consideration The total fund requirement for the Offer i.e. Rs. 1370 lakhs assuming full acceptance of

the Offer.

Corrigendum Revised Public Announcement to be made by the Acquirer on April 21, 2004

DSE The Delhi Stock Exchange, Delhi

LOO Letter of Offer

FOA Form of Acceptance cum Acknowledgement

FOW Form of Withdrawal

FEMA Foreign Exchange Management Act, 1999

Manager/ Manager to Ambit Corporate Finance Private Limited

the Offer/ Ambit

NRI Non Resident Indian

Offer Cash offer being made by the Acquirer to acquire upto 13,699,985 equity shares (both

fully paid and partly paid up) of Inertia Industries Limited representing 25.00% of issued

and subscribed equity share capital (which constitute 25.04 % of the voting capital, refer

para 5.2 of LOO) of Inertia at the Offer Price.

Offer Period Period between date of Public Announcement i.e May 19, 2003 and the date of completion

of offer formalities i.e June 19, 2004

Offer Price Rs 10 per fully paid-up equity share and Rs. 5/- per partly paid up share

Persons eligible to Registered and unregistered shareholders of Inertia Industries Limited other than the

participate in the Offer Acquirer, Sellers and parties to the agreement (SPA)

Share Purchase Share Purchase Agreement dated May 15, 2003 between MAL ( as Acquirer) and UBL,

Agreement /SPA Feedback, Accra (as Sellers)

Public Announcement /PA Original Public Announcement of this Offer made by the Acquirer on May 19, 2003

Registrar/Registrar Intime Spectrum Registry Limited (“Intime”)

to the Offer

SEBI Securities and Exchange Board of India

Specified Date Date for the purpose of determining the names of Shareholders, as appearing in the

Register of Members of Inertia Industries Limited or the records of the Depositories, to

whom the Letter of Offer should be sent, i.e. June 13, 2003

SEBI Takeover Code Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)

or the Regulations Regulations 1997, and subsequent amendments thereto.

Target Company/ Inertia Inertia Industries Limited

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1. DISCLAIMER

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE FILING OF THE DRAFT LETTER OF OFFER WITH SEBISHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED,VETTED OR APPROVED BY SEBI. THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FORA LIMITED PURPOSE OF OVERSEEING WHETHER THE DISCLOSURES CONTAINED THEREIN AREGENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT ISTO FACILITATE THE SHAREHOLDERS OF INERTIA TO TAKE AN INFORMED DECISION WITH REGARD TOTHE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OFACQUIRER OR OF THE COMPANY WHOSE SHARES/CONTROL ARE/IS PROPOSED TO BE ACQUIRED ORFOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OFOFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT, WHILE THE ACQUIRER IS PRIMARILYRESPONSIBLE FOR THE CORRECTNESS, ADEQUACY, AND DISCLOSURE OF ALL RELEVANTINFORMATION IN THIS LETTER OF OFFER, THE MERCHANT BANKER IS EXPECTED TO EXERCISE DUEDILIGENCE TO ENSURE THAT THE ACQUIRER DULY DISCHARGES ITS RESPONSIBILITY ADEQUATELY.IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER, AMBIT CORPORATEFINANCE PVT LTD, HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED MAY 31, 2003 TO SEBI INACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS)REGULATIONS 1997 AND SUBSEQUENT AMENDMENT(S) THERETO. THE FILING OF THE LETTER OFOFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAININGSUCH STATUTORY CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE OFFER.”

THE ACQUIRER ACCEPTS NO RESPONSIBILITY FOR STATEMENTS MADE OTHERWISE THAN IN THEOFFER DOCUMENT OR IN THE ADVERTISEMENT OR ANY OTHER MATERIAL ISSUED BY OR AT THEINSTANCE OF THE ACQUIRER AND THE MANAGER TO THE OFFER, AND ANY ONE PLACING RELIANCEON ANY OTHER SOURCE OF INFORMATION WOULD BE DOING SO AT HIS/HER/THEIR OWN RISK.

2. DETAILS OF THE OFFER

2.1 Background of the Offer

2.1.1 This Offer is being made in compliance with Regulation 10 and Regulation 12 of the Regulations.

2.1.2 In terms of the Share Purchase Agreement (“SPA”), entered into on May 15, 2003 between McDowellAlcobev Limited, a company incorporated under the Companies Act, 1956 and having its registered officeat 3, Second Line Beach, Chennai 600 001 (hereinafter referred to as “MAL” or the “Acquirer”) and (a)United Breweries Limited (“UBL”), a company incorporated under the Companies Act, 1956 and having itsregistered office at UB Anchorage, 100/1, Richmond Road, Bangalore 560 025 (Phone: 080-22127084,Fax: 080-2127212 ) and (b) Feedback Computers Private Limited (“Feedback”), a company incorporatedunder the Companies Act, 1956 and having its registered office at 6, Sea Foam, 49-A Cuffe Parade, WindyHall Lane, Colaba, Mumbai 400 005 (Phone/Fax: 022-22151698) and (c) Accra Investments PrivateLimited (“Accra”), a company incorporated under the Companies Act, 1956 and having its registered officeat 6, Sea Foam, 49-A Cuffe Parade, Windy Hall Lane, Colaba, Mumbai 400 005 (Phone/Fax: 22151698)(UBL, Feedback and Accra are hereinafter together referred to as the “Sellers”), the Sellers have agreedto sell and the Acquirer has agreed to purchase 28,360,853 fully paid up equity shares of (Rs. 10/- each )held by the Sellers in Inertia Industries Limited, a company incorporated under the Companies Act, 1956and having its registered office at O-14, Lajpat Nagar-II, New Delhi 110 024 (hereinafter referred to as“Inertia” or “Target Company”), for cash at a price of Rs. 10/- per fully paid-up equity share upon the termsand subject to the conditions of the SPA, representing 51.75% of present issued share capital of Inertiaas on the date of this Offer (“SPA Shares”). Subject to the aforesaid, as on date of Original PA and thisLOO, the Acquirer or any of its directors or any persons deemed to be acting in concert with the Acquirerdo not hold any equity shares of Inertia.

2.1.3 Change in name of United Breweries (Holdings) Limited (“UBHL”) and transfer of its shareholdingto UBL

UBL (formerly known as UB Beer Ltd.) (the joint venture partner of MAL), incorporated as UB InfrastructureProjects Limited in 1999, is the flagship company of the UB Group. The brewing business of UnitedBreweries (Holdings) Limited (formerly known as United Breweries Limited) was demerged into UBL w.e.f.August 1, 2001. UBL – the joint venture partner with respect to MAL and UBL (formerly known as UB BeerLimited) are the same company. Recent name changes of UB group companies is highlighted below:

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2.1.4 UBL, the leader in the Indian beer industry, is the flagship Company of the UB Group and is engaged inbrewing & marketing of beer. Accra and Feedback are companies promoted by Mr. Ravinder Kumar Jain,a professional with more than 25 years experience in the brewing & distilling industry. UB GeneralInvestments Limited (“UBGIL”) (formerly known as UBHL) along with Feedback, an associate of UBcollectively acquired 23,800,000 shares (representing 43.43% of the enhanced capital of Inertia -54,799,938 equity shares) in Inertia through preferential allotment on January 12, 2001. With the resultthe shareholding of UBHL increased from 13.31% to 40.92% and of Feedback increased from NIL to10.03% thereby increasing their collective stake from 41,27,987 (13.31%) to 2,79,27,987 equity shares(50.95%). A report in this regard was filed with SEBI in terms of regulation 3(4) of the Regulations. It wasobserved that UBHL and Feedback had not complied with the Regulation 3 (3) and hence, videAdjudication Order dated May 9, 2003 a penalty of Rs. 10,000 each (aggregating to Rs. 20,000) waslevied on UBGIL and Feedback. The penalty has since then been paid. UBGIL has transferred its entireholding of 40.92% to United Breweries Limited (formerly known as UB Beer Ltd.) through inter se transferamong group companies on July 30, 2001. With the result of which the shareholding of UBL increasedfrom NIL to 40.92%. UBL and Feedback have been the promoters of the Target Company post January12, 2001, when they acquired management control over the Target Company via the above preferentialallotment. Now MAL, as part of SPA has agreed to purchase the entire 40.92% held by UBL and 10.03%held by Feedback.

2.1.5 Salient Features of SPA� In terms of the SPA, Acquirer has paid the consideration payable to the Sellers. The Sellers have

deposited the SPA Shares in an escrow account (hereinafter referred to as “SPA Escrow Account”)with the escrow agent, Rabo India Finance Private Limited, wherein the SPA Shares would be helduntil the Acquirer completes all the formalities of the Open Offer to be made in terms of theRegulations.

� On completion of formalities as aforesaid and, upon certification from the Manager to the Offer, the SPAShares would be transferred from the SPA Escrow Account to the beneficiary account of the Acquirer andthe persons nominated by the Acquirer would be appointed as directors of the Target Company inaccordance with Regulations 23(3) and/or Regulations 23(6) of the Regulations. Upon completion of theobligations under the SEBI Takeover Code, the Acquirer will acquire control over the Target Company andtherefore reserves the right to seek the reconstitution of the Board of Directors of Inertia, in accordancewith the provisions contained in the Regulations and the Companies Act, 1956.

� In the event of any non compliance of any of the provisions of the Regulations or non compliance ofthe Offer, then in terms of Regulation 22(16) of the Regulations, the SPA agreement would not beacted upon.

2.1.6 The acquisition of Inertia is in line with the objective of MAL to emerge as a major player in the brewingindustry by gaining access to all the key Indian markets through acquisition of existing breweries, orgreenfield projects. Currently, MAL has no manufacturing facility in the northern and western region of thecountry. MAL’s two wholly owned subsidiaries viz. GMR Beverages and Industries Limited (GMR) andEmpee Breweries Limited (Empee) have breweries in Andhra Pradesh, Kerala and Tamil Nadu. Inertiaoffers MAL a ready market in the northern and western region of the country and its brands like Sandpiper,Turbo, Zingaro and Guru shall facilitate MAL in establishing itself in the brewing industry.

2.1.7 Acquirer and Target Company are in the same line of business. MAL has presence in southern region ofthe country via its subsidiaries Empee, and GMR, which have breweries in the states of Tamil Nadu,

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Kerala and Andhra Pradesh. MAL also has popular brands Bullet and Kalyani Black Label, which havea good market in northern and western India. The Acquirer has no manufacturing arrangement of its ownin northern and western India. The Target Company has its breweries in northern (in Haryana State) andwestern (in Maharashtra State) India. The Target Company also has popular brands viz. Sandpiper, Turbo,Zingaro and Guru, which have a well established market in northern India. With the acquisition of TargetCompany, the Acquirer will get a foothold in the northern and western markets and also with the brandsof Target Company its market share (along with its subsidiaries) is expected to go up to 10%.

2.1.8 Acquirer during the 12 months preceding the date of the Original PA and this LOO has not acquired anyequity shares of Inertia other than the SPA Shares mentioned in para 2.1.2

2.1.9 Pursuant to this offer, the public shareholding will not be reduced to 10% or less of the voting equity capitalof Inertia and therefore Regulation 21(3) of the SEBI Takeover Code is not applicable.

2.1.10 The Acquirer, Sellers and Inertia have not been prohibited by SEBI from dealing in securities, in terms ofdirection issued u/s 11B of the SEBI Act or under any regulations made under the SEBI Act.

2.2 Details of the proposed Offer2.2.1 The original PA dated May 19, 2003 in respect of this Offer was made in the following newspapers, in

accordance with provisions of the SEBI Takeover Code.

NEWSPAPERS LANGUAGE EDITIONSThe Financial Express English All EditionsJansatta Hindi All EditionsMaharashtra Times Marathi Mumbai

The Corrigendum dated April 21, 2004 will also be published in the above newspapers. The original PAand the Corrigendum are also available on SEBI’s website http://www.sebi.gov.in.

2.2.2 The Offer is to acquire 13,699,985 equity shares of Inertia, representing 25.00% of its total equity capitalwhich constitute 25.04% of voting capital (refer para 5.2 for details) at a price of Rs. 10/- (Rupees ten only)per fully paid equity share (and the offer price for partly paid up shares is Rs. 5 /- (Rupees five only) perpartly paid up share). The entire consideration is payable in cash. The Offer is subject to the approval ofthe Reserve Bank of India under the FEMA for acquiring the shares tendered by non-resident shareholdersincluding NRIs/FIIs and OCBs.

2.2.3 The Shares to be acquired under the Offer will be acquired free from all liens, charges, and encumbrancesand together with all rights attaching thereto, including the rights to all dividends to be declared after allthe formalities relating to this Offer are completed.

2.2.4 The Offer is NOT subject to any minimum level of acceptance and the Acquirer will acquire all the fullypaid-up and partly paid up equity shares of Inertia that are validly tendered in terms of this Offer up toa maximum of 13,699,985 equity shares (representing 25.00% of present issued equity share capital and25.04% of the voting capital) at the Offer Price of Rs. 10/- per fully paid equity share (and the offer pricefor partly paid up shares is Rs. 5 /- per partly paid up share). If the aggregate of the valid responseexceeds 13,699,985 equity shares (representing 25.00% of present issued equity share capital and25.04% of the voting capital), then the Acquirer shall accept the Offers received from the Shareholdersof Inertia on a proportionate basis, in consultation with the Manager to the Offer, in accordance withRegulation 21(6) of the SEBI Takeover Code.

2.2.5 Further terms and conditions of the Offer are set out in Section 7 of this Letter of Offer. The procedurefor acceptance and settlement is set out in Section 8 of this Letter of Offer.

2.3. Objects of the Offer2.3.1 This Offer is being made in compliance with Regulation 10 and Regulation 12 of the Regulations, for the

purposes of substantial acquisition of equity shares and / or voting rights accompanied with change incontrol and management of the Target Company thereby enabling MAL to exercise control over Inertia,inter-alia, through the right to appoint directors or through control over management or policy decisions,by virtue of its shareholding. The Acquirer reserves the right to seek reconstitution of the Board ofDirectors of the Target Company, in accordance with the provisions contained in the Regulations and theCompanies Act, 1956. The acquisition of Inertia is in line with the objective of MAL to emerge as a majorplayer in the brewing industry by gaining access to all the key Indian markets through acquisition ofexisting breweries, or greenfield projects. The names of the members of the Board of Directors, who wouldform part of the Target Company after the completion of Offer have not been decided as yet.

3. BACKGROUND OF THE ACQUIRER3.1 Background of the Acquirer3.1.1 MAL is a closely held company registered under the Companies Act, 1956, with its registered office at 3,

Second Line Beach, Chennai 600 001. MAL’s primary focus is brewing and marketing of beer. MAL wasincorporated in 1999. Securities issued by MAL are not listed on any Stock Exchange.

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3.1.2 MAL is a Joint Venture between UBL, Scottish & Newcastle India Private Limited (“S&N India”) and Accra.S&N India has invested in 40% of the issued and fully paid up equity capital of MAL whereas UBL andAccra hold 40% and 20% respectively of the paid up equity capital of MAL. The objective of the jointventure is to emerge as a major player in the brewing industry by gaining access to all the key Indianmarkets through acquisition of existing breweries, or greenfield projects or through securing toll brewingcontracts with existing breweries. MAL has two wholly owned subsidiaries which it recently acquired,GMR Beverages & Industries Limited, having a brewery in Andhra Pradesh and Empee Breweries Limitedhaving breweries in Tamil Nadu and Kerala.

3.1.3 UB Group, an Indian conglomerate promoted by Dr. Vijay Mallya which has presence in diverse sectorswhich inter-alia include brewing, distilling, pharmaceuticals, engineering, eco-tourism, print media, biotech/ life sciences, manufacturing of fertilizers, etc, has entered into a strategic alliance with Scottish &Newcastle Plc (“S&N”), a leading European Brewer and amongst the top 10 in the world, for a multifacetedfinancial, marketing and technical tie-up. Through the strategic alliance with S&N, UB Group is toconsolidate its leadership status and position itself to exploit emerging opportunities in the Indian Brewerylandscape. S&N’s strategic alliance with UB Group envisages investments in UBL and into a joint venturecompany i.e MAL, global distribution arrangement for Kingfisher – the flagship beer brand of UBL, licensearrangements for S&N brands in India and technical assistance.

3.1.4 UBL is the flagship Company of the UB Group and is engaged in brewing & marketing of beer and is theleader in the Indian beer industry. S&N India is a wholly owned Indian subsidiary of S&N. Accra andFeedback are companies promoted by Mr. Ravinder Kumar Jain, a professional with more than 25 yearsexperience in the brewing Industry, who is also the managing director of MAL.

3.1.5 The paid up share capital of MAL is Rs 1,387,500,000 (Rupees One Hundred Thirty Eight crore andseventy five lacs only), divided into (a) 15,350,000 equity shares of Rs. 10 each aggregating to Rs.15,35,00,000 (b) 11,000,000 0% Series “A” Convertible Redeemable Preference Shares (“CRPS”) of Rs.100 each aggregating to Rs. 1,100,000,000 and (c) 1,340,000 0% Series “B” CRPS of Rs. 100 eachaggregating to Rs. 134,000,000.

3.1.6 The Equity Shareholding Pattern of MAL as on the date of this LOO is as follows:

Shareholders Category No. of shares Percentage

Promoters* 15,350,000 100

FII/Mutual Funds/ FI’s/ Banks –– ––

Public –– ––

Total Equity Share capital 15,350,000 100

* (a) UBL - 6,140,000, (b) S&N India - 6,140,000, (c) Accra - 3,070,000

3.1.7 The Board of Directors of MAL as on the date of the original PA is as follows:

Name of the Director Designation Residential /Correspondence Address

Dr. Vijay Mallya Chairman P.O. Box 20196 Dubai, UAE

Dr. Neville Bain Deputy Chairman C/O Scottish & Newcastle Plc, 33 Ellersley Road, Edinburgh EH 12 6HX

Mr. R.K. Jain Managing Director 303-B, Bakhtawar, Shahid Bhagat Singh Road,Opp. Colaba, P.O. , Colaba, Mumbai- 400005

Mr. A.K. Ravi Nedungadi Director Flat No. 103, Delphi-III, Prestige Acropolis,20 Hosur Road, Bangalore 560029

Mr. Richard Gibb Director C/O Scottish & Newcastle Plc,33 Ellersley Road, Edinburgh EH 12 6HX

Mr. S.R. Gupte Alternate Director to Niladri, 66, Nepeansea Road, Mumbai 400 006Dr. Vijay Mallya

Dr. John David Brown Alternate Director to C/O Scottish & Newcastle Plc,Dr. Neville Bain 33 Ellersley Road, Edinburgh EH 12 6HX

Mr. A Raghunathan Alternate Director to 604 II B, Wallace ApartmentsMr. A.K. Ravi Nedungadi Nausher Bharucha Marg, Mumbai – 4000 007

Mr. John Cowden Alternate Director to C/O Scottish & Newcastle Plc,Mr. Richard Gibb 33 Ellersley Road, Edinburgh EH 12 6HX

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3.1.8 The Board of Directors of MAL as on the date of this LOO is as follows:

Name of the Director Designation Residential /Correspondence Address

Dr. Vijay Mallya Chairman 6, Bulkley Avenue, Sausalito,California, USA 94965

Dr. Neville Bain Deputy Chairman C/O Scottish & Newcastle Plc,33 Ellersley Road, Edinburgh EH 12 6HX

Mr. R.K. Jain Managing Director 303-B, Bakhtawar, Shahid Bhagat Singh Road,Opp. Colaba, P.O., Colaba, Mumbai- 400005

Mr. A.K. Ravi Nedungadi Director Flat No. 103, Delphi-III, Prestige Acropolis,20 Hosur Road, Bangalore 560029

Mr. Richard Gibb Director C/O Scottish & Newcastle Plc,33 Ellersley Road, Edinburgh EH 12 6HX

Mr. S.R. Gupte Alternate Director to Niladri, 66, Nepeansea Road,Dr. Vijay Mallya Mumbai 400 006

Mr.S.R Ainapur Alternate Director to 2, Gilder House67F, BhulabhaiMr.A.K. Ravi Nedungadi Desai Road, Mumbai 400 026.

Ms.Dina Wadia Alternate Director to 302, Plot No.276/277, Mohnesh Apartments-3Mr. Richard Gibb Sector 21, Nerul Navi Mumbai 400 706

3.1.9 Out of the above directors, Mr. S.R. Gupte, Mr. R.K. Jain and Mr. A.K. Ravi Nedungadi are also on theboard of Inertia. The provisions of Regulations 22(9) of the SEBI Takeover Code have been complied withand will continue to be complied with until all the formalities relating to the Offer are completed.

3.1.10 The provisions of the Regulations are not applicable to MAL since it is not a listed company neither hasit held any shares in any listed company till date (subject to the Share Purchase Agreement referred toin Para 2.1.2).

3.1.11 MAL, its directors and its promoters have not been prohibited by SEBI from dealing in securities, in termsof directions issued u/s 11B of the SEBI Act or under any regulations made under the SEBI Act.

3.1.12 Information on other companies promoted by MAL

A) Name of Company : GMR Beverages & Industries Ltd.(“GMR”)

Date of Incorporation : 13-11-2000

Nature of Business : Manufacturing of BeerRs.Lacs

December 31, 2003 March 31, 2003 13-11-2000 to(Unaudited) (Audited) 12.02.2002

(Audited)

Equity capital 2,000.0 2,000.0 2,000.0

Reserves (excluding revaluation reserves) –– –– (36.0)

Total Income 2,338.3 4,275.9 4,725.8

Profit After Tax (PAT) (126.0) (175.7) (36.0)

Earnings Per Shares (EPS) (0.6) (0.9) (0.2)

Net Asset Value (NAV) per share 8.4 9.0 9.8

GMR is not a sick industrial company.

6

B) Name of Company : Empee Breweries Ltd.(“Empee”)

Date of Incorporation : 16-12-1985

Nature of Business : Manufacturing of BeerRs.Lacs

December March March March31, 2003 31, 2003 31, 2002* 31, 2001*

(Unaudited) (Audited) (Audited) (Audited)

Equity capital 582.5 582.5 582.5 240.0

Reserves (excluding revaluation reserves) –– –– –– ––

Total Income 2,869.2 2,781.9 –– ––

Profit After Tax (PAT) (353.6) (460.6) –– ––

Earnings Per Shares (EPS) (6.1) (7.9) –– ––

Book value per share (4.0) 2.1 10.0 10.0

As on December 31, 2003, Empee has completely eroded its networth

* There is no Profit & Loss A/c for the years ending 2002, 2001 since Empee Breweries Limited had notcommenced commercial production in these years.

3.1.13 The summarized financial statements of MAL given hereunder are in compliance with 4.1.11 & 4.1.12 ofAnnexure 1 of the standard letter of offer :

Profit & Loss StatementRs. In lakhs

Period ended December March March March31, 2003 31, 2003 31, 2002 31, 2001

Unaudited Audited Audited Audited

Duration (months) 9 12 12 12

Income from Operations –– –– ––

Other Income 1,432.7 882.0 79.8 ––

Total Income 1,432.7 882.0 79.8 ––

Total Expenditure 779.9 435.5 28.5 ––

Profit /(Loss) before Depreciation,Interest and Tax 652.8 446.5 51.3 ––

Depreciation 206.8 242.9 –– ––

Interest 1,215.4 2067.8 91.8 ––

Profit /(Loss) before Tax (769.4) (1,864.2) (40.5) ––

Provision for Tax 215.9 685.1 –– ––

Profit /(Loss) after Tax (553.5) (1,179.1) (40.5) ––

Balance Sheet Statement Rs. In lakhs

As on December March March March31, 2003 31, 2003 31, 2002 31, 2001

Unaudited Audited Audited Audited

Sources of fundsPaid up share capital 13,875.0 5.0 0.008 0.008

Reserves and Surplus(excluding revaluation reserves ) 6,706.1 –– –– ––

P&LA/c (1,758.2) (1,204.7) (40.5) ––

Net Worth 18,822.9 (1,199.7) (40.5) 0.008

Secured loans 15,287.6 12,838.1 –– ––

Unsecured loans –– 6,386.5 10,873.9 ––

Total 34,110.5 18,024.9 10,833.5 0.008

7

Balance Sheet Statement Rs. In lakhs

As on December March March March31, 2003 31, 2003 31, 2002 31, 2001

Unaudited Audited Audited Audited

Uses of funds

Net fixed assets 1,661.9 1,457.1 1,700.00 ––

Investments 7,430.9 7,307.5 3,070.1 ––

Deferred Tax Assets 915.9 700.0 –– ––

Net current assets 24,101.8 8,560.1 6,063.1 (0.382)

Total miscellaneousexpenditure not written off –– 0.2 0.3 0.390

Total 34,110.5 18,024.9 10,833.5 0.008

Other Financial Data

For year ended December March March March 31, 2003 31, 2003 31, 2002 31, 2001

Unaudited Audited Audited Audited

Equity Dividend (%) Nil Nil Nil Nil

Earning per share (Rs.) (3.6) (2,358.2) (50,625.0) ––

Return on Net Worth (%) 2.9 (98.3) (100.0) ––

Book Value per share (Rs.) 122.6 (2,399.4) (50,625.0) 10.0

Notes (For Audited Financials for March 31, 2003, March 31, 2002 and March 31, 2001):

(a) There are no changes in accounting policies or any failure to make provisions or other adjustmentswhich result in audit qualifications in last three years

(b) No adjustments relating to material amounts have been made

(c) No incorrect accounting policies have been followed in last three years which resulted in auditqualifications

(d) The profit or loss disclose both the profit or loss arrived before considering extraordinary items andafter considering the profit or loss from extraordinary items

(e) The statement of assets and liabilities has been prepared after deducting the balance outstanding onrevaluation reserve account from both fixed assets and reserves and the net worth arrived after suchdeductions

(f) MAL, incorporated in 1999, is a marketing and distribution company and currently has nomanufacturing facilities and thus income from operations is NIL. The main source of income for FY2002, FY 2003 and 9 months ended December 31, 2003 is viz. other income, which is derived frominterest accrued on loans to subsidiaries and other associate companies and income from licensingof brands. MAL acquired GMR and Empee in January 2002. The acquisition was funded throughborrowings.

(g) Paid up capital of MAL at the time of incorporation was Rs 800. In terms of amendment in theCompanies Act, 1956, MAL’s paid up capital increased to Rs 5 lacs in December 2002. Thereafter,the paid up capital increased in May 2003 as S&N, UBL and Accra the joint venture partners infusedfunds into MAL to the tune of Rs 13,870 lakhs. The funds were utilized for repayment of outstandingloans taken for acquiring its subsidiaries and meeting the capital expenditure and working capitalneeds for itself and its subsidiaries.

(h) As on March 31, 2003 and December 31, 2003, there are no contingent liabilities

(i) Acquirer has not made any acquisitions in Target Company including acquisitions from open offers,apart from the SPA shares and the Public Offer being made under this LOO.

Note:EPS = Profit after Tax /No. of equity sharesNet Worth = Equity Share Cap + Reserves and Surplus - P&L A/cReturn on Net Worth = Profit after Tax /Net WorthBook Value per Share = Net Worth/ No. of equity shares

8

3.1.14 Significant Accounting Policies of MAL:a) Basis of Accounting

The accounts are prepared in accordance with the historical cost convention.

b) Fixed Assets and Depreciation

Fixed assets are stated at cost of acquisition which includes costs incidental to acquisition,installation, commissioning and interests on funds borrowed to finance the assets until the assets areready for commercial use, less accumulated depreciation.

Depreciation is provided on straight-line method on all assets at the rates and in the manner specifiedin Schedule XIV to the Companies Act, 1956. Assets individually costing Rs. 5,000/- or less aredepreciated fully in the year of acquisition.

Amount paid for non compete fee (paid to the promoters of Empee for acquisition of Empee) is beingamortised over the period of the non compete agreement (i.e 7 years). License fees and brand valuesare recorded at their cost of acquisition and amortised over a period of 10 years.

c) Investments

Long term investments are carried at cost (including related expenses) and provision is made for anypermanent diminution in the value. Current investments are stated at lower of cost and fair value.

d) Deferred taxation

Deferred tax is recognized, subject to consideration of prudence, on the timing differences betweentaxable income and accounting income that originate in the period and are capable of reversal in oneor more subsequent periods. Deferred tax assets, including assets arising from loss carried forward,are not recognized unless there is a virtual certainty that sufficient future taxable income will beavailable against which such deferred tax asset can be realised.

3.1.15 Future Plans and Strategies for Target CompanyThe Acquirer shall endeavor to make best efforts to rehabilitate the Target Company and take it out fromthe purview of BIFR (refer para 5.19.1) by arranging for capital for the Target Company which inter-aliamay include investment in preference shares of Inertia and / or debt / loan stock. In order to rehabilitatethe Target Company and to take it out of the purview of the BIFR, the Acquirer may, if advised, restructure/reorganize its businesses by engaging in merger / divestitures / amalgamations or business combinationof joint ventures in its areas of business activity. MAL would also make efforts to restore the financialcondition of Inertia in order to meet requirement of working capital, capital expenditure for the operationand maintenance of its breweries and its financial obligations and liabilities of trade creditors

3.2 Disclosure in terms of Regulation 16(ix) of the SEBI Takeover Code

3.2.1 This Offer is being made in compliance with Regulation 10 and Regulation 12 of the Regulations, for thepurposes of substantial acquisition of equity shares and / or voting rights accompanied with change incontrol and management of the Target Company thereby enabling MAL to exercise control over Inertia,inter-alia, through the right to appoint directors or through control over management or policy decisions,by virtue of their shareholding. The Acquirer reserves the right to seek reconstitution of the Board ofDirectors of the Target Company, in accordance with the provisions contained in the Regulations and theCompanies Act 1956..

3.2.2 The Acquirer intends to continue with the operations of Inertia, as referred to in paragraph 5.1 of this LOO,and does not intend to make any major change to the existing lines of business of the Target Company.The Target Company may, if advised, restructure/reorganize its businesses by engaging in merger /amalgamations or business combination of joint ventures in its areas of business activity. The Acquirermay, if advised, in the ordinary course of business of the Target Company and / or to the extent requiredfor the purposes of any arrangement / reconstruction, restructuring, merger / demerger, and/or streamliningof various operations, assets, liabilities, businesses or otherwise of Inertia and/or its subsidiaries/associates, dispose off or otherwise encumber any assets of the Target Company. The Target Companyor the Board of directors of the Target Company has taken no decisions yet in this regard. It will be theresponsibility of the Board of Directors of the Target Company to make appropriate decisions in thesematters in accordance with business requirements and in line with opportunities or changes in theeconomic scenario, from time to time. Such decisions will be governed by the provisions of the relevantregulations or any other applicable laws or legislation at the relevant time. The Acquirer will evaluate andconsider such proposals and may, if appropriate, support the same.

9

3.2.3 As the Target Company has been incurring losses over the last few years (including current year), thefinancial health of the Target Company is weak. In order to restore the financial condition, to meet itsworking capital requirements, for capital expenditure for the operation and maintenance of its breweriesand to meet its financial obligations which inter alia include repayment / prepayment of debt and accruedinterest liability and meeting liabilities of trade creditors, the Acquirer shall make efforts to arrange forcapital for the Target Company. The Acquirer is evaluating options to raise capital which inter-alia includeinvestment in debt / loan stock or preference shares of Inertia and which may entail creating encumbranceover assets of the Target Company in favor of Banks / FI / NBFCs as may be required by such lenders.

3.2.4 The Acquirer undertakes not to sell, dispose of or otherwise encumber any substantial asset of Inertiaexcept with the prior approval of the shareholders of Inertia.

3.2.5 During the offer period the Acquirer may purchase additional equity shares of the Target Company inaccordance with the Regulations, to the extent and in the manner that the public shareholding of Inertiawill not be reduced to 10% or less of its voting capital.

3.2.6 As per its letter dated May 30, 2003, the Target Company has informed the Manager that its Board ofDirectors have accepted a proposal to avail a short term loan of Rs 6,000 lacs from the Acquirer, whichmay necessitate creating encumbrances on the assets. The Target Company has vide its letter dated April12, 2004 has stated that it can avail short term loans upto an amount of Rs. 20,000 lacs from the Acquirer.The Target Company has confirmed that it shall comply with the requirements of Regulation 23(1) of theRegulations.

4. OPTION AVAILABLE TO THE ACQUIRER IN TERMS OF REGULATION 21(3) OF THE SEBI TAKEOVER CODE4.1 Pursuant to this offer, the public shareholding will not be reduced to 10% or less of the voting equity capital

of Inertia and therefore Regulation 21(3) of the SEBI Takeover Code is not applicable

5. BACKGROUND OF THE TARGET COMPANY – INERTIA INDUSTRIES LIMITED5.1 Inertia is a listed company, incorporated under the Companies Act, 1956 having its registered office at O-

14, 1st Floor, Lajpat Nagar-II, New Delhi 110 024, Phone No. 29835424 and corporate office at 17th Floor,Hoechst House, Nariman Point, Mumbai 400 021, Phone No 22834510. It was incorporated in 1989.Inertia is engaged in brewing, marketing and distribution of beer. Inertia has two breweries located atDharuhera, Haryana and Aurangabad, Maharashtra. Its popular beer brands include Zingaro, Sandpiperand Turbo.

5.2 The present issued, subscribed and paid up capital of the Target Company comprises of 54,711,038 fullypaid up equity shares of Rs. 10/- each fully paid and 88,900 equity shares of Rs. 10/- each withRs. 5/- paid up per share (with an amount of Rs. 5/- due towards calls remaining unpaid) aggregatingRs. 547,554,880. The partly paid up equity shares do not carry voting rights in terms of Article 77 of theArticles of Association of Inertia. The capital and voting rights structure of Inertia as on the date of thisLetter of Offer is as follows:

Paid up equity shares No of equity shares/ Percentage of equity sharesof the Company voting rights

Fully paid up equity shares 54,711,038 99.84

Partly paid up equity shares 88,900 0.16

Total equity shares 54,799,938 100

Total voting rights in Inertia* 54,711,038 99.84

* Presently 88,900 shares not entitled to voting rights

5.3 The shares of Inertia are listed on the stock exchanges at Delhi (“DSE”), Mumbai (“BSE”), Kolkata (“CSE”),Ahmedabad (“ASE”) and Jaipur (“JSE”). DSE is the regional stock exchange for Inertia’s shares. Statusof listing of the shares on various stock exchanges is given below:

Exchange Listed Pending Listing* TotalDelhi **30,228,238 24,571,700 54,799,938Mumbai 12,089,338 42,710,600 54,799,938Kolkata 12,089,338 42,710,600 54,799,938Ahmedabad 12,089,338 42,710,600 54,799,938Jaipur **30,999,938 23,800,000 54,799,938

The Target Company has been following up with the stock exchanges for listing of the shares that arepending listing (Refer para 5.4).

10

* Includes 23,800,000 shares that are part of SPA shares

** The stock exchange at Jaipur and DSE have issued the listing and trading permissions to 18,910,600equity shares issued and allotted in 1997 & 1999 via preferential allotment.

5.3.1 Total number of listed shares as a percentage of total voting capital of the Target Company is as follows:

Stock Exchange Listed Capital Voting Capital % of listed capital in(no. of shares)* (no. of shares) terms of voting capital

DSE 30,228,238 54,711,038 55.25

BSE 12,089,338 54,711,038 22.10

ASE 12,089,338 54,711,038 22.10

CSE 12,089,338 54,711,038 22.10

JSE 30,999,938 54,711,038 56.66

* includes 88,900 partly paid up shares which do not carry voting rights

5.4 Target Company vide their letter dated April 12, 2004 has stated (refer table below) the paid up capitalof Inertia along with the listing status:

No. of Shares Stock Exchange Stock Exchange(No. of Shares Listed) (No. of Shares Unlisted)

Post IPO capital of the Company 12,089,338 DSE (11,317,638) DSE (771,700)BSE (12,089,338)CSE (12,089,338)ASE (12,089,338)JSE (12,089,338)

Preferential allotment 12,659,500 DSE (12,659,500) BSE (12,659,500)made in 1997 JSE (12,659,500) CSE (12,659,500)

ASE (12,659,500)

Preferential allotment 6,251,100 DSE (6,251,100) BSE (6,251,100)made in 1999 JSE (6,251,100) CSE (6,251,100)

ASE (6,251,100)

Preferential allotment made in 2001 23,800,000 — DSE (23,800,000)BSE (23,800,000)CSE (23,800,000)ASE (23,800,000)JSE (23,800,000)

Total paid up capital 54,799,938 DSE (30,228,238) DSE (24,571,700)BSE (12,089,338) BSE (42,710,600)CSE (12,089,338) CSE (42,710,600)ASE (12,089,338) ASE (42,710,600)JSE (30,999,938) JSE (23,800,000)

Less partly paid up shares 88,900 88,900* —(not carrying voting rights)

Total voting capital 54,711,038 DSE (30,139,338) DSE (24,571,700)BSE (12,000,438) BSE (42,710,600)CSE (12,000,438) CSE (42,710,600)ASE (12,000,438) ASE (42,710,600)JSE (12,000,438) JSE (23,800,000)

* Equity shares listed on all stock exchanges

As per letter dated May 30, 2003 and April 12, 2004 to the Manager, the Target Company has stated thefollowing details regarding listing of shares:

Target Company had not furnished information/documents pertaining to preferential allotments made in1997 and 1999, hence these shares are not yet listed. The new management - UBL and Feedback tookover control of Inertia in January 2001 and are making efforts to regularize the listing at relevant stockexchanges.

11

5.4.1 771,000 shares issued to NRI’s:(a) Inertia has stated that it had allotted 771,700 equity shares to NRIs at the time of its IPO in the year

1994. Thereafter the company had applied for listing of 12,089,338 equity shares (including the said771,700 shares) on the stock exchanges at Delhi, Mumbai, Jaipur, Calcutta and Ahmedabad.However, Target Company did not submit RBI permissions at that time to DSE in respect of the sharesallotted to NRI’s.

(b) Inertia has stated that on receipt of DSE’s letter no. DSE/LIST/6850/R/219 dated May 21, 2003, theydiscussed the matter with DSE officials and accordingly, Target Company submitted a fresh listingapplication dated June 26, 2003 for the said 771,700 equity shares.

(c) Inertia has stated that out of 771,700 equity shares, the company submitted RBI permissions inrespect of 769,200 equity shares with DSE. The company informed DSE that the RBI permission inrespect of balance 2,500 equity shares was not traceable in the company records. As per DSE’sadvise, Inertia submitted an indemnity cum undertaking in the respect of the 2,500 equity shares, RBIpermission whereof was not traceable.

(d) Inertia has stated that they have submitted additional documents/information to DSE on July 9, 2003,July 22, 2003 and October 31, 2003. DSE further advised the company to submit an Indemnity cumUndertaking seeking condonation in delay in applying for listing and another Indemnity cumUndertaking in respect of 2,500 equity shares, RBI permission whereof were not traceable in theCompany records. The said Indemnity cum Undertakings were submitted with DSE on November 27,2003. Thereafter DSE invited the company executives for a meeting on January 20, 2004. After themeeting DSE sought additional documents/information vide their letter dated February 18, 2004. TheCompany submitted its response on February 27, 2004 along with documents / information sought byDSE. The listing approval / response of DSE is still awaited.

5.4.2 12,659,500 shares allotted in 1997 preferential allotment(a) Inertia has stated that since they had not furnished certain information / documents in time to the

Stock Exchanges at Mumbai (“BSE”), Kolkata (“CSE”) and Ahmedabad (“ASE”), these exchanges didnot list the shares. Reasons for non listing and steps taken by Target Company to list these sharesare follows:

Stock Exchange Reasons for non listing / Steps taken by Target Company to get theshares listed

Mumbai BSE vide its letter dated January 23, 2004 has sought additional documents,which are being compiled and are in the process of being submitted.

Calcutta The exchange, vide their letter dated October 10, 2003 sought additionaldocuments / information and the listing approval of BSE. The companysubmitted its reply vide letter dated October 14, 2003. The listing approvalof BSE is awaited which will be submitted to CSE once the Company getsthe same from BSE

Ahmedabad Documents / Information sought by the ASE vide their letter datedNovember 3, 2003 was submitted vide letter dated December 3, 2003.Listing approval from ASE is awaited.

(b) The company issued 12,659,500 equity shares of Rs.10/- each to persons other than promoters fallingunder the public category. These shares have been allotted to discharge consideration towardspurchase of brewery plant of M/s Intraport India Limited at Aurangabad, Maharashtra.

5.4.3 6,251,100 shares allotted in 1999 preferential allotment

(a) Inertia has stated that since they had not furnished certain information / documents in time to theStock Exchanges at BSE, CSE and ASE, these exchanges did not list these shares. Reasons for nonlisting and steps taken by Target Company to list these shares are follows:

Stock Exchange Reasons for non listing / Steps taken by Target Company to get theshares listed

Mumbai BSE vide its letter dated January 23, 2004 has sought additional documents,which are being compiled and are in the process of being submitted.

Calcutta The exchange, vide their letter dated October 10, 2003 sought additionaldocuments / information, inter alia, listing approval of BSE. The companysubmitted its reply vide letter dated October 14, 2003. The listing approvalof BSE is awaited which will be submitted to the exchange once theCompany gets the same from BSE.

12

Stock Exchange Reasons for non listing / Steps taken by Target Company to get theshares listed

Ahmedabad Documents / Information sought by the exchange vide their letter datedNovember 3, 2003 was submitted vide letter dated December 3, 2003.Listing approval from the exchange is awaited.

(b) The company issued 6,251,100 equity shares of Rs.10/- each to persons (creditors of TargetCompany) other than promoters falling under the public category in settlement of their outstandingdues.

5.5 As mentioned in para 2.1.5, that on completion of the Open Offer formalities and, upon certification fromthe Manager to the Offer, the SPA Shares would be transferred from the SPA Escrow Account to thebeneficiary account of the Acquirer. However, SPA dated May 15, 2003 entered between the Acquirer andthe Seller promoters would be put on hold till the Acquirer completes the listing of the unlisted shares. Inthis regard, the Acquirer has submitted an undertaking to SEBI dated April 15, 2004 stating that in theinterest of the shareholders, it will make best efforts to take necessary steps to resolve all the pendingissues including listing of the unlisted shares of the Target Company on the stock exchanges within aperiod of 12 months from the date of closing of the instant offer and would ensure compliance with allprovisions of the SEBI (SAST) Regulations 1997 and SEBI Act, 1992, as applicable.

5.6 As on date, there are no outstanding convertible instruments (Warrants/Fully Convertible Debentures/Partly Convertible Debentures).

5.7 The applicable provisions of Chapter II of the SEBI Takeover Code have been complied with by Inertiaand by UBL & Feedback as its promoters and as its key shareholders. Provision of Chapter II of the SEBITakeover Code are not applicable to Accra.

5.8 In its letter dated May 30, 2003 and April 12, 2004 to the Manager, the Target Company has provided acertificate obtained from M/s Rabi Satapathy & Associates, Company Secretaries, dated May 28, 2003 andMarch 5, 2004, which indicates that there have been certain instances of irregularity in complying withsome provisions of its listing agreements. The equity shares of Inertia were suspended from trading onBSE w.e.f November 2, 1998 for non-compliance of provisions of the listing agreement. The TargetCompany was allowed to resume trading on the BSE on July 12, 2002 after it had paid a reinstatementfee of Rs. 120,000 and after having complied with the other requirements for reinstatement. In May 2000,DSE suspended trading in the shares of the Target Company for non-compliance of Clause 36 of thelisting agreement. Inertia submitted its reply to DSE and the trading was subsequently resumed. The BSEhas again suspended trading in Inertia’s shares w.e.f February 14, 2003. However, the Target Companyhas not received any written communication from BSE spelling out the reasons for suspension. Inertia hasrequested BSE vide their letters dated March 21, 2003, March 26, 2003 and April 23, 2003 to furnish thereasons for the suspension and detailed course of action for revocation of the suspension. TargetCompany is awaiting communication from BSE on this matter. Target Company believes that once thelisting of the unlisted shares on BSE is achieved, the suspension would automatically be revoked.

5.9 Target Company vide its letter dated April 12, 2004 has informed the Manager that its Auditors M/s PriceWaterhouse in the FY 2003 annual report have certified that the Company has complied with theconditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement

5.10 Target Company vide its letter dated April 12, 2004 has provided to the Manager a list of pending litigationsagainst Inertia as certified by their solicitors M/s Kanga & Co. vide their letter dated April 12, 2004. Thelist of pending litigations as certified by M/s Kanga & Co. forms part of material documents for inspection.

The summary of the pending litigations is as follows:

Type of case No. of cases Amount Involved (Rs lacs)

Civil offences 16 132

Writ petitions 1 ––

Winding up petitions 9 161

Consumer forum 3 2

Labour 9 7

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5.11 The Board of Directors of Inertia as on the date of the original PA is as follows:

S. Name Designation Address Date ofNo appointment

1. Mr. S. R. Gupte Director Niladri, 66, Nepeansea Road, 12.01.2001Mumbai 400 006

2. Mr. R. K. Jain Managing Director 303-B, Bakhtawar, Shahid Bhagat 01.08.2001Singh Road,Opp. Colaba P.O.,Colaba, Mumbai – 400 005.

3. Mr. A. K. R. Nedungadi Director Flat No.103, Delphi III, Prestige 12.01.2001Acropolis, 20, Hosur Road,Bangalore 560 029.

4. Mr. K. Ganguly Director Flat No.203 Brigade, Cavelle I, 06.10.2000Cavelle Road,Bangalore, 560 001.

5. Mr. P. Subramani Director No.259, Sai Enclave III 06.10.2000Behind Raghavendra Layout,Bannerghatta Road,Bangalore 560 076.

6. Mr.Vasant Narkar Director 72, Orchids 30.04.200273G, Pali Hill, BandraMumbai 400 050.

7. Mr. C. L. Jain Director 13/B/2 Woodlands, 30.04.2002Peddar Road,Mumbai 400 026.

8. Mr. R. M. Parekh Director B/306, Amit Darshan 30.04.2002Dadabhai X Road No.3,Vile Parle (W)Mumbai – 400 056.

5.12 The Board of Directors of Inertia as on the date of this LOO is as follows:

S. Name Designation Address Date ofNo appointment

1. Mr. S. R. Gupte Director Niladri, 66, Nepeansea Road, 12.01.2001Mumbai 400 006

2. Mr. R. K. Jain Managing Director 303-B, Bakhtawar, 01.08.2001Shahid Bhagat Singh Road,Opp. Colaba P.O., ColabaMumbai – 400 005.

3. Mr. A. K. R. Nedungadi Director Flat No.103, Delphi III, 12.01.2001Prestige Acropolis, 20,Hosur Road,Bangalore 560 029.

4. Mr. K. Ganguly Director Flat No.203 Brigade, Cavelle I, 06.10.2000Cavelle Road,Bangalore, 560 001.

5. Mr. P. Subramani Director No.259, Sai Enclave III 06.10.2000Behind Raghavendra Layout,Bannerghatta Road,Bangalore 560 076.

6. Mr.Vasant Narkar Director 72, Orchids 30.04.200273G, Pali Hill, BandraMumbai 400 050.

7. Mr. C. L. Jain Director 13/B/2 Woodlands, 30.04.2002Peddar Road,Mumbai 400 026.

14

Out of the above, as on the date of this Letter of Offer, Mr. S.R. Gupte (“SRG”), Mr. R.K Jain (“RKJ”) andMr. A.K. Ravi Nedungadi (“AKRN”) are also on the Board of Directors of the Acquirer. The provisions ofRegulations 22(9) and 23(3)(b) of the SEBI Takeover Code have been complied with and will continue to becomplied with until all the formalities relating to the Offer are completed.

5.13 Inertia has had no mergers, demergers or spin offs during the last 3 years.

5.14 The summarized financial statements of IIL given hereunder are in compliance with clause 6.14 of the standardletter of offer compliance :

Profit & Loss StatementRs. in Lakhs

Period ended December March March March31, 2003 31, 2003 31, 2002 31, 2001

Unaudited* Audited Audited Audited

Duration (months) 9 12 12 6

Income from Operations (Net of excise) 4,822.2 6,702.5 5,088.3 297.5

Other Income 65.9 56.7 133.3 1,464.6

Total Income 4,888.1 6,759.2 5,221.7 1,762.1

Total Expenditure 6,771.5 9,803.2 6,117.1 961.3

Profit /(Loss) before Depreciation, (1,883.4) (3,044.0) (895.4) 800.8Interest and Tax

Depreciation 271.9 469.1 277.3 119.4

Interest 918.9 1,018.7 592.4 56.8

Profit /(Loss) before Tax (3,074.2) (4,531.8) (1,765.1) 624.5

Provision for Tax 1,025.6 1,646.4 667.6 (0.3)

Profit /(Loss) after Tax (2,048.6) (2,885.4) (1097.5) 624.2

Balance Sheet StatementRs in lakhs

As on December March March March31, 2003 31, 2003 31, 2002 31, 2001

Unaudited* Audited Audited Audited

Sources of funds

Paid up share capital 5,475.6 5,475.6 5,475.6 5,475.6

Reserves and Surplus (excluding 31.0 31.0 31.0 31.0revaluation reserve)

P&L A/c (8,537.5) (6,488.9) (3,603.5) (3,680.1)

Net Worth (3,030.9) (982.3) 1903.1 1826.5

Secured loans 5,825.3 5655.2 3,805.1 3027.8

Unsecured loans 8,639.2 705.1 284.4 117.7

Total 11,433.6 5,378.0 5,992.6 4,972.0

Uses of funds

Net fixed assets 5,756.0 5,543.1 6,026.6 6,210.4

Investments 551.1 1.1 1.1 51.1

Net current assets 13.2 (4,453.9) (2,687.4) (1,371.1)

Deferred Tax Asset 4,507.1 3,481.5 1,835.1 ––

Total miscellaneous expenditure 606.2 806.2 817.2 81.6not written off

Total 11,433.6 5,378.0 5,992.6 4,972.0

* Subjected to limited review done by statutory auditors M/s Price Waterhouse

15

Other Financial Data

For year ended December March March Period ended31, 2003 31, 2003 31, 2002 March

Unaudited Audited Audited 31, 2001Audited

Equity Dividend (%) Nil Nil Nil Nil

Earning per share (Rs.)** (3.7) (5.3) (2.0) 2.3

Return on Net Worth (%)** (67.6) (293.7) (57.7) 68.4

Book Value per share (Rs.) (5.5) (1.8) 3.5 3.3

** Annualized for the period ended 2001.

Note:

EPS = Profit after Tax /No. of equity shares

Net Worth = Equity Share Cap + Reserves and Surplus –P&L A/c

Return on Net Worth = Profit after Tax /Net Worth

Book Value per Share = Net Worth/ No. of equity shares

5.15 Pre and post offer shareholding pattern of Inertia, is as under:

Shareholder Category Shareholding prior Shareholding Shareholding Shareholdingto agreement / agreed to be agreed to be after the Offer

acquisition and acquired which acquired in openoffer triggered off SEBI Offer (assuming

Takeover Code full acceptance)(A) (B) (C) (A+B+C=D)

1. Promoter Group (excludingthe Acquirer)- UBL 22,427,987 (41%) (22,427,987) (41%) –– ––- Feedback 5,500,000 (10%) (5,500,000) (10%) –– ––

2. Acquirer

MAL Nil 28,360,853 (52%) 13,699,985 (25%) 42,060,838 (77%)

3. Parties to agreement other 432,866(0.8%) (432,866)(0.8%) –– ––than 1 and 2Accra

4. Public (other than partiesto agreement, acquirer &PACs)[Total 13,433 shareholders]

a) – MF’s/UTI 174,300(0%) –– (13,699,985)– ICICI 1,250,000(2%) –– (25%) 11,314,800 (23%)

b) Others 25,014,785 (46%) –– ––

Total (4) (a + b) 26,871,951 (49%) –– –– 12,739,100 (23%)

TOTAL (1+2+3+4) 54,799,938 (100%) –– –– 54,799,938 (100%)

Source: Target Company/Acquirer

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Presently 88,900 shares are not entitled to voting rights (see paragraph.5.2 for details). The pre & post shareholdingpattern of Inertia with respect to voting rights is as follows:

Shareholder Category Voting rights prior Voting rights Voting rights Voting rightsto agreement / agreed to be agreed to be after the

acquisition and acquired which acquired in open Offeroffer triggered off SEBI Offer (assuming

Takeover Code full acceptance)(A) (B) (C) (A+B+C=D)

1. Promoter Group (excluding the Acquirer)- UBL 22,427,987 (41%) (22,427,987) (41%) –– ––- Feedback 5,500,000 (10%) (5,500,000) (10%) –– ––

2. Acquirer

MAL Nil 28,360,853 (52%) 13,611,085(25%) 41,971,938 (77%)

3. Parties to agreementother than 1 and 2

Accra 432,866(0.8%) (432,866)(0.8%) –– ––

4. Public (other than partiesto agreement, acquirer &PACs)[Total 13,433 shareholders]

a) – MF’s/UTI 1,74,300(0%) (13,611,085)– ICICI 1,250,000(2%) (25%) 11,314,800 (23%)

b) Others 24,925,885 (46%) –– ––

Total (4) (a + b) 26,350,185(49%) –– –– 12,739,100(23%)

TOTAL (1+2+3+4) 54,711,038 (100%) –– –– 54,711,038 (100%)

Source: Target Company/Acquirer

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5.16 Target Company vide their letter dated April 12, 2004 has stated (refer table below) how the equity share capitalof Inertia has been built up since inception and status of compliance:

Date of No. & % of Cumulative Mode of Identity of Status ofAllotment Shares issued * paid up capital Allotment allottees compliance

(Rs. in lakhs) (Promoters/Ex-Promoter/Others)

25.11.89 700 (100%) 0.07 Subscribers to the Ex-promoters and Complied withMemorandum and others applicableArticles of provisionsAssociation(“MAA”)

26.12.89 109,726 11.04 Private Placement Ex-promoters and Complied with(99.37%) others applicable

provisions

28.12.92 220,852 33.12 Bonus in the ratio 2:1 Ex-promoters and Complied with(66.67%) others applicable

provisions

26.03.93 4,758,060 508.93 Private Placement Others Complied with(93.49%) applicable

provisions

13.05.94 7,000,000 1204.49 IPO Ex-promoters, and Complied with(57.90%) others applicable

provisions(Refer Note 1)

30.06.97 3,024,500 1506.94 Preferential Others Complied with(20.01%) Allotment applicable

provisions(Refer Note 2)

30.07.97 3,635,000 1870.44 Preferential Others – do –(19.39%) Allotment

30.08.97 3,000,000 2170.44 Preferential Others – do –(13.79%) Allotment

20.09.97 3,000,000 2470.44 Preferential Others – do –(12.12%) Allotment

18.11.99 1,890,200 2659.46 Preferential Others Complied with(7.10%) Allotment applicable

provisions(Refer Note 3)

20.12.99 560,100 2715.47 Preferential Others – do –(2.06%) Allotment

25.12.99 3,800,800 3095.55 Preferential Others – do –(12.26%) Allotment

12.01.01 23,800,000 5475.55 Preferential Promoters Complied with(43.43%) Allotment applicable

provisions(Refer Note 4)

* % calculated on total number of shares issued on respective dates.

Notes:

1) Shares allotted to NRI’s (7,71,000) under the IPO remain unlisted at DSE; However these shares are listedat the other stock exchanges (refer para 5.4.1)

2) These shares are not listed on the stock exchanges at BSE, CSE and ASE; However these shares are listedat the DSE and JSE (refer para 5.4.2)

3) These shares are not listed on the stock exchanges at BSE, CSE and ASE; However these shares are listedat the DSE and JSE (refer para 5.4.3)

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4) These shares are not listed on any stock exchange

5.18 Target Company vide their letter dated April 12, 2004 has given the following details of their compliance officer:

Mr. Vivek Raizada17th Floor, Hoecsht House,Nariman Point, Mumbai - 21

5.19 Actions Initiated by the Target Company post Public Announcement

5.19.1 On November 27, 2003 Inertia had filed reference with BIFR under section 15(1) of Sick IndustrialCompanies (Special Provisions) Act, 1985 declaring itself as a Sick Industrial Company within themeaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 and Section2(46AA) of the Companies Act, 1956 and BIFR vide their letter dated February 20, 2004 has registeredthe reference of Inertia.

5.19.2 Rabo India Finance Private Limited had sanctioned a Long Term Acquisition Finance Facility (“LTAFF”) ofRs.8,000 lacs in favor of Inertia vide their letter dated July 16, 2003. Inertia had taken approval of itsshareholders on September 29, 2003 in terms of Section 293 (1) (a) of the Companies Act, 1956 andRegulation 23 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. In addition,GMR and Empee, wholly owned subsidiaries of Acquirer have also created a security in favour of RaboIndia Finance Private Limited on their respective assets on behalf of Inertia to secure the LTAFF.

5.19.3 Target Company in its shareholders meeting held on September 29, 2003 has also taken approval ofits shareholders in terms of Section 293 (1) (a), 372A of the Companies Act, 1956 and Regulation 23of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 to provide corporateguarantee or create security in favor of Rabo India Finance Private Limited on behalf of the Acquirer assecurity for the Long Term Acquisition Finance Facility (“LTAFF”) and Working Capital Revolver Facility(“WCRF”) amounting to Rs.21,000 lacs sanctioned by Rabo India Finance Private Limited in favour of theAcquirer.

6. OFFER PRICE AND FINANCIAL ARRANGEMENTS

6.1 Justification of Offer Price

6.1.1 The shares of IIL are listed on the stock exchanges at Delhi, Mumbai, Kolkata, Ahmedabad and Jaipur.As mentioned in para 5.4 herein above, BSE has suspended trading in Inertia’s securities w.e.f. 14thFebruary 2003.

6.1.2 The annualized trading turnover during the preceding six months ended April 30, 2003 in each of the stockexchanges is as follows:

Total Shares traded during Total no. of Annualized Tradingthe six calendar months listed shares Turnover (as % of

prior to the month in which total shares listed)Original PA was made

(November 2002 to April 2003)

BSE 28,376 12,089,338 0.47%

DSE Nil 30,228,238 Nil

CSE Nil 12,089,338 Nil

Ahmedabad Nil 12,089,338 Nil

Jaipur Nil 30,999,938 Nil

Source: BSE websites - www.bseindia.com

Stock Exchange letters provided by Inertia for DSE, Calcutta, Jaipur and Ahmedabad stock exchanges.

6.1.3 As the annualized trading turnover of Inertia’s shares on all the stock exchanges, where it is listed is lessthan 5% of the total numbers of shares, the equity shares are deemed to be infrequently traded on theseexchanges as per explanation to Regulation 20(5) of the Regulations. Based on the table in 6.1.3 theTarget Company’s shares are infrequently traded as per explanation to Regulation 20(5) of theRegulations.

6.1.4 Target Company’s shares are infrequently traded as per explanation to Regulation 20(5) of the Regulationson DSE, BSE, Jaipur, Ahmedabad and Calcutta stock exchanges. The book value of FY 2003 andDecember 31, 2003 is not relevant as the net worth has been eroded. The Offer Price is therefore justifiedin terms of Regulations 20(5) of the SEBI Takeover Code.

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� Negotiated Price Rs 10/- per fully paid upequity share

� Highest price paid by the Acquirer for any acquisitions,including through a public or rights issue or preferentialissue, during the 26-week period upto the date of the PA NA

� Other Parameters,

Period ended March 31, 2003X March 31, 2002Audited (Audited)

– Return on Net Worth - ve 294% - ve 58%

– EPS (Rs) - ve 5.3 - ve 2.0

– Book Value per share (Rs) - ve1.8 3.47

– Offer Price to Earning ratio (Rs) NA NA

– Industry P/E ratio (x) ** 12.3

** Source: Capital Market dated May 11, 2003 Volume XVIII/04

6.1.5 In terms of the SPA as mentioned in para 2.1.2 there is no non compete agreement between the Acquirerand the Sellers

6.1.6 As per the audited financials for FY 2002 and FY 2003, and as at December 31, 2003 Inertia has reportednet losses due to which, ratios such as Return on Net Worth, EPS, Offer Price to Earnings ratio are notapplicable. As per the unaudited quarterly financials for the quarter ended March 31, 2003 filed by theTarget Company with the Stock Exchanges, its Board of Directors have noted the erosion of net worth ofthe Target Company. BIFR vide its letter dated February 20, 2004 has registered the reference of Inertia(refer para 5.19.1).

The Offer Price of Rs. 10 per fully paid up equity share and Rs 5 per partly paid up equity shareof Inertia is therefore justified in the opinion of the Manager and the Acquirer.

6.1.7 If the Acquirer acquires Shares after the original PA and upto seven days prior to closure of offer at a pricehigher than the Offer Price, then the highest price paid for such acquisitions shall be payable for allacceptances received under this Offer as per Regulation 20(4) of the SEBI Takeover Code. Any revisionin the Offer Price shall be notified by advertisement in the same newspapers in which the PublicAnnouncement dated May 19, 2003 appeared.

6.2 Financial Arrangements

6.2.1 Acquirer has made firm arrangements for financing the acquisition of equity shares under the Public Offer,in terms of the Regulation 16(xiv), from internal accruals / surplus funds of the Acquirer.

6.2.2 The total fund requirement for the Offer of 13,699,985 equity shares (representing 25.00% of presentissued equity share capital and 25.04% of the voting capital) of Inertia at a price of Rs 10 per equity sharewould amount to Rs. 1,370 lakhs assuming that the entire Offer is accepted. As required under Regulation28 of the Regulations, Acquirer has created an Escrow Account with Citibank N.A, located at 506/507,Level 5, Prestige Meridien 2, 30 M.G. Road, Bangalore - 560001, in favor of the Manager to the Offerfor Rs. 342.5 lakhs (equivalent to 25% of the total consideration payable under the Public Offer) by wayof a cash deposit. A lien in favor of the Manager to the Offer, Ambit Corporate Finance Private Limitedhas been marked on the aforesaid escrow account.

6.2.3 The Manager to the Offer has been duly authorized by the Acquirer to realize the value of the EscrowAccount in terms of the SEBI Takeover Code.

6.2.4 M/s Hrishikesh, Vishwanathan & Associates, Chartered Accountants ( Ms. Sandhya Kailasnathan,Membership No. 100642), with their Office at A13/4, Sriram Nagar, S V Road, Andheri West, Mumbai –400 058 (Tel 022 26210613, Fax 022 56602362) have certified vide their letter dated May 15, 2003 thatAcquirer has adequate resources to fulfill all their financial obligations arising out of the Offer. Based onthis, the Manager to the Offer has satisfied itself about the Acquirer’s ability to implement the Offer inaccordance with the SEBI Takeover Code.

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7. TERMS AND CONDITIONS OF THE OFFER

7.1 Statutory Approvals

7.1.1 The offer is subject to receiving the necessary approval(s), if any, from the Reserve Bank of India underForeign Exchange Management Act, 1999, for acquiring shares validly tendered by non-residentshareholders.

Besides this, as on this date to the knowledge of the Acquirer, no other approvals are required to acquirethe shares tendered pursuant to this Offer. However, the Offer would be subject to all statutory approvalsthat may be applicable at a later date.

7.1.2 The Acquirer shall complete all procedures relating to the Offer, including payment of consideration to theshareholders, by June 19, 2004 (Saturday). In case of delay due to non receipt of statutory approvals,SEBI may, if satisfied that the non-receipt of approvals was not due to willful default or negligence, grantextension of time for the purpose of completion of Offer, subject to the Acquirer paying interest at the rateof 10% p.a. on the Offer Price to the shareholders for delay in payment of consideration beyondJune 19, 2004.

7.2 Other terms

7.2.1 The Offer is being made to the public shareholders of Inertia and the Letter of Offer (the “LOO”) togetherwith the Form of Acceptance cum Acknowledgement (“FOA”) & Form of Withdrawal (“FOW”) will be mailedto all shareholders of the Target Company (except the Acquirer and Sellers) whose names appear in theregister of members of the Target Company and the beneficial owners of the shares, whose names appearon the beneficial records of the respective share depositories, at the close of the business on June 13,2003, Friday (the ’Specified Date’).

7.2.2 All owners of shares, registered or unregistered (except the Acquirer and Sellers), are eligible to participatein the Offer as per the procedure set out in Section 7 below. Eligible persons can participate in the Offerby offering their shareholding in whole or in part. No indemnity is required from the unregistered owners.

7.2.3 Accidental omission to dispatch this Letter of Offer or the non-receipt or delayed receipt of this Letter ofOffer will not invalidate the Offer in any way.

7.2.4 There are no Inertia shares that are locked-in as per SEBI guidelines.

7.2.5 Shareholders who have accepted the Offer by tendering the requisite documents, in terms of the PublicAnnouncement/ Letter of Offer, can withdraw the same upto three working days prior to the date of theclosure of the offer.

a) The withdrawal option can be exercised by submitting the documents as per the instruction below, soas to reach the Registrar to the Offer at any of the collection centers on or before May 18, 2004(Tuesday).

b) The withdrawal option can be exercised by submitting the Form of withdrawal attached to this LOO,duly completed.

c) In case of non-receipt of the form of withdrawal, the withdrawal option can be exercised by makingan application on plain paper along with the following details:

i. In case of physical shares: Name, address, distinctive numbers, folio number and number ofshares tendered / withdrawn.

ii. In case of dematerialized shares: Name, address, number of shares tendered / withdrawn, DPname, DP ID, Beneficiary Account no., and a photocopy of delivery instructions in “off market”mode or counterfoil of the delivery instruction in “off market” mode, duly acknowledged by the DPin favor of the Depository Escrow Account.

7.2.6 Any equity shares of Inertia that are the subject matter of litigation wherein the shareholder(s) may beprecluded from transferring the equity shares during the pendency of the said litigation are liable to berejected in case directions/orders to the contrary regarding these equity shares are not received togetherwith the equity shares tendered under the Offer.

7.2.7 Incomplete applications, including non-submissions of necessary enclosures, if any, are liable to berejected.

7.2.8 The instructions and provisions contained in the FOA constitute an integral part of the terms of this Offer.

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8. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT

8.1 Shareholders of Inertia who wish to avail of this Offer should forward the under mentioned documents by handdelivery at the Collection Centers mentioned below, on or before the close of business hours on May 21, 2004(Friday) .

Name & Address of the Contact Person & Mode ofCollection Centre Contact Numbers Delivery

Intime Spectrum Registry Ltd. Mr.Nikunj Daftary Hand Delivery /C-13 Pannalal Silk Mills Compound, Tel : 022-5555 5454 Registered PostLBS Marg, Bhandup (W), Fax : 022-2567 2693 /5555 5353Mumbai - 400 078 E-mail: nikunj@intimespectrum.com

Intime Spectrum Registry Ltd., Mr.Vivek Limaye Hand Delivery203 Davar House, Tel : 022-2269 4127197/198 D.N. Road, Fax : 022-2567 2693Mumbai - 400 001. E-mail: vivek.limaye@intimespectrum.com

Intime Spectrum Registry Ltd., Mr.Sanjeev Kapoor Hand Delivery3rd Floor, A-31, Nariana Industrial Area, Tel : 011-5141 0592/ 93 / 94Phase –1, New Delhi - 110 028 Fax : 011-5141 0591

E-mail: delhi@intimespectrum.com

Intime Spectrum Registry Ltd., Mr.S.P. Guha Hand Delivery1/17, Prince Gulam Mohammad Road, Tel : 033-2464 5145Kolkata – 700 026. Fax : 033-2464 5145

E-mail: kolkata@intimespectrum.com

Timing : Monday to Friday (10 AM to 1PM and 2PM to 4PM)

Saturdays (10 AM to 1PM)

Shareholders who cannot hand deliver their documents should send the same by registered post, at their ownrisk, to the Registrar to the Offer at their office at Intime Spectrum Registry Limited, C-13 Pannalal Silk MillsCompound, LBS Marg, Bhandup (W), Mumbai - 400 078, to reach before the close of business hours onMay 21, 2004 (Friday).

8.2 Shareholders who wish to tender their shares under this Offer should enclose the following documentsduly completed:

8.2.1 For equity shares held in physical form:

Registered Shareholders should enclose:

� Form of Acceptance cum Acknowledgement duly completed and signed in accordance with theinstructions contained therein, by all shareholders whose names appear on the share certificates.

� Original share certificate(s).

� Valid share transfer form(s) duly signed as transferors by all registered shareholders (in case of jointholdings) in the same order and as per specimen signatures registered with Inertia and duly witnessedat the appropriate place. A blank share transfer form is enclosed along with this Letter of Offer.

Unregistered owners should enclose

� Form of Acceptance cum Acknowledgement duly completed and signed in accordance with theinstructions contained therein.

� Original share certificate(s).

� Original broker contract note.

� Valid share transfer form(s) as received from market. The details of buyer should be left blankfailing which, the same will be invalid under the Offer. Unregistered shareholders should not signthe transfer deed. No indemnity is required from unregistered shareholders.

All other requirements for valid transfer will be precondition for acceptance.

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8.2.2 For Equity shares held in demat form:-

Beneficial owners should enclose:

� Form of Acceptance cum Acknowledgement duly completed and signed in accordance with theinstructions contained therein, by all the beneficial owners whose names appear in the beneficiaryaccount, as per the records of the respective depository.

� Photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instructionin “Off-market” mode, duly acknowledged by DP in favour of the special depository account (pleasesee below) before the close of business hours on May 21, 2004 (Friday) .

The Registrar to the Offer, Intime, has opened a special depository account with Citibank, N.A.,Mumbai styled “Intime Ltd – Inertia Escrow Account”. The details of the special depository accountare as under:

DP Name Citibank, N.A.

DP ID IN300054

Client ID 10008988

Depository NSDL

For each delivery instruction, the beneficial owner should submit a separate FOA. In the case of dematshares, the shareholders are advised to ensure that their shares are credited in favor of the specialdepository account, before the closure of the Offer. The Forms of Acceptance of such demat sharesnot credited in favor of the special depository account, before the closure of the Offer are liableto be rejected.

8.3 Shareholders should also provide all relevant documents, which are necessary to ensure transferability ofthe shares in respect of which the application is being sent failing which the tender would be consideredinvalid.

8.4 The share certificate(s), share transfer form, FOA and other documents, if any should be sent only to theRegistrar to the Offer, at the collection centres mentioned above. They should not be sent to the Managerto the Offer or the Acquirer or the PACs or the Target Company. The above-mentioned documents canbe sent to the collection centers (as mentioned in clause 8.1 above) by hand delivery on all days exceptSundays and public holidays.

8.5 The minimum marketable lot for the purposes of acceptance, for both physical and demat shares, wouldbe 1.

8.6 In case of non-receipt of the Letter of Offer, the eligible persons may obtain a copy of the same from anyof the collection centres mentioned above on providing suitable documentary evidence of acquisition ofshares of Inertia. The Letter of Offer and Form of Acceptance cum Acknowledgment will be available onSEBI’s website: www.sebi.gov.in, from the Offer Opening Date. The eligible persons can download thesedocuments from the SEBI’s website and apply on the same. Alternately, they may send their consent toparticipate in the Offer, to the Registrar to the Offer, on a plain paper stating their name, address, numberof shares held, folio number, distinctive numbers of the shares held, number of shares offered, along withdocuments as mentioned above, so as to reach the Registrar to the Offer on or before the close of theOffer. Unregistered owners should not sign the transfer deed and the transfer deed should be valid. Incase of beneficial owners, they may send their application in writing to the Registrar to the Offer, on a plainpaper stating their name, address, number of shares held, number of shares offered, DP name, DP ID,beneficiary account number and a photocopy of the delivery instruction in “Off-market” mode or counterfoilof the delivery instruction in “Off-market” mode, duly acknowledged by the DP in favor of the specialdepository account, so as to reach the Registrar to the Offer, on or before the close of the Offer. Theapplication should be signed by all the shareholders as per the registration details available with Inertiaand should be sent to the Registrar to the Offer in an envelope clearly marked “Inertia Industries Limited- Open Offer”.

8.7 Non-Resident shareholders should also enclose a copy of permission received from RBI for the sharesheld by them in Inertia.

8.8 Non-Resident shareholders should also enclose a copy of ‘no-objection’ certificate / tax clearancecertificate from the income tax authorities under Income Tax Act, 1961, indicating the amount of tax to bededucted by the Acquirer before remitting the consideration. In case the aforesaid ‘no-objection’ certificateis not submitted, the Acquirer will arrange to deduct tax at the maximum marginal rate as may beapplicable to the shareholder, on the entire consideration amount payable.

23

8.9 In case of delay in receipt of statutory approvals beyond June 19, 2004 (Saturday) , SEBI has the powerto grant extension of time to Acquirer for payment of consideration to shareholders, subject to the Acquireragreeing to pay interest for the delayed period, as directed by SEBI in terms of Regulation 22(12) of theRegulations.

8.10 Payment of consideration will be made by crossed account payee cheque/demand draft / pay order andsent by Registered Post, to those shareholders/unregistered owners and at their risk, whose shares/ sharecertificates and other documents are found in order and accepted by Acquirer in part or in full. In caseof joint holders cheques/demand drafts will be drawn in the name of the first holder. It is advised thatshareholders provide bank details in the Form of Acceptance cum Acknowledgment, so that samecan be incorporated in the cheque/demand draft/pay order.

8.11 Unaccepted share certificates, transfer forms and other documents, if any, will be returned by registeredpost at the shareholders’/unregistered owners’ sole risk to the sole/first shareholder.

Shares held in demat form to the extent not accepted will be credited back to the beneficial owners’depository account with the respective depository participant as per the details furnished by the beneficialowner in the FOA.

8.12 The Registrars to the Offer will hold in trust the shares/share certificates, shares lying in credit of thespecial depository account, FOA, and the transfer form(s), if any, on behalf of the shareholders of Inertiawho have accepted the Offer, till the cheques/ drafts for the consideration and/or the unaccepted shares/share certificates are dispatched or credited back to the beneficial owners’ DP accounts.

8.13 In case any person has lodged shares of Inertia for transfer and such transfer has not yet been effected,the concerned person may apply as per instruction contained in paragraph 8.5 above together with theacknowledgement of the lodgment of shares for transfer. Such persons should also instruct Inertia andits registrar & transfer agents to send the transferred share certificate(s) directly to the collection centrelocated at Mumbai. The applicant should ensure that the certificate(s) reach the designated collectioncentre on or before the Offer closing date.

8.14 In case any person has tendered his physical shares in Inertia for dematerialisation and suchdematerialisation has not yet been effected the concerned shareholder may apply in the Offer as perinstructions mentioned above together with a photocopy of the completed dematerialisation request formacknowledged by shareholder’s DP. Such shareholders should ensure the credit of the shares to thespecial depository account on or before the Offer closing date. A copy of delivery instructionsacknowledged by the DP in favour of the special depository account should be forwarded to the collectioncentre where the FOA and other documents were tendered, before the close of the Offer.

8.15 If the aggregate of the valid response exceeds 13,699,985 equity shares (representing 25.00% of presentissued equity share capital and 25.04% of the voting capital), then the Acquirer shall accept the Offersreceived from the Shareholders of Inertia Industries Limited on a proportionate basis, in consultation withthe Manager to the Offer, in accordance with Regulation 21(6) of the SEBI Takeover Code

9. DOCUMENTS FOR INSPECTION

The following documents are regarded as material documents and are available for inspection at the office ofMAL, 17th Floor, Hoechst House, Nariman Point, Mumbai 400021 from 10.30 AM to 1.00 PM on any workingday, except Saturdays, Sundays and holidays until the Offer closes:

� SPA dated May 15, 2003 between Acquirer and Sellers;

� Certificate(s) of Incorporation and the Memorandum and Articles of Association of the Acquirer and the TargetCompany;

� Copy of the Public Announcement dated May 19, 2003;

� Copy of the Revised Public Announcement (Corrigendum) dated April 21, 2004;

� Best Efforts Undertaking executed by the Acquirer as mentioned in para 5.5

� Trading data of Target Company provided by BSE as mentioned in para 6.1.3

� The annual reports of the Acquirer and the Target Company for the financial years 2003, 2002, 2001 and theunaudited financials as at December 31, 2003;

� Copy of the letter from M/s Hrishikesh, Vishwanathan & Associates dated May 15, 2003 confirming the ability ofAcquirer to fulfill its financial obligations under the Offer;

24

� Copy of the letter from Citibank, N.A. dated May 16, 2003 confirming the marking of lien on the 25% cash depositof Rs. 342.5 lakhs in favour of the Manager to the Offer;

� Final SEBI observation letter no CFD/DCR/TO/AG/6336/04 dated March 31, 2004; ;

� A copy of the agreement entered into by the Registrar with depository participant for opening a special depositoryaccount for the purposes of the offer;

� A copy of the letter dated May 30, 2003 and April 12, 2004 from the Target Company addressed to the Manager tothe Offer disclosing information on the Target Company.

� The SEBI order (under rule 5(1) of SEBI (Procedure for holding enquiry and imposing penalties by AdjudicationOfficer) Rules, 1995) dated May 9, 2003

� Certificate from M/s Hrishikesh, Vishwanathan & Associates, Chartered Accountants, ( Ms. Sandhya Kailasnathan,Membership No. 100642) with their Office at A13/4, Sriram Nagar, S V Road, Andheri West, Mumbai – 400 058(Tel 022 26210613, Fax 022 56602362) dated May 16, 2003 computing the book value of the Target Company asat March 31, 2002.

� Letter dated April 12, 2004 addressed to the Manager by the Target Company containing a certificatefrom M/s Kanga & Co. giving the details of pending litigations against Inertia.

10. DECLARATION BY THE ACQUIRER

The Board of Directors of MAL accept full responsibility for the information contained in the PublicAnnouncement, this Letter of Offer and are also responsible for completing the Offer and ensuring compliancewith the SEBI Takeover Code. Information related to the Target Company has been obtained from the TargetCompany and from publicly available sources.

For and on behalf of McDowell Alcobev Limited

Peter Ellis Sridhar Rengan

Authorised Person(s)

Place : MumbaiDate : 16th April, 2004.

FORM OF ACCEPTANCE-CUM-ACKNOWLEDGEMENTTHIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION(Please send this Form with enclosures to Intime Spectrum Registry Limited)

To,McDowell Alcobev LimitedC/o. Intime Spectrum Registry Ltd.C-13 Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai - 400 078

Tel No.: Fax No.: E-mail :

Dear Sir/Madam,Sub: Open Offer to acquire up to 13,699,985 shares, representing 25% of the total equity share capital and 25.04 % of voting rights of Inertia Industries Limited (Target Company) byMcDowell Alcobev Limited (Acquirer) at a price of Rs. 10 per fully paid up shares and Rs 5 per partly paid up shareI/We refer to the Letter of Offer dated 16th April, 2004 for acquiring the Shares held by me/us in Inertia Industries Limited.I/We, the undersigned, have read the Letter of Offer and understood its contents including the terms and conditions as mentioned therein.

SHARES HELD IN PHYSICAL FORMI/We, accept the Offer and enclose the original share certificate(s) and duly signed transfer deed(s) in respect of my/our shares as detailed below.

From:Name:Address:

Please attach additional sheets of paper and authenticate the same if the space is insufficient.

SHARES HELD IN DEMAT FORMI/We, holding shares in demat form, accept the Offer and enclose a photocopy of the Delivery Instructions duly acknowledged by my/our DP in respect of my/our equity shares as detailed below.

I/We confirm that the equity shares of Inertia Industries Limited, which are being tendered herewith by me/us under the Offer, are free from liens, charges and encumbrances of any kindwhatsoever.I/We note and understand that the original share certificate(s) and valid share transfer deed will be held in trust for me/us by the Registrar to the Offer until the time the Acquirer pays thepurchase consideration as mentioned in the Letter of Offer. I/We also note and understand that the Acquirer will pay the purchase consideration only after verification of the documents andsignatures.I/We note and understand that the Shares would lie in the Special Depository Account until the time the Acquirer makes payment of purchase consideration as mentioned in the Letter of Offer.I/We authorise the Acquirer to accept the shares so offered which it may decide to accept in consultation with the Manager to the Offer and in terms of the Letter of Offer and I/we furtherauthorise the Acquirer to return to me/us, equity share certificate(s) in respect of which the offer is not found valid/not accepted.The Permanent Account No. (PAN/GIR No.) allotted under the Income Tax Act, 1961 is as under.

Sr. No Folio No. Certificate No. Distinctive Nos. No. of SharesFrom To

Total

DP Name DP ID Client ID Name of Beneficiary No. of Shares

Power of Attorney

No Objection Certificate & Tax Clearance Certificate under Income-tax Act, 1961,for NRIs/OCBs/Foreign Shareholders as applicableDeath Certificate/ Succession Certificate

Corporate authorization in case of Companies along with Board Resolution andSpecimen Signatures of Authorised SignatoriesOthers (please specify) : ____________________________________________

I/We have done an off-market transaction for crediting the shares to the depository account with Citibank, N.A. at NSDL styled “Intime Ltd. – Intertia Escrow Account” whose particulars are:DP Name: Citibank N.A. Client ID : 10008988 DP ID : IN300054

Shareholders having their beneficiary account with CDSL will have to use inter-depository slip where available for purpose of crediting their shares in favour of the special depository account with NSDL.Enclosures (Please tick as appropriate, if applicable)

So as to avoid fraudulent encashment in transit, shareholder(s) holding shares in physical form should provide details of bank account of the first/sole shareholderand the consideration cheque or demand draft will be drawn accordingly.

FULL NAME(S) OF THE HOLDER SIGNATURE(S)

First/Sole Holder

Joint Holder 1

Joint Holder 2

Joint Holder 3

Note: In case of joint holdings, all holders must sign. In case of body corporate, the Company seal should be affixedPlace: Date:

I/We authorise the Acquirer to send by registered post/speed post/UCP the draft/cheque, in settlement of the amount to the sole/first holder at the address mentioned above.Yours faithfully,

Signed and Delivered

Name of the Bank ____________________________________________________ Branch ______________________________ City ____________________________

Account Number __________________________________________________ Savings/Current/Others (please specify) ______________________________________

1st Shareholder 2nd Shareholder 3rd ShareholderPAN/GIR No.Ward No.

Acknowledgement Slip : Inertia Industries Limited – Open OfferReceived from Mr./Ms. ________________________________________________________________________________________________________________

Physical shares: Folio No. ______________ / Demat shares: Client ID____________________ ; DP ID _____________________;Form of Acceptance along with :� Physical shares: No. of shares- ______________________ ; No. of certificates enclosed-_____________________� Demat shares: Copy of delivery instruction for _____________________________________ number of shares enclosed(Tick whichever is applicable)Signature of Official ________________ Date of Receipt __________________

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Stamp of collection center

OFFER

OPENS ON Thursday, 22nd April, 2004

LAST DATE OFWITHDRAWAL Tuesday, 18th May, 2004

CLOSES ON Friday, 21st May, 2004

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INSTRUCTIONS

1. In the case of demateralized shares, the shareholders are advised to ensure that their shares are credited in favour of the special depositoryaccount, before the closure of the Offer i.e. Friday, May 21, 2004. The Form of Acceptance-cum-Acknowledgement of such demat shares notcredited in favour of the special depository account, before the closure of the Offer will be rejected.

2. Shareholders should enclose the following :

I. For Equity shares held in demat form :- Beneficial owners should enclose

� Form of Acceptance-cum-Acknowledgement duly completed and signed in accordance with the instructions contained therein, asper the records of the Depository Participant (DP).

� Photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, dulyacknowledged by the DP as per the instruction in the Letter of Offer.

II. For Equity shares held in physical form :- Registered shareholders should enclose

� Form of Acceptance-cum-Acknowledgement duly completed and signed in accordance with the instructions contained therein,by all shareholders whose names appear on the share certificates.

� Original Share Certificate(s).

� Valid Share Transfer form(s) duly signed as transferors by all registered shareholders (in case of joint holdings) in the same orderand as per specimen signatures registered with Inertia Industries Limited and duly witnessed at the appropriate place. A blank ShareTransfer form is enclosed along with the Letter of Offer. Attestation, where required, (thumb impressions, signature difference, etc.)should be done.

The details of buyer should be left blank failing which the same will be invalid under the Offer. The details of the Acquirer as buyer willbe filled by the Acquirer upon verification of the Form of Acceptance and the same being found valid. All other requirements for validtransfer will be preconditions for valid acceptance.

III. Unregistered owners should enclose

� Form of Acceptance-cum-Acknowledgement duly completed and signed in accordance with the instructions contained therein.

� Original Share Certificate(s).

� Original broker contract note.

� Valid Share Transfer form(s) as received from the market leaving details of buyer blank. If the same is filled in then the Share(s) areliable to be rejected.

3. The share certificate(s) share transfer form(s) and the Form of Acceptance should be sent only to the Registrar to the Offer and not to theManager to the Offer or the Acquirer or Target Company.

4. Shareholders having their beneficiary account in CDSL have to use “INTER DEPOSITORY DELIVERY INSTRUCTION SLIP” for thepurpose of crediting their shares in favour of the special depository account with NSDL.

5. Non-resident shareholders should enclose a copy of the permission received from RBI for the equity shares held by them in InertiaIndustries Limited If the shares are held under General Permission of RBI, the non resident shareholder should state that the sharesare held under General Permission and whether on repatriable basis or non repatriable basis.

6. Non resident shareholders should enclose No Objection Certificate/Tax Clearance Certificate from the Income Tax Authorities underIncome Tax Act, 1961, indicating the tax to be deducted by the Acquirer before remittance of consideration otherwise tax will bededucted at the marginal rate as may be applicable to the category of the shareholder on the consideration payable by the Acquirer.

7. The Form of Acceptance-cum-Acknowledgement and other related documents should be submitted at any of the Collection Centers ofIntime Spectrum Registry Ltd. as stated in Paragraph 8 of the Letter of Offer.

8. Applicants who cannot hand deliver their documents at the Collection Centers, may send their documents only by Registered Post, at theirown risk, to the Registrar to the Offer at Intime Spectrum Registry Ltd., C-13 Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W),Mumbai - 400 078 so as to reach the Registrars to the Offer on or before the last date of acceptance i.e. Friday, May 21, 2004.

All queries in this regard to be addressed to the Registrar to the Offer at the following address quoting your Reference Folio No./DPID/Client ID:

Intime Spectrum Registry Ltd.(Unit Inertia Industries Limited)

C-13 Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai - 400 078Tel: 022-5555 5454 Fax: 022-2567 2693 / 5555 5353

E-mail: nikunj@intimespectrum.com WESTERN PRESS PVT. LTD.MUMBAI 400 013. 2493 9382

FORM OF WITHDRAWAL

To,McDowell Alcobev LimitedC/o. Intime Spectrum Registry Ltd.C-13 Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai - 400 078Dear Sir/Madam,Sub: Open Offer to acquire up to 13,699,985 shares, representing 25% of the total equity share capital and 25.04 % of voting rights of Inertia Industries Limited(Target Company) by McDowell Alcobev Limited (Acquirer) at a price of Rs. 10 per fully paid up shares and Rs 5 per partly paid up shareI/We refer to the Letter of Offer dated 16th April, 2004 for acquiring the equity shares held by me/us in Inertia Industries Limited.I/We the undersigned, have read the Letter of Offer and accept unconditionally its contents including the terms and conditions and procedures as mentionedtherein.I/We have read the procedure for withdrawal of equity shares tendered by me/us in the Offer as mentioned in para 7.2.5 of the Letter of Offer and unconditionallyagree to the terms and conditions mentioned therein.I/We hereby consent unconditionally and irrevocably to withdraw my/our equity shares from the Offer and I/We further authorise the Acquirers to return to me/us,tendered equity share certificate(s)/share(s) at my/our sole risk.I/We note that upon withdrawal of my/our equity shares from the Offer, no claim or liability shall lie against the Acquirers/ Manager to the Offer/Registrar tothe Offer.I/We note that this Form of Withdrawal should reach the Registrar to the Offer at any of the collection centres mentioned in the Letter of Offer as per the mode ofdelivery indicated therein on or before the last date of withdrawal.I/We note that the Acquirers/Manager to the Offer/Registrar to the Offer shall not be liable for any postal delay/loss in transit of the equity shares held in physicalform and also for the non-receipt of equity shares held in the dematerialised form in the DP account due to inaccurate/incomplete particulars/instructions.I/We also note and understand that the Acquirers shall return Original Share Certificate(s), Share Transfer Deed(s) and equity shares only on completion ofverification of the documents, signatures carried out by Inertia Industries Limited and/ or their R & T Agents and beneficiary position data as available from theDepository from time to time, respectively. The particulars of tendered original share certificate(s), which I/we wish to withdraw are detailed below:

Signed and delivered FULL NAME(S) OF THE HOLDER SIGNATURE(S) VERIFIED AND ATTESTED BYUS. PLEASE AFFIX THE STAMPOF DP (IN CASE OF DEMATSHARES)/ BANK (IN CASE OFPHYSICAL SHARES)

First/Sole Shareholder

Second Shareholder

Third Shareholder

Note : In case of joint holders all must sign. In case of body corporate, stamp of the company should be affixed and necessary Board resolution should be attached.

Place: Date:

From:Name:Address:

OFFER

OPENS ON Thursday, 22nd April, 2004

LAST DATE OFWITHDRAWAL Tuesday, 18th May, 2004

CLOSES ON Friday, 21th May, 2004

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I/We note that the equity shares will be credited back only to that Depository Account, from which the equity shares have been tendered and necessary standinginstructions have been issued in this regard.I/We confirm that the particulars given above are true and correct.In case of dematerialised equity shares, I/We confirm that the signatures of the beneficiary holders have been verified by the DP as per the records maintained attheir end and the same have also been duly attested by them under their seal.Yours faithfully,

DP Name DP ID Client ID Name of Beneficiary No. of Shares

(In case of insufficient space, please use an additional sheet and authenticate the same)I/We hold the following equity shares in dematerialised form and tendered the equity shares in the Offer and had done an off-market transaction for crediting the Sharesto the Depository Account with Citi Bank N. A. at NSDL styled “Intime Ltd. – Intertia Escrow Account” as per the following particulars:

DP Name Citibank N.A Client ID 10008988 DP ID IN 300054Please find enclosed a photocopy of the Depository Delivery Instruction(s) duly acknowledged by the Depository Participant.The particulars of the account from which my/our Equity Shares have been tendered are as detailed below

Sr. No Folio No. Certificate No. Distinctive Nos. No. of Shares

Tendered From To

Withdrawn

Total

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION(Please send this Form with enclosures to Intime Spectrum Registry Limited)

Acknowledgement Slip : Inertia Industries Limited – Open OfferReceived from Mr./Ms. ________________________________________________________________________________________________________________

Physical shares: Folio No. ______________ / Demat shares: Client ID____________________ ; DP ID _____________________;Form of Withdrawal for withdrawal of :� Physical shares: No. of shares tendered __________________________ No. of Shares withdrawn ____________________________� Demat shares: Copy of delivery instruction for shares tendered _______________________________________________(Tick whichever is applicableSignature of Official ____________________ Date of Receipt __________________

Stamp of collection center

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All queries in this regard to be addressed to the Registrar to the Offer at the following address quoting your Reference Folio No./DPID/Client ID:

Intime Spectrum Registry Ltd.(Unit Inertia Industries Limited)

C-13 Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai - 400 078Tel: 022-5555 5454 Fax: 022-2567 2693 / 5555 5353

E-mail: nikunj@intimespectrum.com

INSTRUCTIONS

1. Shareholders are advised to ensure that the Form of Withdrawal should reach the Registrar to the Offer at any of the CollectionCenters mentioned in the Letter of Offer as per the mode of delivery indicated therein on or before the last date of withdrawal i.e.Tuesday, 18th May, 2004.

2. Shareholders should enclose the following:-i. For Equity Shares held in demat form:- Beneficial owners should enclose

� Duly signed and completed Form of Withdrawal.

� Acknowledgement slip in original/ Copy of the submitted Form of Acceptance-cum-Acknowledgement in case delivered byRegistered A.D.

� Photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, dulyacknowledged by the DP.

ii. For Equity Shares held in physical form:- Registered Shareholders should enclose:

� Duly signed and completed Form of Withdrawal.� Acknowledgement slip in original/ Copy of the submitted Form of Acceptance-cum-Acknowledgement in case delivered by

Registered A.D.

� In case of partial withdrawal, Valid Share Transfer form(s) duly signed as transferors by all registered shareholders (in case ofjoint holdings) in the same order and as per specimen signatures registered with Inertia Industries Limited and duly witnessedat the appropriate place.

iii. Unregistered owners should enclose:� Duly signed and completed Form of Withdrawal.

� Acknowledgement slip in original/ Copy of the submitted Form of Acceptance-cum-Acknowledgement in case delivered byRegistered A.D.

3. The withdrawal of Shares will be available only for the Share certificates/the Shares that have been received by the Registrar to the Offer/Special Depository Escrow Account.

4. The intimation of returned Shares to the Shareholders will be at the address as per the records of the Target Company/ Depository as thecase may be.

5. The Form of Withdrawal should be sent only to the Registrar to the Offer.

6. In case of partial withdrawal of Shares tendered in physical form, if the original share certificates are required to be split, the same will bereturned on receipt of share certificates from the Target Company. The facility of partial withdrawal is available only to registered shareholders.

7. Shareholders holding Shares in dematerialised form are requested to issue the necessary standing instruction for receipt of the credit intheir DP account.

8. The Form of Withdrawal and other related documents should be submitted at any of the Collection Centers of Intime Spectrum RegistryLimited stated in Paragraph 8 of the Letter of Offer.

9. Applicants who cannot hand deliver their documents at the Collection Centers, may send their documents only by Registered Post, at theirown risk, to the Registrar to the Offer at Intime Spectrum Registry Limited, C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup(W),Mumbai – 400 078. so as to reach the Registrars on or before the last date of withdrawal i.e. Tuesday, May 18, 2004.

WESTERN PRESS PVT. LTD.MUMBAI 400 013. 2493 9382